<PAGE>
[LOGO]
Global Fund
Global Equity Fund
Global Technology Fund
Global Biotech Fund
Global Bond Fund
U.S. Balanced Fund
U.S. Equity Fund
U.S. Large Cap Equity Fund
U.S. Large Cap Growth Fund
U.S. Small Cap Growth Fund
U.S. Bond Fund
High Yield Fund
Global (Ex-U.S.) Equity Fund
Annual Report
June 30, 2000
[LOGO] The Brinson Funds
-----------------
<PAGE>
Trustees and Officers
------------------------------------------------------------------------------
[LOGO] Trustees
Walter E. Auch
Frank K. Reilly, CFA
Edward M. Roob
Officers
Frank K. Reilly, CFA
Chairman of the Board
Thomas J. Digenan, CFA, CPA
President
Carolyn M. Burke, CPA
Secretary and Treasurer
David E. Floyd, CPA
Assistant Secretary
Mark F. Kemper
Assistant Secretary
Alanna N. Palmer
Assistant Secretary
================================================================================
1
<PAGE>
The Funds' Advisor -- Brinson Partners, Inc.
--------------------------------------------------------------------------------
[LOGO] Since the founding of our organization nearly twenty years ago, we
have focused our collective energy on two goals: creating meaningful
value-added investment performance; and providing our clients with
individualized client relationships of the highest quality.
Now in 2000, nearly 500 focused investment specialists, located in all
of the world's major financial centers, continue to deliver investment
strategies that meet our clients' needs. With an unrelenting focus on
our goals, we have grown into one of the world's premier investment
management organizations, and a recognized leader in our industry. In
North America, we make our investment capabilities available to
institutions and individual investors through the Brinson Family of
Funds. The Brinson Funds are no-load, institutionally priced mutual
funds that provide investors convenient access to our global
investment expertise and capabilities.
We select portfolio investments for all of The Brinson Funds by
focusing on long-term investment fundamentals within a framework of
integrated capital markets. Investment performance for our clients is
maximized within and across asset classes through a comprehensive
understanding of global investment markets and their
interrelationships. We apply a systematic, disciplined approach to
valuing investments and combine the seasoned judgment of our global
investment teams to construct optimal portfolios--balancing
considerations for both risk and return.
Brinson Partners, Inc. is a member of UBS Asset Management, the asset
management division of UBS AG.
================================================================================
2
<PAGE>
----------------------------------------------------------------------
Table of Contents
----------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
[LOGO] <S> <C>
To Our Shareholders.............................................. 4
Global Economic and Market Highlights............................ 5
U.S. Economic and Market Highlights.............................. 6
Portfolio Managers' Commentary and Schedule of Investments
Global Fund................................................. 7
Global Equity............................................... 18
Global Technology Fund...................................... 25
Global Biotech Fund......................................... 28
Global Bond Fund............................................ 31
U.S. Balanced Fund.......................................... 37
U.S. Equity Fund............................................ 43
U.S. Large Cap Equity Fund.................................. 48
U.S. Large Cap Growth Fund.................................. 52
U.S. Small Cap Growth Fund.................................. 56
U.S. Bond Fund.............................................. 61
High Yield Fund............................................. 67
Global (Ex-U.S.) Equity Fund................................ 74
Statements of Assets and Liabilities............................. 82
Statements of Operations......................................... 84
Statement of Cash Flows.......................................... 86
Statements of Changes in Net Assets.............................. 88
Financial Highlights............................................. 93
Notes to Financial Statements.................................... 106
Report of Independent Auditors................................... 112
</TABLE>
================================================================================
3
<PAGE>
Shareholder Letter
--------------------------------------------------------------------------------
[LOGO] August 28, 2000
Dear Shareholder:
Thank you for investing in The Brinson Funds. We appreciate the
confidence you have placed in us.
The first half of 2000 was characterized by turbulence in both equity
and bond markets as uncertainty about interest rates, inflation and
economic growth came to the fore. While investor sentiment showed
continued adoration of the so-called "new economy" in the first
quarter, trends reversed sharply in the second quarter. Investors
began to heed the warning signs of increasing volatility in most major
equity markets, and of swelling share prices in the technology, media
and telecommunications sectors. Investor attention shifted to
searching for investment value among "old economy" stocks.
Investors have also begun to look at dot-com companies more
skeptically. Many of the new dot-com companies that have sprung up in
the past few years are starting to see increasing pressures to
solidify their bottom lines. The days of free (or almost free) capital
are, if not ending, certainly beginning to slow. More than 120 dot-com
companies laid off workers in the past eight months, and 24 of them
have subsequently gone out of business. There are still many
opportunities to invest in strong, growing companies and undervalued
out-of-favor stocks, but active security selection is increasingly
important in the current environment.
While we understand and appreciate the role of new and emerging
technology in business, our analysis is focused on investing in
companies with solid fundamentals that are using the Internet to
strengthen and leverage their existing businesses. Furthermore, as we
identify investment opportunities in other specialized areas, we will
continue to broaden our selection of offerings within The Brinson
Funds. In view of this, we launched two new Funds in the second
quarter of 2000: the Global Technology Fund and the Global Biotech
Fund.
The long-term success of our organization was built by focusing on two
main goals:
(1) delivering value-added investment performance, and (2) providing
the highest quality client service. We remain as focused as ever on
achieving those goals, and we continue to develop our mutual fund
organization to better serve our shareholders. We are committed to
providing individual investors with the same access to the industry-
leading investment expertise and state-of-the-art techniques that are
offered to large institutional investors.
We look forward to continuing our relationship with you, and to
helping you meet your long-term investment objectives.
Sincerely,
/s/ Thomas J. Digenan
Thomas J. Digenan, CFA, CPA
President, The Brinson Funds
================================================================================
4
<PAGE>
Global Economic and Market Highlights
--------------------------------------------------------------------------------
[LOGO] The tentative recovery in Japan continues. Real GDP growth was 0.7%
year-on-year in the first quarter but on figures which were not
adjusted for the leap year. Consensus Forecasts predicts year-on-year
GDP growth to be flat in the second quarter but to pick up strongly in
H2 2000. Recently, industrial production has strengthened on the back
of demand for IT goods. The big news to affect the Japanese economy is
the removal of the zero interest rate policy. The overnight call rate
was raised to 0.25%. This represents the first tightening of monetary
policy in Japan in 10 years. The consensus view is that this is
premature with the economy still suffering from deflation and the
recovery still green.
In Euroland, sentiment continues to be upbeat. The Euroland real GDP
grew by 3.4% year-on-year in the first quarter. Consensus Forecasts
predict 3.3% growth in 2000. Inflation is rising, from 1.9% at the
start of the year, to 2.4% in July. The Euro continues to languish,
reaching new lows against the Dollar earlier this month. The weak Euro
is bolstering the recovery in industrial production and export growth.
This, coupled with the pick up in domestic demand, means that there
are upside risks for inflation. It is likely that the European Central
Bank (ECB) will raise rates again. The ECB measure of M3 growth slowed
again in June, down 40 basis points to 5.4% year-on-year increase.
The United Kingdom position is finely balanced. At the recent meeting
of the Monetary Policy Committee, interest rates were not changed but
the minutes show that there is a big split within the committee as to
the size of risks to the economy. The Governor used his casting vote.
There has been a weakening in some areas of the economy. Earnings
growth have weakened as has the housing market. But with the labor
market tightening further and the Bank of England forecasting that
inflation is likely to beach its 2.5% target in two years time, a
further increase in interest rates seems possible.
Global Environment
<TABLE>
<CAPTION>
6 months 1 year 3 years 5 years
Major Markets ended ended ended ended
Total Return in U.S. Dollars 6/30/00 6/30/00 6/30/00 6/30/00
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Equity (0.84)% 9.52% 19.06% 22.47%
Global (Ex-U.S.) Equities (currency unhedged) (2.99) 18.78 10.52 11.75
Global (Ex-U.S.) Equities (currency hedged) 2.69 23.11 16.45 20.48
U.S. Bonds 3.92 4.49 6.02 6.23
Global (Ex-U.S.) Bonds (currency unhedged) (1.95) 2.40 2.70 1.70
Global (EX-U.S.) Bonds (currency hedged) 4.02 5.75 8.20 9.81
U.S. Cash Equivalents 3.13 6.08 5.82 5.83
------------------------------------------------------------------------------------------------
6 months 1 year 3 years 5 years
Major Markets ended ended ended ended
Percent Change Relative to U.S. Dollars 6/30/00 6/30/00 6/30/00 6/30/00
------------------------------------------------------------------------------------------------
Yen (3.26)% 14.40% 2.65% (4.31)%
Pound (6.07) (3.96) (3.11) (0.99)
Euro (4.37) (7.05) (5.16) (6.94)
Canadian Dollar (2.05) (0.11) (2.35) (1.50)
------------------------------------------------------------------------------------------------
</TABLE>
All total returns in excess of 1 year are average annualized returns.
================================================================================
5
<PAGE>
U.S. Economic and Market Highlights
--------------------------------------------------------------------------------
[LOGO] The slowdown in the economy seems less evident than a few months ago.
The annualized growth rate in real GDP rose from 5.4% in the first
quarter of this year to 6% in the second quarter. Federal government
spending and business investment were strong contributors but personal
consumption growth weakened in the second quarter. Consensus Forecasts
estimate that activity will slow by the end of the year. Growth is
forecast to be 5% in 2000, falling sharply to 3.4% in 2001.
The oil price has risen by nearly 50 percent in the year to July and
had an impact on consumer price inflation. From lows of around 1.5%
year-on-year increase in late 1998, the rate of price inflation has
surged to 3.7% in July 2000. Core inflation, which excludes energy and
food, was 2.4% in July, up from 1.9% at the beginning of this year.
Thanks to recent productivity gains and the expected unwinding of the
oil price effect, the CPI rate is expected to stabilize in the coming
months.
Evidence is emerging that the U.S. economy has undergone a structural
change. Productivity, measured by workers' output per hour, has
recorded its fastest increase in 17 years. The figures provide some
evidence that the economy is utilizing "information-technology
enhanced production processes." In the year to June, non-farm
productivity grew by 5.1% and the annualized increase in the second
quarter was 5.3%. The labor market continues to tighten with the
unemployment rate falling to 4% but the increases in productivity seem
to be keeping a lid on inflationary pressures as unit labor costs are
falling.
The outlook for short-term interest rates seems to be fairly benign.
The consensus opinion is that interest rates have peaked. The
combination of a slowing economy, increases in productivity and the
prospect of lower energy costs all seem to point to the effective Fed
Funds rate being held at 6.5%. The current account deficit poses a
risk. Should foreign capital inflows slow, the dollar would fall and
raise inflationary pressures.
U.S. Environment
Major Markets
Year To Date June 30, 2000
[GRAPH APPEARS HERE]
Salomon U.S.Treasury Benchmark Returns
Year To Date June 30, 2000
[GRAPH APPEARS HERE]
Top Ten Industry Returns Relative to S&P 500
Year To Date June 30, 2000
[GRAPH APPEARS HERE]
Bottom Ten Industry Returns Relative to S&P 500
Year To Date June 30, 2000
[GRAPH APPEARS HERE]
Label A B C
Label U.S. Cash Equiv U.S. Bonds U.S. Equities
1 6/30/2000 4.9 4.49 9.52
Label A
Label
1 1 5.1
2 2 4
3 5 3.64
4 10 3.44
5 30 4.31
Label A
Label 0
1 Semiconductors 41.7
2 Oil Services 37.47
3 Drugs 35.58
4 Energy Reserves 26.2
5 Securities & Asst. Mgmt. 22.46
6 Heavy Electrical Eqp 20.85
7 Electronic Equipment 20.85
8 Medical Products 20.14
9 Oil Refining 18.92
10 Electric Utility 11.26
Label A
Label
1 Grocery Stores -15.27
2 Entertainment -17.73
3 Department Stores -19.71
4 Forestry & Paper -20.00
5 Motor Vehicles & Parts -20.04
6 Home Products -20.53
7 Gold -21.25
8 Internet -22.41
9 Wireless Telecom -27.01
10 Mining & Metals -34.61
================================================================================
6
<PAGE>
----------------------------------------------------------------------
Global Fund
----------------------------------------------------------------------
--------------------------------------------------------------------------------
[LOGO] Since its inception on August 31, 1992, the Brinson Global Fund Class
I has provided an annualized return of 8.97% versus the 13.06% return
of its index, the Global Securities Markets Mutual Fund Index. The
annualized volatility or risk of the Fund over this period was 6.61%,
or about 30% less than the 8.78% volatility of the benchmark. The
Fund's return of 0.72% for the first six months of 2000 is 113 basis
points higher than the benchmark return of -0.41%. Most of this
performance advantage came in the second quarter of the year when the
Fund returned 1.81%, greatly outperforming the -2.56% return of the
benchmark.
Market turbulence that began early this year, particularly in
equities, continued into the second quarter. Aggregate equity indices
generally fell by moderate amounts. In recent quarters, industry
selection has been critical. In the latest quarter, there were
significant setbacks in technology, media and telecommunications
stocks, with so-called "old economy" stocks generally outperforming.
The Fund's focus on these "old economy" stocks greatly contributed to
the Fund's performance advantage in the quarter and for the year-to-
date period.
In the current market environment, our analyses show that bond
valuations are more attractive than equities. The risk premium on
equities versus government inflation-linked bonds is only about 1%.
This clearly does not compensate investors for the added risk of
holding large equity positions. Our strategies therefore include a
general overweight to bonds offset by underweights to equities.
Notably this quarter, widening credit spreads prompted us to increase
holdings in U.S. high-yield bonds, which was offset by reducing our
large overweight position in U.S. Treasury Inflation Protected
Securities (TIPS). We reduced our Japanese equity overweight and
redistributed the proceeds to U.S. and U.K. equities. This move came
after earlier outperformance that allowed us to take profits on some
highly valued Japanese technology shares. In U.S. and U.K. equity
markets, we see opportunities in the "old economy" sectors where some
undervalued companies are making progress in leveraging their skills,
assets and competitive positions to take advantage of technology and
the Internet.
======================================================================
7
<PAGE>
----------------------------------------------------------------------
Global Fund
----------------------------------------------------------------------
----------------------------------------------------------------------
[LOGO] Total Return
----------------------------------------------------------------------
<TABLE>
<CAPTION>
6 months 1 year 3 years 5 years Inception*
ended ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00 6/30/00
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brinson Global Fund Class I 0.72% -0.48% 4.12% 9.30% 8.97%
------------------------------------------------------------------------------------------------------------------------
Brinson Global Fund Class N 0.54 -0.80 3.79 N/A 3.79
------------------------------------------------------------------------------------------------------------------------
GSMI Mutual Fund Index** -0.41 9.96 11.85 13.90 13.06
------------------------------------------------------------------------------------------------------------------------
MSCI World Equity (Free) Index -2.49 12.39 15.13 17.35 15.66
------------------------------------------------------------------------------------------------------------------------
Salomon Smith Barney World Gov't. Bond Index 0.03 3.16 3.87 3.16 5.66
------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Inception dates of the Brinson Global Fund Class I and Class N are
8/31/92 and 6/30/97, respectively. Performance inception date of
each of the Indices is 8/31/92.
** An unmanaged index compiled by the Advisor, constructed as
follows: 40% Wilshire 5000 Index; 22% MSCI World ex USA (Free)
Index; 21% Salomon Smith Barney BIG Bond Index; 9% Salomon Non-
U.S. Government Bond Index (unhedged); 2% JP Morgan EMBI+; 3% MSCI
Emerging Markets Free Index; and 3% Merrill Lynch High Yield
Master Index.
Total return includes reinvestment of all capital gain and income
distributions.
All total returns in excess of 1 year are average annualized returns.
----------------------------------------------------------------------
Illustration of an Assumed Investment of $1,000,000
----------------------------------------------------------------------
This chart shows the growth in the value of an investment in the
Brinson Global Fund Class I, the GSMI Mutual Fund Index, the MSCI
World Equity (Free) Index and the Salomon Smith Barney World
Government Bond Index if you had invested $1,000,000 on August 31,
1992, and had reinvested all your income dividends and capital gain
distributions through June 30, 2000. The performance of Class N shares
will vary based upon the different inception dates and class
specific expenses. No adjustment has been made for any income taxes
payable by shareholders on income dividends and capital gain
distributions. Past performance is no guarantee of future results.
Share price and return will vary with market conditions; investors may
realize a gain or loss upon redemption.
Brinson Global Fund Class I vs. GSMI Mutual Fund Index,
MSCI World Equity (Free) Index and Salomon Smith Barney World Gov't.
Bond Index
Wealth Value with Dividends Reinvested
[GRAPH]
$1,960,819 Brinson Global Fund Class I
$2,615,635 GSMI Mutual Fund Index
$3,126,211 MSCI World Equity (Free) Index
$1,539,557 Salomon Smith Barney World Gov't Bond Index
Fund returns are net of all fees and costs, while the Index returns
are based solely on market returns without deduction for fees or
transaction costs for rebalancing.
<TABLE>
<CAPTION>
Label A B C D
Label Date Brinson Global F GSMI Mutual Fun MSCI World Equi Solomon Smith
<S> <C> <C> <C> <C> <C>
1 8/31/92 $1,000,000 $1,000,000 $1,000,000 $1,000,000
2 9/30/92 $1,013,000 $1,005,314 $ 991,423 $1,010,000
3 10/31/92 $1,007,000 $ 997,514 $ 964,679 $ 982,528
4 11/30/92 $1,022,000 $1,017,428 $ 981,884 $ 966,906
5 12/31/92 $1,032,925 $1,030,790 $ 990,218 $ 972,746
6 1/31/93 $1,048,115 $1,042,387 $ 993,554 $ 989,769
7 2/28/93 $1,068,369 $1,055,458 $1,017,111 $1,009,267
8 3/31/93 $1,081,142 $1,087,329 $1,075,990 $1,024,810
9 4/30/93 $1,086,223 $1,093,919 $1,125,787 $1,046,434
10 5/31/93 $1,097,400 $1,116,872 $1,151,607 $1,056,898
11 6/30/93 $1,107,567 $1,119,316 $1,141,994 $1,054,636
12 7/31/93 $1,110,624 $1,127,126 $1,165,369 $1,057,589
13 8/31/93 $1,134,059 $1,166,328 $1,219,770 $1,089,423
14 9/30/93 $1,134,084 $1,165,278 $1,197,452 $1,102,387
15 10/31/93 $1,143,329 $1,182,155 $1,230,667 $1,100,513
16 11/31/93 $1,131,002 $1,153,045 $1,160,612 $1,092,699
17 12/31/93 $1,148,054 $1,179,801 $1,216,971 $1,101,932
18 1/31/94 $1,173,590 $1,218,762 $1,297,252 $1,110,748
19 2/28/94 $1,152,310 $1,200,386 $1,280,212 $1,103,528
20 3/31/94 $1,118,262 $1,159,904 $1,225,058 $1,101,983
21 4/30/94 $1,122,518 $1,172,614 $1,263,624 $1,103,195
22 5/31/94 $1,124,646 $1,176,336 $1,267,367 $1,093,487
23 6/30/94 $1,116,140 $1,164,819 $1,263,654 $1,109,233
24 7/31/94 $1,132,192 $1,189,041 $1,287,845 $1,118,107
25 8/31/94 $1,156,805 $1,220,386 $1,326,765 $1,114,194
26 9/30/94 $1,139,683 $1,201,154 $1,291,216 $1,122,216
27 10/31/94 $1,137,543 $1,219,154 $1,328,899 $1,140,171
28 11/30/94 $1,122,561 $1,185,232 $1,271,624 $1,124,437
29 12/31/94 $1,126,372 $1,196,582 $1,283,697 $1,127,585
30 1/31/95 $1,139,482 $1,208,708 $1,264,853 $1,151,265
31 2/28/95 $1,167,887 $1,241,252 $1,283,629 $1,180,737
32 3/31/95 $1,183,182 $1,281,224 $1,345,557 $1,250,873
33 4/30/95 $1,206,125 $1,311,158 $1,392,627 $1,274,014
34 5/31/95 $1,244,362 $1,344,050 $1,405,194 $1,309,941
35 6/30/95 $1,256,423 $1,364,548 $1,404,730 $1,317,670
36 7/31/95 $1,284,098 $1,407,051 $1,475,061 $1,320,832
37 8/31/95 $1,300,703 $1,402,131 $1,442,139 $1,275,396
38 9/30/95 $1,322,842 $1,439,648 $1,484,738 $1,303,837
39 10/31/95 $1,332,805 $1,430,595 $1,461,673 $1,313,485
40 11/30/95 $1,371,549 $1,473,410 $1,512,618 $1,328,328
41 12/31/95 $1,398,239 $1,500,615 $1,557,008 $1,342,275
42 1/31/96 $1,424,264 $1,525,115 $1,586,118 $1,325,765
43 2/29/96 $1,418,349 $1,529,469 $1,595,765 $1,319,004
44 3/31/96 $1,428,996 $1,542,531 $1,622,258 $1,317,157
45 4/30/96 $1,447,923 $1,569,098 $1,660,371 $1,311,889
46 5/31/96 $1,452,665 $1,580,746 $1,661,700 $1,312,151
47 6/30/96 $1,462,269 $1,583,964 $1,670,556 $1,322,517
48 7/31/96 $1,440,730 $1,542,337 $1,611,517 $1,347,909
49 8/31/96 $1,463,465 $1,567,235 $1,630,575 $1,353,166
50 9/30/96 $1,511,330 $1,618,828 $1,694,511 $1,358,714
51 10/31/96 $1,536,459 $1,634,988 $1,706,176 $1,384,122
52 11/30/96 $1,596,290 $1,703,760 $1,802,360 $1,402,393
53 12/31/96 $1,595,424 $1,688,579 $1,773,715 $1,391,033
54 1/31/97 $1,615,268 $1,713,300 $1,795,458 $1,353,893
55 2/28/97 $1,629,820 $1,721,365 $1,815,922 $1,343,738
56 3/31/97 $1,604,685 $1,638,518 $1,779,579 $1,333,526
57 4/30/97 $1,621,882 $1,717,598 $1,837,956 $1,321,791
58 5/31/97 $1,689,351 $1,804,433 $1,951,687 $1,357,744
59 6/30/97 $1,736,975 $1,869,036 $2,048,777 $1,373,901
60 7/31/97 $1,792,537 $1,943,405 $2,143,340 $1,363,184
61 8/31/97 $1,746,236 $1,872,161 $1,998,281 $1,362,366
62 9/30/97 $1,800,475 $1,953,277 $2,106,924 $1,391,385
63 10/31/97 $1,747,558 $1,890,285 $1,996,326 $1,420,326
64 11/30/97 $1,751,527 $1,907,153 $2,031,241 $1,398,595
65 12/31/97 $1,770,868 $1,930,073 $2,056,062 $1,394,399
66 1/31/98 $1,791,307 $1,956,072 $2,113,744 $1,407,925
67 2/28/98 $1,857,002 $2,050,747 $2,256,714 $1,419,329
68 3/31/98 $1,899,340 $2,108,872 $2,351,694 $1,405,277
69 4/30/98 $1,902,260 $2,129,617 $2,374,688 $1,427,762
70 5/31/98 $1,892,040 $2,099,572 $2,345,875 $1,431,046
71 6/30/98 $1,880,791 $2,126,234 $2,400,742 $1,433,192
72 7/31/98 $1,876,373 $2,115,137 $2,397,120 $1,435,055
73 8/31/98 $1,726,145 $1,901,138 $2,077,601 $1,474,089
74 9/30/98 $1,780,639 $1,966,845 $2,114,573 $1,552,510
75 10/31/98 $1,845,443 $2,084,211 $2,306,041 $1,598,465
76 11/30/98 $1,896,992 $2,169,407 $2,443,383 $1,575,926
77 12/31/98 $1,918,264 $2,247,617 $2,562,162 $1,607,603
78 1/31/99 $1,921,515 $2,278,825 $2,618,459 $1,592,813
79 2/28/99 $1,874,371 $2,218,396 $2,548,880 $1,541,683
80 3/31/99 $1,905,259 $2,288,480 $2,654,612 $1,545,538
81 4/30/99 $1,983,290 $2,368,078 $2,759,702 $1,544,919
82 5/31/99 $1,947,525 $2,308,167 $2,658,037 $1,518,965
83 6/30/99 $1,970,339 $2,378,691 $2,781,681 $1,492,383
84 7/31/99 $1,965,421 $2,365,993 $2,773,416 $1,528,946
85 8/31/99 $1,934,276 $2,359,432 $2,768,275 $1,535,979
86 9/30/99 $1,906,409 $2,349,454 $2,742,252 $1,559,941
87 10/31/99 $1,903,131 $2,433,356 $2,884,676 $1,559,161
88 11/30/99 $1,911,327 $2,490,310 $2,965,705 $1,542,789
89 12/31/99 $1,946,875 $2,626,332 $3,205,905 $1,539,087
90 1/31/2000 $1,889,358 $2,537,983 $3,022,476 $1,506,304
91 2/29/2000 $1,861,471 $2,583,396 $3,030,359 $1,495,459
92 3/31/2000 $1,925,960 $2,684,238 $3,240,090 $1,541,818
93 4/30/2000 $1,925,960 $2,576,701 $3,102,949 $1,491,401
94 5/31/2000 $1,931,189 $2,523,472 $3,024,393 $1,503,033
95 6/30/2000 $1,960,819 $2,615,635 $3,126,211 $1,539,557
</TABLE>
======================================================================
8
<PAGE>
----------------------------------------------------------------------
Global Fund
----------------------------------------------------------------------
--------------------------------------------------------------------------------
----------------------------------------------------------------------
Asset Allocation
----------------------------------------------------------------------
As of June 30, 2000
Current
Benchmark Strategy
----------------------------------------------------------------------
U.S. Equities 40.0% 22.5%
Global (Ex-U.S.) Equities 22.0 14.5
Emerging Markets Equities 3.0 3.0
Dollar Bonds 21.0 40.0
High Yield Bonds 3.0 5.5
Global (Ex-U.S.) Bonds 9.0 11.0
Emerging Markets Debt 2.0 3.5
Cash Equivalents 0.0 0.0
----------------------------------------------------------------------
100.0% 100.0%
----------------------------------------------------------------------
Top Ten Equity Holdings
----------------------------------------------------------------------
As of June 30, 2000
Percent of
Net Assets
----------------------------------------------------------------------
1. Advanced Micro Devices, Inc. 1.45%
2. FedEx Corp. 1.10
3. Burlington Northern Santa Fe Corp. 1.05
4. Allergan, Inc. 1.03
5. Electronic Data Systems Corp. 0.87
6. Gateway, Inc. 0.73
7. CIGNA Corp. 0.71
8. St. Jude Medical, Inc. 0.71
9. Alza Corp. 0.71
10.Baxter International, Inc. 0.70
----------------------------------------------------------------------
----------------------------------------------------------------------
Currency Allocation
----------------------------------------------------------------------
As of June 30, 2000
Current
Benchmark Strategy
----------------------------------------------------------------------
U.S. 66.0% 62.4%
Japan 9.0 1.0
U.K. 5.0 0.0
Euro 12.0 23.0
Other Europe 2.5 2.5
Canada 1.3 1.3
Emerging Markets 3.0 3.0
Asia (Ex-Japan) 0.6 0.2
Australia/New Zealand 0.6 6.6
----------------------------------------------------------------------
100.0% 100.0%
----------------------------------------------------------------------
Top Ten Fixed Income Holdings
----------------------------------------------------------------------
As of June 30, 2000
Percent of
Net Assets
----------------------------------------------------------------------
1. U.S. Treasury Inflation Indexed Note,
3.875%, due 04/15/29 8.60%
2. U.S. Treasury Inflation Indexed Note,
3.625%, due 04/15/28 4.59
3. Petroleum Geo-Services,
7.425%, due 03/20/02 1.19
4. Federal Home Loan Mortgage Corp.,
5.750%, due 03/15/09 0.77
5. U.S. Treasury Note,
5.625%, due 05/15/08 0.74
6. Government of Canada,
4.250%, due 12/01/21 0.74
7. Government of Japan,
4.600%, due 03/21/05 0.71
8. Government National Mortgage Association,
6.500%, due 01/15/29 0.69
9. Key Bank, NA,
6.675%, due 07/23/01 0.68
10. Government of France (OAT),
4.000%, due 10/25/09 0.67
----------------------------------------------------------------------
======================================================================
9
<PAGE>
Global Fund
________________________________________________________________________________
[LOGO] Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
______________________________________________________________________
U.S. EQUITIES
Energy..................................................... 1.12%
Capital Investment
Capital Goods......................................... 1.51
Electronic Components................................. 2.63
Technology............................................ 0.62
-----
4.76
Basic Industries
Chemicals............................................. 1.04
Housing/Paper......................................... 2.31
Metals................................................ 0.59
-----
3.94
Computers
Software.............................................. 0.85
Systems............................................... 1.59
-----
2.44
Consumer
Autos/Durables........................................ 0.77
Food/House Products................................... 0.16
Health: Drugs......................................... 2.08
Health: Non-Drugs..................................... 3.04
Leisure/Tourism....................................... 0.17
Retail/Apparel........................................ 2.39
Non-Durables.......................................... 0.67
-----
9.28
Financial
Banks................................................. 1.96
Non-Banks............................................. 2.49
-----
4.45
Telecommunications
Equipment............................................. 0.05
Services.............................................. 1.82
-----
1.87
Transportation............................................. 2.43
Services/Misc.............................................. 2.58
U.S. Small Capitalization Equity........................... 2.78
Utilities.................................................. 1.07
-----
Total U.S. Equities............................. 36.72*
GLOBAL (EX-U.S.) EQUITIES
Aerospace and Military................................ 0.04
Airlines.............................................. 0.09
Appliances & Household................................ 0.44
Autos/Durables........................................ 0.40
Banking............................................... 1.65
Beverages & Tobacco................................... 0.52
Broadcasting & Publishing............................. 0.63
Building Materials.................................... 0.12
Business & Public Service............................. 0.26
Chemicals............................................. 0.45
Computer Software..................................... 0.10
Consumer.............................................. 0.04
Data Processing....................................... 0.45
Electric Components................................... 0.50
Electronics........................................... 0.56
Energy................................................ 0.70
Financial Services.................................... 0.68
Food & House Products................................. 0.54
Forest Products....................................... 0.06%
Health: Drugs........................................ 0.09
Health: Non-Drugs.................................... 1.07
Industrial Components................................. 0.20
Insurance............................................. 0.81
Leisure & Tourism..................................... 0.09
Machinery & Engineering............................... 0.32
Merchandising......................................... 0.16
Metals-Non Ferrous.................................... 0.13
Metals-Steel.......................................... 0.07
Multi-Industry........................................ 0.02
Non-Durables.......................................... 0.01
Real Estate........................................... 0.21
Recreation............................................ 0.16
Telecommunications.................................... 1.74
Transportation........................................ 0.44
Utilities............................................. 0.72
Wholesale & International Trade....................... 0.04
-----
Total Global (Ex-U.S.) Equities.................. 14.51
EMERGING MARKETS EQUITIES.................................. 3.39
-----
TOTAL EQUITIES............................................. 54.62
U.S. BONDS
U.S. Corporate Bonds
Airlines.............................................. 0.05
Banks................................................. 0.85
Building Materials.................................... 0.08
Chemicals............................................. 0.04
Consumer.............................................. 0.20
Construction.......................................... 0.03
Energy................................................ 1.50
Financial............................................. 0.79
Services/Miscellaneous................................ 0.30
Technology............................................ 0.16
Telecommunications.................................... 0.42
-----
Total U.S. Corporate Bonds....................... 4.42
International Dollar Bonds
Foreign Banks......................................... 0.34
Foreign Energy........................................ 0.15
-----
Total International Dollar Bonds................. 0.49
Asset-Backed............................................... 0.35
Corporate Mortgage-Backed Securities....................... 1.64
U.S. Government Agencies................................... 1.58
U.S. Government Mortgage-Backed Securities................. 1.89
U.S. Government Obligations................................ 14.83
-----
Total U.S. Bonds................................. 25.20*
HIGH YIELD BONDS........................................... 5.46
GLOBAL (EX-U.S.) BONDS
Foreign Financial Bonds............................... 0.78
Foreign Government Bonds.............................. 10.16
-----
Total Global (Ex-U.S.) Bonds..................... 10.94
EMERGING MARKETS BONDS..................................... 3.84
-----
SHORT-TERM INVESTMENTS..................................... 17.45*
TOTAL INVESTMENTS................................ 117.51
LIABILITIES, LESS CASH AND
OTHER ASSETS.......................................... (17.51)
-----
NET ASSETS................................................. 100.00%
======
______________________________________________________________________
* -The Fund held a long position in U.S. Treasury futures on June 30,
2000 which increased U.S. Bond exposure from 25.20% to 40.21%.The
Fund held a short position in stock index futures on June 30, 2000
which reduced U.S. Equity exposure from 36.72% to 21.58%.These
adjustments result in a net increase in the Fund's exposure to Short-
Term Investments from 17.45% to 17.58%.
======================================================================
10
<PAGE>
GLOBAL FUND -- SCHEDULE OF INVESTMENTS
June 30, 2000
________________________________________________________________________________
<TABLE>
<CAPTION>
Shares Value
-------- -------
<S> <C> <C>
Equities -- 54.62%
U.S. Equities -- 36.72%
Advanced Micro Devices, Inc. (b).................................. 55,200 $ 4,264,200
Allergan, Inc. 40,400 3,009,800
Alza Corp. (b).................................................... 35,200 2,081,200
American Electric Power Co., Inc.................................. 43,560 1,290,465
American General Corp............................................. 14,800 902,800
American Standard Companies, Inc. (b)............................. 27,500 1,127,500
AmSouth Bancorp................................................... 32,087 505,370
Aon Corp.......................................................... 45,047 1,399,272
Associates First Capital Corp., Class A........................... 61,400 1,369,987
Baxter International, Inc......................................... 29,300 2,060,156
Brinson U.S. Small Capitalization
Equity Fund (b) 397,192 8,140,053
Burlington Northern Santa Fe Corp................................. 133,700 3,066,744
Cardinal Health, Inc.............................................. 300 22,200
Carnival Corp., Class A........................................... 25,700 501,150
CIGNA Corp........................................................ 22,300 2,085,050
Circuit City Stores-Circuit City Group............................ 17,300 574,144
CMS Energy Corp................................................... 24,600 544,275
CommScope, Inc. (b)............................................... 3,900 159,900
Compaq Computer Corp.............................................. 67,700 1,730,581
Computer Sciences Corp. (b)....................................... 2,900 216,594
Compuware Corp. (b)............................................... 117,800 1,222,175
CVS Corp.......................................................... 13,500 540,000
Delhaize America, Inc............................................. 1 18
Dell Computer Corp. (b)........................................... 15,700 774,206
Eastman Chemical Co............................................... 14,700 701,925
Electronic Data Systems Corp...................................... 61,700 2,545,125
Emerson Electric Co............................................... 33,300 2,010,487
Entergy Corp...................................................... 36,300 986,906
Exxon Mobil Corp.................................................. 16,600 1,303,100
Federated Department Stores, Inc. (b)............................. 20,000 675,000
FedEx Corp. (b)................................................... 84,800 3,222,400
First Data Corp................................................... 35,830 1,778,064
Fleet Boston Financial Corp....................................... 42,515 1,445,510
Fort James Corp................................................... 46,300 1,070,687
Gateway, Inc. (b)................................................. 37,800 2,145,150
GATX Corp......................................................... 10,700 363,800
Genzyme Corp. (b)................................................. 17,600 1,046,100
GreenPoint Financial Corp......................................... 51,300 961,875
Household International, Inc...................................... 27,700 1,151,281
Illinois Tool Works, Inc.......................................... 35,000 1,995,000
IMC Global, Inc................................................... 57,000 741,000
Johnson & Johnson Co.............................................. 18,900 1,925,437
Johnson Controls, Inc............................................. 17,200 882,575
Kimberly-Clark Corp............................................... 22,200 1,273,725
Kroger Co. (b).................................................... 71,600 1,579,675
Lafarge Corp...................................................... 21,300 447,300
Lear Corp. (b).................................................... 38,400 768,000
Lexmark International Group, Inc. (b)............................. 20,500 1,378,625
Lincoln National Corp............................................. 26,900 971,762
Lyondell Chemical Co.............................................. 33,200 556,100
Martin Marietta Materials, Inc.................................... 15,984 646,353
Masco Corp........................................................ 96,300 1,739,419
Mattel, Inc....................................................... 104,300 1,375,456
Mead Corp......................................................... 25,100 633,775
Microsoft Corp. (b)............................................... 16,000 1,280,000
Motorola, Inc..................................................... 23,230 $ 675,122
New York Times Co................................................. 18,600 734,700
Newell Rubbermaid, Inc............................................ 54,300 1,398,225
Nextel Communications, Inc. (b)................................... 29,700 1,817,269
Norfolk Southern Corp............................................. 31,800 473,025
Owens-Illinois, Inc. (b).......................................... 14,500 169,469
Peco Energy Co.................................................... 39,900 1,608,469
Pentair, Inc...................................................... 23,396 830,558
PepsiCo, Inc...................................................... 33,500 1,488,656
PNC Bank Corp..................................................... 21,700 1,017,187
Praxair, Inc...................................................... 28,400 1,063,225
Raytheon Co., Class B............................................. 49,800 958,650
Sara Lee Corp..................................................... 24,900 480,881
SBC Communications, Inc........................................... 44,100 1,907,325
Smurfit-Stone Container Corp. (b)................................. 28,400 365,650
Southdown, Inc.................................................... 18,436 1,064,679
St. Jude Medical, Inc. (b)........................................ 45,400 2,082,725
Tellabs, Inc. (b)................................................. 13,900 951,281
Texas Instruments, Inc............................................ 13,100 899,806
Tyson Foods, Inc., Class A........................................ 33,698 294,858
Ultramar Diamond Shamrock Corp.................................... 27,502 682,393
Unisys Corp. (b).................................................. 29,600 431,050
United Health Group, Inc.......................................... 20,600 1,766,450
USG Corp.......................................................... 12,200 370,575
Viad Corp......................................................... 26,200 713,950
W.W. Grainger, Inc................................................ 19,500 600,844
Wal-Mart Stores, Inc.............................................. 15,100 870,138
Watson Pharmaceutical Co. (b)..................................... 18,800 1,010,500
Wells Fargo and Co................................................ 46,600 1,805,750
Westvaco Corp..................................................... 17,400 431,738
Xerox Corp........................................................ 21,000 435,750
XL Capital Ltd.................................................... 10,400 562,900
York International Corp........................................... 20,100 525,113
-----------
Total U.S. Equities............................................... 107,678,363
-----------
Global (Ex-U.S.) Equities -- 14.51%
Australia -- 0.82%
Amcor Ltd......................................................... 10,220 35,841
Amp Ltd........................................................... 11,300 115,337
Boral Ltd. (b).................................................... 19,100 24,082
Brambles Industries Ltd........................................... 3,670 113,117
Broken Hill Proprietary Co., Ltd.................................. 13,910 164,943
CSR Ltd........................................................... 11,070 30,839
Howard Smith Ltd.................................................. 9,300 45,563
Lend Lease Corp., Ltd............................................. 7,932 101,476
National Australia Bank Ltd....................................... 20,727 347,176
News Corp., Ltd................................................... 23,489 324,364
News Corp., Ltd., Preferred....................................... 8,936 108,188
Origin Energy Ltd. (b)............................................ 19,100 18,463
Qantas Airways Ltd................................................ 12,937 26,254
QBE Insurance Group Ltd........................................... 21,471 105,347
Rio Tinto Ltd..................................................... 4,645 77,025
Santos Ltd........................................................ 20,490 62,618
Telstra Corp., Ltd................................................ 71,700 291,869
Westpac Banking Corp., Ltd........................................ 36,928 267,167
WMC Ltd........................................................... 10,640 47,739
Woolworth's Ltd................................................... 26,660 98,681
---------
2,406,089
</TABLE>
================================================================================
11
<PAGE>
GLOBAL FUND - SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
June 30, 2000
____________________________________________________________________________________________________
Shares Values
------ ------
<S> <C> <C>
Austria -- 0.01%
Austria Tabakwerke AG........................................ 800 $ 29,755
-----------
Belgium -- 0.14%.............................................
Electrabel S.A............................................... 740 183,654
Fortis B..................................................... 8,027 234,533
-----------
418,187
-----------
Canada -- 0.45%
Agrium, Inc.................................................. 9,040 77,484
Alcan Aluminum Ltd........................................... 2,520 78,234
Bank of Montreal............................................. 1,020 43,025
Canadian National Railway Co................................ 4,920 143,114
Canadian Pacific Ltd......................................... 5,573 144,431
Hudson's Bay Co.............................................. 10,210 108,185
Imperial Oil Ltd............................................. 2,710 66,118
Magna Entertainment Corp. (b)................................ 412 2,711
Magna International, Inc. Class A............................ 2,060 96,695
Nova Chemicals Corp.......................................... 5,904 123,921
Potash Corporation of Saskatchewan, Inc...................... 1,060 57,947
Royal Bank of Canada......................................... 2,970 151,837
Shaw Communications, Inc., Class B........................... 5,160 127,111
TransCanada Pipelines Ltd.................................... 2,390 18,227
Westcoast Energy, Inc........................................ 4,650 71,553
-----------
1,310,593
-----------
Denmark -- 0.07%
Tele Danmark A/S............................................. 3,120 210,876
-----------
Finland -- 0.28%
Metso Oyj.................................................... 2,700 32,611
Nokia Oyj.................................................... 7,340 376,080
Sampo Insurance Co., Ltd., Series A.......................... 6,000 244,443
UPM-Kymmene Corp............................................. 6,270 156,271
-----------
809,405
-----------
France -- 1.22%
Air France (b)............................................... 5,070 87,968
Air Liquide.................................................. 1,656 216,779
Alcatel...................................................... 3,750 246,959
Alcatel S.A. ADR............................................. 3,693 245,585
Axa.......................................................... 866 136,974
Banque Nationale de Paris.................................... 5,809 561,304
Cie de Saint Gobain.......................................... 2,117 287,356
CSF Thomson.................................................. 3,000 118,655
Groupe Danone................................................ 1,460 194,538
L'Oreal S.A.................................................. 130 113,028
Rhone-Poulenc, Class A....................................... 3,074 225,278
Schneider S.A................................................ 1,710 119,662
Societe Generale............................................. 4,420 266,931
Suez Lyonnaise des Eaux S.A.................................. 450 79,156
Total Fina S.A., Class B..................................... 3,522 542,215
Vivendi...................................................... 1,470 130,275
-----------
3,572,663
-----------
Germany -- 0.71%
Allianz AG................................................... 1,430 510,347
Bayer AG..................................................... 9,680 372,097
Bayerische Motoren Werke AG.................................. 4,600 140,665
Continental AG............................................... 6,250 105,446
Linde AG..................................................... 2,800 113,536
SAP AG....................................................... 810 $ 122,992
Siemens AG................................................... 1,750 263,039
Veba AG...................................................... 9,289 449,673
-----------
2,077,795
-----------
Hong Kong -- 0.06%
Henderson Land Development Co., Ltd.......................... 39,000 171,603
-----------
Ireland -- 0.09%
Bank of Ireland.............................................. 15,000 94,254
Eircom PLC................................................... 68,700 184,396
-----------
278,650
-----------
Italy -- 0.45%
Assicurazioni Generali....................................... 3,800 130,772
ENI Spa...................................................... 52,000 301,575
ENI Spa ADR.................................................. 3,070 178,636
La Rinascente Spa............................................ 10,740 61,154
San Paolo-imi Spa............................................ 10,511 187,309
Telecom Italia Mobile Spa.................................... 29,000 297,453
Telecom Italia Spa........................................... 12,000 165,646
-----------
1,322,545
-----------
Japan -- 5.12%
Acom Co., Ltd................................................ 2,900 244,488
Asahi Bank Ltd............................................... 23,000 96,952
Bank of Tokyo-Mitsubushi Ltd................................. 31,000 375,323
Benesse Corp................................................. 1,400 97,254
Bridgestone Corp............................................. 8,000 169,746
Canon, Inc................................................... 12,000 598,837
Dai Nippon Printing Co., Ltd................................. 8,000 141,317
Dai-Ichi Kangyo Bank......................................... 14,000 106,517
Daikin Industries Ltd........................................ 5,000 116,488
Denso Corp................................................... 7,000 170,691
East Japan Railway Co........................................ 43 250,347
Fanuc........................................................ 2,300 234,554
Fuji Bank Ltd................................................ 22,000 167,591
Fuji Photo Film Co., Ltd..................................... 5,000 205,094
Fujitsu...................................................... 21,000 728,415
Hitachi Ltd.................................................. 20,000 289,211
Honda Motor Co............................................... 13,000 443,552
Hoya Corp.................................................... 2,000 179,576
Ito Yokado Co., Ltd.......................................... 2,000 120,599
Kamigumi Co., Ltd............................................ 24,000 126,799
Kao Corp..................................................... 10,000 306,224
Kirin Brewery Co., Ltd....................................... 10,000 125,230
Kuraray Co., Ltd............................................. 18,000 206,871
Kyocera Corp................................................. 400 68,012
Matsushita Electric Industrial Co............................ 18,000 467,842
Mitsubishi Corp.............................................. 12,000 108,766
Mitsubishi Estate Co., Ltd................................... 28,000 330,268
Mitsubishi Trusts and Banking Corp........................... 9,000 70,006
Murata Manufacturing Co., Inc................................ 1,000 143,850
NEC Corp..................................................... 22,000 692,406
NGK Insulators............................................... 15,000 186,286
Nintendo Corp., Ltd.......................................... 2,700 472,605
Nippon Steel Co.............................................. 02,000 214,980
Nippon Telegraph & Telephone Corp............................ 77 1,026,133
Nissin Food Products Co...................................... 5,300 135,249
Nomura Securities Co., Ltd................................... 23,000 564,104
Omron Corp................................................... 3,000 81,660
Orix Corp.................................................... 2,100 310,619
</TABLE>
===============================================================================
12
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
________________________________________________________________________________
<TABLE>
<CAPTION>
Shares Value
----------- -------------
<S> <C> <C>
Rohm Co............................................. 400 $ 117,197
Sankyo Co., Ltd..................................... 11,000 248,996
Santen Pharmaceutical Co., Ltd...................... 6,000 145,173
Secom Co., Ltd...................................... 4,000 292,992
Shin-Etsu Chemical Co., Ltd......................... 3,000 152,545
Softbank Corp....................................... 1,200 163,319
Sony Corp........................................... 6,800 636,265
Sumitomo Bank....................................... 22,000 270,309
Sumitomo Chemical Co................................ 39,000 235,168
Sumitomo Electric Industries........................ 8,000 137,460
Takeda Chemical Industries.......................... 6,000 394,688
Takefuji Corp....................................... 1,200 145,286
TDK Corp............................................ 3,000 432,116
Tokio Marine & Fire Insurance Co.................... 14,000 161,958
Tokyo Electric Power................................ 6,000 146,590
Tokyo Gas Co., Ltd.................................. 60,000 168,990
Toyoda Automatic Loom Works......................... 2,000 43,382
Toyota Motor Corp................................... 11,000 502,150
Yamanouchi Pharmaceutical Co., Ltd.................. 2,000 109,447
Yamato Transport Co., Ltd........................... 6,000 149,426
------------
15,027,919
------------
Netherlands -- 0.68%
ABN-AMRO Holdings NV................................ 6,594 162,197
Aegon NV............................................ 5,554 198,428
Elsevier NV......................................... 24,970 303,750
Heineken NV......................................... 7,700 470,552
ING Groep NV........................................ 4,108 278,805
Koninklijke Philips Electronics NV.................. 2,600 123,122
Royal KPN NV........................................ 600 26,946
TNT Post Group NV................................... 4,242 114,875
Wolters Kluwer NV................................... 12,213 326,635
------------
2,005,310
------------
New Zealand -- 0.05%
Auckland International Airport Ltd.................. 17,350 20,584
Carter Holt Harvey Ltd.............................. 26,940 23,464
Lion Nathan Ltd..................................... 20,220 45,218
Telecom Corp. of New Zealand Ltd.................... 16,410 57,558
------------
146,824
------------
Portugal -- 0.19%
Brisa-Auto Estradas de
Portugal S.A....................................... 14,800 127,969
Electricidade de Portugal S.A....................... 6,900 125,804
Portugal Telecom.................................... 26,000 293,101
------------
546,874
------------
Singapore -- 0.10%
DBS Group Holdings Ltd.............................. 6,000 77,039
SIA Engineering Co., Ltd. (b)....................... 15,000 16,830
Singapore Airport Terminal Services Ltd. (b)........ 5,000 6,073
United Overseas Bank Ltd............................ 30,116 196,825
------------
296,767
------------
Spain -- 0.25%
Banco Popular Espanol S.A........................... 3,643 113,147
Banco Santander Central Hispano S.A................. 17,843 189,002
Endesa S.A.......................................... 5,757 111,973
Tabacalera S.A...................................... 20,200 311,562
------------
725,684
------------
Sweden -- 0.41%
Electrolux AB, B Shares............................. 11,510 $ 179,126
Ericsson, B Shares.................................. 23,290 463,357
Investor AB, B Shares............................... 10,100 138,758
Nordic Baltic Holdings AB........................... 38,636 292,931
Swedish Match AB.................................... 36,780 114,060
------------
1,188,232
------------
Switzerland -- 0.42%
Givaudan (b)........................................ 24 7,328
Nestle S.A. (Reg.).................................. 155 311,220
New ABB Ltd......................................... 1,274 152,972
Novartis AG (Reg.).................................. 240 381,379
Roche Holding AG (Gen.)............................. 21 205,080
Swisscom AG (Reg.).................................. 470 163,305
------------
1,221,284
------------
United Kingdom -- 2.99%
Allied Zurich PLC................................... 13,052 154,419
AstraZeneca PLC..................................... 4,002 186,907
BP Amoco PLC........................................ 65,946 632,954
British Airways PLC................................. 25,000 143,820
British Telecommunications PLC...................... 37,000 478,359
Charter PLC......................................... 28,676 165,401
De Vere Group PLC................................... 8,899 41,494
Diageo PLC.......................................... 28,209 253,243
FKI PLC............................................. 33,040 117,545
Glaxo Wellcome PLC.................................. 32,260 941,110
House of Fraser PLC................................. 30,780 22,460
HSBC Holdings PLC................................... 10,500 120,093
Kelda Group PLC..................................... 35,080 171,536
Lloyds TSB Group PLC................................ 41,969 396,467
Marconi PLC......................................... 41,360 538,485
Marks & Spencer PLC................................. 33,060 116,239
National Power PLC.................................. 31,500 200,765
Nycomed Amersham PLC................................ 22,844 226,866
Peninsular & Oriental Steam Navigation Co........... 12,040 103,166
Powergen PLC........................................ 18,000 153,963
Prudential Corp. PLC................................ 17,040 249,712
Reckitt & Benckiser PLC............................. 10,500 117,629
Reed International PLC.............................. 26,010 226,414
RJB Mining PLC...................................... 26,590 22,542
Royal & Sun Alliance Insurance Group PLC............ 49,884 323,976
Royal Bank of Scotland Group PLC.................... 23,000 385,103
Scottish & Newcastle PLC............................ 20,000 163,349
Scottish & Southern Energy PLC...................... 26,380 242,015
Shell Transport & Trading Co........................ 27,000 225,426
SmithKline Beecham PLC.............................. 11,000 144,047
Tesco PLC........................................... 66,190 205,920
Thames Water PLC.................................... 8,497 109,983
Trinity Mirror PLC.................................. 15,815 141,977
Unilever PLC........................................ 40,000 242,222
United News & Media PLC............................. 19,990 287,495
Vodafone Group PLC.................................. 129,957 525,297
------------
8,778,399
------------
Total Global (Ex-U.S.) Equities..................... 42,545,454
------------
Emerging Markets Equities -- 3.39%
Brinson Emerging Markets Equity Fund (b)............ 925,032 9,943,169
------------
Total Equities (Cost $159,505,128).................. 160,166,986
------------
</TABLE>
================================================================================
13
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
------------ -----------
<S> <C> <C>
Bonds -- 45.44%
U.S. Bonds -- 25.20%
U.S. Corporate Bonds -- 4.42%
Avon Products, Inc., 7.150%, due 11/15/09............ $ 85,000 $ 81,401
Bank of America Corp.,
7.800%, due 02/15/10............................... 500,000 497,355
Bombardier Capital, Inc. MTN, 144A,
7.300%, due 12/15/02............................... 565,000 555,651
Burlington Resources, 7.375%,
due 03/01/29....................................... 300,000 279,225
Capital One Bank, BKNT,
8.250%, due 06/15/05............................... 150,000 149,703
Cendant Corp., 7.750%, due 12/01/03.................. 640,000 618,070
Centaur Funding Corp., Class B, 144A,
9.080%, due 04/21/20 (b)........................... 250 248,203
Centaur Funding Corp., Class C, 144A,
0.000%, due 04/21/20 (b)........................... 1,430 220,756
Centex Corp., 9.750%, due 06/15/05................... 85,000 84,540
Key Bank, NA, 6.675%, due 07/23/01................... 2,000,000 2,001,070
Lowe's Cos., Inc., 8.250%, due 06/01/10.............. 220,000 224,794
Morgan Stanley Dean Witter, 7.750%,
due 06/15/05....................................... 300,000 301,564
Newcourt Credit Group, Inc., 6.875%,
due 02/16/05....................................... 600,000 574,524
PanAmSat Corp.
6.000%, due 01/15/03............................... 225,000 213,930
6.375%, due 01/15/08............................... 500,000 445,399
Petroleum Geo-Services, 7.425%,
due 03/20/02....................................... 3,500,000 3,495,604
Pharmacia Corp., 6.600%, due 12/01/28................ 545,000 480,560
Sempra Energy, 7.950%, due 03/01/10.................. 510,000 514,321
Service Corp., International,
6.000%, due 12/15/05............................... 500,000 270,000
Time Warner Cos., Inc.,
7.570%, due 02/01/24............................... 540,000 510,493
U.S. Airways, Inc., 1999 1A EETC,
8.360%, due 07/20/20............................... 160,000 158,533
Valero Energy, 8.375%, due 06/15/05.................. 150,000 152,341
Verizon Communications,
8.000%, due 10/15/29............................... 78,000 78,092
Washington Mutual Financial Corp.,
8.250%, due 06/15/05............................... 275,000 277,544
WorldCom, Inc., 8.250%, due 05/15/10................. 500,000 511,778
----------
12,945,451
----------
Asset-Backed Securities -- 0.35%
First Bank Corporate Card Master Trust,
97-1, Class A, 6.400%, due 02/15/03................ 1,055,000 1,040,852
----------
Corporate Mortgage-
Backed Securities -- 1.64%
Asset Securitization Corp., 96-D, Class A1B,
7.210%, due 10/13/26............................... 1,000,000 993,140
DLJ Commercial Mortgage Corp., 99-CG2,
Class A1B, 7.300%, due 06/10/32.................... 485,000 477,697
Norwest Asset Securities Corp., 96-2,
Class A9, 7.000%, due 09/25/11..................... 435,000 420,058
Prudential Home Mortgage Securities, 94-3,
Class A10, 6.500%, due 02/25/24.................... 730,000 703,450
Residential Asset Securitization Trust
96-A3, Class A11, 7.500%, due 07/25/11............. $ 592,550 $ 589,966
97-A10, Class A5, 7.250%, due 12/25/27............. 1,080,000 1,036,605
97-A7, Class A1, 7.500%, due 09/25/27.............. 73,220 72,956
97-A11, Class A2, 7.000%, due 01/25/28............. 2,253 2,243
Structured Asset Securities Corp., 98-RF1,
Class A, 8.713%, due 04/15/27...................... 465,205 472,183
Thrift Financing Corp., Class A4
11.250%, due 01/01/16.............................. 45,036 46,211
----------
4,814,509
----------
International Dollar Bonds -- 0.49%
Banco Santiago S.A., 7.000%,
due 07/18/07....................................... 650,000 578,640
Ras Laffan Liquified Natural Gas Co., Ltd.,
144A, 8.294%, due 03/15/14......................... 500,000 461,875
Royal Bank of Scotland, 8.817%,
due 03/31/05....................................... 385,000 396,610
----------
1,437,125
----------
U.S. Government Mortgage-
Backed Securities -- 1.89%
Fannie Mae Whole Loan, 95-W3,
Class A, 9.000%, due 04/25/25...................... 16,375 16,860
Federal Home Loan Mortgage Corp., Gold
5.500%, due 02/01/07............................... 612,268 573,835
8.000%, due 11/01/22............................... 60,818 61,474
9.000%, due 07/01/30, TBA.......................... 425,000 438,414
Federal Home Loan Mortgage Corp.
194, Class PO, due 04/01/28........................ 680,468 429,263
Federal National Mortgage Association
8.000%, due 02/01/13............................... 433,496 438,003
8.000%, due 07/01/30, TBA.......................... 600,000 602,250
Government National Mortgage Association
6.500%, due 01/15/29............................... 2,141,194 2,031,927
7.000%, due 06/15/27............................... 486,467 473,129
8.000%, due 08/15/22............................... 264,092 268,221
8.000%, due 11/15/22............................... 191,581 194,655
9.000%, due 11/15/04............................... 8,445 8,762
10.000%, due 05/15/01.............................. 423 449
----------
5,537,242
----------
U.S. Government Agencies -- 1.58%
Federal Home Loan Mortgage Corp.
5.750%, due 03/15/09............................... 2,500,000 2,269,865
Federal National Mortgage Association
5.250%, due 01/15/09............................... 60,000 52,653
6.000%, due 10/01/14............................... 1,006,020 951,674
6.500%, due 03/01/19............................... 270,506 258,518
7.000%, due 10/01/28............................... 905,496 874,162
7.000%, due 03/01/29............................... 246,315 237,890
----------
4,644,762
----------
</TABLE>
================================================================================
14
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
------------ ------------
<S> <C> <C>
U.S. Government Obligations -- 14.83%
U.S. Treasury Bond, 8.000%, due 11/15/21........... $ 1,160,000 $ 1,399,975
U.S. Treasury Inflation Indexed Note
3.625%, due 04/15/28............................. 13,325,000 13,451,798
3.875%, due 04/15/29............................. 24,270,000 25,203,220
U.S. Treasury Note
5.625%, due 05/15/08............................. 2,260,000 2,179,488
5.750%, due 08/15/03............................. 560,000 550,375
6.625%, due 02/15/27............................. 80,000 84,825
7.000%, due 07/15/06............................. 580,000 600,844
------------
43,470,525
------------
Total U.S. Bonds................................... 73,890,466
------------
Shares
------------
High Yield Bonds -- 5.46%
Brinson High Yield Fund (b)........................ 1,175,251 16,003,393
------------
Face
Amount
------------
Global (Ex-U.S.) Bonds --10.94%
Australia -- 0.43%
Queensland Treasury Corp., Global Notes
6.500%, due 06/14/05..........................AUD 1,500,000 904,374
8.000%, due 09/14/07............................. 530,000 347,274
------------
1,251,648
------------
Canada -- 1.12%
Government of Canada, Real Return Bond
4.250%, due 12/01/21..........................CAD 2,650,000 2,174,978
Government of Canada
6.000%, due 06/01/08............................. 550,000 373,066
7.000%, due 12/01/06............................. 1,050,000 747,040
------------
3,295,084
------------
Denmark -- 0.99%
Depfa Pfandbrief Bank,
5.750%, due 03/04/09..........................DKK 930,000 888,553
Kingdom of Denmark
7.000%, due 12/15/04............................. 5,480,000 736,384
7.000%, due 11/10/24............................. 2,350,000 346,563
8.000%, due 03/15/06............................. 3,000,000 425,307
9.000%, due 11/15/00............................. 3,800,000 493,056
------------
2,889,863
------------
France -- 1.62%
Government of France (OAT)
4.000%, due 10/25/09..........................EUR 2,285,000 1,976,866
5.500%, due 04/25/29............................. 330,000 311,814
8.500%, due 12/26/12............................. 800,000 977,003
9.500%, due 01/25/01............................. 1,500,000 1,473,090
------------
4,738,773
------------
Germany -- 0.80%
Bundesrepublik Deutschland
6.250%, due 04/26/06............................. 625,000 630,555
6.250%, due 01/04/24............................. 320,000 334,477
8.375%, due 05/21/01............................. 1,185,000 1,168,791
DePfa Deutsche Pfandbriefbank AG,
4.750%, due 03/20/03............................. 240,000 226,647
------------
2,360,470
------------
Israel -- 0.17%
State of Israel, 7.750%, due 03/15/10...........ILS 500,000 $ 493,671
------------
Italy -- 1.23%
Buoni Poliennali Del Tes
3.250%, due 04/15/04..........................EUR 1,100,000 981,223
5.000%, due 05/01/08............................. 920,000 853,710
6.750%, due 07/01/07............................. 1,250,000 1,273,780
12.000%, due 09/01/02............................ 470,000 511,308
------------
3,620,021
------------
Japan -- 2.03%
Government of Japan
2.500%, due 03/20/20..........................JPY 18,000,000 180,718
3.000%, due 09/20/05............................. 178,500,000 1,844,300
3.100%, due 03/20/06............................. 175,800,000 1,829,257
4.600%, due 03/21/05............................. 189,900,000 2,087,236
------------
5,941,511
------------
Netherlands -- 0.43%
Government of Netherlands
5.500%, due 07/15/10..........................EUR 900,000 871,241
7.750%, due 03/01/05............................. 380,000 401,226
------------
1,272,467
------------
Spain -- 0.76%
Government of Spain
3.250%, due 01/31/05............................. 2,070,000 1,820,653
6.150%, due 01/31/13............................. 400,001 400,200
------------
2,220,853
------------
Sweden -- 0.51%
Government of Sweden
6.750%, due 05/05/14..........................SEK 4,400,000 571,873
10.250%, due 05/05/03............................ 7,200,000 926,987
------------
1,498,860
------------
United Kingdom -- 0.85%
Halifax PLC, Series EMTN, 8.750%,
due 07/10/06..................................GBP 720,000 1,175,834
U.K. Treasury, 5.750%, due 12/07/09................ 840,000 1,324,569
------------
2,500,403
------------
Total Global (Ex-U.S.) Bonds....................... 32,083,624
------------
Shares
-----------
Emerging Markets Bonds -- 3.84%
Brinson Emerging Markets Debt Fund (b)............. 444,026 11,243,315
------------
Total Bonds (Cost $130,749,445).................... 133,220,798
------------
Short-Term Investments -- 17.45%
Investment Companies -- 0.63%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund............................ 1,830,859 1,830,859
------------
</TABLE>
===============================================================================
16
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
------------ ------------
<S> <C> <C>
U.S. Corporate Bonds -- 9.57%
Centex Corp., Series B, MTN,
6.840%, due 04/02/01............................. $ 5,000,000 $ 4,997,755
Dominion Resources, Inc.
7.026%, due 01/26/01............................. 2,100,000 2,099,937
GATX Capital Corp., 6.500%, due 11/01/00........... 1,500,000 1,495,236
GATX Capital Corp., Series F, MTN
7.4175%, due 04/25/01............................ 1,000,000 1,000,425
Hertz Corp., 6.625%, due 07/15/00.................. 2,500,000 2,499,557
Kroger Co., 7.661%, due 10/01/00................... 5,000,000 4,999,000
NorAm Energy Corp., 7.500%, due 08/01/00........... 2,000,000 2,000,228
Raytheon Co., 6.300%, due 08/15/00................. 3,000,000 2,996,625
Safeway, Inc., 5.750%, due 11/15/00................ 4,000,000 3,980,204
Supervalue Stores, Inc., Series A, MTN
6.500%, due 10/06/00............................. 2,000,000 1,995,026
------------
28,063,993
------------
U.S. Government Obligations -- 1.08%
U.S. Treasury Bill, due 08/17/00................... 3,200,000 3,177,520
------------
Commercial Paper -- 6.17%
Boston Scientific Corp.,
7.350%, due 07/05/00............................. 2,500,000 2,497,958
Case Credit Corp.
7.250%, due 07/19/00............................. 2,000,000 1,992,750
7.400%, due 07/03/00............................. 3,900,000 3,898,397
Crown Cork & Seal, 7.150%, due 07/20/00............ 2,438,000 2,428,800
FMC Corp., 7.330%, due 07/03/00.................... 2,500,000 2,498,982
Phillips Petroleum, 7.150%, due 07/05/00........... 2,500,000 2,498,014
Southern Industries, 7.200%, due 07/06/00.......... 2,280,000 2,277,720
------------
18,092,621
------------
Total Short-Term Investments
(Cost $51,163,762)............................... 51,164,993
------------
Total Investments
(Cost $341,418,335) -- 117.51% (a)............... 344,552,777
Liabilities, less cash and
other assets -- (17.51%)......................... (51,338,578)
------------
Net Assets -- 100%................................. $293,214,199
============
</TABLE>
See accompanying notes to schedule of investments.
================================================================================
16
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $345,071,906; and net
unrealized depreciation consisted of:
Gross unrealized appreciation......................... $ 22,527,796
Gross unrealized depreciation......................... (23,046,925)
------------
Net unrealized depreciation..................... $ (519,129)
============
(b) Non-income producing security
FRN: Floating Rate Note -- The rate disclosed is that in effect at June 30,
2000.
MTN: Medium Term Note
TBA: Security is subject to delayed delivery.
144A: Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At June 30, 2000, the value of
these securities amounted to $1,486,485 or 0.51% of net assets.
Resettable Perpetual Preferred: A bond with either no maturity date or a
maturity date that is so far in the future that the bond will pay interest
indefinitely. The issuer generally retains the right to call such a bond.
FORWARD FOREIGN CURRENCY CONTRACTS
The Global Fund had the following open forward foreign currency contracts as of
June 30, 2000:
<TABLE>
<CAPTION>
Settlement Local Current Unrealized
Date Currency Value Gain/(Loss)
---------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Forward Foreign Currency Buy Contracts
Australian Dollar.......................... 08/08/00 29,200,000 $17,542,911 $(979,839)
Euro....................................... 08/08/00 52,600,000 50,546,789 (991,373)
Japanese Yen............................... 08/08/00 1,586,000,000 15,098,035 224,980
Swedish Krona.............................. 08/08/00 117,500,000 13,436,895 (112,559)
Swiss Franc................................ 08/08/00 4,600,000 2,839,471 315
Forward Foreign Currency Sale Contracts
Australian Dollar.......................... 08/08/00 2,700,000 1,622,118 7,332
British Pound.............................. 08/08/00 7,300,000 11,059,601 587,969
Danish Krone............................... 08/08/00 12,000,000 1,544,722 44,725
Euro....................................... 08/08/00 10,700,000 10,282,331 44,511
Japanese Yen............................... 08/08/00 3,370,000,000 32,080,945 157,503
Swedish Krona.............................. 08/08/00 117,500,000 13,436,895 326,561
---------
Total.................................... $(689,875)
=========
</TABLE>
FUTURES CONTRACTS
The Global Fund had the following open futures contracts as of June 30, 2000:
<TABLE>
<CAPTION>
Expiration Cost/ Current Unrealized
Date Proceeds Value Gain/Loss
------------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U.S. Interest Rate Futures Buy Contracts
5 year U.S. Treasury Notes, 300 contracts...... September 2000 $29,080,788 $29,704,686 $ 623,898
10 year U.S. Treasury Notes, 88 contracts...... September 2000 8,545,022 8,666,625 121,603
30 year U.S. Treasury Bonds, 58 contracts...... September 2000 5,555,992 5,645,937 89,945
Index Futures Sale Contracts
Standard & Poor's 500, 121 contracts........... September 2000 44,388,003 44,410,025 (22,022)
---------
Total........................................ $ 813,424
=========
</TABLE>
The market value of investments pledged to cover margin requirements for the
open futures positions at June 30, 2000 was $3,177,526.
================================================================================
See accompanying notes to financial statements.
17
<PAGE>
Global Equity Fund
--------------------------------------------------------------------------------
[LOGO] The Brinson Global Equity Fund Class I has provided an annualized
return of 10.51% since its inception on January 31, 1994. Over the
same period, the annualized return of the benchmark, the MSCI World
Equity (Free) Index, has been 14.69%. The Fund's performance was
achieved with a volatility of 10.97%, significantly less risk than its
benchmark's volatility of 12.96%. Year-to-date, the Fund returned -
2.58%, underperforming the benchmark return of -2.49%. During the
second quarter, returns were dominated by "old economy" stocks, and
the Fund outperformed the benchmark by a wide margin of 657 basis
points.
Trends of the last two years show a remarkable divergence between the
performance of "new economy" and "old economy" sectors. In contrast to
recent bull markets, the current price appreciation has been limited
to narrow groups of technology, media and telecommunications (TMT)
stocks. This phenomenon is most easily recognizable in the U.S. where
it began, but has also proliferated into all developed equity markets.
In the first quarter of 2000, the Fund's lag in performance was most
directly attributable to security selection in the U.S. market, where
we hold significant underweights to TMT sectors. Our strategy began to
pay off in the second quarter as investors began to question whether
TMT companies can grow and increase earnings fast enough and for long
enough to justify their high valuations.
While we are skeptical of inflated equity investment expectations, we
understand and appreciate the role of new and emerging technology in
business. Our analysis is focused on investing in companies with solid
fundamentals as well as promising uses for new technologies.
Specifically, we see opportunities in some "old economy" sectors such
as utilities, diversified financials, and food, beverages and tobacco
where some companies are leveraging their skills, assets and
competitive positions to take advantage of the Internet.
With respect to countries, we continue to overweight Japan and
underweight the U.S. However, we have reduced the underweight to the
U.S. from -8.95 at the end of the first quarter to -1.98 at the end of
the second quarter. We have also reduced our Japanese overweight from
6.09 at the end of the first quarter to 0.52 at the end of the second
quarter. The increased weight in the U.S. is allocated to sectors we
estimate to be undervalued including materials, transportation and
healthcare equipment/services.
================================================================================
18
<PAGE>
Global Equity Fund
--------------------------------------------------------------------------------
Total Return
<TABLE>
<CAPTION>
6 months 1 year 3 year 5 years Inception*
ended ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00 6/30/00
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brinson Global Equity Fund Class I -2.58% 2.69% 7.22% 13.42% 10.51%
-----------------------------------------------------------------------------------------------------
Brinson Global Equity Fund Class N -2.66 2.49 6.90 N/A 6.90
-----------------------------------------------------------------------------------------------------
MSCI World Equity (Free) Index -2.49 12.39 15.13 17.35 14.69
-----------------------------------------------------------------------------------------------------
</TABLE>
*Performance inception date of the Brinson Global Equity Fund Class I
and MSCI World Equity (Free) Index is 1/31/94 and inception date of
Class N is 6/30/97.
Total return includes reinvestment of all capital gain and income
distributions.
All total returns in excess of 1 year are average annualized returns.
Illustration of an Assumed Investment of $1,000,000
This chart shows the growth in the value of an investment in the
Brinson Global Equity Fund Class I and the MSCI World Equity (Free)
Index if you had invested $1,000,000 on January 31, 1994, and had
reinvested all your income dividends and capital gain distributions
through June 30, 2000. The performance of Class N shares will vary
based upon the different inception dates and class specific expenses.
No adjustment has been made for any income taxes payable by
shareholders on income dividends and capital gain distributions. Past
performance is no guarantee of future results. Share price and return
will vary with market conditions; investors may realize a gain or loss
upon redemption.
Brinson Global Equity Fund Class I
vs. MSCI World Equity (Free) Index
Wealth Value with Dividends Reinvested
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Label A B C D
-----------------------------------------------------------------------------------------------------
Label Brinson Global Equity Fund MSCI World Equity (Free) Index
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
1 1/31/94 $1,000,000 $1,000,000
2 2/28/94 $ 978,000 $ 986,865
3 3/31/94 $ 935,000 $ 944,349
4 4/30/94 $ 957,000 $ 974,078
5 5/31/94 $ 964,000 $ 976,963
6 6/30/94 $ 953,025 $ 974,101
7 7/31/94 $ 967,085 $ 992,749
8 8/31/94 $1,008,259 $1,022,751
9 9/30/94 $ 981,144 $ 995,748
10 10/31/94 $ 983,153 $1,024,396
11 11/30/94 $ 957,042 $ 980,245
12 12/31/94 $ 956,520 $ 989,551
13 1/31/95 $ 942,320 $ 975,025
14 2/28/95 $ 957,535 $ 989,499
15 3/31/95 $ 965,650 $1,037,236
16 4/30/95 $ 991,008 $1,073,521
17 5/31/95 $1,004,194 $1,083,208
18 6/30/95 $1,010,802 $1,082,851
19 7/31/95 $1,057,638 $1,137,066
20 8/31/95 $1,075,010 $1,111,688
21 9/30/95 $1,094,426 $1,144,526
22 10/31/95 $1,092,382 $1,126,746
23 11/30/95 $1,131,213 $1,166,018
24 12/31/95 $1,166,324 $1,200,236
25 1/31/96 $1,201,270 $1,222,676
26 2/29/96 $1,206,730 $1,230,112
27 3/31/96 $1,227,479 $1,250,534
28 4/30/96 $1,261,333 $1,279,914
29 5/31/96 $1,264,610 $1,280,939
30 6/30/96 $1,270,202 $1,287,765
31 7/31/96 $1,229,582 $1,242,255
32 8/31/96 $1,251,539 $1,256,945
33 9/30/96 $1,293,257 $1,306,231
34 10/31/96 $1,297,648 $1,315,223
35 11/30/96 $1,363,519 $1,389,368
36 12/31/96 $1,367,688 $1,367,286
37 1/31/97 $1,379,696 $1,384,047
38 2/28/97 $1,398,908 $1,399,822
39 3/31/97 $1,392,904 $1,371,807
40 4/30/97 $1,401,310 $1,416,808
41 5/31/97 $1,484,164 $1,504,478
42 6/30/97 $1,540,253 $1,579,321
43 7/31/97 $1,590,951 $1,652,216
44 8/31/97 $1,517,318 $1,540,396
45 9/30/97 $1,582,501 $1,624,144
46 10/31/97 $1,496,797 $1,538,889
47 11/30/97 $1,495,590 $1,565,803
48 12/31/97 $1,514,304 $1,584,937
49 1/31/98 $1,539,631 $1,629,401
50 2/28/98 $1,634,275 $1,739,612
51 3/31/98 $1,700,926 $1,812,828
52 4/30/98 $1,698,260 $1,830,553
53 5/31/98 $1,692,928 $1,808,342
54 6/30/98 $1,678,772 $1,850,637
55 7/31/98 $1,670,739 $1,847,845
56 8/31/98 $1,487,333 $1,601,540
57 9/30/98 $1,511,430 $1,630,041
58 10/31/98 $1,611,835 $1,777,635
59 11/30/98 $1,673,417 $1,883,507
60 12/31/98 $1,726,828 $1,975,069
61 1/31/99 $1,726,828 $2,018,467
62 2/28/99 $1,676,039 $1,964,831
63 3/31/99 $1,728,200 $2,046,335
64 4/31/99 $1,847,623 $2,127,345
65 5/31/99 $1,780,362 $2,048,976
66 6/30/99 $1,849,022 $2,144,287
67 7/31/99 $1,842,133 $2,137,917
68 8/31/99 $1,813,199 $2,313,954
69 9/30/99 $1,762,220 $2,113,893
70 10/31/99 $1,787,020 $2,223,683
71 11/30/99 $1,831,110 $2,286,144
72 12/31/99 $1,949,056 $2,471,305
73 1/31/2000 $1,816,581 $2,329,907
74 2/29/2000 $1,780,037 $2,335,984
75 3/31/2000 $1,842,467 $2,497,657
76 4/30/2000 $1,822,672 $2,391,940
77 5/31/2000 $1,837,899 $2,331,385
78 6/30/2000 $1,898,807 $2,409,872
</TABLE>
Fund returns are net of all fees and costs, while the Index returns
are based solely on market returns without deduction for fees or
transaction costs for rebalancing.
19
<PAGE>
Global Equity Fund
--------------------------------------------------------------------------------
[LOGO] Market Allocation
As of June 30,2000
Current
Benchmark Strategy
----------------------------------------------------------------------
U.S. 49.3% 46.8%
Australia 1.3 3.2
Austria 0.1 0.0
Belgium 0.4 0.8
Canada 2.6 1.5
Denmark 0.4 0.3
Finland 1.5 1.7
France 5.5 5.5
Germany 4.1 1.5
Hong Kong 1.0 0.6
Ireland 0.2 0.6
Italy 2.1 1.5
Japan 12.9 13.6
Netherlands 2.6 3.6
New Zealand 0.1 0.0
Norway 0.2 0.0
Portugual 0.2 0.2
Singapore 0.5 0.6
Spain 1.3 2.7
Sweden 1.5 2.2
Switzerland 2.8 1.8
United Kingdom 9.4 11.3
Cash Reserves 0.0 0.0
----------------------------------------------------------------------
100.0% 100.0%
Top Ten U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
----------------------------------------------------------------------
1. Microsoft Corp. 2.00%
2. Johnson & Johnson Co. 1.57
3. PepsiCo, Inc. 1.45
4. Alza Corp. 1.38
5. FedEx Corp. 1.34
6. Advanced Micro Devices, Inc. 1.33
7. Texas Instruments, Inc. 1.31
8. CIGNA Corp. 1.29
9. SBC Communications, Inc. 1.25
10. Wells Fargo and Co. 1.23
----------------------------------------------------------------------
Currency Allocation
As of June 30, 2000
Current
Benchmark Strategy
---------------------------------------------------------------------
U.S. 49.3% 44.3%
Australia 1.3 9.2
Canada 2.6 2.6
Denmark 0.4 0.4
Euro 18.0 31.9
Hong Kong 1.0 0.0
Japan 12.9 5.0
New Zealand 0.1 0.2
Norway 0.2 0.2
Singapore 0.5 0.5
Sweden 1.5 1.5
Switzerland 2.8 2.8
United Kingdom 9.4 1.4
---------------------------------------------------------------------
100.0% 100.0%
Top Ten Global (Ex-U.S.) Equity Holdings
As of June 30. 2000
Percent of
Net Assets
---------------------------------------------------------------------
1. Banque Nationale de Paris 1.21%
2. Canon, Inc. 1.09
3. Bayer AG 1.02
4. Diageo PLC 1.01
5. Heineken NV 1.01
6. Nippon Telegraph & Telephone Corp. 0.95
7. Honda Motor Co. 0.94
8. National Australia Bank Ltd., Preferred 0.90
9. Kao Corp. 0.89
10. Nycomed Amersham PLC 0.85
----------------------------------------------------------------------
20
<PAGE>
GLOBAL EQUITY FUND
[LOGO] Industry Diversification
<TABLE>
<CAPTION>
As a Percent of Net Assets
As of June 30, 2000
------------------------------------------------------------------------------
<S> <C>
U.S. EQUITIES
Energy........................................................... 1.67%
Capital Investment
Capital Goods.................................................... 0.40
Electronic Components............................................ 2.23
Technology....................................................... 1.64
------
Basic Industries
Chemicals........................................................ 1.95
Housing/Paper.................................................... 2.22
Metals........................................................... 1.75
------
Computers
Software......................................................... 2.00
Systems.......................................................... 0.69
------
Consumer
Autos/Durables................................................... 0.74
Health: Drugs.................................................... 3.63
Health: Non-Drugs................................................ 3.78
Non-Durables..................................................... 1.45
Retail/Apparel................................................... 2.77
------
12.37
Financial
Banks............................................................ 2.21
Non-Banks........................................................ 2.41
------
4.62
Telecommunications Services....................................... 3.22
Transportation.................................................... 2.55
Services/Misc..................................................... 3.77
Utilities......................................................... 1.59
------
Total U.S. Equities........................................... 42.67
GLOBAL (EX-U.S.) EQUITIES
Aerospace & Military.............................................. 0.44%
Appliances & Households........................................... 1.10
Autos/Durables.................................................... 0.94
Banking........................................................... 8.06
Beverages and Tobacco............................................. 3.03
Broadcasting & Publishing......................................... 3.26
Building Materials................................................ 0.17
Business & Public Service......................................... 1.47
Chemicals......................................................... 2.71
Consumer.......................................................... 0.01
Data Processing................................................... 1.09
Electric Components............................................... 2.07
Electronics....................................................... 0.72
Energy............................................................ 1.15
Financial Services................................................ 2.29
Food & House Products............................................. 3.02
Forest Products................................................... 0.67
Health & Personal Care............................................ 3.16
Industrial Components............................................. 0.41
Insurance......................................................... 2.36
Machinery & Engineering........................................... 0.49
Merchandising..................................................... 0.87
Multi-Industry.................................................... 0.28
Non-Ferrous Metals................................................ 0.25
Real Estate....................................................... 1.06
Recreation........................................................ 1.06
Textile & Apparel................................................. 0.21
Telecommunications................................................ 4.98
Transportation.................................................... 0.98
Utilities......................................................... 2.86
------
Total Global (Ex-U.S.) Equities............................... 51.17
SHORT-TERM INVESTMENTS............................................ 3.56
------
TOTAL INVESTMENTS............................................. 97.40
CASH AND OTHER ASSETS, LESS LIABILITIES........................... 2.60
------
NET ASSETS........................................................ 100.00%
======
</TABLE>
================================================================================
21
<PAGE>
GLOBAL EQUITY FUND -- SCHEDULE OF INVESTMENTS
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
---------- -----------
<S> <C> <C>
Equities -- 93.84%
U.S. Equities -- 42.67%
Advanced Micro Devices, Inc. (b).............................. 11,900 $ 919,275
Allergan, Inc................................................. 7,500 558,750
Alza Corp. (b)................................................ 16,100 951,912
American Electric Power Co., Inc.............................. 15,480 458,595
Baxter International, Inc..................................... 7,800 548,437
Bristol-Myers Squibb Co....................................... 7,800 454,350
Burlington Northern Santa Fe Corp............................. 36,300 832,631
CIGNA Corp.................................................... 9,500 888,250
Compaq Computer Corp.......................................... 10,200 260,738
Computer Sciences Corp. (b)................................... 6,900 515,344
Compuware Corp. (b)........................................... 32,300 335,112
CVS Corp...................................................... 8,000 320,000
Dell Computer Corp. (b)....................................... 9,600 473,400
Dominion Resources, Inc....................................... 10,600 454,475
E.I. du Pont de Nemours and Co................................ 4,100 179,375
Electronic Data Systems Corp.................................. 5,200 214,500
Emerson Electric Co........................................... 10,500 633,937
Exxon Mobil Corp.............................................. 8,900 698,650
Federated Department Stores, Inc. (b)......................... 4,200 141,750
FedEx Corp. (b)............................................... 24,300 923,400
First Data Corp............................................... 15,004 744,573
Fort James Corp............................................... 12,500 289,063
Gateway, Inc. (b)............................................. 5,600 317,800
Genzyme Corp. (b)............................................. 6,400 380,400
GreenPoint Financial Corp..................................... 11,700 219,375
Household International, Inc.................................. 11,700 486,281
Illinois Tool Works, Inc...................................... 8,700 495,900
Johnson & Johnson Co.......................................... 10,600 1,079,875
Kimberly-Clark Corp........................................... 10,400 596,700
Lafarge Corp.................................................. 3,900 81,900
Lear Corp. (b)................................................ 11,900 238,000
Lexmark International Group, Inc. (b)......................... 4,100 275,725
Lincoln National Corp......................................... 10,900 393,762
Masco Corp.................................................... 39,200 708,050
Mattel, Inc................................................... 18,600 245,288
Microsoft Corp. (b)........................................... 17,200 1,376,000
Motorola, Inc................................................. 17,715 514,842
New York Times Co............................................. 14,500 572,750
Newell Rubbermaid, Inc........................................ 7,400 190,550
Nextel Communications, Inc. (b)............................... 6,900 422,194
Peco Energy Co................................................ 15,910 641,372
PepsiCo, Inc.................................................. 22,400 995,400
PNC Bank Corp................................................. 5,900 276,563
Praxair, Inc.................................................. 6,600 247,088
Raytheon Co., Class B......................................... 14,700 282,975
Reliaster Financial Corp...................................... 3,400 178,288
SBC Communications, Inc....................................... 19,900 860,675
Smurfit-Stone Container Corp. (b)............................. 24,800 319,300
Southdown, Inc................................................ 4,176 241,164
St. Jude Medical, Inc. (b).................................... 12,900 591,787
Tellabs, Inc. (b)............................................. 6,100 417,469
Texas Instruments, Inc........................................ 13,100 899,806
U.S. Bancorp.................................................. 9,263 178,313
Unisys Corp. (b).............................................. 19,000 276,688
W.W. Grainger, Inc............................................ 8,900 274,231
Wal-Mart Stores, Inc.......................................... 12,700 731,837
Watson Pharmaceutical Co. (b)................................. 9,900 532,125
Wells Fargo and Co............................................ 21,900 848,625
XL Capital Ltd................................................ 3,700 200,263
------------
Total U.S. Equities........................................... 29,385,878
------------
Global (Ex-U.S.) Equities -- 51.17%
Australia -- 3.14%
Broken Hill Proprietary Co., Ltd.............................. 27,650 327,870
Lend Lease Corp., Ltd......................................... 11,294 144,487
National Australia Bank Ltd., Preferred....................... 21,900 620,044
News Corp., Ltd............................................... 22,540 311,259
QBE Insurance Group Ltd....................................... 25,789 126,533
Rio Tinto Ltd................................................. 10,263 170,185
Westpac Banking Corp., Ltd.................................... 64,145 464,076
------------
2,164,454
------------
Belgium -- 0.79%
Electrabel S.A................................................ 1,530 379,717
Fortis B...................................................... 5,542 161,927
------------
541,644
------------
Canada -- 1.45%
Canadian National Railway Co.................................. 13,300 386,873
NOVA Chemicals Corp........................................... 14,200 298,050
Shaw Communications, Inc., Class B............................ 12,700 312,850
------------
997,773
------------
Denmark -- 0.28%
Tele Danmark A/S............................................... 2,900 196,006
------------
Finland -- 1.36%
Metso Oyj..................................................... 22,300 269,347
Nokia Oyj..................................................... 4,000 204,948
UPM-Kymmene Corp.............................................. 18,500 461,086
------------
935,381
------------
France -- 5.35%
Air Liquide................................................... 3,676 481,352
Banque Nationale de Paris..................................... 8,602 831,183
Cie de Saint Gobain........................................... 876 118,906
CSF Thomson................................................... 7,465 295,254
Groupe Danone................................................. 1,860 247,836
Rhone-Poulenc, Class A........................................ 6,390 468,290
Schneider S.A................................................. 6,150 430,362
Total Fina S.A., Class B...................................... 3,029 466,317
Vivendi....................................................... 3,899 345,539
------------
3,685,039
------------
Germany -- 1.43%
Bayer AG...................................................... 18,190 699,220
Continental AG................................................ 16,850 284,282
------------
983,502
------------
Hong Kong -- 0.59%
Cheung Kong Holdings, Ltd..................................... 20,000 221,287
Guoco Group Ltd............................................... 93,000 186,709
------------
407,996
------------
Ireland -- 0.55%
Bank of Ireland............................................... 41,200 258,884
Eircom PLC.................................................... 45,100 121,052
------------
379,936
------------
</TABLE>
================================================================================
22
<PAGE>
GLOBAL EQUITY FUND -- SCHEDULE OF INVESTMENTS
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
---------- -----------
<S> <C> <C>
Italy -- 1.45%
San Paolo-imi Spa............................................ 19,811 $ 353,039
Telecom Italia Mobile Spa.................................... 43,800 449,257
Telecom Italia Spa........................................... 14,000 193,253
-----------
995,549
-----------
Japan -- 13.08%
Acom Co., Ltd................................................ 3,300 278,210
Bank of Tokyo-Mitsubushi Ltd................................. 42,000 508,501
Benesse Corp................................................. 3,600 250,083
Canon, Inc................................................... 15,000 748,547
Dai-Ichi Kangyo Bank......................................... 38,000 289,117
Fuji Photo Film Co., Ltd..................................... 11,000 451,207
Honda Motor Co............................................... 19,000 648,268
Hoya Corp.................................................... 2,000 179,576
Kao Corp..................................................... 20,000 612,447
Mitsubishi Chemical Corp..................................... 94,000 386,466
Mitsubishi Estate Co., Ltd................................... 31,000 365,654
NEC Corp..................................................... 6,000 188,838
Nintendo Corp., Ltd.......................................... 1,600 280,062
Nippon Telegraph & Telephone Corp............................ 49 652,994
Nissin Food Products Co...................................... 21,500 548,651
Nomura Securities Co., Ltd................................... 20,000 490,525
Orix Corp.................................................... 2,900 428,949
Secom Co., Ltd............................................... 2,000 146,496
Sony Corp.................................................... 5,500 514,626
Takeda Chemical Industries................................... 6,000 394,688
TDK Corp..................................................... 2,000 288,077
Toyoda Automatic Loom Works.................................. 3,000 65,073
West Japan Railway Co........................................ 71 288,550
-----------
9,005,605
-----------
Netherlands -- 3.49%
Aegon NV..................................................... 6,760 241,514
Heineken NV.................................................. 17,700 692,261
ING Groep NV................................................. 5,612 380,879
Philips Electronics NV....................................... 11,100 525,638
TNT Post Group NV............................................ 10,089 273,214
Wolters Kluwer NV............................................ 10,689 285,876
-----------
2,399,382
-----------
Portugal -- 0.23%
Electricidade de Portugal S.A................................ 8,700 158,623
-----------
Singapore -- 0.55%
Singapore Press Holdings Ltd................................. 13,046 203,726
United Overseas Bank Ltd..................................... 26,512 173,271
-----------
376,997
-----------
Spain -- 2.55%
Banco Popular Espanol S.A.................................... 15,203 472,184
Banco Santander Central Hispano S.A.......................... 24,155 255,862
Endesa S.A................................................... 7,814 151,982
Tabacalera S.A............................................... 33,726 520,184
Telefonica S.A. (b).......................................... 16,532 356,570
-----------
1,756,782
-----------
Sweden -- 2.16%
Electrolux AB, B Shares...................................... 14,950 $ 232,662
Ericsson, B Shares........................................... 21,560 428,939
Investor AB, B Shares........................................ 14,170 194,674
Nordbanken Holding AB........................................ 60,100 455,666
Swedish Match AB............................................. 57,700 178,935
-----------
1,490,876
-----------
Switzerland -- 1.72%
Givaudan (b)................................................. 14 4,275
Nestle S.A. (Reg.)........................................... 145 291,141
Novartis AG (Reg.)........................................... 212 336,885
Roche Holding AG (Gen.)...................................... 13 126,954
Swiss Reinsurance Co. (Reg.)................................. 207 423,267
-----------
1,182,522
-----------
United Kingdom -- 11.00%
Allied Zurich PLC............................................ 31,975 378,298
AstraZeneca PLC.............................................. 5,639 263,361
British Telecommunications PLC............................... 23,000 297,358
Diageo PLC................................................... 77,630 696,913
FKI PLC...................................................... 86,405 307,398
HSBC Holdings PLC............................................ 25,000 285,936
Lloyds TSB Group PLC......................................... 42,220 398,838
National Power PLC........................................... 50,500 321,861
Nycomed Amersham PLC......................................... 59,000 585,936
Pentokil Initial PLC......................................... 63,800 144,880
Powergen PLC................................................. 59,000 504,655
Prudential Corp. PLC......................................... 20,000 293,089
Reckitt & Colman PLC......................................... 13,000 145,636
Reed International PLC....................................... 67,000 583,226
Scottish & Southern Energy PLC............................... 49,650 455,498
Tesco PLC.................................................... 80,250 249,661
The Great Universal Stores PLC............................... 54,000 347,438
Trinity Mirror PLC........................................... 21,175 190,096
Unilever PLC................................................. 39,000 236,167
United News & Media PLC...................................... 25,000 359,549
Vodafone Group PLC........................................... 131,188 530,273
-----------
7,576,067
-----------
Total Global (Ex-U.S.) Equities.............................. 35,234,134
-----------
Total Equities (Cost $56,332,868)............................ 64,620,012
-----------
Short-Term Investments -- 3.56%
Investment Companies -- 3.56%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund (Cost $2,453,941)...................... 2,453,941 2,453,941
-----------
Total Investments (Cost $58,786,809) -- 97.40% (a)........... 67,073,953
Cash and other assets, less liabilities -- 2.60%............. 1,789,330
-----------
Net Assets -- 100%........................................... $68,863,283
===========
</TABLE>
See accompanying notes to schedule of investments.
================================================================================
23
<PAGE>
GLOBAL EQUITY FUND -- SCHEDULE OF INVESTMENTS
June 30, 2000
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $59,974,004; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation........................................................... $ 12,365,192
Gross unrealized depreciation........................................................... (5,265,243)
------------
Net unrealized appreciation........................................................ $ 7,099,949
============
</TABLE>
(b) Non-income producing security
FORWARD FOREIGN CURRENCY CONTRACTS
The Global Equity Fund had the following open forward foreign currency
contracts as of June 30, 2000:
<TABLE>
<CAPTION>
Settlement Local Currency Unrealized
Date Current Value Gain/(Loss)
---------- ------- -------- ----------
<S> <C> <C> <C> <C>
Forward Foreign Currency Buy Contracts
Australian Dollar................................. 12/01/00 7,600,000 $ 4,577,458 $ 230,258
British Pound..................................... 12/01/00 900,000 1,366,929 5,439
Canadian Dollar................................... 12/01/00 800,000 542,160 (4,774)
Euro.............................................. 12/01/00 12,540,000 12,134,114 358,406
Singapore Dollar.................................. 12/01/00 700,000 412,014 (2,678)
Swiss Francs...................................... 12/01/00 1,000,000 623,729 19,864
Forward Foreign Currency Sale Contracts
British Pound..................................... 12/01/00 5,300,000 8,049,695 (156,935)
Euro.............................................. 12/01/00 2,000,000 1,935,265 2,135
Hong Kong Dollar.................................. 12/01/00 2,300,000 295,233 (345)
Japanese Yen...................................... 12/01/00 628,000,000 6,107,814 (25,372)
Singapore Dollar.................................. 12/01/00 700,000 412,014 (1,216)
Swedish Krona..................................... 12/01/00 3,500,000 403,291 (11,169)
---------
Total........................................ $ 413,613
=========
</TABLE>
================================================================================
See accompanying notes to financial statements.
24
<PAGE>
Global Technology Fund
[LOGO] After a serious correction lasting about eight weeks, technology
stocks staged a rapid two-week recovery beginning in the last week of
May. During the remainder of the month of June there was mostly steady
recovery, with a few very significant gains.
Computer hardware and software were the best industry groups in June,
rising about 20%. Semiconductors and optoelectronics were also strong,
while technology services declined. The serious April-May correction
reminded investors that it can be difficult to invest in the long-term
growth opportunity of technology stocks. While a decline in value is
always painful, we have maintained our perspective and kept our eyes
on the strong growth opportunities available to our Fund's companies.
The April-May slump and the relatively slow continuing recovery have
enabled the Fund to selectively accumulate positions at very favorable
discounts from previously higher prices.
We see many very attractively undervalued technology stocks,
especially among the less well known names, as well as continued
strength in the global demand for technology products and services. We
expect better investment results going forward, particularly in the
second half of the year, a traditionally strong season for technology
stocks. Significant changes in the competitive structure of the
computer and communications industries will occur over the next year
as new technological solutions meet the seemingly infinite demand for
Internet access devices and communications bandwidth. We are
particularly excited about the opportunities for the smaller telecom
services providers, who are in a good position to deliver broadband
Internet access to a wide range of business and consumer markets.
================================================================================
25
<PAGE>
Global Technology Fund
[LOGO] Top Ten Equity Holdings
As of June 30, 2000
Percent of
Net Assets
-----------------------------------------------------------
1. Micron Technology, Inc. 4.57%
2. Nortel Networks Corp. 4.13
3. EMC Corp. 3.99
4. Yahoo!, Inc. 3.21
5. STMicroelectronics N.V. 3.06
6. Oracle Corp. 2.91
7. International Business Machines Corp. 2.84
8. Compaq Computer Corp. 2.65
9. SAP AG 2.43
10. Texas Instruments, Inc. 2.37
-----------------------------------------------------------
Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
-----------------------------------------------
U.S. EQUITIES
Computers
Services............................. 6.15%
Software............................. 8.94
Systems.............................. 16.87
------
31.96
Electronic Components................. 23.51
Internet Services..................... 6.74
Telecommunications
Equipment............................ 11.24
Services............................. 6.41
------
17.65
------
Total U.S. Equities................. 79.86
GLOBAL (EX-U.S.) EQUITIES
Computers
Software............................. 2.44%
Systems.............................. 0.63
------
3.07
Electronic Components................. 5.70
Telecommunications
Equipment............................. 3.54
Services............................. 0.68
------
4.22
------
Total Global (Ex-U.S.) Equities...... 12.99
SHORT-TERM INVESTMENTS................ 1.55
TOTAL INVESTMENTS............... 94.40
CASH AND OTHER ASSETS,
LESS LIABILITIES.................... 5.60
------
NET ASSETS............................ 100.00%
======
================================================================================
26
<PAGE>
Global Technology Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
------ -----
Equities -- 92.85%
U.S. Equities -- 79.86%
Advanced Micro Devices, Inc. (b)........................ 100 $ 7,725
Agilent Technologies, Inc (b)........................... 19 1,401
Amazon.com, Inc. (b).................................... 150 5,447
America On-Line, Inc. (b)............................... 200 10,550
Amkor Technologies, Inc. (b)............................ 200 7,062
Applied Material, Inc. (b).............................. 150 13,594
Atmel Corp. (b)......................................... 200 7,375
Broadcom Corp. (b)...................................... 50 10,947
Cisco Systems, Inc. (b)................................. 200 12,713
Comdisco, Inc........................................... 200 4,463
Compaq Computer Corp.................................... 600 15,337
Computer Associates International, Inc.................. 200 10,237
Computer Sciences Corp. (b)............................. 150 11,203
Covad Communications Group, Inc. (b).................... 200 3,225
Electronic Data Systems Corp............................ 150 6,188
EMC Corp. (b)........................................... 300 23,081
Emcore Corp. (b)........................................ 100 12,000
eMerge Interactive, Inc. (b)............................ 200 3,588
Flextronics International Ltd........................... 50 3,435
Gateway, Inc. (b)....................................... 50 2,838
Hewlett-Packard Co...................................... 50 6,244
Inprise Corp. (b)....................................... 400 2,450
Intel Corp.............................................. 50 6,684
International Business Machines Corp.................... 150 16,434
Intuit, Inc. (b)........................................ 300 12,412
Jabil Circuit, Inc. (b)................................. 100 4,963
JDA Software Group, Inc. (b)............................ 100 1,919
JDS Uniphase Corp. (b).................................. 100 11,987
KLA-Tencor Corp. (b).................................... 150 8,784
Leap Wireless International, Inc. (b)................... 100 4,700
Linear Technology Corp.................................. 150 9,591
Lucent Technologies, Inc................................ 200 11,850
Micron Technology, Inc. (b)............................. 300 26,419
Motorola, Inc........................................... 450 13,078
Network Plus Corp. (b).................................. 650 9,222
Oracle Corp. (b)........................................ 200 16,812
PeopleSoft, Inc. (b).................................... 650 10,887
Phone.com, Inc. (b)..................................... 100 6,513
QUALCOMM, Inc. (b)...................................... 200 12,000
Red Hat, Inc. (b)....................................... 50 1,353
Safeguard Scientifics, Inc. (b)......................... 50 1,603
Sipex Corp. (b)......................................... 50 1,384
Solectron Corp. (b)..................................... 100 4,188
Sun Microsystems, Inc. (b).............................. 150 13,641
Sykes Enterprises, Inc. (b).............................. 200 $ 2,575
Texas Instruments, Inc................................... 200 13,738
Titan Corp. (b).......................................... 150 6,712
Uniroyal Technology Corp. (b)............................ 100 1,106
VerticalNet, Inc. (b).................................... 100 3,694
Winstar Communications, Inc. (b)......................... 250 8,469
Worldcom, Inc. (b)....................................... 250 11,469
Xilinx, Inc. (b)......................................... 100 8,256
Yahoo!, Inc. (b)......................................... 150 18,581
--------
Total U.S. Equities...................................... 462,127
--------
Global (Ex-U.S.) Equities -- 12.99%
Bermuda -- 0.68%
Global Crossing Ltd. (b)................................. 150 3,947
--------
Canada -- 4.13%
Nortel Networks Corp..................................... 350 23,887
--------
France -- 3.06%
STMicroelectronics N.V................................... 276 17,716
--------
Germany -- 4.49%
Infineon Technologies AG (b)............................. 150 11,888
SAP AG................................................... 300 14,081
--------
25,969
--------
Switzerland -- 0.63%
Logitech International SA (b)............................ 50 3,650
--------
Total Global (Ex-U.S.) Equities.......................... 75,169
--------
Total Equities (Cost $490,560)........................... 537,296
--------
Short-Term Investments -- 1.55%
Investment Companies -- 1.55%
Vista U.S. Government Money
Market Fund (Cost $8,983)............................... 8,983 8,983
--------
Total Investments (Cost $499,543) -- 94.40% (a).......... 546,279
Cash and other assets, less liabilities -- 5.60%......... 32,381
--------
Net Assets -- 100%....................................... $578,660
========
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $500,976; and net
unrealized appreciation consisted of:
Gross unrealized appreciation............................. $ 59,362
Gross unrealized depreciation............................. (14,059)
--------
Net unrealized appreciation........................... $ 45,303
========
(b) Non-income producing security
================================================================================
27
See accompanying notes to financial statements.
<PAGE>
GLOBAL BIOTECH FUND
--------------------------------------------------------------------------------
[LOGO] Volatility initiated in March in the biotech sector continued into the
second quarter of 2000, with the biotech indices bottoming in May
followed by a substantial rally in June. The NASDAQ Biotech Index
increased 11% during the second quarter. Biotech performance was in
line with the pharmaceutical sector, but continued to outperform the
general market and the small capitalization market. The biotech rally
became more selective in the second quarter. Only 41% of 351 publicly
traded stocks had positive returns, whereas in the first quarter of
2000 and the fourth quarter of 1999 the positive returns were 84% and
70%, respectively. Biotech investors flocked to larger companies in
the second quarter, with 77% of the stocks enjoying positive returns,
versus only 31% for small cap biotechs.
In 2000, the biotech industry will continue to move into a more mature
stage as an increasing number of companies generate sales and reach
profitability. With more than 800 products in clinical trial
development, we expect several research breakthroughs in the next few
years, particularly in the treatment of diabetes, asthma, allergies,
psoriasis, cancer, heart and vessel disease, and autoimmune diseases.
If we extend our horizon to the next five to ten years, we are firmly
convinced that the human genome sequence map(s) will be another strong
growth driver for this industry. In the interim, we expect continued
consolidation in this industry. Pharmaceutical companies will probably
continue to buy biotech companies and large biotechs will keep buying
smaller biotechs. Momentum players will come and go in this sector and
contribute to short-term volatility, but they will have little impact
on the promising long-term picture that is developing in this area. We
remain focused on identifying promising new companies with strong drug
pipelines that will produce handsome long-term returns for patient
investors.
================================================================================
28
<PAGE>
GLOBAL BIOTECH FUND
--------------------------------------------------------------------------------
[LOGO] Top Ten Equity Holdings
As of June 30, 2000
Percent of
Net Assets
---------------------------------------------------------
1. Amgen, Inc................................ 4.18%
2. Human Genome Sciences, Inc................ 3.97
3. Protein Design Labs, Inc.................. 3.93
4. COR Therapeutics, Inc..................... 3.55
5. Celgene Corp.............................. 3.50
6. Millennium Pharmaceuticals, Inc........... 3.33
7. QLT, Inc.................................. 3.22
8. Vertex Pharmaceuticals, Inc............... 3.13
9. Genentech, Inc............................ 3.07
10. CV Therapeutics, Inc...................... 2.89
---------------------------------------------------------
Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
-----------------------------------------------------
U.S. EQUITIES
Biomedical................................. 15.79%
Gene....................................... 4.97
Health: Drugs.............................. 17.62
Medical Products........................... 4.10
Therapeutics............................... 14.35
Research and Development................... 17.16
-----
Total U.S. Equities.................. 73.99
GLOBAL (Ex-U.S.) EQUITIES
Gene....................................... 2.01%
Health: Drugs.............................. 4.24
Therapeutics............................... 3.22
----
Total Global (Ex-U.S.) Equities............. 9.47
SHORT-TERM INVESTMENTS...................... 4.39
-----
TOTAL INVESTMENTS.................... 87.85
CASH AND OTHER ASSETS, LESS LIABILITIES..... 12.15
------
NET ASSETS.................................. 100.00%
======
================================================================================
29
<PAGE>
Global Biotech Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
------ -----
Equities - 83.46%
U.S. Equities - 73.99%
Abgenix, Inc. (b)........................................ 150 $ 17,979
Affymetrix, Inc. (b)..................................... 50 8,256
Alkermes, Inc. (b)....................................... 150 7,069
American Home Products Corp.............................. 100 5,875
Amgen, Inc. (b).......................................... 500 35,125
Aurora Biosciences Corp. (b)............................. 150 10,228
Biogen, Inc. (b)......................................... 100 6,450
Celgene Corp. (b)........................................ 500 29,437
Cephalon, Inc. (b)....................................... 300 17,962
Chiron Corp. (b)......................................... 500 23,750
COR Therapeutics, Inc. (b)............................... 350 29,859
CV Therapeutics, Inc. (b)................................ 350 24,259
Enzon, Inc. (b).......................................... 200 8,500
Geltex Pharmaceuticals, Inc. (b)......................... 350 7,153
Genentech, Inc. (b)...................................... 150 25,800
Genzyme Corp. (b)........................................ 300 17,831
Gilead Sciences, Inc. (b)................................ 150 10,669
Guilford Pharmaceuticals, Inc. (b)....................... 250 3,766
Human Genome Sciences, Inc. (b).......................... 250 33,344
Idec Pharmaceuticals Corp. (b)........................... 200 23,462
Immunex Corp. (b)........................................ 450 22,247
Inhale Therapeutic Systems, Inc. (b)..................... 100 10,147
Johnson & Johnson Co..................................... 100 10,188
Luminex Corp. (b)........................................ 50 2,081
Maxim Pharmaceuticals, Inc. (b).......................... 250 12,844
Medarex, Inc. (b)........................................ 200 16,900
Medimmune, Inc. (b)...................................... 300 22,200
Millennium Pharmaceuticals, Inc. (b)..................... 250 27,969
Myriad Genetics, Inc. (b)................................ 100 14,808
PE Corp. -- Biosystems Group............................. 150 9,881
PE Corp. -- Celera Genomics Group (b).................... 200 18,700
Pfizer, Inc.............................................. 150 7,200
Protein Design Labs, Inc. (b)............................ 200 32,991
Sangstat Medical Corp. (b)............................... 250 7,219
Schering Plough Corp..................................... 150 7,575
Tanox, Inc. (b).......................................... 200 9,463
United Therapeutics Corp. (b)............................ 150 16,256
Vertex Pharmaceuticals, Inc. (b)......................... 250 26,344
-------
Total U.S. Equities...................................... 621,787
-------
Shares Value
------ -----
Global (EX-U.S.) Equities -- 9.47%
CANADA -- 3.22%
QLT, Inc................................................. 350 $ 27,060
---------
Denmark -- 1.02%
Novo Nordisk A/S......................................... 50 8,545
---------
France -- 0.41%
Genset S.A............................................... 150 3,469
---------
Switzerland -- 1.99%
Serono S.A. (b).......................................... 20 16,727
--------
United Kingdom -- 2.83%
Cambridge Antibody Technology Group PLC (b).............. 300 13,443
Shire Pharmaceuticals Group PLC (b)...................... 200 10,375
---------
23,818
---------
Total Global (Ex-U.S.) Equities.......................... 79,619
---------
Total Equities (Cost $601,199)........................... 701,406
---------
Short-Term Investments -- 4.39%
Investment Companies -- 4.39%
Vista U.S. Government Money Market Fund (Cost $36,889).. 36,889 36,889
---------
Total Investments (Cost $638,088) -- 87.85% (a).......... 738,295
Cash and other assets, less liabilities -- 12.15%....... 102,143
---------
Net Assets -- 100%....................................... $ 840,438
=========
<TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $638,743; and net
<S> <C>
unrealized appreciation consisted of:
Gross unrealized appreciation............................................ $ 103,644
Gross unrealized depreciation............................................ (4,092)
---------
Net unrealized appreciation......................................... $ 99,552
=========
(b) Non-income producing security
</TABLE>
================================================================================
30
See accompanying notes to financial statements.
<PAGE>
Global Bond Fund
--------------------------------------------------------------------------------
[LOGO] Since its inception on July 31, 1993, the Brinson Global Bond Fund
Class I has recorded an annualized return of 4.98%, versus the 5.58%
return of its benchmark, the Salomon Smith Barney World Government
Bond Index. This performance record was achieved with less risk or
volatility than the benchmark; 5.12% versus 5.86%, respectively. Year-
to-date, the Fund returned -0.44%, underperforming the benchmark
return of 0.03%. During the second quarter, the Fund outperformed the
benchmark by 71 basis points.
In preemptive moves to combat inflation, most of the world's major
central banks raised interest rates during the first quarter of 2000.
The rate increases pushed up yields at the short end of the yield
curve, while benign long-term inflationary expectations and government
supply concerns pulled down long bond yields. This outlook was largely
the same as it was in the last quarter of 1999, and during the first
quarter bond yields in most markets fell to levels lower than at the
beginning of the year. Our most significant strategy move in the first
quarter was to reduce our overweight to Australia by half, after
taking advantage of an Australian 10-year government yield decline of
almost 100 basis points. With the proceeds, we moderately reduced our
underweight to Japan.
Despite some periods of volatility, long-term bond yields in most
major markets finished the second quarter at levels similar to those
at the end of March. Market sentiment was dominated by shifting
expectations over the pace of economic growth and by the implications
this had for the interest rate policies of central banks. The largest
factor leading to Fund outperformance in the second quarter came from
currency allocation, with the biggest contributions coming from our
overweight to the euro and underweights to the British pound and the
Japanese yen. In Australia, which was the strongest performing bond
market during the period, we benefited from our overweight to
government bonds.
================================================================================
31
<PAGE>
Global Bond Fund
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total Return
6 months 1 year 3 years 5 years Inception*
ended ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00 6/30/00
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brinson Global Bond Fund Class I -0.44% -0.34% 1.81% 4.85% 4.98%
-----------------------------------------------------------------------------------------------------------------
Brinson Global Bond Fund Class N -0.66 -0.66 1.52 N/A 1.52
-----------------------------------------------------------------------------------------------------------------
Salomon Smith Barney World Gov't Bond Index 0.03 3.16 3.87 3.16 5.58
-----------------------------------------------------------------------------------------------------------------
</TABLE>
*Performance inception date of the Brinson Global Bond Fund Class I and the
Salomon Smith Barney World Government Bond Index is 7/31/93, and inception date
of Class N is 6/30/97.
Total return includes reinvestment of all capital gain and income distributions.
All total returns in excess of 1 year are average annualized returns.
Illustration of an Assumed Investment of $1,000,000
This chart shows the growth in the value of an investment in the Brinson Global
Bond Fund Class I and the Salomon Smith Barney World Government Bond Index if
you had invested $1,000,000 on July 31, 1993, and had reinvested all your income
dividends and capital gain distributions through June 30, 2000. The performance
of Class N shares will vary based upon the different inception dates and class
specific expenses. No adjustment has been made for any income taxes payable by
shareholders on income dividends and capital gain distributions. Past
performance is no guarantee of future results. Share price and return will vary
with market conditions; investors may realize a gain or loss upon redemption.
Brinson Global Bond Fund Class I vs. Salomon Smith Barney World Gov't Bond Index
Wealth Value with Dividends Reinvested
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
Brinson Global Bond Fund Class I Solomon Smith Barney World Gov't Bond Index
<S> <C> <C>
7/31/93 1000000 1000000
8/31/93 1019000 1030100
9/30/93 1022010 1042358
10/31/93 1032059 1040586
11/30/93 1023015 1033198
12/31/93 1038591 1041929
1/31/94 1045818 1050264
2/28/94 1021040 1043437
3/31/94 $1,007,619 $1,041,976
4/30/94 $1,002,457 $1,043,123
5/31/94 $994,198 $1,003,943
6/30/94 $992,146 $1,048,832
7/31/94 $999,419 $1,057,223
8/31/94 $1,000,457 $1,053,522
9/30/94 $1,001,496 $1,061,108
10/31/94 $1,005,652 $1,078,085
10/30/94 $1,003,574 $1,063,208
12/31/94 $1,002,396 $1,066,185
1/31/95 $1,012,827 $1,088,575
2/28/95 $1,030,559 $1,116,442
3/31/95 $1,044,119 $1,182,759
4/30/95 $1,069,153 $1,204,640
5/31/95 $1,069,704 $1,238,611
6/30/95 $1,104,638 $1,245,919
7/31/95 $1,122,712 $1,248,909
8/31/95 $1,134,406 $1,205,946
9/30/95 $1,148,228 $1,232,839
10/31/95 $1,167,365 $1,241,962
11/30/95 $1,190,755 $1,255,996
12/31/95 $1,206,119 $1,269,184
1/31/96 $1,212,149 $1,253,573
2/29/96 $1,200,088 $1,247,180
3/31/96 $1,204,913 $1,245,434
4/30/96 $1,216,974 $1,240,452
5/31/96 $1,220,592 $1,240,700
6/30/96 $1,231,653 $1,250,502
7/31/96 $1,243,921 $1,274,511
8/31/96 $1,253,735 $1,279,482
9/30/96 $1,274,590 $1,284,728
10/31/96 $1,301,578 $1,308,752
11/30/96 $1,326,113 $1,326,028
12/31/96 $1,318,299 $1,315,287
1/31/97 $1,297,658 $1,280,169
2/28/97 $1,299,034 $1,270,567
3/31/97 $1,279,768 $1,260,911
4/30/97 $1,272,888 $1,249,815
5/31/97 $1,310,043 $1,283,810
6/30/97 $1,326,556 $1,299,088
7/31/97 $1,321,051 $1,288,955
8/31/97 $1,316,923 $1,288,181
9/30/97 $1,343,069 $1,315,619
10/31/97 $1,360,958 $1,342,984
11/30/97 $1,343,069 $1,322,437
12/31/97 $1,339,835 $1,318,469
1/31/98 $1,351,311 $1,331,259
2/28/98 $1,359,918 $1,342,042
3/31/98 $1,345,573 $1,328,756
4/30/98 $1,362,787 $1,350,016
5/31/98 $1,362,787 $1,353,121
6/30/98 $1,362,306 $1,355,150
7/31/98 $1,362,306 $1,356,912
8/31/98 $1,378,231 $1,393,820
9/30/98 $1,444,826 $1,467,971
10/31/98 $1,476,676 $1,511,423
11/30/98 $1,466,542 $1,490,112
12/31/98 $1,500,412 $1,520,063
1/31/99 $1,500,412 $1,506,079
2/28/99 $1,451,914 $1,457,734
3/31/99 $1,450,398 $1,461,378
4/30/99 $1,453,429 $1,460,793
5/31/99 $1,427,665 $1,436,252
6/30/99 $1,404,902 $1,411,118
7/31/99 $1,430,918 $1,445,690
8/31/99 $1,424,797 $1,452,340
9/30/99 $1,438,570 $1,474,997
10/31/99 $1,430,918 $1,474 259
11/30/99 $1,409,493 $1,458,780
12/31/99 $1,406,271 $1,455,279
1/31/2000 $1,370,532 $1,424,281
2/29/2000 $1,362,762 $1,414,026
3/31/2000 $1,329,286 $1,457,861
4/30/2000 $1,342,562 $1,410,189
5/31/2000 $1,350,331 $1,421,188
6/30/2000 $1,400,056 $1,455,723
</TABLE>
Fund returns are net of all fees and costs, while the Index returns are based
solely on market returns without deduction for fees or transaction costs for
rebalancing.
================================================================================
32
<PAGE>
Global Bond Fund
--------------------------------------------------------------------------------
Asset Allocation
As of June 30, 2000
Current
Benchmark Strategy
------------------------------------------------------------
U.S. 26.94% 29.94%
Australia 0.58 2.58
Austria 1.03 0.00
Belgium 2.36 0.00
Canada 2.78 4.92
Denmark 1.16 4.16
Finland 0.66 0.00
France 7.77 12.95
Germany 8.03 5.69
Greece 0.74 0.00
Ireland 0.29 0.00
Italy 8.45 9.60
Japan 25.87 9.37
Netherlands 2.46 3.33
Portugal 0.50 0.00
Spain 3.09 6.01
Sweden 1.09 2.79
Switzerland 0.46 0.00
TIPS 0.00 1.75
U.K. 5.74 2.74
Euro 0.00 4.17
------------------------------------------------------------
100.0% 100.0%
Currency Allocation
As of June 30, 2000
Current
Benchmark Strategy
------------------------------------------------------------
U.S. 26.9% 22.9%
Australia 0.6 8.6
Canada 2.8 2.8
Denmark 1.2 1.2
Euro 35.3 47.2
Japan 25.9 15.9
Sweden 1.1 1.1
Switzerland 0.5 0.5
U.K. 5.7 -0.2
------------------------------------------------------------
100.0% 100.0%
Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
------------------------------------------------------------
U.S. BONDS
Corporate Bonds
Construction...................................... 0.10%
Consumer.......................................... 0.97
Energy............................................ 0.22
Financial Services................................ 2.59
Food and Housing Products......................... 0.54
Publishing........................................ 0.29
Services/Miscellaneous............................ 1.03
------
Total U.S. Corporate Bonds................... 5.74
International Dollar Bonds.......................... 1.12
Asset-Backed........................................ 2.47
Corporate Mortgage-Backed Securities................ 7.39
U.S. Government Agencies............................ 2.39
U.S. Government Mortgage-Backed Securities.......... 6.01
U.S. Government Obligations......................... 6.89
------
Total U.S. Bonds............................. 32.01
GLOBAL (EX-U.S.) BONDS
Foreign Financial Bonds............................. 7.65
Foreign Government Bonds............................ 54.87
------
Total Global (Ex-U.S.) Bonds................. 62.52
SHORT-TERM INVESTMENTS.............................. 11.89
------
TOTAL INVESTMENTS............................ 106.42
LIABILITIES, LESS CASH
AND OTHER ASSETS................................... (6.42)
------
NET ASSETS.......................................... 100.00%
======
================================================================================
33
<PAGE>
Global Bond Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
--------- ---------
<S> <C> <C>
Bonds -- 94.53%
U.S. Bonds -- 32.01%
U.S. Corporate Bonds -- 5.74%
Capital One Bank, BKNT, 8.250%,
due 06/15/05........................................ $ 70,000 $ 69,861
Cendant Corp., 7.750%, due 12/01/03................... 200,000 193,147
Centaur Funding Corp., Class B, 144A,
9.080%, due 04/21/20 (b)............................ 140 138,994
Centaur Funding Corp., Class C, 144A,
0.000%, due 04/21/20 (b)............................ 750 115,781
Centex Corp., 9.750%, due 06/15/05.................... 45,000 44,756
Countrywide Capital, Inc., 8.000%,
due 12/15/26........................................ 250,000 206,795
Fidelity Investments, 144A, 7.570%,
due 06/15/29........................................ 450,000 426,496
Lilly Del Mar, 144A, 7.717%,
due 08/01/29........................................ 150,000 149,114
News America Holdings, 7.750%,
due 12/01/45........................................ 150,000 130,289
PDVSA Finance, 99-F, 8.750%,
due 02/15/04........................................ 187,600 184,786
Safeway, Inc., 7.250%, due 09/15/04................... 250,000 247,110
Sempra Energy, 7.950%, due 03/01/10................... 100,000 100,847
Time Warner Cos., Inc.,
7.570%, due 02/01/24................................ 310,000 293,061
Washington Mutual Financial Corp., 8.250%,
due 06/15/05........................................ 35,000 35,324
Waste Management, 7.000%,
due 10/01/04........................................ 300,000 278,245
---------
2,614,606
---------
Asset-Backed Securities -- 2.47%
Chase Manhattan Auto Owner Trust,
96-C, Class A4, 6.150%,
due 03/15/02........................................ 76,569 76,283
Comed Transitional Funding Trust, 98-1,
Class A7, 5.740%, due 12/25/10...................... 370,000 331,953
First Bank Corporate Card Master Trust,
97-1, Class A, 6.400%, due 02/15/03.................. 240,000 236,782
Vanderbilt Mortgage Finance, 98-B,
Class 1A2, 6.120%, due 05/07/09....................... 485,885 480,798
---------
1,125,816
---------
Corporate Mortgage-Backed Securities -- 7.39%
Bear Stearns Mortgage Securities, Inc.,
96-7A4, 6.000%, due 01/28/09........................ 200,000 191,686
DLJ Commercial Mortgage Corp., 99-CG2,
Class A1B, 7.300%, due 06/10/32..................... 75,000 73,871
First Union Lehman Brothers, 97-C2,
Class A2, 6.600%, due 11/18/29...................... 240,000 232,027
GE Capital Mortgage Services, Inc., 93-7F,
Class FA3, 6.500%, due 09/25/08..................... 96,382 95,661
Heller Financial Commercial Mortgage Assets,
99-PH1, Class A1, 6.500%,
due 05/15/31........................................ 386,237 373,520
PNC Mortgage Securities Corp., 94-3,
Class A8, 7.500%, due 07/25/24...................... 190,000 182,045
Prudential Home Mortgage Securities
93-43, Class A9, 6.750%, due 10/25/23............... 196,000 188,360
96-7, Class A4, 6.750%, due 06/25/11................ 150,000 144,350
Residential Accredit Loans, Inc
96-QS4, Class Al10, 7.900%, due 08/25/26............ $ 625,000 $ 623,056
98-QS4, Class AI5, 7.000%, due 03/25/28............. 400,000 376,857
Residential Asset Securitization Trust
97-A10, Class A5, 7.250%, due 12/25/27.............. 335,000 321,540
97-A7, Class A1, 7.500%, due 09/25/27............... 22,529 22,448
97-A11, Class A2, 7.000%, due 01/25/28.............. 3,255 3,240
98-A1, Class A1,7.000%, due 03/25/28................ 60,302 59,909
Structured Asset Securities Corp
98-RF1, Class A, 8.713%, due 04/15/27............... 189,291 192,130
98-RF2, 8.582%, due 07/15/27........................ 288,209 291,091
---------
3,371,791
---------
International Dollar Bonds -- 1.12%
Korea Development Bank, 7.125%,
due 09/17/01........................................ 150,000 148,688
Credit Suisse-London, 144A, Step up Callable,
7.900%, due 05/29/49................................ 250,000 231,650
State of Qatar, 144A, 9.750%, due 06/15/30............ 130,000 128,212
---------
508,550
---------
U.S. Government Agencies -- 2.39%
Federal National Mortgage Association
5.250%, due 01/15/09................................ 355,000 311,529
7.250%, due 05/15/30................................ 280,000 285,066
Jordan Aid, 8.750%, due 09/01/19...................... 448,173 494,429
---------
1,091,024
---------
U.S. Government Mortgage-Backed
Securities -- 6.01%
Fannie Mae Whole Loan, 95-W3,
Class A, 9.000%, due 04/25/25....................... 7,756 7,986
Federal Home Loan Mortgage Corp
5.500%, due 02/01/07................................ 39,822 37,322
7.000%, due 10/15/13................................ 68,215 65,142
Federal Home Loan Mortgage Corp. Gold,
9.000%, due 07/01/30................................ 135,000 139,261
Federal National Mortgage Association
6.000%, due 10/01/14................................ 149,936 141,836
6.000%, due 01/01/29................................ 150,018 137,226
6.500%, due 03/01/19................................ 116,597 111,430
6.500%, due 03/01/29................................ 577,598 544,783
7.000%, due 12/01/24................................ 382,185 368,960
7.000%, due 03/01/29................................ 25,928 25,041
7.500%, due 12/01/23................................ 298,195 294,092
7.890%, due 04/01/26................................ 163,571 167,875
8.000%, due 03/01/11................................ 61,267 61,904
8.000%, due 02/01/13................................ 62,857 63,510
Government National Mortgage Association
7.000%, due 08/15/24................................ 332,267 324,448
7.000%, due 07/15/25................................ 46,828 45,714
7.500%, due 08/15/23................................ 56,602 56,471
7.500%, due 12/15/23................................ 88,097 87,917
7.500%, due 01/15/24................................ 59,507 59,312
---------
2,740,230
---------
</TABLE>
================================================================================
34
<PAGE>
Global Bond Fund -- Schedule Of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
------------ ----------
<S> <C> <C>
U.S. Government
Obligations -- 6.89%
U.S. Treasury Bond
8.000%, due 11/15/21......................... $ 220,000 $ 265,513
8.750%, due 05/15/17......................... 350,000 439,906
U.S. Treasury Inflation Indexed Note
3.625%, due 04/15/28......................... 570,000 575,424
3.875%, due 04/15/29......................... 880,000 913,837
U.S. Treasury Note
5.625%, due 05/15/08......................... 265,000 255,559
6.125%, due 12/31/01......................... 445,000 442,497
6.625%, due 02/15/27......................... 110,000 116,635
7.500%, due 02/15/05......................... 125,000 131,094
----------
3,140,465
----------
Total U.S. Bonds............................... 14,592,482
----------
Global (Ex-U.S.) Bonds -- 62.52%
Australia -- 2.36%
International Bank for Reconstruction
& Development, 5.500%,
due 05/14/03.................................AUD 605,000 355,982
Queensland Treasury Corp., Global Notes
6.000%, due 07/14/09......................... 670,000 393,186
8.000%, due 09/14/07
500,000 327,617
----------
1,076,785
----------
Canada -- 6.50%
Government of Canada, Real Return Bond
4.250%, due 12/01/21.........................CAD 1,455,000 1,194,186
Government of Canada
6.000%, due 06/01/08......................... 2,030,000 1,376,953
Province of Ontario, 7.500%, due 01/19/06...... 550,000 393,767
----------
2,964,906
----------
Denmark -- 5.78%
City of Copenhagen, 6.250%,
due 03/15/01.................................DKK 2,400,000 308,493
Depfa Pfandbrief Bank,
5.750%, due 03/04/09......................... 950,000 909,575
Great Belt, 7.000%, due 09/02/03.............. 3,650,000 479,500
Kingdom of Denmark
7.000%, due 11/15/07......................... 2,500,000 344,792
7.000%, due 11/10/24......................... 2,500,000 368,684
8.000%, due 11/15/01......................... 1,700,000 223,968
----------
2,635,012
----------
France -- 9.50%
Government of France (OAT)
7.500%, due 04/25/05.........................EUR 1,530,000 1,614,143
8.500%, due 04/25/23......................... 1,350,000 1,745,794
9.500%, due 01/25/01......................... 990,000 972,239
----------
4,332,176
----------
Germany -- 4.85%
Bundesobligation 118,
5.250%, due 02/21/01.........................EUR 390,000 $ 374,844
Bundesrepublik Deutschland
5.625%, due 01/04/28......................... 380,000 368,966
6.000%, due 07/04/07......................... 1,150,000 1,152,326
International Bank for Reconstruction and
Development, 7.125%, due 04/12/05............ 306,775 312,910
----------
2,209,046
----------
Italy -- 9.26%
Buoni Poliennali Del Tes
3.250%, due 04/15/04......................... 2,500,000 2,230,052
7.750%, due 11/01/06......................... 660,000 704,703
9.000%, due 10/01/03......................... 380,001 403,689
Republic of Italy,
3.750%, due 06/08/05.........................JPY 83,000,000 881,216
----------
4,219,660
----------
Japan -- 9.35%
Government of Japan
2.500%, due 03/20/20......................... 28,000,000 281,117
3.100%, due 03/20/06......................... 23,400,000 243,485
4.600%, due 03/21/05......................... 339,800,000 3,734,823
----------
4,259,425
----------
Mexico -- 0.35%
United Mexican States,
9.875%, due 02/01/10.........................MXN 160,000 161,600
Netherlands -- 2.55%
Government of Netherlands
3.000%, due 02/15/02........................EUR 1,050,000 975,829
5.500%, due 01/15/28......................... 195,000 184,997
----------
1,160,826
----------
Spain -- 4.21%
Government of Spain,
3.250%, due 01/31/05......................... 1,400,000 1,231,360
6.000%, due 01/31/08,........................ 700,000 688,110
----------
1,919,470
----------
Sweden -- 2.84%
Government of Sweden
6.750%, due 05/05/14........................SEK 4,300,000 558,875
10.250%, due, 05/05/03....................... 5,700,000 733,865
----------
1,292,740
----------
United Kingdom -- 4.97%
Abbey National Treasury Service,
6.500%, due 03/05/04........................GBP 190,000 285,720
British Gas PLC, 8.125%, due 03/31/03......... 195,000 302,872
U.K. Treasury
5.750%, due 12/07/09........................... 1,000,000 1,576,868
7.250%, due 12/07/07........................... 60,000 100,392
----------
2,265,852
----------
Total Global (Ex-U.S.) Bonds..................... 28,497,498
----------
Total Bonds (Cost $45,532,378)................. 43,089,980
----------
</TABLE>
================================================================================
35
<PAGE>
Global Bond Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
--------- -----------
Short-Term Investments -- 11.89%
Investment Companies -- 11.89%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund (Cost $5,419,195).............. 5,419,195 $ 5,419,195
-----------
Total Investments (Cost $50,951,573) -- 106.42% (a) 48,509,175
Liabilities, less cash and other assets -- (6.42%)..... (2,927,951)
-----------
Net Assets -- 100%..................................... $45,581,224
===========
NOTES TO SCHEDULE OF INVESTMENTS
<TABLE>
<S> <C>
(a) Aggregate cost for federal income tax purposes was $51,047,800; and net unrealized depreciation consisted of:
Gross unrealized appreciation .......................................................................... $ 304,499
Gross unrealized depreciation........................................................................... (2,843,124)
-----------
Net unrealized depreciation........................................................................ $(2,538,625)
===========
</TABLE>
(b) Non-income producing security
144A: Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30,
2000, the value of these securities amounted to $1,190,247 or 2.61% of net
assets.
Resettable Perpetual Preferred: A bond with either no maturity date or a
maturity date that is so far in the future that the bond will pay interest
indefinitely.
The issuer generally retains the right to call such a bond.
FORWARD FOREIGN CURRENCY CONTRACTS
The Global Bond Fund had the following open forward foreign currency contracts
as of June 30, 2000:
<TABLE>
<CAPTION>
Settlement Local Current Unrealized
Date Currency Value Gain/(Loss)
---------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Forward Foreign Currency Buy Contracts
Australian Dollar......................................... 09/01/00 6,050,000 $ 3,636,473 $ (45,851)
British Pound............................................. 09/01/00 1,400,000 2,121,984 (28,683)
Canadian Dollar........................................... 09/01/00 2,650,000 1,791,296 (4,534)
Danish Krone.............................................. 09/01/00 8,100,000 1,043,319 67,138
Euro...................................................... 09/01/00 15,150,000 14,579,925 (759,401)
Japanese Yen.............................................. 09/01/00 1,103,500,000 10,550,283 259,794
Swedish Krona............................................. 09/01/00 30,300,000 3,470,965 (43,290)
Forward Foreign Currency Sale Contracts
Australian Dollar......................................... 09/01/00 1,550,000 931,658 (4,471)
British Pound............................................. 09/01/00 2,950,000 4,471,323 272,277
Canadian Dollar........................................... 09/01/00 5,100,000 3,447,437 57,606
Danish Krone.............................................. 09/01/00 18,200,000 2,344,249 128,846
Euro...................................................... 09/01/00 8,600,000 8,276,375 (19,137)
Japanese Yen.............................................. 09/01/00 770,000,000 7,361,774 (52,211)
Swedish Krona............................................. 09/01/00 36,800,000 4,215,562 117,010
----------
Total........................................... $ (54,907)
==========
</TABLE>
================================================================================
See accompanying notes to financial statements.
36
<PAGE>
U.S. Balanced Fund
--------------------------------------------------------------------------------
[LOGO] The Brinson U.S. Balanced Fund Class I has produced an annualized
return of 9.72% since its performance inception on December 31, 1994,
while the return of the U.S. Balanced Mutual Fund Index was 18.35%
over this time period. Importantly however, the U.S. Balanced Fund's
performance was achieved with an annualized volatility over the life
of the Fund of 6.25%, or approximately 40% less than the benchmark's
annualized volatility of 9.86%. In the first half of 2000, the U.S.
Balanced Fund returned 3.00%, well ahead of the 0.89% return of the
Index. While the past few years have seen a market environment that
hurt our price/value based approach, we see some compelling signs that
the environment is changing. Investors seem to be more cognizant of
the risks associated with large equity positions, as some Internet and
technology stocks have experienced severe corrections in the recent
past.
Much of the Fund's year-to-date overperformance relative to the
benchmark was due largely to our asset allocation strategy, which paid
off in the second quarter. The Fund continues to overweight bonds and
underweight equities. Second quarter returns of the two key indices
that make up the benchmark for the Fund show that bond markets
outperformed equity markets by a wide margin (618 basis points); the
Wilshire 5000 Equity Index returned -4.49%, while the Salomon Broad
Investment Grade Bond Index returned 1.69%.
The second quarter also saw some dramatic changes in equity investor
sentiment toward the technology, media and telecommunication (TMT)
sectors that have driven the equity market to its highs in the recent
past. Investors began to question whether TMT companies can grow and
increase earnings fast enough and for long enough to justify their
high valuations. Our assessment, as implied by our equity underweight,
is that they cannot.
Our equity analysis is focused on investing in companies with solid
fundamentals as well as promising uses for new technologies.
Specifically, we see opportunities in some "old" economy sectors such
as basic materials, transportation and healthcare. These sectors
represent the largest overweights in the equity portion of the Fund,
and contributed to the outperformance of the Fund during the period.
These overweights are offset by significant underweight positions to
software, hardware and telecommunications sectors.
================================================================================
37
<PAGE>
U.S. Balanced Fund
--------------------------------------------------------------------------------
[LOGO] Total Return
<TABLE>
<CAPTION>
6 months 1 year 3 years 5 years Inception*
ended ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00 6/30/00
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brinson U.S. Balanced Fund Class I 3.00% -5.07% 3.71% 7.89% 9.72%
--------------------------------------------------------------------------------------------------------------
Brinson U.S. Balanced Fund Class N 2.75 -5.39 3.39 N/A 3.39
--------------------------------------------------------------------------------------------------------------
U.S. Balanced Mutual Fund Index** 0.89 7.99 14.73 16.84 18.35
--------------------------------------------------------------------------------------------------------------
Salomon Smith Barney Broad Investment
Grade (BIG) Bond Index 3.92 4.49 6.02 6.23 7.76
--------------------------------------------------------------------------------------------------------------
Wilshire 5000 Index -0.84 9.52 19.06 22.47 24.13
--------------------------------------------------------------------------------------------------------------
</TABLE>
* Performance inception date of the Brinson U.S. Balanced Fund Class
I and of each of the indices is 12/31/94 and inception date of
Class N is 6/30/97.
** An unmanaged index compiled by the Advisor, constructed as
follows: 65% Wilshire 5000 Index and 35% Salomon Smith Barney BIG
Bond Index.
Total return includes reinvestment of all capital gain and income
distributions.
All total returns in excess of 1 year are average annualized returns.
Illustration of an Assumed Investment of $1,000,000
This chart shows the growth in the value of an investment in the
Brinson U.S. Balanced Fund Class I, the U.S. Balanced Mutual Fund
Index, the Salomon Smith Barney BIG Bond Index and the Wilshire 5000
Index if you had invested $1,000,000 on December 31, 1994, and had
reinvested all your income dividends and capital gain distributions
through June 30, 2000. The performance of Class N shares will vary
based upon the different inception dates and class specific expenses.
No adjustment has been made for any income taxes payable by
shareholders on income dividends and capital gain distributions. Past
performance is no guarantee of future results. Share price and return
will vary with market conditions; investors may realize a gain or loss
upon redemption.
Brinson U.S. Balanced Fund Class I vs. U.S. Balanced Mutual Fund
Index, Salomon Smith Barney BIG Bond Index and Wilshire 5000 Index
Wealth Value with Dividends Reinvested
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Label A B C D
--------------------------------------------------------------------------------------------------------------------------
Label Brinson U.S. Balanced Fund U.S. Balanced Mutual Fund Wilshire 5000 Index Salomon Smith Barney
Class I Index Big Bond Index
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 12/31/94 1,000,000 1,000,000 1,000,000 1,000,000
2 1/31/95 1,019,000 1,020,459 1,021,610 1,020,700
3 2/28/95 1,050,000 1,054,246 1,062,301 1,044,584
4 3/31/95 1,064,000 1,074,390 1,090,303 1,050,643
5 4/30/95 1,080,000 1,096,416 1,117,397 1,065,037
6 5/31/95 1,120,000 1,133,880 1,155,243 1,107,319
7 6/30/95 1,139,086 1,160,041 1,192,095 1,115,070
8 7/31/95 1,154,301 1,190,257 1,241,150 1,112,840
9 8/31/95 1,170,530 1,202,592 1,253,251 1,125,637
10 9/30/95 1,192,845 1,236,361 1,301,050 1,136,219
11 10/31/95 1,199,945 1,234,092 1,287,988 1,151,444
12 11/30/95 1,236,461 1,274,817 1,342,560 1,169,406
13 12/31/95 1,254,813 1,294,523 1,364,511 1,185,544
14 1/31/96 1,278,797 1,320,146 1,401,066 1,193,606
15 2/29/96 1,273,346 1,327,345 1,425,571 1,173,434
16 3/31/96 1,276,616 1,333,439 1,441,166 1,164,985
17 4/30/96 1,279,887 1,351,402 1,476,778 1,156,364
18 5/31/96 1,284,248 1,375,182 1,517,153 1,155,786
19 6/30/96 1,293,124 1,374,034 1,504,667 1,170,696
20 7/31/96 1,273,247 1,327,149 1,423,490 1,173,857
21 8/31/96 1,287,603 1,354,048 1,469,027 1,172,096
22 9/30/96 1,324,045 1,409,152 1,547,238 1,192,490
23 10/31/96 1,354,965 1,433,054 1,568,869 1,219,321
24 11/30/96 1,405,762 1,503,041 1,672,806 1,239,440
25 12/31/96 1,396,859 1,487,401 1,653,954 1,228,533
26 1/31/97 1,414,616 1,541,133 1,742,490 1,233,201
27 2/28/97 1,419,351 1,541,265 1,741,688 1,234,558
28 3/31/97 1,394,492 1,491,506 1,664,653 1,222,089
29 4/30/97 1,418,167 1,541,250 1,737,249 1,239,565
30 5/31/97 1,459,599 1,617,300 1,860,333 1,251,217
31 6/30/97 1,493,510 1,672,330 1,945,797 1,266,106
32 7/31/97 1,555,541 1,771,761 2,095,390 1,300,418
33 8/31/97 1,530,490 1,723,138 2,016,624 1,289,234
34 9/30/97 1,563,891 1,798,097 2,135,625 1,308,186
35 10/31/97 1,548,383 1,768,165 2,064,487 1,326,893
36 11/30/97 1,559,120 1,808,702 2,132,078 1,333,129
37 12/31/97 1,581,464 1,836,885 2,171,479 1,346,727
38 1/31/98 1,597,411 1,851,662 2,183,270 1,364,100
39 2/28/98 1,638,609 1,938,829 2,342,213 1,363,145
40 3/31/98 1,670,504 2,004,551 2,459,440 1,368,461
41 4/30/98 1,666,517 2,023,665 2,488,634 1,375,577
42 5/31/98 1,670,504 1,995,462 2,422,411 1,388,783
43 6/30/98 1,675,623 2,046,664 2,507,341 1,400,171
44 7/31/98 1,661,933 2,019,021 2,452,405 1,403,111
45 8/31/98 1,614,019 1,825,458 2,070,492 1,424,579
46 9/30/98 1,672,885 1,918,042 2,205,737 1,458,199
47 10/31/98 1,705,740 2,007,777 2,369,843 1,451,637
48 11/30/98 1,726,275 2,093,822 2,519,072 1,459,621
49 12/31/98 1,738,302 2,183,183 2,183,183 1,464,146
50 1/31/99 1,734,600 2,241,002 2,241,002 1,474,981
51 2/28/99 1,693,873 2,174,472 2,174,472 1,449,168
52 3/31/99 1,712,385 2,233,354 2,233,354 1,457,429
53 4/30/99 1,762,368 2,305,512 2,305,512 1,462,238
54 5/31/99 1,753,112 2,265,285 2,265,285 1,448,786
55 6/30/99 1,755,023 2,338,817 2,338,817 1,443,860
56 7/31/99 1,728,828 2,286,804 2,286,804 1,438,084
57 8/31/99 1,702,634 2,272,390 2,272,390 1,437,078
58 9/30/99 1,665,214 2,243,339 2,243,339 1,454,323
59 10/31/99 1,646,503 2,338,427 2,338,427 1,458,686
60 11/30/99 1,646,503 2,389,249 2,389,249 1,458,540
61 12/31/99 1,617,539 2,503,324 2,503,324 1,451,830
62 1/31/2000 1,582,878 2,433,309 2,433,309 1,447,728
63 2/29/2000 1,532,811 2,478,673 2,478,673 1,464,624
64 3/31/2000 1,602,134 2,585,621 2,585,621 1,483,622
65 4/30/2000 1,656,052 2,495,371 2,495,371 1,479,217
66 5/31/2000 1,675,309 2,437,951 2,437,951 1,477,911
67 6/30/2000 1,666,038 2,525,643 2,525,643 1,508,740
</TABLE>
Fund returns are net of all fees and costs, while the Index returns
are based solely on market returns without deduction for fees or
transaction costs for rebalancing.
================================================================================
38
<PAGE>
U.S. Balanced Fund
--------------------------------------------------------------------------------
Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
----------------------------------------------------------------------------
U.S. EQUITIES
Energy.......................................................... 1.61%
Capital Investment
Capital Goods................................................. 1.43
Electronic Components......................................... 1.42
Technology.................................................... 5.20
------
8.05
Basic Industries
Chemicals..................................................... 1.50
Housing/Paper................................................. 3.34
Metals........................................................ 1.83
------
6.67
Computers
Software...................................................... 0.65
Systems....................................................... 0.40
------
1.05
Consumer
Autos/Durables................................................ 1.21
Food/House Products........................................... 0.23
Health: Drugs................................................. 2.99
Health: Non-Drugs............................................. 4.47
Leisure/Tourism............................................... 0.25
Non-Durables.................................................. 0.87
Retail/Apparel................................................ 4.11
------
14.13
Financial
Banks......................................................... 2.81
Non-Banks..................................................... 3.59
------
6.40
Telecommunications
Equipment..................................................... 0.07%
Services...................................................... 2.28
------
2.35
Transportation.................................................. 3.54
Services/Misc................................................... 3.73
Utilities....................................................... 1.53
------
Total U.S. Equities.................................. 49.06*
U.S. BONDS
Corporate Bonds
Industrial Components......................................... 1.86
Health: Drugs................................................. 0.53
Telecommunications--Services.................................. 0.77
Telecommunications--Wireless.................................. 0.29
------
Total U.S. Corporate Bonds........................... 3.45
International Dollar Bonds...................................... 1.04
Asset-Backed.................................................... 1.60
Corporate Mortgage-Backed Securities............................ 0.70
U.S. Government Agencies........................................ 1.77
U.S. Gov't. Mortgage-Backed Securities.......................... 8.41
U.S. Government Obligations..................................... 26.35
------
Total U.S. Bonds..................................... 43.32*
SHORT-TERM INVESTMENTS.......................................... 7.05*
------
TOTAL INVESTMENTS.................................... 99.43
CASH AND OTHER ASSETS, LESS LIABILITIES......................... 0.57
------
NET ASSETS...................................................... 100.00%
======
--------------------------------------------------------------------------------
* The Fund held a long position in U.S. Treasury futures on June 30, 2000 which
increased U.S. bond exposure from 43.32% to 71.22%. The Fund also held a
short position in stock index futures which reduced U.S. Equity exposure from
49.06% to 25.33%. These two adjustments result in a net decrease in the
Fund's exposure to Short-Term Investments from 7.05% to 2.88%.
Asset Allocation
As of June 30, 2000
Current
Benchmark Strategy
--------------------------------------------------------------------
U.S. Equities 65% 25%
U.S. Bonds 35 75
--------------------------------------------------------------------
100% 100%
Top Ten U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
-------------------------------------------------------------------
1. Advanced Micro Devices, Inc. 2.12%
2. FedEx Corp. 1.60
3. Burlington Northern Santa Fe Corp. 1.52
4. Allergan, Inc. 1.51
5. Electronic Data Systems Corp. 1.27
6. CIGNA Corp. 1.06
7. Gateway, Inc. 1.05
8. St. Jude Medical, Inc. 1.04
9. Baxter International, Inc. 1.02
10. Alza Corp. 1.00
-------------------------------------------------------------------
================================================================================
39
<PAGE>
U.S. BALANCED FUND -- SCHEDULE OF INVESTMENTS
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
U.S. Equities -- 49.06%
Advanced Micro Devices, Inc. (b)................................................. 3,400 $ 262,650
Allergan, Inc.................................................................... 2,500 186,250
Alza Corp. (b)................................................................... 2,100 124,162
American Electric Power Co., Inc................................................. 2,640 78,210
American General Corp............................................................ 900 54,900
American Standard Companies, Inc. (b)............................................ 1,700 69,700
AmSouth Bancorp.................................................................. 1,980 31,185
Aon Corp......................................................................... 2,750 85,422
Associates First Capital Corp., Class A.......................................... 3,700 82,556
Baxter International, Inc........................................................ 1,800 126,562
Burlington Northern Santa Fe Corp................................................ 8,200 188,087
Carnival Corp., Class A.......................................................... 1,600 31,200
CIGNA Corp....................................................................... 1,400 130,900
Circuit City Stores-Circuit City Group........................................... 1,100 36,506
CMS Energy Corp.................................................................. 1,500 33,188
CommScope, Inc. (b).............................................................. 200 8,200
Compaq Computer Corp............................................................. 4,100 104,806
Computer Sciences Corp. (b)...................................................... 200 14,938
Compuware Corp. (b).............................................................. 7,200 74,700
CVS Corp......................................................................... 800 32,000
Dell Computer Corp. (b).......................................................... 1,000 49,312
Eastman Chemical Co.............................................................. 900 42,975
Electronic Data Systems Corp..................................................... 3,800 156,750
Emerson Electric Co.............................................................. 2,000 120,750
Entergy Corp..................................................................... 2,200 59,812
Exxon Mobil Corp................................................................. 1,000 78,500
Federated Department Stores, Inc. (b)............................................ 1,200 40,500
FedEx Corp. (b).................................................................. 5,200 197,600
First Data Corp.................................................................. 2,158 107,091
Fleet Boston Financial Corp...................................................... 2,605 88,570
Fort James Corp.................................................................. 2,800 64,750
Gateway, Inc. (b)................................................................ 2,300 130,525
GATX Corp........................................................................ 700 23,800
Genzyme Corp. (b)................................................................ 1,100 65,381
GreenPoint Financial Corp........................................................ 3,100 58,125
Household International, Inc..................................................... 1,700 70,656
Illinois Tool Works, Inc......................................................... 2,100 119,700
IMC Global, Inc.................................................................. 3,500 45,500
Johnson & Johnson Co............................................................. 1,200 122,250
Johnson Controls, Inc............................................................ 1,100 56,444
Kimberly-Clark Corp.............................................................. 1,400 80,325
Kroger Co. (b)................................................................... 4,400 97,075
Lafarge Corp..................................................................... 1,300 27,300
Lear Corp. (b)................................................................... 2,300 46,000
Lexmark International Group, Inc. (b)............................................ 1,200 80,700
Lincoln National Corp............................................................ 1,600 57,800
Lyondell Chemical Co............................................................. 2,000 33,500
Martin Marietta Materials, Inc................................................... 936 37,850
Masco Corp....................................................................... 5,900 106,569
Mattel, Inc...................................................................... 6,400 84,400
Mead Corp........................................................................ 1,500 37,875
Microsoft Corp. (b).............................................................. 1,000 80,000
Motorola, Inc.................................................................... 1,515 44,030
New York Times Co................................................................ 1,100 43,450
Newell Rubbermaid, Inc........................................................... 3,300 $ 84,975
Nextel Communications, Inc. (b).................................................. 1,800 110,137
Norfolk Southern Corp............................................................ 1,900 28,263
Owens-Illinois, Inc. (b)......................................................... 900 10,519
Peco Energy Co................................................................... 2,400 96,750
Pentair, Inc..................................................................... 1,400 49,700
PepsiCo, Inc..................................................................... 2,000 88,875
PNC Bank Corp.................................................................... 1,300 60,937
Praxair, Inc..................................................................... 1,700 63,644
Raytheon Co., Class B............................................................ 3,000 57,750
Sara Lee Corp.................................................................... 1,500 28,969
SBC Communications, Inc.......................................................... 2,700 116,775
Smurfit-Stone Container Corp. (b)................................................ 1,700 21,888
Southdown, Inc................................................................... 1,116 64,449
St. Jude Medical, Inc. (b)....................................................... 2,800 128,450
Tellabs, Inc. (b)................................................................ 800 54,750
Texas Instruments, Inc........................................................... 800 54,950
Tyson Foods, Inc., Class A....................................................... 2,100 18,375
Ultramar Diamond Shamrock Corp................................................... 1,690 41,933
Unisys Corp. (b)................................................................. 1,800 26,213
UnitedHealth Group, Inc.......................................................... 1,300 111,475
USG Corp......................................................................... 700 21,263
Viad Corp........................................................................ 1,600 43,600
W.W. Grainger, Inc............................................................... 1,200 36,975
Wal-Mart Stores, Inc............................................................. 900 51,862
Watson Pharmaceutical Co. (b).................................................... 1,100 59,125
Wells Fargo and Co............................................................... 2,800 108,500
Westvaco Corp.................................................................... 1,100 27,294
Xerox Corp....................................................................... 1,300 26,975
XL Capital Ltd................................................................... 600 32,475
York International Corp.......................................................... 1,200 31,350
----------
Total U.S. Equities (Cost $6,145,953)............................................ 6,071,183
----------
</TABLE>
<TABLE>
<CAPTION>
Face
Amount
------
<S> <C> <C>
Bonds -- 43.32%
U.S. Corporate Bonds -- 3.45%
Archer Daniels Midland, 6.950%, due 12/15/97..................................... $ 250,000 204,464
Lowe's Cos., Inc., 8.250%, due 06/01/10.......................................... 25,000 25,545
PanAmSat Corp., 6.000%, due 01/15/03............................................. 100,000 95,080
Rite Aid Corp., 144A,
6.125%, due 12/15/08............................................................. 140,000 65,100
WorldCom, Inc., 8.250%, due 05/15/10............................................. 35,000 35,824
-------
426,013
-------
International Dollar Bonds -- 1.04%
Empresa Nacional de Electricidad S.A.,
8.125%, due 02/01/97............................................................ 100,000 78,522
United Mexican States, 9.875%, due 02/01/10..................................... 50,000 50,500
-------
129,022
-------
Asset-Backed Securities -- 1.60%
Peco Energy Transition Trust, 6.130%, due 03/01/09.............................. 215,000 198,200
-------
</TABLE>
================================================================================
40
<PAGE>
U.S. BALANCED FUND -- SCHEDULE OF INVESTMENTS
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
------ -----
<S> <C> <C>
Corporate Mortgage-Backed Securities -- 0.70%
LB Commercial Conduit Mortgage Trust, 99-C1, Class A1, 6.410%, due 06/15/31..... $ 86,268 $ 83,168
Residential Asset Securitization Trust, 97-A11, Class A2, 7.000%, due 01/25/28.. 3,505 3,489
---------
86,657
---------
U.S. Government Mortgage-Backed Securities -- 8.41%
Federal Home Loan Mortgage Corp. Gold,
9.000%, due 07/01/30, TBA....................................................... 270,000 278,522
Federal National Mortgage Assoc.,
97-72, Class EG 0.000%, due 09/25/22 (b)......................................... 146,578 136,425
Federal National Mortgage Association,
6.500%, due 06/01/14............................................................ 213,486 205,860
Federal National Mortgage Association,
Series G94-8, Class G,7.600%, due 06/17/19..................................... 205,867 206,388
Government National Mortgage Association,
7.000%, due 12/15/23............................................................ 121,338 118,515
7.500%, due 10/15/29............................................................ 94,980 94,369
---------
1,040,079
---------
U.S. Government Agencies -- 1.77%
Federal National Mortgage Association,
5.250%, due 01/15/09............................................................ 250,000 219,387
---------
U.S. Government Obligations -- 26.35%
U.S. Treasury Bond,
8.000%, due 11/15/21............................................................ 135,000 162,928
8.750%, due 05/15/17............................................................ 100,000 125,688
U.S. Treasury Inflation Indexed Note,
3.875%, due 04/15/29............................................................ 2,540,000 2,637,667
U.S. Treasury Note,
5.625%, due 05/15/08............................................................ 75,000 72,328
7.500%, due 02/15/05............................................................ 250,000 262,187
---------
3,260,798
---------
Total U.S. Bonds (Cost $5,383,527)............................................... 5,360,156
---------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
Short-Term Investments -- 7.05%
Investment Companies -- 5.04%
Brinson Supplementary Trust U.S. Cash Management Prime Fund..................... 623,691 $ 623,691
------------
</TABLE>
<TABLE>
<CAPTION>
Face
Amount
-------
<S> <C> <C>
U.S. Government Obligations -- 2.01%
U.S. Treasury Bill, due 08/17/00................................................. $ 250,000 248,244
------------
Total Short-Term Investments (Cost $871,855).................................... 871,935
------------
Total Investments (Cost $12,401,335) -- 99.43% (a).............................. 12,303,274
Cash and other assets, less liabilities -- 0.57%................................ 71,107
------------
Net Assets -- 100%............................................................... $ 12,374,381
============
</TABLE>
See accompanying notes to schedule of investments.
================================================================================
41
<PAGE>
U.S. Balanced Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $12,665,011; and net
unrealized depreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation ......................................................................... $ 773,580
Gross unrealized depreciation ......................................................................... (1,135,317)
-----------
Net unrealized depreciation ..................................................................... $ (361,737)
===========
</TABLE>
(b) Non-income producing security
TBA: Security is subject to delayed delivery.
144A: Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At June 30, 2000, the value
of these securities amounted to $65,100 or 0.53% of net assets.
FUTURES CONTRACTS
The U.S. Balanced Fund had the following open futures contracts as of June 30,
2000:
<TABLE>
<CAPTION>
Expiration Cost/ Current Unrealized
Date Proceeds Value Gain
-------------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U.S. Interest Rate Futures Buy Contracts
5 Year U.S. Treasury Notes, 23 contracts ............ September 2000 $ 2,225,950 $ 2,277,359 $ 51,409
10 Year U.S. Treasury Notes, 23 contracts ........... September 2000 678,713 689,390 10,677
30 Year U.S. Treasury Notes, 5 contracts ............ September 2000 482,441 486,719 4,278
Index Future Sale Contracts
Standard & Poor,s 500, 8 contracts .................. September 2000 2,994,544 2,936,200 58,344
---------
Total .......................................... $ 124,708
=========
</TABLE>
The aggregate market value of investments pledged to cover margin requirements
for the open future positions at June 30, 2000 was $248,244.
================================================================================
42 See accompanying notes to financial statements.
<PAGE>
U.S. Equity Fund
--------------------------------------------------------------------------------
[LOGO] Since its performance inception on February 28, 1994, the Brinson U.S.
Equity Fund Class I has provided an annualized return of 14.48%,
compared to the 20.48% return of its benchmark, the Wilshire 5000
Equity Index. The annualized volatility of the Fund has been 15.13%
since its inception, only slightly above the 14.33% volatility for the
benchmark. For the first six months of 2000, the Fund's total return
of -4.46% trailed the -0.84% return for its benchmark. However, as a
more realistic view of some of the risks inherent in the equity
markets took root in the second quarter of 2000, the Fund outperformed
the benchmark. For the second quarter, the Fund returned 1.45%
compared to the benchmark return of -4.49%.
The momentum that had been driving prices higher in the technology,
media and telecommunications (TMT) sectors subsided in the second
quarter. Many so-called "old economy" stocks saw favorable attention
from investors, as they began to look for more reasonable stock
valuations. Investors have begun to question whether TMT companies can
grow and increase earnings fast enough and for long enough to justify
their high valuations. Past experience is not encouraging. Studies
show that in the past, only 3% of the companies in the S&P 500 Index
have sustained growth of 20% for 10 years, and only one (Microsoft)
has sustained 20% growth for 15 years. While we are skeptical of
inflated investment expectations, we understand and appreciate the
role of new and emerging technology in business.
Our analysis is focused on investing in companies with solid
fundamentals as well as promising uses for new technologies.
Specifically, we see opportunities in some "old economy" sectors such
as basic materials, transportation and healthcare where some
undervalued companies are leveraging their skills, assets and
competitive positions to take advantage of technology and the
Internet. These sectors represent the largest overweights in the Fund,
and are offset by significant underweight positions to software,
hardware and telecommunications sectors.
================================================================================
43
<PAGE>
U.S. Equity Fund
--------------------------------------------------------------------------------
[LOGO] Total Return
<TABLE>
<CAPTION>
6 months 1 year 3 years 5 years Inception*
ended ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00 6/30/00
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brinson U.S. Equity Fund Class I -4.46% -17.00% 5.12% 14.86% 14.48%
-----------------------------------------------------------------------------------------------------
Brinson U.S. Equity Fund Class N -4.66 -17.24 4.76 N/A 4.76
-----------------------------------------------------------------------------------------------------
Wilshire 5000 Equity Index -0.84 9.52 19.06 22.47 20.48
</TABLE>
* Performance inception date of the Brinson U.S. Equity Fund Class I
and the Wilshire 5000 Equity Index is 2/28/94, and inception date of
Class N is 6/30/97.
Total return includes reinvestment of all capital gain and income
distributions.
All total returns in excess of 1 year are average annualized returns.
Illustration of an Assumed Investment of $1,000,000
This chart shows the growth in the value of an investment in the
Brinson U.S. Equity Fund Class I and the Wilshire 5000 Equity Index if
you had invested $1,000,000 on February 28, 1994, and had reinvested
all your income dividends and capital gain distributions through June
30, 2000. The performance of Class N shares will vary based upon the
different inception dates and class specific expenses. No adjustment
has been made for any income taxes payable by shareholders on income
dividends and capital gain distributions. Past performance is no
guarantee of future results. Share price and return will vary with
market conditions; investors may realize a gain or loss upon
redemption.
Brinson U.S. Equity Fund Class I
vs. Wilshire 5000 Equity Index
Wealth Value with Dividends Reinvested
[GRAPH APPEARS HERE]
Fund returns are net of all fees and costs, while the Index returns
are based solely on market returns without deduction for fees or
transaction costs for rebalancing.
Label A B
---------------------------------------------------------
Label Brinson U.S Equity Fund Wilshire 5000
Class 1 Equity Index
---------------------------------------------------------
1 2/28/94 1,000,000 1,000,000
2 3/31/94 942,943 954,720
3 4/30/94 964,965 963,876
4 5/31/94 984,985 973,322
5 6/30/94 970,003 947,285
6 7/31/94 992,118 975,401
7 8/31/94 1,055,444 1,018,484
8 9/30/94 1,019,258 998,766
9 10/31/94 1,014,232 1,015,076
10 11/30/94 979,050 977,904
11 12/31/94 983,676 991,086
12 1/31/95 1,004,021 1,012,504
13 2/28/95 1,049,797 1,052,832
14 3/31/95 1,076,245 1,080,584
15 4/30/95 1,099,642 1,107,437
16 5/31/95 1,140,332 1,144,946
17 6/30/95 1,178,023 1,818,470
18 7/31/95 1,219,913 1,242,080
19 8/31/95 1,242,391 1,242,080
20 9/30/95 1,289,389 1,289,453
21 10/31/95 1,285,302 1,276,507
22 11/30/95 1,358,865 1,330,593
23 12/31/95 1,382,877 1,352,348
24 1/31/96 1,439,578 1,388,577
25 2/29/96 1,462,678 1,412,864
26 3/31/96 1,489,979 1,428,320
27 4/30/96 1,518,329 1,463,614
28 5/31/96 1,542,480 1,503,629
29 6/30/96 1,538,200 1,491,254
30 7/31/96 1,464,400 1,410,801
31 8/31/96 1,520,277 1,455,933
32 9/30/96 1,588,806 1,533,447
33 10/31/96 1,622,543 1,554,884
34 11/30/96 1,735,351 1,657,895
35 12/31/96 1,737,594 1,639,211
36 1/31/97 1,800,717 1,726,958
37 2/28/97 1,811,046 1,726,163
38 3/31/97 1,751,366 1,649,815
39 4/30/97 1,805,308 1,712,764
40 5/31/97 1,937,291 1,843,751
41 6/30/97 2,028,487 1,928,453
42 7/31/97 2,183,729 2,076,712
43 8/31/97 2,098,633 1,998,648
44 9/30/97 2,192,928 2,116,589
45 10/31/97 2,076,785 2,046,085
46 11/30/97 2,118,182 2,113,074
47 12/31/97 2,167,878 2,152,123
48 1/31/98 2,182,676 2,163,809
49 2/28/98 2,372,581 2,321,335
50 3/31/98 2,509,461 2,437,518
51 4/30/98 2,484,798 2,466,451
52 5/31/98 2,449,037 2,400,819
53 6/30/98 2,464,186 2,484,991
54 7/31/98 2,402,303 2,430,545
55 8/31/98 2,059,471 2,052,036
56 9/30/98 2,209,228 2,186,075
57 10/31/98 2,377,550 2,348,719
58 11/30/98 2,476,563 2,496,618
59 12/31/98 2,570,544 2,656,377
60 1/31/99 2,553,433 2,754,025
61 2/28/99 2,459,983 2,654,192
62 3/31/99 2,540,271 2,756,617
63 4/30/99 2,769,291 2,888,742
64 5/31/99 2,735,069 2,825,507
65 6/30/99 2,839,189 2,971,784
66 7/31/99 2,720,229 2,849,699
67 8/31/99 2,625,060 2,849,699
68 9/30/99 2,434,723 2,775,237
69 10/31/99 2,436,045 2,951,728
70 11/30/99 2,450,585 3,050,581
71 12/31/99 2,463,489 3,282,215
72 1/31/2000 2,300,757 3,145,980
73 2/29/2000 2,113,060 3,216,441
74 3/31/2000 2,322,753 3,407,484
75 4/30/2000 2,415,135 3,229,951
76 5/31/2000 2,435,664 3,117,144
77 6/30/2000 2,354,848 3,254,626
================================================================================
44
<PAGE>
U.S. Equity Fund
--------------------------------------------------------------------------------
[LOGO] Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
----------------------------------------------------------------------
U.S. EQUITIES
Energy...................................................... 3.27%
Capital Investment
Capital Goods............................................. 2.43
Electronic Components..................................... 7.70
Technology................................................ 1.81
------
11.94
Basic Industries
Chemicals................................................. 3.06
Housing/Paper............................................. 6.81
Metals.................................................... 3.73
------
13.60
Computers
Software.................................................. 2.50
Systems................................................... 4.65
------
7.15
Consumer
Autos/Durables............................................ 2.25
Food/House Products....................................... 0.48
Health: Drugs............................................. 6.10
Health: Non-Drugs......................................... 8.89
Leisure/Tourism........................................... 0.50
Non-Durables.............................................. 1.97%
Retail/Apparel............................................ 7.01
------
27.20
Financial
Banks..................................................... 5.73
Non-Banks................................................. 7.28
------
13.01
Telecommunications
Equipment................................................. 0.16
Services.................................................. 5.34
------
5.50
Transportation.............................................. 7.15
Services/Misc............................................... 7.59
Utilities................................................... 3.14
------
Total U.S. Equities.................................... 99.55*
SHORT-TERM INVESTMENTS...................................... 0.98*
------
TOTAL INVESTMENTS...................................... 100.53
LIABILITIES, LESS CASH
AND OTHER ASSETS.......................................... (0.53)
------
NET ASSETS.................................................. 100.00%
======
----------------------------------------------------------------------
* The Fund held a long position in stock index futures which increased
U.S. Equity exposure from 99.55% to 100.53%. This adjustment results
in a net decrease in the Fund's exposure to Short-Term Investments
from 0.98% to 0.00%.
Top Ten U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
--------------------------------------------------------
1. Advanced Micro Devices, Inc. 4.26%
2. FedEx Corp. 3.22
3. Burlington Northern Santa Fe Corp. 3.06
4. Allergan, Inc. 3.01
5. Electronic Data Systems Corp. 2.54
6. Gateway, Inc. 2.14
7. CIGNA Corp. 2.08
8. Alza Corp. 2.08
9. St. Jude Medical, Inc. 2.08
10. Baxter International, Inc. 2.05
--------------------------------------------------------
================================================================================
45
<PAGE>
U.S. Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
------- ------------
U.S. Equities -- 99.55%
Advanced Micro Devices, Inc. (b) 103,500 $ 7,995,375
Allergan, Inc. 75,800 5,647,100
Alza Corp. (b) 66,000 3,902,250
American Electric Power Co., Inc. 81,580 2,416,807
American General Corp. 27,700 1,689,700
American Standard Companies, Inc. (b) 51,500 2,111,500
AmSouth Bancorp. 60,109 946,717
Aon Corp. 84,450 2,623,228
Associates First Capital Corp., Class A 115,000 2,565,937
Baxter International, Inc. 54,800 3,853,125
Burlington Northern Santa Fe Corp. 250,400 5,743,550
Cardinal Health, Inc. 600 44,400
Carnival Corp., Class A 48,400 943,800
CIGNA Corp. 41,750 3,903,625
Circuit City Stores-Circuit City Group 32,400 1,075,275
CMS Energy Corp. 46,250 1,023,281
CommScope, Inc. (b) 7,300 299,300
Compaq Computer Corp. 126,900 3,243,881
Computer Sciences Corp. (b) 6,100 455,594
Compuware Corp. (b) 220,700 2,289,762
CVS Corp. 25,400 1,016,000
Delhaize America, Inc. 1 18
Dell Computer Corp. (b) 29,500 1,454,719
Eastman Chemical Co. 27,550 1,315,513
Electronic Data Systems Corp. 115,500 4,764,375
Emerson Electric Co. 62,400 3,767,400
Entergy Corp. 68,000 1,848,750
Exxon Mobil Corp. 31,000 2,433,500
Federated Department Stores, Inc. (b) 37,400 1,262,250
FedEx Corp. (b) 158,900 6,038,200
First Data Corp. 67,130 3,331,326
Fleet Boston Financial Corp. 79,555 2,704,870
Fort James Corp. 86,700 2,004,937
Gateway, Inc. (b) 70,800 4,017,900
GATX Corp. 20,100 683,400
Genzyme Corp. (b) 33,050 1,964,409
GreenPoint Financial Corp. 96,100 1,801,875
Household International, Inc. 51,900 2,157,094
Illinois Tool Works, Inc. 65,600 3,739,200
IMC Global, Inc. 106,600 1,385,800
Johnson & Johnson Co. 35,400 3,606,375
Johnson Controls, Inc. 32,300 1,657,394
Kimberly-Clark Corp. 41,550 2,383,931
Kroger Co. (b) 134,100 2,958,581
Lafarge Corp. 40,000 840,000
Lear Corp. (b) 71,850 1,437,000
Lexmark International Group, Inc. (b) 38,400 2,582,400
Lincoln National Corp. 50,500 1,824,312
Lyondell Chemical Co. 62,250 1,042,688
Martin Marietta Materials, Inc. 29,907 1,209,364
Masco Corp. 180,400 3,258,475
Mattel, Inc. 195,500 2,578,156
Mead Corp. 47,000 1,186,750
Microsoft Corp. (b) 30,100 2,408,000
Motorola, Inc. 43,423 1,261,981
New York Times Co. 34,900 1,378,550
Newell Rubbermaid, Inc. 101,800 $ 2,621,350
Nextel Communications, Inc. (b) 55,600 3,402,025
Norfolk Southern Corp. 63,600 946,050
Owens-Illinois, Inc. (b) 27,100 316,731
Peco Energy Co. 74,800 3,015,375
Pentair, Inc. 43,800 1,554,900
PepsiCo, Inc. 62,800 2,790,675
PNC Bank Corp. 40,700 1,907,812
Praxair, Inc. 53,300 1,995,419
Raytheon Co., Class B 93,250 1,795,062
Sara Lee Corp. 46,800 903,825
SBC Communications, Inc. 82,600 3,572,450
Smurfit-Stone Container Corp. (b) 53,300 686,238
Southdown, Inc. 34,540 1,994,685
St. Jude Medical, Inc. (b) 85,000 3,899,375
Tellabs, Inc. (b) 26,000 1,779,375
Texas Instruments, Inc. 24,600 1,689,712
Tyson Foods, Inc., Class A 67,250 588,438
Ultramar Diamond Shamrock Corp. 51,618 1,280,772
Unisys Corp. (b) 55,400 806,763
UnitedHealth Group, Inc. 38,500 3,301,375
USG Corp. 22,900 695,588
Viad Corp. 49,150 1,339,338
W.W. Grainger, Inc. 36,400 1,121,575
Wal-Mart Stores, Inc. 28,400 1,636,550
Watson Pharmaceutical Co. (b) 35,200 1,892,000
Wells Fargo and Co. 87,300 3,382,875
Westvaco Corp. 34,800 863,475
Xerox Corp. 39,400 817,550
XL Capital Ltd. 19,500 1,055,438
York International Corp. 37,600 982,300
------------
Total U.S. Equities (Cost $163,993,543) 186,714,796
------------
Short-Term Investments -- 0.98%
Investment Companies -- 0.45%
Brinson Supplementary Trust U.S.
Cash Management Prime Fund 849,414 849,414
------------
Face
Amount
------
U.S. Government Obligations -- 0.53%
U.S. Treasury Bill, due 08/17/00 $1,000,000 992,975
------------
Total Short-Term Investments
(Cost $1,841,972) 1,842,389
------------
Total Investments
(Cost $165,835,515) -- 100.53% (a) 188,557,185
Liabilities, less cash and
other assets -- (0.53%) (993,088)
------------
Net Assets -- 100% $187,564,097
============
See accompanying notes to schedule of investments.
================================================================================
46
<PAGE>
U.S. Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $173,799,988; and net
unrealized appreciation consisted of:
Gross unrealized appreciation.............................. $ 41,336,875
Gross unrealized depreciation.............................. (26,579,678)
------------
Net unrealized appreciation................................... $ 14,757,197
============
(b) Non-income producing security
FUTURES CONTRACTS
The U.S. Equity Fund had the following open futures contracts as of June 30,
2000:
<TABLE>
<CAPTION>
Expiration Current Unrealized
Date Cost Value Loss
---------- ----------- ---------- -------
<S> <C> <C> <C> <C>
Index Futures Buy Contracts
Standard & Poor's 500, 5 contracts............... September 2000 $ 1,839,547 $1,835,125 $(4,422)
=======
</TABLE>
The aggregate market value of investments pledged to cover margin requirements
for the open futures positions at June 30, 2000 was $992,975.
================================================================================
See accompanying notes to financial statements.
47
<PAGE>
U.S. Large Cap Equity Fund
--------------------------------------------------------------------------------
[LOGO] Since its performance inception on April 30, 1998, the Brinson U.S.
Large Cap Equity Fund Class I has provided an annualized return of -
6.22% compared to the 14.72% return of its benchmark, the S&P 500
Equity Index. Results for the calendar year-to-date period continued
to be disappointing, with the Fund returning -7.63% versus the
benchmark return of -0.42%. While these results are well below our
expectations, we feel the Fund is very well positioned to take
advantage of the current market environment--which sees investors
focussing more on the so-called "old economy" companies. In the second
quarter alone, the Fund made up 456 basis points of performance versus
the benchmark, returning 1.90% versus the benchmark return of -2.66%.
We see signs that this favorable short-term performance will continue
into the future.
The momentum that had been driving prices higher in the technology,
media and telecommunications (TMT) sectors subsided in the second
quarter. Many so-called "old economy" stocks saw favorable attention
from investors, as they began to look for more reasonable stock
valuations. Investors have begun to question whether TMT companies can
grow and increase earnings fast enough and for long enough to justify
their high valuations. Past experience is not encouraging. Studies
show that in the past, only 3% of the companies in the S&P 500 Index
have sustained growth of 20% for 10 years, and only one (Microsoft)
has sustained 20% growth for 15 years. While we are skeptical of
inflated investment expectations, we understand and appreciate the
role of new and emerging technology in business.
Our analysis is focused on investing in companies with solid
fundamentals as well as promising uses for new technologies.
Specifically, we see opportunities in some "old economy" sectors such
as basic materials, transportation and healthcare where some
undervalued companies are leveraging their skills, assets and
competitive positions to take advantage of technology and the
Internet. These sectors represent the largest overweights in the Fund,
and are offset by significant underweight positions to software,
hardware and telecommunications sectors.
================================================================================
48
<PAGE>
U.S. Large Cap Equity Fund
--------------------------------------------------------------------------------
[LOGO] Total Return
<TABLE>
<CAPTION>
6 months 1 year Inception*
ended ended to
6/30/00 6/30/00 6/30/00
<S> <C> <C> <C>
-------------------------------------------------------------------------------
Brinson U.S. Large Cap Equity Fund Class I -7.63% -23.95% -6.22%
-------------------------------------------------------------------------------
Brinson U.S. Large Cap Equity Fund Class N -7.84 -24.12 -6.47
-------------------------------------------------------------------------------
S&P 500 Equity Index -0.42 7.25 14.72
-------------------------------------------------------------------------------
* Performance inception date Of the Brinson U.S. Large Cap Equity Fund Class I,
Class N and the S&P 500 Equity Index is 4/30/98.
Total return includes reinvestment of all capital gain and income distributions.
All total returns in excess of 1 year are average annualized returns.
Illustration of an Assumed Investment of $1,000,000
This chart shows the growth in the value of an investment in the Brinson U.S.
Large Cap Equity Fund Class I and the S&P 500 Equity Index if you had invested
$1,000,000 on April 30, 1998, and had reinvested all your income dividends and
capital gain distributions through June 30, 2000. The performance of Class N
shares will vary based upon the different class specific expenses. No adjustment
has been made for any income taxes payable by shareholders on income dividends
and capital gain distributions. Past performance is no guarantee of future
results. Share price and return will vary with market conditions; investors may
realize a gain or loss upon redemption.
Brinson U.S. Large Cap Equity Fund Class 1 vs. S&P 500 Equity Index
Wealth Value with Dividends Reinvested
--------------------------------------
Brinson U.S.
Large Cap S&P 500
Equity Fund Equity
Label Class 1 Index
--------------------------------------
1 4/30/98 1,000,000 1,000,000
--------------------------------------
2 5/31/98 983,723 982,810
--------------------------------------
3 6/30/98 998,652 1,022,732
--------------------------------------
4 7/31/98 980,310 1,011,840
--------------------------------------
5 8/31/98 850,893 865,548
--------------------------------------
6 9/30/98 917,130 920,995
--------------------------------------
7 10/31/98 984,386 995,909
--------------------------------------
8 11/30/98 1,026,166 1,056,263
--------------------------------------
9 12/31/98 1,058,703 1,117,132
--------------------------------------
10 1/31/99 1,065,884 1,163,846
--------------------------------------
11 2/28/99 1,032,030 1,127,676
--------------------------------------
12 3/31/99 1,057,677 1,172,792
--------------------------------------
13 4/30/99 1,147,954 1,218,210
--------------------------------------
14 5/31/99 1,114,100 1,189,443
--------------------------------------
15 6/30/99 1,143,860 1,255,453
--------------------------------------
16 7/31/99 1,092,473 1,216,261
--------------------------------------
17 8/31/99 1,060,614 1,210,248
--------------------------------------
18 9/30/99 968,118 1,177,075
--------------------------------------
19 10/31/99 965,035 1,251,560
--------------------------------------
20 11/30/99 955,786 1,277,004
--------------------------------------
21 12/31/99 941,729 1,352,229
--------------------------------------
22 1/31/2000 872,229 1,284,289
--------------------------------------
23 2/29/2000 787,670 1,259,976
--------------------------------------
24 3/31/2000 853,696 1,383,239
--------------------------------------
25 4/30/2000 884,971 1,341,633
--------------------------------------
26 5/31/2000 900,029 1,314,110
--------------------------------------
27 6/30/2000 869,885 1,346,506
--------------------------------------
</TABLE>
Fund returns are net of all fees and costs, while the index returns
are based solely on market returns without deduction for fees or
transaction costs for rebalancing.
================================================================================
49
<PAGE>
U.S. Large Cap Equity Fund
--------------------------------------------------------------------------------
[LOGO] Industry Diversification
<TABLE>
<CAPTION>
As a Percent of Net Assets
As of June 30, 2000
--------------------------------------------------------------------------------
<S> <C>
U.S. EQUITIES
Energy.................................................................. 3.93%
Capital Investment
Capital Goods.......................................................... 4.49
Electric Components.................................................... 4.41
Technology............................................................. 2.76
------
11.66
Basic Industries
Chemicals.............................................................. 1.62
Housing/Paper.......................................................... 1.26
Metals................................................................. 2.64
------
5.52
Computers
Software............................................................... 3.81
Systems................................................................ 7.04
------
10.85
Consumer
Food/House Products.................................................... 0.62
Health: Drugs.......................................................... 1.22
Health: Non-Drugs...................................................... 8.94
Leisure/Tourism........................................................ 0.75%
Non-Durables........................................................... 2.26
Retail/Apparel......................................................... 8.75
------
22.54
Financial
Banks.................................................................. 6.49
Non-Banks.............................................................. 8.73
------
15.22
Telecommunications...................................................... 4.06
Transportation.......................................................... 8.12
Utilities............................................................... 1.50
Services/Miscellaneous.................................................. 8.64
------
Total U.S. Equities................................................... 92.04%
SHORT-TERM INVESTMENTS.................................................. 7.62*
------
TOTAL INVESTMENTS..................................................... 99.66
CASH AND OTHER ASSETS, LESS LIABILITIES................................. 0.34
------
NET ASSETS.............................................................. 100.00%
======
--------------------------------------------------------------------------------
* The Fund held a long position in stock index futures which increased U.S.
Equity exposure from 92.04% to 98.94%. This adjustment results in a net decrease
in the Fund's exposure to Short-Term Investments from 7.62% to 0.72%.
Top 10 U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
-------------------------------------------------------------------------
1. Electronic Data Systems Corp. 3.85%
2. FedEx Corp. 3.74
3. Burlington Northern Santa Fe Corp. 3.58
4. Gateway, Inc. 3.24
5. CIGNA Corp. 3.17
6. Baxter International, Inc. 3.13
7. Johnson & Johnson Co. 3.13
8. Illinois Tool Works, Inc. 3.04
9. Emerson Electric Co. 3.03
10. Wells Fargo and Co. 2.75
-------------------------------------------------------------------------
</TABLE>
================================================================================
50
<PAGE>
U.S. Large Cap Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
--------- -----------
<S> <C> <C>
U.S. Equities -- 92.04%
American Electric Power Co., Inc. ............................ 10,560 $ 312,840
American General Corp. ....................................... 3,600 219,600
Aon Corp. .................................................... 10,850 337,028
Associates First Capital Corp., Class A....................... 14,800 330,225
Baxter International, Inc. ................................... 7,100 499,219
Burlington Northern Santa Fe Corp. ........................... 24,900 571,144
Cardinal Health, Inc. ........................................ 100 7,400
Carnival Corp., Class A....................................... 6,100 118,950
CIGNA Corp. .................................................. 5,400 504,900
Compaq Computer Corp. ........................................ 16,400 419,225
Computer Sciences Corp. (b)................................... 800 59,750
Compuware Corp. (b)........................................... 28,500 295,687
CVS Corp. .................................................... 3,300 132,000
Dell Computer Corp. (b)....................................... 3,800 187,388
Electronic Data Systems Corp. ................................ 14,900 614,625
Eli Lilly and Co. ............................................ 300 29,963
Emerson Electric Co. ......................................... 8,000 483,000
Entergy Corp. ................................................ 8,800 239,250
Exxon Mobil Corp. ............................................ 4,000 314,000
FedEx Corp. (b)............................................... 15,700 596,600
First Data Corp. ............................................. 8,600 426,775
Fleet Boston Financial Corp. ................................. 10,285 349,690
Gateway, Inc. (b)............................................. 9,100 516,425
Household International, Inc. ................................ 6,700 278,469
Illinois Tool Works, Inc. .................................... 8,500 484,500
Johnson & Johnson Co. ........................................ 4,900 499,187
Kimberly-Clark Corp. ......................................... 3,500 200,813
Kroger Co. (b)................................................ 17,300 381,681
Lexmark International Group, Inc. (b)......................... 5,000 336,250
Masco Corp. .................................................. 23,300 420,856
Mattel, Inc. ................................................. 25,200 332,325
Microsoft Corp. (b)........................................... 3,900 $ 312,000
Newell Rubbermaid, Inc. ...................................... 13,100 337,325
Norfolk Southern Corp. ....................................... 8,600 127,925
PepsiCo, Inc. ................................................ 8,100 359,944
PNC Bank Corp. ............................................... 5,300 248,437
Praxair, Inc. ................................................ 6,900 258,319
Raytheon Co., Class B......................................... 12,000 231,000
Sara Lee Corp. ............................................... 5,100 98,494
SBC Communications, Inc. ..................................... 9,600 415,200
Schering Plough Corp. ........................................ 3,100 156,550
Tellabs, Inc. (b)............................................. 3,400 232,687
Texas Instruments, Inc. ...................................... 3,200 219,800
UnitedHealth Group, Inc. ..................................... 5,000 428,750
Wal-Mart Stores, Inc. ........................................ 3,700 213,212
Wells Fargo and Co. .......................................... 11,300 437,875
Xerox Corp. .................................................. 5,000 103,750
------------
Total U.S. Equities (Cost $15,674,981)........................ 14,681,033
------------
Short Term Investments -- 7.62%
Investment Companies -- 7.62%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund
(Cost $1,215,982)........................................... 1,215,982 1,215,982
------------
Total Investments
(Cost $16,890,963) -- 99.66% (a)............................. 15,897,015
Cash and other assets,
less liabilities -- 0.34%.................................... 53,820
------------
Net Assets -- 100%............................................ $15,950,835
============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $18,155,680; and net
unrealized depreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation.......................... $ 728,386
Gross unrealized depreciation.......................... (2,987,051)
-----------
Net unrealized depreciation......................... $(2,258,665)
===========
</TABLE>
(b) Non-income producing security
FUTURES CONTRACTS
The U.S. Large Cap Equity Fund had the following open futures contracts as of
June 30, 2000:
<TABLE>
<CAPTION>
Expiration Current Unrealized
Date Cost Value Loss
-------------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Index Futures Buy Contracts
Standard & Poor's 500, 3 contracts.. September 2000 $1,108,971 $1,101,075 $(7,896)
=======
</TABLE>
The segregated cash pledged to cover margin requirements for the open futures
positions at June 30, 2000 was $56,250.
================================================================================
See accompanying notes to financial statements.
51
<PAGE>
U.S. Large Cap Growth Fund
--------------------------------------------------------------------------------
[LOGO] Since its inception on October 31, 1997, the Brinson U.S. Large Cap
Growth Fund Class I has returned 24.46%, compared to a return of 30.40%
for the Russell 1000 Growth Index. On a calendar year to date basis, the
Fund has returned 4.02% versus the 4.23% return of the benchmark. The
Fund outperformed the benchmark by a small margin in the first quarter,
but lagged the benchmark somewhat in the second quarter. Performance in
the first quarter was strong, mainly due to strong stock selection
decisions. Stock selection in the second quarter was weaker, and offset
the earlier gains.
During the second quarter, we decided to add to our holdings in the
technology sector, which has seen a significant correction from its
highs in mid March. In spite of this, we continue to be underweight the
sector with a 41.4% holding versus the Russell 1000 Growth Index, for
which technology exposure now constitutes about 47.8%. Along with the
technology underweight, the Fund also holds underweight positions in
consumer staples and capital goods, which are offset by overweight
positions in the energy, financial and healthcare sectors.
================================================================================
52
<PAGE>
U.S. Large Cap Growth Fund
[LOGO] Total Return
<TABLE>
<CAPTION>
6 months 1 year Inception*
ended ended to
6/30/00 6/30/00 6/30/00
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Brinson U.S. Large Cap Growth Fund Class I 4.02% 17.52% 24.46%
-------------------------------------------------------------------------------------------------------
Brinson U.S. Large Cap Growth Fund Class N 3.90 17.18 23.60
-------------------------------------------------------------------------------------------------------
S&P 500 Equity Index -0.42 7.25 20.64
-------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index** 4.23 25.67 30.40
-------------------------------------------------------------------------------------------------------
</TABLE>
* Performance inception date of the Brinson U.S. Large Cap Growth
Fund Class I and of both indices is 10/31/97, and inception date of
Class N is 12/31/98.
** Advisor has chosen to change the Fund's benchmark index from the
S&P 500 Equity Index to the Russell 1000 Growth Index due to the
Advisor's determination that the Russell 1000 Growth Index more
closely reflects the Fund's investment strategies.
Total return includes reinvestment of all capital gain and income
distributions.
All total returns in excess of 1 year are average annualized returns.
Illustration of an Assumed Investment of $1,000,000
This chart shows the growth in the value of an investment in the
Brinson U.S. Large Cap Growth Fund Class I, the S&P 500 Equity Index
and the Russell 1000 Growth Index if you had invested $1,000,000 on
October 31, 1997, and had reinvested all your income dividends and
capital gain distributions through June 30, 2000. The performance of
Class N shares will vary based upon the different inception dates and
class specific expenses. No adjustment has been made for any income
taxes payable by shareholders on income dividends and capital gain
distributions. Past performance is no guarantee of future results.
Share price and return will vary with market conditions; investors may
realize a gain or loss upon redemption.
Brinson U.S. Large Cap Growth Fund Class I
vs. S&P 500 Equity Index and Russell 1000 Growth Index
Wealth Value with Dividends Reinvested
[Graph Appears here]
Fund returns are net of all fees and costs, while the Index returns
are based solely on market returns without deduction for fees or
transaction costs for rebalancing.
U.S. Large Cap Growth Fund
<TABLE>
<CAPTION>
Brinson U.S. Large Capitalization Growth Russell 1000
Fund Class 1 S&P 500 Equity Index Growth Index
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 10/31/97 1,000,000 1,000,000 1,000,000
2 11/30/97 1,018,495 1,046,290 1,042,475
3 12/31/97 1,039/140 1,064,255 1,054,153
4 1/31/98 1,031,495 1,076,025 1,085,675
5 2/28/98 1,091,715 1,153,628 1,167,341
6 3/31/98 1,134,655 1,212,706 1,213,876
7 4/30/98 1,156,858 1,224,906 1,230,674
8 5/31/98 1,131,408 1,203,849 1,195,753
9 6/30/98 1,175,605 1,252,750 1,268,988
10 7/31/98 1,171,311 1,239,408 1,260,588
11 8/31/98 973,788 1,060,214 1,071,404
12 9/30/98 1,026,697 1,128,132 1,153,706
13 10/31/98 1,129,126 1,219,894 1,246,431
14 11/30/98 1,210,713 1,293,822 1,341,241
15 12/31/98 1,297,885 1,368,381 1,462,181
16 1/31/99 1,380,099 1,425,601 1,548,037
17 2/28/99 1,319,808 1,381,297 1,477,318
18 3/31/99 1,384,483 1,436,559 1,555,122
19 4/30/99 1,436,004 1,492,192 1,557,111
20 5/31/99 1,418,465 1,456,988 1,509,257
21 6/30/99 1,524,795 1,537,847 1,614,973
22 7/31/99 1,462,313 1,489,805 1,563,646
23 8/31/99 1,461,216 1,482,439 1,589,196
24 9/30/99 1,411,888 1,441,805 1,555,811
25 10/31/99 1,489,717 1,533,043 1,673,303
26 11/30/99 1,565,354 1,564,209 1,763,584
27 12/31/99 1,722,699 1,656,352 1,947,010
28 1/31/2000 1,655,855 1,573,133 1,855,718
29 2/29/2000 1,732,080 1,543,352 1,946,436
30 3/31/2000 1,845,832 1,694,337 2,085,754
31 4/30/2000 1,795,406 1,643,374 1,986,504
32 5/31/2000 1,725,044 1,609,661 1,886,490
33 6/30/2000 1,792,308 1,649,343 2,029,463
==============================================================================================================
</TABLE>
<PAGE>
U.S. Large Cap Growth Fund
[LOGO] Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
----------------------------------------------------------------------
U.S. EQUITIES
Energy............................................. 3.00%
Capital Investment
Electric Components.............................. 15.94
Technology....................................... 1.47
------
17.41
Basic Industries
Housing/Paper.................................... 0.94
Computers
Software......................................... 7.09
Systems.......................................... 12.11
------
19.20
Consumer
Autos/Durables................................... 1.41
Health: Drugs.................................... 10.12
Health: Non-Drugs................................ 6.78%
Non-Durables..................................... 2.37
Retail/Apparel................................... 8.45
------
29.13
Financial
Non-Banks........................................ 3.92
Telecommunications................................. 9.21
Services/Misc...................................... 5.79
------
Total U.S. Equities....................... 88.60*
SHORT-TERM INVESTMENTS............................. 7.80*
------
TOTAL INVESTMENTS......................... 96.40
CASH AND OTHER ASSETS,
LESS LIABILITIES................................ 3.60
------
NET ASSETS......................................... 100.00%
======
----------------------------------------------------------------------
*The Fund held a long position in stock index futures which increased
U.S. Equity exposure from 88.60% to 97.02%. This adjustment results in
a net decrease in the Fund's exposure to Short-Term Investments from
7.80% to -0.62%.
Top 10 U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
----------------------------------------------------------
1. Cisco Systems, Inc. 4.47%
2. Intel Corp. 4.09
3. Pfizer, Inc. 3.75
4. Microsoft Corp. 3.24
5. General Electric Co. 3.16
6. Oracle Corp. 3.09
7. Sun Microsystems, Inc. 2.99
8. Texas Instruments, Inc. 2.94
9. Micron Technology, Inc. 2.70
10. Johnson & Johnson Co. 2.57
----------------------------------------------------------
======================================================================
54
<PAGE>
U.S. Large Cap Growth Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
U.S. Equities -- 88.60%
AFLAC, Inc........................................................................... 3,500 $ 160,781
Agilent Technologies, Inc. (b)....................................................... 900 66,375
Alltel Corp........................................................................ 1,700 105,294
America On-Line, Inc. (b).......................................................... 4,300 226,825
American Express Co................................................................ 2,200 114,675
American International Group, Inc.................................................. 1,025 120,438
Amgen, Inc. (b).................................................................... 1,700 119,425
Anheuser-Busch Cos., Inc., Class A................................................. 1,600 119,500
Applied Material, Inc. (b)......................................................... 1,900 172,188
AT&T Corp.- Liberty Media Goup, Inc. (b)........................................... 8,612 208,841
Avon Products, Inc................................................................. 4,100 182,450
BMC Software, Inc. (b)............................................................. 2,700 98,508
Boeing Co.......................................................................... 4,400 183,975
Boston Scientific Corp. (b)........................................................ 5,100 111,881
Bristol-Myers Squibb Co............................................................ 2,500 145,625
Cisco Systems, Inc. (b)............................................................ 9,200 584,775
Citigroup, Inc..................................................................... 2,700 162,675
Compaq Computer Corp............................................................... 6,400 163,600
Dell Computer Corp. (b)............................................................ 2,500 123,281
EMC Corp. (b)...................................................................... 1,600 123,100
Gap, Inc........................................................................... 3,500 109,375
General Electric Co................................................................ 7,800 413,400
Guidant Corp. (b).................................................................. 3,200 158,400
Halliburton Co..................................................................... 3,400 160,438
Immunex Corp. (b).................................................................. 4,200 207,637
Intel Corp......................................................................... 4,000 534,750
International Business Machines Corp............................................... 1,800 197,212
JDS Uniphase Corp. (b)............................................................. 700 83,913
Johnson & Johnson Co............................................................... 3,300 336,187
Lowe's Companies, Inc.............................................................. 3,000 123,188
Lucent Technologies, Inc........................................................... 3,900 231,075
Merck & Co., Inc................................................................... 2,700 206,887
Merrill Lynch & Co................................................................. 1,000 115,000
Micron Technology, Inc. (b)........................................................ 4,000 352,250
Microsoft Corp. (b)................................................................ 5,300 $ 424,000
Motorola, Inc...................................................................... 3,700 107,531
NEXTLINK Communications, Inc....................................................... 1,600 60,700
Nike, Inc.......................................................................... 2,100 83,606
Nortel Networks Corp............................................................... 2,000 136,500
Oracle Corp. (b)................................................................... 4,800 403,500
Pepsi Bottling Group, Inc.......................................................... 6,500 189,719
Pfizer, Inc........................................................................ 10,200 489,600
Pharmacia Corp..................................................................... 2,100 108,544
QUALCOMM, Inc. (b)................................................................. 1,800 108,000
Safeway, Inc. (b).................................................................. 5,400 243,675
Schering Plough Corp............................................................... 5,400 272,700
Schlumberger Ltd................................................................... 3,100 231,337
Solectron Corp. (b)................................................................ 3,800 159,125
Sprint Corp. (b)................................................................... 900 53,550
Sun Microsystems, Inc. (b)......................................................... 4,300 391,031
Target Corp........................................................................ 3,800 220,400
Texas Instruments, Inc............................................................. 5,600 384,650
Time Warner, Inc................................................................... 800 60,800
Tyco International Co.............................................................. 3,300 156,338
Viacom, Inc. (b)................................................................... 2,646 180,424
Wal-Mart Stores, Inc............................................................... 4,600 265,075
Walt Disney Co..................................................................... 3,400 131,963
Worldcom, Inc. (b)................................................................. 4,200 192,675
-----------
Total U.S. Equities (Cost $10,029,797)............................................. 11,579,367
-----------
</TABLE>
<TABLE>
<S> <C> <C>
Short-Term Investments -- 7.80%
Investment Companies -- 7.80%
Vista U.S. Government Money Market
Fund (Cost $1,019,932)........................................................... 1,019,932 1,019,932
-----------
Total Investments
(Cost $11,049,729) -- 96.40% (a)................................................. 12,599,299
Cash and other assets,
less liabilities -- 3.60%........................................................ 469,968
-----------
Net Assets -- 100%................................................................. $13,069,267
===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $11,090,213; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation..................................... $1,893,400
Gross unrealized depreciation..................................... (384,314)
----------
Net unrealized appreciation................................... $1,509,086
==========
</TABLE>
(b) Non-income producing security
FUTURES CONTRACTS
The U.S. Large Cap Growth Fund had the following open futures contracts as of
June 30, 2000:
<TABLE>
<CAPTION>
Expiration Current Unrealized
Date Cost Value Loss
------------ ---------- ----------- -----------
<S> <C> <C> <C> <C>
Index Futures Buy Contracts
Standard & Poor's 500, 3 contracts....................... September 2000 $1,102,896 $1,101,075 $ (1,821)
</TABLE>
The segregated cash pledged to cover margin requirements for the open futures
positions at June 30, 2000 was $18,750.
================================================================================
See accompanying notes to financial statements.
55
<PAGE>
U.S. Small Cap Growth Fund
--------------------------------------------------------------------------------
[LOGO] The Brinson U.S. Small Cap Growth Fund Class I has appreciated 19.39%
on an annualized basis since its inception on September 30, 1997. This
compares favorably with the return of the Russell 2000 Growth Index,
(a commonly cited index of small capitalization U.S. growth stocks)
which has returned 11.41% over the same period. Much of that
outperformance has come in the last six months with the Fund returning
30.47% while the index returned just 1.23%.
During the second quarter, small cap stocks underperformed large caps.
The S&P 500 index declined 2.7% in the second quarter, versus a 3.8%
decline in the Russell 2000 Index. Year to date, however, small caps
have returned a positive 3.0% versus a 0.4% decline for the S&P 500.
Small cap growth stocks declined 7.4% in the second quarter and have
returned a positive 1.2% year to date. The top performing small cap
growth sector in the second quarter was healthcare, up 19.2%, while
the worst performing sector was technology, down 19.4%.
In the first quarter, the Fund's technology underweight detracted
somewhat from performance, as that sector continued to dominate market
performance. For the second quarter, however, the Fund benefited from
both strong stock and sector selection. Stock selection was
particularly strong in the technology sector and was weak in the
consumer cyclical sector. Sector selection was helped by the Fund's
underweight in both technology as well as the communication services
sectors, both of which performed poorly during the quarter. At the end
of June, the Fund was overweighted versus the Russell 2000 Growth
Index in the energy, healthcare, and transportation sectors. The Fund
was underweighted in the capital goods, financials, and technology
areas. We have taken advantage of the recent weakness in the
technology sector and have increased our exposure over the past
several weeks.
================================================================================
56
<PAGE>
U.S. Small Cap Growth Fund
--------------------------------------------------------------------------------
[LOGO] Total Return
<TABLE>
<CAPTION>
6 months 1 year Inception*
ended ended to
6/30/00 6/30/00 6/30/00
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Brinson U.S. Small Cap Growth Fund Class I 30.47% 77.23% 19.39%
-----------------------------------------------------------------------------------------------
Brinson U.S. Small Cap Growth Fund Class N 30.43 76.86 50.26
-----------------------------------------------------------------------------------------------
Russell 2000 Index 3.04 14.32 6.10
-----------------------------------------------------------------------------------------------
Russell 2000 Growth Index** 1.23 28.39 11.41
-----------------------------------------------------------------------------------------------
</TABLE>
* Inception dates of the Brinson U.S. Small Cap Growth Fund Class I
and Class N are 9/30/97 and 12/31/98, respectively. Performance
inception date of both indices is 9/30/97.
** The Advisor has chosen to change the Fund's benchmark index from
the Russell 2000 Index to the Russell 2000 Growth Index due to
the Advisor's determination that the Russell 2000 Growth Index
more closely reflects the Fund's investment strategies.
Total return includes reinvestment of all capital gain and income
distributions.
All total returns in excess of 1 year represent average annualized
returns.
The Fund invests in IPOs which may have a magnified impact on
performance.
Illustration of an Assumed Investment of $1,000,000
This chart shows the growth in the value of an investment in the
Brinson U.S. Small Cap Growth Fund Class I, the Russell 2000 Index and
the Russell 2000 Growth Index if you had invested $1,000,000 on
September 30, 1997, and had reinvested all your income dividends and
capital gain distributions through June 30, 2000. The performance of
Class N shares will vary based upon the different inception dates and
class specific expenses. No adjustment has been made for any income
taxes payable by shareholders on income dividends and capital gain
distributions. Past performance is no guarantee of future results.
Share price and return will vary with market conditions; investors may
realize a gain or loss upon redemption.
Brinson U.S. Small Cap Growth Fund Class I
vs. Russell 2000 Index and Russell 2000 Growth Index
Wealth Value with Dividends Reinvested
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Label A B C
---------------------------------------------------------------------------------------------------------------------------
Label Brinson U.S. Small Capitalization Growth Fund-I Russell 2000 Russell 2000 Growth (Benchmark)
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 9/30/97 1,000,000.00 1,000,000.00 1,000,000.00
2 10/31/97 953,600.00 956,071.13 939,936.59
3 11/30/97 936,600.00 949,887.41 917,524.60
4 12/31/97 943,800.00 966,513.23 918,041.67
5 1/31/98 932,700.00 951,260.06 905,795.36
6 2/28/98 1,007,600.00 1,021,598.93 985,766.02
7 3/31/98 1,049,900.00 1,063,732.42 1,027,114.90
8 4/30/98 1,047,200.00 1,069,618.47 1,033,414.08
9 5/31/98 990,700.00 1,012,012.01 958,333.52
10 6/30/98 971,100.00 1,014,140.99 968,125.50
11 7/31/98 887,800.00 932,042.32 887,282.65
12 8/31/98 700,200.00 751,058.64 682,459.76
13 9/30/98 739,371.93 809,834.75 751,654.30
14 10/31/98 788,803.48 842,862.68 790,858.26
15 11/30/98 807,515.42 887,022.39 852,208.61
16 12/31/98 880,562.05 941,912.94 929,327.67
17 1/31/99 881,562.69 954,429.95 971,129.75
18 2/28/99 807,515.42 877,126.38 882,294.49
19 3/31/99 825,526.92 890,819.65 913,718.38
20 4/30/99 823,525.64 970,643.69 994,409.92
21 5/31/99 859,548.63 984,821.90 995,985.45
22 6/30/99 918,586.32 1,029,355.08 1,048,449.20
23 7/31/99 926,591,43 1,001,110.37 1,016,028.29
24 8/31/99 906,578.65 964,060.35 978,030.26
25 9/30/99 938,599.09 964,270.90 996,895.10
26 10/31/99 974,622.08 968,176.36 1,022,429.62
27 11/30/99 1,127,719.80 1,025,985.52 1,130,537.69
28 12/31/99 1,247,796.45 1,142,127.05 1,329,797.00
29 1/31/2000 1,212,774.09 1,123,786.02 1,317,421.36
30 2/29/2000 1,405,897.36 1,309,363.50 1,623,938.60
31 3/31/2000 1,526,974.64 1,223,036.24 1,453,236.55
32 4/30/2000 1,472,940,15 1,149,439.75 1,306,509.89
33 5/31/2000 1,377,879.48 1,082,449.00 1,192,107.49
34 6/30/2000 1,628,039.15 1,176,807.00 1,346,104.76
</TABLE>
Fund returns are net of all fees and costs, while the Index returns
are based solely on market returns without deduction for fees or
transaction costs for rebalancing.
================================================================================
57
<PAGE>
U.S. Small Cap Growth Fund
--------------------------------------------------------------------------------
[LOGO] Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
----------------------------------------------------------------------
U.S. EQUITIES
Energy........................... 3.76%
Capital Investment
Electrical Components.......... 15.85
Technology..................... 5.62
------
21.47
Basic Industries
Housing/Paper.................. 1.17
Computers
Software....................... 5.43
Systems........................ 1.65
------
7.08
Consumer
Autos/Durables................. 5.98
Food/House Products............ 2.02
Health: Drugs.................. 5.61
Health: Non-Drugs.............. 12.23
Retail/Apparel................. 8.50
------
34.34
Financial
Banks.......................... 2.64%
Non-Banks...................... 2.70
------
5.34
Telecommunications
Equipment...................... 0.98
Services....................... 4.46
------
5.44
Transportation................... 3.58
Services/Miscellaneous........... 9.18
------
Total U.S. Equities..... 91.36
SHORT-TERM INVESTMENTS........... 4.58
------
TOTAL INVESTMENTS......... 95.94
CASH AND OTHER ASSETS,
LESS LIABILITIES............... 4.06
------
NET ASSETS....................... 100.00%
======
----------------------------------------------------------------------
Top 10 U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
----------------------------------------------------
1. Elantec Semiconductor, Inc. 3.15%
2. Tollgrade Communications, Inc. 2.86
3. Waters Corp. 2.67
4. Mercury Interactive Corp. 2.39
5. Investors Financial Services Corp. 2.22
6. Quest Diagnostics, Inc. 2.16
7. Shaw Group, Inc. 2.06
8. Hain Celestial Group, Inc. 2.02
9. Flextronics International Ltd. 1.96
10. C & D Technologies, Inc. 1.84
----------------------------------------------------
================================================================================
58
<PAGE>
U.S. Small Cap Growth Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
U.S. Equities -- 91.36%
724 Solutions, Inc. (b)......................... 700 $ 30,713
About.com, Inc. (b)............................. 4,900 154,350
ACT Manufacturing, Inc. (b)..................... 15,300 710,494
Anixter International, Inc. (b)................. 17,200 455,800
Aurora Biosciences Corp. (b).................... 9,000 613,687
Bookham Technology ADR (b)...................... 4,200 248,850
BreezeCom Ltd. (b).............................. 4,150 180,525
C & D Technologies, Inc......................... 17,800 1,005,700
C-COR.net Corp. (b)............................. 20,200 545,400
Caldera Systems, Inc. (b)....................... 4,950 64,659
Celeritek, Inc. (b)............................. 13,100 534,644
Charles River Associates, Inc. (b).............. 9,300 163,913
Children's Place Retail Stores, Inc. (b)........ 8,000 164,000
COR Therapeutics, Inc. (b)...................... 5,100 435,094
Cost Plus, Inc. (b)............................. 17,950 514,941
Credence Systems Corp. (b)...................... 15,400 849,887
Cubist Pharmaceuticals, Inc. (b)................ 9,500 467,875
Cytyc Corp. (b)................................. 12,000 640,500
Data Return Corp. (b)........................... 2,100 60,900
Datascope Corp.................................. 10,800 388,800
Dendrite International, Inc. (b)................ 24,350 811,159
Dobson Communications (b)....................... 4,700 90,475
Elantec Semiconductor, Inc. (b)................. 24,700 1,719,737
Emmis Communications Corp. (b).................. 6,900 285,488
Exar Corp. (b).................................. 8,500 741,094
Exfo Electro Optical Engineering, Inc. (b)...... 2,100 92,138
Expeditors International of Washington, Inc..... 16,700 793,250
Flextronics International Ltd. (b).............. 15,613 1,072,418
Forward Air Corp. (b)........................... 22,500 900,000
Graco, Inc...................................... 15,700 510,250
Greater Bay Bancorp............................. 9,400 439,450
Hain Celestial Group, Inc. (b).................. 30,090 1,103,927
Haverty Furniture Cos., Inc..................... 15,700 133,450
Helix Technology Corp........................... 15,700 612,300
Hooper Holmes, Inc.............................. 32,900 263,200
Inamed Corp. (b)................................ 13,000 476,125
Insight Enterprises, Inc. (b)................... 16,300 966,794
Insituform Technologies, Inc. (b)............... 23,400 634,725
Intersil Holding Corp. (b)...................... 4,000 216,250
Investors Financial Services Corp............... 30,600 1,214,437
Jack in the Box, Inc. (b)....................... 22,900 563,912
Jakks Pacific, Inc. (b)......................... 18,100 266,975
Kenneth Cole Productions, Inc. (b).............. 21,900 876,000
Kent Electronics Corp. (b)...................... 23,900 712,519
King Pharmaceuticals, Inc. (b).................. 18,300 802,912
Littlefuse, Inc. (b)............................ 8,300 406,700
Loudeye Technologies, Inc. (b).................. 4,900 85,444
Marvell Technology Group Ltd. (b)............... 2,100 119,700
Matrixone, Inc. (b)............................. 1,050 42,656
Maverick Tube Corp. (b)......................... 24,000 $ 699,000
Meade Instruments Corp. (b)..................... 17,400 437,175
Mediaplex, Inc. (b)............................. 5,000 96,563
MedQuist, Inc. (b).............................. 12,800 435,200
Mercury Interactive Corp. (b)................... 13,500 1,306,125
Metasolv Software, Inc. (b)..................... 2,100 92,400
Myriad Genetics, Inc. (b)....................... 6,000 888,469
Niku Corp. (b).................................. 3,000 101,250
North Fork Bancorporation, Inc.................. 28,200 426,525
Pacific Sunwear of California, Inc. (b)......... 17,950 336,562
Parlex Corp. (b)................................ 14,800 623,450
Parthus Technologies ADR (b).................... 2,100 59,850
Patterson Dental Co. (b)........................ 18,100 923,100
Patterson Energy, Inc. (b)...................... 26,100 743,850
Peregrine Systems, Inc. (b)..................... 20,300 704,156
QRS Corp. (b)................................... 4,150 101,934
Quest Diagnostics, Inc. (b)..................... 16,500 1,180,781
Rainbow Technologies, Inc. (b).................. 14,600 709,925
Register.com (b)................................ 3,000 91,688
ResMed, Inc. (b)................................ 22,800 609,900
Richmond County Financial Corp.................. 30,100 575,662
Roper Industries, Inc........................... 5,900 151,188
Rudolph Technologies, Inc. (b).................. 1,600 62,000
Saba Software, Inc. (b)......................... 3,150 66,150
Sangstat Medical Corp. (b)...................... 9,900 285,863
Selectica, Inc. (b)............................. 2,000 140,125
Shaw Group, Inc. (b)............................ 23,900 1,126,287
Silicon Laboratories, Inc. (b).................. 700 37,188
Spanish Broadcasting System (b)................. 14,500 298,156
Stone Energy Corp. (b).......................... 12,000 717,000
StorageNetworks, Inc............................ 2,100 189,525
Stratos Lightwave, Inc. (b)..................... 2,100 58,538
Swift Transportation Co., Inc. (b).............. 18,800 263,200
Talbots, Inc.................................... 13,400 736,162
Telcom Semiconductor, Inc. (b).................. 21,400 864,025
TMP Worldwide, Inc. (b)......................... 8,900 656,931
Tollgrade Communications, Inc. (b).............. 11,800 1,563,500
Tower Automotive, Inc. (b)...................... 19,300 241,250
Triton PCS Holdings, Inc. (b)................... 7,800 450,450
United Therapeutics Corp. (b)................... 7,800 845,325
Universal Access, Inc. (b)...................... 1,800 44,100
Utstarcom, Inc. (b)............................. 2,000 60,750
Vertex Pharmaceuticals, Inc. (b)................ 6,300 663,862
Vicinity Corp. (b).............................. 15,400 302,225
Vintage Petroleum, Inc.......................... 28,300 638,519
Waters Corp. (b)................................ 11,700 1,460,306
Whitehall Jewellers, Inc. (b)................... 25,550 475,869
Zebra Technologies Corp., Class A (b)........... 11,200 496,300
Zoll Medical Corp. (b).......................... 14,400 705,600
-----------
Total U.S. Equities (Cost $33,685,619).......... 49,928,176
-----------
</TABLE>
================================================================================
59
<PAGE>
U.S. Small Cap Growth Fund--Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
--------- ------------
<S> <C> <C>
Short-Term Investments -- 4.58%
Investment Companies -- 4.58%
Brinson Supplementary Trust U.S.
Cash Management Prime Fund
(Cost $2,503,641)...................... 2,503,641 $ 2,503,641
------------
Total Investments
(Cost $36,189,260) -- 95.94% (a)....... 52,431,817
Cash and other assets,
less liabilities -- 4.06%.............. 2,216,357
------------
Net Assets -- 100%....................... $ 54,648,174
============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $36,311,146;
and net unrealized appreciation consisted of:
Gross unrealized appreciation................ $17,978,411
Gross unrealized depreciation................ (1,857,740)
-----------
Net unrealized appreciation............... $16,120,671
===========
(b) Non-income producing security
================================================================================
60 See accompanying notes to financial statements.
<PAGE>
U.S. Bond Fund
--------------------------------------------------------------------------------
[LOGO] Since its inception on August 31, 1995, the Brinson U.S. Bond Fund
Class I has returned 6.03%, while its benchmark, the Salomon Smith
Barney Broad Investment Grade (BIG) Bond Index has returned 6.25%.
Over the same period the Fund's annualized volatility or risk of 3.87%
was comparable to the benchmark volatility of 3.40%. For the calendar
year-to-date period, the Fund has returned 3.36% while the benchmark
has returned 3.92%.
Sector strategies hurt the Fund in the first quarter, as we were
overweight corporate bonds (and underweight Treasuries) in a period
during which Treasury securities showed the strongest relative
returns. The negative sector contribution was offset to a large extent
by strong security selection decisions and positive duration
positioning. Early in the second quarter, we diversified our
overweight to those sectors with greater credit risk (non-Treasury) by
increasing our positions in agencies and mortgages and selling
corporate bonds. This also served to slightly upgrade the credit
exposure of the Fund. For the second quarter, the strongest
contributor to performance was our sector exposure as the move to
agency and mortgage securities paid off. However, returns were hurt by
issue selection and our positioning on the yield curve during this
period of high volatility in interest rates.
The Federal Reserve raised rates twice in the first quarter by 25
basis points each time, and then surprised the market with a 50 basis
point increase in the federal funds rate in May. Rates were not
increased at the June 28 Federal Open Market Committee meeting, but
since the beginning of January, the fed funds rate has gone from 5.5%
to 6.5%. Large fluctuations in economic forecasts in the second
quarter contributed to interest rate volatility. Though rates
fluctuated over the quarter, they finished close to first quarter
levels by the end of June.
================================================================================
61
<PAGE>
U.S. Bond Fund
--------------------------------------------------------------------------------
[LOGO] Total Return
<TABLE>
<CAPTION>
6 months 1 year 3 years Inception*
ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Brinson U.S. Bond Fund Class I 3.36% 3.74% 5.71% 6.03%
-------------------------------------------------------------------------------------------------------
Brinson U.S. Bond Fund Class N 3.14 3.29 5.43 5.43
-------------------------------------------------------------------------------------------------------
Salomon Smith Barney Broad Investment Grade (BIG) Bond Index 3.92 4.49 6.02 6.25
-------------------------------------------------------------------------------------------------------
</TABLE>
* Inception dates of the Brinson U.S. Bond Fund Class I and Class N
are 8/31/95 and 6/30/97, respectively. Performance inception date of
the Salomon Smith Barney BIG Bond Index is 8/31/95.
Total return includes reinvestment of all capital gain and income
distributions.
All total returns in excess of 1 year are average annualized returns.
Illustration of an Assumed Investment of $1,000,000
This chart shows the growth in the value of an investment in the
Brinson U.S. Bond Fund Class I and the Salomon Smith Barney BIG Bond
Index if you had invested $1,000,000 on August 31, 1995, and had
reinvested all your income dividends and capital gain distributions
through June 30, 2000. The performance of Class N shares will vary
based upon the different inception dates and class specific expenses.
No adjustment has been made for any income taxes payable by
shareholders on income dividends and capital gain distributions. Past
performance is no guarantee of future results. Share price and return
will vary with market conditions; investors may realize a gain or loss
upon redemption.
Brinson U.S. Bond Fund Class I
vs. Salomon Smith Barney BIG Bond Index
Wealth Value with Dividends Reinvested
[GRAPH APPEARS HERE]
Label Label A B
-------------------------------------------------------------------
Brinson U.S. Bond Fund Salomon Smith Barney
Class I Big Bond Index
-------------------------------------------------------------------
1 8/31/95 1,000,000 1,000,000
2 9/30/95 1,009,000 1,009,400
3 10/31/95 1,024,000 1,022,926
4 11/30/95 1,040,000 1,038,884
5 12/31/95 1,054,932 1,053,220
6 1/31/96 1,061,071 1,060,382
7 2/29/96 1,038,561 1,042,462
8 3/31/96 1,031,398 1,034,956
9 4/30/96 1,023,213 1,027,297
10 5/31/96 1,020,143 1,026,784
11 6/30/96 1,035,997 1,040,026
12 7/31/96 1,039,127 1,042,837
13 8/31/96 1,032,867 1,041,273
14 9/30/96 1,054,776 1,059,391
15 10/31/96 1,081,902 1,083,227
16 11/30/96 1,109,028 1,101,101
17 12/31/96 1,092,169 1,091,411
18 1/31/97 1,094,339 1,095,558
19 2/28/97 1,096,507 1,096,763
20 3/31/97 1,081,323 1,085,688
21 4/30/97 1,098,676 1,101,211
22 5/31/97 1,109,522 1,111,563
23 6/30/97 1,123,558 1,124,790
24 7/31/97 1,158,669 1,155,272
25 8/31/97 1,148,794 1,145,337
26 9/30/97 1,164,156 1,162,173
27 10/31/97 1,180,614 1,178,792
28 11/30/97 1,183,906 1,184,333
29 12/31/97 1,197,458 1,196,413
30 1/31/98 1,211,341 1,211,847
31 2/28/98 1,211,341 1,210,998
32 3/31/98 1,214,812 1,215,721
33 4/30/98 1,220,597 1,222,043
34 5/31/98 1,232,167 1,233,775
35 6/30/98 1,242,614 1,243,892
36 7/31/98 1,243,789 1,246,504
37 8/31/98 1,264,930 1,265,575
38 9/30/98 1,287,245 1,295,443
39 10/31/98 1,282,547 1,289,613
40 11/30/98 1,291,943 1,296,706
41 12/31/98 1,297,674 1,300,726
42 1/31/99 1,308,672 1,301,351
43 2/28/99 1,286,677 1,287,420
44 3/31/99 1,295,231 1,294,759
45 4/30/99 1,298,896 1,299,031
46 5/31/99 1,285,455 1,287,080
47 6/30/99 1,279,528 1,282,704
48 7/31/99 1,273,304 1,277,573
49 8/31/99 1,269,570 1,276,679
50 9/30/99 1,285,751 1,291,999
51 10/31/99 1,286,996 1,295,875
52 11/30/99 1,289,485 1,295,746
53 12/31/99 1,284,169 1,289,785
54 1/31/2000 1,278,906.27 1,286,140.18
55 2/29/2000 1,293,379.49 1,301,150.75
56 3/31/2000 1,309,168.45 1,318,027.91
57 4/30/2000 1,301,273.97 1,314,114.75
58 5/31/2000 1,296,010.98 1,312,954.29
59 6/30/2000 1,327,337.36 1,340,342.54
Fund returns are net of all fees and costs, while the Index returns
are based solely on market returns without deduction for fees or
transaction costs for rebalancing.
================================================================================
62
<PAGE>
U.S. Bond Fund
-------------------------------------------------------------------------------
[LOGO] Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
----------------------------------------------------------------------
U.S. BONDS
Corporate Bonds
Consumer........................................ 2.13%
Construction.................................... 0.25
Energy.......................................... 1.23
Financial Services.............................. 3.84
Food & House Products........................... 0.77
Health.......................................... 0.67
Publishing...................................... 0.50
Services/Miscellaneous.......................... 3.92
Technology...................................... 0.79
Telecommunications.............................. 3.21
Utilities....................................... 2.10
------
Total U.S. Corporate Bonds................... 19.41
Asset-Backed..................................... 9.71
Corporate Mortgage-Backed Securities............. 21.12
International Dollar Bonds....................... 4.89
U.S. Government Agencies......................... 8.97
U.S. Government Mortgage-Backed Securities....... 19.36
U.S. Government Obligations...................... 13.88
------
Total U.S. Bonds............................. 97.34
SHORT-TERM INVESTMENTS........................... 0.35
------
TOTAL INVESTMENTS............................ 97.69
CASH AND OTHER ASSETS,
LESS LIABILITIES.......................... 2.31
------
NET ASSETS....................................... 100.00%
======
----------------------------------------------------------------------
======================================================================
63
<PAGE>
U.S. Bond Fund -- Schedule of Investments
June 30, 2000
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
-------- -------
<S> <C> <C>
Bonds -- 97.34%
U.S. Corporate Bonds -- 19.41%
AT&T, 9.800%, due 02/01/12....................... $ 950,000 $ 1,090,243
Capital One Bank, BKNT,
8.250%, due 06/15/05........................... 250,000 249,505
Cendant Corp., 7.750%, due
12/01/03........................................ 1,060,000 1,023,679
Centaur Funding Corp., Class B, 144A,
9.080%, due 04/21/20 (b)....................... 715 709,861
Centaur Funding Corp., Class C, 144A,
0.000%, due 04/21/20 (b)......................... 1,355 209,178
Centex Corp., 9.750%, due 06/15/05............... 155,000 154,160
Fidelity Investments, 144A,
7.570%, due 06/15/29........................... 550,000 521,272
Ford Motor Credit Co.,
6.700%, due 07/16/04........................... 310,000 299,251
GMAC, 9.625%, due 12/15/01....................... 294,000 303,146
Kroger Co., 8.000%, due 09/15/29................. 500,000 476,020
Lilly Del Mar, 144A, FRN,
7.717%, due 08/01/29.......................... 1,000,000 994,090
MBNA Global Capital Securities FRN,
7.191%, due 02/01/27............................ 90,000 75,391
News America Holdings,
7.750%, due 12/01/45............................ 358,000 310,957
PanAmSat Corp.,
6.000%, due 01/15/03........................... 375,000 356,550
6.375%, due 01/15/08........................... 500,000 445,399
Pharmacia Corp., 6.600%, due 12/01/28............ 550,000 484,969
Public Service Co. of Colorado,
6.875%, due 07/15/09........................... 940,000 881,389
Rite Aid Corp., 144A,
6.125%, due 12/15/08........................... 890,000 413,850
Sempra Energy, 7.950%, due 03/01/10.............. 750,000 756,354
Service Corp. International,
6.000%, due 12/15/05........................... 750,000 405,000
Texas Utilities Holding,
5.940%, due 10/15/11........................... 420,000 412,071
Time Warner Cos., Inc.,
7.570%, due 02/01/24........................... 340,000 321,421
Verizon Communications,
8.000%, due 10/15/29........................... 87,000 87,102
Viacom, 8.625%, due 08/01/12..................... 575,000 610,180
Waste Management,
6.500%, due 12/15/02............................ 400,000 376,502
-----------
11,967,540
-----------
Asset-Backed Securities -- 9.71%
First Bank Corporate Card Master Trust,
97-1, Class A, 6.400% due 02/15/03............. $ 980,000 $ 966,858
GE Capital Mortgage Services, Inc.,
97-HE4 A7, 6.735%, due 12/25/28................ 410,000 398,725
Green Tree Financial Corp.,
6.160%, due 02/01/31........................... 1,000,000 927,230
Green Tree Financial Corp., 94-5,
Class A5, 8.300%, due 11/15/19................. 320,000 319,469
Peco Energy Transition Trust,
6.130%, due 03/01/09........................... 1,135,000 1,046,311
Pemex Finance Ltd.,
8.450%, due 02/15/07........................... 940,000 924,123
PP&L Transition Bond Company LLC,
6.960%, due 12/26/07........................... 200,000 198,446
Premier Auto Trust, 96-4A, Class A4,
6.400%, due 10/06/01........................... 38,811 38,803
Sears Credit Account Master Trust,
99-3, Class A, 6.450%, due 11/17/09............ 1,200,000 1,164,660
-----------
5,984,625
-----------
Corporate Mortgage-Backed
Securities -- 21.12%
ABN AMRO Mortgage Corp., 99-2 Class IA2,
6.300%, due 04/25/29........................... 2,100,000 1,982,190
ABN AMRO Mortgage Corp., 99-3, Class A2,
6.300%, due 05/25/29........................... 1,000,000 942,930
Bank One Mortgage, 2000-2, Class 6A,
6.761%, due 03/15/30........................... 97,337 97,629
Chemical Mortgage Securities Inc.,
93-1, Class A5, 7.450%, due 02/25/23........... 165,534 164,951
Citicorp Mortgage Securities, Inc., 94-9,
Class A8, 5.750%, due 06/25/09................. 1,072,002 996,340
Heller Financial Commercial Mortgage
Assets, 99-PH1, Class A1,
6.500%, due 05/15/31........................... 1,163,364 1,125,060
LB Commercial Conduit Mortgage Trust,
99-C1, Class A1, 6.410%, due 06/15/31.......... 675,762 651,479
Nomura Asset Securities Corp.,
7.120%, due 04/13/36........................... 1,200,000 1,181,134
PNC Mortgage Securities Corp., 94-3,
Class A8, 7.500%, due 07/25/24................. 375,000 359,299
Prudential Home Mortgage Securities,
93-43, Class A9, 6.750%, due 10/25/23.......... 261,333 251,146
Prudential Home Mortgage Securities,
94-3, Class A10, 6.500%, due 02/25/24......... 170,000 163,817
</TABLE>
===============================================================================
64
<PAGE>
U.S. Bond Fund -- Schedule of Investments
June 30, 2000
------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Residential Accredit Loans, Inc.,
96-QS4, Class Al10,
7.900%, due 08/25/26............................. $ 275,000 $ 274,145
Residential Accredit Loans, Inc.,
98-QS4, Class AI5,
7.000%, due 03/25/28............................. 2,850,000 2,685,107
Residential Asset Securitization Trust,
97-A10, Class A1, 7.250%, due 12/25/27........... 126,380 125,909
Residential Funding Mortgage,
95-S6, Class A7, 7.500%, due 11/25/25............ 943,020 933,420
Structured Asset Securities Corp.,
98-RF1, Class A, 8.712%, due 04/15/27............ 352,914 358,208
Structured Asset Securities Corp.,
98-RF2, 8.582%, due 07/15/27..................... 125,456 126,710
Thrift Financial Corp., Class A4
11.250%, due 01/01/16............................ 25,660 26,329
Vendee Mortgage Trust, 92-1,
Class 2Z, 7.750%, due 05/15/22................... 575,120 571,807
------------
13,017,610
------------
International Dollar Bonds -- 4.89%
Banco Santiago S.A.,
7.000%, due 07/18/07............................. 380,000 338,282
Empresa Nacional de Electricidad S.A.,
8.125%, due 02/01/97............................. 335,000 263,048
Interamer Development Bank,
6.800%, due 10/15/25............................. 100,000 94,693
Korea Development Bank,
7.125%, due 09/17/01............................. 500,000 495,628
Petroliam Nasional Berhad, 144A,
7.625%, due 10/15/26............................. 430,000 363,591
Ras Laffan Liquified Natural Gas Co., Ltd.,
144A, 8.294%, due 03/15/14....................... 450,000 415,687
State of Qatar, 144A, 9.750%, due 06/15/30......... 250,000 246,563
Tyco International Group S.A.,
7.000%, due 06/15/28............................. 500,000 433,359
United Mexican States,
9.875%, due 02/01/10............................. 360,000 363,600
----------
3,014,451
----------
U.S. Government Mortgage-Backed
Securities -- 19.36%
Fannie Mae Whole Loan, 95-W3,
Class A, 9.000%, due 04/25/25.................... $ 100,832 $ 103,818
Federal Home Loan Mortgage Corp.,
1595, Class D, 7.000%, due 10/15/13.............. 492,125 469,960
Federal Home Loan Mortgage Corp. Gold,
8.000%, due 08/01/08............................. 474,009 479,085
8.000%, due 11/01/22............................. 80,657 81,528
9.000%, due 07/01/30, TBA........................ 145,000 149,577
Federal National Mortgage Assoc.,
97-72, Class EG, 0.000%, due 09/25/22............ 191,413 178,154
Federal National Mortgage Association,
6.000%, due 10/01/14............................. 236,995 224,192
6.000%, due 03/01/28............................. 615,771 564,384
6.000%, due 08/01/28............................. 1,393,813 1,274,961
6.500%, due 03/01/19............................. 461,725 441,262
6.500%, due 06/01/28............................. 676,070 637,942
6.500%, due 09/01/28............................. 226,071 213,321
6.500%, due 03/01/29............................. 484,437 456,915
7.000%, due 12/01/24............................. 538,990 520,339
7.000%, due 03/01/29............................. 43,213 41,735
7.500%, due 12/01/23............................. 447,293 441,138
7.500%, due 01/01/28............................. 248,835 246,263
8.000%, due 02/01/13............................. 147,389 148,921
Government National Mortgage Association,
6.500%, due 10/15/24............................. 4,206,370 4,018,337
7.000%, due 07/15/25............................. 79,883 77,983
7.500%, due 12/15/22............................. 193,849 193,492
7.500%, due 12/15/23............................. 807,080 805,433
7.500%, due 01/15/24............................. 51,829 51,660
7.500%, due 06/15/25............................. 67,140 66,989
8.000%, due 08/15/22............................. 39,536 40,154
9.000%, due 11/15/04............................. 7,447 7,726
10.000%, due 05/15/01............................ 372 395
----------
11,935,664
----------
U.S. Government Agencies -- 8.97%
Aid-Israel, 10-Z,
0.000%, due 02/15/03............................. 805,000 679,314
Federal Home Loan Mortgage Corp.,
5.750%, due 03/15/09............................. 230,000 208,828
7.000%, due 02/15/03............................. 2,190,000 2,191,320
Federal National Mortgage Association,
7.250%, due 05/15/30............................. 950,000 967,188
Jordan Aid, 8.750%, due 09/01/19................... 1,344,519 1,483,287
----------
5,529,937
----------
</TABLE>
===============================================================================
65
<PAGE>
U.S. Bond Fund -- Schedule of Investments
June 30, 2000
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
------ -----
<S> <C> <C>
U.S. Government Obligations -- 13.88%
U.S. Treasury Bond,
8.000%, due 11/15/21................................ $ 510,000 $615,506
8.750%, due 05/15/17................................ 770,000 967,794
U.S. Treasury Inflation Indexed Note,
3.625%, due 04/15/28................................ 1,770,000 1,786,843
3.875%, due 04/15/29................................ 60,000 62,307
U.S. Treasury Note,
5.625%, due 05/15/08................................ 475,000 458,078
5.750%, due 08/15/03................................ 1,455,000 1,429,993
6.125%, due 12/31/01................................ 1,000,000 994,375
6.625%, due 05/15/07................................ 1,215,000 1,240,060
7.500%, due 02/15/05................................ 955,000 1,001,556
----------
8,556,512
----------
Total Bonds (Cost $62,291,605)........................ 60,006,339
----------
<CAPTION>
Shares Value
<S> <C> <C>
Short-Term Investments -- 0.35%
Investment Companies -- 0.35%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund
(Cost $217,046)..................................... 217,046 $ 217,046
-----------
Total Investments
(Cost $62,508,651) -- 97.69% (a).................... 60,223,385
Cash and other assets,
less liabilities -- 2.31%........................... 1,424,454
-----------
Net Assets -- 100%.................................... $61,647,839
===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $62,522,716;
and net unrealized depreciation consisted of:
Gross unrealized appreciation........................ $ 350,762
Gross unrealized depreciation........................ (2,650,093)
------------
Net unrealized depreciation....................... $(2,299,331)
===========
(b) Non-income producing security
FRN: Floating rate note -- The rate disclosed is that in effect at
June 30, 2000.
TBA: Security is subject to delayed delivery.
144A: Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified buyers. At June 30,
2000, the value of these securities amounted to $3,874,092 or 6.28% of
net assets.
================================================================================
66 See accompanying notes to financial statements.
<PAGE>
HIGH YIELD FUND
--------------------------------------------------------------------------------
[LOGO] The Brinson U.S. High Yield Fund Class I has earned an annualized
return of 4.71% since inception on September 30, 1997 versus 2.40% for
its benchmark, the Merrill Lynch High Yield Master Index. This
performance was achieved with an annualized volatility of 6.13% versus
4.82% for the benchmark. The Fund's total return for the calendar
year-to-date through June 30, 2000 was -1.84% versus -1.19% for the
benchmark. High yield fixed income has been one of the worst
performing asset classes so far in 2000, but we remain optimistic
about the medium term future of the high yield asset class.
Continued uncertainty about the direction of the economy has kept the
perceived risks of high yield investing at a higher-than-normal level
thus far in 2000. Currently, the yield spread of high yield bonds over
"risk free" U.S. Treasuries stands at about 6.0%. That 6.0% spread can
be thought of as the extra compensation investors require for taking
on the credit risk of the underlying companies. That spread has
continued to widen throughout 2000, while interestingly, default rates
on high yield bonds seem to be trending downward. When we look at data
of investors' expectations for defaults, the prices of high yield
bonds are much lower than those default rates should imply. Continued
near-term economic uncertainty and generally rising interest rates may
continue to stall the high yield market, but we think that on a
fundamental basis, the medium to longer-term outlook for the asset
class is very attractive.
During the most recent quarter, the environmental services,
publishing, gaming and textile sectors performed well relative to the
index, while the retail, financial services and steel sectors
underperformed. We are positive about industries that we think will
benefit from de-leveraging, growth or M&A activity, including
telecommunications, cable and gaming. We hold overweight positions in
these sectors.
================================================================================
67
<PAGE>
High Yield Fund
--------------------------------------------------------------------------------
[LOGO] Total Return
6 months 1 year Inception*
ended ended to
6/30/00 6/30/00 6/30/00
----------------------------------------------------------------------
Brinson High Yield Fund Class I -1.84% 0.02% 4.71%
----------------------------------------------------------------------
Brinson High Yield Fund Class N -1.87 -0.13 1.71
----------------------------------------------------------------------
Merrill Lynch High Yield Master Index -1.19 -1.37 2.40
----------------------------------------------------------------------
* Inception dates of the Brinson High Yield Fund Class I and Class N
are 9/30/97 and 12/31/98, respectively. Performance inception date
of the Merrill Lynch High Yield Master Index is 9/30/97.
Total return includes reinvestment of all capital gain and income
distributions.
All total returns in excess of 1 year are average annualized returns.
Illustration of an Assumed Investment of $1,000,000
This chart shows the growth in the value of an investment in the
Brinson High Yield Fund Class I and the Merrill Lynch High Yield
Master Index if you had invested $1,000,000 on September 30, 1997, and
had reinvested all your income dividends and capital gain
distributions through June 30, 2000. The performance of Class N shares
will vary based upon the different inception dates and class specific
expenses. No adjustment has been made for any income taxes payable by
shareholders on income dividends and capital gain distributions. Past
performance is no guarantee of future results. Share price and return
will vary with market conditions; investors may realize a gain or loss
upon redemption.
Brinson High Yield Fund Class I
vs. Merrill Lynch High Yield Master Index
Wealth Value with Dividends Reinvested
[GRAPH APPEARS HERE]
------------------------------------------------------------
Label A B
------------------------------------------------------------
Label Date Brinson High Yield Merrill Lynch High
------------------------------------------------------------
1 9/30/97 1,000,000 1,000,000
2 10/31/97 995,405 1,006,640
3 11/30/97 1,005,534 1,016,173
4 12/31/97 1,023,434 1,025,816
5 1/31/98 1,047,259 1,041,091
6 2/28/98 1,054,152 1,045,391
7 3/31/98 1,066,777 1,054,402
8 4/30/98 1,068,387 1,059,410
9 5/31/98 1,070,928 1,066,784
10 6/30/98 1,081,780 1,072,064
11 7/31/98 1,098,343 1,078,175
12 8/31/98 1,042,275 1,031,652
13 9/30/98 1,057,065 1,033,715
14 10/31/98 1,049,791 1,016,742
15 11/30/98 1,109,624 1,063,035
16 12/31/98 1,102,713 1,063,388
17 1/31/99 1,129,231 1,073,905
18 2/28/99 1,134,755 1,065,711
19 3/31/99 1,146,909 1,074,897
20 4/30/99 1,163,483 1,091,709
21 5/31/99 1,140,280 1,084,132
22 6/30/99 1,134,755 1,082,094
23 7/31/99 1,133,616 1,083,685
24 8/31/99 1,127,919 1,082,685
25 9/30/99 1,124,501 1,068,566
26 10/31/99 1,124,501 1,062,315
27 11/30/99 1,147,288 1,074,468
28 12/31/99 1,156,238 1,080,109
29 1/31/2000 1,141,800.25 1,074,751.71
30 2/29/2000 1,138,190.77 1,075,676.00
31 3/31/2000 1,111,721.22 1,060,637.93
32 4/30/2000 1,118,940.18 1,061,009.26
33 5/31/2000 1,115,330.70 1,049,327.44
34 6/30/2000 1,134,974.08 1,067,292.01
Fund returns are net of all fees and costs, while the Index returns
are based solely on market returns without deduction for fees or
transaction costs for rebalancing.
================================================================================
68
<PAGE>
HIGH YIELD FUND
--------------------------------------------------------------------------------
[LOGO] Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
----------------------------------------------------------------------
U.S. BONDS
Corporate Bonds
Aerospace................................................ 0.94%
Appliances & Household Durables......................... 0.44
Autos/Durables.......................................... 3.53
Cable Television........................................ 2.99
Chemicals............................................... 2.15
Computer Software....................................... 0.96
Computer Systems........................................ 0.31
Construction............................................ 2.39
Consumer................................................ 2.08
Electronics and Electric Components..................... 0.98
Energy.................................................. 2.43
Financial Services...................................... 1.73
Food & House Products................................... 3.47
Health.................................................. 2.76
Housing/Paper........................................... 0.50
Non-Durables............................................ 1.13
Publishing.............................................. 0.90
Radio Broadcasting...................................... 2.27
Real Estate............................................. 0.32
Recreation.............................................. 7.90
Retail.................................................. 3.01%
Services/Miscellaneous.................................. 9.18
Technology.............................................. 1.00
Telecommunications - Services........................... 7.84
Telecommunications - Equipment.......................... 1.65
Telecommunications - Wireless........................... 8.72
Television Broadcasting................................. 8.60
Transportation.......................................... 0.36
------
Total U.S. Corporate Bonds........................... 80.54
International Dollar Bonds................................ 6.78
------
Total U.S. Bonds..................................... 87.32
Warrants.................................................. 0.01
SHORT-TERM INVESTMENTS.................................... 19.21
------
TOTAL INVESTMENTS......................................... 106.54
LIABILITIES, LESS CASH
AND OTHER ASSETS....................................... (6.54)
------
NET ASSETS................................................ 100.00%
======
Top Ten U.S. Bond Holdings
As of June 30, 2000
Percent of
Net Assets
----------------------------------------------------------------------
1. Dobson Sygnet Communications, Inc.,
12.250%, due 12/15/08............................... 1.61%
2. Paxson Communications Corp.,
12.500%, due 10/31/06............................... 1.60
3. Triton PCS, Inc.,
0.000%, due 05/01/08................................ 1.54
4. Liberty Group Operating,
9.375%, due 02/01/08................................ 1.31
5. Lyondell Chemical Co., Series B,
9.875%, due 05/01/07................................ 1.21
6. Perry Ellis International, Inc.,
12.250%, due 04/01/06............................... 1.16
7. Newpark Resources, Inc., Series B,
8.625%, due 12/15/07................................ 1.15
8. Pegasus Communications Corp., Class B,
12.500%, due 08/01/07............................... 1.10
9. NTL Communications Corp., Series B,
0.000%, due 10/01/08................................ 1.08
10. Mohegan Tribal Gaming Authority,
8.750%, due 01/01/09................................ 1.08
======================================================================
69
<PAGE>
High Yield Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Face
Amount Value
---------- ---------
U.S. Bonds -- 87.32%
U.S. Corporate Bonds -- 80.54%
Ackerley Group, Inc., Class B,
9.000%, due 01/15/09................................... $ 100,000 $ 91,750
Adelphia Communications Corp.,
9.375%, due 11/15/09................................... 500,000 462,500
Allbritton Communications Co.,
9.750%, due 11/30/07................................... 250,000 240,000
American Mobile Satellite Corp.,
12.250%, due 04/01/08.................................. 182,000 141,960
American Restaurant Group, Inc., Class B,
11.500%, due 02/15/03.................................. 150,000 115,125
Atrium Cos., Inc., 10.500%, due 05/01/09................ 125,000 105,313
Aztar Corp., 8.875%, due 05/15/07....................... 250,000 235,625
Bally Total Fitness Corp., Class B,
9.875%, due 10/15/07................................... 400,000 362,000
Big City Radio, Inc., (c)
0.000%, due 03/15/05................................... 500,000 281,250
Building Materials Corp.,
7.750%, due 07/15/05................................... 350,000 287,875
Capstar Broadcasting Partners, Inc., (c)
0.000%, due 02/01/09................................... 525,000 483,000
Carmike Cinemas, Inc.,
9.375%, due 02/01/09................................... 200,000 120,000
CB Richard Ellis Services, Inc.,
8.875%, due 06/01/06................................... 200,000 170,000
Centennial Cellular,
10.750%, due 12/15/08.................................. 500,000 485,625
Century Communications Corp.,
0.000%, due 01/15/08................................... 425,000 174,250
8.375%, due 11/15/17................................... 300,000 234,750
Charter Communications Holdings,
10.000%, due 04/01/09.................................. 400,000 386,000
Classic Cable, Inc.,
10.500%, due 03/01/10.................................. 250,000 230,625
Coast Hotels and Casinos, Inc.,
9.500%, due 04/01/09................................... 370,000 351,500
Collins & Alkman Corp.,
11.500%, due 04/15/06.................................. 250,000 240,625
Crown Castle International Corp.,
0.000%, due 05/15/11 (c)............................... 630,000 385,087
9.000%, due 05/15/11................................... 150,000 138,375
CSC Holdings, Inc.,
7.625%, due 07/15/18................................... 600,000 538,141
Cumulus Media, Inc.,
10.375%, due 07/01/08.................................. 155,000 130,975
Dayton Superior Corp., 144A,
13.000%, due 06/15/09.................................. 225 221,625
Delco Remy International, Inc.,
8.625%, due 12/15/07................................... $ 150,000 $ 139,500
Diamond Triumph Auto Glass, Inc.,
9.250%, due 04/01/08................................... 250,000 195,000
Dobson Communications Corp., 144A,
10.875%, due 07/01/10.................................. 400,000 402,000
Dobson Sygnet Communications, Inc.,
12.250%, due 12/15/08.................................. 800,000 852,000
Eagle Family Foods, Class B,
8.750%, due 01/15/08................................... 750,000 442,500
Echostar Dbs Corp.,
9.375%, due 02/01/09................................... 500,000 480,000
Exodus Communications, Inc.,
11.250%, due 07/01/08.................................. 500,000 495,000
Exodus Communications, Inc., 144A,
11.625%, due 07/15/10.................................. 150,000 150,375
FairPoint Communications, Inc., 144A,
12.500%, due 05/01/10.................................. 200,000 202,000
Fedders North America,
9.375%, due 08/15/07................................... 250,000 234,687
Federal-Mogul Corp.,
7.500%, due 01/15/09................................... 250,000 171,463
Finova Capital Corp.,
7.250%, due 11/08/04................................... 250,000 220,217
Fox/Liberty Networks, (c)
0.000%, due 08/15/07................................... 500,000 405,000
Global Imaging Systems, Inc.,
10.750%, due 02/15/07.................................. 325,000 276,250
Globix Corp., 12.500%, due 02/01/10..................... 200,000 164,000
Golden Sky DBS, Inc., (c)
0.000%, due 03/01/07................................... 375,000 253,125
Gothic Production Corp., Class B,
11.125%, due 05/01/05.................................. 500,000 466,250
Granite Broadcasting Corp.,
10.375%, due 05/15/05.................................. 200,000 190,000
Hayes Lemmerz International, Inc.,
8.250%, due 12/15/08................................... 220,000 185,900
HMH Properties, Class B,
7.875%, due 08/01/08................................... 300,000 269,250
Hollinger International Publishing Corp.,
9.250%, due 02/01/06................................... 250,000 246,562
Hollywood Park, Inc.,
9.500%, due 08/01/07................................... 140,000 139,300
Horseshoe Gaming Holdings,
8.625%, due 05/15/09................................... 142,000 133,835
Horseshoe Gaming LLC, Class B,
9.375%, due 06/15/07................................... 150,000 147,750
Huntsman Corp., 144A,
9.500%, due 07/01/07................................... 200,000 182,000
================================================================================
70
<PAGE>
High Yield Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Face
Amount Value
---------- ---------
Huntsman Packaging Corp., 144A,
13.000%, due 06/01/10.................................. $ 160,000 $ 164,800
ICN Pharmaceuticals, Inc.,
9.250%, due 08/15/05................................... 400,000 396,000
Integrated Electrical Services, Inc.,
9.375%, due 02/01/09................................... 550,000 445,500
Interep National Radio Sales, Class B,
10.000%, due 07/01/08.................................. 455,000 402,675
Iron Mountain, Inc.,
8.750%, due 09/30/09................................... 500,000 460,000
ISP Holdings Inc., Class B,
9.000%, due 10/15/03................................... 295,000 274,719
J.H. Heafner Co.,
10.000%, due 05/15/08.................................. 350,000 255,500
Jackson Products, Inc., Class B,
9.500%, due 04/15/05................................... 550,000 495,000
Level 3 Communications, Inc.,
0.000%, due 12/01/08 (c)............................... 850,000 516,375
9.125%, due 05/01/08................................... 200,000 179,500
Liberty Group Operating,
9.375%, due 02/01/08................................... 850,000 697,000
Lifepoint Hospital,
10.750%, due 05/15/09.................................. 250,000 257,500
LIN Holdings Corp., (c)
0.000%, due 03/01/08................................... 200,000 131,500
Loral Space & Communications Ltd.,
9.500%, due 01/15/06................................... 200,000 145,000
Luigino's, Inc., 10.000%, due 02/01/06.................. 210,000 168,000
Lyondell Chemical Co., Class B,
9.875%, due 05/01/07................................... 650,000 641,875
Mail Well Corp., 8.750%, due 12/15/08................... 500,000 420,000
Majestic Star Casino LLC, Class B,
10.875%, due 07/01/06.................................. 175,000 142,625
McLeod USA, Inc.,
9.250%, due 07/15/07................................... 250,000 241,250
Merrill Corp., Class B,
12.000%, due 05/01/09.................................. 325,000 234,000
Metromedia Fiber Network,
10.000%, due 12/15/09.................................. 540,000 531,900
MGM Grand, Inc., 9.750%, due 06/01/07................... 350,000 356,125
Mohegan Tribal Gaming Authority,
8.750%, due 01/01/09................................... 600,000 570,000
Motors & Gears, Inc., Class B,
10.750%, due 11/15/06.................................. 250,000 240,625
MTS, Inc., 9.375%, due 05/01/05......................... 575,000 247,250
New World Pasta Co.,
9.250%, due 02/15/09................................... 200,000 119,000
Newpark Resources, Inc., Class B,
8.625%, due 12/15/07................................... 700,000 610,750
Nextel Communications, Inc.,
0.000%, due 09/15/07 (c)............................... $ 200,000 $ 157,000
9.375%, due 11/15/09................................... 420,000 401,100
Nextel Partners, Inc., 144A,
11.000%, due 03/15/10.................................. 200,000 199,000
Nextlink Communications, 144A,
0.000%, due 12/01/09 (c)............................... 712,000 409,400
10.500%, due 12/01/09.................................. 175,000 170,625
Nortex, Inc., 9.875%, due 03/01/04...................... 450,000 427,500
NTL Communications Corp., Class B, (c)
0.000%, due 10/01/08................................... 900,000 571,500
NTL, Inc., Class A, (c)
12.750%, due 04/15/05.................................. 150,000 152,625
Nuevo Energy Co.,
9.500%, due 06/01/08................................... 150,000 148,125
Pacifica Papers, Inc.,
10.000%, due 03/15/09.................................. 270,000 265,275
Packaging Corp. of America,
9.625%, due 04/01/09................................... 500,000 496,250
Pantry, Inc.,
10.250%, due 10/15/07.................................. 200,000 189,000
Paxson Communications Corp.,
11.625%, due 10/01/02.................................. 450,000 460,125
12.500%, due 10/31/06 (b).............................. 847 846,685
Pegasus Communications Corp., Class B,
9.750%, due 12/01/06................................... 150,000 144,375
12.500%, due 08/01/07.................................. 550,000 585,750
Perry Ellis International, Inc.,
12.250%, due 04/01/06.................................. 650,000 617,500
Phillips Van-Heusen,
9.500%, due 05/01/08................................... 250,000 227,500
Phoenix Color, Inc.,
10.375%, due 02/01/09.................................. 300,000 270,000
Pillowtex Corp., 10.000%, due 11/15/06.................. 188,000 65,800
Pioneer Natural Resources Co.,
9.625%, due 04/01/10................................... 360,000 371,746
Plains Resources, Inc., Class B,
10.250%, due 03/15/06.................................. 300,000 302,250
Premier Parks, Inc., (c)
0.000%, due 04/01/08................................... 425,000 288,469
Protection One Alarm, Inc.,
7.375%, due 08/15/05................................... 365,000 271,925
PSINet, Inc.,
10.500%, due 12/01/06.................................. 150,000 138,000
11.000%, due 08/01/09.................................. 86,000 79,550
11.500%, due 11/01/08.................................. 300,000 282,000
Qwest Communications International, Inc., (c)
0.000%, due 10/15/07................................... 500,000 420,006
R. H. Donnelley, Inc.,
9.125%, due 06/01/08................................... 190,000 178,838
================================================================================
71
<PAGE>
High Yield Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Face
Amount Value
----------- ----------
RailWorks Corp., 11.500%, due 04/15/09.................. $ 200,000 $ 188,000
Rayovac Corp., Class B,
10.250%, due 11/01/06.................................. 300,000 307,500
RCN Corp., 10.000%, due 10/15/07........................ 300,000 254,250
Samsonite Corp.,
10.750%, due 06/15/08.................................. 250,000 208,750
SBA Communications Corp., (c)
0.000%, due 03/01/08................................... 390,000 274,950
Sbarro, Inc., 11.000%, due 09/15/09..................... 250,000 255,625
Scotts Co., 144A,
8.625%, due 01/15/09................................... 285,000 273,600
Sequa Corp., 9.000%, due 08/01/09....................... 520,000 499,200
Simmons Co., 10.250%, due 03/15/09...................... 200,000 177,500
Sinclair Broadcast Group,
10.000%, due 09/30/05.................................. 400,000 382,000
Sleepmaster, 11.000%, due 05/15/09...................... 250,000 236,250
Spectrasite Holdings, Inc.,
0.000%, due 07/15/08 (c)............................... 440,000 305,800
0.000%, due 03/15/10, 144A (c)......................... 190,000 103,550
10.750%, due 03/15/10, 144A............................ 95,000 94,763
Speedway Motorsports, Inc.,
8.500%, due 08/15/07................................... 600,000 558,000
Station Casinos,Inc.,
8.875%, due 12/01/08................................... 67,000 63,818
9.875%, due 07/01/10, 144A............................. 450,000 451,125
Sterling Chemicals, Inc., Class B,
12.375%, due 07/15/06.................................. 160,000 162,400
Stone Container Corp.,
10.750%, due 10/01/02.................................. 250,000 253,437
T/SF Communications Corp., Class B,
10.375%, due 11/01/07.................................. 250,000 232,500
TeleCorp PCS, Inc.,
0.000%, due 04/15/09 (c)............................... 700,000 456,750
Tenet Healthcare Corp., 144A,
9.250%, due 09/01/10................................... 350,000 352,625
Trans-Resources, Inc., Class B, (c)
0.000%, due 03/15/08................................... 650,000 58,500
Triad Hospitals Holdings, Inc.,
11.000%, due 05/15/09.................................. 229,000 234,153
Tritel PCS, Inc. (c),
0.000%, due 05/15/09................................... 450,000 298,125
Triton PCS, Inc., (c)
0.000%, due 05/01/08................................... 1,125,000 815,625
United Rentals, Inc., Class B,
9.250%, due 01/15/09................................... 70,000 63,175
US Unwired, Inc., (c)
0.000%, due 11/01/09................................... 800,000 434,000
Verio, Inc., 13.500%, due 06/15/04...................... 450,000 507,937
Voicestream Wireless Corp.,
10.375%, due 11/15/09.................................. $ 550,000 $ 569,250
Weirton Steel Corp.,
11.375%, due 07/01/04.................................. 200,000 188,000
Westpoint Stevens, Inc.,
7.875%, due 06/15/05................................... 220,000 183,700
Williams Communications Group, Inc.,
10.875%, due 10/01/09.................................. 550,000 537,625
Winsloew Furniture, Inc., Class B,
12.750%, due 08/15/07.................................. 25,000 23,000
Winstar Communications, Inc., 144A,
12.750%, due 04/15/10.................................. 200,000 186,500
WMX Technologies, Inc.,
6.250%, due 10/15/00................................... 365,000 362,055
-----------
42,694,366
-----------
International Dollar Bonds -- 6.78%
Callahan Nordrhein-Westfalen, 144A,
14.000%, due 07/15/10.................................. 160,000 160,000
Clearnet Communications, (c)
0.000%, due 12/15/05................................... 500,000 516,250
0.000%, due 05/01/09................................... 250,000 150,000
Energis PLC, 9.750%, due 06/15/09....................... 250,000 245,000
Global Crossing Holding Ltd.,
9.500%, due 11/15/09................................... 400,000 386,000
Imax, Corp., 7.875%, due 12/01/05....................... 250,000 226,250
Microcell Telecommunications, Inc.,
Class B, (c)
0.000%, due 06/01/06................................... 500,000 461,250
Norampac, Inc., 9.500%, due 02/01/08.................... 140,000 135,100
Rogers Communications, Inc.,
9.125%, due 01/15/06................................... 250,000 245,000
TeleWest Communications PLC,
0.000%, due 10/01/07 (c)............................... 500,000 473,750
0.000%, due 04/15/09 (c)............................... 500,000 270,000
United Pan-Europe Communications NV,
11.500%, due 02/01/10.................................. 225,000 200,250
United Pan-Europe Communications NV,
Class B,
0.000%, due 02/01/10 (c)............................... 25,000 11,750
11.250%, due 02/01/10.................................. 125,000 111,250
-----------
3,591,850
-----------
Total U.S. Bonds (Cost $49,816,312)..................... 46,286,216
-----------
================================================================================
72
<PAGE>
High Yield Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
----------- -----------
Warrants -- 0.01%
Merrill Corp., 144A,
Expires 05/01/09 (b)................................. 325 $ 3
Motient Corp., 144A,
Expires 04/01/08 (b)................................. 182 7,280
Winsloew Furniture, Inc., 144A,
Expires 07/01/00 (b)................................. 25 125
-----------
Total Warrants (Cost $8,314).......................... 7,408
-----------
Short-Term Investments -- 19.21%
Investment Companies -- 19.21%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund
(Cost $10,185,196).................................. 10,185,196 $10,185,196
-----------
Total Investments
(Cost $60,009,822) -- 106.54% (a)................... 56,478,820
Liabilities, less cash
and other assets -- (6.54%)......................... (3,469,306)
-----------
Net Assets -- 100%.................................... $53,009,514
===========
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was
$60,022,205; and net unrealized depreciation
consisted of:
Gross unrealized appreciation.................. $ 341,964
Gross unrealized depreciation.................. (3,885,349)
-----------
Net unrealized depreciation.............. $(3,543,385)
===========
(b) Non-income producing security
(c) Step bonds - coupon rate increases in increments to maturity. Rate disclosed
is as of June 30, 2000. Maturity date disclosed is the ultimate maturity
date.
144A: Security exempt from registration under Rue 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At June 30, 2000, the value of
these securities amounted to $3,731,396 or 7.04% of net assets.
================================================================================
See accompanying note to financial statements.
73
<PAGE>
Global (Ex-U.S.) Equity Fund
--------------------------------------------------------------------------------
[LOGO] The Brinson Global (Ex-U.S.) Equity Fund Class I has provided an
annualized return of 8.61% since its inception on August 31, 1993.
Over the same period, its benchmark, the MSCI World Ex USA (Free)
Index, has produced a return of 9.93%. The Fund's performance was
achieved with a volatility or risk of 12.92%, considerably below the
14.38% volatility of the benchmark. Calendar year-to-date, the Fund
returned -3.90%, underperforming the benchmark return of -2.99%.
During the second quarter, returns were dominated by "old economy"
stocks, and the Fund outperformed the benchmark by 387 basis points.
Trends of the last two years show a remarkable divergence between the
performance of "new economy" and "old economy" sectors. In contrast to
recent bull markets, the current price appreciation has been limited
to narrow groups of technology, media and telecommunications (TMT)
stocks. This phenomenon, while originally most prevalent in the U.S.
where it began, has proliferated into all developed equity markets. As
such, we hold significant underweights to TMT sectors. This strategy
began to pay off in the second quarter as investors began to question
whether TMT companies can grow and increase earnings fast enough and
for long enough to justify their high valuations.
While we are skeptical of inflated equity investment expectations, we
understand and appreciate the role of new and emerging technology in
business. Our analysis is focused on investing in companies with solid
fundamentals as well as promising uses for new technologies.
Specifically, we see opportunities in some "old economy" sectors such
as utilities, diversified financials, and food, beverages and tobacco
where some companies are leveraging their skills, assets and
competitive positions to take advantage of the Internet.
With respect to countries, we increased our underweights to Canada,
Europe (ex-UK) and the EMU region during the quarter where our
analysis indicates overvaluation. After a few periods of
outperformance in Japan, we sold some Japanese holdings and employed
the proceeds in the UK market. We still maintain a modest overweight
to Japan to capture opportunities that are coming from the ongoing
restructuring of the corporate sector in the region. The restructuring
trend is breaking old business molds and bringing much needed
efficiencies to many companies. The Fund's regional weightings added
modestly to returns during the quarter.
======================================================================
74
<PAGE>
Global (Ex-U.S.) Equity Fund
--------------------------------------------------------------------------------
[LOGO] Total Return
<TABLE>
<CAPTION>
6 months 1 year 3 years 5 years Inception*
ended ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00 6/30/00
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brinson Global (Ex-U.S.) Equity Fund Class I -3.90% 11.76% 6.66% 12.52% 8.61%
-------------------------------------------------------------------------------------------------------
Brinson Global (Ex-U.S.) Equity Fund Class N -3.96 11.51 6.37 N/A 6.37
-------------------------------------------------------------------------------------------------------
MSCI World Ex USA (Free) Index -2.99 18.78 10.52 11.75 9.93
-------------------------------------------------------------------------------------------------------
</TABLE>
* Performance inception date of the Brinson Global (Ex-U.S.) Equity
Fund Class I and the MSCI World Ex USA (Free) Index is 8/31/93,
and inception date of Class N is 6/30/97.
Performance is net of withholding taxes on dividends.
Total return includes reinvestment of all capital gain and income
distributions.
All total returns in excess of 1 year are average annualized returns
Illustration of an Assumed Investment of $1,000,000/
This chart shows the growth in the value of an investment in the
Brinson Global (Ex-U.S.) Equity Fund Class I and the MSCI World Ex USA
(Free) Index if you had invested $1,000,000 on August 31, 1993, and
had reinvested all your income dividends and capital gain
distributions through June 30, 2000. The performance of Class N shares
will vary based upon the different inception dates and class specific
expenses. No adjustment has been made for any income taxes payable by
shareholders on income dividends and capital gain distributions. Past
performance is no guarantee of future results. Share price and return
will vary with market conditions; investors may realize a gain or loss
upon redemption.
Brinson Global (Ex-U.S.) Equity Fund Class I
vs. MSCI World Ex USA (Free) Index
Wealth Value with Dividends Reinvested
[GRAPH APPEARS HERE]
----------------------------------------------
Label A B
----------------------------------------------
Label
----------------------------------------------
1 8/31/93 $1,000,000 $1,000,000
----------------------------------------------
2 9/30/93 $972,000 $976,801
----------------------------------------------
3 10/31/93 $997,000 $1,009,608
----------------------------------------------
4 11/30/93 $929,000 $923,179
----------------------------------------------
5 12/31/93 $965,000 $988,754
----------------------------------------------
6 1/31/94 $1,033,606 $1,070,906
----------------------------------------------
7 2/28/94 $1,002,558 $1,065,670
----------------------------------------------
8 3/31/94 $957,488 $1,019,802
----------------------------------------------
9 4/30/94 $984,530 $1,061,899
----------------------------------------------
10 5/31/94 $985,531 $1,056,878
----------------------------------------------
11 6/30/94 $975,547 $1,068,786
----------------------------------------------
12 7/31/94 $990,648 $1,080,676
----------------------------------------------
13 8/31/94 $1,019,844 $1,107,766
----------------------------------------------
14 9/30/94 $990,648 $1,075,157
----------------------------------------------
15 10/31/94 $1,007,763 $1,109,504
----------------------------------------------
16 11/30/94 $974,540 $1,055,989
----------------------------------------------
17 12/31/94 $974,540 $1,062,774
----------------------------------------------
18 1/31/95 $940,310 $1,021,304
----------------------------------------------
19 2/28/95 $936,283 $1,020,965
----------------------------------------------
20 3/31/95 $952,391 $1,083,956
----------------------------------------------
21 4/30/95 $983,601 $1,124,094
----------------------------------------------
22 5/31/95 $984,608 $1,113,640
----------------------------------------------
23 6/30/95 $974,540 $1,095,525
----------------------------------------------
24 7/31/95 $1,032,932 $1,161,851
----------------------------------------------
25 8/31/95 $1,049,040 $1,119,130
----------------------------------------------
26 9/30/95 $1,066,155 $1,140,633
----------------------------------------------
27 10/31/95 $1,056,087 $1,111,131
----------------------------------------------
28 11/30/95 $1,082,263 $1,142,655
----------------------------------------------
29 12/31/95 $1,126,103 $1,187,456
----------------------------------------------
30 1/31/96 $1,148,603 $1,195,638
----------------------------------------------
31 2/29/96 $1,144,317 $1,199,070
----------------------------------------------
32 3/31/96 $1,159,318 $1,224,309
----------------------------------------------
33 4/30/96 $1,202,176 $1,260,387
----------------------------------------------
34 5/31/96 $1,196,819 $1,238,760
----------------------------------------------
35 6/30/96 $1,204,891 $1,244,668
----------------------------------------------
36 7/31/96 $1,171,452 $1,208,125
----------------------------------------------
37 8/31/96 $1,176,845 $1,213,344
----------------------------------------------
38 9/30/96 $1,212,442 $1,246,309
----------------------------------------------
39 10/31/96 $1,209,206 $1,237,797
----------------------------------------------
40 11/30/96 $1,270,691 $1,289,539
----------------------------------------------
41 12/31/96 $1,269,637 $1,271,887
----------------------------------------------
42 1/31/97 $1,262,768 $1,232,998
----------------------------------------------
43 2/28/97 $1,283,375 $1,251,330
----------------------------------------------
44 3/31/97 $1,291,389 $1,251,910
----------------------------------------------
45 4/30/97 $1,300,548 $1,259,870
----------------------------------------------
46 5/31/97 $1,385,267 $1,343,159
----------------------------------------------
47 6/30/97 $1,449,115 $1,414,422
----------------------------------------------
48 7/31/97 $1,475,588 $1,440,682
----------------------------------------------
49 8/31/97 $1,371,998 $1,332,372
----------------------------------------------
50 9/30/97 $1,449,115 $1,407,165
----------------------------------------------
51 10/31/97 $1,358,186 $1,301,262
----------------------------------------------
52 11/30/97 $1,335,166 $1,285,972
----------------------------------------------
53 12/31/97 $1,342,509 $1,298,199
----------------------------------------------
54 1/31/98 $1,387,259 $1,353,933
----------------------------------------------
55 2/28/98 $1,460,600 $1,441,984
----------------------------------------------
56 3/31/98 $1,516,538 $1,488,747
----------------------------------------------
57 4/30/98 $1,528,968 $1,500,225
----------------------------------------------
58 5/31/98 $1,528,968 $1,493,504
----------------------------------------------
59 6/30/98 $1,518,353 $1,499,791
----------------------------------------------
60 7/31/98 $1,533,349 $1,509,693
----------------------------------------------
61 8/31/98 $1,343,399 $1,316,941
----------------------------------------------
62 9/30/98 $1,310,908 $1,279,306
----------------------------------------------
63 10/31/98 $1,412,131 $1,412,768
----------------------------------------------
64 11/30/98 $1,484,612 $1,484,565
----------------------------------------------
65 12/31/98 $1,535,729 $1,540,540
----------------------------------------------
66 1/31/99 $1,531,928 $1,540,310
----------------------------------------------
67 2/28/99 $1,482,511 $1,501,564
----------------------------------------------
68 3/31/99 $1,525,592 $1,563,641
----------------------------------------------
69 4/30/99 $1,596,550 $1,631,168
----------------------------------------------
70 5/31/99 $1,512,921 $1,547,714
----------------------------------------------
71 6/30/99 $1,573,726 $1,607,444
----------------------------------------------
72 7/31/99 $1,619,637 $1,653,940
----------------------------------------------
73 8/31/99 $1,610,710 $1,658,379
----------------------------------------------
74 9/30/99 $1,603,058 $1,676,897
----------------------------------------------
75 10/31/99 $1,641,317 $1,741,712
----------------------------------------------
76 11/30/99 $1,680,851 $1,802,394
----------------------------------------------
77 12/31/99 $1,830,034 $1,968,326
----------------------------------------------
78 1/31/2000 $1,691,356 $1,848,755
----------------------------------------------
79 2/29/2000 $1,696,540 $1,900,648
----------------------------------------------
80 3/31/2000 $1,752,270 $1,978,709
----------------------------------------------
81 4/30/2000 $1,683,579 $1,875,811
----------------------------------------------
82 5/31/2000 $1,666,731 $1,830,374
----------------------------------------------
83 6/30/2000 $1,758,751 $1,909,385
----------------------------------------------
Funds returns are net of all fees and costs, while the index returns
are based solely on market returns without deduction for fees or
transaction costs for rebalancing.
======================================================================
75
<PAGE>
Global (Ex-U.S.) Equity Fund
--------------------------------------------------------------------------------
[LOGO] Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
----------------------------------------------------------------------
GLOBAL (EX-U.S.) EQUITIES
Aerospace & Military............................. 0.36%
Airlines......................................... 0.78
Appliances & Households.......................... 2.46
Autos/Durables................................... 2.19
Banking.......................................... 11.42
Beverages & Tobacco.............................. 3.66
Broadcasting & Publishing........................ 4.78
Building Materials............................... 0.50
Business & Public Service........................ 1.71
Chemicals........................................ 3.15
Computer Software................................ 0.59
Consumer......................................... 0.39
Data Processing.................................. 2.36
Electric Components.............................. 2.07
Electronics...................................... 4.84
Energy........................................... 5.03
Financial Services............................... 4.27
Food & House Products............................ 3.89
Forest Products.................................. 0.48
Health & Personal Care........................... 7.82
Industrial Components............................ 0.76
Insurance........................................ 5.83
Leisure & Tourism................................ 0.48
Machinery & Engineering.......................... 1.81
Merchandising.................................... 1.00
Metals-Steel..................................... 0.38
Multi-Industry................................... 0.20
Non-Ferrous Metals............................... 0.76
Non-Durables..................................... 0.06
Real Estate...................................... 1.10
Recreation....................................... 0.67
Services/Miscellaneous........................... 0.02
Telecommunications............................... 13.33
Transportation................................... 2.25
Utilities........................................ 5.18
Wholesale & International Trade.................. 0.20
------
Total Global (Ex-U.S.) Equities.................. 96.78
CONVERTIBLE BONDS................................ 0.03
WARRANTS......................................... 0.04
SHORT-TERM INVESTMENTS........................... 1.23
------
TOTAL INVESTMENTS................................ 98.08
CASH AND OTHER ASSETS,
LESS LIABILITIES................................. 1.92
------
NET ASSETS....................................... 100.00%
======
Market and Currency Strategy
As of June 30, 2000
Fund Benchmark
------------------- ---------------------
Market Currency Market Currency
Strategy Strategy Strategy Strategy
--------------------------------------------------------------
Australia 4.49% 10.49% 2.61% 2.61%
Austria 0.08 0.00 0.19 0.00
Belgium 1.17 0.00 0.73 0.00
Canada 3.53 5.13 5.13 5.13
Denmark 0.58 0.74 0.74 0.74
Euro 0.00 47.42 0.00 35.44
Finland 2.37 0.00 2.96 0.00
France 9.96 0.00 10.80 0.00
Germany 5.31 0.00 8.12 0.00
Hong Kong 0.39 0.00 1.97 1.97
Ireland 0.76 0.00 0.34 0.00
Italy 4.10 0.00 4.19 0.00
Japan 27.50 15.50 25.50 25.50
Netherlands 6.34 0.00 5.16 0.00
New Zealand 0.25 0.25 0.14 0.14
Norway 0.00 0.35 0.35 0.35
Portugal 1.52 0.00 0.44 0.00
Singapore 0.71 0.92 0.92 0.92
Spain 1.91 0.00 2.51 0.00
Sweden 3.41 3.18 3.18 3.18
Switzerland 3.60 5.49 5.49 5.49
U.K. 22.02 10.53 18.53 18.53
--------------------------------------------------------------
100.00% 100.00% 100.00% 100.00%
Top Ten Global (Ex-U.S.) Equity Holdings
As of June 30, 2000
Percent of
Net Assets
--------------------------------------------------------------
1. Glaxo Wellcome PLC 2.02%
2. Nippon Telegraph & Telephone Corp. 1.86
3. BP Amoco PLC 1.61
4. Total Fina S.A., Class B 1.50
5. Heineken NV 1.47
6. Fujitsu 1.32
7. Allianz AG 1.27
8. Marconi PLC 1.26
9. NEC Corp. 1.25
10. Ericsson, B Shares 1.25
--------------------------------------------------------------
================================================================================
76
<PAGE>
Global (Ex-U.S.) Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
--------- ------------
Global (Ex-U.S.) Equities -- 96.78%
Australia -- 4.40%
Amcor Ltd........................................... 76,940 $ 269,823
Amp Ltd............................................. 82,400 841,038
Boral Ltd........................................... 138,300 174,374
Brambles Industries Ltd............................. 27,140 836,511
Broken Hill Proprietary Co., Ltd.................... 105,320 1,248,871
CSR Ltd............................................. 82,190 228,969
Howard Smith Ltd.................................... 64,800 317,472
Lend Lease Corp., Ltd............................... 69,396 887,803
National Australia Bank Ltd......................... 101,748 1,704,271
National Australia Bank Ltd., Preferred............. 29,800 843,712
News Corp., Ltd..................................... 183,588 2,535,198
News Corp., Ltd., Preferred......................... 80,079 969,520
Origin Energy Ltd. (b).............................. 158,600 153,309
Qantas Airways Ltd.................................. 106,438 216,000
QBE Insurance Group Ltd............................. 160,688 788,409
Rio Tinto Ltd....................................... 45,960 762,128
Santos Ltd.......................................... 139,861 427,419
Telstra Corp., Ltd.................................. 519,710 2,115,585
Westpac Banking Corp., Ltd.......................... 276,541 2,000,720
WMC Ltd............................................. 79,870 358,359
Woolworth's Ltd..................................... 188,760 698,687
------------
18,378,178
------------
Austria -- 0.10%
Austria Tabakwerke AG............................... 11,280 419,544
------------
Belgium -- 1.19%
Electrabel S.A...................................... 8,820 2,188,957
Fortis B............................................ 95,867 2,801,049
------------
4,990,006
------------
Canada -- 2.45%
Agrium, Inc......................................... 71,480 612,672
Alcan Aluminum Ltd.................................. 19,140 594,209
Bank of Montreal.................................... 7,510 316,782
Canadian National Railway Co........................ 37,380 1,087,317
Canadian Pacific Ltd................................ 44,414 1,151,041
Hudson's Bay Co..................................... 82,220 871,198
Imperial Oil Ltd.................................... 21,460 523,574
Magna International, Inc., Class A.................. 16,560 777,315
NOVA Chemicals Corp................................. 45,321 951,261
Potash Corporation of Saskatchewan, Inc............. 8,760 478,882
Royal Bank of Canada................................ 23,420 1,197,317
Shaw Communications, Inc., Class B.................. 40,260 991,760
TransCanada Pipelines Ltd........................... 18,976 144,718
Westcoast Energy, Inc............................... 35,520 546,572
------------
10,244,618
------------
Denmark -- 0.60%
Tele Danmark A/S.................................... 36,750 2,483,874
------------
Finland -- 2.36%
Metso Oyj........................................... 55,191 666,615
Nokia Oyj........................................... 86,792 4,446,968
Sampo Insurance Co., Ltd., Series A................. 70,692 2,880,022
UPM-Kymmene Corp.................................... 74,989 1,868,992
------------
9,862,597
------------
France -- 9.89%
Air France (b)...................................... 65,770 $ 1,141,151
Air Liquide......................................... 20,315 2,660,138
Alcatel............................................. 46,755 3,079,083
Alcatel S.A. ADR.................................... 37,673 2,505,255
Aventis S.A. Class A................................ 39,162 2,869,980
Axa................................................. 4,401 696,100
Banque Nationale de Paris........................... 45,847 4,430,044
Cie de Saint Gobain................................. 12,488 1,695,090
CSF Thomson......................................... 37,581 1,486,395
France Telecom S.A.................................. 22,831 3,204,074
Groupe Danone....................................... 17,792 2,370,698
L'Oreal S.A......................................... 1,773 1,541,532
Schneider Electric S.A.............................. 22,268 1,558,263
Societe Generale.................................... 55,160 3,331,205
Suez Lyonnaise des Eaux S.A......................... 6,066 1,067,026
Total Fina S.A., Class B............................ 40,799 6,281,041
Vivendi............................................. 15,932 1,411,932
------------
41,329,007
------------
Germany -- 4.64%
Allianz AG.......................................... 14,878 5,309,751
Bayer AG............................................ 98,866 3,800,388
Bayerische Motoren Werke AG......................... 50,110 1,532,328
Continental AG...................................... 51,890 875,453
E.on AG............................................. 75,928 3,675,614
SAP AG.............................................. 9,420 1,430,351
Siemens AG.......................................... 17,850 2,683,001
Volkswagen AG....................................... 1,800 69,537
------------
19,376,423
------------
Hong Kong -- 0.32%
Henderson Land Development Co., Ltd................. 307,000 1,350,827
------------
Ireland -- 0.76%
Bank of Ireland..................................... 195,955 1,231,305
Eircom PLC.......................................... 719,030 1,929,930
------------
3,161,235
------------
Italy -- 3.63%
Assicurazioni Generali.............................. 61,446 2,114,583
ENI Spa............................................. 666,000 3,862,479
ENI Spa ADR......................................... 10,352 602,357
Rinascente Spa...................................... 129,140 735,333
San Paolo-imi Spa................................... 165,610 2,951,226
Telecom Italia Mobile Spa........................... 266,000 2,728,362
Telecom Italia Spa.................................. 156,000 2,153,395
------------
15,147,735
------------
Japan -- 26.23%
Acom Co., Ltd....................................... 22,200 1,871,594
Asahi Bank Ltd...................................... 153,000 644,941
Bank of Tokyo-Mitsubushi Ltd........................ 236,000 2,857,294
Benesse Corp........................................ 9,900 687,727
Bridgestone Corp.................................... 53,000 1,124,569
Canon, Inc.......................................... 87,000 4,341,572
Dai Nippon Printing Co., Ltd........................ 61,000 1,077,539
Dai-Ichi Kangyo Bank................................ 92,000 699,967
Daikin Industries Ltd............................... 39,000 908,605
Denso Corp.......................................... 48,000 1,170,455
East Japan Railway Co............................... 294 1,711,677
Fanuc............................................... 22,200 2,263,957
================================================================================
77
<PAGE>
Global (Ex-U.S.) Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
--------- ------------
Fuji Bank Ltd....................................... 149,000 $ 1,135,050
Fuji Photo Film Co., Ltd............................ 37,000 1,517,698
Fujitsu............................................. 159,000 5,515,146
Hitachi Ltd......................................... 142,000 2,053,400
Honda Motor Co...................................... 87,000 2,968,385
Hoya Corp........................................... 18,000 1,616,181
Ito Yokado Co., Ltd................................. 18,000 1,085,393
Kamigumi Co., Ltd................................... 176,000 929,861
Kao Corp............................................ 71,000 2,174,188
Kirin Brewery Co., Ltd.............................. 79,000 989,320
Kuraray Co., Ltd.................................... 139,000 1,597,505
Kyocera Corp........................................ 2,700 459,080
Matsushita Electric Industrial Co................... 135,000 3,508,813
Mitsubishi Corp..................................... 91,000 824,810
Mitsubishi Estate Co., Ltd.......................... 201,000 2,370,852
Mitsubishi Trust and Banking Corp................... 67,000 521,157
Murata Manufacturing Co., Inc....................... 8,000 1,150,796
NEC Corp............................................ 166,000 5,224,517
NGK Insulators...................................... 119,000 1,477,870
Nintendo Corp., Ltd................................. 16,100 2,818,128
Nippon Steel Co..................................... 757,000 1,595,492
Nippon Telegraph & Telephone Corp................... 584 7,782,619
Nissin Food Products Co............................. 35,500 905,912
Nomura Securities Co., Ltd.......................... 166,000 4,071,358
Omron Corp.......................................... 25,000 680,497
Orix Corp........................................... 13,200 1,952,460
Rohm Co............................................. 2,600 761,779
Sankyo Pharm Co., Ltd............................... 77,000 1,742,970
Santen Pharmaceutical Co., Ltd...................... 45,000 1,088,795
Secom Co., Ltd...................................... 29,000 2,124,191
Shin-Etsu Chemical Co., Ltd......................... 25,000 1,271,206
Softbank Corp....................................... 7,600 1,034,356
Sony Corp........................................... 50,000 4,678,418
Sumitomo Bank....................................... 147,000 1,806,153
Sumitomo Chemical Co................................ 295,000 1,778,838
Sumitomo Electric Industries........................ 62,000 1,065,318
Taiheiyo Cement Corp................................ 600 1,259
Takeda Chemical Industries.......................... 45,000 2,960,163
Takefuji Corp....................................... 8,500 1,029,110
TDK Corp............................................ 20,000 2,880,771
Tokio Marine & Fire Insurance Co.................... 104,000 1,203,119
Tokyo Electric Power................................ 13,600 332,272
Tokyo Gas Co., Ltd.................................. 434,000 1,222,362
Toyoda Automatic Loom Works......................... 18,000 390,435
Toyota Motor Corp................................... 83,000 3,788,951
Yamanouchi Pharmaceutical Co., Ltd.................. 18,000 985,020
Yamato Transport Co., Ltd........................... 46,000 1,145,598
------------
109,577,469
------------
Netherlands -- 6.42%
ABN AMRO Holdings NV................................ 85,487 2,102,777
Aegon NV............................................ 101,708 3,633,717
Elsevier NV......................................... 320,850 3,903,015
Heineken NV......................................... 100,500 6,141,619
ING Groep NV........................................ 52,923 3,591,818
Philips Electronics NV.............................. 34,900 1,652,681
TNT Post Group NV................................... 55,421 1,500,823
Wolters Kluwer NV................................... 160,799 4,300,551
------------
26,827,001
------------
New Zealand -- 0.21%
Auckland International Airport Ltd.................. 104,810 $ 124,349
Carter Holt Harvey Ltd.............................. 163,140 142,092
Lion Nathan Ltd..................................... 122,170 273,209
Telecom Corp. of New Zealand Ltd.................... 97,890 343,346
------------
882,996
------------
Portugal -- 1.56%
Brisa-Auto Estradas de Portugal S.A................. 176,007 1,521,854
Electricidade de Portugal S.A....................... 81,894 1,493,135
Portugal Telecom.................................... 309,345 3,487,282
------------
6,502,271
------------
Singapore -- 0.74%
DBS Group Holdings Ltd.............................. 58,000 744,708
SIA Engineering Co., Ltd. (b)....................... 188,000 210,943
Singapore Airport Terminal Services Ltd. (b)........ 67,000 81,376
Singapore Press Holdings Ltd........................ 27,975 436,857
United Overseas Bank Ltd............................ 250,360 1,636,245
------------
3,110,129
------------
Spain -- 2.95%
Altadis S.A......................................... 182,292 2,811,643
Banco Popular Espanol S.A........................... 85,452 2,654,018
Banco Santander Central Hispano S.A................. 216,733 2,295,746
Endesa S.A.......................................... 69,958 1,360,680
Telefonica S.A. (b)................................. 148,026 3,192,693
------------
12,314,780
------------
Sweden -- 3.33%
Electrolux AB, B Shares............................. 135,090 2,102,358
Ericsson, B Shares.................................. 262,560 5,223,660
Investor AB, B Shares............................... 128,160 1,760,720
Nordic Baltic Holdings AB........................... 435,550 3,302,255
Swedish Match AB.................................... 496,670 1,540,238
------------
13,929,231
------------
Switzerland -- 3.75%
Givaudan (b)........................................ 269 82,134
Nestle S.A. (Reg.).................................. 1,976 3,967,554
New ABB Ltd......................................... 16,203 1,945,536
Novartis AG (Reg.).................................. 3,039 4,829,209
Roche Holding AG (Gen.)............................. 269 2,626,973
Swisscom AG (Reg.).................................. 6,343 2,203,920
------------
15,655,326
------------
United Kingdom -- 21.25%
Allied Zurich PLC................................... 140,194 1,658,642
AstraZeneca PLC..................................... 41,094 1,919,234
BP Amoco PLC........................................ 701,884 6,736,726
British Airways PLC................................. 291,879 1,679,116
British Telecommunications PLC...................... 360,551 4,661,427
Charter PLC......................................... 320,907 1,850,966
De Vere Group PLC................................... 80,888 377,163
Diageo PLC.......................................... 302,322 2,714,056
FKI PLC............................................. 332,763 1,183,851
Glaxo Wellcome PLC.................................. 288,962 8,429,790
House of Fraser PLC................................. 357,685 261,001
HSBC Holdings PLC................................... 139,884 1,599,915
Invensys PLC........................................ 133,000 499,341
Kelda Group PLC..................................... 383,011 1,872,872
================================================================================
78
<PAGE>
Global (Ex-U.S.) Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
--------- ------------
Lloyds TSB Group PLC.............................. 539,725 $ 5,098,606
Marconi PLC....................................... 405,269 5,276,381
Marks & Spencer PLC............................... 356,624 1,253,893
National Power PLC................................ 383,314 2,443,043
Nycomed Amersham PLC.............................. 227,876 2,263,063
Peninsular & Oriental Steam Navigation Co......... 108,517 929,841
Powergen PLC...................................... 201,812 1,726,194
Prudential Corp. PLC.............................. 160,964 2,358,840
Reckitt & Benckiser PLC........................... 102,497 1,148,252
Reed International PLC............................ 307,307 2,675,067
RJB Mining PLC.................................... 262,602 222,628
Royal & Sun Alliance Insurance Group PLC.......... 442,733 2,875,368
Royal Bank of Scotland Group PLC.................. 197,168 3,301,307
Scottish & Newcastle PLC.......................... 50,000 408,372
Scottish & Southern Energy PLC.................... 305,875 2,806,150
Shell Transport & Trading Co...................... 289,404 2,416,264
SmithKline Beecham PLC............................ 105,000 1,374,991
Tesco PLC......................................... 782,592 2,434,678
Thames Water PLC.................................. 94,744 1,226,343
Trinity Mirror PLC................................ 177,566 1,594,075
Unilever PLC...................................... 413,082 2,501,443
United News & Media PLC........................... 177,609 2,554,365
Vodafone Group PLC................................ 1,105,309 4,467,754
------------
88,801,018
------------
Total Global (Ex-U.S.) Equities
(Cost $310,362,667)............................. 404,344,265
------------
Face
Amount Value
-------- -------
Convertible Bonds -- 0.03%
Australia -- 0.03%
Burns Philp Food North America, Inc.,
7.500%, due 08/15/03
(Cost $65,332)..............................AUD 1,228,664 $ 132,046
------------
Shares
--------
Warrants -- 0.04%
Australia -- 0.04%
Burns, Philip & Co., Ltd. (b)
(Cost $82,131).............................. 1,228,664 165,980
------------
Short-Term Investments -- 1.23%
Investment Companies -- 1.23%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund
(Cost $5,129,357)........................... 5,129,357 5,129,357
------------
Total Investments
(Cost $315,639,487) -- 98.08% (a)........... 409,771,648
------------
Cash and other assets,
less liabilities -- 1.92%..................... 8,032,897
------------
Net Assets -- 100%............................ $417,804,545
============
See accompanying notes to schedule of investments.
================================================================================
79
<PAGE>
Global (Ex-U.S.) Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $320,511,470; and net
unrealized appreciation consisted of:
Gross unrealized appreciation......................... $107,013,078
Gross unrealized depreciation......................... (17,752,900)
------------
Net unrealized appreciation..................... $ 89,260,178
============
(b) Non-income producing security
FORWARD FOREIGN CURRENCY CONTRACTS
The Global (Ex-U.S.) Equity Fund had the following open forward foreign currency
contracts as of June 30, 2000:
<TABLE>
<CAPTION>
Settlement Local Current Unrealized
Date Currency Value Gain/(Loss)
---------- -------- ------- -----------
<S> <C> <C> <C> <C>
Forward Foreign Currency Buy Contracts
Australian Dollar.................................. 08/08/00 41,200,000 $ 24,752,327 $ (797,456)
British Pound...................................... 08/08/00 12,350,000 18,710,420 5,189
Canadian Dollar.................................... 08/08/00 13,800,000 9,322,435 (200,752)
Euro............................................... 08/08/00 90,900,000 87,351,771 (1,985,349)
Japanese Yen....................................... 08/08/00 2,320,000,000 22,085,399 (2,988)
Swedish Krona...................................... 08/08/00 120,000,000 13,722,786 (361,721)
Swiss Franc........................................ 08/08/00 14,000,000 8,641,869 (126,216)
Forward Foreign Currency Sale Contracts
British Pound...................................... 08/08/00 40,850,000 61,888,313 2,500,938
Canadian Dollar.................................... 08/08/00 3,900,000 2,634,601 (4,087)
Euro............................................... 08/08/00 29,200,000 28,060,195 (436,190)
Japanese Yen....................................... 08/08/00 7,670,000,000 73,015,089 (271,531)
Swedish Krona...................................... 08/08/00 120,000,000 13,722,786 192,113
Swiss Franc........................................ 08/08/00 4,500,000 2,777,743 (94,860)
------------
Total........................................... $ (1,582,910)
============
</TABLE>
================================================================================
80 See accompanying notes to financial statements.
<PAGE>
This page intentionally left blank
81
<PAGE>
THE BRINSON FUNDS -- FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000
Global Global Equity Global Global
Fund Fund Technology Biotech Global Bond
Fund Fund Fund
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at cost:
Unaffiliated issuers............. $ 301,007,938 $ 56,332,868 $ 499,543 $ 638,088 $ 45,532,378
Affiliated issuers............... 40,410,397 2,453,941 -- -- 5,419,195
Foreign currency, at cost......... 231,280 66,558 -- -- 133,064
--------------- --------------- ------------- ----------- -------------
$ 341,649,615 $ 58,853,367 $ 499,543 $ 638,088 $ 51,084,637
=============== =============== ============= =========== =============
Investments, at value:
Unaffiliated issuers............. $ 297,391,988 $ 64,620,012 $ 546,279 $ 738,295 $ 43,089,980
Affiliated issuers............... 47,160,789 2,453,941 -- -- 5,419,195
Foreign currency, at value........ 231,198 67,086 -- -- 135,332
Cash.............................. -- -- -- -- 995
Receivables:
Investment securities sold...... 1,770,059 1,841,960 21,621 17,575 5,678,145
Due from Advisor................. -- 4,090 3,257 --
Dividends........................ 193,493 107,552 46 -- --
Interest......................... 1,356,426 1,236 177 317 675,892
Fund shares sold................. 2,069,859 31,893 27,791 101,961 301,765
Variation margin................. -- -- -- -- --
Other assets...................... 2,184 1,383 -- -- --
Net unrealized appreciation on forward
foreign currency contracts...... -- 413,613 -- -- --
--------------- --------------- ------------- ----------- --------------
TOTAL ASSETS...................... 350,175,996 69,538,676 600,004 861,405 55,301,304
LIABILITIES:....................... --------------- --------------- ------------- ----------- --------------
Payables:
Securities loaned................ 51,691,365 -- -- -- --
Investment securities purchased.. 2,309,632 201,585 18,310 10,188 213,960
Investment advisory fees......... 194,797 40,447 -- -- 22,948
Fund shares redeemed............. 1,661,002 359,432 -- -- 9,370,003
Variation margin................. 272,146 -- -- -- --
Due to custodian bank............ -- -- -- 8,854 --
Accrued expenses................. 142,980 73,929 3,034 1,925 58,262
Net unrealized depreciation on forward
foreign currency contracts....... 689,875 -- -- -- 54,907
--------------- --------------- ------------- ----------- --------------
TOTAL LIABILITIES............... 56,961,797 675,393 21,344 20,967 9,720,080
--------------- --------------- ------------- ----------- --------------
NET ASSETS......................... $ 293,214,199 $ 68,863,283 $ 578,660 $ 840,438 $ 45,581,224
=============== =============== ============= =========== =============
NET ASSETS CONSIST OF:
Paid in capital................... $ 287,633,867 $ 55,848,764 $ 530,572 $ 732,490 $ 55,033,793
Accumulated
undistributed net
investment income................. -- -- -- -- 335,909
Accumulated net realized
gain (loss)....................... 2,362,694 4,303,083 1,352 7,741 (7,333,042)
Net unrealized
appreciation
(depreciation).................... 3,217,638 8,711,436 46,736 100,207 (2,455,436)
--------------- --------------- ------------- ----------- --------------
NET ASSETS...................... $ 293,214,199 $ 68,863,283 $ 578,660 $ 840,438 $ 45,581,224
=============== =============== ============= =========== =============
BRINSON CLASS I
Net assets........................ $ 284,228,604 $ 40,538,328 $ 223,553 $ 691,460 $ 43,466,600
=============== =============== ============= =========== =============
Shares outstanding................ 25,255,651 3,249,678 19,786 57,263 4,825,867
=============== =============== ============= =========== =============
Net asset value,
offering and redemption
price per share................... $ 11.25 $ 12.47 $ 11.30 $ 12.08 9.01
BRINSON CLASS N:................... =============== =============== ============= =========== =============
Net assets........................ $ 202,037 $ 224,292 $ 1,130 $ 1,207 $ 782
--------------- --------------- ------------- ----------- -------------
Shares outstanding................ 18,035 18,033 100 100 86
=============== =============== ============= =========== =============
Net asset value, offering and redemption
Price per share................. $ 11.20 $ 12.44 $ 11.30 $ 12.07 $ 9.09
=============== =============== ============= =========== =============
UBS INVESTMENT FUNDS CLASS:
Net assets........................ $ 8,783,558 $ 28,100,663 $ 353,977 $ 147,771 $ 2,113,842
=============== =============== ============= =========== =============
Shares outstanding................. 786,388 2,264,523 31,355 12,240 235,559
=============== =============== ============= =========== =============
Net asset value, offering and redemption
price per share.................. $ 11.17 $ 12.41 $ 11.29 $ 12.07 $ 8.97
=============== =============== ============== =========== =============
</TABLE>
================================================================================
82 See accompanying notes to financial statements.
<PAGE>
THE BRINSON FUNDS -- FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND
LIABILITIES
U.S. U.S.
June 30, 2000 U.S. Balanced U.S. Equity Large Cap Large Cap
Fund Fund Equity Fund Growth Fund
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at cost:
Unaffiliated issuers $ 11,777,644 $164,986,101 $ 15,674,981 $ 11,049,729
Affiliated issuers 623,691 849,414 1,215,982 --
Foreign currency, at cost -- -- -- --
------------ ------------ ------------ ------------
$ 12,401,335 $165,835,515 $ 16,890,963 $ 11,049,729
============ ============ ============ ============
Investments, at value:
Unaffiliated issuers $ 11,679,583 $187,707,771 $ 14,681,033 $ 12,599,299
Affiliated issuers 623,691 849,414 1,215,982 --
Foreign currency, at value -- -- -- --
Cash 74,669 -- 56,250 18,750
Receivables:
Investment securities
sold 425,781 1,637,443 222,055 --
Due from Advisor -- -- 5,193 2,191
Dividends 6,282 212,488 20,888 4,431
Interest 59,354 27,281 730 3,189
Fund shares sold 9,979 160,436 24,481 1,250,964
Variation margin -- 12,625 7,575 --
Other assets -- -- -- --
-Net unrealized
appreciation on forward
foreign currency
contracts -- -- -- --
------------ ------------ ------------ ------------
TOTAL ASSETS 12,879,339 190,607,458 16,234,187 13,878,824
------------ ------------ ------------ ------------
LIABILITIES:
Payables:
Securities loaned -- -- -- --
Investment securities
purchased 419,328 1,301,715 170,722 708,750
Investment advisory fees 7,460 66,878 -- --
Fund shares redeemed 5,810 1,585,937 81,864 14,023
Variation margin 17,745 -- -- 953
Due to custodian bank -- -- -- --
Accrued expenses 54,615 88,831 30,766 85,831
-Net unrealized
depreciation on forward
foreign currency
contracts -- -- -- --
------------ ------------ ------------ ------------
TOTAL LIABILITIES 504,958 3,043,361 283,352 809,557
------------ ------------ ------------ ------------
NET ASSETS $ 12,374,381 $187,564,097 $ 15,950,835 $ 13,069,267
============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid in capital $ 14,375,291 $166,431,820 $ 23,039,476 $ 10,447,588
-Accumulated
undistributed net
investment income 178,497 4,239,650 -- --
-Accumulated net realized
gain (loss) (2,206,054) (5,824,621) (6,086,797) 1,073,930
Net unrealized
appreciation
(depreciation) 26,647 22,717,248 (1,001,844) 1,547,749
------------ ------------ ------------ ------------
NET ASSETS $ 12,374,381 $187,564,097 $ 15,950,835 $ 13,069,267
============ ============ ============ ============
BRINSON CLASS I
Net assets $ 11,136,032 $167,870,183 $ 15,758,324 $ 5,885,011
============ ============ ============ ============
Shares outstanding 1,296,639 10,448,418 2,106,508 385,178
============ ============ ============ ============
-Net asset value,
offering and redemption
price per share $ 8.59 $ 16.07 $ 7.48 $ 15.28
============ ============ ============ ============
BRINSON CLASS N:
Net assets $ 1,106 $ 7,191,363 $ 35,006 $ 1,368
============ ============ ============ ============
Shares outstanding 129 450,175 4,662 90
============ ============ ============ ============
-Net asset value,
offering and redemption
price per share $ 8.57 $ 15.97 $ 7.51 $ 15.20
============ ============ ============ ============
UBS INVESTMENT FUNDS CLASS:
Net assets $ 1,237,243 $ 12,502,551 $ 157,505 $ 7,182,888
============ ============ ============ ============
Shares outstanding 145,236 783,650 21,200 476,113
============ ============ ============ ============
-Net asset value,
offering and redemption
price per share $ 8.52 $ 15.95 $ 7.43 $ 15.09
============ ============ ============ ============
<CAPTION>
U.S. Global
June 30, 2000 Small Cap U.S. Bond High Yield (Ex-U.S.)
Growth Fund Fund Fund Equity Fund
<S> <C> <C> <C> <C>
ASSETS:
Investments, at cost:
Unaffiliated issuers $ 33,685,619 $ 62,291,605 $ 49,824,626 $310,510,130
Affiliated issuers 2,503,641 217,046 10,185,196 5,129,357
Foreign currency, at cost -- -- -- 1,590,185
------------ ------------ ------------ ------------
$ 36,189,260 $ 62,508,651 $ 60,009,822 $317,229,672
============ ============ ============ ============
Investments, at value:
Unaffiliated issuers $ 49,928,176 $ 60,006,339 $ 46,293,624 $404,642,291
Affiliated issuers 2,503,641 217,046 10,185,196 5,129,357
Foreign currency, at value -- -- -- 1,587,725
Cash -- -- -- --
Receivables:
Investment securities
sold 837,682 760,531 -- 2,539,311
Due from Advisor -- -- -- --
Dividends 2,259 -- -- 740,368
Interest 2,400 727,982 980,928 34,963
Fund shares sold 2,057,388 2,144,030 146,988 8,306,076
Variation margin -- -- -- --
Other assets -- 451 -- --
-Net unrealized
appreciation on forward
foreign currency
contracts -- -- -- --
------------ ------------ ------------ ------------
TOTAL ASSETS 55,331,546 63,856,379 57,606,736 422,980,091
------------ ------------ ------------ ------------
LIABILITIES:
Payables:
Securities loaned -- -- -- --
Investment securities
purchased 391,228 1,105,361 1,016,965 1,141,416
Investment advisory fees 35,597 4,380 17,752 280,841
Fund shares redeemed 215,243 1,064,617 3,523,751 2,052,645
Variation margin -- -- -- --
Due to custodian bank -- 1,709 -- --
Accrued expenses 41,304 32,473 38,754 117,734
-Net unrealized
depreciation on forward
foreign currency
contracts -- -- -- 1,582,910
------------ ------------ ------------ ------------
TOTAL LIABILITIES 683,372 2,208,540 4,597,222 5,175,546
------------ ------------ ------------ ------------
NET ASSETS $ 54,648,174 $ 61,647,839 $ 53,009,514 $417,804,545
============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid in capital $ 30,141,261 $ 66,462,617 $ 58,700,942 $312,288,833
-Accumulated
undistributed net
investment income -- 1,417,249 1,495,285 --
-Accumulated net realized
gain (loss) 8,264,356 (3,946,761) (3,655,711) 12,982,737
Net unrealized
appreciation
(depreciation) 16,242,557 (2,285,266) (3,531,002) 92,532,975
------------ ------------ ------------ ------------
NET ASSETS $ 54,648,174 $ 61,647,839 $ 53,009,514 $417,804,545
============ ============ ============ ============
BRINSON CLASS I
Net assets $ 50,974,940 $ 58,121,065 $ 50,844,798 $411,984,628
============ ============ ============ ============
Shares outstanding 3,132,204 5,813,445 5,529,623 30,355,206
============ ============ ============ ============
-Net asset value,
offering and redemption
price per share $ 16.27 $ 10.00 $ 9.19 $ 13.57
============ ============ ============ ============
BRINSON CLASS N:
Net assets $ 1,847 $ 1,169 $ 1,028 $ 1,208
============ ============ ============ ============
Shares outstanding 114 117 112 89
============ ============ ============ ============
-Net asset value,
offering and redemption
price per share $ 16.20 $ 9.99 $ 9.18 $ 13.57
============ ============ ============ ============
UBS INVESTMENT FUNDS CLASS:
Net assets $ 3,671,387 $ 3,525,605 $ 2,163,688 $ 5,818,709
============ ============ ============ ============
Shares outstanding 228,312 354,856 236,022 435,360
============ ============ ============ ============
-Net asset value,
offering and redemption
price per share $ 16.08 $ 9.94 $ 9.17 $ 13.37
============ ============ ============ ============
</TABLE>
================================================================================
83
<PAGE>
THE BRINSON FUNDS -- FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED Global* Global*
JUNE 30, 2000 Global Global Equity Technology Biotech Global Bond
Fund Fund Fund Fund Fund
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.......................... $ 2,749,313 $ 1,261,596 $ 46 $ -- $ 43,183
Interest........................... 8,012,042 79,263 358 317 4,268,523
Securities lending-net............. 239,626 -- -- -- --
Foreign tax withheld............... (208,685) (90,155) -- -- (18,681)
------------ ------------ ----------- -------- -----------
TOTAL INCOME...................... 10,792,296 1,250,704 404 317 4,293,025
------------ ------------ ----------- -------- -----------
EXPENSES:
Advisory........................... 2,899,741 639,859 549 480 597,228
Administration..................... 250,979 -- -- -- --
Professional....................... 145,844 49,112 2,556 2,059 48,296
Printing........................... 123,158 83,429 504 406 55,840
Distribution....................... 103,485 288,672 256 7 17,645
Custodian.......................... 69,831 36,245 13 14 28,308
Registration....................... 34,880 29,350 1,188 957 53,690
Other.............................. 71,705 22,654 441 366 55,557
------------ ------------ ----------- -------- -----------
TOTAL EXPENSES.................... 3,699,623 1,149,321 5,507 4,289 856,564
------------ ------------ ----------- -------- -----------
Expenses waived by
Advisor........................... -- (54,359) (4,639) (3,737) (91,069)
Earnings credits.................. (2,276) (6,515) -- -- (428)
------------ ------------ ----------- -------- -----------
NET EXPENSES...................... 3,697,347 1,088,447 868 552 765,067
------------ ------------ ----------- -------- -----------
NET INVESTMENT
INCOME LOSS)..................... 7,094,949 162,257 (464) (235) 3,527,958
------------ ------------ ----------- -------- -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS):
Net realized gain (loss)
on:
Investments........................ 18,961,366 9,939,571 1,624 9,364 (2,820,354)
Futures contracts.................. (3,937,165) (36,304) -- -- --
Foreign currency
transactions...................... (6,047,250) (1,428,985) -- (1,388) (5,716,144)
------------ ------------ ----------- -------- -----------
Net realized gain
(loss)........................... 8,976,951 8,474,282 1,624 7,976 (8,536,498)
------------ ------------ ----------- -------- -----------
Change in net unrealized
appreciation or depreciation on:
Investments and foreign
currency.......................... (22,852,102) (7,942,884) 46,736 100,207 2,567,911
Futures contracts.................. 3,453,796 -- -- -- --
Forward contracts.................. (2,097,895) 282,864 -- -- 1,270,002
Translation of other
assets and liabilities
denominated in foreign
currency.......................... 51,494 13,066 -- -- 86,792
------------ ------------ ----------- -------- -----------
Change in net unrealized
appreciation or depreciation..... (21,444,707) (7,646,954) 46,736 100,207 3,924,705
------------ ------------ ----------- -------- -----------
Net realized and
unrealized gain (loss).............. (12,467,756) 827,328 48,360 108,183 (4,611,793)
------------ ------------ ----------- -------- -----------
Net increase (decrease)
in net assets resulting
from operations..................... $ (5,372,807) $ 989,585 $ 47,896 $107,948 $(1,083,835)
============ ============ =========== ======== ===========
* Commencement of investment operations was May 26, 2000
** Commencement of investment operations was June 2, 2000
</TABLE>
================================================================================
See accompanying notes to financial statements.
84
<PAGE>
THE BRINSON FUNDS -- FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the period Ended JUNE 30, 2000
U.S. U.S. U.S.
U.S. Balanced U.S. Equity Large Cap Large Cap Small Cap
Fund Fund Equity Fund Growth Fund Growth Fund
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 219,595 $ 7,423,217 $ 404,074 $ 67,519 $ 122,738
Interest 865,703 907,483 53,714 23,453 120,571
Securities lending-net -- -- -- -- --
Foreign tax withheld -- -- -- -- --
----------- ------------ ------------- ----------- -----------
TOTAL INCOME 1,085,298 8,330,700 457,788 90,972 243,309
----------- ------------ ------------- ----------- -----------
EXPENSES:
Advisory 199,072 3,376,519 163,052 71,140 445,220
Administration -- 29,949 -- -- --
Professional 28,500 197,716 37,014 32,278 39,299
Printing 9,211 234,243 38,830 22,085 25,990
Distribution 7,529 221,543 3,407 50,192 13,614
Custodian 718 12,587 2,597 6,767 1,229
Registration 34,546 54,881 42,214 32,432 36,281
Other 16,771 119,773 10,474 24,809 34,449
----------- ------------ ------------- ----------- -----------
TOTAL EXPENSES 296,347 4,247,211 297,588 239,703 596,082
----------- ------------ ------------- ----------- -----------
Expenses waived by
Advisor (57,436) (160,099) (108,284) (101,585) (69,313)
Earnings credits (7) (528) (15) (6,513) (69)
----------- ------------ ------------- ----------- -----------
NET EXPENSES 238,904 4,086,584 189,289 131,605 526,700
----------- ------------ ------------- ----------- -----------
NET INVESTMENT INCOME
(LOSS) 846,394 4,244,116 268,499 (40,633) (283,391)
----------- ------------ ------------- ----------- -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS):
Net realized gain (loss)
on:
Investments (1,183,394) 12,361,736 (4,203,112) 1,333,599 14,184,229
Futures contracts (819,701) (1,065,527) 33,037 (26,358) --
Foreign currency
transactions -- -- -- -- --
----------- ------------ ------------- ----------- -----------
Net realized gain
(loss) (2,003,095) 11,296,209 (4,170,075) 1,307,241 14,184,229
----------- ------------ ------------- ----------- -----------
-Change in net unrealized
appreciation or
depreciation on:
Investments and foreign
currency (2,957,865) (145,728,152) (3,189,824) 497,407 12,102,689
Futures contracts 661,078 (4,422) (7,896) (1,821) --
Forward contracts -- -- -- -- --
-Translation of other
assets and liabilities
denominated
in foreign
currency -- -- -- -- --
----------- ------------ ------------- ----------- -----------
-Change in net
unrealized
appreciation or
depreciation (2,296,787) (145,732,574) (3,197,720) 495,586 12,102,689
----------- ------------ ------------- ----------- -----------
Net realized and
unrealized gain (loss) (4,299,882) (134,436,365) (7,367,795) 1,802,827 26,286,918
----------- ------------ ------------- ----------- -----------
-Net increase (decrease)
in net assets resulting
from operations $(3,453,488) $(130,192,249) $(7,099,296) $ 1,762,194 $26,003,527
=========== ============= ============= =========== ===========
<CAPTION>
Global
U.S. Bond High Yield (Ex-U.S)
Fund Fund Equity Fund
----------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 79,168 $ -- $ 8,949,581
Interest 6,069,432 5,703,173 735,552
Securities lending-net -- -- 147,942
Foreign tax withheld -- -- (807,226)
------------ ------------ ------------
TOTAL INCOME 6,148,600 5,703,173 9,025,849
------------ ------------ ------------
EXPENSES:
Advisory 452,989 336,440 3,822,993
Administration -- -- 358,405
Professional 41,267 36,805 125,346
Printing 46,542 28,651 59,963
Distribution 23,917 36,379 55,727
Custodian 3,924 3,158 253,105
Registration 39,484 38,132 34,858
Other 21,988 38,648 107,368
------------ ------------ ------------
TOTAL EXPENSES 630,111 518,213 4,817,765
------------ ------------ ------------
Expenses waived by
Advisor (60,829) (87,728) --
Earnings credits (1,659) (1,756) --
------------ ------------ ------------
NET EXPENSES 567,623 428,729 4,817,765
------------ ------------ ------------
NET INVESTMENT INCOME
(LOSS) 5,580,977 5,274,444 4,208,084
------------ ------------ ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS):
Net realized gain (loss)
on:
Investments (2,898,299) (3,589,002) 48,286,353
Futures contracts -- -- (477)
Foreign currency
transactions -- -- (6,868,873)
------------ ------------ ------------
Net realized gain
(loss) (2,898,299) (3,589,002) 41,417,003
------------ ------------ ------------
-Change in net unrealized
appreciation or
depreciation on:
Investments and foreign
currency 218,149 (1,386,533) 16,453,119
Futures contracts -- -- --
Forward contracts -- -- (1,101,620)
-Translation of other
assets and liabilities
denominated
in foreign
currency -- -- 19,644
------------ ------------ ------------
-Change in net
unrealized
appreciation or
depreciation 218,149 (1,386,533) 15,371,143
------------ ------------ ------------
Net realized and
unrealized gain (loss) (2,680,150) (4,975,535) 56,788,146
------------ ------------ ------------
-Net increase (decrease)
in net assets resulting
from $ 2,900,827 $ 298,909 $ 60,996,230
============ =========== ============
</TABLE>
===============================================================================
85
<PAGE>
THE BRINSON FUNDS -- FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED June 30, 2000
<TABLE>
<CAPTION>
Global
Fund
-----------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net decrease in net assets resulting from operations.................................. $ (5,372,807)
Adjustments to reconcile net decrease in net assets resulting from operations
to net cash used for operating activities:
Net realized and unrealized loss on investments...................................... 12,467,756
Decrease in receivable for investment securities sold................................ 7,123,722
Decrease in dividends and interest receivable........................................ 1,684,342
Increase in other assets............................................................. (2,184)
Decrease in payable for securities purchased......................................... (22,903,530)
Decrease in payable for investment advisory fee...................................... (126,514)
Decrease in accrued expenses......................................................... (62,552)
Decrease in variation margin......................................................... (252,979)
Net amortization of premium.......................................................... 523,499
--------------
Net cash used for operating activities.............................................. (6,921,247)
--------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments.............................................................. (759,492,570)
Proceeds from sales of investments.................................................... 1,010,245,660
Net realized loss on futures contracts................................................ (3,937,165)
Net realized loss on foreign currency transactions.................................... (6,047,250)
Change in net unrealized appreciaton or depreciation on futures contracts............. 3,453,796
Change in net unrealized appreciation or depreciation on other assets and liabilities. 51,494
Net decrease in foreign currency...................................................... 2,144,534
--------------
Net cash provided by investing activities........................................... 246,418,499
--------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net capital shares transactions....................................................... (193,609,810)
Net decrease from securities lending.................................................. (45,782,809)
Dividends and capital gain distributions paid......................................... (1,895,986)
--------------
Net cash used for financing activities.............................................. (241,288,605)
--------------
Net decrease in cash................................................................... (1,791,353)
CASH AT BEGINNING OF YEAR.............................................................. 1,791,353
--------------
CASH AT END OF YEAR.................................................................... $ --
==============
</TABLE>
================================================================================
See accompanying notes to financial statements.
86
<PAGE>
This page intentionally left blank.
<PAGE>
THE BRINSON FUNDS - FINANCIAL STATEMENTS
________________________________________________________________________________
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Global Fund Global Equity Fund
---------------------------- ----------------------------
Year Ended June 30, Year Ended June 30,
2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)...................................... $ 7,094,949 $ 12,109,444 $ 162,257 $ 497,109
Net realized gain (loss).......................................... 8,976,951 44,693,620 8,474,282 5,596,677
Change in net unrealized appreciation or depreciation............. (21,444,707) (37,993,047) (7,646,954) 1,132,303
------------- ------------- ------------ ------------
Net increase (decrease) in net assets from operations............. (5,372,807) 18,810,017 989,585 7,226,089
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS BY CLASS:
Brinson Class I:
Distributions from net investment income........................ (4,971,880) (17,500,696) (229,745) (384,423)
Distributions from net realized gains........................... (14,468,448) (31,201,392) (3,607,561) (352,100)
------------- ------------- ------------ ------------
Total Class I distributions....................................... (19,440,328) (48,702,088) (3,837,306) (736,523)
------------- ------------- ------------ ------------
Brinson Class N:
Distributions from net investment income........................ (18,729) (52,645) (986) (2,181)
Distributions from net realized gains........................... (59,854) (97,443) (19,859) (2,950)
------------- ------------- ------------ ------------
Total Class N distributions....................................... (78,583) (150,088) (20,845) (5,131)
------------- ------------- ------------ ------------
UBS Investment Funds Class:
Distributions from net investment income........................ (181,202) (753,377) (77,666) (219,326)
Distributions from net realized gains........................... (720,519) (1,710,286) (3,756,176) (713,059)
------------- ------------- ------------ ------------
Total UBS Investment Funds Class distributions.................... (901,721) (2,463,663) (3,833,842) (932,385)
------------- ------------- ------------ ------------
Decrease in net assets from distributions......................... (20,420,632) (51,315,839) (7,691,993) (1,674,039)
------------- ------------- ------------ ------------
CAPITAL SHARE TRANSACTIONS BY CLASS:
Brinson Class I:
Shares sold..................................................... 378,057,007 404,497,836 31,965,448 30,206,170
Shares issued on reinvestment of distributions.................. 17,592,753 45,438,730 3,143,195 661,376
Shares redeemed................................................. (556,236,057) (617,784,220) (33,431,209) (14,484,716)
------------- ------------- ------------ ------------
Total Brinson Class I transactions................................ (160,586,297) (167,847,654) 1,677,434 16,382,830
------------- ------------- ------------ ------------
Brinson Class N:
Shares sold..................................................... 85,811 401,372 __ 200,000
Shares issued on reinvestment of distributions.................. 68,059 148,599 20,844 5,130
Shares redeemed................................................. (1,405,050) (53,226) (1,198) __
------------- ------------- ------------ ------------
Total Brinson Class N transactions................................ (1,251,180) 496,745 19,646 205,130
------------- ------------- ------------ ------------
UBS Investment Funds Class:
Shares sold..................................................... 385,340 5,622,287 3,098,087 4,402,461
Shares issued on reinvestment of distributions.................. 863,834 2,326,850 3,281,750 795,940
Shares redeemed................................................. (13,120,314) (14,718,874) (18,879,433) (22,842,212)
------------- ------------- ------------ ------------
Total UBS Investment Funds Class transactions..................... (11,871,140) (6,769,737) (12,499,596) (17,643,811)
------------- ------------- ------------ ------------
Net increase (decrease) in net assets resulting from
capital share transactions...................................... (173,708,617) (174,120,646) (10,802,516) (1,055,851)
------------- ------------- ------------ ------------
Increase (Decrease) in Net Assets................................. (199,502,056) (206,626,468) (17,504,924) 4,496,199
Net Assets, Beginning of Period................................... 492,716,255 699,342,723 86,368,207 81,872,008
------------- ------------- ------------ ------------
Net Assets, End of Period......................................... $ 293,214,199 $ 492,716,255 $ 68,863,283 $ 86,368,207
------------- ------------- ------------ ------------
Net assets include accumulated undistributed
net investment income........................................... $ __ $ 753,116 $ __ $ 302,311
============= ============= ============ ============
Share Transactions:
Brinson Class I:
Shares sold..................................................... 33,602,761 33,634,272 2,577,643 2,413,314
Shares issued on reinvestment of distributions.................. 1,590,665 3,914,936 257,009 54,126
Shares redeemed................................................. (48,975,929) (50,809,625) (2,721,479) (1,142,595)
------------- ------------- ------------ ------------
Total Brinson Class I transactions................................ (13,782,503) (13,260,417) 113,173 1,324,845
------------- ------------- ------------ ------------
Brinson Class N:
7,386 31,878 __ 15,911
Shares issued on reinvestment of distributions.................. 6,165 12,826 1,707 426
Shares redeemed................................................. (127,026) (4,388) (98) __
------------- ------------- ------------ ------------
Total Brinson Class N transactions................................ (113,475) 40,316 1,609 16,337
------------- ------------- ------------ ------------
UBS Investment Funds Class:
Shares sold..................................................... 33,492 469,115 243,526 352,164
Shares issued on reinvestment of distributions.................. 78,388 201,293 268,566 66,261
Shares redeemed................................................. (1,170,744) (1,220,493) (1,533,100) (1,860,700)
------------- ------------- ------------ ------------
Total UBS Investment Funds Class transactions..................... (1,058,864) (550,085) (1,021,008) (1,442,275)
------------- ------------- ------------ ------------
</TABLE>
* Commencement of investment operations
________________________________________________________________________________
88 See accompanying notes to financial statements.
<PAGE>
The Brinson Funds -- Financial Statements
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Global
Technology Fund Biotech Fund Global Bond Fund U.S. Balanced Fund
--------------- -------------- -------------------------------- -------------------------------
May 26, 2000* June 2, 2000*
Through Through Year Ended June 30, Year Ended June 30,
June 30, 2000 June 30, 2000 2000 1999 2000 1999
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ (464) $ (235) $ 3,527,958 $ 5,139,936 $ 846,394 $ 1,558,422
1,624 7,976 (8,536,498) 1,499,627 (2,003,095) 4,257,213
46,736 100,207 3,924,705 (6,052,418) (2,296,787) (5,162,345)
--------- --------- ------------- ------------- ------------ ------------
47,896 107,948 (1,083,835) 587,145 (3,453,488) 653,290
--------- --------- ------------- ------------- ------------ ------------
-- -- (1,118,342) (5,705,972) (815,029) (2,554,055)
-- -- (82,557) (925,451) (225,248) (9,074,452)
--------- --------- ------------- ------------- ------------ ------------
-- -- (1,200,899) (6,631,423) (1,040,277) (11,628,507)
--------- --------- ------------- ------------- ------------ ------------
-- -- -- (13,166) (31) (68)
-- -- (1) (811) (7) (243)
--------- --------- ------------- ------------- ------------ ------------
-- -- (1) (13,977) (38) (311)
--------- --------- ------------- ------------- ------------ ------------
-- -- (43,991) (180,397) (37,261) (123,921)
-- -- (4,026) (35,005) (10,418) (483,100)
--------- --------- ------------- ------------- ------------ ------------
-- -- (48,017) (215,402) (47,679) (607,021)
--------- --------- ------------- ------------- ------------ ------------
-- -- (1,248,917) (6,860,802) (1,087,994) (12,235,839)
--------- --------- ------------- ------------- ------------ ------------
208,013 87,520 25,700,559 110,539,879 11,292,015 12,704,822
-- -- 1,040,704 4,679,150 1,016,548 11,512,192
-- -- (73,843,125) (107,591,860) (34,385,369) (56,107,946)
--------- --------- ------------- ------------- ------------ ------------
208,013 87,520 (47,101,862) 7,627,169 (22,076,806) (31,890,932)
--------- --------- ------------- ------------- ------------ ------------
-- -- 1,912 1,120,104 -- 15,306
-- -- 1 5,581 38 311
-- -- (1,106,396) (871) (96) (15,210)
--------- --------- ------------- ------------- ------------ ------------
-- -- (1,104,483) 1,124,814 (58) 407
--------- --------- ------------- ------------- ------------ ------------
320,741 144,960 366,668 4,222,107 147,189 1,464,212
-- -- 38,350 187,579 41,422 523,561
-- -- (2,630,429) (4,202,489) (588,978) (1,558,776)
--------- --------- ------------- ------------- ------------ ------------
320,741 144,960 (2,225,411) 207,197 (400,367) 428,997
--------- --------- ------------- ------------- ------------ ------------
528,754 232,480 (50,431,756) 8,959,180 (22,477,231) (31,461,528)
--------- --------- ------------- ------------- ------------ ------------
576,650 340,428 (52,764,508) 2,685,523 (27,018,713) (43,044,077)
2,010 500,010 98,345,732 95,660,209 39,393,094 82,437,171
--------- --------- ------------- ------------- ------------ ------------
$ 578,660 $ 840,438 $ 45,581,224 $ 98,345,732 $ 12,374,381 $ 39,393,094
========= ========= ============= ============= ============ ============
$ -- $ -- $ 335,909 $ 1,161,994 $ 178,497 $ 200,223
========= ========= ============= ============= ============ ============
19,785 7,462 2,835,427 11,338,295 1,279,917 1,174,303
-- -- 113,243 484,490 119,214 1,235,079
-- -- (8,240,771) (11,403,020) (4,112,896) (4,977,791)
--------- --------- ------------- ------------- ------------ ------------
19,785 7,462 (5,292,101) 419,765 (2,713,765) (2,568,409)
--------- --------- ------------- ------------- ------------ ------------
-- -- 210 117,021 -- 1,652
-- -- -- 579 4 33
-- -- (118,588) (90) (10) (1,641)
--------- --------- ------------- ------------- ------------ ------------
-- -- (118,378) 117,510 (6) 44
--------- --------- ------------- ------------- ------------ ------------
31,255 12,140 40,841 432,357 16,973 135,474
-- -- 4,177 19,366 4,883 56,474
-- -- (292,883) (434,492) (68,563) (154,266)
--------- --------- ------------- ------------- ------------ ------------
31,255 12,140 (247,865) 17,231 (46,707) 37,682
--------- --------- ------------- ------------- ------------ ------------
</TABLE>
================================================================================
89
<PAGE>
The Brinson Funds -- Financial Statements
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S Large Cap
U.S Equity Fund Equity Fund
--------------------------- ----------------------
Year Ended June 30, Year Ended June 30,
2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..................................... $ 4,244,116 $ 5,562,471 $ 268,499 $ 185,687
Net realized gain (loss)......................................... 11,296,209 53,949,031 (4,170,075) 339,283
Change in net unrealized appreciation or depreciation........... (145,732,574) 51,667,938 (3,197,720) 2,374,562
------------- ------------- ------------ ------------
Net increase (decrease) in net assets from operations............ (130,192,249) 111,179,440 (7,099,296) 2,899,532
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS BY CLASS:
Brinson Class I:
Distributions from net investment income...................... (1,354,937) (5,223,351) (260,485) (87,626)
Distributions from net realized gains......................... (46,078,258) (36,404,562) (2,112,124) --
------------- ------------- ------------ ------------
Total Brinson Class I distributions.............................. (47,433,195) (41,627,913) (2,372,609) (87,626)
------------- ------------- ------------ ------------
Brinson Class N:
Distributions from net investment income...................... (12,687) (28,171) (3,358) (69,880)
Distributions from net realized gains......................... (773,650) (234,496) (67,254) --
------------- ------------- ------------ ------------
Total Brinson Class N distributions.............................. (786,337) (262,667) (70,612) (69,880)
------------- ------------- ------------ ------------
UBS Investment Funds Class:
Distributions from net investment income....................... -- (190,578) (854) (12)
Distributions from net realized gains.......................... (5,191,383) (3,937,537) (6,269) --
------------- ------------- ------------ ------------
Total UBS Investment Funds Class distributions................... (5,191,383) (4,128,115) (7,123) (12)
------------- ------------- ------------ ------------
Decrease in net assets from distributions........................ (53,410,915) (46,018,695) (2,450,344) (157,518)
------------- ------------- ------------ ------------
CAPITAL SHARE TRANSACTIONS BY CLASS:
Brinson Class I:
Shares sold.................................................... 122,681,959 272,587,287 20,498,512 24,164,112
Shares issued on reinvestment of distributions................. 46,438,462 40,726,871 1,882,863 77,433
Shares redeemed............................................... (549,708,344) (265,910,621) (20,540,523) (3,862,037)
------------- ------------- ------------ ------------
Total Brinson Class I transactions............................... (380,587,923) 47,403,537 1,840,852 20,379,508
------------- ------------- ------------ ------------
Brinson Class N:
Shares sold.................................................... 6,190,218 8,022,220 23,427 684,700
Shares issued on reinvestment of distributions................. 39,033 239,980 70,611 69,880
Shares redeemed................................................ (4,286,205) (1,768,705) (3,038,230) (13,638,399)
------------- ------------- ------------ ------------
Total Brinson Class N transactions............................... 1,943,046 6,493,495 (2,944,192) (12,883,819)
------------- ------------- ------------ ------------
UBS Investment Funds Class:
Shares sold................................................... 885,348 26,390,598 184,571 4,617
Shares issued on reinvestment of distributions................ 1,938,596 1,678,518 7,113 11
Shares redeemed............................................... (43,062,328) (18,175,221) (17,573) --
------------- ------------- ------------ ------------
Total UBS Investment Funds Class transactions.................... (40,238,384) 9,893,895 174,111 4,628
------------- ------------- ------------ ------------
Net increase (decrease) in net assets resulting from
capital share transactions...................................... (418,883,261) 63,790,927 (929,229) 7,500,317
------------- ------------- ------------ ------------
Increase (Decrease) in Net Assets................................ (602,486,425) 128,951,672 (10,478,869) 10,242,331
Net Assets, Beginning of Period.................................. 790,050,522 661,098,850 26,429,704 16,187,373
------------- ------------- ------------ ------------
Net Assets, End of Period........................................ $ 187,564,097 $ 790,050,522 $ 15,950,835 $ 26,429,704
============ ============= ============ ============
Net assets include accumulated undistributed
net investment income........................................... $ 4,239,650 $ 1,363,158 $ -- $ 81,256
============= ============= ============ ============
Share Transactions:
Brinson Class I:
Shares sold.................................................... 7,021,481 14,157,093 2,464,710 2,384,176
Shares issued on reinvestment of distributions................. 2,790,780 2,164,601 231,926 7,506
Shares redeemed............................................... (32,569,089) (13,543,224) (2,626,652) (370,824)
------------- ------------- ------------ ------------
Total Brinson Class I transactions............................... (22,756,828) 2,778,470 69,984 2,020,858
------------- ------------- ------------ ------------
Brinson Class N:
Shares sold.................................................... 355,231 417,980 952 61,091
Shares issued on reinvestment of distributions................. 2,356 12,904 8,644 7,094
Shares redeemed................................................ (260,962) (90,831) (342,514) (1,369,240)
------------- ------------- ------------ ------------
Total Brinson Class N transactions............................... 96,625 340,053 (332,918) (1,301,055)
------------- ------------- ------------ ------------
UBS Investment Funds Class:
Shares sold.................................................... 44,999 1,317,474 22,263 427
Shares issued on reinvestment of distributions................. 116,996 89,839 884 1
Shares redeemed............................................... (2,612,305) (950,265) (2,479) --
------------- ------------- ------------ ------------
Total UBS Investment Funds Class transactions.................... (2,450,310) 457,048 20,668 428
------------- ------------- ------------ ------------
</TABLE>
*Reflects the Fund's change in fiscal year end from December 31 to June 30
================================================================================
90 See accompanying notes to financial statements
<PAGE>
The Brinson Funds -- Financial Statements
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Large Cap U.S. Large Cap
Growth Fund Growth Fund U.S. Bond Fund
--------------------------------- ---------------------------------- --------------------------
Year Ended Six Months Ended* Year Ended Six Months Ended* Year Ended June 30,
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 2000 1999
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss) $ (40,633) $ (123) $ (283,391) $ (68,177) $ 5,580,977 $ 4,517,147
Net realized gain (loss) 1,307,241 408,525 14,184,229 (633,451) (2,898,299) (338,906)
Change in net
unrealized
appreciation or
depreciation 495,586 463,877 12,102,689 1,970,811 218,149 (3,036,340)
------------ ----------- ------------ ------------ ------------- -------------
Net increase
(decrease) in net
assets from
operations 1,762,194 872,279 26,003,527 1,269,183 2,900,827 1,141,901
------------ ----------- ------------ ------------ ------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS BY CLASS:
Brinson Class I:
Distributions from
net investment income -- -- -- -- (4,678,165) (3,583,162)
Distributions from
net realized gains. (226,909) -- -- -- -- (1,038,553)
------------ ----------- ------------ ------------ ------------- -------------
Total Brinson Class I
distributions (226,909) -- -- -- (4,678,165) (4,621,715)
------------ ----------- ------------ ------------ ------------- -------------
Brinson Class N:
Distributions from
net investment income -- -- -- -- (71) (46)
Distributions from
net realized gains (80) -- -- -- -- (16)
------------ ----------- ------------ ------------ ------------- -------------
Total Brinson Class N
distributions (80) -- -- -- (71) (62)
------------ ----------- ------------ ------------ ------------- -------------
UBS Investment Funds
Class:
Distributions from
net investment income -- -- -- -- (374,662) (229,168)
Distributions from
net realized gains (376,172) -- -- -- -- (68,968)
------------ ----------- ------------ ------------ ------------- -------------
Total UBS Investment
Funds Class
distributions (376,172) -- -- -- (374,662) (298,136)
------------ ----------- ------------ ------------ ------------- -------------
Decrease in net
assets from
distributions (603,161) -- -- -- (5,052,898) (4,919,913)
------------ ----------- ------------ ------------ ------------- -------------
CAPITAL SHARE TRANSACTIONS
BY CLASS:
Brinson Class I:
Shares sold 4,048,482 451,776 29,765,229 22,702,120 70,180,980 165,316,122
Shares issued on
reinvestment of
distributions 217,384 -- -- -- 4,552,534 4,042,561
Shares redeemed (1,701,110) (2,143,629) (38,928,066) (11,346,801) (106,749,956) (112,692,202)
------------ ----------- ------------ ------------ ------------- -------------
Total Brinson Class I
transactions 2,564,756 (1,691,853) (9,162,837) 11,355,319 (32,016,442) 56,666,481
------------ ----------- ------------ ------------ ------------- -------------
Brinson Class N:
Shares sold -- -- -- -- -- 25,964
Shares issued on
reinvestment of
distributions 80 -- -- -- 71 62
Shares redeemed -- -- -- -- -- (25,905)
------------ ----------- ------------ ------------ ------------- -------------
Total Brinson Class N
transactions 80 -- -- -- 71 121
------------ ----------- ------------ ------------ ------------- -------------
UBS Investment Funds
Class:
Shares sold 5,084,906 4,781,902 2,415,418 858,153 1,492,544 6,222,123
Shares issued on
reinvestment of
distributions 376,172 -- -- -- 310,529 229,364
Shares redeemed (4,200,579) (26,217) (459,900) (240,000) (4,032,375) (2,612,918)
------------ ----------- ------------ ------------ ------------- -------------
Total UBS Investment
Funds Class
transactions 1,260,499 4,755,685 1,955,518 618,153 (2,229,302) 3,838,569
------------ ----------- ------------ ------------ ------------- -------------
Net increase
(decrease) in net
assets resulting from
capital share
transactions 3,825,335 3,063,832 (7,207,319) 11,973,472 (34,245,673) 60,505,171
------------ ----------- ------------ ------------ ------------- -------------
Increase (Decrease)
in Net Assets 4,984,368 3,936,111 18,796,208 13,242,655 (36,397,744) 56,727,159
Net Assets, Beginning
of Period 8,084,899 4,148,788 35,851,966 22,609,311 98,045,583 41,318,424
------------ ----------- ------------ ------------ ------------- -------------
Net Assets, End of
Period $ 13,069,267 $ 8,084,899 $ 54,648,174 $ 35,851,966 $ 61,647,839 $ 98,045,583
============ =========== ============ ============ ============= =============
Net assets include
accumulated undistributed
net investment income $ -- $ -- $ -- $ -- $ 1,417,249 $ 961,121
============ =========== ============ ============ ============= =============
Share Transactions:
Brinson Class I:
Shares sold 276,574 35,111 2,526,985 2,641,837 6,936,124 15,463,879
Shares issued on
reinvestment of
distributions 15,996 -- -- -- 461,106 386,462
Shares redeemed (119,266) (173,449) (3,231,011) (1,375,470) (10,539,673) (10,568,875)
------------ ----------- ------------ ------------ ------------- -------------
Total Brinson Class I
transactions 173,304 (138,338) (704,026) 1,266,367 (3,142,443) 5,281,466
------------ ----------- ------------ ------------ ------------- -------------
Brinson Class N:
Shares sold -- -- -- -- -- 2,379
Shares issued on
reinvestment of
distributions 6 -- -- -- 7 6
Shares redeemed -- -- -- -- -- (2,379)
------------ ----------- ------------ ------------ ------------- -------------
Total Brinson Class N
transactions 6 -- -- -- 7 6
------------ ----------- ------------ ------------ ------------- -------------
UBS Investment Funds
Class:
Shares sold 363,462 372,727 193,136 99,579 146,887 582,475
Shares issued on
reinvestment of
distributions 27,906 -- -- -- 31,628 22,041
Shares redeemed (286,213) (1,853) (34,814) (29,703) (411,376) (248,522)
------------ ----------- ------------ ------------ ------------- -------------
Total UBS Investment
Funds Class
transactions 105,155 370,874 158,322 69,876 (232,861) 355,994
------------ ----------- ------------ ------------ ------------- -------------
</TABLE>
================================================================================
91
<PAGE>
The Brinson Funds -- Financial Statements
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Global (Ex-U.S.) Equity
High Yield Fund Fund
-------------------------------- ----------------------------------
Year Ended Six Months Ended* Year Ended June 30,
June 30, 2000 June 30, 1999 2000 1999
------------- ------------- ---- ----
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income.............................. $ 5,274,444 $ 2,487,185 $ 4,208,084 $ 6,208,221
Net realized gain (loss)........................... (3,589,002) 420,129 41,417,003 (1,916,922)
Change in net unrealized appreciation
or depreciation................................... (1,386,533) (1,916,114) 15,371,143 19,559,006
------------ ------------ --------------- -------------
Net increase in net assets from operations......... 298,909 991,200 60,996,230 23,850,305
------------ ------------ --------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS BY CLASS:
Brinson Class I:
Distributions from net investment income......... (3,997,434) (1,845,754) (2,727,974) (4,564,403)
Distributions from net realized gains............ (384,243) -- (5,283,152) (4,498,729)
------------ ------------ --------------- -------------
Total Brinson Class I distributions................ (4,381,677) (1,845,754) (8,011,126) (9,063,132)
------------ ------------ --------------- -------------
Brinson Class N:
Distributions from net investment income......... (74) (30) -- (121)
Distributions from net realized gains............ (7) -- (13) (126)
------------ ------------ --------------- -------------
Total Brinson Class N distributions................ (81) (30) (13) (247)
------------ ------------ --------------- -------------
UBS Investment Funds Class:
Distributions from net investment income......... (315,019) (167,575) (9,831) (23,356)
Distributions from net realized gains............ (40,374) -- (74,353) (52,439)
------------ ------------ --------------- -------------
Total UBS Investment Funds Class distributions..... (355,393) (167,575) (84,184) (75,795)
------------ ------------ --------------- -------------
Decrease in net assets from distributions........ (4,737,151) (2,013,359) (8,095,323) (9,139,174)
------------ ------------ --------------- -------------
CAPITAL SHARE TRANSACTIONS BY CLASS:
Brinson Class I:
Shares sold...................................... 75,679,660 46,327,741 1,049,008,547 857,199,838
Shares issued on reinvestment of distributions... 3,943,554 1,658,538 7,708,071 8,514,975
Shares redeemed.................................. (84,709,596) (22,018,291) (1,187,345,955) (829,422,705)
------------ ------------ --------------- -------------
Total Brinson Class I transactions................. (5,086,382) 25,967,988 (130,629,337) 36,292,108
------------ ------------ --------------- -------------
Brinson Class N:
Shares sold...................................... -- -- 373 4,263
Shares issued on reinvestment of distributions... 81 30 13 247
Shares redeemed.................................. -- -- (14,890) (487)
------------ ------------ --------------- -------------
Total Brinson Class N transactions................. 81 30 (14,504) 4,023
------------ ------------ --------------- -------------
UBS Investment Funds Class:
Shares sold...................................... 484,592 6,368,108 1,895,728 6,909,236
Shares issued on reinvestment of distributions... 274,449 139,258 81,724 68,163
Shares redeemed.................................. (4,562,131) (18,000) (3,506,844) (5,556,938)
------------ ------------ --------------- -------------
Total UBS Investment Funds Class transactions...... (3,803,090) 6,489,366 (1,529,392) 1,420,461
------------ ------------ --------------- -------------
Net increase (decrease) in net assets resulting
from capital share transactions................... (8,889,391) 32,457,384 (132,173,233) 37,716,592
------------ ------------ --------------- -------------
Increase (Decrease) in Net Assets.................. (13,327,633) 31,435,225 (79,272,326) 52,427,723
Net Assets, Beginning of Period.................... 66,337,147 34,901,922 497,076,871 444,649,148
------------ ------------ --------------- -------------
Net Assets, End of Period.......................... $ 53,009,514 $ 66,337,147 $ 417,804,545 $ 497,076,871
============ =========== =============== =============
Net assets include accumulated undistributed net
investment income................................. $ 1,495,285 $ 611,744 $ -- $ 2,738,174
============ ============ =============== =============
SHARE TRANSACTIONS:
Brinson Class I:
Shares sold...................................... 8,072,340 4,509,034 80,245,905 72,650,740
Shares issued on reinvestment of distributions... 416,227 166,520 575,659 726,832
Shares redeemed.................................. (8,988,112) (2,144,630) (90,203,629) (69,803,887)
------------ ------------ --------------- -------------
Total Brinson Class I transactions................. (499,545) 2,530,924 (9,382,065) 3,573,685
------------ ------------ --------------- -------------
Brinson Class N:
Shares sold...................................... -- -- 30 365
Shares issued on reinvestment of distributions... 9 3 1 21
Shares redeemed.................................. -- -- (1,174) (41)
------------ ------------ --------------- -------------
Total Brinson Class N transactions................. 9 3 (1,143) 345
------------ ------------ --------------- -------------
UBS Investment Funds Class:
Shares sold...................................... 50,427 620,093 146,606 587,229
Shares issued on reinvestment of distributions... 28,713 13,996 6,167 5,917
Shares redeemed.................................. (475,553) (1,754) (269,636) (481,376)
------------ ------------ --------------- -------------
Total UBS Investment Funds Class transactions...... (396,413) 632,335 (116,863) 111,770
------------ ------------ --------------- -------------
</TABLE>
*Reflects the Fund's change in fiscal year end from December 31 to June 30
================================================================================
92 See accompanying notes to financial statements.
<PAGE>
Global Fund -- Financial Highlights
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
Year Ended June 30,
---------------------------------------------------------
Brinson Class I 2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............................. $ 12.02 $ 12.77 $ 13.13 $ 12.22 $ 11.35
--------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income....................................... 0.23* 0.30 0.37 0.38 0.44
Net realized and unrealized gain (loss)..................... (0.30) 0.25 0.62 1.79 1.37
--------- -------- -------- -------- --------
Total income (loss) from investment operations......... (0.07) 0.55 0.99 2.17 1.81
--------- -------- -------- -------- --------
Less distributions:
Distributions from net investment income.................... (0.18) (0.46) (0.65) (0.61) (0.62)
Distributions from net realized gains....................... (0.52) (0.84) (0.70) (0.65) (0.32)
--------- -------- -------- -------- --------
Total distributions.................................... (0.70) (1.30) (1.35) (1.26) (0.94)
--------- -------- -------- -------- --------
Net asset value, end of period................................... $ 11.25 $ 12.02 $ 12.77 $ 13.13 $ 12.22
========= ======== ======== ======== ========
Total return..................................................... (0.48)% 4.76% 8.28% 18.79% 16.38%
Ratios/Supplemental data:
Net assets, end of period (in 000s)......................... $ 284,229 $469,080 $667,745 $586,667 $457,933
Ratio of total expenses to average net assets............... 0.99% 0.96% 0.94% 0.99% 1.04%
Ratio of net investment income to average net assets........ 1.99% 2.23% 2.70% 3.03% 3.69%
Portfolio turnover rate..................................... 98% 105% 88% 150% 142%
-----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended June 30,
---------------------------------------
Brinson Class N 2000 1999 1998
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period.......................................... $ 11.99 $ 12.75 $ 13.13
--------- -------- --------
Income (loss) from investment operations:
Net investment income...................................................... 0.19* 0.27 0.63
Net realized and unrealized gain (loss).................................... (0.30) 0.25 0.32
--------- -------- --------
Total income (loss) from investment operations....................... (0.11) 0.52 0.95
--------- -------- --------
Less distributions:
Distributions from net investment income................................... (0.16) (0.44) (0.63)
Distributions from net realized gains...................................... (0.52) (0.84) (0.70)
--------- -------- --------
Total distributions.................................................. (0.68) (1.28) (1.33)
--------- -------- --------
Net asset value, end of period................................................ $ 11.20 $ 11.99 $ 12.75
========= ======== ========
Total return.................................................................. (0.80)% 4.47% 7.90%
Ratios/Supplemental data:
Net assets, end of period (in 000s)........................................ $ 202 $ 1,576 $ 1,163
Ratio of total expenses to average net assets.............................. 1.24% 1.21% 1.19%
Ratio of net investment income to average net assets....................... 1.74% 1.98% 2.45%
Portfolio turnover rate.................................................... 98% 105% 88%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The net investment income per share data was determined by using average
shares outstanding throughout the period.
================================================================================
See accompanying notes to financial statements. 93
<PAGE>
Global Equity Fund -- Financial Highlights
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
Year Ended June 30,
------------------------------------------------------------
Brinson Class I 2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............................. $ 13.42 $ 12.54 $ 12.76 $ 11.57 $ 9.93
--------- ---------- --------- -------- -------
Income from investment operations:
Net investment income.......................................... 0.07* 0.14* 0.22 0.16 0.18
Net realized and unrealized gain............................... 0.27 1.09 0.78 2.14 2.29
--------- ---------- --------- -------- -------
Total income from investment operations.................. 0.34 1.23 1.00 2.30 2.47
--------- ---------- --------- -------- -------
Less distributions:
Distributions from net investment income....................... (0.08) (0.17) (0.17) (0.12) (0.14)
Distributions from net realized gains.......................... (1.21) (0.18) (1.05) (0.99) (0.69)
--------- ---------- --------- -------- -------
Total distributions...................................... (1.29) (0.35) (1.22) (1.11) (0.83)
--------- ---------- --------- -------- -------
Net asset value, end of period.................................... $ 12.47 $ 13.42 $ 12.54 $ 12.76 $ 11.57
========= ========== ========= ======== =======
Total return...................................................... 2.69% 10.14% 8.99% 21.26% 25.66%
Ratios/Supplemental data:
Net assets, end of period (in 000s)............................ $ 40,538 $ 42,106 $ 22,724 $ 48,054 27,126
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits.......... 1.08% 1.05% 1.02% 1.25% 1.77%
After expense reimbursement and earnings credits........... 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits.......... 0.48% 1.05% 1.29% 1.35% 0.57%
After expense reimbursement and earnings credits........... 0.56% 1.10% 1.31% 1.60% 1.34%
Portfolio turnover rate........................................ 111% 86% 46% 32% 74%
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended June 30,
------------------------------------
Brinson Class N 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................. $ 13.40 $ 12.53 $ 12.76
-------- -------- -------
Income from investment operations:
Net investment income.............................................. 0.04* 0.10* 0.13
Net realized and unrealized gain................................... 0.27 1.09 0.82
-------- -------- -------
Total income from investment operations...................... 0.31 1.19 0.95
-------- -------- -------
Less distributions:
Distributions from net investment income........................... (0.06) (0.14) (0.13)
Distributions from net realized gains.............................. (1.21) (0.18) (1.05)
-------- -------- -------
Total distributions.......................................... (1.27) (0.32) (1.18)
-------- -------- -------
Net asset value, end of period........................................ $ 12.44 $ 13.40 $ 12.53
======== ======== =======
Total return
Ratios/Supplemental data:............................................. 2.49% 9.80% 8.60%
Net assets, end of period (in 000s)................................ $ 224 $ 220 $ 1
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits.............. 1.33% 1.30% 1.27%
After expense reimbursement and earnings credits............... 1.25% 1.25% 1.25%
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits.............. 0.23% 0.80% 1.04%
After expense reimbursement and earnings credits............... 0.31% 0.85% 1.06%
Portfolio turnover rate............................................ 111% 86% 46%
------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The net investment income per share data was determined by using average
shares outstanding throughout the period.
===============================================================================
94 See accompanying notes to financial statements.
<PAGE>
Global Technology Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout the period presented.
<TABLE>
<CAPTION>
Period Ended
Brinson Class I June 30, 2000*
--------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period................................................. $ 10.00
Income from investment operations:
Net investment income............................................................. --
Net realized and unrealized gain.................................................. 1.30
---------
Total income from investment operations..................................... 1.30
---------
Less distributions:
Distributions from net investment income.......................................... --
Distributions from net realized gains............................................. --
---------
Total distributions......................................................... --
---------
Net asset value, end of period....................................................... $ 11.30
=========
Total return (non-annualized)........................................................ 13.00%
Ratios/Supplemental data:
Net assets, end of period (in 000s)............................................... $ 224
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits............................... 13.28%**
After expense reimbursement and earnings credits................................ 1.55%**
Ratio of net investment loss to average net assets:
Before expense reimbursement and earnings credits............................... (12.26)%**
After expense reimbursement and earnings credits................................ (0.53)%**
Portfolio turnover rate........................................................... 14%
--------------------------------------------------------------------------------------------------------
<CAPTION>
Period Ended
Brinson Class N June 30, 2000*
--------------------------------------------------------------------------------------------------------
Net asset value, beginning of period................................................. $ 10.00
---------
Income from investment operations:
Net investment income............................................................. --
Net realized and unrealized gain.................................................. 1.30
---------
Total income from investment operations..................................... 1.30
---------
Less distributions:
Distributions from net investment income.......................................... --
Distributions from net realized gains............................................. --
---------
Total distributions......................................................... --
---------
Net asset value, end of period....................................................... $ 11.30
=========
Total return (non-annualized)........................................................ 13.00%
Ratios/Supplemental data:
Net assets, end of period (in 000s)............................................... $ 1
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits............................... 13.53%**
After expense reimbursement and earnings credits................................ 1.80%**
Ratio of net investment loss to average net assets:
Before expense reimbursement and earnings credits............................... (12.51)%**
After expense reimbursement and earnings credits................................ (0.78)%**
Portfolio turnover rate........................................................... 14%
--------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations was May 26, 2000
** Annualized
================================================================================
See accompanying notes to financial statements.
95
<PAGE>
Global Technology Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Period Ended
Brinson Class I June 30, 2000*
--------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period................................................. $ 10.00
---------
Income from investment operations:
Net investment income............................................................. --**
Net realized and unrealized gain.................................................. 2.08
---------
Total income from investment operations..................................... 2.08
---------
Less distributions:
Distributions from net investment income.......................................... --
Distributions from net realized gains............................................. --
---------
Total distributions......................................................... --
---------
Net asset value, end of period....................................................... $ 12.08
=========
Total return (non-annualized)........................................................ 20.80%
Ratios/Supplemental data:
Net assets, end of period (in 000s)............................................... $ 691
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits............................... 10.10%***
After expense reimbursement and earnings credits................................ 1.30%***
Ratio of net investment loss to average net assets:
Before expense reimbursement and earnings credits............................... (9.29)%***
After expense reimbursement and earnings credits................................ (0.49)%***
Portfolio turnover rate........................................................... 19%
--------------------------------------------------------------------------------------------------------
<CAPTION>
Period Ended
Brinson Class N June 30, 2000*
--------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period................................................. $ 10.00
---------
Income from investment operations:
Net investment loss............................................................... (0.01)**
Net realized and unrealized gain.................................................. 2.08
---------
Total income from investment operations..................................... 2.07
---------
Less distributions:
Distributions from net investment income.......................................... --
Distributions from net realized gains............................................. --
---------
Total distributions......................................................... --
---------
Net asset value, end of period....................................................... $ 12.07
=========
Total return (non-annualized)........................................................ 20.70%
Ratios/Supplemental data:
Net assets, end of period (in 000s)............................................... $ 1
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits............................... 10.35%***
After expense reimbursement and earnings credits................................ 1.55%***
Ratio of net investment loss to average net assets:
Before expense reimbursement and earnings credits............................... (9.54)%***
After expense reimbursement and earnings credits................................ (0.74)%***
Portfolio turnover rate........................................................... 19%
--------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations was June 2, 2000
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
See accompanying notes to financial statements.
96
<PAGE>
Global Bond Fund --- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Year Ended June 30,
---------------------------------------------------------------------
Brinson Class I 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 9.18 $ 9.41 $ 9.64 $ 10.04 $ 10.39
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income.................................... 0.40* 0.39* 0.43* 0.67 0.84
Net realized and unrealized gain (loss).................. (0.43) (0.07) (0.18) 0.08 0.31
------- ------- ------- ------- -------
Total income (loss) from investment operations..... (0.03) 0.32 0.25 0.75 1.15
------- ------- ------- ------- -------
Less distributions:
Distributions from net investment income................. (0.13) (0.47) (0.31) (0.96) (1.40)
Distributions from net realized gains.................... (0.01) (0.08) (0.17) (0.19) (0.10)
------- ------- ------- ------- -------
Total distributions................................ (0.14) (0.55) (0.48) (1.15) (1.50)
------- ------- ------- ------- -------
Net asset value, end of period.............................. $ 9.01 $ 9.18 $ 9.41 $ 9.64 $ 10.04
======= ======= ======= ======= =======
Total return................................................ (0.34)% 3.13% 2.69% 7.71% 11.50%
Ratios/Supplemental data:
Net assets, end of period (in 000s)...................... $43,467 $92,832 $ 91,274 $54,157 $41,066
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits..... 1.05% 0.90% 0.96% 1.32% 1.65%
After expense reimbursement and earnings credits...... 0.94%** N/A 0.90% 0.90% 0.90%
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits..... 4.34% 4.05% 4.47% 4.90% 4.98%
After expense reimbursement and earnings credits...... 4.45% N/A 4.53% 5.32% 5.73%
Portfolio turnover rate.................................. 87% 138% 151% 235% 184%
------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended June 30,
-----------------------------------
Brinson Class N 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................................. $ 9.16 $ 9.40 $ 9.64
------- ------- -------
Income (loss) from investment operations:
Net investment income.............................................................. 0.37* 0.37* 0.42*
Net realized and unrealized gain (loss)............................................ (0.43) (0.07) (0.20)
------- ------- -------
Total income (loss) from investment operations............................... (0.06) 0.30 0.22
------- ------- -------
Less distributions:
Distributions from net investment income........................................... -- (0.46) (0.29)
Distributions from net realized gains.............................................. (0.01) (0.08) (0.17)
------- ------- -------
Total distributions.......................................................... (0.01) (0.54) (0.46)
------- ------- -------
Net asset value, end of period........................................................ $ 9.09 $ 9.16 $ 9.40
======= ======= =======
Total return.......................................................................... (0.66)% 2.89% 2.37%
Ratios/Supplemental data:
Net assets, end of period (in 000s)................................................ $ 1 $ 1,085 $ 9
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits............................... 1.30% 1.15% 1.21%
After expense reimbursement and earnings credits................................ 1.19%** N/A 1.15%
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits............................... 4.09% 3.80% 4.22%
After expense reimbursement and earnings credits................................ 4.20% N/A 4.28%
Portfolio turnover rate............................................................ 87% 138% 151%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The net investment income per share data was determined by using average
shares outstanding throughout the period.
** The ratio of net operating expenses to average net assets for Class I and
Class N was 0.90% and 1.15%, respectively.
N/A = Not Applicable
================================================================================
See accompanying notes to financial statements. 97
<PAGE>
U.S. Balanced Fund --- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Year Ended June 30,
---------------------------------------------------------------------
Brinson Class I 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................ $ 9.38 $ 12.24 $ 12.53 $ 11.71 $ 11.23
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income.................................... 0.26* 0.34* 0.49* 0.47 0.44
Net realized and unrealized gain (loss).................. (0.74) 0.18 0.93 1.29 1.04
------- ------- ------- ------- -------
Total income (loss) from investment operations..... (0.48) 0.52 1.42 1.76 1.48
------- ------- ------- ------- -------
Less distributions:
Distributions from net investment income................. (0.25) (0.73) (0.77) (0.40) (0.43)
Distributions from net realized gains.................... (0.06) (2.65) (0.94) (0.54) (0.57)
------- ------- ------- ------- -------
Total distributions................................ (0.13) (3.38) (1.71) (0.94) (1.00)
------- ------- ------- ------- -------
Net asset value, end of period.............................. $ 8.59 $ 9.38 $ 12.24 $ 12.53 $ 11.71
======= ======= ======= ======= =======
Total return................................................ (5.07)% 4.74% 12.19% 15.50% 13.52%
Ratios/Supplemental data:
Net assets, end of period (in 000s)...................... $11,136 $37,603 $ 80,556 $282,860 $227,829
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits..... 1.01% 0.96% 0.81% 0.88% 1.01%
After expense reimbursement and earnings credits...... 0.81%** 0.80% 0.80% 0.80% 0.80%
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits..... 2.80% 3.00% 3.88% 3.78% 3.76%
After expense reimbursement and earnings credits...... 3.00% 3.16% 3.89% 3.86% 3.97%
Portfolio turnover rate.................................. 96% 113% 194% 329% 240%
------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended June 30,
-----------------------------------
Brinson Class N 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period.................................................. $ 9.38 $ 12.27 $ 12.53
------- ------- -------
Income (loss) from investment operations:
Net investment income.............................................................. 0.23* 0.29* 0.47*
Net realized and unrealized gain (loss)............................................ (0.74) (0.18) 0.94
------- ------- -------
Total income (loss) from investment operations............................... (0.51) 0.47 1.41
------- ------- -------
Less distributions:
Distributions from net investment income........................................... (0.24) (0.71) (0.73)
Distributions from net realized gains.............................................. (0.06) (2.65) (0.94)
------- ------- -------
Total distributions.......................................................... (0.30) (3.36) (1.67)
------- ------- -------
Net asset value, end of period........................................................ $ 8.57 $ 9.38 $ 12.27
======= ======= =======
Total return.......................................................................... (5.39)% 4.17% 12.15%
Ratios/Supplemental data:
Net assets, end of period (in 000s)................................................ $ 1 $ 1 $ 1
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits............................... 1.26% 1.21% 1.06%
After expense reimbursement and earnings credits................................ 1.06%** 1.05% 1.05%
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits............................... 2.55% 2.75% 3.63%
After expense reimbursement and earnings credits................................ 2.75% 2.91% 3.64%
Portfolio turnover rate............................................................ 96% 113% 194%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The net investment income per share data was determined by using average
shares outstanding throughout the period.
** The ratio of net operating expenses to average net assets for Class I and
Class N was 0.80% and 1.05%, respectively.
================================================================================
98 See accompanying notes to financial statements.
<PAGE>
U.S. Equity Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Year Ended June 30,
------------------------------------------------------------
Brinson Class I 2000 1999 1998 1997 1996
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............................. $ 21.48 $ 19.91 $ 17.64 $ 14.59 $ 11.53
-------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income.......................................... 0.16* 0.17* 0.19 0.15 0.17
Net realized and unrealized gain (loss)........................ (3.75) 2.67 3.39 4.27 3.31
-------- -------- -------- -------- --------
Total income (loss) from investment operations........... (3.59) 2.84 3.58 4.42 3.48
-------- -------- -------- -------- --------
Less distributions:
Distributions from net investment income....................... (0.05) (0.15) (0.18) (0.14) (0.17)
Distributions from net realized gains.......................... (1.77) (1.12) (1.13) (1.23) (0.25)
-------- -------- -------- -------- --------
Total distributions...................................... (1.82) (1.27) (1.31) (1.37) (0.42)
-------- -------- -------- -------- --------
Net asset value, end of period.................................... $ 16.07 $ 21.48 $ 19.91 $ 17.64 $ 14.59
======== ======== ======== ======== ========
Total return...................................................... (17.00)% 15.22% 21.48% 31.87% 30.57%
Ratios/Supplemental data:
Net assets, end of period (in 000s)............................ $167,870 $713,321 $605,768 $337,949 $126,342
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits........... 0.84% 0.80% 0.80% 0.89% 1.14%
After expense reimbursement and earnings credits............ 0.80% N/A N/A 0.80% 0.80%
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits........... 0.89% 0.82% 1.12% 1.06% 1.13%
After expense reimbursement and earnings credits............ 0.93% N/A N/A 1.15% 1.47%
Portfolio turnover rate........................................ 55% 48% 42% 43% 36%
--------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended June 30,
--------------------------------
Brinson Class N 2000 1999 1998
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period......................................................... $ 21.39 $ 19.88 $ 17.64
-------- ------- -------
Income (loss) from investment operations:
Net investment income..................................................................... 0.13* 0.08* 0.15
Net realized and unrealized gain (loss)................................................... (3.75) 2.67 3.37
-------- ------- -------
Total income (loss) from investment operations...................................... (3.62) 2.75 3.52
-------- ------- -------
Less distributions:
Distributions from net investment income.................................................. (0.03) (0.12) (0.15)
Distributions from net realized gains..................................................... (1.77) (1.12) (1.13)
-------- ------- -------
Total distributions................................................................. (1.80) (1.24) (1.28)
-------- ------- -------
Net asset value, end of period............................................................... $ 15.97 $ 21.39 $ 19.88
======== ======= =======
Total return................................................................................. (17.24)% 14.75% 21.10%
Ratios/Supplemental data:
Net assets, end of period (in 000s)....................................................... $ 7,191 $ 7,563 $ 268
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits...................................... 1.09% 1.05% 1.05%
After expense reimbursement and earnings credits....................................... 1.05% N/A N/A
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits...................................... 0.64% 0.57% 0.87%
After expense reimbursement and earnings credits....................................... 0.68% N/A N/A
Portfolio turnover rate................................................................... 55% 48% 42%
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*The net investment income per share data was determined by using average
shares outstanding throughout the period.
N/A = Not Applicable
================================================================================
See accompanying notes to financial statements.
99
<PAGE>
U.S. Large Cap Equity Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
April 6, 1998*
Year Ended June 30, Through June 30,
------------------------------------------------
Brinson Class I 2000 1999 1998
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period............................. $ 11.13 $ 9.80 $ 10.00
--------- ------- --------
Income (loss) from investment operations:
Net investment income......................................... 0.09** 0.11** 0.02
Net realized and unrealized gain (loss)....................... (2.68) 1.31 (0.20)
--------- ------- --------
Total income (loss) from investment operations.......... (2.59) 1.42 (0.18)
--------- ------- --------
Less distributions:
Distributions from net investment income...................... (0.11) (0.09) (0.02)
Distributions from net realized gains......................... (0.95) -- --
--------- ------- --------
Total distributions........................................ (1.06) (0.09) (0.02)
--------- ------- --------
Net asset value, end of period.................................. $ 7.48 $ 11.13 $ 9.80
========= ======= ========
Total return (non-annualized)................................... (23.95)% 14.54% (1.83)%
Ratios/Supplemental data:
Net assets, end of period (in 000s)........................... $ 15,758 $22,668 $ 154
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits........... 1.27% 1.29% 1.59%***
After expense reimbursement and earnings credits............ 0.80% 0.80% 0.80%***
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits........... 0.70% 0.57% 0.52%***
After expense reimbursement and earnings credits............ 1.17% 1.06% 1.31%***
Portfolio turnover rate....................................... 174% 88% 12%
--------------------------------------------------------------------------------------------------------------------
<CAPTION>
April 6, 1998*
Year Ended June 30, Through June 30,
------------------------------------------------
Brinson Class N 2000 1999 1998
--------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period............................ $ 11.13 $ 9.78 $ 10.00
--------- ------- --------
Income (loss) from investment operations:
Net investment income......................................... 0.07** 0.09** 0.02
Net realized and unrealized gain (loss)....................... (2.68) 1.31 (0.23)
--------- ------- --------
Total income (loss) from investment operations.......... (2.61) 1.40 (0.21)
--------- ------- --------
Less distributions:
Distributions from net investment income...................... (0.06) (0.05) (0.01)
Distributions from net realized gains......................... (0.95) -- --
--------- ------- --------
Total distributions..................................... (1.01) (0.05) (0.01)
--------- ------- --------
Net asset value, end of period................................... $ 7.51 $ 11.13 $ 9.78
========= ======= ========
Total return (non-annualized).................................... (24.12)% 14.40% (2.02)%
Ratios/Supplemental data:
Net assets, end of period (in 000s)........................... $ 35 $ 3,756 $ 16,033
Ratio of expenses to average net assets
Before expense reimbursement and earnings credits.......... 1.52% 1.54% 1.84%***
After expense reimbursement and earnings credits........... 1.05% 1.05% 1.05%***
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits.......... 0.45% 0.32% 0.27%***
After expense reimbursement and earnings credits........... 0.92% 0.81% 1.06%***
Portfolio turnover rate....................................... 174% 88% 12%
--------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
100 See accompanying notes to financial statements.
<PAGE>
U.S. Large Cap Growth Fund - Financial Highlights
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
Six Months October 14, 1997/1/
Year Ended Ended/3/ Year Ended Through
Brinson Class I June 30, 2000 June 30, 1999 December 31, 1998/2/ December 31, 1997
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period......................... $ 13.91 $ 11.84 $ 9.92 $ 10.00
-------- -------- -------- --------
Income (loss) from investment operations:
Net investment income..................................... 0.03/4/ 0.02 0.06 0.02
Net realized and unrealized gain (loss)................... 2.29 2.05 2.38 (0.08)
-------- -------- -------- --------
Total income (loss) from investment operations...... 2.32 2.07 2.44 (0.06)
-------- -------- -------- --------
Less distributions:
Distributions from net investment income.................. -- -- (0.06) (0.02)
Distributions from net realized gains..................... (0.95) -- (0.46) --
-------- -------- -------- --------
Total distributions................................. (0.95) -- (0.52) (0.02)
-------- -------- -------- --------
Net asset value, end of period............................... $ 15.28 $ 13.91 $ 11.84 $ 9.92
======== ======== ======== ========
Total return (non-annualized)................................ 17.52% 17.48% 24.90% (0.55)%
Ratios/Supplemental data:
Net assets, end of period (in 000s)........................ $ 5,885 $ 2,947 $ 4,147 $ 4,137
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits........ 1.86% 2.38%/5/ 2.76% 8.54%/5/
After expense reimbursement and earnings credits......... 0.80% 0.80%/5/ 0.99% 1.00%/5/
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement and earnings credits........ (0.97)% (1.26)%/5/ (1.40)% (6.19)%/5/
After expense reimbursement and earnings credits......... 0.09% 0.32%/5/ 0.37% 1.35%/5/
Portfolio turnover rate.................................... 86% 51% N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Six Months
Year Ended Ended
Brinson Class N June 30, 2000 June 30, 1999/6/
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period....................................................... $ 13.88 $ 11.84
-------- --------
Income from investment operations:
Net investment loss..................................................................... (0.02)/4/ (0.01)
Net realized and unrealized gain........................................................ 2.29 2.05
-------- --------
Total income from investment operations........................................... 2.27 2.04
-------- --------
Less distributions:
Distributions from net realized gains................................................... (0.95) --
-------- --------
Total distributions............................................................... (0.95) --
-------- --------
Net asset value, end of period............................................................. $ 15.20 $ 13.88
======== ========
Total return (non-annualized).............................................................. 17.18% 17.23%
Ratios/Supplemental data:
Net assets, end of period (in 000s)..................................................... $ 1 $ 1
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits................................. 2.11% 2.63%/5/
After expense reimbursement and earnings credits.................................. 1.05% 1.05%/5/
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement and earnings credits................................. (1.22)% (1.51)%/5/
After expense reimbursement and earnings credits.................................. (0.16)% 0.07%/5/
Portfolio turnover rate................................................................. 86% 51%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1 Commencement of investment operations
2 Reflects 10 for 1 share split effective December 9, 1998
3 Reflects the Fund's change in fiscal year end from December 31 to June 30
4 The net investment income per share data was determined by using average
shares outstanding throughout the period.
5 Annualized
6 Commencement of Brinson Class N was December 31, 1998
N/A = Information is not available for periods prior to reorganization, as
described in notes to financial statements
================================================================================
See accompanying notes to financial statements. 101
<PAGE>
U.S. Small Cap Growth Fund - Financial Highlights
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
Six Months September 30, 1997/1/
Year Ended Ended/3/ Year Ended Through
Brinson Class I June 30, 2000 June 30, 1999 December 31, 1998/2/ December 31, 1997
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period......................... $ 9.18 $ 8.80 $ 9.44 $ 10.00
-------- -------- -------- --------
Income (loss) from investment operations:
Net investment income..................................... (0.03)/4/ (0.02) (0.02) --
Net realized and unrealized gain (loss)................... 7.12 0.40 (0.57) (0.56)
-------- -------- -------- --------
Total income (loss) from investment operations...... 7.09 0.38 0.59 (0.56)
-------- -------- -------- --------
Less distributions:
Distributions from net investment income.................. -- -- (0.05) --
-------- -------- -------- --------
Total distributions................................. -- -- (0.05) --
-------- -------- -------- --------
Net asset value, end of period............................... $ 16.27 $ 9.18 $ 8.80 $ 9.44
======== ======== ======== ========
Total return (non-annualized)................................ 77.23% 74.32% (6.70)% (5.62)%
Ratios/Supplemental data:
Net assets, end of period (in 000s)........................ $ 50,975 $ 35,211 $ 22,607 $ 11,954
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits........ 1.31% 1.32%/5/ 1.69% 3.63%/5/
After expense reimbursement and earnings credits......... 1.15% 1.15%/5/ 1.20% 1.20%/5/
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement and earnings credits........ (0.76)% (0.62)%/5/ (0.76)% (2.53)%/5/
After expense reimbursement and earnings credits......... (0.60)% (0.45)%/5/ (0.27)% (0.10)%/5/
Portfolio turnover rate.................................... 104% 71% N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Six Months
Year Ended Ended
Brinson Class N June 30, 2000 June 30, 1999/6/
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period....................................................... $ 9.16 $ 8.80
-------- --------
Income from investment operations:
Net investment loss..................................................................... (0.08)/4/ (0.04)
Net realized and unrealized gain........................................................ 7.12 0.40
-------- --------
Total income from investment operations........................................... 7.04 0.36
-------- --------
Net asset value, end of period............................................................. $ 16.20 $ 9.16
======== ========
Total return (non-annualized).............................................................. 76.86% 4.09%
Ratios/Supplemental data:
Net assets, end of period (in 000s)..................................................... $ 2 $ 1
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits................................. 1.56% 1.57%/5/
After expense reimbursement and earnings credits.................................. 1.40% 1.40%/5/
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement and earnings credits................................. (1.01)% (0.87)%/5/
After expense reimbursement and earnings credits.................................. (0.85)% (0.70)%/5/
Portfolio turnover rate................................................................. 104% 71%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1 Commencement of investment operations
2 Reflects 10 for 1 share split effective December 9, 1998
3 Reflects the Fund's change in fiscal year end from December 31 to June 30
4 The net investment income per share data was determined by using average
shares outstanding throughout the period.
5 Annualized
6 Commencement of Brinson Class N was December 31, 1998
N/A Information is not available for periods prior to reorganization, as
described in notes to financial statements
================================================================================
102 See accompanying notes to financial statements.
<PAGE>
U.S. Bond Fund - Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
<TABLE>
<CAPTION>
August 31, 1995*
Year Ended June 30, Through June 30,
-------------------------------------------------------------------
Brinson Class I 2000 1999 1998 1997 1996
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 10.28 $ 10.58 $ 10.24 $ 9.93 $ 10.00
--------- --------- --------- -------- ---------
Income from investment operations:
Net investment income................................ 0.62** 0.58** 0.53 0.51** 0.50
Net realized and unrealized gain (loss).............. (0.25) (0.26) 0.53 0.32 (0.14)
--------- --------- --------- -------- ---------
Total income from investment operations........ 0.37 0.32 1.06 0.83 0.36
--------- --------- --------- -------- ---------
Less distributions:
Distributions from net investment income............. (0.65) (0.47) (0.58) (0.52) (0.40)
Distributions from net realized gains................ -- (0.15) (0.14) -- (0.03)
--------- --------- --------- -------- ---------
Total distributions............................ (0.65) (0.62) (0.72) (0.52) (0.43)
--------- --------- --------- -------- ---------
Net asset value, end of period.......................... $ 10.00 $ 10.28 $ 10.58 $ 10.24 $ 9.93
========= ========= ========= ======== =========
Total return (non-annualized)........................... 3.74% 2.97% 10.60% 8.45% 3.60%
Ratios/Supplemental data:
Net assets, end of period (in 000s).................. $ 58,121 $ 92,030 $ 38,874 $ 22,421 $ 9,047
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits.. 0.67% 0.61% 0.84% 1.65% 3.63%***
After expense reimbursement and earnings credits... 0.60% 0.60% 0.60% 0.60% 0.60%***
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits.. 6.12% 5.42% 5.61% 5.14% 3.00%***
After expense reimbursement and earnings credits... 6.19% 5.43% 5.85% 6.19% 6.03%***
Portfolio turnover rate.............................. 170% 260% 198% 410% 363%
---------------------------------------------------------------------------------------------------------------------------------
Year Ended June 30,
--------------------------------------
Brinson Class N 2000 1999 1998
---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.................................................... $ 10.30 <S> 10.58 $ 10.24
Income from investment operations:
Net investment income................................................................ 0.58** 0.57** 0.61
Net realized and unrealized gain (loss).............................................. (0.25) (0.26) 0.42
---------- ----------- ----------
Total income from investment operations........................................ 0.33 0.31 1.03
---------- ----------- ----------
Less distributions:
Distributions from net investment income............................................. (0.64) (0.44) (0.55)
Distributions from net realized gains................................................ -- (0.15) (0.14)
---------- ----------- ----------
Total distributions............................................................ (0.64) (0.59) (0.69)
---------- ----------- ----------
Net asset value, end of period.......................................................... $ 9.99 $ 10.30 $ 10.58
========== =========== ==========
Total return............................................................................ 3.29% 2.88% 10.30%
Ratios/Supplemental data:
Net assets, end of period (in 000s).................................................. $ 1 $ 1 $ 1
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits................................. 0.92% 0.86% 1.09%
After expense reimbursement and earnings credits.................................. 0.85% 0.85% 0.85%
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits................................. 5.87% 5.17% 5.36%
After expense reimbursement and earnings credits.................................. 5.94% 5.18% 5.60%
Portfolio turnover rate.............................................................. 170% 260% 198%
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
See accompanying notes to financial statements. 103
<PAGE>
High Yield Fund - Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
<TABLE>
<CAPTION>
Six Months September 30, 1997/1/
Year Ended Ended/3/ Year Ended Through
Brinson Class I June 30, 2000 June 30, 1999 December 31, 1998/2/ December 31, 1997
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................... $ 9.96 $ 9.98 $ 10.05 $ 10.00
--------- --------- --------- -----------
Income from investment operations:
Net investment income............................... 0.91/4/ (0.44)/4/ 7.30 0.18
Net realized and unrealized gain (loss)............. (0.90) (0.15) 0.02 0.05
--------- --------- --------- -----------
Total income from investment operations....... 0.01 0.29 7.32 0.23
--------- --------- --------- -----------
Less distributions:
Distributions from net investment income............ (0.71) (0.31) (7.33) (0.18)
Distributions from net realized gains............... (0.07) -- (0.06) --
--------- --------- --------- -----------
Total distributions........................... (0.78) (0.31) (7.39) (0.18)
--------- --------- --------- -----------
Net asset value, end of period......................... $ 9.19 $ 9.96 $ 9.98 $ 10.05
========= ========= ========= ===========
Total return (non-annualized).......................... 0.02% 2.91% 7.75% 2.34%
Ratios/Supplemental data:
Net assets, end of period (in 000s) $ 50,845 $ 60,044 $ 34,900 $ 7,861
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits.. 0.86% 0.83%/5/ 1.59% 4.98%/5/
After expense reimbursement and earnings credits... 0.70% 0.70%/5/ 0.89% 0.90%/5/
Ratio of net investment income to average net assets
Before expense reimbursement and earnings credits.. 9.31% 8.54%/5/ 7.38% 3.15%/5/
After expense reimbursement and earnings credits... 9.47% 8.67%/5/ 8.08% 7.23%/5/
Portfolio turnover rate.............................. 73% 77% N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
Six Months
Year Ended Ended
Brinson Class N June 30, 2000 June 30, 1999/6/
------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period......................................................... $ 9.95 $ 9.98
--------- -----------
Income from investment operations:
Net investment income..................................................................... 0.90/4/ 0.42/4/
Net realized and unrealized gain (loss)................................................... (0.90) (0.15)
--------- -----------
Total income from investment operations............................................. -- 0.27
--------- -----------
Less distributions:
Distributions from net investment income.................................................. (0.70) (0.30)
Distributions from net realized gains..................................................... (0.07) --
--------- -----------
Total distributions................................................................. (0.77) (0.30)
--------- -----------
Net asset value, end of period............................................................... $ 9.18 $ 9.95
========= ===========
Total return (non-annualized)............................................................... (0.13)% 2.71%
Ratios/Supplemental data:
Net assets, end of period (in 000s)....................................................... $ 1 $ 1
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits........................................ 1.11% 1.08%/5/
After expense reimbursement and earnings credits......................................... 0.95% 0.95%/5/
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits........................................ 9.06% 8.29%/5/
After expense reimbursement and earnings credits......................................... 9.22% 8.42%/5/
Portfolio turnover rate................................................................... 73% 77%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1 Commencement of investment operations
2 Reflects 10 for 1 share split effective December 9, 1998
3 Reflects the Fund's change in fiscal year end from December 31 to June 30
4 The net investment income per share data was determined by using average
shares outstanding throughout the period.
5 Annualized
6 Commencement of Brinson Class N was December 31, 1998
N/A Information is not available for periods prior to reorganization, as
described in notes to financial statements
================================================================================
104 See accompanying notes to financial statements.
<PAGE>
Global (Ex-U.S.) Equity Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Year Ended June 30,
----------------------------------------------------------------
Brinson Class I 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............................. $ 12.34 $ 12.15 $ 12.59 $ 11.17 $ 9.68
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income......................................... 0.11* 0.16 0.18 0.18 0.18
Net realized and unrealized gain.............................. 1.33 0.27 0.30 1.97 2.05
-------- -------- -------- -------- --------
Total income from investment operations................. 1.44 0.43 0.48 2.15 2.23
-------- -------- -------- -------- --------
Less distributions:
Distributions from net investment income...................... (0.07) (0.12) (0.18) (0.17) (0.18)
Distributions from net realized gains......................... (0.14) (0.12) (0.74) (0.56) (0.56)
-------- -------- -------- -------- --------
Total distributions..................................... (0.21) (0.24) (0.92) (0.73) (0.74)
-------- -------- -------- -------- --------
Net asset value, end of period................................... $ 13.57 $ 12.34 $ 12.15 $ 12.59 $ 11.17
======== ======== ======== ======== ========
Total return..................................................... 11.76% 3.65% 4.78% 20.27% 23.64%
Ratios/Supplemental data:
Net assets, end of period (in 000s)........................... $411,985 $490,322 $439,329 $420,855 $212,366
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits........... 1.00%** 0.99% 1.00% 1.00% 1.20%
After expense reimbursement and earnings credits............ N/A N/A N/A N/A 1.00%
Ratio of net investment income to average net assets:
Before expense reimbursement and earnings credits........... 0.89% 1.35% 1.52% 1.83% 1.67%
After expense reimbursement and earnings credits............ N/A N/A N/A N/A 1.87%
Portfolio turnover rate....................................... 59% 74% 49% 25% 20%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended June 30,
-----------------------------------
Brinson Class N 2000 1999 1998
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period......................................................... $ 12.30 $ 12.14 $ 12.59
-------- -------- --------
Income from investment operations:
Net investment income..................................................................... 0.08* 0.12 0.16
Net realized and unrealized gain.......................................................... 1.33 0.27 0.29
-------- -------- --------
Total income from investment operations............................................. 1.41 0.39 0.45
-------- -------- --------
Less distributions:
Distributions from net investment income.................................................. -- (0.11) (0.16)
Distributions from net realized gains..................................................... (0.14) (0.12) (0.74)
-------- -------- --------
Total distributions................................................................. (0.14) (0.23) (0.90)
-------- -------- --------
Net asset value, end of period............................................................... $ 13.57 $ 12.30 $ 12.14
======== ======== ========
Total return................................................................................. 11.51% 3.30% 4.51%
Ratios/Supplemental data:
Net assets, end of period (in 000s)....................................................... $ 1 $ 15 $ 11
Ratio of total expenses to average net assets:............................................ 1.25%** 1.24% 1.25%
Ratio of net investment income to average net assets:..................................... 0.64% 1.10% 1.27%
Portfolio turnover rate................................................................... 59% 74% 49%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The net investment income per share data was determined by using average
shares outstanding throughout the period.
** The ratio of net operating expenses to average net assets for Class I and
Class N was 0.99% and 1.24%, respectively
N/A = Not Applicable
================================================================================
See accompanying notes to financial statements.
105
<PAGE>
The Brinson Funds -- Notes To Financial Statements
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Brinson Funds (the "Trust") is an open-end, management investment company
registered under the Investment Company Act of 1940, as amended, as a series
company. The Trust currently offers shares of thirteen series: Global Fund,
Global Equity Fund, Global Technology Fund, Global Biotech Fund, Global Bond
Fund, U.S. Balanced Fund, U.S. Equity Fund, U.S. Large Cap Equity Fund
(formerly, U.S. Large Capitalization Equity Fund), U.S. Large Cap Growth Fund
(formerly, U.S. Large Capitalization Growth Fund), U.S. Small Cap Growth Fund
(formerly, U.S. Small Capitalization Growth Fund), U.S. Bond Fund, High Yield
Fund and Global (Ex-U.S.) Equity Fund (each a "Fund" and collectively, the
"Funds"). Each Fund has three classes of shares outstanding, Brinson Class I,
Brinson Class N and UBS Investment Funds Class. There are an unlimited number of
shares of each class with par value of $0.001 authorized. Each share represents
an identical interest in the investments of the Funds and has the same rights.
The financial highlights of the UBS Investment Funds Class are presented in a
separate report. The following is a summary of significant accounting policies
followed by the Funds in the preparation of their financial statements.
A. Investment Valuation: Securities for which market quotations are readily
available are valued at the last available sales price on the exchange or market
on which they are principally traded, or lacking any sales, at the last
available bid price on the exchange or market on which such securities are
principally traded. U.S. equity securities traded over-the-counter are valued at
the most recent bid price. Investments in affiliated investment companies are
valued at the daily closing net asset value of the respective fund. Debt
securities are valued at the most recent bid price by using market quotations or
independent pricing services. Securities for which market quotations are not
readily available, including restricted securities which are subject to
limitations on their sale, are valued at fair value as determined in good faith
by or under the direction of the Trust's Board of Trustees.
Futures contracts are valued at the settlement price established each day on the
exchange on which they are traded. Forward foreign currency contracts are valued
daily using quoted forward exchange rates. Short-term obligations with a
maturity of 60 days or less are valued at amortized cost, which approximates
market value.
B. Foreign Currency Translation: Investment securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollars
using the WM/Reuters closing spot rates as of 4:00 p.m. London time. Purchases
and sales of portfolio securities, commitments under forward foreign currency
contracts and income receipts are translated at the prevailing exchange rate as
of the date of each transaction. Realized and unrealized foreign exchange gains
or losses on investments are included as a component of net realized and
unrealized gain or loss on investments in the statement of operations.
C. Investment Transactions: Investment transactions are accounted for on a
trade date basis. Gains and losses on securities sold are determined on an
identified cost basis.
D. Investment Income: Interest income, which includes the amortization of
premiums and discounts, is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date, except that certain dividends from foreign
securities are recorded as the information becomes available.
E. Federal Income Taxes: It is the policy of the Funds to comply with all
requirements of the Internal Revenue Code (the "Code") applicable to regulated
investment companies and to distribute substantially all of their taxable income
to their shareholders. The Funds met the requirements of the Code applicable to
regulated investment companies for the year ended June 30, 2000, therefore, no
federal income tax provision was required. At June 30, 2000, the following Funds
had capital loss carryforwards for Federal income tax purposes available to
offset future net capital gains through the indicated expiration dates:
<TABLE>
<CAPTION>
Fund Expiration Date Amount
---- --------------- ------
<S> <C> <C>
Global Bond Fund................... June 30, 2008 $1,109,176
U.S. Bond Fund..................... June 30, 2008 1,664,910
High Yield Fund.................... June 30, 2008 861,570
</TABLE>
================================================================================
106
<PAGE>
The Brinson Funds -- Notes To Financial Statements
--------------------------------------------------------------------------------
F. Distribution to Shareholders: It is the policy of the Funds to distribute
their respective net investment income on a semi-annual basis and net capital
gains, if any, annually. Distributions to shareholders are recorded on the ex-
dividend date. Income and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions. Differences in dividends per share
between the classes are due to distribution expenses. The percentage of
dividends paid that qualify for the dividends received deduction available to
corporate shareholders for the year ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
Dividends Received
------------------
Fund Deduction
---- ---------
<S> <C>
Global Fund............................................... 16.77%
Global Equity Fund........................................ 32.26
U. S. Balanced............................................ 23.37
U. S. Equity.............................................. 100.00
U. S. Large Cap Equity.................................... 31.75
U. S. Large Cap Growth.................................... 10.18
U. S. Bond................................................ 0.11
</TABLE>
G. Income and Expense Allocation: All income earned and expenses incurred by
each Fund will be borne on a pro rata basis by each of the classes, except that
the Brinson Class I will not incur any of the distribution expenses of the
Brinson Class N nor the UBS Investment Funds Class.
H. Earnings Credits: The Funds have entered into an arrangement with their
custodian whereby interest earned on uninvested cash balances are used to offset
a portion of the Fund's expenses. These amounts are reflected in the statements
of operations.
I. 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 amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.
2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Brinson Partners, Inc. (the "Advisor"), a registered investment advisor,
provides the Funds with investment management services. As compensation for
these services, each Fund pays the Advisor a monthly fee based on each Fund's
respective average daily net assets. The Advisor has agreed to waive its fees
and reimburse each Fund to the extent that total annualized operating expenses
exceed a specified percentage of each Fund's respective average daily net
assets. The Advisor may recapture any amounts waived or reimbursed with respect
to the Global Technology Fund and Global Biotech Fund subject to the following
conditions: (1) the Advisor must request reimbursement within five years from
the date on which the waiver and/or reimbursement was made, and (2) the Fund
must be able to reimburse the Advisor and remain within the operating expense
limits noted in the following chart. No amounts were recaptured by the Advisor
during the period ended June 30, 2000. Investment advisory fees and other
transactions for the year ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
UBS
Brinson Investment
Advisory Brinson Class I Class N Funds Class Advisory Fees
Fee Expense Cap Expense Cap Expense Cap Fees Waived
-------- --------------- ----------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Global Fund................................. 0.80% 1.10% 1.35% 1.75% $ 2,899,741 $ --
Global Equity Fund.......................... 0.80 1.00 1.25 1.76 639,859 54,359
Global Technology Fund...................... 1.40 1.55 1.80 2.55 549 4,639
Global Biotech Fund......................... 1.15 1.30 1.55 2.30 480 3,737
Global Bond Fund............................ 0.75 0.90 1.15 1.39 597,228 91,069
U.S. Balanced Fund.......................... 0.70 0.80 1.05 1.30 199,072 57,436
U.S. Equity Fund............................ 0.70 0.80 1.05 1.32 3,376,519 160,099
U.S. Large Cap Equity Fund.................. 0.70 0.80 1.05 1.32 163,052 108,284
U.S. Large Cap Growth Fund.................. 0.70 0.80 1.05 1.57 71,140 101,585
U.S. Small Cap Growth Fund.................. 1.00 1.15 1.40 1.92 445,220 69,313
U.S. Bond Fund.............................. 0.50 0.60 0.85 1.07 452,989 60,829
High Yield Fund............................. 0.60 0.70 0.95 1.55 336,440 87,728
Global (Ex-U.S.) Equity Fund................ 0.80 1.00 1.25 1.84 3,822,993 --
</TABLE>
================================================================================
107
<PAGE>
The Brinson Funds -- Notes To Financial Statements
--------------------------------------------------------------------------------
Certain officers of the Funds are also officers of the Advisor. All officers
serve without direct compensation from the Funds. Trustees' fees paid to
unaffiliated trustees for the year ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
Fees Paid
---------
<S> <C>
Global Fund............................................. $ 8,272
Global Equity Fund...................................... 4,414
Global Technology Fund.................................. 360
Global Biotech Fund..................................... 290
Global Bond Fund........................................ 4,392
U.S. Balanced Fund...................................... 4,246
U.S. Equity Fund........................................ 15,374
U.S. Large Cap Equity Fund.............................. 4,246
U.S. Large Cap Growth Fund.............................. 3,649
U.S. Small Cap Growth Fund.............................. 4,117
U.S. Bond Fund.......................................... 4,370
High Yield Fund......................................... 4,365
Global (Ex-U.S.) Equity Fund............................ 8,264
</TABLE>
The Global Fund invests in shares of certain affiliated investment companies
also sponsored by the Advisor. These investments represented 16.08% of the
Fund's net assets at June 30, 2000. Amounts relating to those investments at
June 30, 2000 and for the year then ended, were as follows:
<TABLE>
<CAPTION>
Net Change in
Sales Realized Net Unrealized
Affiliates Purchases Proceeds Gain/(Loss) Gain/(Loss) Value
---------- --------- ----------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Brinson U.S. Small Capitalization Equity Fund....... $ -- $ -- $ -- $ 479,608 $ 8,140,053
Brinson High Yield Fund............................. 9,500,000 8,000,000 1,240,415 (958,356) 16,003,393
Brinson Emerging Markets Equity Fund................ -- 10,509,950 (472,848) 3,382,681 9,943,169
Brinson Emerging Markets Debt Fund.................. -- 18,100,000 4,035,383 594,382 11,243,315
Brinson Supplementary Trust U.S. Cash
Management Prime Fund............................. 452,709,674 482,973,495 -- -- 1,830,859
</TABLE>
108
The following Funds invest in shares of the Brinson Supplementary Trust U.S.
Cash Management Prime Fund ("Supplementary Trust"). The Supplementary Trust is
an investment company managed by the Advisor. The Supplementary Trust is offered
as a cash management option only to mutual funds and other accounts managed by
the Advisor. The Supplementary Trust pays no management fees. Distributions
received from the Supplementary Trust are reflected as interest income in the
statement of operations. Amounts relating to those investments at June 30, 2000
and for the year then ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
% of
Sales Interest Net
Fund Purchases Proceeds Income Value Assets
---- ------------- ----------- ------------- -------------- -------
<S> <C> <C> <C> <C> <C>
Global Fund................................... $ 452,709,674 $ 482,973,494 $ 732,300 $ 1,830,859 0.63%
Global Equity Fund............................ 51,279,587 49,847,833 77,639 2,453,941 3.56
Global Technology Fund........................ -- -- -- -- --
Global Biotech Fund........................... -- -- -- -- --
Global Bond Fund.............................. 46,252,518 46,972,556 91,982 5,419,195 11.89
U.S. Balanced Fund............................ 23,615,731 23,228,119 36,392 623,691 5.04
U.S. Equity Fund.............................. 324,163,891 360,999,461 885,159 849,414 0.45
U.S. Large Cap Equity Fund.................... 42,642,990 42,960,013 53,714 1,215,982 7.62
U.S. Large Cap Growth Fund.................... -- -- -- -- --
U.S. Small Cap Growth Fund.................... 43,005,104 42,635,680 120,511 2,503,641 4.58
U.S. Bond Fund................................ 87,525,697 92,813,027 273,586 217,046 0.35
High Yield Fund............................... 85,172,972 77,233,925 194,207 10,185,196 19.21
Global (Ex-U.S.) Equity Fund.................. 807,825,648 806,997,127 708,393 5,129,357 1.23
</TABLE>
================================================================================
108
<PAGE>
The Brinson Funds--Notes To Financial Statements
________________________________________________________________________________
3. INVESTMENT TRANSACTIONS
Investment transactions for the year ended June 30, 2000, excluding short-term
investments, were as follows:
Proceeds
Fund Purchases From Sales
---- --------- ----------
Global Fund..................................... $340,289,160 $510,377,106
Global Equity Fund.............................. 86,434,670 109,260,719
Global Technology Fund.......................... 547,609 58,675
Global Biotech Fund............................. 704,861 113,026
Global Bond Fund................................ 66,489,929 129,362,852
U.S. Balanced Fund.............................. 26,024,597 47,524,289
U.S. Equity Fund................................ 254,397,613 714,232,204
U.S. Large Cap Equity Fund...................... 37,900,184 40,675,202
U.S. Large Cap Growth Fund...................... 10,468,677 8,415,371
U.S. Small Cap Growth Fund...................... 43,729,341 52,864,256
U.S. Bond Fund.................................. 141,682,053 167,767,766
High Yield Fund................................. 37,576,913 50,920,592
Global (Ex-U.S.) Equity Fund.................... 274,569,893 410,021,861
4. FORWARD FOREIGN CURRENCY CONTRACTS
The Funds may engage in portfolio hedging with respect to changes in currency
exchange rates by entering into forward foreign currency contracts to purchase
or sell currencies. Forward foreign currency contracts are also used to achieve
currency allocation strategies. A forward foreign currency contract is a
commitment to purchase or sell a foreign currency at a future date at a
negotiated forward rate. Risks associated with such contracts include movement
in the value of the foreign currency relative to the U.S. dollar and the ability
of the counterparty to perform. The unrealized gain, if any, represents the
credit risk to each Fund on a forward foreign currency contract. Fluctuations in
the value of forward foreign currency contracts are recorded daily as net
unrealized gains or losses. The Funds realize a gain or loss upon settlement of
the contracts. The statement of operations reflects net realized and net
unrealized gains and losses on these contracts. The counterparty to all forward
foreign currency contracts during the year ended June 30, 2000, was the Funds'
custodian.
5. FUTURES CONTRACTS
The Funds may purchase or sell exchange-traded futures contracts, which are
contracts that obligate the Funds to make or take delivery of a financial
instrument or the cash value of a securities index at a specified future date at
a specified price. The Funds enter into such contracts to hedge a portion of
their portfolio. Risks of entering into futures contracts include the
possibility that there may be an illiquid market or that a change in the value
of the contract may not correlate with changes in the value of the underlying
securities. Upon entering into a futures contract, the Funds are required to
deposit either cash or securities (initial margin). Subsequent payments
(variation margin) are made or received by the Funds, generally on a daily
basis. The variation margin payments are equal to the daily changes in the
contract value and are recorded as unrealized gains or losses. The Funds
recognize a realized gain or loss when the contract is closed or expires. The
statement of operations reflects net realized and net unrealized gains and
losses on these contracts.
================================================================================
109
<PAGE>
The Brinson Funds--Notes To Financial Statements
________________________________________________________________________________
6. SECURITY LENDING
The Global Fund and Global (Ex-U.S.) Equity Fund loaned securities to certain
brokers, with the Funds' custodian acting as the Funds' lending agent. The Funds
earned negotiated lenders' fees, which are included in interest income in the
statements of operations. The Global Fund receives cash as collateral against
the loaned securities. The cash is then generally invested in interest-bearing
securities which are included in the schedule of investments. The Global (Ex-
U.S.) Equity Fund receives securities, which are not reflected in the statement
of assets and liabilities, as collateral against the loaned securities. The
Funds' monitor the market value of securities loaned on a daily basis and
initially require collateral against the loaned securities in an amount at least
equal to 102% of the value of domestic securities loaned and 105% of the value
of foreign securities loaned. The value of loaned securities and related
collateral outstanding at June 30, 2000, were as follows:
Value of Loaned Value of
Securities Collateral
--------------- -----------
Global Fund.................................. $50,587,586 $51,691,365
Global (Ex-U.S.) Equity Fund................. 15,980,918 16,163,433
7. DISTRIBUTION PLANS
The Trust has adopted distribution plans (the "Plans") pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, for the Brinson Class N
and the UBS Investment Funds Class. Each Plan governs payments made for the
expenses incurred in the promotion and distribution of the Brinson Class N and
the UBS Investment Funds Class. Annual fees under the Brinson Class N Plan shall
not exceed 0.25% of the average daily net assets of the Brinson Class N of each
of the Funds. Annual fees under the UBS Investment Funds Plan, which include a
0.25% service fee, are as follows as a percentage of the average daily net
assets of the UBS Investment Funds Class of each of the Funds:
% of
Fund Net Assets
---- ----------
Global Fund....................................................... 0.65%
Global Equity Fund................................................ 0.76
Global Technology Fund............................................ 1.00
Global Biotech Fund............................................... 1.00
Global Bond Fund.................................................. 0.49
U.S. Balanced Fund................................................ 0.50
U.S. Equity Fund.................................................. 0.52
U.S. Large Cap Equity Fund........................................ 0.52
U.S. Large Cap Growth Fund........................................ 0.77
U.S. Small Cap Growth Fund........................................ 0.77
U.S. Bond Fund.................................................... 0.47
High Yield Fund................................................... 0.85
Global (Ex-U.S.) Equity Fund...................................... 0.84
================================================================================
110
<PAGE>
The Brinson Funds--Notes To Financial Statements
________________________________________________________________________________
8. LINE OF CREDIT
The Trust has entered into an agreement with Chase Manhattan Bank to provide a
364-day $100 million committed line of credit to the Funds. Borrowings will be
made for temporary purposes. Interest on amounts borrowed is calculated based on
the Federal Funds Rate plus 0.50%. The Funds pay an annual commitment fee of
0.10% (prior to April 14, 2000 the commitment fee was 0.08%) of the average
daily balance of the line of credit not utilized. The average borrowings under
the agreement for the year then ended June 30, 2000, were as follows:
Average Number of Days
Fund Borrowings Outstanding
---- ------------ --------------
Global Fund................................... $ 4,750,000 2
Global Bond Fund.............................. 18,940,000 10
U.S. Balanced Fund............................ 2,925,000 8
U.S. Equity Fund.............................. 7,442,857 7
Global (Ex-U.S.) Equity Fund.................. 16,050,000 14
================================================================================
111
<PAGE>
Report of Independent Auditors
--------------------------------------------------------------------------------
The Board of Trustees and Shareholders
The Brinson Funds
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of The Brinson Funds--Global Fund, Global Equity
Fund, Global Technology Fund, Global Biotech Fund, Global Bond Fund, U.S.
Balanced Fund, U.S. Equity Fund, U.S. Large Cap Equity Fund, U.S. Large Cap
Growth Fund, U.S. Small Cap Growth Fund, U.S. Bond Fund, High Yield Fund, and
Global (Ex-U.S.) Equity Fund as of June 30, 2000, and the related statements of
operations, cash flows (Global Fund only), changes in net assets and financial
highlights for the periods indicated therein. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of June 30, 2000, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Brinson Funds--Global Fund, Global Equity Fund, Global Technology Fund, Global
Biotech Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity Fund, U.S. Large
Cap Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund, U.S.
Bond Fund, High Yield Fund, and Global (Ex-U.S.) Equity Fund at June 30, 2000
and the results of their operations, cash flows (Global Fund only), changes in
their net assets and the financial highlights for the periods indicated therein
in conformity with accounting principles generally accepted in the United
States.
Ernst & Young LLP
Chicago, Illinois
August 11, 2000
================================================================================
112
<PAGE>
[LOGO] The Brinson Funds
-------------------------------------------------------------------------
<PAGE>
[LOGO]UBS
Investment Funds
Global Fund
Global Equity Fund
Global Technology Fund
Global Biotech Fund
Global Bond Fund
U.S. Balanced Fund
U.S. Equity Fund
U.S. Large Cap Equity Fund
U.S. Large Cap Growth Fund
U.S. Small Cap Growth Fund
U.S. Bond Fund
High Yield Fund
Global (Ex-U.S.) Equity Fund
Annual Report
June 30, 2000
<PAGE>
Trustees and Officers
--------------------------------------------------------------------------------
[LOGO] UBS
Investment Funds
Trustees
Walter E. Auch
Frank K. Reilly, CFA
Edward M. Roob
Officers
Frank K. Reilly, CFA
Chairman of the Board
Thomas J. Digenan, CFA, CPA
President
Carolyn M. Burke, CPA
Secretary and Treasurer
David E. Floyd, CPA
Assistant Secretary
Mark F. Kemper
Assistant Secretary
Alanna N. Palmer
Assistant Secretary
=======================================================
1
<PAGE>
The Funds' Advisor-- Brinson Partners, Inc.
--------------------------------------------------------------------------------
[LOGO] UBS Since the founding of our organization nearly twenty
Investment Funds years ago, we have focused our collective energy on two
goals: creating meaningful value-added investment
performance; and providing our clients with
individualized client relationships of the highest
quality.
Now in 2000, nearly 500 focused investment specialists,
located in all of the world's major financial centers,
continue to deliver investment strategies that meet our
clients' needs. With an unrelenting focus on our goals,
we have grown into one of the world's premier
investment management organizations, and a recognized
leader in our industry. In North America, we make our
investment capabilities available to institutions and
individual investors through the Brinson Family of
Funds. The Brinson Funds are institutionally priced
mutual funds that provide investors convenient access
to our global investment expertise and capabilities.
We select portfolio investments for all of The Brinson
Funds by focusing on long-term investment fundamentals
within a framework of integrated capital markets.
Investment performance for our clients is maximized
within and across asset classes through a comprehensive
understanding of global investment markets and their
interrelationships. We apply a systematic, disciplined
approach to valuing investments and combine the
seasoned judgment of our global investment teams to
construct optimal portfolios--balancing considerations
for both risk and return.
Brinson Partners, Inc. is a member of UBS Asset
Management, the asset management division of UBS AG.
=======================================================
2
<PAGE>
Table of Contents
--------------------------------------------------------------------------------
[LOGO] UBS
Investment Funds
<TABLE>
<S> <C>
To Our Shareholders ...................................................... 4
Global Economic and Market Highlights .................................... 5
U.S. Economic and Market Highlights ...................................... 6
Portfolio Managers' Commentary and Schedule of Investments
Global Fund ......................................................... 7
Global Equity Fund .................................................. 18
Global Technology Fund .............................................. 25
Global Biotech Fund ................................................. 28
Global Bond Fund .................................................... 31
U.S. Balanced Fund .................................................. 37
U.S. Equity Fund .................................................... 43
U.S. Large Cap Equity Fund .......................................... 48
U.S. Large Cap Growth Fund .......................................... 52
U.S. Small Cap Growth Fund .......................................... 56
U.S. Bond Fund ...................................................... 61
High Yield Fund ..................................................... 67
Global (Ex-U.S.) Equity Fund ........................................ 74
Statements of Assets and Liabilities ..................................... 82
Statements of Operations ................................................. 84
Statement of Cash Flows .................................................. 86
Statements of Changes in Net Assets ...................................... 88
Financial Highlights ..................................................... 93
Notes to Financial Statements ............................................ 106
Report of Independent Auditors ........................................... 112
</TABLE>
=======================================================
3
<PAGE>
Shareholder Letter
--------------------------------------------------------------------------------
[LOGO] UBS August 28, 2000
Investment Funds
Dear Shareholder:
The first half of 2000 was characterized by turbulence
in both equity and bond markets as uncertainty about
interest rates, inflation and economic growth came to
the fore. While investor sentiment showed continued
adoration of the so-called "new economy" in the first
quarter, trends reversed sharply in the second quarter.
Investors began to heed the warning signs of increasing
volatility in most major equity markets, and of
swelling share prices in the technology, media and
telecommunications (TMT) sectors. Investor attention
shifted to searching for investment value among "old
economy" stocks.
Investors have also begun to look at dot-com companies
more skeptically. Many of the new dot-com companies
that have sprung up in the past few years are starting
to see increasing pressures to solidify their bottom
lines. The days of free (or almost free) capital are,
if not ending, certainly beginning to slow. More than
120 dot-com companies laid off workers in the past
eight months, and 24 of them have subsequently gone out
of business. There are still many opportunities to
invest in strong, growing companies and undervalued
out-of-favor stocks, but active security selection is
increasingly important in the current environment.
While we understand and appreciate the role of new and
emerging technology in business, our analysis is
focused on investing in companies with solid
fundamentals that are using the Internet to strengthen
and leverage their existing businesses. Furthermore, as
we identify investment opportunities in other
specialized areas, we will continue to broaden our
selection of offerings within the UBS Investment Funds.
In view of this, we launched two new Funds in the
second quarter of 2000: the Global Technology Fund and
the Global Biotech Fund. For more information about
these or any of the UBS Investment Funds, please feel
free to contact us at 1-800-794-7753.
We look forward to continuing our relationship with
you, and to helping you meet your long-term investment
objectives. Thank you for investing in the UBS
Investment Funds. We appreciate the confidence you have
placed in us.
Sincerely,
/s/ Hanspeter A. Walder /s/ Raymond Simon
Hanspeter A. Walder Raymond Simon
Executive Director Managing Director
Private Banking Private Banking
=======================================================
4
<PAGE>
Global Economic and Market Highlights
--------------------------------------------------------------------------------
[LOGO] UBS The tentative recovery in Japan continues. Real GDP
Investment Funds growth was 0.7% year-on-year in the first quarter but
on figures which were not adjusted for the leap year.
Consensus Forecasts predicts year-on-year GDP growth to
be flat in the second quarter but to pick up strongly
in H2 2000. Recently, industrial production has
strengthened on the back of demand for IT goods. The
big news to affect the Japanese economy is the removal
of the zero interest rate policy. The overnight call
rate was raised to 0.25%. This represents the first
tightening of monetary policy in Japan in 10 years. The
consensus view is that this is premature with the
economy still suffering from deflation and the recovery
still green. In Euroland, sentiment continues to be
upbeat.
The Euroland real GDP grew by 3.4% year-on-year in the
first quarter. Consensus Forecasts predict 3.3% growth
in 2000. Inflation is rising, from 1.9% at the start of
the year, to 2.4% in July. The Euro continues to
languish, reaching new lows against the Dollar earlier
this month. The weak Euro is bolstering the recovery in
industrial production and export growth. This, coupled
with the pick up in domestic demand, means that there
are upside risks for inflation. It is likely that the
European Central Bank (ECB) will raise rates again. The
ECB measure of M3 growth slowed again in June, down 40
basis points to 5.4% year-on-year increase.
The United Kingdom position is finely balanced. At the
recent meeting of the Monetary Policy Committee,
interest rates were not changed but the minutes show
that there is a big split within the committee as to
the size of risks to the economy. The Governor used his
casting vote. There has been a weakening in some areas
of the economy. Earnings growth have weakened as has
the housing market. But with the labor market
tightening further and the Bank of England forecasting
that inflation is likely to beach its 2.5% target in
two years time, a further increase in interest rates
seems possible.
Global Environment
<TABLE>
<CAPTION>
6 months 1 year 3 years 5 years
Major Markets ended ended ended ended
Total Return in U.S. Dollars 6/30/00 6/30/00 6/30/00 6/30/00
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Equity -0.84% 9.52% 19.06% 22.47%
Global (Ex-U.S.) Equities (currency unhedged) -2.99 18.78 10.52 11.75
Global (Ex-U.S.) Equities (currency hedged) 2.69 23.11 16.45 20.48
U.S. Bonds 3.92 4.49 6.02 6.23
Global (Ex-U.S.) Bonds (currency unhedged) -1.95 2.40 2.70 1.70
Global (Ex-U.S.) Bonds (currency hedged) 4.02 5.75 8.20 9.81
U.S. Cash Equivalents 3.13 6.08 5.82 5.83
----------------------------------------------------------------------------------------------
6 months 1 year 3 years 5 years
Major Currencies ended ended ended ended
Percent Change Relative to U.S. Dollars 6/30/00 6/30/00 6/30/00 6/30/00
----------------------------------------------------------------------------------------------
Yen -3.26% 14.40% 2.65% -4.31%
Pound -6.07 -3.96 -3.11 -0.99
Euro -4.37 -7.05 -5.16 -6.94
Canadian Dollar -2.05 -0.11 -2.35 -1.50
----------------------------------------------------------------------------------------------
</TABLE>
All total returns in excess of 1 year are average
annualized returns.
=======================================================
5
<PAGE>
U.S. Economic and Market Highlights
--------------------------------------------------------------------------------
[LOGO] UBS The slowdown in the economy seems less evident than a
Investment Funds few months ago. The annualized growth rate in real GDP
rose from 5.4% in the first quarter of this year to 6%
in the second quarter. Federal government spending and
business investment were strong contributors but
personal consumption growth weakened in the second
quarter. Consensus Forecasts estimate that activity
will slow by the end of the year. Growth is forecast to
be 5% in 2000, falling sharply to 3.4% in 2001.
The oil price has risen by nearly 50 percent in the
year to July and had an impact on consumer price
inflation. From lows of around 1.5% year-on-year
increase in late 1998, the rate of price inflation has
surged to 3.7% in July 2000. Core inflation, which
excludes energy and food, was 2.4% in July, up from
1.9% at the beginning of this year. Thanks to recent
productivity gains and the expected unwinding of the
The oil price has risen by nearly 50 percent in the
year to July and had an impact on consumer price
inflation. From lows of around 1.5% year-on-year
increase in late 1998, the rate of price inflation has
surged to 3.7% in July 2000. Core inflation, which
excludes energy and food, was 2.4% in July, up from
1.9% at the beginning of this year. Thanks to recent
productivity gains and the expected unwinding of the
oil price effect, the CPI rate is expected to stabilize
in the coming months.
Evidence is emerging that the U.S. economy has
undergone a structural change. Productivity, measured
by workers' output per hour, has recorded its fastest
increase in 17 years. The figures provide some evidence
that the economy is utilizing "information-technology
enhanced production processes." In the year to June,
non-farm productivity grew by 5.1% and the annualized
increase in the second quarter was 5.3%. The labor
market continues to tighten with the unemployment rate
falling to 4% but the increases in productivity seem to
be keeping a lid on inflationary pressures as unit
labor costs are falling.
The outlook for short-term interest rates seems to be
fairly benign. The consensus opinion is that interest
rates have peaked. The combination of a slowing
economy, increases in productivity and the prospect of
lower energy costs all seem to point to the effective
Fed Funds rate being held at 6.5%. The current account
deficit poses a risk. Should foreign capital inflows
slow, the dollar would fall and raise inflationary
pressures.
U.S. Environment
Major Markets
Year to Date June 30, 2000
[GRAPH]
4.90 4.49 9.52
U.S. Cash U.S. U.S.
Equivalents Bonds Equities
Top Ten Industry Returns Relative to S&P 5000
Year to Date June 30, 2000
[GRAPH]
Salomon U.S. Treasury Benchmark Returns
Year to Date June 30, 2000
[GRAPH]
5.10 4.00 3.64 3.44 4.31
1 2 5 10 30
Maturity (Years)
Bottom Ten Industry Returns Relative to S&P 5000
Year to Date June 30, 2000
[GRAPH]
=======================================================
6
<PAGE>
Global Fund
--------------------------------------------------------------------------------
[LOGO] UBS Since its inception on July 31, 1995, the UBS
Investment Funds Investment Fund - Global has provided an annualized
return of 8.31% versus the 13.44% return of its index,
the Global Securities Markets Mutual Fund Index. The
annualized volatility or risk of the Fund over this
period was 7.54%, or about 25% less than the 10.06%
volatility of the benchmark. The Fund's return of 0.45%
for the first six months of 2000 is 86 basis points
higher than the benchmark return of -0.41%. Most of
this performance advantage came in the second quarter
of the year when the Fund returned 1.64%, greatly
outperforming the -2.56% return of the benchmark.
Market turbulence that began early this year,
particularly in equities, continued into the second
quarter. Aggregate equity indices generally fell by
moderate amounts. In recent quarters, industry
selection has been critical. In the latest quarter,
there were significant setbacks in technology, media
and telecommunications stocks, with so-called "old
economy" stocks generally outperforming. The Fund's
focus on these "old economy" stocks greatly contributed
to the Fund's performance advantage in the quarter and
for the year-to-date period.
In the current market environment, our analyses show
that bond valuations are more attractive than equities.
The risk premium on equities versus government
inflation-linked bonds is only about 1%. This clearly
does not compensate investors for the added risk of
holding large equity positions. Our strategies
therefore include a general overweight to bonds offset
by underweights to equities. Notably this quarter,
widening credit spreads prompted us to increase
holdings in U.S. high-yield bonds, which was offset by
reducing our large overweight position in U.S. Treasury
Inflation Protected Securities (TIPS). We reduced our
Japanese equity overweight and redistributed the
proceeds to U.S. and U.K. equities. This move came
after earlier outperformance that allowed us to take
profits on some highly valued Japanese technology
shares. In U.S. and U.K. equity markets, we see
opportunities in the "old economy" sectors where some
undervalued companies are making progress in leveraging
their skills, assets and competitive positions to take
advantage of technology and the Internet.
=======================================================
7
<PAGE>
Global Fund
[LOGO] UBS
Investment Funds
Total Return
<TABLE>
<CAPTION>
6 months 1 year 3 years Inception*
ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00
<S> <C> <C> <C> <C>
UBS Investment Fund - Global 0.45% -1.00% 3.44% 8.31%
---------------------------------------------------------------------------------------------
GSMI Mutual Fund Index** -0.41 9.96 11.85 13.44
---------------------------------------------------------------------------------------------
MSCI World Equity (Free) Index -2.49 12.39 15.13 16.51
---------------------------------------------------------------------------------------------
Salomon Smith Barney World Gov't. Bond Index 0.03 3.16 3.87 3.17
---------------------------------------------------------------------------------------------
</TABLE>
* Inception date of the UBS Investment Fund - Global
is 7/31/95.
** An unmanaged index compiled by the Advisor,
constructed as follows: 40% Wilshire 5000 Index; 22%
MSCI World ex USA (Free) Index; 21% Salomon Smith
Barney BIG Bond Index; 9% Salomon Non-U.S.
Government Bond Index (unhedged); 2% JP Morgan
EMBI+; 3% MSCI Emerging Markets Free Index; and 3%
Merrill Lynch High Yield Master Index.
Total return includes reinvestment of all capital gain
and income distributions.
All total returns in excess of 1 year are average
annualized returns.
Illustration of an Assumed Investment of $10,000
This chart shows the growth in the value of an
investment in the UBS Investment Fund - Global, the
GSMI Mutual Fund Index, the MSCI World Equity (Free)
Index and the Salomon Smith Barney World Government
Bond Index if you had invested $10,000 on July 31,
1995, and had reinvested all your income dividends and
capital gain distributions through June 30, 2000. No
adjustment has been made for any income taxes payable
by shareholders on income dividends and capital gain
distributions. Past performance is no guarantee of
future results. Share price and return will vary with
market conditions; investors may realize a gain or loss
upon redemption.
UBS Investment Fund - Global vs. GSMI Mutual Fund
Index,
MSCI World Equity (Free) Index and Salomon Smith Barney
World Gov't. Bond Index Wealth Value with Dividends
Reinvested
[GRAPH]
<TABLE>
<CAPTION>
Label A B C D
------------------------------------------------------------------------------------------
Label Date UBS Global Fund GSMI Mutual Fun MSCI World Equi Solomon Smith
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 7/31/95 10,000 10,000 10,000 10,000
------------------------------------------------------------------------------------------
2 8/31/95 10,129 9,965 9,777 9,656
------------------------------------------------------------------------------------------
3 9/30/95 10,293 10,232 10,066 9,871
------------------------------------------------------------------------------------------
4 10/31/95 10,362 10,167 9,909 9,944
------------------------------------------------------------------------------------------
5 11/30/95 10,655 10,472 10,255 10,057
------------------------------------------------------------------------------------------
6 12/31/95 10,861 10,665 10,556 10,162
------------------------------------------------------------------------------------------
7 1/31/96 11,063 10,839 10,753 10,037
------------------------------------------------------------------------------------------
8 2/29/96 11,008 10,870 10,818 9,986
------------------------------------------------------------------------------------------
9 3/31/96 11,091 10,963 10,998 9,972
------------------------------------------------------------------------------------------
10 4/30/96 11,229 11,152 11,256 9,932
------------------------------------------------------------------------------------------
11 5/31/96 11,266 11,234 11,265 9,934
------------------------------------------------------------------------------------------
12 6/30/96 11,324 11,257 11,325 10,013
------------------------------------------------------------------------------------------
13 7/31/96 11,157 10,961 10,925 10,205
------------------------------------------------------------------------------------------
14 8/31/96 11,334 11,138 11,054 10,245
------------------------------------------------------------------------------------------
15 9/30/96 11,687 11,505 11,488 10,287
------------------------------------------------------------------------------------------
16 10/31/96 11,873 11,620 11,567 10,479
------------------------------------------------------------------------------------------
17 11/30/96 12,329 12,109 12,219 10,617
------------------------------------------------------------------------------------------
18 12/31/96 12,332 12,001 12,025 10,531
------------------------------------------------------------------------------------------
19 1/31/97 12,475 12,177 12,172 10,250
------------------------------------------------------------------------------------------
20 2/28/97 12,567 12,234 12,311 10,173
------------------------------------------------------------------------------------------
21 3/31/97 12,373 11,965 12,064 10,096
------------------------------------------------------------------------------------------
22 4/30/97 12,506 12,207 12,460 10,007
------------------------------------------------------------------------------------------
23 5/31/97 13,008 12,824 13,231 10,279
------------------------------------------------------------------------------------------
24 6/30/97 13,377 13,283 13,889 10,402
------------------------------------------------------------------------------------------
25 7/31/97 13,797 13,812 14,531 10,321
------------------------------------------------------------------------------------------
26 8/31/97 13,428 13,306 13,547 10,314
------------------------------------------------------------------------------------------
27 9/30/97 13,838 13,882 14,284 10,534
------------------------------------------------------------------------------------------
28 10/31/97 13,428 13,434 13,534 10,753
------------------------------------------------------------------------------------------
29 11/30/97 13,449 13,554 13,771 10,589
------------------------------------------------------------------------------------------
30 12/31/97 13,589 13,717 13,939 10,557
------------------------------------------------------------------------------------------
31 1/31/98 13,735 13,902 14,330 10,659
------------------------------------------------------------------------------------------
32 2/28/98 14,230 14,575 15,299 10,746
------------------------------------------------------------------------------------------
33 3/31/98 14,556 14,988 15,943 10,639
------------------------------------------------------------------------------------------
34 4/30/98 14,568 15,135 16,099 10,810
------------------------------------------------------------------------------------------
35 5/31/98 14,478 14,922 15,904 10,834
------------------------------------------------------------------------------------------
36 6/30/98 14,394 15,111 16,276 10,851
------------------------------------------------------------------------------------------
37 7/31/98 14,349 15,032 16,251 10,865
------------------------------------------------------------------------------------------
38 8/31/98 13,193 13,512 14,085 11,160
------------------------------------------------------------------------------------------
39 9/30/98 13,601 13,978 14,335 11,754
------------------------------------------------------------------------------------------
40 10/31/98 14,088 14,813 15,634 12,102
------------------------------------------------------------------------------------------
41 11/30/98 14,473 15,418 16,565 11,931
------------------------------------------------------------------------------------------
42 12/31/98 14,622 15,974 17,370 12,171
------------------------------------------------------------------------------------------
43 1/31/99 14,647 16,196 17,752 12,059
------------------------------------------------------------------------------------------
44 2/28/99 14,274 15,766 17,280 11,672
------------------------------------------------------------------------------------------
45 3/31/99 14,498 16,264 17,997 11,701
------------------------------------------------------------------------------------------
46 4/30/99 15,083 16,830 18,709 11,697
------------------------------------------------------------------------------------------
47 5/31/99 14,796 16,404 18,020 11,500
------------------------------------------------------------------------------------------
48 6/30/99 14,958 16,906 18,858 11,299
------------------------------------------------------------------------------------------
49 7/31/99 14,921 16,815 18,802 11,576
------------------------------------------------------------------------------------------
50 8/31/99 14,683 16,769 18,767 11,629
------------------------------------------------------------------------------------------
51 9/30/99 14,458 16,698 18,591 11,810
------------------------------------------------------------------------------------------
52 10/31/99 14,433 17,294 19,556 11,804
------------------------------------------------------------------------------------------
53 11/30/99 14,483 17,699 20,106 11,680
------------------------------------------------------------------------------------------
54 12/31/99 14,743 18,666 21,734 11,652
------------------------------------------------------------------------------------------
55 1/31/00 14,292 18,038 20,491 11,404
------------------------------------------------------------------------------------------
56 2/29/00 14,093 18,360 20,544 11,322
------------------------------------------------------------------------------------------
57 3/31/98 14,570 19,077 21,966 11,673
------------------------------------------------------------------------------------------
58 4/30/00 14,557 18,313 21,036 11,291
------------------------------------------------------------------------------------------
59 5/31/00 14,584 17,934 20,504 11,379
------------------------------------------------------------------------------------------
60 6/30/00 14,809 18,589 21,194 11,656
------------------------------------------------------------------------------------------
</TABLE>
Fund returns are net of all fees and costs, while the
Index returns are based solely on market returns
without deduction for fees or transaction costs for
rebalancing.
=======================================================
8
<PAGE>
Global Funds
--------------------------------------------------------------------------------
[LOGO] UBS Asset Allocation
Investment Funds
As of June 30, 2000
<TABLE>
<CAPTION>
Current
Benchmark Strategy
---------------------------------------------------------------
<S> <C> <C>
U.S. Equities 40.0% 22.5%
Global (Ex-U.S.) Equities 22.0 14.5
Emerging Markets Equities 3.0 3.0
Dollar Bonds 21.0 40.0
High Yield Bonds 3.0 5.5
Global (Ex-U.S.) Bonds 9.0 11.0
Emerging Markets Debt 2.0 3.5
Cash Equivalents 0.0 0.0
---------------------------------------------------------------
100.0% 100.0%
</TABLE>
Top Ten Equity Holdings
As of June 30, 2000
<TABLE>
<CAPTION>
Percent of
Net Assets
---------------------------------------------------------------
<S> <C>
1. Advanced Micro Devices, Inc. 1.45%
2. FedEx Corp. 1.10
3. Burlington Northern Santa Fe Corp 1.05
4. Allergan, Inc. 1.03
5. Electronic Data Systems Corp. 0.87
6. Gateway, Inc. 0.73
7. CIGNA Corp. 0.71
8. St. Jude Medical, Inc. 0.71
9. Alza Corp. 0.71
10. Baxter International, Inc. 0.70
---------------------------------------------------------------
</TABLE>
Currency Allocation
As of June 30, 2000
<TABLE>
<CAPTION>
Current
Benchmark Strategy
---------------------------------------------------------------
<S> <C> <C>
U.S. 66.0% 62.4%
Japan 9.0 1.0
U.K 5.0 0.0
Euro 12.0 23.0
Other Europe 2.5 2.5
Canada 1.3 1.3
Emerging Markets 3.0 3.0
Asia (Ex-Japan) 0.6 0.2
Australia/New Zealand 0.6 6.6
---------------------------------------------------------------
100.0% 100.0%
</TABLE>
Top Ten Fixed Income Holdings
As of June 30, 2000
<TABLE>
<CAPTION>
Percent of
Net Assets
---------------------------------------------------------------
<S> <C>
1. U.S. Treasury Inflation Indexed Note,
3.875%, due 04/15/29 8.60%
2. U.S. Treasury Inflation Indexed Note,
3.625%, due 04/15/28 4.59
3. Petroleum Geo-Services,
7.425%, due 03/20/02 1.19
4. Federal Home Loan Mortgage Corp.,
5.750%, due 03/15/09 0.77
5. U.S. Treasury Note,
5.625%, due 05/15/08 0.74
6. Government of Canada,
4.250%, due 12/01/21 0.74
7. Government of Japan,
4.600%, due 03/21/05 0.71
8. Government National Mortgage Association,
6.500%, due 01/15/29 0.69
9. Key Bank, NA,
6.675%, due 07/23/01 0.68
10. Government of France (OAT),
4.000%, due 10/25/09 0.67
---------------------------------------------------------------
</TABLE>
==================================================
9
<PAGE>
Global Fund
--------------------------------------------------------------------------------
[LOGO] UBS Industry Diversification
Investment Funds
As a Percent of Net Assets
As of June 30, 2000
--------------------------------------------------
<TABLE>
<S> <C>
U.S. EQUITIES
Energy......................................... 1.12%
Capital Investment
Capital Goods.......................... 1.51
Electronic Components.................. 2.63
Technology............................. 0.62
------
4.76
Basic Industries
Chemicals.............................. 1.04
Housing/Paper.......................... 2.31
Metals................................. 0.59
------
3.94
Computers
Software............................... 0.85
Systems................................ 1.59
------
2.44
Consumer
Autos/Durables......................... 0.77
Food/House Products.................... 0.16
Health: Drugs.......................... 2.08
Health: Non-Drugs...................... 3.04
Leisure/Tourism........................ 0.17
Retail/Apparel......................... 2.39
Non-Durables........................... 0.67
------
9.28
Financial
Banks.................................. 1.96
Non-Banks.............................. 2.49
------
4.45
Telecommunications
Equipment.............................. 0.05
Services............................... 1.82
------
1.87
Transportation................................. 2.43
Services/Misc.................................. 2.58
U.S. Small Capitalization Equity............... 2.78
Utilities...................................... 1.07
------
Total U.S. Equities............. 36.72*
GLOBAL (EX-U.S.) EQUITIES
Aerospace and Military................. 0.04
Airlines............................... 0.09
Appliances & Household................. 0.44
Autos/Durables......................... 0.40
Banking................................ 1.65
Beverages & Tobacco.................... 0.52
Broadcasting & Publishing.............. 0.63
Building Materials..................... 0.12
Business & Public Service.............. 0.26
Chemicals.............................. 0.45
Computer Software...................... 0.10
Consumer............................... 0.04
Data Processing........................ 0.45
Electric Components.................... 0.50
Electronics............................ 0.56
Energy................................. 0.70
Financial Services..................... 0.68
Food & House Products.................. 0.54
Forest Products........................ 0.06%
Health: Drugs.......................... 0.09
Health: Non-Drugs...................... 1.07
Industrial Components.................. 0.20
Insurance.............................. 0.81
Leisure & Tourism...................... 0.09
Machinery & Engineering................ 0.32
Merchandising.......................... 0.16
Metals-Non Ferrous..................... 0.13
Metals-Steel........................... 0.07
Multi-Industry......................... 0.02
Non-Durables........................... 0.01
Real Estate............................ 0.21
Recreation............................. 0.16
Telecommunications..................... 1.74
Transportation......................... 0.44
Utilities.............................. 0.72
Wholesale & International Trade........ 0.04
------
Total Global (Ex-U.S.) Equities. 14.51
EMERGING MARKETS EQUITIES...................... 3.39
------
TOTAL EQUITIES................................. 54.62
U.S. BONDS
U.S. Corporate Bonds
Airlines............................... 0.05
Banks.................................. 0.85
Building Materials..................... 0.08
Chemicals.............................. 0.04
Consumer............................... 0.20
Construction........................... 0.03
Energy................................. 1.50
Financial.............................. 0.79
Services/Miscellaneous................. 0.30
Technology............................. 0.16
Telecommunications..................... 0.42
------
Total U.S. Corporate Bonds....... 4.42
International Dollar Bonds
Foreign Banks.......................... 0.34
Foreign Energy......................... 0.15
------
Total International Dollar Bonds. 0.49
Asset-Backed................................... 0.35
Corporate Mortgage-Backed Securities........... 1.64
U.S. Government Agencies....................... 1.58
U.S. Government Mortgage-Backed Securities..... 1.89
U.S. Government Obligations.................... 14.83
------
Total U.S. Bonds................. 25.20*
HIGH YIELD BONDS............................... 5.46
GLOBAL (EX-U.S.) BONDS
Foreign Financial Bonds................ 0.78
Foreign Government Bonds............... 10.16
------
Total Global (Ex-U.S.) Bonds..... 10.94
EMERGING MARKETS BONDS......................... 3.84
SHORT-TERM INVESTMENTS......................... 17.45*
------
TOTAL INVESTMENTS................ 117.51
LIABILITIES, LESS CASH AND
OTHER ASSETS........................... (17.51)
------
NET ASSETS..................................... 100.00%
======
</TABLE>
--------------------------------------------------
* The Fund held a long position in U.S. Treasury
futures on June 30, 2000 which increased U.S.
Bond exposure from 25.20% to 40.21%.
The Fund held a short position in stock index
futures on June 30, 2000 which reduced U.S.
Equity exposure from 36.72% to 21.58%.
These adjustments result in a net increase in
the Fund's exposure to Short-Term Investments
from 17.45% to 17.58%.
==================================================
10
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
-------------------------------------------------------------------------------
Shares Value
-------- ------------
Equities -- 54.62%
U.S. Equities -- 36.72%
Advanced Micro Devices, Inc. (b)................ 55,200 $ 4,264,200
Allergan, Inc................................... 40,400 3,009,800
Alza Corp. (b).................................. 35,200 2,081,200
American Electric Power Co., Inc................ 43,560 1,290,465
American General Corp........................... 14,800 902,800
American Standard Companies, Inc. (b)........... 27,500 1,127,500
AmSouth Bancorp................................. 32,087 505,370
Aon Corp........................................ 45,047 1,399,272
Associates First Capital Corp., Class A......... 61,400 1,369,987
Baxter International, Inc....................... 29,300 2,060,156
Brinson U.S. Small Capitalization
Equity Fund (b)................................ 397,192 8,140,053
Burlington Northern Santa Fe Corp............... 133,700 3,066,744
Cardinal Health, Inc............................ 300 22,200
Carnival Corp., Class A......................... 25,700 501,150
CIGNA Corp...................................... 22,300 2,085,050
Circuit City Stores-Circuit City Group.......... 17,300 574,144
CMS Energy Corp................................. 24,600 544,275
CommScope, Inc. (b)............................. 3,900 159,900
Compaq Computer Corp............................ 67,700 1,730,581
Computer Sciences Corp. (b)..................... 2,900 216,594
Compuware Corp. (b)............................. 117,800 1,222,175
CVS Corp........................................ 13,500 540,000
Delhaize America, Inc........................... 1 18
Dell Computer Corp. (b)......................... 15,700 774,206
Eastman Chemical Co............................. 14,700 701,925
Electronic Data Systems Corp.................... 61,700 2,545,125
Emerson Electric Co............................. 33,300 2,010,487
Entergy Corp.................................... 36,300 986,906
Exxon Mobil Corp................................ 16,600 1,303,100
Federated Department Stores, Inc. (b)........... 20,000 675,000
FedEx Corp. (b)................................. 84,800 3,222,400
First Data Corp................................. 35,830 1,778,064
Fleet Boston Financial Corp..................... 42,515 1,445,510
Fort James Corp................................. 46,300 1,070,687
Gateway, Inc. (b)............................... 37,800 2,145,150
GATX Corp....................................... 10,700 363,800
Genzyme Corp. (b)............................... 17,600 1,046,100
GreenPoint Financial Corp....................... 51,300 961,875
Household International, Inc.................... 27,700 1,151,281
Illinois Tool Works, Inc........................ 35,000 1,995,000
IMC Global, Inc................................. 57,000 741,000
Johnson & Johnson Co............................ 18,900 1,925,437
Johnson Controls, Inc........................... 17,200 882,575
Kimberly-Clark Corp............................. 22,200 1,273,725
Kroger Co. (b).................................. 71,600 1,579,675
Lafarge Corp.................................... 21,300 447,300
Lear Corp. (b).................................. 38,400 768,000
Lexmark International Group, Inc. (b)........... 20,500 1,378,625
Lincoln National Corp........................... 26,900 971,762
Lyondell Chemical Co............................ 33,200 556,100
Martin Marietta Materials, Inc.................. 15,984 646,353
Masco Corp...................................... 96,300 1,739,419
Mattel, Inc..................................... 104,300 1,375,456
Mead Corp....................................... 25,100 633,775
Microsoft Corp. (b)............................. 16,000 1,280,000
Motorola, Inc................................... 23,230 $ 675,122
New York Times Co............................... 18,600 734,700
Newell Rubbermaid, Inc.......................... 54,300 1,398,225
Nextel Communications, Inc. (b)................. 29,700 1,817,269
Norfolk Southern Corp........................... 31,800 473,025
Owens-Illinois, Inc. (b)........................ 14,500 169,469
Peco Energy Co.................................. 39,900 1,608,469
Pentair, Inc.................................... 23,396 830,558
PepsiCo, Inc.................................... 33,500 1,488,656
PNC Bank Corp................................... 21,700 1,017,187
Praxair, Inc.................................... 28,400 1,063,225
Raytheon Co., Class B........................... 49,800 958,650
Sara Lee Corp................................... 24,900 480,881
SBC Communications, Inc......................... 44,100 1,907,325
Smurfit-Stone Container Corp. (b)............... 28,400 365,650
Southdown, Inc.................................. 18,436 1,064,679
St. Jude Medical, Inc. (b)...................... 45,400 2,082,725
Tellabs, Inc. (b)............................... 13,900 951,281
Texas Instruments, Inc.......................... 13,100 899,806
Tyson Foods, Inc., Class A...................... 33,698 294,858
Ultramar Diamond Shamrock Corp.................. 27,502 682,393
Unisys Corp. (b)................................ 29,600 431,050
United Health Group, Inc........................ 20,600 1,766,450
USG Corp........................................ 12,200 370,575
Viad Corp....................................... 26,200 713,950
W.W. Grainger, Inc.............................. 19,500 600,844
Wal-Mart Stores, Inc............................ 15,100 870,138
Watson Pharmaceutical Co. (b)................... 18,800 1,010,500
Wells Fargo and Co.............................. 46,600 1,805,750
Westvaco Corp................................... 17,400 431,738
Xerox Corp...................................... 21,000 435,750
XL Capital Ltd.................................. 10,400 562,900
York International Corp......................... 20,100 525,113
------------
Total U.S. Equities............................. 107,678,363
------------
Global (Ex-U.S.) Equities -- 14.51%
Australia -- 0.82%
Amcor Ltd....................................... 10,220 35,841
Amp Ltd......................................... 11,300 115,337
Boral Ltd. (b).................................. 19,100 24,082
Brambles Industries Ltd......................... 3,670 113,117
Broken Hill Proprietary Co., Ltd................ 13,910 164,943
CSR Ltd......................................... 11,070 30,839
Howard Smith Ltd................................ 9,300 45,563
Lend Lease Corp., Ltd........................... 7,932 101,476
National Australia Bank Ltd..................... 20,727 347,176
News Corp., Ltd................................. 23,489 324,364
News Corp., Ltd., Preferred..................... 8,936 108,188
Origin Energy Ltd. (b).......................... 19,100 18,463
Qantas Airways Ltd.............................. 12,937 26,254
QBE Insurance Group Ltd......................... 21,471 105,347
Rio Tinto Ltd................................... 4,645 77,025
Santos Ltd...................................... 20,490 62,618
Telstra Corp., Ltd.............................. 71,700 291,869
Westpac Banking Corp., Ltd...................... 36,928 267,167
WMC Ltd......................................... 10,640 47,739
Woolworth's Ltd................................. 26,660 98,681
------------
2,406,089
------------
================================================================================
11
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
-------------------------------------------------------------------------------
Shares Value
-------- ------------
Austria -- 0.01%
Austria Tabakwerke AG........................... 800 $ 29,755
------------
Belgium -- 0.14%
Electrabel S.A.................................. 740 183,654
Fortis B........................................ 8,027 234,533
------------
418,187
------------
Canada -- 0.45%
Agrium, Inc..................................... 9,040 77,484
Alcan Aluminum Ltd.............................. 2,520 78,234
Bank of Montreal................................ 1,020 43,025
Canadian National Railway Co.................... 4,920 143,114
Canadian Pacific Ltd............................ 5,573 144,431
Hudson's Bay Co................................. 10,210 108,185
Imperial Oil Ltd................................ 2,710 66,118
Magna Entertainment Corp. (b)................... 412 2,711
Magna International, Inc., Class A.............. 2,060 96,695
Nova Chemicals Corp............................. 5,904 123,921
Potash Corporation of Saskatchewan, Inc......... 1,060 57,947
Royal Bank of Canada............................ 2,970 151,837
Shaw Communications, Inc., Class B.............. 5,160 127,111
TransCanada Pipelines Ltd....................... 2,390 18,227
Westcoast Energy, Inc........................... 4,650 71,553
------------
1,310,593
------------
Denmark -- 0.07%
Tele Danmark A/S................................ 3,120 210,876
------------
Finland-- 0.28%
Metso Oyj....................................... 2,700 32,611
Nokia Oyj....................................... 7,340 376,080
Sampo Insurance Co., Ltd., Series A............. 6,000 244,443
UPM-Kymmene Corp................................ 6,270 156,271
------------
809,405
------------
France -- 1.22%
Air France (b).................................. 5,070 87,968
Air Liquide..................................... 1,656 216,779
Alcatel......................................... 3,750 246,959
Alcatel S.A. ADR................................ 3,693 245,585
Axa............................................. 866 136,974
Banque Nationale de Paris....................... 5,809 561,304
Cie de Saint Gobain............................. 2,117 287,356
CSF Thomson..................................... 3,000 118,655
Groupe Danone................................... 1,460 194,538
L'Oreal S.A..................................... 130 113,028
Rhone-Poulenc, Class A.......................... 3,074 225,278
Schneider S.A................................... 1,710 119,662
Societe Generale................................ 4,420 266,931
Suez Lyonnaise des Eaux S.A..................... 450 79,156
Total Fina S.A., Class B........................ 3,522 542,215
Vivendi......................................... 1,470 130,275
------------
3,572,663
------------
Germany -- 0.71%
Allianz AG...................................... 1,430 510,347
Bayer AG........................................ 9,680 372,097
Bayerische Motoren Werke AG..................... 4,600 140,665
Continental AG.................................. 6,250 105,446
Linde AG........................................ 2,800 113,536
Shares Value
-------- ------------
SAP AG.......................................... 810 $ 122,992
Siemens AG...................................... 1,750 263,039
Veba AG......................................... 9,289 449,673
------------
2,077,795
------------
Hong Kong-- 0.06%
Henderson Land Development Co., Ltd............. 39,000 171,603
------------
Ireland-- 0.09%
Bank of Ireland................................. 15,000 94,254
Eircom PLC...................................... 68,700 184,396
------------
278,650
------------
Italy-- 0.45%
Assicurazioni Generali.......................... 3,800 130,772
ENI Spa......................................... 52,000 301,575
ENI Spa ADR..................................... 3,070 178,636
La Rinascente Spa............................... 10,740 61,154
San Paolo-imi Spa............................... 10,511 187,309
Telecom Italia Mobile Spa....................... 29,000 297,453
Telecom Italia Spa.............................. 12,000 165,646
------------
1,322,545
------------
Japan-- 5.12%
Acom Co., Ltd................................... 2,900 244,488
Asahi Bank Ltd.................................. 23,000 96,952
Bank of Tokyo-Mitsubushi Ltd.................... 31,000 375,323
Benesse Corp.................................... 1,400 97,254
Bridgestone Corp................................ 8,000 169,746
Canon, Inc...................................... 12,000 598,837
Dai Nippon Printing Co., Ltd.................... 8,000 141,317
Dai-Ichi Kangyo Bank............................ 14,000 106,517
Daikin Industries Ltd........................... 5,000 116,488
Denso Corp...................................... 7,000 170,691
East Japan Railway Co........................... 43 250,347
Fanuc........................................... 2,300 234,554
Fuji Bank Ltd................................... 22,000 167,591
Fuji Photo Film Co., Ltd........................ 5,000 205,094
Fujitsu......................................... 21,000 728,415
Hitachi Ltd..................................... 20,000 289,211
Honda Motor Co.................................. 13,000 443,552
Hoya Corp....................................... 2,000 179,576
Ito Yokado Co., Ltd............................. 2,000 120,599
Kamigumi Co., Ltd............................... 24,000 126,799
Kao Corp........................................ 10,000 306,224
Kirin Brewery Co., Ltd.......................... 10,000 125,230
Kuraray Co., Ltd................................ 18,000 206,871
Kyocera Corp.................................... 400 68,012
Matsushita Electric Industrial Co............... 18,000 467,842
Mitsubishi Corp................................. 12,000 108,766
Mitsubishi Estate Co., Ltd...................... 28,000 330,268
Mitsubishi Trust and Banking Corp............... 9,000 70,006
Murata Manufacturing Co., Inc................... 1,000 143,850
NEC Corp........................................ 22,000 692,406
NGK Insulators.................................. 15,000 186,286
Nintendo Corp., Ltd............................. 2,700 472,605
Nippon Steel Co................................. 102,000 214,980
Nippon Telegraph & Telephone Corp............... 77 1,026,133
Nissin Food Products Co......................... 5,300 135,249
Nomura Securities Co., Ltd...................... 23,000 564,104
Omron Corp...................................... 3,000 81,660
Orix Corp....................................... 2,100 310,619
--------------------------------------------------------------------------------
12
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
---------------------------------------------------------------------------
Shares Value
---------- -----------
Rohm Co......................................... 400 $ 117,197
Sankyo Co., Ltd................................. 11,000 248,996
Santen Pharmaceutical Co., Ltd.................. 6,000 145,173
Secom Co., Ltd.................................. 4,000 292,992
Shin-Etsu Chemical Co., Ltd..................... 3,000 152,545
Softbank Corp................................... 1,200 163,319
Sony Corp....................................... 6,800 636,265
Sumitomo Bank................................... 22,000 270,309
Sumitomo Chemical Co............................ 39,000 235,168
Sumitomo Electric Industries.................... 8,000 137,460
Takeda Chemical Industries...................... 6,000 394,688
Takefuji Corp................................... 1,200 145,286
TDK Corp........................................ 3,000 432,116
Tokio Marine & Fire Insurance Co................ 14,000 161,958
Tokyo Electric Power............................ 6,000 146,590
Tokyo Gas Co., Ltd.............................. 60,000 168,990
Toyoda Automatic Loom Works..................... 2,000 43,382
Toyota Motor Corp............................... 11,000 502,150
Yamanouchi Pharmaceutical Co., Ltd.............. 2,000 109,447
Yamato Transport Co., Ltd....................... 6,000 149,426
-----------
15,027,919
-----------
Netherlands -- 0.68%
ABN-AMRO Holdings NV............................ 6,594 162,197
Aegon NV........................................ 5,554 198,428
Elsevier NV..................................... 24,970 303,750
Heineken NV..................................... 7,700 470,552
ING Groep NV.................................... 4,108 278,805
Koninklijke Philips Electronics NV.............. 2,600 123,122
Royal KPN NV.................................... 600 26,946
TNT Post Group NV............................... 4,242 114,875
Wolters Kluwer NV............................... 12,213 326,635
-----------
2,005,310
-----------
New Zealand -- 0.05%
Auckland International Airport Ltd.............. 17,350 20,584
Carter Holt Harvey Ltd.......................... 26,940 23,464
Lion Nathan Ltd................................. 20,220 45,218
Telecom Corp. of New Zealand Ltd................ 16,410 57,558
-----------
146,824
-----------
Portugal -- 0.19%
Brisa-Auto Estradas de Portugal S.A............. 14,800 127,969
Electricidade de Portugal S.A................... 6,900 125,804
Portugal Telecom................................ 26,000 293,101
-----------
546,874
-----------
Singapore -- 0.10%
DBS Group Holdings Ltd.......................... 6,000 77,039
SIA Engineering Co., Ltd. (b)................... 15,000 16,830
Singapore Airport Terminal Services Ltd. (b).... 5,000 6,073
United Overseas Bank Ltd........................ 30,116 196,825
-----------
296,767
-----------
Spain -- 0.25%
Banco Popular Espanol S.A....................... 3,643 113,147
Banco Santander Central Hispano S.A............. 17,843 189,002
Endesa S.A...................................... 5,757 111,973
Tabacalera S.A.................................. 20,200 311,562
-----------
725,684
-----------
Sweden -- 0.41%
Electrolux AB, B Shares......................... 11,510 $ 179,126
Ericsson, B Shares.............................. 23,290 463,357
Investor AB, B Shares........................... 10,100 138,758
Nordic Baltic Holdings AB....................... 38,636 292,931
Swedish Match AB................................ 36,780 114,060
-----------
1,188,232
-----------
Switzerland -- 0.42%
Givaudan (b).................................... 24 7,328
Nestle S.A. (Reg.).............................. 155 311,220
New ABB Ltd..................................... 1,274 152,972
Novartis AG (Reg.).............................. 240 381,379
Roche Holding AG (Gen.)......................... 21 205,080
Swisscom AG (Reg.).............................. 470 163,305
-----------
1,221,284
-----------
United Kingdom -- 2.99%
Allied Zurich PLC............................... 13,052 154,419
AstraZeneca PLC................................. 4,002 186,907
BP Amoco PLC.................................... 65,946 632,954
British Airways PLC............................. 25,000 143,820
British Telecommunications PLC.................. 37,000 478,359
Charter PLC..................................... 28,676 165,401
De Vere Group PLC............................... 8,899 41,494
Diageo PLC...................................... 28,209 253,243
FKI PLC......................................... 33,040 117,545
Glaxo Wellcome PLC.............................. 32,260 941,110
House of Fraser PLC............................. 30,780 22,460
HSBC Holdings PLC............................... 10,500 120,093
Kelda Group PLC................................. 35,080 171,536
Lloyds TSB Group PLC............................ 41,969 396,467
Marconi PLC..................................... 41,360 538,485
Marks & Spencer PLC............................. 33,060 116,239
National Power PLC.............................. 31,500 200,765
Nycomed Amersham PLC............................ 22,844 226,866
Peninsular & Oriental Steam Navigation Co....... 12,040 103,166
Powergen PLC.................................... 18,000 153,963
Prudential Corp. PLC............................ 17,040 249,712
Reckitt & Benckiser PLC......................... 10,500 117,629
Reed International PLC.......................... 26,010 226,414
RJB Mining PLC.................................. 26,590 22,542
Royal & Sun Alliance Insurance Group PLC........ 49,884 323,976
Royal Bank of Scotland Group PLC................ 23,000 385,103
Scottish & Newcastle PLC........................ 20,000 163,349
Scottish & Southern Energy PLC.................. 26,380 242,015
Shell Transport & Trading Co.................... 27,000 225,426
SmithKline Beecham PLC.......................... 11,000 144,047
Tesco PLC....................................... 66,190 205,920
Thames Water PLC................................ 8,497 109,983
Trinity Mirror PLC.............................. 15,815 141,977
Unilever PLC.................................... 40,000 242,222
United News & Media PLC......................... 19,990 287,495
Vodafone Group PLC.............................. 129,957 525,297
-----------
8,778,399
-----------
Total Global (Ex-U.S.) Equities................. 42,545,454
-----------
Emerging Markets Equities -- 3.39%
Brinson Emerging Markets Equity Fund (b)........ 925,032 9,943,169
-----------
Total Equities (Cost $159,505,128).............. 160,166,986
-----------
===========================================================================
13
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Face
Amount Value
---------- ----------
Bonds -- 45.44%
U.S. Bonds -- 25.20%
U.S. Corporate Bonds -- 4.42%
Avon Products, Inc., 7.150%, due 11/15/09......... $ 85,000 $ 81,401
Bank of America Corp.,
7.800%, due 02/15/10........................... 500,000 497,355
Bombardier Capital, Inc. MTN, 144A,
7.300%, due 12/15/02........................... 565,000 555,651
Burlington Resources, 7.375%,
due 03/01/29................................... 300,000 279,225
Capital One Bank, BKNT,
8.250%, due 06/15/05........................... 150,000 149,703
Cendant Corp., 7.750%, due 12/01/03............... 640,000 618,070
Centaur Funding Corp., Class B, 144A,
9.080%, due 04/21/20 (b)....................... 250 248,203
Centaur Funding Corp., Class C, 144A,
0.000%, due 04/21/20 (b)....................... 1,430 220,756
Centex Corp., 9.750%, due 06/15/05................ 85,000 84,540
Key Bank, NA, 6.675%, due 07/23/01................ 2,000,000 2,001,070
Lowe's Cos., Inc., 8.250%, due 06/01/10........... 220,000 224,794
Morgan Stanley Dean Witter, 7.750%,
due 06/15/05................................... 300,000 301,564
Newcourt Credit Group, Inc., 6.875%,
due 02/16/05................................... 600,000 574,524
PanAmSat Corp.
6.000%, due 01/15/03........................... 225,000 213,930
6.375%, due 01/15/08........................... 500,000 445,399
Petroleum Geo-Services, 7.425%,
due 03/20/02................................... 3,500,000 3,495,604
Pharmacia Corp., 6.600%, due 12/01/28............. 545,000 480,560
Sempra Energy, 7.950%, due 03/01/10............... 510,000 514,321
Service Corp., International,
6.000%, due 12/15/05........................... 500,000 270,000
Time Warner Cos., Inc.,
7.570%, due 02/01/24........................... 540,000 510,493
U.S. Airways, Inc., 1999 1A EETC,
8.360%, due 07/20/20........................... 160,000 158,533
Valero Energy, 8.375%, due 06/15/05............... 150,000 152,341
Verizon Communications,
8.000%, due 10/15/29........................... 78,000 78,092
Washington Mutual Financial Corp.,
8.250%, due 06/15/05........................... 275,000 277,544
WorldCom, Inc., 8.250%, due 05/15/10.............. 500,000 511,778
-------------
12,945,451
-------------
Asset-Backed Securities -- 0.35%
First Bank Corporate Card Master Trust,
97-1, Class A, 6.400%, due 02/15/03............ 1,055,000 1,040,852
-------------
Corporate Mortgage-
Backed Securities -- 1.64%
Asset Securitization Corp., 96-D, Class A1B,
7.210%, due 10/13/26........................... 1,000,000 993,140
DLJ Commercial Mortgage Corp., 99-CG2,
Class A1B, 7.300%, due 06/10/32................ 485,000 477,697
Norwest Asset Securities Corp., 96-2,
Class A9, 7.000%, due 09/25/11................. 435,000 420,058
Prudential Home Mortgage Securities, 94-3,
Class A10, 6.500%, due 02/25/24................ 730,000 703,450
Residential Asset Securitization Trust
96-A3, Class A11, 7.500%, due 07/25/11......... $ 592,550 $ 589,966
97-A10, Class A5, 7.250%, due 12/25/27......... 1,080,000 1,036,605
97-A7, Class A1, 7.500%, due 09/25/27.......... 73,220 72,956
97-A11, Class A2, 7.000%, due 01/25/28......... 2,253 2,243
Structured Asset Securities Corp., 98-RF1,
Class A, 8.713%, due 04/15/27.................. 465,205 472,183
Thrift Financing Corp., Class A4
11.250%, due 01/01/16.......................... 45,036 46,211
-------------
4,814,509
-------------
International Dollar Bonds -- 0.49%
Banco Santiago S.A., 7.000%,
due 07/18/07................................... 650,000 578,640
Ras Laffan Liquified Natural Gas Co., Ltd.,
144A, 8.294%, due 03/15/14..................... 500,000 461,875
Royal Bank of Scotland, 8.817%,
due 03/31/05................................... 385,000 396,610
-------------
1,437,125
-------------
U.S. Government Mortgage-
Backed Securities -- 1.89%
Fannie Mae Whole Loan, 95-W3,
Class A, 9.000%, due 04/25/25................... 16,375 16,860
Federal Home Loan Mortgage Corp., Gold
5.500%, due 02/01/07............................ 612,268 573,835
8.000%, due 11/01/22............................ 60,818 61,474
9.000%, due 07/01/30, TBA....................... 425,000 438,414
Federal Home Loan Mortgage Corp.
194, Class PO, due 04/01/28.................... 680,468 429,263
Federal National Mortgage Association
8.000%, due 02/01/13........................... 433,496 438,003
8.000%, due 07/01/30, TBA...................... 600,000 602,250
Government National Mortgage Association
6.500%, due 01/15/29........................... 2,141,194 2,031,927
7.000%, due 06/15/27........................... 486,467 473,129
8.000%, due 08/15/22........................... 264,092 268,221
8.000%, due 11/15/22........................... 191,581 194,655
9.000%, due 11/15/04........................... 8,445 8,762
10.000%, due 05/15/01.......................... 423 449
-------------
5,537,242
-------------
U.S. Government Agencies -- 1.58%
Federal Home Loan Mortgage Corp.
5.750%, due 03/15/09........................... 2,500,000 2,269,865
Federal National Mortgage Association
5.250%, due 01/15/09........................... 60,000 52,653
6.000%, due 10/01/14........................... 1,006,020 951,674
6.500%, due 03/01/19........................... 270,506 258,518
7.000%, due 10/01/28........................... 905,496 874,162
7.000%, due 03/01/29........................... 246,315 237,890
-------------
4,644,762
-------------
================================================================================
14
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Face
Amount Value
------------ ------------
U.S. Government Obligations -- 14.83%
U.S. Treasury Bond, 8.000%, due 11/15/21 $ 1,160,000 $ 1,399,975
U.S. Treasury Inflation Indexed Note
3.625%, due 04/15/28....................... 13,325,000 13,451,798
3.875%, due 04/15/29....................... 24,270,000 25,203,220
U.S. Treasury Note
5.625%, due 05/15/08....................... 2,260,000 2,179,488
5.750%, due 08/15/03....................... 560,000 550,375
6.625%, due 02/15/27....................... 80,000 84,825
7.000%, due 07/15/06....................... 580,000 600,844
------------
43,470,525
------------
Total U.S. Bonds.............................. 73,890,466
------------
Shares
----------
High Yield Bonds -- 5.46%
Brinson High Yield Fund (b)................... 1,175,251 16,003,393
------------
Face
Amount
----------
Global (Ex-U.S.) Bonds -- 10.94%
Australia -- 0.43%
Queensland Treasury Corp., Global Notes
6.500%, due 06/14/05....................AUD 1,500,000 904,374
8.000%, due 09/14/07....................... 530,000 347,274
------------
1,251,648
------------
Canada -- 1.12%
Government of Canada, Real Return Bond
4.250%, due 12/01/21....................CAD 2,650,000 2,174,978
Government of Canada
6.000%, due 06/01/08....................... 550,000 373,066
7.000%, due 12/01/06....................... 1,050,000 747,040
------------
3,295,084
------------
Denmark -- 0.99%
Depfa Pfandbrief Bank,
5.750%, due 03/04/09....................DKK 930,000 888,553
Kingdom of Denmark
7.000%, due 12/15/04....................... 5,480,000 736,384
7.000%, due 11/10/24....................... 2,350,000 346,563
8.000%, due 03/15/06....................... 3,000,000 425,307
9.000%, due 11/15/00....................... 3,800,000 493,056
------------
2,889,863
------------
France -- 1.62%
Government of France (OAT)
4.000%, due 10/25/09....................EUR 2,285,000 1,976,866
5.500%, due 04/25/29....................... 330,000 311,814
8.500%, due 12/26/12....................... 800,000 977,003
9.500%, due 01/25/01....................... 1,500,000 1,473,090
------------
4,738,773
------------
Germany -- 0.80%
Bundesrepublik Deutschland
6.250%, due 04/26/06....................... 625,000 630,555
6.250%, due 01/04/24....................... 320,000 334,477
8.375%, due 05/21/01....................... 1,185,000 1,168,791
DePfa Deutsche Pfandbriefbank AG,
4.750%, due 03/20/03....................... 240,000 226,647
------------
2,360,470
------------
Israel -- 0.17%
State of Israel, 7.750%, due 03/15/10 ILS.... 500,000 $ 493,671
------------
Italy -- 1.23%
Buoni Poliennali Del Tes
3.250%, due 04/15/04....................EUR 1,100,000 981,223
5.000%, due 05/01/08....................... 920,000 853,710
6.750%, due 07/01/07....................... 1,250,000 1,273,780
12.000%, due 09/01/02...................... 470,000 511,308
------------
3,620,021
------------
Japan -- 2.03%
Government of Japan
2.500%, due 03/20/20....................JPY 18,000,000 180,718
3.000%, due 09/20/05....................... 178,500,000 1,844,300
3.100%, due 03/20/06....................... 175,800,000 1,829,257
4.600%, due 03/21/05....................... 189,900,000 2,087,236
------------
5,941,511
------------
Netherlands -- 0.43%
Government of Netherlands
5.500%, due 07/15/10....................EUR 900,000 871,241
7.750%, due 03/01/05....................... 380,000 401,226
------------
1,272,467
------------
Spain -- 0.76%
Government of Spain
3.250%, due 01/31/05....................... 2,070,000 1,820,653
6.150%, due 01/31/13....................... 400,001 400,200
------------
2,220,853
------------
Sweden -- 0.51%
Government of Sweden
6.750%, due 05/05/14....................SEK 4,400,000 571,873
10.250%, due 05/05/03...................... 7,200,000 926,987
------------
1,498,860
------------
United Kingdom -- 0.85%
Halifax PLC, Series EMTN, 8.750%,
due 07/10/06.............................GBP 720,000 1,175,834
U.K. Treasury, 5.750%, due 12/07/09........... 840,000 1,324,569
------------
2,500,403
------------
Total Global (Ex-U.S.) Bonds.................. 32,083,624
------------
Shares
--------
Emerging Markets Bonds -- 3.84%
Brinson Emerging Markets Debt Fund (b)........ 444,026 11,243,315
------------
Total Bonds (Cost $130,749,445)............... 133,220,798
------------
Short-Term Investments -- 17.45%
Investment Companies -- 0.63%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund....................... 1,830,859 1,830,859
------------
================================================================================
15
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Face
Amount Value
-------------- -------------
U.S. Corporate Bonds -- 9.57%
Centex Corp., Series B, MTN,
6.840%, due 04/02/01....................... $ 5,000,000 $ 4,997,755
Dominion Resources, Inc.
7.026%, due 01/26/01....................... 2,100,000 2,099,937
GATX Capital Corp., 6.500%, due 11/01/00...... 1,500,000 1,495,236
GATX Capital Corp., Series F, MTN
7.4175%, due 04/25/01...................... 1,000,000 1,000,425
Hertz Corp., 6.625%, due 07/15/00............. 2,500,000 2,499,557
Kroger Co., 7.661%, due 10/01/00.............. 5,000,000 4,999,000
NorAm Energy Corp., 7.500%, due 08/01/00...... 2,000,000 2,000,228
Raytheon Co., 6.300%, due 08/15/00............ 3,000,000 2,996,625
Safeway, Inc., 5.750%, due 11/15/00........... 4,000,000 3,980,204
Supervalue Stores, Inc., Series A, MTN
6.500%, due 10/06/00........................ 2,000,000 1,995,026
-------------
28,063,993
-------------
U.S. Government Obligations -- 1.08%
U.S. Treasury Bill, due 08/17/00.............. 3,200,000 3,177,520
-------------
Commercial Paper -- 6.17%
Boston Scientific Corp.,
7.350%, due 07/05/00....................... 2,500,000 2,497,958
Case Credit Corp.
7.250%, due 07/19/00....................... 2,000,000 1,992,750
7.400%, due 07/03/00....................... 3,900,000 3,898,397
Crown Cork & Seal, 7.150%, due 07/20/00....... 2,438,000 2,428,800
FMC Corp., 7.330%, due 07/03/00............... 2,500,000 2,498,982
Phillips Petroleum, 7.150%, due 07/05/00...... 2,500,000 2,498,014
Southern Industries, 7.200%, due 07/06/00..... 2,280,000 2,277,720
-------------
18,092,621
-------------
Total Short-Term Investments
(Cost $51,163,762).......................... 51,164,993
-------------
Total Investments
(Cost $341,418,335) -- 117.51% (a)........... 344,552,777
Liabilities, less cash and
other assets -- (17.51%)..................... (51,338,578)
-------------
Net Assets -- 100%............................. $ 293,214,199
=============
See accompanying notes to schedule of investments.
================================================================================
16
<PAGE>
Global Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $345,071,906; and net
unrealized depreciation consisted of:
Gross unrealized appreciation........................... $ 22,527,796
Gross unrealized depreciation........................... (23,046,925)
------------
Net unrealized depreciation..................... $ (519,129)
============
(b) Non-income producing security
FRN: Floating Rate Note-- The rate disclosed is that in effect at June 30,
2000.
MTN: Medium Term Note
TBA: Security is subject to delayed delivery.
144A: Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At June 30, 2000, the value of
these securities amounted to $1,486,485 or 0.51% of net assets.
Resettable Perpetual Preferred: A bond with either no maturity date or a
maturity date that is so far in the future that the bond will pay interest
indefinitely.
The issuer generally retains the right to call such a bond.
FORWARD FOREIGN CURRENCY CONTRACTS
The Global Fund had the following open forward foreign currency contracts as of
June 30, 2000:
<TABLE>
<CAPTION>
Settlement Local Current Unrealized
Date Currency Value Gain/(Loss)
---------- -------- --------- -------------
<S> <C> <C> <C> <C>
Forward Foreign Currency Buy Contracts
Australian Dollar........................... 08/08/00 29,200,000 $ 17,542,911 $ (979,839)
Euro........................................ 08/08/00 52,600,000 50,546,789 (991,373)
Japanese Yen................................ 08/08/00 1,586,000,000 15,098,035 224,980
Swedish Krona............................... 08/08/00 117,500,000 13,436,895 (112,559)
Swiss Franc................................. 08/08/00 4,600,000 2,839,471 315
Forward Foreign Currency Sale Contracts
Australian Dollar........................... 08/08/00 2,700,000 1,622,118 7,332
British Pound............................... 08/08/00 7,300,000 11,059,601 587,969
Danish Krone................................ 08/08/00 12,000,000 1,544,722 44,725
Euro........................................ 08/08/00 10,700,000 10,282,331 44,511
Japanese Yen................................ 08/08/00 3,370,000,000 32,080,945 157,503
Swedish Krona............................... 08/08/00 117,500,000 13,436,895 326,561
---------
Total............................... $ (689,875)
=========
</TABLE>
FUTURES CONTRACTS
The Global Fund had the following open futures contracts as of June 30, 2000:
<TABLE>
<CAPTION>
Expiration Cost/ Current Unrealized
Date Proceeds Value Gain/Loss
-------------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Interest Rate Futures Buy Contracts
5 year U.S. Treasury Notes, 300 contracts..................... September 2000 $29,080,788 $29,704,686 $ 623,898
10 year U.S. Treasury Notes, 88 contracts..................... September 2000 8,545,022 8,666,625 121,603
30 year U.S. Treasury Bonds, 58 contracts..................... September 2000 5,555,992 5,645,937 89,945
Index Futures Sale Contracts
Standard & Poor's 500, 121 contracts.......................... September 2000 44,388,003 44,410,025 (22,022)
----------
Total................................................. $ 813,424
==========
</TABLE>
The market value of investments pledged to cover margin requirements for
the open futures positions at June 30, 2000 was $3,177,520.
--------------------------------------------------------------------------------
See accompany notes to financial statements. 17
<PAGE>
Global Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS The UBS Investment Fund - Global Equity has
Investment Funds provided an annualized return of 11.77% since its
inception on July 31, 1995. Over the same period,
the annualized return of the benchmark, the MSCI
World Equity (Free) Index, has been 16.51%. The
Fund's performance was achieved with a volatility
of 11.89%, significantly less risk than its
benchmark's volatility of 13.84%. For the calendar
year-to-date, the Fund returned -2.90%,
underperforming the benchmark return of -2.49%.
During the second quarter, returns were dominated
by "old economy" stocks, and the Fund outperformed
the benchmark by a wide margin of 650 basis
points.
Trends of the last two years show a remarkable
divergence between the performance of "new
economy" and "old economy" sectors. In contrast to
recent bull markets, the current price
appreciation has been limited to narrow groups of
technology, media and telecommunications (TMT)
stocks. This phenomenon is most easily
recognizable in the U.S. where it began, but has
also proliferated into all developed equity
markets. In the first quarter of 2000, the Fund's
lag in performance was most directly attributable
to security selection in the U.S. market, where we
hold significant underweights to TMT sectors. Our
strategy began to pay off in the second quarter as
investors began to question whether TMT companies
can grow and increase earnings fast enough and for
long enough to justify their high valuations.
While we are skeptical of inflated equity
investment expectations, we understand and
appreciate the role of new and emerging technology
in business. Our analysis is focused on investing
in companies with solid fundamentals as well as
promising uses for new technologies. Specifically,
we see opportunities in some "old economy" sectors
such as utilities, diversified financials, and
food, beverages and tobacco where some companies
are leveraging their skills, assets and
competitive positions to take advantage of the
Internet.
With respect to countries, we continue to
overweight Japan and underweight the U.S. However,
we have reduced the underweight to the U.S. from -
8.95 at the end of the first quarter to -1.98 at
the end of the second quarter. We have also
reduced our Japanese overweight from 6.09 at the
end of the first quarter to 0.52 at the end of the
second quarter. The increased weight in the U.S.
is allocated to sectors we estimate to be
undervalued including materials, transportation
and healthcare equipment/services.
==================================================
18
<PAGE>
Global Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS Total Return
--------------------------------------------------
Investment Funds
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 months 1 year 3 years Inception*
ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UBS Investment Fund - Global Equity - 2.90% 1.96% 6.41% 11.77%
--------------------------------------------------------------------------------
MSCI World Equity (Free) Index - 2.49 12.39 15.13 16.51
--------------------------------------------------------------------------------
</TABLE>
* Inception date of the UBS Investment Fund-
Global Equity is 7/31/95.
Total return includes reinvestment of all capital
gain and income distributions.
All total returns in excess of 1 year are average
annualized returns.
--------------------------------------------------
Illustration of an Assumed Investment of $10,000
--------------------------------------------------
This chart shows the growth in the value of an
investment in the UBS Investment Fund - Global
Equity and the MSCI World Equity (Free) Index if
you had invested $10,000 on July 31, 1995, and had
reinvested all your income dividends and capital
gain distributions through June 30, 2000. No
adjustment has been made for any income taxes
payable by shareholders on income dividends and
capital gain distributions. Past performance is no
guarantee of future results. Share price and
return will vary with market conditions; investors
may realize a gain or loss upon redemption.
UBS Investment Fund - Global Equity
vs. MSCI World Equity (Free) Index
Wealth Value with Dividends Reinvested
[GRAPH]
<TABLE>
<CAPTION>
Label A B
-----------------------------------------------------
Label Date UBS Global Fund MSCI Benchmark
-----------------------------------------------------
<S> <C> <C> <C>
1 7/31/95 10,000 10,000
-----------------------------------------------------
2 8/31/95 10,155 9,777
-----------------------------------------------------
3 9/30/95 10,329 10,066
-----------------------------------------------------
4 10/31/95 10,300 9,909
-----------------------------------------------------
5 11/30/95 10,667 10,255
-----------------------------------------------------
6 12/31/95 10,993 10,556
-----------------------------------------------------
7 1/31/96 11,312 10,753
-----------------------------------------------------
8 2/29/96 11,354 10,818
-----------------------------------------------------
9 3/31/96 11,539 10,998
-----------------------------------------------------
10 4/30/96 11,858 11,256
-----------------------------------------------------
11 5/31/96 11,889 11,265
-----------------------------------------------------
12 6/30/96 11,925 11,325
-----------------------------------------------------
13 7/31/96 11,544 10,925
-----------------------------------------------------
14 8/31/96 11,739 11,054
-----------------------------------------------------
15 9/30/96 12,110 11,488
-----------------------------------------------------
16 10/31/96 12,152 11,567
-----------------------------------------------------
17 11/30/96 12,760 12,219
-----------------------------------------------------
18 12/31/96 12,787 12,025
-----------------------------------------------------
19 1/31/97 12,899 12,172
-----------------------------------------------------
20 2/28/97 13,067 12,311
-----------------------------------------------------
21 3/31/97 13,011 12,064
-----------------------------------------------------
22 4/30/97 13,067 12,460
-----------------------------------------------------
23 5/31/97 13,832 13,231
-----------------------------------------------------
24 6/30/97 14,351 13,889
-----------------------------------------------------
25 7/31/97 14,813 14,531
-----------------------------------------------------
26 8/31/97 14,125 13,547
-----------------------------------------------------
27 9/30/97 14,711 14,284
-----------------------------------------------------
28 10/31/97 13,900 13,534
-----------------------------------------------------
29 11/30/97 13,888 13,771
-----------------------------------------------------
30 12/31/97 14,048 13,939
-----------------------------------------------------
31 1/31/98 14,271 14,330
-----------------------------------------------------
32 2/28/98 15,138 15,299
-----------------------------------------------------
33 3/31/98 15,757 15,943
-----------------------------------------------------
34 4/30/98 15,720 16,099
-----------------------------------------------------
35 5/31/98 15,658 15,704
-----------------------------------------------------
36 6/30/98 15,520 16,276
-----------------------------------------------------
37 7/31/98 15,433 16,251
-----------------------------------------------------
38 8/31/98 13,734 14,085
-----------------------------------------------------
39 9/30/98 13,932 14,335
-----------------------------------------------------
40 10/31/98 14,850 15,634
-----------------------------------------------------
41 11/30/98 15,408 16,565
-----------------------------------------------------
42 12/31/98 15,897 17,370
-----------------------------------------------------
43 1/31/99 15,897 17,752
-----------------------------------------------------
44 2/28/99 15,404 17,280
-----------------------------------------------------
45 3/31/99 15,885 17,997
-----------------------------------------------------
46 4/30/99 16,960 18,709
-----------------------------------------------------
47 5/31/99 16,340 18,020
-----------------------------------------------------
48 6/30/99 16,960 18,858
-----------------------------------------------------
49 7/31/99 16,884 18,802
-----------------------------------------------------
50 8/31/99 16,605 18,767
-----------------------------------------------------
51 9/30/99 16,137 18,591
-----------------------------------------------------
52 10/31/99 16,340 19,556
-----------------------------------------------------
53 11/30/99 16,745 20,106
-----------------------------------------------------
54 12/31/99 17,809 21,734
-----------------------------------------------------
55 1/31/2000 16,582 20,491
-----------------------------------------------------
56 2/29/2000 16,248 20,544
-----------------------------------------------------
57 3/31/2000 16,791 21,966
-----------------------------------------------------
58 4/30/2000 16,610 21,036
-----------------------------------------------------
59 5/31/2000 16,736 20,504
-----------------------------------------------------
60 6/30/2000 17,285 21,194
-----------------------------------------------------
</TABLE>
Fund returns are net of all fees and costs, while
the Index returns are based solely on market
returns without deduction for fees or transaction
costs for rebalancing.
===================================================
19
<PAGE>
Global Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS
Investment Funds Market Allocation
As of June 30, 2000
Current
Benchmark Strategy
--------------------------------------
U.S. 49.3% 46.8%
Australia 1.3 3.2
Austria 0.1 0.0
Belgium 0.4 0.8
Canada 2.6 1.5
Denmark 0.4 0.3
Finland 1.5 1.7
France 5.5 5.5
Germany 4.1 1.5
Hong Kong 1.0 0.6
Ireland 0.2 0.6
Italy 2.1 1.5
Japan 12.9 13.6
Netherlands 2.6 3.6
New Zealand 0.1 0.0
Norway 0.2 0.0
Portugual 0.2 0.2
Singapore 0.5 0.6
Spain 1.3 2.7
Sweden 1.5 2.2
Switzerland 2.8 1.8
United Kingdom 9.4 11.3
Cash Reserves 0.0 0.0
--------------------------------------
100.0% 100.0%
Top Ten U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
--------------------------------------
1. Microsoft Corp. 2.00%
2. Johnson & Johnson Co. 1.57
3. PepsiCo, Inc. 1.45
4. Alza Corp. 1.38
5. FedEx Corp. 1.34
6. Advanced Micro Devices, Inc. 1.33
7. Texas Instruments, Inc. 1.31
8. CIGNA Corp. 1.29
9. SBC Communications, Inc. 1.25
10. Wells Fargo and Co. 1.23
--------------------------------------
Currency Allocation
As of June 30, 2000
Current
Benchmark Strategy
--------------------------------------
U.S. 49.3% 44.3%
Australia 1.3 9.2
Canada 2.6 2.6
Denmark 0.4 0.4
Euro 18.0 31.9
Hong Kong 1.0 0.0
Japan 12.9 5.0
New Zealand 0.1 0.2
Norway 0.2 0.2
Singapore 0.5 0.5
Sweden 1.5 1.5
Switzerland 2.8 2.8
United Kingdom 9.4 1.4
--------------------------------------
100.0% 100.0%
Top Ten Global (Ex-U.S.) Equity Holdings
As of June 30, 2000
Percent of
Net Assets
-------------------------------------------------
1. Banque Nationale de Paris 1.21%
2. Canon, Inc. 1.09
3. Bayer AG 1.02
4. Diageo PLC 1.01
5. Heineken NV 1.01
6. Nippon Telegraph & Telephone Corp. 0.95
7. Honda Motor Co. 0.94
8. National Australia Bank Ltd., Preferred 0.90
9. Kao Corp. 0.89
10. Nycomed Amersham PLC 0.85
-------------------------------------------------
=================================================
20
<PAGE>
Global Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS
Industry Diversification
Imvestment Funds
As a Percent of Net Assets
As of June 30, 2000
-------------------------------------------------------
U.S. EQUITIES
Energy.............................. 1.67%
Capital Investment
Capital Goods....................... 0.40
Electronic Components............... 2.23
Technology.......................... 1.64
------
4.27
Basic Industries
Chemicals........................... 1.95
Housing/Paper....................... 2.22
Metals.............................. 1.75
------
5.92
Computers
Software............................ 2.00
Systems............................. 0.69
------
2.69
Consumer
Autos/Durables...................... 0.74
Health: Drugs....................... 3.63
Health: Non-Drugs................... 3.78
Non-Durables........................ 1.45
Retail/Apparel...................... 2.77
------
12.37
Financial
Banks............................... 2.21
Non-Banks........................... 2.41
------
4.62
Telecommunications Services 3.22
Transportation........................ 2.55
Services/Misc......................... 3.77
Utilities............................. 1.59
------
Total U.S. Equities........... 42.67
Global (Ex-U.S.) EQUITIES
Aerospace & Military.................. 0.44%
Appliances & Household................ 1.10
Autos/Durables........................ 0.94
Banking............................... 8.06
Beverages and Tobacco................. 3.03
Broadcasting & Publishing............. 3.26
Building Materials.................... 0.17
Business & Public Service............. 1.47
Chemicals............................. 2.71
Consumer.............................. 0.01
Data Processing....................... 1.09
Electric Components................... 2.07
Electronics........................... 0.72
Energy................................ 1.15
Financial Services.................... 2.29
Food & House Products................. 3.02
Forest Products....................... 0.67
Health & Personal Care................ 3.16
Industrial Components................. 0.41
Insurance............................. 2.36
Machinery & Engineering............... 0.49
Merchandising......................... 0.87
Multi-Industry........................ 0.28
Non-Ferrous Metals.................... 0.25
Real Estate........................... 1.06
Recreation............................ 1.06
Textile & Apparel..................... 0.21
Telecommunications.................... 4.98
Transportation........................ 0.98
Utilities............................. 2.86
------
Total Global (Ex-U.S.) Equities... 51.17
SHORT-TERM INVESTMENTS................ 3.56
------
TOTAL INVESTMENTS................. 97.40
CASH AND OTHER ASSETS,
LESS LIABILITIES.................... 2.60
------
NET ASSETS............................ 100.00%
======
===============================================
21
<PAGE>
Global Equity Fund -- Schedule of Investments
June 30, 2000
-------------------------------------------------------------------------
Shares Value
------ -----------
Equities -- 93.84%
U.S. Equities -- 42.67%
Advanced Micro Devices, Inc. (b)........... 11,900 $ 919,275
Allergan, Inc.............................. 7,500 558,750
Alza Corp. (b)............................. 16,100 951,912
American Electric Power Co., Inc........... 15,480 458,595
Baxter International, Inc.................. 7,800 548,437
Bristol-Myers Squibb Co.................... 7,800 454,350
Burlington Northern Santa Fe Corp.......... 36,300 832,631
CIGNA Corp................................. 9,500 888,250
Compaq Computer Corp....................... 10,200 260,738
Computer Sciences Corp. (b)................ 6,900 515,344
Compuware Corp. (b)........................ 32,300 335,112
CVS Corp................................... 8,000 320,000
Dell Computer Corp. (b).................... 9,600 473,400
Dominion Resources, Inc.................... 10,600 454,475
E.I. du Pont de Nemours and Co............. 4,100 179,375
Electronic Data Systems Corp............... 5,200 214,500
Emerson Electric Co........................ 10,500 633,937
Exxon Mobil Corp........................... 8,900 698,650
Federated Department Stores, Inc. (b)...... 4,200 141,750
FedEx Corp. (b)............................ 24,300 923,400
First Data Corp............................ 15,004 744,573
Fort James Corp............................ 12,500 289,063
Gateway, Inc. (b).......................... 5,600 317,800
Genzyme Corp. (b).......................... 6,400 380,400
GreenPoint Financial Corp.................. 11,700 219,375
Household International, Inc............... 11,700 486,281
Illinois Tool Works, Inc................... 8,700 495,900
Johnson & Johnson Co....................... 10,600 1,079,875
Kimberly-Clark Corp........................ 10,400 596,700
Lafarge Corp............................... 3,900 81,900
Lear Corp. (b)............................. 11,900 238,000
Lexmark International Group, Inc. (b)...... 4,100 275,725
Lincoln National Corp...................... 10,900 393,762
Masco Corp................................. 39,200 708,050
Mattel, Inc................................ 18,600 245,288
Microsoft Corp. (b)........................ 17,200 1,376,000
Motorola, Inc.............................. 17,715 514,842
New York Times Co.......................... 14,500 572,750
Newell Rubbermaid, Inc..................... 7,400 190,550
Nextel Communications, Inc. (b)............ 6,900 422,194
Peco Energy Co............................. 15,910 641,372
PepsiCo, Inc............................... 22,400 995,400
PNC Bank Corp.............................. 5,900 276,563
Praxair, Inc............................... 6,600 247,088
Raytheon Co., Class B...................... 14,700 282,975
Reliaster Financial Corp................... 3,400 178,288
SBC Communications, Inc.................... 19,900 860,675
Smurfit-Stone Container Corp. (b).......... 24,800 319,300
Southdown, Inc............................. 4,176 241,164
St. Jude Medical, Inc. (b)................. 12,900 591,787
Tellabs, Inc. (b).......................... 6,100 417,469
Texas Instruments, Inc..................... 13,100 899,806
U.S. Bancorp............................... 9,263 178,313
Unisys Corp. (b)........................... 19,000 276,688
W.W. Grainger, Inc......................... 8,900 274,231
Wal-Mart Stores, Inc....................... 12,700 731,837
Watson Pharmaceutical Co. (b).............. 9,900 $ 532,125
Wells Fargo and Co......................... 21,900 848,625
XL Capital Ltd............................. 3,700 200,263
-----------
Total U.S. Equities........................ 29,385,878
-----------
Global (Ex-U.S.) Equities -- 51.17%
Australia -- 3.14%
Broken Hill Proprietary Co., Ltd........... 27,650 327,870
Lend Lease Corp., Ltd...................... 11,294 144,487
National Australia Bank Ltd., Preferred.... 21,900 620,044
News Corp., Ltd............................ 22,540 311,259
QBE Insurance Group Ltd.................... 25,789 126,533
Rio Tinto Ltd.............................. 10,263 170,185
Westpac Banking Corp., Ltd................. 64,145 464,076
-----------
2,164,454
-----------
Belgium -- 0.79%
Electrabel S.A............................. 1,530 379,717
Fortis B................................... 5,542 161,927
-----------
541,644
-----------
Canada -- 1.45%
Canadian National Railway Co............... 13,300 386,873
NOVA Chemicals Corp........................ 14,200 298,050
Shaw Communications, Inc., Class B......... 12,700 312,850
-----------
997,773
-----------
Denmark -- 0.28%
Tele Danmark A/S........................... 2,900 196,006
-----------
Finland -- 1.36%
Metso Oyj.................................. 22,300 269,347
Nokia Oyj.................................. 4,000 204,948
UPM-Kymmene Corp........................... 18,500 461,086
-----------
935,381
-----------
France -- 5.35%
Air Liquide................................ 3,676 481,352
Banque Nationale de Paris.................. 8,602 831,183
Cie de Saint Gobain........................ 876 118,906
CSF Thomson................................ 7,465 295,254
Groupe Danone.............................. 1,860 247,836
Rhone-Poulenc, Class A..................... 6,390 468,290
Schneider S.A.............................. 6,150 430,362
Total Fina S.A., Class B................... 3,029 466,317
Vivendi.................................... 3,899 345,539
-----------
3,685,039
-----------
Germany -- 1.43%
Bayer AG................................... 18,190 699,220
Continental AG............................. 16,850 284,282
-----------
983,502
-----------
Hong Kong -- 0.59%
Cheung Kong Holdings, Ltd.................. 20,000 221,287
Guoco Group Ltd............................ 93,000 186,709
-----------
407,996
-----------
Ireland -- 0.55%
Bank of Ireland............................ 41,200 258,884
Eircom PLC................................. 45,100 121,052
-----------
379,936
-----------
=========================================================================
22
<PAGE>
Global Equity Fund -- Schedule of Investments
June 30, 2000
----------------------------------------------------------------------
Shares Value
------ -----
Italy -- 1.45%
San Paolo-imi Spa......................... 19,811 $ 353,039
Telecom Italia Mobile Spa................. 43,800 449,257
Telecom Italia Spa........................ 14,000 193,253
-----------
995,549
-----------
Japan -- 13.08%
Acom Co., Ltd............................. 3,300 278,210
Bank of Tokyo-Mitsubushi Ltd.............. 42,000 508,501
Benesse Corp.............................. 3,600 250,083
Canon, Inc................................ 15,000 748,547
Dai-Ichi Kangyo Bank...................... 38,000 289,117
Fuji Photo Film Co., Ltd.................. 11,000 451,207
Honda Motor Co............................ 19,000 648,268
Hoya Corp................................. 2,000 179,576
Kao Corp.................................. 20,000 612,447
Mitsubishi Chemical Corp.................. 94,000 386,466
Mitsubishi Estate Co., Ltd................ 31,000 365,654
NEC Corp.................................. 6,000 188,838
Nintendo Corp., Ltd....................... 1,600 280,062
Nippon Telegraph & Telephone Corp......... 49 652,994
Nissin Food Products Co................... 21,500 548,651
Nomura Securities Co., Ltd................ 20,000 490,525
Orix Corp................................. 2,900 428,949
Secom Co., Ltd............................ 2,000 146,496
Sony Corp................................. 5,500 514,626
Takeda Chemical Industries................ 6,000 394,688
TDK Corp.................................. 2,000 288,077
Toyoda Automatic Loom Works............... 3,000 65,073
West Japan Railway Co..................... 71 288,550
-----------
9,005,605
-----------
Netherlands -- 3.49%
Aegon NV.................................. 6,760 241,514
Heineken NV............................... 17,700 692,261
ING Groep NV.............................. 5,612 380,879
Philips Electronics NV.................... 11,100 525,638
TNT Post Group NV......................... 10,089 273,214
Wolters Kluwer NV......................... 10,689 285,876
-----------
2,399,382
-----------
Portugal -- 0.23%
Electricidade de Portugal S.A............. 8,700 158,623
-----------
Singapore -- 0.55%
Singapore Press Holdings Ltd.............. 13,046 203,726
United Overseas Bank Ltd.................. 26,512 173,271
-----------
376,997
-----------
Spain -- 2.55%
Banco Popular Espanol S.A................. 15,203 472,184
Banco Santander Central Hispano S.A....... 24,155 255,862
Endesa S.A................................ 7,814 151,982
Tabacalera S.A............................ 33,726 520,184
Telefonica S.A. (b)....................... 16,532 356,570
-----------
1,756,782
-----------
Sweden -- 2.16%
Electrolux AB, B Shares................... 14,950 $ 232,662
Ericsson, B Shares........................ 21,560 428,939
Investor AB, B Shares..................... 14,170 194,674
Nordbanken Holding AB..................... 60,100 455,666
Swedish Match AB.......................... 57,700 178,935
-----------
1,490,876
-----------
Switzerland -- 1.72%
Givaudan (b).............................. 14 4,275
Nestle S.A. (Reg.)........................ 145 291,141
Novartis AG (Reg.)........................ 212 336,885
Roche Holding AG (Gen.)................... 13 126,954
Swiss Reinsurance Co. (Reg.).............. 207 423,267
-----------
1,182,522
-----------
United Kingdom -- 11.00%
Allied Zurich PLC......................... 31,975 378,298
AstraZeneca PLC........................... 5,639 263,361
British Telecommunications PLC............ 23,000 297,358
Diageo PLC................................ 77,630 696,913
FKI PLC................................... 86,405 307,398
HSBC Holdings PLC......................... 25,000 285,936
Lloyds TSB Group PLC...................... 42,220 398,838
National Power PLC........................ 50,500 321,861
Nycomed Amersham PLC...................... 59,000 585,936
Pentokil Initial PLC...................... 63,800 144,880
Powergen PLC.............................. 59,000 504,655
Prudential Corp. PLC...................... 20,000 293,089
Reckitt & Colman PLC...................... 13,000 145,636
Reed International PLC.................... 67,000 583,226
Scottish & Southern Energy PLC............ 49,650 455,498
Tesco PLC................................. 80,250 249,661
The Great Universal Stores PLC............ 54,000 347,438
Trinity Mirror PLC........................ 21,175 190,096
Unilever PLC.............................. 39,000 236,167
United News & Media PLC................... 25,000 359,549
Vodafone Group PLC........................ 131,188 530,273
-----------
7,576,067
-----------
Total Global (Ex-U.S.) Equities........... 35,234,134
-----------
Total Equities (Cost $56,332,868)......... 64,620,012
-----------
Short-Term Investments -- 3.56%
Investment Companies -- 3.56%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund
(Cost $2,453,941)....................... 2,453,941 2,453,941
-----------
Total Investments
(Cost $58,786,809) -- 97.40% (a)........ 67,073,953
Cash and other assets,
less liabilities -- 2.60%.............. 1,789,330
-----------
Net Assets -- 100%........................ $68,863,283
===========
See accompanying notes to schedule of investments.
===========================================================================
23
<PAGE>
Global Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $59,974,004; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation........................................ $ 12,365,192
Gross unrealized depreciation........................................ (5,265,243)
------------
Net unrealized appreciation.................................... $ 7,099,949
============
</TABLE>
(b) Non-income producing security
FORWARD FOREIGN CURRENCY CONTRACTS
The Global Equity Fund had the following open forward foreign currency contracts
as of June 30, 2000:
<TABLE>
<CAPTION>
Settlement Local Current Unrealized
Date Currency Value Gain/(Loss)
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Forward Foreign Currency Buy Contracts
Australian Dollar............................... 12/01/00 7,600,000 $ 4,577,458 $ 230,258
British Pound................................... 12/01/00 900,000 1,366,929 5,439
Canadian Dollar................................. 12/01/00 800,000 542,160 (4,774)
Euro............................................ 12/01/00 12,540,000 12,134,114 358,406
Singapore Dollar................................ 12/01/00 700,000 412,014 (2,678)
Swiss Francs.................................... 12/01/00 1,000,000 623,729 19,864
Forward Foreign Currency Sale Contracts
British Pound................................... 12/01/00 5,300,000 8,049,695 (156,935)
Euro............................................ 12/01/00 2,000,000 1,935,265 2,135
Hong Kong Dollar................................ 12/01/00 2,300,000 295,233 (345)
Japanese Yen.................................... 12/01/00 628,000,000 6,107,814 (25,372)
Singapore Dollar................................ 12/01/00 700,000 412,014 (1,216)
Swedish Krona................................... 12/01/00 3,500,000 403,291 (11,169)
-----------
Total.................................... $ 413,613
===========
</TABLE>
================================================================================
24 See accompanying notes to financial statements.
<PAGE>
Global Technology Fund
--------------------------------------------------------------------------------
[LOGO] UBS After a serious correction lasting about eight weeks,
Investment Funds technology stocks staged a rapid two-week recovery
beginning in the last week of May. During the remainder
of the month of June there was mostly steady recovery,
with a few very significant gains.
Computer hardware and software were the best industry
groups in June, rising about 20%. Semiconductors and
optoelectronics were also strong, while technology
services declined. The serious April-May correction
reminded investors that it can be difficult to invest
in the long-term growth opportunity of technology
stocks. While a decline in value is always painful, we
have maintained our perspective and kept our eyes on
the strong growth opportunities available to our Fund's
companies. The April-May slump and the relatively slow
continuing recovery have enabled the Fund to
selectively accumulate positions at very favorable
discounts from previously higher prices.
We see many very attractively undervalued technology
stocks, especially among the less well known names, as
well as continued strength in the global demand for
technology products and services. We expect better
investment results going forward, particularly in the
second half of the year, a traditionally strong season
for technology stocks. Significant changes in the
competitive structure of the computer and
communications industries will occur over the next year
as new technological solutions meet the seemingly
infinite demand for Internet access devices and
communications bandwidth. We are particularly excited
about the opportunities for the smaller telecom
services providers, who are in a good position to
deliver broadband Internet access to a wide range of
business and consumer markets.
=======================================================
25
<PAGE>
Global Technology Fund
--------------------------------------------------------------------------------
[LOGO] UBS Top Ten Equity Holdings
Investment Funds
As of June 30, 2000
Percent of
Net Assets
------------------------------------------------------
1. Micron Technology, Inc. 4.57%
2. Nortel Networks Corp. 4.13
3. EMC Corp. 3.99
4. Yahoo!, Inc. 3.21
5. STMicroelectronics N.V 3.06
6. Oracle Corp. 2.91
7. International Business Machines Corp. 2.84
8. Compaq Computer Corp. 2.65
9. SAP AG 2.43
10. Texas Instruments, Inc. 2.37
------------------------------------------------------
Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
-------------------------------------------------------
U.S. EQUITIES
Computers
Services............................... 6.15%
Software............................... 8.94
Systems................................ 16.87
------
31.96
Electronic Components..................... 23.51
Internet Services......................... 6.74
Telecommunications
Equipment.............................. 11.24
Services............................... 6.41
------
17.65
------
Total U.S. Equities................ 79.86
GLOBAL (EX-U.S.) EQUITIES
Computers
Software............................... 2.44%
Systems................................ 0.63
------
3.07
Electronic Components..................... 5.70
Telecommunications
Equipment.............................. 3.54
Services............................... 0.68
------
4.22
------
Total Global (Ex-U.S.) Equities........ 12.99
SHORT-TERM INVESTMENTS.................... 1.55
------
TOTAL INVESTMENTS.................. 94.40
CASH AND OTHER ASSETS,
LESS LIABILITIES....................... 5.60
------
NET ASSETS................................ 100.00%
======
=======================================================
26
<PAGE>
Global Technology Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
---------- ----------
Equities -- 92.85%
U.S. Equities -- 79.86%
Advanced Micro Devices, Inc. (b)................ 100 $ 7,725
Agilent Technologies, Inc (b)................... 19 1,401
Amazon.com, Inc. (b)............................ 150 5,447
America On-Line, Inc. (b)....................... 200 10,550
Amkor Technologies, Inc. (b).................... 200 7,062
Applied Material, Inc. (b)...................... 150 13,594
Atmel Corp. (b)................................. 200 7,375
Broadcom Corp. (b).............................. 50 10,947
Cisco Systems, Inc. (b)......................... 200 12,713
Comdisco, Inc................................... 200 4,463
Compaq Computer Corp............................ 600 15,337
Computer Associates International, Inc.......... 200 10,237
Computer Sciences Corp. (b)..................... 150 11,203
Covad Communications Group, Inc. (b)............ 200 3,225
Electronic Data Systems Corp.................... 150 6,188
EMC Corp. (b)................................... 300 23,081
Emcore Corp. (b)................................ 100 12,000
eMerge Interactive, Inc. (b).................... 200 3,588
Flextronics International Ltd................... 50 3,435
Gateway, Inc. (b)............................... 50 2,838
Hewlett-Packard Co.............................. 50 6,244
Inprise Corp. (b)............................... 400 2,450
Intel Corp...................................... 50 6,684
International Business Machines Corp............ 150 16,434
Intuit, Inc. (b)................................ 300 12,412
Jabil Circuit, Inc. (b)......................... 100 4,963
JDA Software Group, Inc. (b).................... 100 1,919
JDS Uniphase Corp. (b).......................... 100 11,987
KLA-Tencor Corp. (b)............................ 150 8,784
Leap Wireless International, Inc. (b)........... 100 4,700
Linear Technology Corp.......................... 150 9,591
Lucent Technologies, Inc........................ 200 11,850
Micron Technology, Inc. (b)..................... 300 26,419
Motorola, Inc................................... 450 13,078
Network Plus Corp. (b).......................... 650 9,222
Oracle Corp. (b)................................ 200 16,812
PeopleSoft, Inc. (b)............................ 650 10,887
Phone.com, Inc. (b)............................. 100 6,513
QUALCOMM, Inc. (b).............................. 200 12,000
Red Hat, Inc. (b)............................... 50 1,353
Safeguard Scientifics, Inc. (b)................. 50 1,603
Sipex Corp. (b)................................. 50 1,384
Solectron Corp. (b)............................. 100 4,188
Sun Microsystems, Inc. (b)...................... 150 13,641
Sykes Enterprises, Inc. (b)..................... 200 $ 2,575
Texas Instruments, Inc.......................... 200 13,738
Titan Corp. (b)................................. 150 6,712
Uniroyal Technology Corp. (b)................... 100 1,106
VerticalNet, Inc. (b)........................... 100 3,694
Winstar Communications, Inc. (b)................ 250 8,469
Worldcom, Inc. (b).............................. 250 11,469
Xilinx, Inc. (b)................................ 100 8,256
Yahoo!, Inc. (b)................................ 150 18,581
----------
Total U.S. Equities............................. 462,127
----------
Global (Ex-U.S.) Equities -- 12.99%
Bermuda -- 0.68%
Global Crossing Ltd. (b)........................ 150 3,947
----------
Canada -- 4.13%
Nortel Networks Corp............................ 350 23,887
----------
France -- 3.06%
STMicroelectronics N.V.......................... 276 17,716
----------
Germany -- 4.49%
Infineon Technologies AG (b).................... 150 11,888
SAP AG.......................................... 300 14,081
----------
25,969
----------
Switzerland -- 0.63%
Logitech International SA (b)................... 50 3,650
----------
Total Global (Ex-U.S.) Equities................. 75,169
----------
Total Equities (Cost $490,560).................. 537,296
----------
Short-Term Investments -- 1.55%
Investment Companies -- 1.55%
Vista U.S. Government Money
Market Fund (Cost $8,983)................... 8,983 8,983
----------
Total Investments
(Cost $499,543) -- 94.40% (a)................... 546,279
Cash and other assets,
less liabilities -- 5.60%....................... 32,381
----------
Net Assets -- 100%.............................. $ 578,660
==========
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $500,976; and net
unrealized appreciation consisted of:
Gross unrealized appreciation.................. $ 59,362
Gross unrealized depreciation.................. (14,059)
--------
Net unrealized appreciation............... $ 45,303
========
(b) Non-income producing security
================================================================================
See accompanying notes to financial statements. 27
<PAGE>
Global Biotech Fund
--------------------------------------------------------------------------------
[LOGO] UBS Volatility initiated in March in the biotech
Investment Funds sector continued into the second quarter of 2000,
with the biotech indices bottoming in May followed
by a substantial rally in June. The NASDAQ Biotech
Index increased 11% during the second quarter.
Biotech performance was in line with the
pharmaceutical sector, but continued to outperform
the general market and the small capitalization
market. The biotech rally became more selective in
the second quarter. Only 41% of 351 publicly
traded stocks had positive returns, whereas in the
first quarter of 2000 and the fourth quarter of
1999 the positive returns were 84% and 70%,
respectively. Biotech investors flocked to larger
companies in the second quarter, with 77% of the
stocks enjoying positive returns, versus only 31%
for small cap biotechs.
In 2000, the biotech industry will continue to
move into a more mature stage as an increasing
number of companies generate sales and reach
profitability. With more than 800 products in
clinical trial development, we expect several
research breakthroughs in the next few years,
particularly in the treatment of diabetes, asthma,
allergies, psoriasis, cancer, heart and vessel
disease, and autoimmune diseases. If we extend our
horizon to the next five to ten years, we are
firmly convinced that the human genome sequence
map(s) will be another strong growth driver for
this industry. In the interim, we expect continued
consolidation in this industry. Pharmaceutical
companies will probably continue to buy biotech
companies and large biotechs will keep buying
smaller biotechs. Momentum players will come and
go in this sector and contribute to short-term
volatility, but they will have little impact on
the promising long-term picture that is developing
in this area. We remain focused on identifying
promising new companies with strong drug pipelines
that will produce handsome long-term returns for
patient investors.
==================================================
28
<PAGE>
Global Biotech Fund
--------------------------------------------------------------------------------
[LOGO] UBS Top Ten Equity Holdings
Investment Funds
As of June 30, 2000
Percent of
Net Assets
--------------------------------------------------
1. Amgen, Inc. 4.18%
2. Human Genome Sciences, Inc. 3.97
3. Protein Design Labs, Inc. 3.93
4. COR Therapeutics, Inc. 3.55
5. Celgene Corp. 3.50
6. Millennium Pharmaceuticals, Inc. 3.33
7. QLT, Inc. 3.22
8. Vertex Pharmaceuticals, Inc. 3.13
9. Genentech, Inc. 3.07
10. CV Therapeutics, Inc. 2.89
--------------------------------------------------
Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
--------------------------------------------------
U.S. EQUITIES
Biomedical.......................... 15.79%
Gene................................ 4.97
Health: Drugs....................... 17.62
Medical Products.................... 4.10
Therapeutics........................ 14.35
Research and Development............ 17.16
------
Total U.S. Equities......... 73.99
GLOBAL (Ex-U.S.) EQUITIES
Gene................................ 2.01%
Health: Drugs....................... 4.24
Therapeutics........................ 3.22
------
Total Global (Ex-U.S.) Equities..... 9.47
SHORT-TERM INVESTMENTS................. 4.39
------
TOTAL INVESTMENTS........... 87.85
CASH AND OTHER ASSETS,
LESS LIABILITIES.................... 12.15
------
NET ASSETS............................. 100.00%
======
====================================================
29
<PAGE>
Global Biotech Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
---------- ---------
<S> <C> <C>
Equities -- 83.46%
U.S. Equities -- 73.99%
Abgenix, Inc. (b)................................................................. 150 $ 17,979
Affymetrix, Inc. (b).............................................................. 50 8,256
Alkermes, Inc. (b)................................................................ 150 7,069
American Home Products Corp....................................................... 100 5,875
Amgen, Inc. (b)................................................................... 500 35,125
Aurora Biosciences Corp. (b)...................................................... 150 10,228
Biogen, Inc. (b).................................................................. 100 6,450
Celgene Corp. (b)................................................................. 500 29,437
Cephalon, Inc. (b)................................................................ 300 17,962
Chiron Corp. (b).................................................................. 500 23,750
COR Therapeutics, Inc. (b)........................................................ 350 29,859
CV Therapeutics, Inc. (b)......................................................... 350 24,259
Enzon, Inc. (b)................................................................... 200 8,500
Geltex Pharmaceuticals, Inc. (b).................................................. 350 7,153
Genentech, Inc. (b)............................................................... 150 25,800
Genzyme Corp. (b)................................................................. 300 17,831
Gilead Sciences, Inc. (b)......................................................... 150 10,669
Guilford Pharmaceuticals, Inc. (b)................................................ 250 3,766
Human Genome Sciences, Inc. (b)................................................... 250 33,344
Idec Pharmaceuticals Corp. (b).................................................... 200 23,462
Immunex Corp. (b)................................................................. 450 22,247
Inhale Therapeutic Systems, Inc. (b).............................................. 100 10,147
Johnson & Johnson Co.............................................................. 100 10,188
Luminex Corp. (b)................................................................. 50 2,081
Maxim Pharmaceuticals, Inc. (b)................................................... 250 12,844
Medarex, Inc. (b)................................................................. 200 16,900
Medimmune, Inc. (b)............................................................... 300 22,200
Millennium Pharmaceuticals, Inc. (b).............................................. 250 27,969
Myriad Genetics, Inc. (b)......................................................... 100 14,808
PE Corp. -- Biosystems Group...................................................... 150 9,881
PE Corp. -- Celera Genomics Group (b)............................................. 200 18,700
Pfizer, Inc....................................................................... 150 7,200
Protein Design Labs, Inc. (b)..................................................... 200 32,991
Sangstat Medical Corp. (b)........................................................ 250 7,219
Schering Plough Corp.............................................................. 150 7,575
Tanox, Inc. (b)................................................................... 200 9,463
United Therapeutics Corp. (b)..................................................... 150 16,256
Vertex Pharmaceuticals, Inc. (b).................................................. 250 26,344
---------
Total U.S. Equities............................................................... 621,787
---------
Global (Ex-U.S.) Equities -- 9.47%
Canada -- 3.22%
QLT, Inc.......................................................................... 350 $ 27,060
---------
Denmark -- 1.02%
Novo Nordisk A/S.................................................................. 50 8,545
---------
France -- 0.41%
Genset S.A........................................................................ 150 3,469
---------
Switzerland -- 1.99%
Serono S.A. (b)................................................................... 20 16,727
---------
United Kingdom -- 2.83%
Cambridge Antibody Technology
Group PLC (b)................................................................... 300 13,443
Shire Pharmaceuticals Group PLC (b)............................................... 200 10,375
---------
23,818
---------
Total Global (Ex-U.S.) Equities................................................... 79,619
---------
Total Equities (Cost $601,199).................................................... 701,406
---------
Short-Term Investments -- 4.39%
Investment Companies -- 4.39%
Vista U.S. Government Money
Market Fund (Cost $36,889)...................................................... 36,889 36,889
---------
Total Investments
(Cost $638,088)-- 87.85% (a).................................................... 738,295
Cash and other assets,
less liabilities -- 12.15%...................................................... 102,143
---------
Net Assets -- 100%................................................................ $ 840,438
=========
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $638,743;
and net unrealized appreciation consisted of:
Gross unrealized appreciation..................................... $ 103,644
Gross unrealized depreciation..................................... (4,092)
---------
Net unrealized appreciation............................... $ 99,552
=========
</TABLE>
(b) Non-income producing security
================================================================================
See accompanying notes to financial statements.
30
<PAGE>
Global Bond Fund
--------------------------------------------------------------------------------
[LOGO] UBS Since its inception on July 31, 1995, the UBS
Investment Funds Investment Fund - Global Bond has recorded an
annualized return of 4.08%, versus the 3.17% return of
its benchmark, the Salomon Smith Barney World
Government Bond Index. This performance record was
achieved with less risk or volatility than the
benchmark; 5.39% versus 5.95%, respectively. For the
calendar year-to-date, the Fund returned -0.77%,
underperforming the benchmark return of 0.03%. During
the second quarter, the Fund outperformed the benchmark
by 49 basis points.
In preemptive moves to combat inflation, most of the
world's major central banks raised interest rates
during the first quarter of 2000. The rate increases
pushed up yields at the short end of the yield curve,
while benign long-term inflationary expectations and
government supply concerns pulled down long bond
yields. This outlook was largely the same as it was in
the last quarter of 1999, and during the first quarter
bond yields in most markets fell to levels lower than
at the beginning of the year. Our most significant
strategy move in the first quarter was to reduce our
overweight to Australia by half, after taking advantage
of an Australian 10-year government yield decline of
almost 100 basis points. With the proceeds, we
moderately reduced our underweight to Japan.
Despite some periods of volatility, long-term bond
yields in most major markets finished the second
quarter at levels similar to those at the end of March.
Market sentiment was dominated by shifting expectations
over the pace of economic growth and by the
implications this had for the interest rate policies of
central banks. The largest factor leading to Fund
outperformance in the second quarter came from currency
allocation, with the biggest contributions coming from
our overweight to the euro and underweights to the
British pound and the Japanese yen. In Australia, which
was the strongest performing bond market during the
period, we benefited from our overweight to government
bonds.
=======================================================
31
<PAGE>
Global Bond Fund
--------------------------------------------------------------------------------
[LOGO] UBS Total Return
Investment Funds
<TABLE>
<CAPTION>
6 months 1 year 3 years Inception*
ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UBS Investment Fund - Global Bond -0.77% -0.84% 1.33% 4.08%
-------------------------------------------------------------------------------------------
Salomon Smith Barney World Gov't Bond Index 0.03 3.16 3.87 3.17
-------------------------------------------------------------------------------------------
</TABLE>
*Inception date of the UBS Investment Fund - Global
Bond is 7/31/95.
Total return includes reinvestment of all capital gain
and income distributions.
All total returns in excess of 1 year are average
annualized returns.
Illustration of an Assumed Investment of $10,000
This chart shows the growth in the value of an
investment in the UBS Investment Fund - Global Bond and
the Salomon Smith Barney World Government Bond Index if
you had invested $10,000 on July 31, 1995, and had
reinvested all your income dividends and capital gain
distributions through June 30, 2000. No adjustment has
been made for any income taxes payable by shareholders
on income dividends and capital gain distributions.
Past performance is no guarantee of future results.
Share price and return will vary with market
conditions; investors may realize a gain or loss upon
redemption.
UBS Investment Fund - Global Bond
vs. Salomon Smith Barney World Gov't Bond Index
Wealth Value with Dividends Reinvested
[GRAPH]
$ 12,175 ---- UBS Investment Fund - Global Bond
$ 11,656 ---- Salomon Smith Barney World Gov't Bond
Index
<TABLE>
<CAPTION>
------------------------------------------------------
Label A B
Label Brinson Global B Salomon Smith B
------------------------------------------------------
<S> <C> <C> <C>
1 7/31/95 $10,000 $10,000
------------------------------------------------------
2 8/31/95 $10,104 $ 9,656
------------------------------------------------------
3 9/30/95 $10,218 $ 9,871
------------------------------------------------------
4 10/31/95 $10,388 $ 9,944
------------------------------------------------------
5 11/30/95 $10,587 $10,057
------------------------------------------------------
6 12/31/95 $10,722 $10,162
------------------------------------------------------
7 1/31/96 $10,776 $10,037
------------------------------------------------------
8 2/29/96 $10,658 $ 9,986
------------------------------------------------------
9 3/31/96 $10,701 $ 9,972
------------------------------------------------------
10 4/30/96 $10,808 $ 9,932
------------------------------------------------------
11 5/31/96 $10,829 $ 9,934
------------------------------------------------------
12 6/30/96 $10,917 $10,013
------------------------------------------------------
13 7/31/96 $11,036 $10,205
------------------------------------------------------
14 8/31/96 $11,113 $10,245
------------------------------------------------------
15 9/30/96 $11,287 $10,287
------------------------------------------------------
16 10/31/96 $11,527 $10,479
------------------------------------------------------
17 11/30/96 $11,734 $10,617
------------------------------------------------------
18 12/31/96 $11,654 $10,531
------------------------------------------------------
19 1/31/97 $11,484 $10,250
------------------------------------------------------
20 2/28/97 $11,484 $10,173
------------------------------------------------------
21 3/31/97 $11,313 $10,096
------------------------------------------------------
22 4/30/97 $11,240 $10,007
------------------------------------------------------
23 5/31/97 $11,569 $10,279
------------------------------------------------------
24 6/30/97 $11,703 $10,402
------------------------------------------------------
25 7/31/97 $11,654 $10,321
------------------------------------------------------
26 8/31/97 $11,606 $10,314
------------------------------------------------------
27 9/30/97 $11,837 $10,534
------------------------------------------------------
28 10/31/97 $11,984 $10,753
------------------------------------------------------
29 11/30/97 $11,825 $10,589
------------------------------------------------------
30 12/31/97 $11,791 $10,557
------------------------------------------------------
31 1/31/98 $11,892 $10,659
------------------------------------------------------
32 2/28/98 $11,968 $10,746
------------------------------------------------------
33 3/31/98 $11,829 $10,639
------------------------------------------------------
34 4/30/98 $11,980 $10,810
------------------------------------------------------
35 5/31/98 $11,968 $10,834
------------------------------------------------------
36 6/30/98 $11,970 $10,851
------------------------------------------------------
37 7/31/98 $11,957 $10,865
------------------------------------------------------
38 8/31/98 $12,097 $11,160
------------------------------------------------------
39 9/30/98 $12,671 $11,754
------------------------------------------------------
40 10/31/98 $12,938 $12,102
------------------------------------------------------
41 11/30/98 $12,849 $11,931
------------------------------------------------------
42 12/31/98 $13,156 $12,171
------------------------------------------------------
43 1/31/99 $13,130 $12,059
------------------------------------------------------
44 2/28/99 $12,717 $11,672
------------------------------------------------------
45 3/31/99 $12,691 $11,701
------------------------------------------------------
46 4/30/99 $12,717 $11,697
------------------------------------------------------
47 5/31/99 $12,478 $11,500
------------------------------------------------------
48 6/30/99 $12,278 $11,299
------------------------------------------------------
49 7/31/99 $12,506 $11,576
------------------------------------------------------
50 8/31/99 $12,452 $11,629
------------------------------------------------------
51 9/30/99 $12,560 $11,810
------------------------------------------------------
52 10/31/99 $12,493 $11,804
------------------------------------------------------
53 11/30/99 $12,305 $11,680
------------------------------------------------------
54 12/31/99 $12,270 $11,652
------------------------------------------------------
55 1/31/2000 $11,944 $11,404
------------------------------------------------------
56 2/29/2000 $11,876 $11,322
------------------------------------------------------
57 3/31/2000 $12,134 $11,673
------------------------------------------------------
58 4/30/2000 $11,700 $11,291
------------------------------------------------------
59 5/31/2000 $11,754 $11,379
------------------------------------------------------
60 6/31/2000 $12,175 $11,656
------------------------------------------------------
</TABLE>
Fund returns are not of all fees and costs, while the
Index returns are based solely on market returns
without deduction for fees or transaction costs for
rebalancing.
=======================================================
32
<PAGE>
Global Bond Fund
--------------------------------------------------------------------------------
[LOGO] UBS Asset Allocation
Investment Funds
As of June 30, 2000
Current
Benchmark Strategy
------------------------------------
U.S. 26.94% 29.94%
Australia 0.58 2.58
Austria 1.03 0.00
Belgium 2.36 0.00
Canada 2.78 4.92
Denmark 1.16 4.16
Finland 0.66 0.00
France 7.77 12.95
Germany 8.03 5.69
Greece 0.74 0.00
Ireland 0.29 0.00
Italy 8.45 9.60
Japan 25.87 9.37
Netherlands 2.46 3.33
Portugal 0.50 0.00
Spain 3.09 6.01
Sweden 1.09 2.79
Switzerland 0.46 0.00
TIPS 0.00 1.75
U.K. 5.74 2.74
Euro 0.00 4.17
-----------------------------------
100.0% 100.0%
Currency Allocation
As of June 30, 2000
Current
Benchmark Strategy
------------------------------------
U.S. 26.9% 22.9%
Australia 0.6 8.6
Canada 2.8 2.8
Denmark 1.2 1.2
Euro 35.3 47.2
Japan 25.9 15.9
Sweden 1.1 1.1
Switzerland 0.5 0.5
U.K. 5.7 -0.2
-----------------------------------
100.0% 100.0%
Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
<TABLE>
--------------------------------------------------------
<S> <C>
U.S. BONDS
Corporate Bonds.................................
Construction.................................. 0.10%
Consumer...................................... 0.97
Energy........................................ 0.22
Financial Services............................ 2.59
Food and Housing Products..................... 0.54
Publishing.................................... 0.29
Services/Miscellaneous........................ 1.03
------
Total U.S. Corporate Bonds.............. 5.74
International Dollar Bonds...................... 1.12
Asset-Backed.................................... 2.47
Corporate Mortgage-Backed Securities............ 7.39
U.S. Government Agencies........................ 2.39
U.S. Government Mortgage-Backed
Securities.................................... 6.01
U.S. Government Obligations..................... 6.89
------
Total U.S. Bonds........................ 32.01
GLOBAL (EX-U.S.) BONDS
Foreign Financial Bonds......................... 7.65
Foreign Government Bonds........................ 54.87
------
Total Global (Ex-U.S.) Bonds............ 62.52
SHORT-TERM INVESTMENTS.......................... 11.89
------
TOTAL INVESTMENTS....................... 106.42
LIABILITIES, LESS CASH
AND OTHER ASSETS.............................. (6.42)
------
NET ASSETS...................................... 100.00%
======
</TABLE>
=======================================================
33
<PAGE>
Global Bond Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
-------- -----
<S> <C> <C>
Bonds -- 94.53%
U.S. Bonds -- 32.01%
U.S. Corporate Bonds -- 5.74%
Capital One Bank, BKNT, 8.250%,
due 06/15/05........................................ $ 70,000 $ 69,861
Cendant Corp., 7.750%, due 12/01/03................... 200,000 193,147
Centaur Funding Corp., Class B, 144A,
9.080%, due 04/21/20 (b)............................ 140 138,994
Centaur Funding Corp., Class C, 144A,
0.000%, due 04/21/20 (b)............................ 750 115,781
Centex Corp., 9.750%, due 06/15/05.................... 45,000 44,756
Countrywide Capital, Inc., 8.000%,
due 12/15/26........................................ 250,000 206,795
Fidelity Investments, 144A, 7.570%,
due 06/15/29........................................ 450,000 426,496
Lilly Del Mar, 144A, 7.717%,
due 08/01/29........................................ 150,000 149,114
News America Holdings, 7.750%,
due 12/01/45........................................ 150,000 130,289
PDVSA Finance, 99-F, 8.750%,
due 02/15/04........................................ 187,600 184,786
Safeway, Inc., 7.250%, due 09/15/04................... 250,000 247,110
Sempra Energy, 7.950%, due 03/01/10................... 100,000 100,847
Time Warner Cos., Inc.,
7.570%, due 02/01/24................................ 310,000 293,061
Washington Mutual Financial Corp., 8.250%,
due 06/15/05........................................ 35,000 35,324
Waste Management, 7.000%,
due 10/01/04........................................ 300,000 278,245
---------
2,614,606
---------
Asset-Backed Securities -- 2.47%
Chase Manhattan Auto Owner Trust,
96-C, Class A4, 6.150%,
due 03/15/02........................................ 76,569 76,283
Comed Transitional Funding Trust, 98-1,
Class A7, 5.740%, due 12/25/10...................... 370,000 331,953
First Bank Corporate Card Master Trust,
97-1, Class A, 6.400%, due 02/15/03................. 240,000 236,782
Vanderbilt Mortgage Finance, 98-B,
Class 1A2, 6.120%, due 05/07/09..................... 485,885 480,798
----------
1,125,816
----------
Corporate Mortgage-Backed Securities -- 7.39%
Bear Stearns Mortgage Securities, Inc.,
96-7A4, 6.000%, due 01/28/09........................ 200,000 191,686
DLJ Commercial Mortgage Corp., 99-CG2,
Class A1B, 7.300%, due 06/10/32..................... 75,000 73,871
First Union Lehman Brothers, 97-C2,
Class A2, 6.600%, due 11/18/29...................... 240,000 232,027
GE Capital Mortgage Services, Inc., 93-7F,
Class FA3, 6.500%, due 09/25/08..................... 96,382 95,661
Heller Financial Commercial Mortgage Assets,
99-PH1, Class A1, 6.500%,
due 05/15/31........................................ 386,237 373,520
PNC Mortgage Securities Corp., 94-3,
Class A8, 7.500%, due 07/25/24...................... 190,000 182,045
Prudential Home Mortgage Securities
93-43, Class A9, 6.750%, due 10/25/23............... 196,000 188,360
96-7, Class A4, 6.750%, due 06/25/11................ 150,000 144,350
Residential Accredit Loans, Inc.
96-QS4, Class Al10, 7.900%, due 08/25/26............ 625,000 623,056
98-QS4, Class AI5, 7.000%, due 03/25/28............. 400,000 376,857
Residential Asset Securitization Trust
97-A10, Class A5, 7.250%, due 12/25/27.............. 335,000 321,540
97-A7, Class A1, 7.500%, due 09/25/27............... 22,529 22,448
97-A11, Class A2, 7.000%, due 01/25/28.............. 3,255 3,240
98-A1, Class A1, 7.000%, due 03/25/28............... 60,302 59,909
Structured Asset Securities Corp.
98-RF1, Class A, 8.713%, due 04/15/27............... 189,291 192,130
98-RF2, 8.582%, due 07/15/27........................ 288,209 291,091
----------
3,371,791
----------
International Dollar Bonds -- 1.12%
Korea Development Bank, 7.125%,
due 09/17/01........................................ 150,000 148,688
Credit Suisse-London, 144A, Step up Callable,
7.900%, due 05/29/49................................ 250,000 231,650
State of Qatar, 144A, 9.750%, due 06/15/30............ 130,000 128,212
----------
508,550
----------
U.S. Government Agencies -- 2.39%1.12%
Federal National Mortgage Association
5.250%, due 01/15/09................................ 355,000 311,529
7.250%, due 05/15/30................................ 280,000 285,066
Jordan Aid, 8.750%, due 09/01/19...................... 448,173 494,429
----------
1,091,024
----------
U.S. Government Mortgage-Backed
Securities -- 6.01%
Fannie Mae Whole Loan, 95-W3,
Class A, 9.000%, due 04/25/25....................... 7,756 7,986
Federal Home Loan Mortgage Corp.
5.500%, due 02/01/07................................ 39,822 37,322
7.000%, due 10/15/13................................ 68,215 65,142
Federal Home Loan Mortgage Corp. Gold,
9.000%, due 07/01/30................................ 135,000 139,261
Federal National Mortgage Association
6.000%, due 10/01/14................................ 149,936 141,836
6.000%, due 01/01/29................................ 150,018 137,226
6.500%, due 03/01/19................................ 116,597 111,430
6.500%, due 03/01/29................................ 577,598 544,783
7.000%, due 12/01/24................................ 382,185 368,960
7.000%, due 03/01/29................................ 25,928 25,041
7.500%, due 12/01/23................................ 298,195 294,092
7.890%, due 04/01/26................................ 163,571 167,875
8.000%, due 03/01/11................................ 61,267 61,904
8.000%, due 02/01/13................................ 62,857 63,510
Government National Mortgage Association
7.000%, due 08/15/24................................ 332,267 324,448
7.000%, due 07/15/25................................ 46,828 45,714
7.500%, due 08/15/23................................ 56,602 56,471
7.500%, due 12/15/23................................ 88,097 87,917
7.500%, due 01/15/24................................ 59,507 59,312
----------
2,740,230
----------
</TABLE>
================================================================================
34
<PAGE>
Global Bond Fund -- Schedule of Investments
June 30,2000
----------------------------------------------------------------------
Face
Amount Value
------ -----
U.S. Government Obligations -- 6.89%
U.S. Treasury Bond
8.000%, due 11/15/21....................... $ 220,000 $ 265,513
8.750%, due 05/15/17....................... 350,000 439,906
U.S. Treasury Inflation Indexed Note
3.625%, due 04/15/28....................... 570,000 575,424
3.875%, due 04/15/29....................... 880,000 913,837
U.S. Treasury Note
5.625%, due 05/15/08....................... 265,000 255,559
6.125%, due 12/31/01....................... 445,000 442,497
6.625%, due 02/15/27....................... 110,000 116,635
7.500%, due 02/15/05....................... 125,000 131,094
----------
3,140,465
----------
Total U.S. Bonds............................. 14,592,482
----------
Global (Ex-U.S.) Bonds -- 62.52%
Australia -- 2.36%
International Bank for Reconstruction
& Development, 5.500%,
due 05/14/03............................AUD 605,000 355,982
Queensland Treasury Corp., Global Notes
6.000%, due 07/14/09....................... 670,000 393,186
8.000%, due 09/14/07....................... 500,000 327,617
----------
1,076,785
----------
Canada -- 6.50%
Government of Canada, Real Return Bond
4.250%, due 12/01/21....................CAD 1,455,000 1,194,186
Government of Canada
6.000%, due 06/01/08....................... 2,030,000 1,376,953
Province of Ontario, 7.500%, due 01/19/06 550,000 393,767
----------
2,964,906
----------
Denmark -- 5.78%
City of Copenhagen, 6.250%,
due 03/15/01............................DKK 2,400,000 308,493
Depfa Pfandbrief Bank,
5.750%, due 03/04/09....................... 950,000 909,575
Great Belt, 7.000%, due 09/02/03............. 3,650,000 479,500
Kingdom of Denmark...........................
7.000%, due 11/15/07....................... 2,500,000 344,792
7.000%, due 11/10/24....................... 2,500,000 368,684
8.000%, due 11/15/01....................... 1,700,000 223,968
----------
2,635,012
----------
France -- 9.50%
Government of France (OAT)
7.500%, due 04/25/05....................EUR 1,530,000 1,614,143
8.500%, due 04/25/23....................... 1,350,000 1,745,794
9.500%, due 01/25/01....................... 990,000 972,239
----------
4,332,176
----------
Germany -- 4.85%
Bundesobligation 118,
5.250%, due 02/21/01....................EUR 390,000 $ 374,844
Bundesrepublik Deutschland
5.625%, due 01/04/28....................... 380,000 368,966
6.000%, due 07/04/07....................... 1,150,000 1,152,326
International Bank for Reconstruction and
Development, 7.125%, due 04/12/05.......... 306,775 312,910
----------
2,209,046
----------
Italy -- 9.26%
Buoni Poliennali Del Tes
3.250%, due 04/15/04....................... 2,500,000 2,230,052
7.750%, due 11/01/06....................... 660,000 704,703
9.000%, due 10/01/03....................... 380,001 403,689
Republic of Italy,
3.750%, due 06/08/05....................JPY 83,000,000 881,216
----------
4,219,660
----------
Japan -- 9.35%
Government of Japan
2.500%, due 03/20/20....................... 28,000,000 281,117
3.100%, due 03/20/06....................... 23,400,000 243,485
4.600%, due 03/21/05....................... 339,800,000 3,734,823
----------
4,259,425
----------
Mexico -- 0.35%
United Mexican States,
9.875%, due 02/01/10....................MXN 160,000 161,600
----------
Netherlands -- 2.55%
Government of Netherlands
3.000%, due 02/15/02....................EUR 1,050,000 975,829
5.500%, due 01/15/28....................... 195,000 184,997
----------
1,160,826
----------
Spain -- 4.21%
Government of Spain,
3.250%, due 01/31/05....................... 1,400,000 1,231,360
6.000%, due 01/31/08....................... 700,000 688,110
----------
1,919,470
----------
Sweden -- 2.84%
Government of Sweden
6.750%, due 05/05/14....................SEK 4,300,000 558,875
10.250%, due 05/05/03...................... 5,700,000 733,865
----------
1,292,740
----------
United Kingdom -- 4.97%
Abbey National Treasury Service,
6.500%, due 03/05/04....................GBP 190,000 285,720
British Gas PLC, 8.125%, due 03/31/03........ 195,000 302,872
U.K. Treasury
5.750%, due 12/07/09....................... 1,000,000 1,576,868
7.250%, due 12/07/07....................... 60,000 100,392
----------
2,265,852
----------
Total Global (Ex-U.S.) Bonds................. 28,497,498
----------
Total Bonds (Cost $45,532,378)............... 43,089,980
----------
======================================================================
35
<PAGE>
Global Bond Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
--------- ------------
Short-Term Investments -- 11.89%
Investment Companies -- 11.89%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund
(Cost $5,419,195)...................... 5,419,195 $ 5,419,195
---------
Total Investments
(Cost $50,951,573) -- 106.42% (a) 48,509,175
Liabilities, less cash and
other assets -- (6.42%)................. (2,927,951)
------------
Net Assets -- 100%........................ $ 45,581,224
============
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $51,047,800; and net
unrealized depreciation consisted of:
Gross unrealized appreciation....................... $ 304,499
Gross unrealized depreciation....................... (2,843,124)
-----------
Net unrealized depreciation.................... $(2,538,625)
===========
(b) Non-income producing security
144A: Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30,
2000, the value of these securities amounted to $1,190,247 or 2.61% of net
assets.
Resettable Perpetual Preferred: A bond with either no maturity date or a
maturity date that is so far in the future that the bond will pay interest
indefinitely. The issuer generally retains the right to call such a bond.
FORWARD FOREIGN CURRENCY CONTRACTS
The Global Bond Fund had the following open forward foreign currency contracts
as of June 30, 2000:
<TABLE>
<CAPTION>
Settlement Local Current Unrealized
Date Currency Value Gain/(Loss)
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Forward Foreign Currency Buy Contracts
Australian Dollar............................. 09/01/00 6,050,000 $ 3,636,473 $ (45,851)
British Pound................................. 09/01/00 1,400,000 2,121,984 (28,683)
Canadian Dollar............................... 09/01/00 2,650,000 1,791,296 (4,534)
Danish Krone.................................. 09/01/00 8,100,000 1,043,319 67,138
Euro.......................................... 09/01/00 15,150,000 14,579,925 (759,401)
Japanese Yen.................................. 09/01/00 1,103,500,000 10,550,283 259,794
Swedish Krona................................. 09/01/00 30,300,000 3,470,965 (43,290)
Forward Foreign Currency Sale Contracts
Australian Dollar............................. 09/01/00 1,550,000 931,658 (4,471)
British Pound................................. 09/01/00 2,950,000 4,471,323 272,277
Canadian Dollar............................... 09/01/00 5,100,000 3,447,437 57,606
Danish Krone.................................. 09/01/00 18,200,000 2,344,249 128,846
Euro.......................................... 09/01/00 8,600,000 8,276,375 (19,137)
Japanese Yen.................................. 09/01/00 770,000,000 7,361,774 (52,211)
Swedish Krona................................. 09/01/00 36,800,000 4,215,562 117,010
------------
Total............................... $ (54,907)
============
</TABLE>
================================================================================
36 See accompanying notes to financial statements.
<PAGE>
U.S. Balanced Fund
--------------------------------------------------------------------------------
[LOGO] UBS The UBS Investment Fund - U.S. Balanced has produced an
Investment Funds annualized return of 7.23% since its inception on July
31, 1995, while the return of the U.S. Balanced Mutual
Fund Index was 16.53% over this time period.
Importantly however, the U.S. Balanced Fund's
performance was achieved with an annualized volatility
over the life of the Fund of 6.35%, or approximately
40% less than the benchmark's annualized volatility of
10.32%. In the first half of 2000, the U.S. Balanced
Fund returned 2.68%, well ahead of the 0.89% return of
the Index. While the past few years have seen a market
environment that hurt our price/value based approach,
we see some compelling signs that the environment is
changing. Investors seem to be more cognizant of the
risks associated with large equity positions, as some
Internet and technology stocks have experienced severe
corrections in the recent past.
Much of the Fund's year-to-date overperformance
relative to the benchmark was due largely to our asset
allocation strategy, which paid off in the second
quarter. The Fund continues to overweight bonds and
underweight equities. Second quarter returns of the two
key indices that make up the benchmark for the Fund
show that bond markets outperformed equity markets by a
wide margin (618 basis points); the Wilshire 5000
Equity Index returned -4.49%, while the Salomon Broad
Investment Grade Bond Index returned 1.69%.
The second quarter also saw some dramatic changes in
equity investor sentiment toward the technology, media
and telecommunication (TMT) sectors that have driven
the equity market to its highs in the recent past.
Investors began to question whether TMT companies can
grow and increase earnings fast enough and for long
enough to justify their high valuations. Our
assessment, as implied by our equity underweight, is
that they cannot.
Our equity analysis is focused on investing in
companies with solid fundamentals as well as promising
uses for new technologies. Specifically, we see
opportunities in some "old" economy sectors such as
basic materials, transportation and healthcare. These
sectors represent the largest overweights in the equity
portion of the Fund, and contributed to the
outperformance of the Fund during the period. These
overweights are offset by significant underweight
positions to software, hardware and telecommunications
sectors.
=======================================================
37
<PAGE>
U.S. Balanced Fund
--------------------------------------------------------------------------------
[LOGO] UBS Total Return
Investment Funds
<TABLE>
<CAPTION>
6 months 1 year 3 years Inception*
ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UBS Investment Fund - U.S. Balanced 2.68% -5.57% 3.20% 7.23%
-----------------------------------------------------------------------------
U.S. Balanced Mutual Fund Index** 0.89 7.99 14.73 16.53
-----------------------------------------------------------------------------
Salomon Smith Barney Broad Investment
Grade (BIG) Bond Index 3.92 4.49 6.02 6.39
-----------------------------------------------------------------------------
Wilshire 5000 Index -0.84 9.52 19.06 21.88
-----------------------------------------------------------------------------
</TABLE>
* Inception date of the UBS Investment Fund - U.S.
Balanced is 7/31/95.
** An unmanaged index compiled by the Advisor,
constructed as follows: 65% Wilshire 5000 Index and
35% Salomon Smith Barney BIG Bond Index.
Total return includes reinvestment of all capital gain
and income distributions.
All total returns in excess of 1 year are average
annualized returns.
Illustration of an Assumed Investment of $10,000
This chart shows the growth in the value of an
investment in the UBS Investment Fund - U.S. Balanced,
the U.S. Balanced Mutual Fund Index, the Salomon Smith
Barney BIG Bond Index and the Wilshire 5000 Index if
you had invested $10,000 on July 31, 1995, and had
reinvested all your income dividends and capital gain
distributions through June 30, 2000. No adjustment has
been made for any income taxes payable by shareholders
on income dividends and capital gain distributions.
Past performance is no guarantee of future results.
Share price and return will vary with market
conditions; investors may realize a gain or loss upon
redemption.
UBS Investment Fund - U.S. Balanced vs. U.S. Balanced
Mutual Fund Index,
Salomon Smith Barney BIG Bond Index and Wilshire 5000
Index
Wealth Value with Dividends Reinvested
[GRAPH]
--------------------------------------------------------------------------------
Label A B C D
--------------------------------------------------------------------------------
Label UBS Investment U.S. Balanced M Wilshire 5000 Solomon Smith B
--------------------------------------------------------------------------------
1 7/31/95 10,000 10,000 10,000 10,000
--------------------------------------------------------------------------------
2 8/31/95 10,141 10,104 10,098 10,115
--------------------------------------------------------------------------------
3 9/30/95 10,325 10,387 10,483 10,210
--------------------------------------------------------------------------------
4 10/30/95 10,387 10,368 10,377 10,347
--------------------------------------------------------------------------------
5 11/30/95 10,694 10,710 10,817 10,508
--------------------------------------------------------------------------------
6 12/31/95 10,841 10,876 10,994 10,653
--------------------------------------------------------------------------------
7 1/31/96 11,058 11,091 11,288 10,726
--------------------------------------------------------------------------------
8 2/29/96 11,001 11,152 11,486 10,544
--------------------------------------------------------------------------------
9 3/31/96 11,030 11,203 11,612 10,469
--------------------------------------------------------------------------------
10 4/30/96 11,049 11,354 11,898 10,391
--------------------------------------------------------------------------------
11 5/31/96 11,086 11,554 12,224 10,386
--------------------------------------------------------------------------------
12 6/30/96 11,154 11,544 12,123 10,520
--------------------------------------------------------------------------------
13 7/31/96 10,982 11,150 11,469 10,548
--------------------------------------------------------------------------------
14 8/31/96 11,096 11,376 11,836 10,532
--------------------------------------------------------------------------------
15 9/30/96 11,412 11,839 12,466 10,716
--------------------------------------------------------------------------------
16 10/31/96 11,670 12,040 12,640 10,957
--------------------------------------------------------------------------------
17 11/30/96 12,100 12,628 13,478 11,138
--------------------------------------------------------------------------------
18 12/31/96 12,018 12,496 13,326 11,040
--------------------------------------------------------------------------------
19 1/31/97 12,162 12,948 14,039 11,082
--------------------------------------------------------------------------------
20 2/28/97 12,202 12,949 14,033 11,094
--------------------------------------------------------------------------------
21 3/31/97 11,988 12,531 13,412 10,982
--------------------------------------------------------------------------------
22 4/30/97 12,182 12,949 13,997 11,139
--------------------------------------------------------------------------------
23 5/31/97 12,530 13,588 14,989 11,243
--------------------------------------------------------------------------------
24 6/30/97 12,826 14,050 15,677 11,377
--------------------------------------------------------------------------------
25 7/31/97 13,351 14,886 16,883 11,686
--------------------------------------------------------------------------------
26 8/31/97 13,125 14,477 16,248 11,585
--------------------------------------------------------------------------------
27 9/30/97 13,413 15,107 17,207 11,755
--------------------------------------------------------------------------------
28 10/31/97 13,269 14,855 16,634 11,923
--------------------------------------------------------------------------------
29 11/30/97 13,351 15,196 17,178 11,980
--------------------------------------------------------------------------------
30 12/31/97 13,540 15,433 17,469 12,102
--------------------------------------------------------------------------------
31 1/31/98 13,665 15,557 17,591 12,258
--------------------------------------------------------------------------------
32 2/28/98 14,020 16,289 18,871 12,249
--------------------------------------------------------------------------------
33 3/31/98 14,294 16,841 19,816 12,297
--------------------------------------------------------------------------------
34 4/30/98 14,260 17,002 20,051 12,361
--------------------------------------------------------------------------------
35 5/31/98 14,294 16,765 19,517 12,480
--------------------------------------------------------------------------------
36 6/30/98 14,338 17,195 20,202 12,582
--------------------------------------------------------------------------------
37 7/31/98 14,209 16,963 19,759 12,608
--------------------------------------------------------------------------------
38 8/31/98 13,797 15,337 16,682 12,801
--------------------------------------------------------------------------------
39 9/30/98 14,280 16,115 17,772 13,103
--------------------------------------------------------------------------------
40 10/31/98 14,562 16,868 19,094 13,044
--------------------------------------------------------------------------------
41 11/30/98 14,738 17,591 20,296 13,116
--------------------------------------------------------------------------------
42 12/31/98 14,835 18,342 21,595 13,157
--------------------------------------------------------------------------------
43 1/31/99 14,787 18,828 22,389 13,254
--------------------------------------------------------------------------------
44 2/28/99 14,438 18,269 21,577 12,022
--------------------------------------------------------------------------------
45 3/31/99 14,581 18,764 22,410 13,096
--------------------------------------------------------------------------------
46 4/30/99 15,010 19,370 23,484 13,140
--------------------------------------------------------------------------------
47 5/31/99 14,930 19,032 22,970 13,019
--------------------------------------------------------------------------------
48 6/30/99 14,931 19,650 24,159 12,975
--------------------------------------------------------------------------------
49 7/31/99 14,706 19,213 23,385 12,973
--------------------------------------------------------------------------------
50 8/31/99 14,482 19,092 23,167 12,914
--------------------------------------------------------------------------------
51 9/30/99 14,162 18,848 22,561 13,069
--------------------------------------------------------------------------------
52 10/31/99 13,985 19,646 23,996 13,108
--------------------------------------------------------------------------------
53 11/30/99 13,985 20,073 24,800 13,106
--------------------------------------------------------------------------------
54 12/31/99 13,726 21,032 26,683 13,046
--------------------------------------------------------------------------------
55 1/31/2000 13,419 20,444 25,575 13,009
--------------------------------------------------------------------------------
56 2/29/2000 12,992 20,825 26,148 13,161
--------------------------------------------------------------------------------
57 3/31/2000 13,584 21,723 27,701 13,332
--------------------------------------------------------------------------------
58 4/30/2000 14,028 20,965 26,258 13,292
--------------------------------------------------------------------------------
59 5/31/2000 14,192 20,483 25,341 13,281
--------------------------------------------------------------------------------
60 6/30/2000 14,100 21,219 26,459 13,558
--------------------------------------------------------------------------------
Fund returns are net of all fees and costs, while the Index
returns are based solely on market returns without deduction
for fees or transaction costs for rebalancing.
=============================================================
38
<PAGE>
U.S. Balanced Fund
--------------------------------------------------------------------------------
[LOGO] UBS Industry Diversification
Investment Funds
As a Percent of Net Assets
As of June 30, 2000
-------------------------------------------------------
U.S. EQUITIES
Energy........................................ 1.61%
Capital Investment
Capital Goods......................... 1.43
Electronic Components................. 1.42
Technology............................ 5.20
------
8.05
Basic Industries
Chemicals............................. 1.50
Housing/Paper......................... 3.34
Metals................................ 1.83
------
6.67
Computers
Software.............................. 0.65
Systems............................... 0.40
------
1.05
Consumer
Autos/Durables........................ 1.21
Food/House Products................... 0.23
Health: Drugs......................... 2.99
Health: Non-Drugs..................... 4.47
Leisure/Tourism....................... 0.25
Non-Durables.......................... 0.87
Retail/Apparel........................ 4.11
------
14.13
Financial
Banks................................. 2.81
Non-Banks............................. 3.59
------
6.40
Telecommunications
Equipment............................. 0.07%
Services.............................. 2.28
------
2.35
Transportation................................ 3.54
Services/Misc................................. 3.73
Utilities..................................... 1.53
------
Total U.S. Equities........... 49.06*
U.S. BONDS
Corporate Bonds
Industrial Components................. 1.86
Health: Drugs......................... 0.53
Telecommunications--Services.......... 0.77
Telecommunications--Wireless.......... 0.29
------
Total U.S. Corporate Bonds.... 3.45
International Dollar Bonds.................... 1.04
Asset-Backed.................................. 1.60
Corporate Mortgage-Backed Securities.......... 0.70
U.S. Government Agencies...................... 1.77
U.S. Gov't. Mortgage-Backed Securities........ 8.41
U.S. Government Obligations................... 26.35
------
Total U.S. Bonds.............. 43.32*
SHORT-TERM INVESTMENTS........................ 7.05*
------
TOTAL INVESTMENTS............. 99.43
CASH AND OTHER ASSETS,
LESS LIABILITIES...................... 0.57
------
NET ASSETS.................................... 100.00%
======
-------------------------------------------------------
*The Fund held a long position in U.S. Treasury futures
on June 30, 2000 which increased U.S. bond exposure
from 43.32% to 71.22%. The Fund also held a short
position in stock index futures which reduced U.S.
Equity exposure from 49.06% to 25.33%. These two
adjustments result in a net decrease in the Fund's
exposure to Short-Term Investments from 7.05% to 2.88%.
Asset Allocation
As of June 30, 2000
Current
Benchmark Strategy
-------------------------------------------------------
U.S. Equities 65% 25%
U.S. Bonds 35 75
-------------------------------------------------------
100% 100%
Top Ten U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
-------------------------------------------------------
1. Advanced Micro Devices, Inc. 2.12%
2. FedEx Corp. 1.60
3. Burlington Northern Santa Fe Corp. 1.52
4. Allergan, Inc. 1.51
5. Electronic Data Systems Corp. 1.27
6. CIGNA Corp. 1.06
7. Gateway, Inc. 1.05
8. St. Jude Medical, Inc. 1.04
9. Baxter International, Inc. 1.02
10. Alza Corp. 1.00
----------------------------------------------------
=======================================================
39
<PAGE>
U.S. Balanced Fund -- Schedule of Investments
June 30, 2000
-------------------------------------------------------------------------------
Shares Value
------ ----------
U.S. Equities -- 49.06%
Advanced Micro Devices, Inc. (b).......... 3,400 $ 262,650
Allergan, Inc............................. 2,500 186,250
Alza Corp. (b)............................ 2,100 124,162
American Electric Power Co., Inc.......... 2,640 78,210
American General Corp..................... 900 54,900
American Standard Companies, Inc. (b)..... 1,700 69,700
AmSouth Bancorp........................... 1,980 31,185
Aon Corp.................................. 2,750 85,422
Associates First Capital Corp., Class A... 3,700 82,556
Baxter International, Inc................. 1,800 126,562
Burlington Northern Santa Fe Corp......... 8,200 188,087
Carnival Corp., Class A................... 1,600 31,200
CIGNA Corp................................ 1,400 130,900
Circuit City Stores-Circuit City Group.... 1,100 36,506
CMS Energy Corp........................... 1,500 33,188
CommScope, Inc. (b)....................... 200 8,200
Compaq Computer Corp...................... 4,100 104,806
Computer Sciences Corp. (b)............... 200 14,938
Compuware Corp. (b)....................... 7,200 74,700
CVS Corp.................................. 800 32,000
Dell Computer Corp. (b)................... 1,000 49,312
Eastman Chemical Co....................... 900 42,975
Electronic Data Systems Corp.............. 3,800 156,750
Emerson Electric Co....................... 2,000 120,750
Entergy Corp.............................. 2,200 59,812
Exxon Mobil Corp.......................... 1,000 78,500
Federated Department Stores, Inc. (b)..... 1,200 40,500
FedEx Corp. (b)........................... 5,200 197,600
First Data Corp........................... 2,158 107,091
Fleet Boston Financial Corp............... 2,605 88,570
Fort James Corp........................... 2,800 64,750
Gateway, Inc. (b)......................... 2,300 130,525
GATX Corp................................. 700 23,800
Genzyme Corp. (b)......................... 1,100 65,381
GreenPoint Financial Corp................. 3,100 58,125
Household International, Inc.............. 1,700 70,656
Illinois Tool Works, Inc.................. 2,100 119,700
IMC Global, Inc........................... 3,500 45,500
Johnson & Johnson Co...................... 1,200 122,250
Johnson Controls, Inc..................... 1,100 56,444
Kimberly-Clark Corp....................... 1,400 80,325
Kroger Co. (b)............................ 4,400 97,075
Lafarge Corp.............................. 1,300 27,300
Lear Corp. (b)............................ 2,300 46,000
Lexmark International Group, Inc. (b)..... 1,200 80,700
Lincoln National Corp..................... 1,600 57,800
Lyondell Chemical Co...................... 2,000 33,500
Martin Marietta Materials, Inc............ 936 37,850
Masco Corp................................ 5,900 106,569
Mattel, Inc............................... 6,400 84,400
Mead Corp................................. 1,500 37,875
Microsoft Corp. (b)....................... 1,000 80,000
Motorola, Inc............................. 1,515 44,030
New York Times Co......................... 1,100 43,450
Newell Rubbermaid, Inc.................... 3,300 84,975
Nextel Communications, Inc. (b)........... 1,800 110,137
Norfolk Southern Corp..................... 1,900 28,263
Owens-Illinois, Inc. (b).................. 900 10,519
Peco Energy Co............................ 2,400 96,750
Pentair, Inc.............................. 1,400 49,700
PepsiCo, Inc.............................. 2,000 88,875
PNC Bank Corp............................. 1,300 60,937
Praxair, Inc.............................. 1,700 63,644
Raytheon Co., Class B..................... 3,000 57,750
Sara Lee Corp............................. 1,500 28,969
SBC Communications, Inc................... 2,700 116,775
Smurfit-Stone Container Corp. (b)......... 1,700 21,888
Southdown, Inc............................ 1,116 64,449
St. Jude Medical, Inc. (b)................ 2,800 128,450
Tellabs, Inc. (b)......................... 800 54,750
Texas Instruments, Inc.................... 800 54,950
Tyson Foods, Inc., Class A................ 2,100 18,375
Ultramar Diamond Shamrock Corp............ 1,690 41,933
Unisys Corp. (b).......................... 1,800 26,213
UnitedHealth Group, Inc................... 1,300 111,475
USG Corp.................................. 700 21,263
Viad Corp................................. 1,600 43,600
W.W. Grainger, Inc........................ 1,200 36,975
Wal-Mart Stores, Inc...................... 900 51,862
Watson Pharmaceutical Co. (b)............. 1,100 59,125
Wells Fargo and Co........................ 2,800 108,500
Westvaco Corp............................. 1,100 27,294
Xerox Corp................................ 1,300 26,975
XL Capital Ltd............................ 600 32,475
York International Corp................... 1,200 31,350
----------
Total U.S. Equities (Cost $6,145,953)..... 6,071,183
----------
Face
Amount
----------
Bonds -- 43.32%
U.S. Corporate Bonds -- 3.45%
Archer Daniels Midland,
6.950%, due 12/15/97.................... $ 250,000 204,464
Lowe's Cos., Inc., 8.250%, due 06/01/10... 25,000 25,545
PanAmSat Corp., 6.000%, due 01/15/03...... 100,000 95,080
Rite Aid Corp., 144A,
6.125%, due 12/15/08.................... 140,000 65,100
WorldCom, Inc., 8.250%, due 05/15/10...... 35,000 35,824
----------
426,013
----------
International Dollar Bonds -- 1.04%
Empresa Nacional de Electricidad S.A.,
8.125%, due 02/01/97.................... 100,000 78,522
United Mexican States,
9.875%, due 02/01/10.................... 50,000 50,500
----------
129,022
----------
Asset-Backed Securities-- 1.60%
Peco Energy Transition Trust,
6.130%, due 03/01/09.................... 215,000 198,200
----------
================================================================================
40
<PAGE>
U.S. Balanced Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Face
Amount Value
--------- ------------
Corporate Mortgage-Backed
Securities -- 0.70%
LB Commercial Conduit Mortgage Trust,
99-C1, Class A1, 6.410%, due 06/15/31.... $ 86,268 $ 83,168
Residential Asset Securitization Trust,
97-A11, Class A2, 7.000%, due 01/25/28 3,505 3,489
------------
86,657
------------
U.S. Government Mortgage-
Backed Securities -- 8.41%
Federal Home Loan Mortgage Corp. Gold,
9.000%, due 07/01/30, TBA................ 270,000 278,522
Federal National Mortgage Assoc.,
97-72, Class EG
0.000%, due 09/25/22 (b)................. 146,578 136,425
Federal National Mortgage Association,
6.500%, due 06/01/14..................... 213,486 205,860
Federal National Mortgage Association,
Series G94-8, Class G,
7.600%, due 06/17/19..................... 205,867 206,388
Government National Mortgage Association,
7.000%, due 12/15/23..................... 121,338 118,515
7.500%, due 10/15/29..................... 94,980 94,369
------------
1,040,079
------------
U.S. Government Agencies -- 1.77%
Federal National Mortgage Association,
5.250%, due 01/15/09..................... 250,000 219,387
------------
U.S. Government Obligations -- 26.35%
U.S. Treasury Bond,
8.000%, due 11/15/21..................... 135,000 162,928
8.750%, due 05/15/17..................... 100,000 125,688
U.S. Treasury Inflation Indexed Note,
3.875%, due 04/15/29..................... 2,540,000 2,637,667
U.S. Treasury Note,
5.625%, due 05/15/08..................... 75,000 72,328
7.500%, due 02/15/05..................... 250,000 262,187
------------
3,260,798
------------
Total U.S. Bonds (Cost $5,383,527)......... 5,360,156
------------
Shares Value
----------- ----------
Short-Term Investments -- 7.05%
Investment Companies -- 5.04%
Brinson Supplementary Trust
U.S. Cash Management Prime Fund.......... 623,691 $ 623,691
----------
Face
Amount
------------
U.S. Government Obligations -- 2.01%
U.S. Treasury Bill, due 08/17/00........... $ 250,000 248,244
------------
Total Short-Term Investments
Cost $871,855)........................... 871,935
------------
Total Investments
(Cost $12,401,335) -- 99.43% (a)......... 12,303,274
Cash and other assets,
less liabilities -- 0.57%................ 71,107
------------
Net Assets -- 100%......................... $ 12,374,381
============
See accompanying notes to schedule of investments.
================================================================================
41
<PAGE>
U.S. Balanced Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $12,665,011; and net
unrealized depreciation consisted of:
Gross unrealized appreciation..................... $ 773,580
Gross unrealized depreciation..................... (1,135,317)
----------
Net unrealized depreciation.................. $ (361,737)
==========
(b) Non-income producing security
TBA: Security is subject to delayed delivery.
144A: Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At June 30, 2000, the value
of these securities amounted to $65,100 or 0.53% of net assets.
FUTURES CONTRACTS
The U.S. Balanced Fund had the following open futures contracts as of June 30,
2000:
<TABLE>
<CAPTION>
Expiration Cost/ Current Unrealized
Date Proceeds Value Gain
-------------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
U.S. Interest Rate Futures Buy Contracts
5 Year U.S. Treasury Notes, 23 contracts.................... September 2000 $ 2,225,950 $ 2,277,359 $ 51,409
10 Year U.S. Treasury Notes, 8 contracts.................... September 2000 678,713 689,390 10,677
30 Year U.S. Treasury Bonds, 5 contracts.................... September 2000 482,441 486,719 4,278
Index Futures Sale Contracts
Standard & Poor's 500, 8 contracts.......................... September 2000 2,994,544 2,936,200 58,344
---------
Total.................................................... $ 124,708
=========
</TABLE>
The aggregate market value of investments pledged to cover margin requirements
for the open futures positions at June 30, 2000 was $248,244.
================================================================================
42 See accompanying notes to financial statements.
<PAGE>
U.S. Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS Since its inception on July 31, 1995, the UBS
Investment Funds Investment Fund - U.S. Equity has provided an
annualized return of 13.76%, compared to the 21.88%
return of its benchmark, the Wilshire 5000 Equity
Index. The annualized volatility of the Fund has been
16.23% since its inception, only slightly above the
15.47% volatility for the benchmark. For the first six
months of 2000, the Fund's total return of -4.78%
trailed the -0.84% return for its benchmark. However,
as a more realistic view of some of the risks inherent
in the equity markets took root in the second quarter
of 2000, the Fund outperformed the benchmark. For the
second quarter, the Fund returned 1.27% compared to the
benchmark return of -4.49%.
The momentum that had been driving prices higher in the
technology, media and telecommunications (TMT) sectors
subsided in the second quarter. Many so-called "old
economy" stocks saw favorable attention from investors,
as they began to look for more reasonable stock
valuations. Investors have begun to question whether
TMT companies can grow and increase earnings fast
enough and for long enough to justify their high
valuations. Past experience is not encouraging. Studies
show that in the past, only 3% of the companies in the
S&P 500 Index have sustained growth of 20% for 10
years, and only one (Microsoft) has sustained 20%
growth for 15 years. While we are skeptical of inflated
investment expectations, we understand and appreciate
the role of new and emerging technology in business.
Our analysis is focused on investing in companies with
solid fundamentals as well as promising uses for new
technologies. Specifically, we see opportunities in
some "old economy" sectors such as basic materials,
transportation and healthcare where some undervalued
companies are leveraging their skills, assets and
competitive positions to take advantage of technology
and the Internet. These sectors represent the largest
overweights in the Fund, and are offset by significant
underweight positions to software, hardware and
telecommunications sectors.
================================================================================
43
<PAGE>
U.S. Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS Total Return
Investment Funds
<TABLE>
<CAPTION>
6 months 1 year 3 years Inception*
ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UBS Investment Fund - U.S.Equity -4.78% -17.47% 4.54% 13.76%
------------------------------------------------------------------------------
Wilshire 5000 Equity Index -0.84 9.52 19.06 21.88
------------------------------------------------------------------------------
</TABLE>
* Inception date of the UBS Investment Fund- U.S.Equity
is 7/31/95.
Total return includes reinvestment of all capital gain
and income distributions.
All total returns in excess of 1 year are average
annualized returns.
Illustration of an Assumed Investment of $10,000
This chart shows the growth in the value of an
investment in the UBS Investment Fund - U.S. Equity and
the Wilshire 5000 Equity Index if you had invested
$10,000 on July 31, 1995, and had reinvested all your
income dividends and capital gain distributions through
June 30, 2000. No adjustment has been made for any
income taxes payable by shareholders on income
dividends and capital gain distributions. Past
performance is no guarantee of future results. Share
price and return will vary with market conditions;
investors may realize a gain or loss upon redemption.
UBS Investment Fund - U.S. Equity
vs. Wilshire 5000 Equity Index
Wealth Value with Dividends Reinvested
[GRAPH]
<TABLE>
<CAPTION>
Label A B
-------------------------------------------------------------------
Label Brinson U.S. Equity Wilshire 5000
-------------------------------------------------------------------
<S> <C> <C> <C>
1 7/31/95 10,000 10,000
2 8/31/95 10,184 10,098
3 9/30/95 10,570 10,483
4 10/31/95 10,528 10,377
5 11/30/95 11,122 10,817
6 12/31/95 11,335 10,994
7 1/31/96 11,790 11,288
8 2/28/96 10,971 11,486
9 3/31/96 12,194 11,612
10 4/30/96 12,418 11,898
11 5/31/96 12,615 12,224
12 6/30/96 12,570 12,123
13 7/31/96 11,958 11,469
14 8/31/96 12,415 11,836
15 9/30/96 12,966 12,466
16 10/31/96 13,242 12,640
17 11/30/96 14,156 13,478
18 12/31/96 14,157 13,326
19 1/31/97 14,663 14,039
20 2/28/97 14,757 14,033
21 3/31/97 14,260 13,412
22 4/30/97 14,691 13,997
23 5/31/97 15,759 14,989
24 6/30/97 16,499 15,677
25 7/31/97 17,756 16,883
26 8/31/97 17,053 16,248
27 9/30/97 17,812 17,207
28 10/31/97 16,865 16,634
29 11/31/97 17,193 17,178
30 12/31/97 17,587 17,496
31 1/31/98 17,697 17,591
32 2/28/98 19,232 18,871
33 3/31/98 20,326 19,816
34 4/30/98 20,115 20,051
35 5/31/98 19,814 19,517
36 6/30/98 19,931 10,202
37 7/31/98 19,418 19,759
38 8/31/98 16,644 16,682
39 9/30/98 17,840 17,772
40 10/31/98 19,187 19,094
41 11/30/98 19,991 20,296
42 12/31/98 20,737 21,595
43 1/31/99 20,587 22,389
44 2/28/99 19,831 21,577
45 3/31/99 20,470 22,410
46 4/30/99 22,303 23,484
47 5/31/99 22,005 22,970
48 6/30/99 22,847 24,159
49 7/31/99 21,875 23,385
50 8/31/99 21,106 23,167
51 9/30/99 19,557 22,561
52 10/31/99 19,568 23,996
53 11/30/99 19,675 24,800
54 12/31/99 19,790 26,683
55 1/31/2000 18,465 25,575
56 2/29/2000 16,940 26,148
57 3/13/2000 18,618 27,701
58 4/30/2000 19,351 26,258
59 5/31/2000 19,505 25,341
60 6/30/2000 18,852 26,459
</TABLE>
Fund returns are net of all fees and costs, while the
Index returns are based solely on market returns
without deduction for fees or transaction costs for
rebalancing.
================================================================================
44
<PAGE>
U.S. Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS
Investment Funds Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
------------------------------------------------
U.S. EQUITIES
Energy............................... 3.27%
Capital Investment
Capital Goods...................... 2.43
Electronic Components.............. 7.70
Technology......................... 1.81
------
11.94
Basic Industries
Chemicals.......................... 3.06
Housing/Paper...................... 6.81
Metals............................. 3.73
------
13.60
Computers
Software........................... 2.50
Systems............................ 4.65
------
7.15
Consumer
Autos/Durables..................... 2.25
Food/House Products................ 0.48
Health: Drugs...................... 6.10
Health: Non-Drugs.................. 8.89
Leisure/Tourism.................... 0.50
Non-Durables....................... 1.97%
Retail/Apparel..................... 7.01
------
27.20
Financial
Banks.............................. 5.73
Non-Banks.......................... 7.28
------
13.01
Telecommunications
Equipment.......................... 0.16
Services........................... 5.34
------
5.50
Transportation....................... 7.15
Services/Misc........................ 7.59
Utilities............................ 3.14
------
Total U.S. Equities............. 99.55*
SHORT-TERM INVESTMENTS............... 0.98*
------
TOTAL INVESTMENTS............... 100.53
LIABILITIES, LESS CASH
AND OTHER ASSETS................... (0.53)
------
NET ASSETS........................... 100.00%
======
------------------------------------------------
*The Fund held a long position in stock index
futures which increased U.S. Equity exposure from
99.55% to 100.53%. This adjustment results in a
net decrease in the Fund's exposure to Short-Term
Investments from 0.98% to 0.00%.
Top Ten U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
--------------------------------------------------
1. Advanced Micro Devices, Inc. 4.26%
2. FedEx Corp. 3.22
3. Burlington Northern Santa Fe Corp. 3.06
4. Allergan, Inc. 3.01
5. Electronic Data Systems Corp. 2.54
6. Gateway, Inc. 2.14
7. CIGNA Corp. 2.08
8. Alza Corp. 2.08
9. St. Jude Medical, Inc. 2.08
10. Baxter International, Inc. 2.05
--------------------------------------------------
================================================================================
45
<PAGE>
U.S. Equity Fund -- Schedule of Investments
June 30, 2000
------------------------------------------------------------------------
Shares Value
------- ------------
U.S. Equities -- 99.55%
Advanced Micro Devices, Inc. (b)............ 103,500 $ 7,995,375
Allergan, Inc............................... 75,800 5,647,100
Alza Corp. (b).............................. 66,000 3,902,250
American Electric Power Co., Inc............ 81,580 2,416,807
American General Corp....................... 27,700 1,689,700
American Standard Companies, Inc. (b)....... 51,500 2,111,500
AmSouth Bancorp............................. 60,109 946,717
Aon Corp.................................... 84,450 2,623,228
Associates First Capital Corp., Class A..... 115,000 2,565,937
Baxter International, Inc................... 54,800 3,853,125
Burlington Northern Santa Fe Corp........... 250,400 5,743,550
Cardinal Health, Inc........................ 600 44,400
Carnival Corp., Class A..................... 48,400 943,800
CIGNA Corp.................................. 41,750 3,903,625
Circuit City Stores-Circuit City Group...... 32,400 1,075,275
CMS Energy Corp............................. 46,250 1,023,281
CommScope, Inc. (b)......................... 7,300 299,300
Compaq Computer Corp........................ 126,900 3,243,881
Computer Sciences Corp. (b)................. 6,100 455,594
Compuware Corp. (b)......................... 220,700 2,289,762
CVS Corp.................................... 25,400 1,016,000
Delhaize America, Inc....................... 1 18
Dell Computer Corp. (b)..................... 29,500 1,454,719
Eastman Chemical Co......................... 27,550 1,315,513
Electronic Data Systems Corp................ 115,500 4,764,375
Emerson Electric Co......................... 62,400 3,767,400
Entergy Corp................................ 68,000 1,848,750
Exxon Mobil Corp............................ 31,000 2,433,500
Federated Department Stores, Inc. (b)....... 37,400 1,262,250
FedEx Corp. (b)............................. 158,900 6,038,200
First Data Corp............................. 67,130 3,331,326
Fleet Boston Financial Corp................. 79,555 2,704,870
Fort James Corp............................. 86,700 2,004,937
Gateway, Inc. (b)........................... 70,800 4,017,900
GATX Corp................................... 20,100 683,400
Genzyme Corp. (b)........................... 33,050 1,964,409
GreenPoint Financial Corp................... 96,100 1,801,875
Household International, Inc................ 51,900 2,157,094
Illinois Tool Works, Inc.................... 65,600 3,739,200
IMC Global, Inc............................. 106,600 1,385,800
Johnson & Johnson Co........................ 35,400 3,606,375
Johnson Controls, Inc....................... 32,300 1,657,394
Kimberly-Clark Corp......................... 41,550 2,383,931
Kroger Co. (b).............................. 134,100 2,958,581
Lafarge Corp................................ 40,000 840,000
Lear Corp. (b).............................. 71,850 1,437,000
Lexmark International Group, Inc. (b)....... 38,400 2,582,400
Lincoln National Corp....................... 50,500 1,824,312
Lyondell Chemical Co........................ 62,250 1,042,688
Martin Marietta Materials, Inc.............. 29,907 1,209,364
Masco Corp.................................. 180,400 3,258,475
Mattel, Inc................................. 195,500 2,578,156
Mead Corp................................... 47,000 1,186,750
Microsoft Corp. (b)......................... 30,100 2,408,000
Motorola, Inc............................... 43,423 1,261,981
New York Times Co........................... 34,900 1,378,550
Newell Rubbermaid, Inc...................... 101,800 2,621,350
Nextel Communications, Inc. (b)............. 55,600 3,402,025
Norfolk Southern Corp....................... 63,600 946,050
Owens-Illinois, Inc. (b).................... 27,100 316,731
Peco Energy Co.............................. 74,800 3,015,375
Pentair, Inc................................ 43,800 1,554,900
PepsiCo, Inc................................ 62,800 2,790,675
PNC Bank Corp............................... 40,700 1,907,812
Praxair, Inc................................ 53,300 1,995,419
Raytheon Co., Class B....................... 93,250 1,795,062
Sara Lee Corp............................... 46,800 903,825
SBC Communications, Inc..................... 82,600 3,572,450
Smurfit-Stone Container Corp. (b)........... 53,300 686,238
Southdown, Inc.............................. 34,540 1,994,685
St. Jude Medical, Inc. (b).................. 85,000 3,899,375
Tellabs, Inc. (b)........................... 26,000 1,779,375
Texas Instruments, Inc...................... 24,600 1,689,712
Tyson Foods, Inc., Class A.................. 67,250 588,438
Ultramar Diamond Shamrock Corp.............. 51,618 1,280,772
Unisys Corp. (b)............................ 55,400 806,763
UnitedHealth Group, Inc..................... 38,500 3,301,375
USG Corp.................................... 22,900 695,588
Viad Corp................................... 49,150 1,339,338
W.W. Grainger, Inc.......................... 36,400 1,121,575
Wal-Mart Stores, Inc........................ 28,400 1,636,550
Watson Pharmaceutical Co. (b)............... 35,200 1,892,000
Wells Fargo and Co.......................... 87,300 3,382,875
Westvaco Corp............................... 34,800 863,475
Xerox Corp.................................. 39,400 817,550
XL Capital Ltd.............................. 19,500 1,055,438
York International Corp..................... 37,600 982,300
------------
Total U.S. Equities (Cost $163,993,543)..... 186,714,796
------------
Short-Term Investments -- 0.98%
Investment Companies -- 0.45%
Brinson Supplementary Trust U.S.
Cash Management Prime Fund................. 849,414 849,414
------------
Face
Amount
------
U.S. Government Obligations -- 0.53%
U.S. Treasury Bill, due 08/17/00............ $1,000,000 992,975
------------
Total Short-Term Investments
(Cost $1,841,972).......................... 1,842,389
------------
Total Investments
(Cost $165,835,515) -- 100.53% (a)......... 188,557,185
Liabilities, less cash and
other assets -- (0.53%).................... (993,088)
------------
Net Assets -- 100%........................... $187,564,097
============
See accompanying notes to schedule of investments.
================================================================================
46
<PAGE>
U.S. Equity Fund-- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $173,799,988; and net
unrealized appreciation consisted of:
Gross unrealized appreciation................... $ 41,336,875
Gross unrealized depreciation................... (26,579,678)
------------
Net unrealized appreciation................ $ 14,757,197
============
(b) Non-income producing security
FUTURES CONTRACTS
The U.S. Equity Fund had the following open futures contracts as of June 30,
2000:
<TABLE>
<CAPTION>
Expiration Current Unrealized
Date Cost Value Loss
---------- ---- ----- ----
<S> <C> <C> <C> <C>
Index Futures Buy Contracts
Standard & Poor's 500, 5 contracts.... September 2000 $1,839,547 $1,835,125 $(4,422)
========
</TABLE>
The aggregate market value of investments pledged to cover margin requirements
for the open futures positions at June 30, 2000 was $992,975.
================================================================================
See accompanying notes to financial statements.
47
<PAGE>
U.S. Large Cap Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS Since its performance inception on April 30, 1998, the
Investment Funds UBS Investment Fund -U.S. Large Cap Equity has provided
an annualized return of -6.70% compared to the 14.72%
return of its benchmark, the S&P 500 Equity Index.
Results for the calendar year-to-date period continued
to be disappointing, with the Fund returning -7.80%
versus the benchmark return of -0.42%. While these
results are well below our expectations, we feel the
Fund is very well positioned to take advantage of the
current market environment--which sees investors
focusing more on the so-called "old economy" companies.
In the second quarter alone, the Fund made up 443 basis
points of performance versus the benchmark, returning
1.77% versus the benchmark return of -2.66%. We see
signs that this favorable short-term performance will
continue into the future.
The momentum that had been driving prices higher in the
technology, media and telecommunications (TMT) sectors
subsided in the second quarter. Many so-called "old
economy" stocks saw favorable attention from investors,
as they began to look for more reasonable stock
valuations. Investors have begun to question whether
TMT companies can grow and increase earnings fast
enough and for long enough to justify their high
valuations. Past experience is not encouraging. Studies
show that in the past, only 3% of the companies in the
S&P 500 Index have sustained growth of 20% for 10
years, and only one (Microsoft) has sustained 20%
growth for 15 years. While we are skeptical of inflated
investment expectations, we understand and appreciate
the role of new and emerging technology in business.
Our analysis is focused on investing in companies with
solid fundamentals as well as promising uses for new
technologies. Specifically, we see opportunities in
some "old economy" sectors such as basic materials,
transportation and healthcare where some undervalued
companies are leveraging their skills, assets and
competitive positions to take advantage of technology
and the Internet. These sectors represent the largest
overweights in the Fund, and are offset by significant
underweight positions to software, hardware and
telecommunications sectors.
=======================================================
48
<PAGE>
U.S. Large Cap Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS Total Return
Investment Funds
<TABLE>
<CAPTION>
6 months 1 year Inception*
ended ended to
6/30/00 6/30/00 6/30/00
--------------------------------------------------------------------------------
<S> <C> <C> <C>
UBS Investment Fund - U.S. Large Cap Equity -7.80% -24.20% -6.70%
--------------------------------------------------------------------------------
S&P 500 Equity Index -0.42 7.25 14.72
--------------------------------------------------------------------------------
</TABLE>
* Performance inception date of the UBS Investment
Fund - U.S. Large Cap Equity is 4/30/98.
Total return includes reinvestment of all capital gain
and income distributions.
All total returns in excess of 1 year are average
annualized returns.
Illustration of an Assumed Investment of $10,000
This chart shows the growth in the value of an
investment in the UBS Investment Fund - U.S. Large Cap
Equity and the S&P 500 Equity Index if you had invested
$10,000 on April 30, 1998, and had reinvested all your
income dividends and capital gain distributions through
June 30, 2000. No adjustment has been made for any
income taxes payable by shareholders on income
dividends and capital gain distributions. Past
performance is no guarantee of future results. Share
price and return will vary with market conditions;
investors may realize a gain or loss upon redemption.
UBS Investment Fund - U.S. Large Cap Equity
vs. S&P 500 Equity Index
Wealth Value with Dividends Reinvested
[GRAPH]
Brinson U.S. S&P 500
Large Cap Equity Equity Index
---------------- ------------
4/30/98 10,000 10,000
5/31/98 9,827 9,828
6/30/98 9,968 10,227
7/31/98 9,774 10,118
8/31/98 8,481 8,655
9/30/98 9,133 9,210
10/31/98 9,795 9,959
11/30/98 10,212 10,563
12/31/98 10,529 11,171
1/31/99 10,601 11,638
2/28/99 10,263 11,277
3/31/99 10,509 11,728
4/30/99 11,400 12,182
5/31/99 11,062 11,894
6/30/99 11,349 12,555
7/31/99 10,836 12,163
8/31/99 10,518 12,102
9/30/99 9,596 11,771
10/31/99 9,565 12,516
11/30/99 9,473 12,770
12/31/99 9,331 13,522
1/31/2000 8,638 12,843
2/29/2000 7,806 12,600
3/31/2000 8,453 13,832
4/30/2000 8,765 13,416
5/31/2000 8,915 13,141
6/30/2000 8,603 13,465
Fund returns are net of all fees and costs, while the
Index returns are based solely on market returns
without deduction for fees or transaction costs for
rebalancing.
=======================================================
49
<PAGE>
U.S. Large Cap Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS Industry Diversification
Investment Funds
As a Percent of Net Assets
As of June 30, 2000
----------------------------------------------------
U.S. EQUITIES
Energy.................................... 3.93%
Capital Investment
Capital Goods........................... 4.49
Electric Components..................... 4.41
Technology.............................. 2.76
------
11.66
Basic Industries
Chemicals............................... 1.62
Housing/Paper........................... 1.26
Metals.................................. 2.64
------
5.52
Computers
Software................................ 3.81
Systems................................. 7.04
------
10.85
Consumer
Food/House Products..................... 0.62
Health: Drugs........................... 1.22
Health: Non-Drugs....................... 8.94
Leisure/Tourism......................... 0.75%
Non-Durables............................ 2.26
Retail/Apparel.......................... 8.75
------
22.54
Financial
Banks................................... 6.49
Non-Banks............................... 8.73
------
15.22
Telecommunications........................ 4.06
Transportation............................ 8.12
Utilities................................. 1.50
Services/Miscellaneous.................... 8.64
------
Total U.S. Equities............ 92.04*
SHORT-TERM INVESTMENTS.................... 7.62*
------
TOTAL INVESTMENTS.................. 99.66
CASH AND OTHER ASSETS,
LESS LIABILITIES........................ 0.34
------
NET ASSETS................................ 100.00%
======
----------------------------------------------------
* The Fund held a long position in stock index
futures which increased U.S. Equity exposure from
92.04% to 98.94%. This adjustment results in a net
decrease in the Fund's exposure to Short-Term
Investments from 7.62% to 0.72%.
Top 10 U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
------------------------------------------------
1. Electronic Data Systems Corp. 3.85%
2. FedEx Corp. 3.74
3. Burlington Northern Santa Fe Corp. 3.58
4. Gateway, Inc. 3.24
5. CIGNA Corp. 3.17
6. Baxter International, Inc. 3.13
7. Johnson & Johnson Co. 3.13
8. Illinois Tool Works, Inc. 3.04
9. Emerson Electric Co. 3.03
10. Wells Fargo and Co. 2.75
------------------------------------------------
===================================================
50
<PAGE>
U.S. Large Cap Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- --------
<S> <C> <C>
U.S. Equities -- 92.04%
American Electric Power Co., Inc................................. 10,560 $ 312,840
American General Corp............................................ 3,600 219,600
Aon Corp......................................................... 10,850 337,028
Associates First Capital Corp., Class A.......................... 14,800 330,225
Baxter International, Inc........................................ 7,100 499,219
Burlington Northern Santa Fe Corp................................ 24,900 571,144
Cardinal Health, Inc............................................. 100 7,400
Carnival Corp., Class A.......................................... 6,100 118,950
CIGNA Corp....................................................... 5,400 504,900
Compaq Computer Corp............................................. 16,400 419,225
Computer Sciences Corp. (b)...................................... 800 59,750
Compuware Corp. (b).............................................. 28,500 295,687
CVS Corp......................................................... 3,300 132,000
Dell Computer Corp. (b).......................................... 3,800 187,388
Electronic Data Systems Corp..................................... 14,900 614,625
Eli Lilly and Co................................................. 300 29,963
Emerson Electric Co.............................................. 8,000 483,000
Entergy Corp..................................................... 8,800 239,250
Exxon Mobil Corp................................................. 4,000 314,000
FedEx Corp. (b).................................................. 15,700 596,600
First Data Corp.................................................. 8,600 426,775
Fleet Boston Financial Corp...................................... 10,285 349,690
Gateway, Inc. (b)................................................ 9,100 516,425
Household International, Inc..................................... 6,700 278,469
Illinois Tool Works, Inc......................................... 8,500 484,500
Johnson & Johnson Co............................................. 4,900 499,187
Kimberly-Clark Corp.............................................. 3,500 200,813
Kroger Co. (b)................................................... 17,300 381,681
Lexmark International Group, Inc. (b)............................ 5,000 336,250
Masco Corp....................................................... 23,300 420,856
Mattel, Inc...................................................... 25,200 332,325
Microsoft Corp. (b).............................................. 3,900 312,000
Newell Rubbermaid, Inc........................................... 13,100 337,325
Norfolk Southern Corp............................................ 8,600 127,925
PepsiCo, Inc..................................................... 8,100 359,944
PNC Bank Corp.................................................... 5,300 248,437
Praxair, Inc..................................................... 6,900 258,319
Raytheon Co., Class B............................................ 12,000 231,000
Sara Lee Corp.................................................... 5,100 98,494
SBC Communications, Inc.......................................... 9,600 415,200
Schering Plough Corp............................................. 3,100 156,550
Tellabs, Inc. (b)................................................ 3,400 232,687
Texas Instruments, Inc........................................... 3,200 219,800
UnitedHealth Group, Inc.......................................... 5,000 428,750
Wal-Mart Stores, Inc............................................. 3,700 213,212
Wells Fargo and Co............................................... 11,300 437,875
Xerox Corp....................................................... 5,000 103,750
-----------
Total U.S. Equities (Cost $15,674,981)........................... 14,681,033
-----------
Short Term Investments -- 7.62%
Investment Companies -- 7.62%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund
(Cost $1,215,982).............................................. 1,215,982 1,215,982
-----------
Total Investments
(Cost $16,890,963) -- 99.66% (a)............................... 15,897,015
Cash and other assets,
less liabilities -- 0.34%...................................... 53,820
-----------
Net Assets -- 100%............................................... $15,950,835
===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $18,155,680; and net
unrealized depreciation consisted of:
Gross unrealized appreciation......................... $ 728,386
Gross unrealized depreciation......................... (2,987,051)
-----------
Net unrealized depreciation................... $(2,258,665)
===========
(b) Non-income producing security
FUTURES CONTRACTS
The U.S. Large Cap Equity Fund had the following open futures contracts as of
June 30, 2000:
<TABLE>
<CAPTION>
Expiration Current Unrealized
Date Cost Value Loss
------------ ------ ---------- ------------
<S> <C> <C> <C> <C>
Index Futures Buy Contracts
Standard & Poor's 500, 3 contracts............... September 2000 $1,108,971 $1,101,075 $(7,896)
=======
</TABLE>
The segregated cash pledged to cover margin requirements for the open futures
positions at June 30, 2000 was $56,250.
================================================================================
See accompanying notes to financial statements. 51
<PAGE>
U.S. Large Cap Growth Fund
-------------------------------------------------------------------------------
[LOGO] UBS Since its inception on December 31, 1998, the UBS
Investment Funds Investment Fund - U.S. Large Cap Growth has returned
23.03%, compared to a return of 24.43% for the Russell
1000 Growth Index. On a calendar year to date basis,
the Fund has returned 3.64% versus the 4.23% return of
the benchmark. The Fund outperformed the benchmark by a
small margin in the first quarter, but lagged the
benchmark somewhat in the second quarter. Performance
in the first quarter was strong, mainly due to strong
stock selection decisions. Stock selection in the
second quarter was weaker, and offset the earlier
gains.
During the second quarter, we decided to add to our
holdings in the technology sector, which has seen a
significant correction from its highs in mid March. In
spite of this, we continue to be underweight the sector
with a 41.4% holding versus the Russell 1000 Growth
Index, for which technology exposure now constitutes
about 47.8%. Along with the technology underweight, the
Fund also holds underweight positions in consumer
staples and capital goods, which are offset by
overweight positions in the energy, financial and
healthcare sectors.
=======================================================
52
<PAGE>
U.S. Large Cap Growth Fund
-------------------------------------------------------------------------------
[LOGO] UBS Total Return
Investment Funds
<TABLE>
<CAPTION>
6 months 1 year Inception*
ended ended to
6/30/00 6/30/00 6/30/00
-----------------------------------------------------------------------------------
<S> <C> <C> <C>
UBS Investment Fund - U.S. Large Cap Growth 3.64% 16.62% 23.03%
-----------------------------------------------------------------------------------
S&P 500 Equity Index -0.42 7.25 13.26
-----------------------------------------------------------------------------------
Russell 1000 Growth Index** 4.23 25.67 24.43
-----------------------------------------------------------------------------------
</TABLE>
* Inception date of the UBS Investment Fund - U.S.
Large Cap Growth is 12/31/98.
** The Advisor has chosen to change the Fund's
benchmark index from the S&P 500 Equity Index to the
Russell 1000 Growth Index due to the Advisor's
determination that the Russell 1000 Growth Index
more closely reflects the Fund's investment
strategies.
Total return includes reinvestment of all capital gain
and income distributions.
All total returns in excess of 1 year are average
annualized returns.
Illustration of an Assumed Investment of $10,000
This chart shows the growth in the value of an
investment in the UBS Investment Fund - U.S. Large Cap
Growth, the S&P 500 Equity Index and the Russell 1000
Growth Index if you had invested $10,000 on December
31, 1998, and had reinvested all your income dividends
and capital gain distributions through June 30, 2000.
No adjustment has been made for any income taxes
payable by shareholders on income dividends and capital
gain distributions. Past performance is no guarantee of
future results. Share price and return will vary with
market conditions; investors may realize a gain or loss
upon redemption.
UBS Investment Fund - U.S. Large Cap Growth
vs. S&P 500 Equity Index and Russell 1000 Growth Index
Wealth Value with Dividends Reinvested
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
Label A B C
---------------------------------------------------------------------------------------
Label Brinson U.S Large Capita S&P 500 Equity Index Russell 1000 G
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 12/31/98 10000 10,000 10,000
---------------------------------------------------------------------------------------
2 1/31/99 10617 10,418 10,587
---------------------------------------------------------------------------------------
3 2/28/99 10152 10,094 10,104
---------------------------------------------------------------------------------------
4 3/31/99 10633 10,498 10,636
---------------------------------------------------------------------------------------
5 4/30/99 11030 10,905 10,649
---------------------------------------------------------------------------------------
6 5/31/99 10887 10,647 10,322
---------------------------------------------------------------------------------------
7 6/30/99 11698 11,238 11,045
---------------------------------------------------------------------------------------
8 7/31/99 11,208 10,887 10,694
---------------------------------------------------------------------------------------
9 8/31/99 11,191 10,834 10,869
---------------------------------------------------------------------------------------
10 9/30/99 10,811 10,537 10,640
---------------------------------------------------------------------------------------
11 10/31/99 11,394 11,203 11,444
---------------------------------------------------------------------------------------
12 11/30/99 11,968 11,431 12,061
---------------------------------------------------------------------------------------
13 12/31/99 13,163 12,104 13,316
---------------------------------------------------------------------------------------
14 1/31/2000 12,638 11,496 12,691
---------------------------------------------------------------------------------------
15 2/29/2000 13,217 11,279 13,316
---------------------------------------------------------------------------------------
16 3/31/2000 14,076 12,382 14,265
---------------------------------------------------------------------------------------
17 4/30/2000 13,678 12,010 13,586
---------------------------------------------------------------------------------------
18 5/31/2000 13,136 11,763 12,902
---------------------------------------------------------------------------------------
19 6/30/2000 13,647 12,053 13,880
---------------------------------------------------------------------------------------
</TABLE>
Fund returns are net of all fees and costs, while the
Index returns are based solely on market returns
without deduction for fees or transaction costs for
rebalancing.
======================================================
53
<PAGE>
U.S. Large Cap Growth Fund
--------------------------------------------------------------------------------
[LOGO] UBS Industry Diversification
Investment Funds
As a Percent of Net Assets
As of June 30, 2000
-----------------------------------------------------
U.S. EQUITIES
Energy.................................... 3.00%
Capital Investment
Electric Components..................... 15.94
Technology.............................. 1.47
-------
17.41
Basic Industries
Housing/Paper........................... 0.94
Computers
Software................................ 7.09
Systems................................. 12.11
-------
19.20
Consumer
Autos/Durables.......................... 1.41
Health: Drugs........................... 10.12
Health: Non-Drugs......................... 6.78%
Non-Durables.............................. 2.37
Retail/Apparel............................ 8.45
------
29.13
Financial
Non-Banks............................... 3.92
Telecommunications........................ 9.21
Services/Misc............................. 5.79
------
Total U.S. Equities................. 88.60*
SHORT-TERM INVESTMENTS.................... 7.80*
------
TOTAL INVESTMENTS................... 96.40
CASH AND OTHER ASSETS,
LESS LIABILIITIES....................... 3.60
------
NET ASSETS................................. 100.00%
======
-----------------------------------------------------
*The Fund held a long position in stock index futures
which increased U.S. Equity exposure from 88.60% to
97.02%. This adjustment results in a net decrease in
the Fund's exposure to Short-Term Investments from
7.80% to -0.62%.
Top 10 U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
----------------------------
1. Cisco Systems, Inc. 4.47%
2. Intel Corp. 4.09
3. Pfizer, Inc. 3.75
4. Microsoft Corp. 3.24
5. General Electric Co. 3.16
6. Oracle Corp. 3.09
7. Sun Microsystems, Inc. 2.99
8. Texas Instruments, Inc. 2.94
9. Micron Technology, Inc. 2.70
10. Johnson & Johnson Co. 2.57
---------------------------------------
=====================================================================
54
<PAGE>
U.S. Large Cap Growth Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
------- -------
U.S. Equities-- 88.60%
AFLAC, Inc.................................. 3,500 $ 160,781
Agilent Technologies, Inc. (b).............. 900 66,375
Alltel Corp................................. 1,700 105,294
America On-Line, Inc. (b)................... 4,300 226,825
American Express Co......................... 2,200 114,675
American International Group, Inc........... 1,025 120,438
Amgen, Inc. (b)............................. 1,700 119,425
Anheuser-Busch Cos., Inc., Class A.......... 1,600 119,500
Applied Material, Inc. (b).................. 1,900 172,188
AT&T Corp.- Liberty Media Group, Inc. (b)... 8,612 208,841
Avon Products, Inc.......................... 4,100 182,450
BMC Software, Inc. (b)...................... 2,700 98,508
Boeing Co................................... 4,400 183,975
Boston Scientific Corp. (b)................. 5,100 111,881
Bristol-Myers Squibb Co..................... 2,500 145,625
Cisco Systems, Inc. (b)..................... 9,200 584,775
Citigroup, Inc.............................. 2,700 162,675
Compaq Computer Corp........................ 6,400 163,600
Dell Computer Corp. (b)..................... 2,500 123,281
EMC Corp. (b)............................... 1,600 123,100
Gap, Inc.................................... 3,500 109,375
General Electric Co......................... 7,800 413,400
Guidant Corp. (b)........................... 3,200 158,400
Halliburton Co.............................. 3,400 160,438
Immunex Corp. (b)........................... 4,200 207,637
Intel Corp.................................. 4,000 534,750
International Business Machines Corp........ 1,800 197,212
JDS Uniphase Corp. (b)...................... 700 83,913
Johnson & Johnson Co........................ 3,300 336,187
Lowe's Companies, Inc....................... 3,000 123,188
Lucent Technologies, Inc.................... 3,900 231,075
Merck & Co., Inc............................ 2,700 206,887
Merrill Lynch & Co.......................... 1,000 115,000
Micron Technology, Inc. (b)................. 4,000 352,250
Microsoft Corp. (b)......................... 5,300 $ 424,000
Motorola, Inc............................... 3,700 107,531
NEXTLINK Communications, Inc................ 1,600 60,700
Nike, Inc................................... 2,100 83,606
Nortel Networks Corp........................ 2,000 136,500
Oracle Corp. (b)............................ 4,800 403,500
Pepsi Bottling Group, Inc................... 6,500 189,719
Pfizer, Inc................................. 10,200 489,600
Pharmacia Corp.............................. 2,100 108,544
QUALCOMM, Inc. (b).......................... 1,800 108,000
Safeway, Inc. (b)........................... 5,400 243,675
Schering Plough Corp........................ 5,400 272,700
Schlumberger Ltd............................ 3,100 231,337
Solectron Corp. (b)......................... 3,800 159,125
Sprint Corp. (b)............................ 900 53,550
Sun Microsystems, Inc. (b).................. 4,300 391,031
Target Corp................................. 3,800 220,400
Texas Instruments, Inc...................... 5,600 384,650
Time Warner, Inc............................ 800 60,800
Tyco International Co....................... 3,300 156,338
Viacom, Inc. (b)............................ 2,646 180,424
Wal-Mart Stores, Inc........................ 4,600 265,075
Walt Disney Co.............................. 3,400 131,963
Worldcom, Inc. (b).......................... 4,200 192,675
-----------
Total U.S. Equities (Cost $10,029,797) 11,579,367
-----------
Short-Term Investments -- 7.80%
Investment Companies -- 7.80%
Vista U.S. Government Money Market
Fund (Cost $1,019,932).................... 1,019,932 1,019,932
-----------
Total Investments
(Cost $11,049,729) -- 96.40% (a)............ 12,599,299
Cash and other assets,
less liabilities -- 3.60%................... 469,968
-----------
Net Assets -- 100%.......................... $13,069,267
===========
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $11,090,213; and net
unrealized appreciation consisted of:
Gross unrealized appreciation................... $ 1,893,400
Gross unrealized depreciation................... (384,314)
-----------
Net unrealized appreciation................ $ 1,509,086
===========
(b) Non-income producing security
FUTURES CONTRACTS
The U.S. Large Cap Growth Fund had the following open futures contracts as of
June 30, 2000:
<TABLE>
<CAPTION>
Expiration Current Unrealized
Date Cost Value Loss
----------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Index Futures Buy Contracts
Standard & Poor's 500, 3 contracts............. September 2000 $1,102,896 $1,101,075 $(1,821)
========
</TABLE>
The segregated cash pledged to cover margin requirements for the open futures
positions at June 30, 2000 was $18,750.
================================================================================
See accompanying notes to financial statements. 55
<PAGE>
U.S. Small Cap Growth Fund
--------------------------------------------------------------------------------
[LOGO] UBS The UBS Investment Fund - U.S. Small Cap Growth has
Investment Funds appreciated 49.52% on an annualized basis since its
inception on December 31, 1998. This compares favorably
with the return of the Russell 2000 Growth Index, a
commonly cited index of small capitalization U.S.
growth stocks, which has returned 28.02% over the same
period. Much of that outperformance has come in the
last six months with the Fund returning 29.99% while
the index returned just 1.23%.
During the second quarter, small cap stocks
underperformed large caps. The S&P 500 index declined
2.7% in the second quarter, versus a 3.8% decline in
the Russell 2000 Index. Year to date, however, small
caps have returned a positive 3.0% versus a 0.4%
decline for the S&P 500. Small cap growth stocks
declined 7.4% in the second quarter and have returned a
positive 1.2% year to date. The top performing small
cap growth sector in the second quarter was healthcare,
up 19.2%, while the worst performing sector was
technology, down 19.4%.
In the first quarter, the Fund's technology underweight
detracted somewhat from performance, as that sector
continued to dominate market performance. For the
second quarter, however, the Fund benefited from both
strong stock and sector selection. Stock selection was
particularly strong in the technology sector and was
weak in the consumer cyclical sector. Sector selection
was helped by the Fund's underweight in both technology
as well as the communication services sectors, both of
which performed poorly during the quarter. At the end
of June, the Fund was overweighted versus the Russell
2000 Growth Index in the energy, healthcare, and
transportation sectors. The Fund was underweighted in
the capital goods, financials, and technology areas. We
have taken advantage of the recent weakness in the
technology sector and have increased our exposure over
the past several weeks.
=======================================================
56
<PAGE>
U.S. Small Cap Growth Fund
--------------------------------------------------------------------------------
[LOGO] UBS Total Return
Investment Funds
<TABLE>
<CAPTION>
6 months 1 year Inception*
ended ended to
6/30/00 6/30/00 6/30/00
---------------------------------------------------------------------------------
<S> <C> <C> <C>
UBS Investment Fund - U.S. Small Cap Growth 29.99% 75.93% 49.52%
---------------------------------------------------------------------------------
Russell 2000 Index 3.04 14.32 16.00
---------------------------------------------------------------------------------
Russell 2000 Growth Index** 1.23 28.39 28.02
---------------------------------------------------------------------------------
</TABLE>
* Inception date of the UBS Investment Fund - U.S.
Small Cap Growth is 12/31/98.
** The Advisor has chosen to change the Fund's
benchmark index from the Russell 2000 Index to the
Russell 2000 Growth Index due to the Advisor's
determination that the Russell 2000 Growth Index
more closely reflects the Fund's investment
strategies.
Total return includes reinvestment of all capital gain
and income distributions.
All total returns in excess of 1 year represent
average annualized returns.
The Fund invests in IPOs which may have a magnified
impact on performance.
Illustration of an Assumed Investment of $10,000
This chart shows the growth in the value of an
investment in the UBS Investment Fund - U.S. Small Cap
Growth, the Russell 2000 Index and the Russell 2000
Growth Index if you had invested $10,000 on December
31, 1998 and had reinvested all your income dividends
and capital gain distributions through June 30, 2000.
No adjustment has been made for any income taxes
payable by shareholders on income dividends and capital
gain distributions. Past performance is no guarantee of
future results. Share price and return will vary with
market conditions; investors may realize a gain or
loss upon redemption.
UBS Investment Fund - U.S. Small Cap Growth vs. Russell
2000 Index and Russell 2000 Growth Index
Wealth Value with Dividends Reinvested
[GRAPH]
<TABLE>
<CAPTION>
Brinson U.S. Small Capitalization Russell 2000 Growth (Bench?) Russell 2000
<S> <C> <C> <C> <C>
1 12/31/98 10000 10000 10000
2 1/31/99 9989 10450 10133
3 2/28/99 9148 9494 9312
4 3/31/99 9352 9832 9458
5 4/30/99 9318 10700 10305
6 5/31/99 9727 10717 10456
7 6/30/99 10386 11282 10928
8 7/31/99 10477 10933 10628
9 8/31/99 10239 10524 10235
10 9/30/99 10591 10727 10237
11 10/31/99 10989 11002 10279
12 11/30/99 12716 12165 10893
13 12/31/99 14057 14309 12126
14 1/31/2000 13648 14176 11931
15 2/29/2000 15807 17474 13901
16 3/31/2000 17159 15638 12985
17 4/30/2000 16545 14059 12203
18 5/31/2000 15466 12828 11492
19 6/30/2000 18283 14485 12494
</TABLE>
Fund returns are net of all fees and costs, while the
Index returns are based solely on market returns
without deduction for fees or transaction costs for
rebalancing.
=======================================================
57
<PAGE>
U.S. Small Cap Growth Fund
--------------------------------------------------------------------------------
[LOGO] UBS Industry Diversification
Investment Funds
As a Percent of Net Assets
As of June 30, 2000
----------------------------------------------------
U.S. EQUITIES
Energy...................................... 3.76%
Capital Investment
Electrical Components..................... 15.85
Technology................................ 5.62
-------
21.47
Basic Industries
Housing/Paper............................. 1.17
Computers
Software.................................. 5.43
Systems................................... 1.65
-------
7.08
Consumer
Autos/Durables............................ 5.98
Food/House Products....................... 2.02
Health: Drugs............................. 5.61
Health: Non-Drugs......................... 12.23
Retail/Apparel............................ 8.50
-------
34.34
Financial
Banks..................................... 2.64%
Non-Banks................................. 2.70
-------
5.34
Telecommunications
Equipment................................. 0.98
Services.................................. 4.46
-------
5.44
Transportation.............................. 3.58
Services/Miscellaneous...................... 9.18
-------
Total U.S. Equities................ 91.36
SHORT-TERM INVESTMENTS....................... 4.58
-------
TOTAL INVESTMENTS.................. 95.94
CASH AND OTHER ASSETS,
LESS LIABILITIES........................... 4.06
-------
NET ASSETS................................... 100.00%
=======
Top 10 U.S. Equity Holdings
As of June 30, 2000
Percent of
Net Assets
-----------------------------------------------------
1. Elantec Semiconductor, Inc.......... 3.15%
2. Tollgrade Communications, Inc....... 2.86
3. Waters Corp......................... 2.67
4. Mercury Interactive Corp............ 2.39
5. Investors Financial Services Corp... 2.22
6. Quest Diagnostics, Inc.............. 2.16
7. Shaw Group, Inc..................... 2.06
8. Hain Celestial Group, Inc........... 2.02
9. Flextronics International Ltd....... 1.96
10. C & D Technologies, Inc............. 1.84
-----------------------------------------------------
=======================================================
58
<PAGE>
U.S. Small Cap Growth Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
--------- -----------
U.S. Equities -- 91.36%
724 Solutions, Inc. (b).............................. 700 $ 30,713
About.com, Inc. (b).................................. 4,900 154,350
ACT Manufacturing, Inc. (b).......................... 15,300 710,494
Anixter International, Inc. (b)...................... 17,200 455,800
Aurora Biosciences Corp. (b)......................... 9,000 613,687
Bookham Technology ADR (b)........................... 4,200 248,850
BreezeCom Ltd. (b)................................... 4,150 180,525
C & D Technologies, Inc.............................. 17,800 1,005,700
C-COR.net Corp. (b).................................. 20,200 545,400
Caldera Systems, Inc. (b)............................ 4,950 64,659
Celeritek, Inc. (b).................................. 13,100 534,644
Charles River Associates, Inc. (b)................... 9,300 163,913
Children's Place Retail Stores, Inc. (b)............. 8,000 164,000
COR Therapeutics, Inc. (b)........................... 5,100 435,094
Cost Plus, Inc. (b).................................. 17,950 514,941
Credence Systems Corp. (b)........................... 15,400 849,887
Cubist Pharmaceuticals, Inc. (b)..................... 9,500 467,875
Cytyc Corp. (b)...................................... 12,000 640,500
Data Return Corp. (b)................................ 2,100 60,900
Datascope Corp....................................... 10,800 388,800
Dendrite International, Inc. (b)..................... 24,350 811,159
Dobson Communications (b)............................ 4,700 90,475
Elantec Semiconductor, Inc. (b)...................... 24,700 1,719,737
Emmis Communications Corp. (b)....................... 6,900 285,488
Exar Corp. (b)....................................... 8,500 741,094
Exfo Electro Optical Engineering, Inc. (b)........... 2,100 92,138
Expeditors International of Washington, Inc.......... 16,700 793,250
Flextronics International Ltd. (b)................... 15,613 1,072,418
Forward Air Corp. (b)................................ 22,500 900,000
Graco, Inc........................................... 15,700 510,250
Greater Bay Bancorp.................................. 9,400 439,450
Hain Celestial Group, Inc. (b)....................... 30,090 1,103,927
Haverty Furniture Cos., Inc.......................... 15,700 133,450
Helix Technology Corp................................ 15,700 612,300
Hooper Holmes, Inc................................... 32,900 263,200
Inamed Corp. (b)..................................... 13,000 476,125
Insight Enterprises, Inc. (b)........................ 16,300 966,794
Insituform Technologies, Inc. (b).................... 23,400 634,725
Intersil Holding Corp. (b)........................... 4,000 216,250
Investors Financial Services Corp.................... 30,600 1,214,437
Jack in the Box, Inc. (b)............................ 22,900 563,912
Jakks Pacific, Inc. (b).............................. 18,100 266,975
Kenneth Cole Productions, Inc. (b)................... 21,900 876,000
Kent Electronics Corp. (b)........................... 23,900 712,519
King Pharmaceuticals, Inc. (b)....................... 18,300 802,912
Littlefuse, Inc. (b)................................. 8,300 406,700
Loudeye Technologies, Inc. (b)....................... 4,900 85,444
Marvell Technology Group Ltd. (b).................... 2,100 119,700
Matrixone, Inc. (b).................................. 1,050 42,656
Maverick Tube Corp. (b).............................. 24,000 $ 699,000
Meade Instruments Corp. (b).......................... 17,400 437,175
Mediaplex, Inc. (b).................................. 5,000 96,563
MedQuist, Inc. (b)................................... 12,800 435,200
Mercury Interactive Corp. (b)........................ 13,500 1,306,125
Metasolv Software, Inc. (b).......................... 2,100 92,400
Myriad Genetics, Inc. (b)............................ 6,000 888,469
Niku Corp. (b)....................................... 3,000 101,250
North Fork Bancorporation, Inc....................... 28,200 426,525
Pacific Sunwear of California, Inc. (b).............. 17,950 336,562
Parlex Corp. (b)..................................... 14,800 623,450
Parthus Technologies ADR (b)......................... 2,100 59,850
Patterson Dental Co. (b)............................. 18,100 923,100
Patterson Energy, Inc. (b)........................... 26,100 743,850
Peregrine Systems, Inc. (b).......................... 20,300 704,156
QRS Corp. (b)........................................ 4,150 101,934
Quest Diagnostics, Inc. (b).......................... 16,500 1,180,781
Rainbow Technologies, Inc. (b)....................... 14,600 709,925
Register.com (b)..................................... 3,000 91,688
ResMed, Inc. (b)..................................... 22,800 609,900
Richmond County Financial Corp....................... 30,100 575,662
Roper Industries, Inc................................ 5,900 151,188
Rudolph Technologies, Inc. (b)....................... 1,600 62,000
Saba Software, Inc. (b).............................. 3,150 66,150
Sangstat Medical Corp. (b)........................... 9,900 285,863
Selectica, Inc. (b).................................. 2,000 140,125
Shaw Group, Inc. (b)................................. 23,900 1,126,287
Silicon Laboratories, Inc. (b)....................... 700 37,188
Spanish Broadcasting System (b)...................... 14,500 298,156
Stone Energy Corp. (b)............................... 12,000 717,000
StorageNetworks, Inc................................. 2,100 189,525
Stratos Lightwave, Inc. (b).......................... 2,100 58,538
Swift Transportation Co., Inc. (b)................... 18,800 263,200
Talbots, Inc......................................... 13,400 736,162
Telcom Semiconductor, Inc. (b)....................... 21,400 864,025
TMP Worldwide, Inc. (b).............................. 8,900 656,931
Tollgrade Communications, Inc. (b)................... 11,800 1,563,500
Tower Automotive, Inc. (b)........................... 19,300 241,250
Triton PCS Holdings, Inc. (b)........................ 7,800 450,450
United Therapeutics Corp. (b)........................ 7,800 845,325
Universal Access, Inc. (b)........................... 1,800 44,100
Utstarcom, Inc. (b).................................. 2,000 60,750
Vertex Pharmaceuticals, Inc. (b)..................... 6,300 663,862
Vicinity Corp. (b)................................... 15,400 302,225
Vintage Petroleum, Inc............................... 28,300 638,519
Waters Corp. (b)..................................... 11,700 1,460,306
Whitehall Jewellers, Inc. (b)........................ 25,550 475,869
Zebra Technologies Corp., Class A (b)................ 11,200 496,300
Zoll Medical Corp. (b)............................... 14,400 705,600
-----------
Total U.S. Equities (Cost $33,685,619)............... 49,928,176
-----------
================================================================================
59
<PAGE>
U.S. Small Cap Growth Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
--------- -----------
Short-Term Investments -- 4.58%
Investment Companies -- 4.58%
Brinson Supplementary Trust U.S.
Cash Management Prime Fund
(Cost $2,503,641)............................. 2,503,641 $ 2,503,641
-----------
Total Investments
(Cost $36,189,260) -- 95.94% (a).............. 52,431,817
Cash and other assets,
less liabilities -- 4.06%..................... 2,216,357
-----------
Net Assets -- 100%.............................. $54,648,174
===========
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $36,311,146; and net
unrealized appreciation consisted of:
Gross unrealized appreciation.............................. $17,978,411
Gross unrealized depreciation.............................. (1,857,740)
-----------
Net unrealized appreciation............................. $16,120,671
===========
(b) Non-income producing security
================================================================================
60 See accompanying notes to financial statements.
<PAGE>
U.S. Bond Fund
--------------------------------------------------------------------------------
[LOGO] UBS Since its inception on August 31, 1995, the UBS
Investment Funds Investment Fund - U.S. Bond has returned 5.52%, while
its benchmark, the Salomon Smith Barney Broad
Investment Grade (BIG) Bond Index has returned 6.25%.
Over the same period the Fund's annualized volatility
or risk of 3.90% was comparable to the benchmark
volatility of 3.40%. For the calendar year-to-date
period, the Fund has returned 3.18% while the benchmar
has returned 3.92%.
Sector strategies hurt the Fund in the first quarter,
as we were overweight corporate bonds (and underweight
Treasuries) in a period during which Treasury
securities showed the strongest relative returns. The
negative sector contribution was offset to a large
extent by strong security selection decisions and
positive duration positioning. Early in the second
quarter, we diversified our overweight to those sectors
with greater credit risk (non-Treasury) by increasing
our positions in agencies and mortgages and selling
corporate bonds. This also served to slightly upgrade
the credit exposure of the Fund. For the second
quarter, the strongest contributor to performance was
our sector exposure as the move to agency and mortgage
securities paid off. However, returns were hurt by
issue selection and our positioning on the yield curve
during this period of high volatility in interest
rates.
The Federal Reserve raised rates twice in the first
quarter by 25 basis points each time, and then
surprised the market with a 50 basis point increase in
the federal funds rate in May. Rates were not increased
at the June 28 Federal Open Market Committee meeting,
but since the beginning of January, the fed funds rate
has gone from 5.5% to 6.5%. Large fluctuations in
economic forecasts in the second quarter contributed to
interest rate volatility. Though rates fluctuated over
the quarter, they finished close to first quarter
levels by the end of June.
=======================================================
61
<PAGE>
U.S. Bond Fund
--------------------------------------------------------------------------------
[LOGO] UBS Total Return
Investment Funds
<TABLE>
<CAPTION>
6 months 1 year 3 years Inception*
ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UBS Investment Fund - U.S. Bond 3.18% 3.33% 5.19% 5.52%
-------------------------------------------------------------------------------------------------------
Salomon Smith Barney Broad Investment Grade (BIG) Bond Index 3.92 4.49 6.02 6.25
-------------------------------------------------------------------------------------------------------
</TABLE>
* Inception date of the UBS Investment Fund - U.S. Bond
is 8/31/95.
Total return includes reinvestment of all capital gain
and income distributions.
All Total return returns in excess of 1 year are
average annualized returns.
Illustration of an Assumed Investment of $10,000
This chart shows the growth in the value of an
investment in the UBS Investment Fund - U.S. Bond and
the Salomon Smith Barney BIG Bond Index if you had
invested $10,000 on August 31, 1995, and had reinvested
all your income dividends and capital gain
distributions through June 30, 2000. No adjustment has
been made for any income taxes payable by shareholders
on income dividends and capital gain distributions.
Past performance is no guarantee of future results.
Share price and return will vary with market
conditions; investors may realize a gain or loss upon
redemption.
UBS Investment Fund - U.S. Bond
vs. Salomon Smith Barney BIG Bond Index
Wealth Value with Dividends Reinvested
[GRAPH]
$12,970 == UBS Investment Fund - U.S. Bond
$13,403 -- Salomon Smith Barney BIG Bond Index
-----------------------------------------------------
Label A B
-----------------------------------------------------
Label Brinson U.S.Bond Salmon Smith B
-----------------------------------------------------
1 8/31/95 10,000 10,000
-----------------------------------------------------
2 10,080 10,094
-----------------------------------------------------
3 10,230 10,229
-----------------------------------------------------
4 10,390 10,389
-----------------------------------------------------
5 12/31/95 10,529 10,532
-----------------------------------------------------
6 10,591 10,604
-----------------------------------------------------
7 10,366 10,425
-----------------------------------------------------
8 10,284 10,350
-----------------------------------------------------
9 10,202 10,273
-----------------------------------------------------
10 10,161 10,268
-----------------------------------------------------
11 6/30/96 10,324 10,400
-----------------------------------------------------
12 10,345 10,428
-----------------------------------------------------
13 10,283 10,413
-----------------------------------------------------
14 10,491 10,594
-----------------------------------------------------
15 10,762 10,832
-----------------------------------------------------
16 11,032 11,011
-----------------------------------------------------
17 12/31/96 10,861 10,914
-----------------------------------------------------
18 10,871 10,956
-----------------------------------------------------
19 10,893 10,968
-----------------------------------------------------
20 10,731 10,857
-----------------------------------------------------
21 10,893 11,012
-----------------------------------------------------
22 11,001 11,116
-----------------------------------------------------
23 6/30/97 11,141 11,248
-----------------------------------------------------
24 11,479 11,553
-----------------------------------------------------
25 11,370 11,453
-----------------------------------------------------
26 11,522 11,622
-----------------------------------------------------
27 11,675 11,788
-----------------------------------------------------
28 11,708 11,843
-----------------------------------------------------
29 12/31/97 11,844 11,964
-----------------------------------------------------
30 11,981 12,118
-----------------------------------------------------
31 11,970 12,110
-----------------------------------------------------
32 12,004 12,157
-----------------------------------------------------
33 12,050 12,220
-----------------------------------------------------
34 12,165 12,338
-----------------------------------------------------
35 6/30/98 12,252 12,439
-----------------------------------------------------
36 12,264 12,465
-----------------------------------------------------
37 12,461 12,656
-----------------------------------------------------
38 12,682 12,954
-----------------------------------------------------
39 12,636 12,896
-----------------------------------------------------
40 12,717 12,967
-----------------------------------------------------
41 12/31/98 12,767 13,007
-----------------------------------------------------
42 12,876 13,104
-----------------------------------------------------
43 12,647 12,874
-----------------------------------------------------
44 12,731 12,948
-----------------------------------------------------
45 12,755 12,990
-----------------------------------------------------
46 12,623 12,871
-----------------------------------------------------
47 6/30/99 12,552 12,827
-----------------------------------------------------
48 12,490 12,776
-----------------------------------------------------
49 12,453 12,767
-----------------------------------------------------
50 12,613 12,920
-----------------------------------------------------
51 12,613 12,959
-----------------------------------------------------
52 12,625 12,957
-----------------------------------------------------
53 12/31/99 12,569 12,898
-----------------------------------------------------
54 12,518 12,861
-----------------------------------------------------
55 12,660 13,012
-----------------------------------------------------
56 12,802 13,180
-----------------------------------------------------
57 12,725 13,141
-----------------------------------------------------
58 12,660 13,130
-----------------------------------------------------
59 6/30/2000 12,970 13,403
-----------------------------------------------------
Fund returns are net of all fees and costs, while the
Index returns are based solely on market returns
without deduction for fees or transaction costs for
rebalancing.
=======================================================
62
<PAGE>
U.S. BONDS
--------------------------------------------------------------------------------
[LOGO] UBS Industry Diversification
Investment Funds
As a Percent of Net Assets
As of June 30, 2000
-------------------------------------------------------
U.S. BONDS
Corporate Bonds
Consumer.................................... 2.13%
Construction................................ 0.25
Energy...................................... 1.23
Financial Services.......................... 3.84
Food & House Products....................... 0.77
Health...................................... 0.67
Publishing.................................. 0.50
Services/Miscellaneous...................... 3.92
Technology.................................. 0.79
Telecommunications.......................... 3.21
Utilities................................... 2.10
-------
Total U.S. Corporate Bonds.......... 19.41
Asset-Backed.................................. 9.71
Corporate Mortgage-Backed Securities.......... 21.12
International Dollar Bonds.................... 4.89
U.S. Government Agencies...................... 8.97
U.S. Government Mortgage-Backed Securities.... 19.36
U.S. Government Obligations................... 13.88
-------
Total U.S. Bonds.................... 97.34
SHORT-TERM INVESTMENTS........................ 0.35
-------
TOTAL INVESTMENTS................... 97.69
CASH AND OTHER ASSETS,
LESS LIABILITIES.................... 2.31
-------
NET ASSETS.................................... 100.00%
=======
-------------------------------------------------------
=======================================================
63
<PAGE>
U.S. Bond Fund-- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
---------- -----------
<S> <C> <C>
Bonds -- 97.34%
U.S. Corporate Bonds -- 19.41%
AT&T, 9.800%, due 02/01/12............................ $ 950,000 $ 1,090,243
Capital One Bank, BKNT,
8.250%, due 06/15/05................................. 250,000 249,505
Cendant Corp., 7.750%, due 12/01/03................... 1,060,000 1,023,679
Centaur Funding Corp., Class B, 144A,
9.080%, due 04/21/20 (b)............................. 715 709,861
Centaur Funding Corp., Class C, 144A,
0.000%, due 04/21/20 (b)............................. 1,355 209,178
Centex Corp., 9.750%, due 06/15/05.................... 155,000 154,160
Fidelity Investments, 144A,
7.570%, due 06/15/29................................. 550,000 521,272
Ford Motor Credit Co.,
6.700%, due 07/16/04................................. 310,000 299,251
GMAC, 9.625%, due 12/15/01............................ 294,000 303,146
Kroger Co., 8.000%, due 09/15/29...................... 500,000 476,020
Lilly Del Mar, 144A, FRN,
7.717%, due 08/01/29................................. 1,000,000 994,090
MBNA Global Capital Securities FRN,
7.191%, due 02/01/27................................. 90,000 75,391
News America Holdings,
7.750%, due 12/01/45................................. 358,000 310,957
PanAmSat Corp.,
6.000%, due 01/15/03................................. 375,000 356,550
6.375%, due 01/15/08................................. 500,000 445,399
Pharmacia Corp., 6.600%, due 12/01/28................. 550,000 484,969
Public Service Co. of Colorado,
6.875%, due 07/15/09................................. 940,000 881,389
Rite Aid Corp., 144A,
6.125%, due 12/15/08................................. 890,000 413,850
Sempra Energy, 7.950%, due 03/01/10................... 750,000 756,354
Service Corp. International,
6.000%, due 12/15/05................................. 750,000 405,000
Texas Utilities Holding,
5.940%, due 10/15/11................................. 420,000 412,071
Time Warner Cos., Inc.,
7.570%, due 02/01/24................................. 340,000 321,421
Verizon Communications,
8.000%, due 10/15/29................................. 87,000 87,102
Viacom, 8.625%, due 08/01/12.......................... 575,000 610,180
Waste Management,
6.500%, due 12/15/02................................. 400,000 376,502
-----------
11,967,540
-----------
Asset-Backed Securities -- 9.71%
First Bank Corporate Card Master Trust,
97-1, Class A, 6.400%, due 02/15/03.................. $ 980,000 $ 966,858
GE Capital Mortgage Services, Inc.,
97-HE4 A7, 6.735%, due 12/25/28...................... 410,000 398,725
Green Tree Financial Corp.,
6.160%, due 02/01/31................................. 1,000,000 927,230
Green Tree Financial Corp., 94-5,
Class A5, 8.300%, due 11/15/19........................ 320,000 319,469
Peco Energy Transition Trust,
6.130%, due 03/01/09................................. 1,135,000 1,046,311
Pemex Finance Ltd.,
8.450%, due 02/15/07................................. 940,000 924,123
PP&L Transition Bond Company LLC,
6.960%, due 12/26/07................................. 200,000 198,446
Premier Auto Trust, 96-4A, Class A4,
6.400%, due 10/06/01................................. 38,811 38,803
Sears Credit Account Master Trust,
99-3, Class A, 6.450%, due 11/17/09.................. 1,200,000 1,164,660
-----------
5,984,625
-----------
Corporate Mortgage-Backed
Securities -- 21.12%
ABN AMRO Mortgage Corp., 99-2 Class IA2,
6.300%, due 04/25/29................................. 2,100,000 1,982,190
ABN AMRO Mortgage Corp., 99-3, Class A2,
6.300%, due 05/25/29................................. 1,000,000 942,930
Bank One Mortgage, 2000-2, Class 6A,
6.761%, due 03/15/30................................. 97,337 97,629
Chemical Mortgage Securities Inc.,
93-1, Class A5, 7.450%, due 02/25/23................. 165,534 164,951
Citicorp Mortgage Securities, Inc., 94-9,
Class A8, 5.750%, due 06/25/09....................... 1,072,002 996,340
Heller Financial Commercial Mortgage
Assets, 99-PH1, Class A1,
6.500%, due 05/15/31................................. 1,163,364 1,125,060
LB Commercial Conduit Mortgage Trust,
99-C1, Class A1, 6.410%, due 06/15/31................ 675,762 651,479
Nomura Asset Securities Corp.,
7.120%, due 04/13/36................................. 1,200,000 1,181,134
PNC Mortgage Securities Corp., 94-3,
Class A8, 7.500%, due 07/25/24....................... 375,000 359,299
Prudential Home Mortgage Securities,
93-43, Class A9, 6.750%, due 10/25/23................ 261,333 251,146
Prudential Home Mortgage Securities,
94-3, Class A10, 6.500%, due 02/25/24................ 170,000 163,817
</TABLE>
================================================================================
64
<PAGE>
U.S. Bond Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
-------- -------
<S> <C> <C>
Residential Accredit Loans, Inc.,
96-QS4, Class AI10,
7.900%, due 08/25/26................................................. $ 275,000 $ 274,145
Residential Accredit Loans, Inc.,
98-QS4, Class AI5,
7.000%, due 03/25/28................................................. 2,850,000 2,685,107
Residential Asset Securitization Trust,
97-A10, Class A1, 7.250%, due 12/25/27............................... 126,380 125,909
Residential Funding Mortgage,
95-S6, Class A7, 7.500%, due 11/25/25................................ 943,020 933,420
Structured Asset Securities Corp.,
98-RF1, Class A, 8.712%, due 04/15/27................................ 352,914 358,208
Structured Asset Securities Corp.,
98-RF2, 8.582%, due 07/15/27......................................... 125,456 126,710
Thrift Financial Corp., Class A4
11.250%, due 01/01/16................................................ 25,660 26,329
Vendee Mortgage Trust, 92-1,
Class 2Z, 7.750%, due 05/15/22....................................... 575,120 571,807
-----------
13,017,610
-----------
International Dollar Bonds -- 4.89%
Banco Santiago S.A.,
7.000%, due 07/18/07................................................. 380,000 338,282
Empresa Nacional de Electricidad S.A.,
8.125%, due 02/01/97................................................. 335,000 263,048
Interamer Development Bank,
6.800%, due 10/15/25................................................. 100,000 94,693
Korea Development Bank,
7.125%, due 09/17/01................................................. 500,000 495,628
Petroliam Nasional Berhad, 144A,
7.625%, due 10/15/26................................................. 430,000 363,591
Ras Laffan Liquified Natural Gas Co.,
Ltd., 144A, 8.294%, due 03/15/14..................................... 450,000 415,687
State of Qatar, 144A, 9.750%, due 06/15/30............................. 250,000 246,563
Tyco International Group S.A.,
7.000%, due 06/15/28................................................. 500,000 433,359
United Mexican States,
9.875%, due 02/01/10................................................. 360,000 363,600
-----------
3,014,451
-----------
U.S. Government Mortgage-Backed
Securities -- 19.36%
Fannie Mae Whole Loan, 95-W3,
Class A, 9.000%, due 04/25/25........................................ $ 100,832 $ 103,818
Federal Home Loan Mortgage Corp.,
1595, Class D, 7.000%, due 10/15/13.................................. 492,125 469,960
Federal Home Loan Mortgage Corp. Gold,
8.000%, due 08/01/08................................................. 474,009 479,085
8.000%, due 11/01/22................................................. 80,657 81,528
9.000%, due 07/01/30, TBA............................................ 145,000 149,577
Federal National Mortgage Assoc.,
97-72, Class EG, 0.000%, due 09/25/22................................ 191,413 178,154
Federal National Mortgage Association,
6.000%, due 10/01/14................................................. 236,995 224,192
6.000%, due 03/01/28................................................. 615,771 564,384
6.000%, due 08/01/28................................................. 1,393,813 1,274,961
6.500%, due 03/01/19................................................. 461,725 441,262
6.500%, due 06/01/28................................................. 676,070 637,942
6.500%, due 09/01/28................................................. 226,071 213,321
6.500%, due 03/01/29................................................. 484,437 456,915
7.000%, due 12/01/24................................................. 538,990 520,339
7.000%, due 03/01/29................................................. 43,213 41,735
7.500%, due 12/01/23................................................. 447,293 441,138
7.500%, due 01/01/28................................................. 248,835 246,263
8.000%, due 02/01/13................................................. 147,389 148,921
Government National Mortgage Association,
6.500%, due 10/15/24................................................. 4,206,370 4,018,337
7.000%, due 07/15/25................................................. 79,883 77,983
7.500%, due 12/15/22................................................. 193,849 193,492
7.500%, due 12/15/23................................................. 807,080 805,433
7.500%, due 01/15/24................................................. 51,829 51,660
7.500%, due 06/15/25................................................. 67,140 66,989
8.000%, due 08/15/22................................................. 39,536 40,154
9.000%, due 11/15/04................................................. 7,447 7,726
10.000%, due 05/15/01................................................ 372 395
-----------
11,935,664
-----------
U.S. Government Agencies -- 8.97%
Aid-Israel, 10-Z,
0.000%, due 02/15/03................................................. 805,000 679,314
Federal Home Loan Mortgage Corp.,
5.750%, due 03/15/09................................................. 230,000 208,828
7.000%, due 02/15/03................................................. 2,190,000 2,191,320
Federal National Mortgage Association,
7.250%, due 05/15/30................................................. 950,000 967,188
Jordan Aid, 8.750%, due 09/01/19....................................... 1,344,519 1,483,287
-----------
5,529,937
-----------
</TABLE>
================================================================================
65
<PAGE>
U.S. Bond Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Value
---------- -----------
<S> <C> <C>
U.S. Government Obligations -- 13.88%
U.S. Treasury Bond,
8.000%, due 11/15/21................................................. $ 510,000 $ 615,506
8.750%, due 05/15/17................................................. 770,000 967,794
U.S. Treasury Inflation Indexed Note,
3.625%, due 04/15/28................................................. 1,770,000 1,786,843
3.875%, due 04/15/29................................................. 60,000 62,307
U.S. Treasury Note,
5.625%, due 05/15/08................................................. 475,000 458,078
5.750%, due 08/15/03................................................. 1,455,000 1,429,993
6.125%, due 12/31/01................................................. 1,000,000 994,375
6.625%, due 05/15/07................................................. 1,215,000 1,240,060
7.500%, due 02/15/05................................................. 955,000 1,001,556
-----------
8,556,512
-----------
Total Bonds (Cost $62,291,605)......................................... 60,006,339
-----------
<CAPTION>
Shares Value
---------- -----------
<S> <C> <C>
Short-Term Investments -- 0.35%
Investment Companies -- 0.35%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund
(Cost $217,046)...................................................... 217,046 $ 217,046
-----------
Total Investments
(Cost $62,508,651) -- 97.69% (a)...................................... 60,223,385
Cash and other assets,
less liabilities -- 2.31%............................................. 1,424,454
-----------
Net Assets -- 100% $61,647,839
===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $62,522,716; and net
unrealized depreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation.......................... $ 350,762
Gross unrealized depreciation.......................... (2,650,093)
-------------
Net unrealized depreciation.................. $ (2,299,331)
=============
</TABLE>
(b) Non-income producing security
FRN: Floating rate note -- The rate disclosed is that in effect at June 30,
2000.
TBA: Security is subject to delayed delivery.
144A: Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At June 30, 2000, the value of
these securities amounted to $3,874,092 or 6.28% of net assets.
================================================================================
See accompanying notes to financial statements. 66
<PAGE>
High Yield Fund
--------------------------------------------------------------------------------
[LOGO] UBS
Investment Funds The UBS Investment Fund - High Yield has earned an
annualized return of 1.27% since inception on December
31, 1998, versus 0.24% for its benchmark, the Merrill
Lynch High Yield Master Index. This performance was
achieved with an annualized volatility of 4.51% versus
3.22% for the benchmark. The Fund's total return for
the calendar year-to-date through June 30, 2000, was -
2.10% versus-1.19% for the benchmark. High yield fixed
income has been one of the worst performing asset
classes so far in 2000, but we remain optimistic about
the medium term future of the high yield asset class.
Continued uncertainty about the direction of the
economy has kept the perceived risks of high yield
investing at a higher-than-normal level thus far in
2000. Currently, the yield spread of high yield bonds
over "risk free" U.S. Treasuries stands at about 6.0%.
That 6.0% spread can be thought of as the extra
compensation investors require for taking on the credit
risk of the underlying companies.
That spread has continued to widen throughout 2000,
while interestingly, default rates on high yield bonds
seem to be trending downward. When we look at data of
investors' expectations for defaults, the prices of
high yield bonds are much lower than those default
rates should imply. Continued near-term economic
uncertainty and generally rising interest rates may
continue to stall the high yield market, but we think
that on a fundamental basis, the medium to longer-term
outlook for the asset class is very attractive.
During the most recent quarter, the environmental
services, publishing, gaming and textile sectors
performed well relative to the index, while the retail,
financial services and steel sectors underperformed. We
are positive about industries that we think will
benefit from de-leveraging, growth or M&A activity,
including telecommunications, cable and gaming. We hold
overweight positions in these sectors.
=======================================================
67
<PAGE>
High Yield Fund
--------------------------------------------------------------------------------
[LOGO] UBS Total Return
Investment Funds
<TABLE>
<CAPTION>
6 months 1 year Inception*
ended ended to
6/30/00 6/30/00 6/30/00
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------
UBS Investment Fund - High Yield -2.10% -0.68% 1.27%
--------------------------------------------------------------------------------------------
Merrill Lynch High Yield Master Index -1.19 -1.37 0.24
--------------------------------------------------------------------------------------------
</TABLE>
* Inception date of the UBS Investment Fund - High
Yield is 12/31/98. Total return includes reinvestment
of all capital gain and income distributions. All
total returns in excess of 1 year are average
annualized returns.
Illustration of an Assumed Investment of $10,000
This chart shows the growth in the value of an
investment in the UBS Investment Fund - High Yield and
the Merrill Lynch High Yield Master Index if you had
invested $10,000 on December 31, 1998, and had
reinvested all your income dividends and capital gain
distributions through June 30, 2000. No adjustment has
been made for any income taxes payable by shareholders
on income dividends and capital gain distributions.
Past performance is no guarantee of future results.
Share price and return will vary with market
conditions; investors may realize a gain or loss upon
redemption.
UBS Investment Fund - High Yield
vs. Merrill Lynch High Yield Master Index
Wealth Value with Dividends Reinvested
[LINE GRAPH APPEARS HERE]
$10,191 === UBS Investment Fund - High Yield
$10,037 --- Merrill Lynch High Yield Master Index
Brinston High Yield Merrill Lynch High
------------------------------------------------------
1 12/31/98 10,000 10,000
2 1/31/99 10,240 10,099
3 2/28/99 10,281 10,022
4 3/31/99 10,391 10,108
5 4/30/99 10,541 10,266
6 5/31/99 10,311 10,195
7 6/30/99 10,261 10,176
8 7/31/99 10,240 10,191
9 8/31/99 10,188 10,087
10 9/30/99 10,147 10,049
11 10/31/99 10,137 9,990
12 11/30/99 10,343 10,104
13 12/31/99 10,409 10,157
14 1/31/2000 10,268 10,107
15 2/29/2000 10,236 10,116
16 3/31/2000 9,997 9,974
17 4/30/2000 10,051 9,978
18 5/31/2000 10,019 9,868
19 6/30/2000 10,191 10,037
12/31/98 = 10,000 Data through 6/30/00
Fund returns are net of all fees and costs, while the Index returns are based
solely on market returns without deduction for fees or transaction costs for
rebalancing.
=======================================================
68
<PAGE>
High Yield Fund
--------------------------------------------------------------------------------
[LOGO] UBS Industry Diversification
Investment Funds
As a Percent of Net Assets
As of June 30, 2000
<TABLE>
---------------------------------------------------------
<S> <C>
U.S. BONDS
Corporate Bonds
Aerospace..................................... 0.94%
Appliances & Household Durables............... 0.44
Autos/Durables................................ 3.53
Cable Television.............................. 2.99
Chemicals..................................... 2.15
Computer Software............................. 0.96
Computer Systems.............................. 0.31
Construction.................................. 2.39
Consumer...................................... 2.08
Electronics and Electric Components........... 0.98
Energy........................................ 2.43
Financial Services............................ 1.73
Food & House Products......................... 3.47
Health........................................ 2.76
Housing/Paper................................. 0.50
Non-Durables.................................. 1.13
Publishing.................................... 0.90
Radio Broadcasting............................ 2.27
Real Estate................................... 0.32
Recreation.................................... 7.90
Retail........................................ 3.01%
Services/Miscellaneous........................ 9.18
Technology.................................... 1.00
Telecommunications - Services................. 7.84
Telecommunications - Equipment................ 1.65
Telecommunications - Wireless................. 8.72
Television Broadcasting....................... 8.60
Transportation................................ 0.36
------
Total U.S. Corporate Bonds................. 80.54
International Dollar Bonds....................... 6.78
------
Total U.S. Bonds........................... 87.32
Warrants......................................... 0.01
SHORT-TERM INVESTMENTS........................... 19.21
------
TOTAL INVESTMENTS.......................... 106.54
LIABILITIES, LESS CASH
AND OTHER ASSETS............................... (6.54)
------
NET ASSETS....................................... 100.00%
======
---------------------------------------------------------
</TABLE>
Top Ten U.S. Bond Holdings
As of June 30, 2000
<TABLE>
<CAPTION>
Percent of
Net Assets
---------------------------------------------------------
<S> <C>
1. Dobson Sygnet Communications, Inc.,
12.250%, due 12/15/08................... 1.61%
2. Paxson Communications Corp.,
12.500%, due 10/31/06................... 1.60
3. Triton PCS, Inc.,
0.000%, due 05/01/08.................... 1.54
4. Liberty Group Operating,
9.375%, due 02/01/08.................... 1.31
5. Lyondell Chemical Co., Series B,
9.875%, due 05/01/07.................... 1.21
6. Perry Ellis International, Inc.,
12.250%, due 04/01/06................... 1.16
7. Newpark Resources, Inc., Series B,
8.625%, due 12/15/07.................... 1.15
8. Pegasus Communications Corp., Class B,
12.500%, due 08/01/07................... 1.10
9. NTL Communications Corp., Series B,
0.000%, due 10/01/08.................... 1.08
10. Mohegan Tribal Gaming Authority,
8.750%, due 01/01/09.................... 1.08
---------------------------------------------------------
</TABLE>
=======================================================
69
<PAGE>
High Yield Fund -- Schedule of Investments
June 30, 2000
------------------------------------------------------------------------------
Face
Amount Value
--------- ---------
U.S. Bonds -- 87.32%
U.S. Corporate Bonds -- 80.54%
Ackerley Group, Inc., Class B,
9.000%, due 01/15/09............................. $ 100,000 $ 91,750
Adelphia Communications Corp.,
9.375%, due 11/15/09............................. 500,000 462,500
Allbritton Communications Co.,
9.750%, due 11/30/07............................. 250,000 240,000
American Mobile Satellite Corp.,
12.250%, due 04/01/08............................ 182,000 141,960
American Restaurant Group, Inc., Class B,
11.500%, due 02/15/03............................ 150,000 115,125
Atrium Cos., Inc., 10.500%, due 05/01/09........... 125,000 105,313
Aztar Corp., 8.875%, due 05/15/07.................. 250,000 235,625
Bally Total Fitness Corp., Class B,
9.875%, due 10/15/07............................. 400,000 362,000
Big City Radio, Inc., (c)
0.000%, due 03/15/05............................. 500,000 281,250
Building Materials Corp.,
7.750%, due 07/15/05............................. 350,000 287,875
Capstar Broadcasting Partners, Inc., (c)
0.000%, due 02/01/09............................. 525,000 483,000
Carmike Cinemas, Inc.,
9.375%, due 02/01/09............................. 200,000 120,000
CB Richard Ellis Services, Inc.,
8.875%, due 06/01/06............................. 200,000 170,000
Centennial Cellular,
10.750%, due 12/15/08............................ 500,000 485,625
Century Communications Corp.,
0.000%, due 01/15/08............................. 425,000 174,250
8.375%, due 11/15/17............................. 300,000 234,750
Charter Communications Holdings,
10.000%, due 04/01/09............................ 400,000 386,000
Classic Cable, Inc.,
10.500%, due 03/01/10............................ 250,000 230,625
Coast Hotels and Casinos, Inc.,
9.500%, due 04/01/09............................. 370,000 351,500
Collins & Alkman Corp.,
11.500%, due 04/15/06............................ 250,000 240,625
Crown Castle International Corp.,
0.000%, due 05/15/11 (c)......................... 630,000 385,087
9.000%, due 05/15/11............................. 150,000 138,375
CSC Holdings, Inc.,
7.625%, due 07/15/18............................. 600,000 538,141
Cumulus Media, Inc.,
10.375%, due 07/01/08............................ 155,000 130,975
Dayton Superior Corp., 144A,
13.000%, due 06/15/09............................ 225 221,625
Delco Remy International, Inc.,
8.625%, due 12/15/07............................. $ 150,000 $ 139,500
Diamond Triumph Auto Glass, Inc.,
9.250%, due 04/01/08............................. 250,000 195,000
Dobson Communications Corp., 144A,
10.875%, due 07/01/10............................ 400,000 402,000
Dobson Sygnet Communications, Inc.,
12.250%, due 12/15/08............................ 800,000 852,000
Eagle Family Foods, Class B,
8.750%, due 01/15/08............................. 750,000 442,500
Echostar Dbs Corp.,
9.375%, due 02/01/09............................. 500,000 480,000
Exodus Communications, Inc.,
11.250%, due 07/01/08............................ 500,000 495,000
Exodus Communications, Inc., 144A,
11.625%, due 07/15/10............................ 150,000 150,375
FairPoint Communications, Inc., 144A,
12.500%, due 05/01/10............................ 200,000 202,000
Fedders North America,
9.375%, due 08/15/07............................. 250,000 234,687
Federal-Mogul Corp.,
7.500%, due 01/15/09............................. 250,000 171,463
Finova Capital Corp.,
7.250%, due 11/08/04............................. 250,000 220,217
Fox/Liberty Networks, (c)
0.000%, due 08/15/07............................. 500,000 405,000
Global Imaging Systems, Inc.,
10.750%, due 02/15/07............................ 325,000 276,250
Globix Corp., 12.500%, due 02/01/10................ 200,000 164,000
Golden Sky DBS, Inc., (c)
0.000%, due 03/01/07............................. 375,000 253,125
Gothic Production Corp., Class B,
11.125%, due 05/01/05............................ 500,000 466,250
Granite Broadcasting Corp.,
10.375%, due 05/15/05............................ 200,000 190,000
Hayes Lemmerz International, Inc.,
8.250%, due 12/15/08............................. 220,000 185,900
HMH Properties, Class B,
7.875%, due 08/01/08............................. 300,000 269,250
Hollinger International Publishing Corp.,
9.250%, due 02/01/06............................. 250,000 246,562
Hollywood Park, Inc.,
9.500%, due 08/01/07............................. 140,000 139,300
Horseshoe Gaming Holdings,
8.625%, due 05/15/09............................. 142,000 133,835
Horseshoe Gaming LLC, Class B,
9.375%, due 06/15/07............................. 150,000 147,750
Huntsman Corp., 144A,
9.500%, due 07/01/07............................. 200,000 182,000
================================================================================
70
<PAGE>
High Yield Fund -- Schedule of Investments
June 30, 2000
-----------------------------------------------------------------------------
Face
Amount Value
--------- ---------
Huntsman Packaging Corp., 144A,
13.000%, due 06/01/10............................ $ 160,000 $ 164,800
ICN Pharmaceuticals, Inc.,
9.250%, due 08/15/05............................. 400,000 396,000
Integrated Electrical Services, Inc.,
9.375%, due 02/01/09............................. 550,000 445,500
Interep National Radio Sales, Class B,
10.000%, due 07/01/08............................ 455,000 402,675
Iron Mountain, Inc.,
8.750%, due 09/30/09............................. 500,000 460,000
ISP Holdings Inc., Class B,
9.000%, due 10/15/03............................. 295,000 274,719
J.H. Heafner Co.,
10.000%, due 05/15/08............................ 350,000 255,500
Jackson Products, Inc., Class B,
9.500%, due 04/15/05............................. 550,000 495,000
Level 3 Communications, Inc.,
0.000%, due 12/01/08 (c)......................... 850,000 516,375
9.125%, due 05/01/08............................. 200,000 179,500
Liberty Group Operating,
9.375%, due 02/01/08............................. 850,000 697,000
Lifepoint Hospital,
10.750%, due 05/15/09............................ 250,000 257,500
LIN Holdings Corp., (c)
0.000%, due 03/01/08............................. 200,000 131,500
Loral Space & Communications Ltd.,
9.500%, due 01/15/06............................. 200,000 145,000
Luigino's, Inc., 10.000%, due 02/01/06............ 210,000 168,000
Lyondell Chemical Co., Class B,
9.875%, due 05/01/07............................. 650,000 641,875
Mail Well Corp., 8.750%, due 12/15/08............. 500,000 420,000
Majestic Star Casino LLC, Class B,
10.875%, due 07/01/06............................ 175,000 142,625
McLeod USA, Inc.,
9.250%, due 07/15/07............................. 250,000 241,250
Merrill Corp., Class B,
12.000%, due 05/01/09............................ 325,000 234,000
Metromedia Fiber Network,
10.000%, due 12/15/09............................ 540,000 531,900
MGM Grand, Inc., 9.750%, due 06/01/07............. 350,000 356,125
Mohegan Tribal Gaming Authority,
8.750%, due 01/01/09............................. 600,000 570,000
Motors & Gears, Inc., Class B,
10.750%, due 11/15/06............................ 250,000 240,625
MTS, Inc., 9.375%, due 05/01/05................... 575,000 247,250
New World Pasta Co.,
9.250%, due 02/15/09............................. 200,000 119,000
Newpark Resources, Inc., Class B,
8.625%, due 12/15/07............................. 700,000 610,750
Nextel Communications, Inc.,
0.000%, due 09/15/07 (c)......................... $ 200,000 $ 157,000
9.375%, due 11/15/09............................. 420,000 401,100
Nextel Partners, Inc., 144A,
11.000%, due 03/15/10............................. 200,000 199,000
Nextlink Communications, 144A,
0.000%, due 12/01/09 (c)......................... 712,000 409,400
10.500%, due 12/01/09............................ 175,000 170,625
Nortex, Inc., 9.875%, due 03/01/04................ 450,000 427,500
NTL Communications Corp., Class B, (c)
0.000%, due 10/01/08............................. 900,000 571,500
NTL, Inc., Class A, (c)
12.750%, due 04/15/05............................ 150,000 152,625
Nuevo Energy Co.,
9.500%, due 06/01/08............................. 150,000 148,125
Pacifica Papers, Inc.,
10.000%, due 03/15/09............................ 270,000 265,275
Packaging Corp. of America,
9.625%, due 04/01/09............................. 500,000 496,250
Pantry, Inc.,
10.250%, due 10/15/07............................ 200,000 189,000
Paxson Communications Corp.,
11.625%, due 10/01/02............................ 450,000 460,125
12.500%, due 10/31/06 (b)........................ 847 846,685
Pegasus Communications Corp., Class B,
9.750%, due 12/01/06............................. 150,000 144,375
12.500%, due 08/01/07............................ 550,000 585,750
Perry Ellis International, Inc.,
12.250%, due 04/01/06............................ 650,000 617,500
Phillips Van-Heusen,
9.500%, due 05/01/08............................. 250,000 227,500
Phoenix Color, Inc.,
10.375%, due 02/01/09............................ 300,000 270,000
Pillowtex Corp., 10.000%, due 11/15/06............ 188,000 65,800
Pioneer Natural Resources Co.,
9.625%, due 04/01/10............................. 360,000 371,746
Plains Resources, Inc., Class B,
10.250%, due 03/15/06............................ 300,000 302,250
Premier Parks, Inc., (c)
0.000%, due 04/01/08............................. 425,000 288,469
Protection One Alarm, Inc.,
7.375%, due 08/15/05............................. 365,000 271,925
PSINet, Inc.,
10.500%, due 12/01/06............................ 150,000 138,000
11.000%, due 08/01/09............................ 86,000 79,550
11.500%, due 11/01/08............................ 300,000 282,000
Qwest Communications International, Inc., (c)
0.000%, due 10/15/07............................. 500,000 420,006
R. H. Donnelley, Inc.,
9.125%, due 06/01/08............................. 190,000 178,838
71
<PAGE>
High Yield Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Face
Amount Value
---------- -----------
RailWorks Corp., 11.500%, due 04/15/09............... $ 200,000 $ 188,000
Rayovac Corp., Class B,
10.250%, due 11/01/06............................... 300,000 307,500
RCN Corp., 10.000%, due 10/15/07..................... 300,000 254,250
Samsonite Corp.,
10.750%, due 06/15/08............................... 250,000 208,750
SBA Communications Corp., (c)
0.000%, due 03/01/08................................ 390,000 274,950
Sbarro, Inc., 11.000%, due 09/15/09.................. 250,000 255,625
Scotts Co., 144A,
8.625%, due 01/15/09................................ 285,000 273,600
Sequa Corp., 9.000%, due 08/01/09.................... 520,000 499,200
Simmons Co., 10.250%, due 03/15/09................... 200,000 177,500
Sinclair Broadcast Group,
10.000%, due 09/30/05............................... 400,000 382,000
Sleepmaster, 11.000%, due 05/15/09................... 250,000 236,250
Spectrasite Holdings, Inc.,
0.000%, due 07/15/08 (c)............................ 440,000 305,800
0.000%, due 03/15/10, 144A (c)...................... 190,000 103,550
10.750%, due 03/15/10, 144A......................... 95,000 94,763
Speedway Motorsports, Inc.,
8.500%, due 08/15/07................................ 600,000 558,000
Station Casinos, Inc.,
8.875%, due 12/01/08................................ 67,000 63,818
9.875%, due 07/01/10, 144A.......................... 450,000 451,125
Sterling Chemicals, Inc., Class B,
12.375%, due 07/15/06............................... 160,000 162,400
Stone Container Corp.,
10.750%, due 10/01/02............................... 250,000 253,437
T/SF Communications Corp., Class B,
10.375%, due 11/01/07............................... 250,000 232,500
TeleCorp PCS, Inc.,
0.000%, due 04/15/09 (c)............................ 700,000 456,750
Tenet Healthcare Corp., 144A,
9.250%, due 09/01/10................................ 350,000 352,625
Trans-Resources, Inc., Class B, (c)
0.000%, due 03/15/08................................ 650,000 58,500
Triad Hospitals Holdings, Inc.,
11.000%, due 05/15/09............................... 229,000 234,153
Tritel PCS, Inc. (c),
0.000%, due 05/15/09................................ 450,000 298,125
Triton PCS, Inc., (c)
0.000%, due 05/01/08................................ 1,125,000 815,625
United Rentals, Inc., Class B,
9.250%, due 01/15/09................................ 70,000 63,175
US Unwired, Inc., (c)
0.000%, due 11/01/09................................ 800,000 434,000
Verio, Inc., 13.500%, due 06/15/04................... 450,000 507,937
Voicestream Wireless Corp.,
10.375%, due 11/15/09............................... $ 550,000 $ 569,250
Weirton Steel Corp.,
11.375%, due 07/01/04............................... 200,000 188,000
Westpoint Stevens, Inc.,
7.875%, due 06/15/05................................ 220,000 183,700
Williams Communications Group, Inc.,
10.875%, due 10/01/09............................... 550,000 537,625
Winsloew Furniture, Inc., Class B,
12.750%, due 08/15/07............................... 25,000 23,000
Winstar Communications, Inc., 144A,
12.750%, due 04/15/10............................... 200,000 186,500
WMX Technologies, Inc.,
6.250%, due 10/15/00................................ 365,000 362,055
-----------
42,694,366
-----------
International Dollar Bonds -- 6.78%
Callahan Nordrhein-Westfalen, 144A,
14.000%, due 07/15/10............................... 160,000 160,000
Clearnet Communications, (c)
0.000%, due 12/15/05................................ 500,000 516,250
0.000%, due 05/01/09................................ 250,000 150,000
Energis PLC, 9.750%, due 06/15/09.................... 250,000 245,000
Global Crossing Holding Ltd.,
9.500%, due 11/15/09................................ 400,000 386,000
Imax, Corp., 7.875%, due 12/01/05.................... 250,000 226,250
Microcell Telecommunications, Inc.,
Class B, (c)
0.000%, due 06/01/06................................ 500,000 461,250
Norampac, Inc., 9.500%, due 02/01/08................. 140,000 135,100
Rogers Communications, Inc.,
9.125%, due 01/15/06................................ 250,000 245,000
TeleWest Communications PLC,
0.000%, due 10/01/07 (c)............................ 500,000 473,750
0.000%, due 04/15/09 (c)............................ 500,000 270,000
United Pan-Europe Communications NV,
11.500%, due 02/01/10............................... 225,000 200,250
United Pan-Europe Communications NV,
Class B,
0.000%, due 02/01/10 (c)............................ 25,000 11,750
11.250%, due 02/01/10............................... 125,000 111,250
-----------
3,591,850
-----------
Total U.S. Bonds (Cost $49,816,312).................. 46,286,216
-----------
================================================================================
72
<PAGE>
High Yield Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
----------- -----------
Warrants -- 0.01%
Merrill Corp., 144A,
Expires 05/01/09 (b)................................ 325 $ 3
Motient Corp., 144A,
Expires 04/01/08 (b)................................ 182 7,280
Winsloew Furniture, Inc., 144A,
Expires 07/01/00 (b)................................ 25 125
-----------
Total Warrants (Cost $8,314)......................... 7,408
-----------
Short-Term Investments -- 19.21%
Investment Companies -- 19.21%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund
(Cost $10,185,196)................................. 10,185,196 $10,185,196
-----------
Total Investments
(Cost $60,009,822) -- 106.54% (a).................. 56,478,820
Liabilities, less cash
and other assets -- (6.54%)........................ (3,469,306)
-----------
Net Assets -- 100%................................... $53,009,514
===========
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $60,022,205; and net
unrealized depreciation consisted of:
Gross unrealized appreciation................ $ 341,964
Gross unrealized depreciation................ (3,885,349)
-----------
Net unrealized depreciation............ $(3,543,385)
===========
(b) Non-income producing security
(c) Step bonds - coupon rate increases in increments to maturity. Rate disclosed
is as of June 30, 2000. Maturity date disclosed is the ultimate maturity
date.
144A: Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At June 30, 2000, the value of
these securities amounted to $3,731,396 or 7.04% of net assets.
================================================================================
See accompanying notes to financial statements. 73
<PAGE>
Global (Ex-U.S.) Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS The UBS Investment Fund - Global (Ex-U.S.) Equity has
Investment Funds provided an annualized return of 10.53% since its
inception on July 31, 1995. Over the same period, its
benchmark, the MSCI World Ex USA (Free) Index, has
produced a return of 10.63%. The Fund's performance was
achieved with a volatility or risk of 13.29%,
considerably below the 14.43% volatility of the
benchmark. Calendar year-to-date, the Fund returned -
4.23%, underperforming the benchmark return of-2.99%.
During the second quarter, returns were dominated by
"old economy" stocks, and the Fund outperformed the
benchmark by 365 basis points.
Trends of the last two years show a remarkable
divergence between the performance of "new economy" and
"old economy" sectors. In contrast to recent bull
markets, the current price appreciation has been
limited to narrow groups of technology, media and
telecommunications (TMT) stocks. This phenomenon, while
originally most prevalent in the U.S. where it began,
has proliferated into all developed equity markets. As
such, we hold significant underweights to TMT sectors.
This strategy began to pay off in the second quarter as
investors began to question whether TMT companies can
grow and increase earnings fast enough and for long
enough to justify their high valuations.
While we are skeptical of inflated equity investment
expectations, we understand and appreciate the role of
new and emerging technology in business. Our analysis
is focused on investing in companies with solid
fundamentals as well as promising uses for new
technologies. Specifically, we see opportunities in
some "old economy" sectors such as utilities,
diversified financials, and food, beverages and tobacco
where some companies are leveraging their skills,
assets and competitive positions to take advantage of
the Internet.
With respect to countries, we increased our
underweights to Canada, Europe (ex-UK) and the EMU
region during the quarter where our analysis indicates
overvaluation. After a few periods of outperformance in
Japan, we sold some Japanese holdings and employed the
proceeds in the UK market. We still maintain a modest
overweight to Japan to capture opportunities that are
coming from the ongoing restructuring of the corporate
sector in the region. The restructuring trend is
breaking old business molds and bringing much needed
efficiencies to many companies. The Fund's regional
weightings added modestly to returns during the
quarter.
================================================================================
74
<PAGE>
Global (Ex-U.S.) Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS Total Return
Investment Funds
<TABLE>
<CAPTION>
6 months 1 year 3 years Inception*
ended ended ended to
6/30/00 6/30/00 6/30/00 6/30/00
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
UBS Investment Fund - Global (Ex-U.S.) Equity -4.23% 10.94% 5.80% 10.53%
---------------------------------------------------------------------------------------------
MSCI World Ex USA (Free) Index -2.99 18.78 10.52 10.63
---------------------------------------------------------------------------------------------
</TABLE>
*Inception date of the UBS Investment Fund - Global
(Ex-U.S.) Equity is 7/31/95.
Performance is net of withholding taxes on dividends.
Total return includes reinvestment of all capital gain
and income distributions.
All total returns in excess of 1 year are average
annualized returns
Illustration of an Assumed Investment of $10,000
This chart shows the growth in the value of an
investment in the UBS Investment Fund - Global (Ex-
U.S.) Equity and the MSCI World Ex USA (Free) Index if
you had invested $10,000 on July 31, 1995, and had
reinvested all your income dividends and capital gain
distributions through June 30, 2000. No adjustment has
been made for any income taxes payable by shareholders
on income dividends and capital gain distributions.
Past performance is no guarantee of future results.
Share price and return will vary with market
conditions; investors may realize a gain or loss upon
redemption.
UBS Investment Fund - Global (Ex-U.S.) Equity
vs. MSCI World Ex USA (Free) Index
Wealth Value with Dividends Reinvested
[GRAPH APPEARS HERE]
Label Date UBS Investment MSCI World Ex
1 7/31/95 10,000 10,000
2 10,146 9,632
3 10,302 9,817
4 10,205 9,563
5 10,448 9,835
6 12/31/95 10,858 10,220
7 11,065 10,291
8 11,024 10,320
9 11,158 10,538
10 11,563 10,848
11 11,500 10,662
12 6/30/96 11,578 10,713
13 11,256 10,398
14 11,287 10,443
15 11,630 10,727
16 11,578 10,654
17 12,161 11,099
18 12/31/96 12,140 10,947
19 12,074 10,612
20 12,262 10,770
21 12,328 10,775
22 12,405 10,844
23 13,220 11,561
24 6/30/97 13,815 12,174
25 14,059 12,400
26 13,063 11,468
27 13,782 12,111
28 12,920 11,200
29 12,687 11,068
30 12/31/97 12,750 11,174
31 13,166 11,653
32 13,844 12,411
33 14,379 12,814
34 14,486 12,912
35 14,475 12,855
36 6/30/98 14,354 12,909
37 14,497 12,994
38 12,698 11,335
39 12,377 11,011
40 13,318 12,160
41 13,985 12,778
42 12/31/98 14,463 13,259
43 14,415 13,257
44 13,945 12,924
45 14,331 13,458
46 14,994 14,039
47 14,198 13,321
48 6/30/99 14,752 13,835
49 15,176 14,235
50 15,079 14,274
51 15,006 14,433
52 15,357 14,991
53 15,708 15,513
54 12/31/99 17,075 16,941
55 15,790 15,912
56 15,827 16,359
57 16,329 17,031
58 15,680 16,145
59 15,509 15,754
60 6/30/2000 16,366 16,434
Fund returns are net of all fees and costs, while the
Index returns are based solely on market returns
without deduction for fees or transaction costs for
rebalancing.
================================================================================
75
<PAGE>
Global (Ex-U.S.) Equity Fund
--------------------------------------------------------------------------------
[LOGO] UBS
INVESTMENT FUNDS Industry Diversification
As a Percent of Net Assets
As of June 30, 2000
----------------------------------------------------
Global (EX-U.S.) EQUITIES
Aerospace & Military....................... 0.36%
Airlines................................... 0.78
Appliances & Households.................... 2.46
Autos/Durables............................. 2.19
Banking.................................... 11.42
Beverages & Tobacco........................ 3.66
Broadcasting & Publishing.................. 4.78
Building Materials......................... 0.50
Business & Public Service.................. 1.71
Chemicals.................................. 3.15
Computer Software.......................... 0.59
Consumer................................... 0.39
Data Processing............................ 2.36
Electric Components........................ 2.07
Electronics................................ 4.84
Energy..................................... 5.03
Financial Services......................... 4.27
Food & House Products...................... 3.89
Forest Products............................ 0.48
Health & Personal Care..................... 7.82
Industrial Components...................... 0.76
Insurance.................................. 5.83
Leisure & Tourism.......................... 0.48
Machinery & Engineering.................... 1.81
Merchandising.............................. 1.00
Metals-Steel............................... 0.38
Multi-Industry............................. 0.20
Non-Ferrous Metals......................... 0.76
Non-Durables............................... 0.06
Real Estate................................ 1.10
Recreation................................. 0.67
Services/Miscellaneous..................... 0.02
Telecommunications......................... 13.33
Transportation............................. 2.25
Utilities.................................. 5.18
Wholesale & International Trade............ 0.20
------
Total Global (Ex-U.S.) Equities.... 96.78
CONVERTIBLE BONDS.......................... 0.03
WARRANTS................................... 0.04
SHORT-TERM INVESTMENTS..................... 1.23
------
TOTAL INVESTMENTS.......... 98.08
CASH AND OTHER ASSETS,
LESS LIABILITIES................... 1.92
------
NET ASSETS................................. 100.00%
======
Market and Currency Strategy
As of June 30, 2000
Fund Benchmark
------------------- ------------------
Market Currency Market Currency
Strategy Strategy Strategy Strategy
------------------------------------------------------
Australia 4.49% 10.49% 2.61% 2.61%
Austria 0.08 0.00 0.19 0.00
Belgium 1.17 0.00 0.73 0.00
Canada 3.53 5.13 5.13 5.13
Denmark 0.58 0.74 0.74 0.74
Euro 0.00 47.42 0.00 35.44
Finland 2.37 0.00 2.96 0.00
France 9.96 0.00 10.80 0.00
Germany 5.31 0.00 8.12 0.00
Hong Kong 0.39 0.00 1.97 1.97
Ireland 0.76 0.00 0.34 0.00
Italy 4.10 0.00 4.19 0.00
Japan 27.50 15.50 25.50 25.50
Netherlands 6.34 0.00 5.16 0.00
New Zealand 0.25 0.25 0.14 0.14
Norway 0.00 0.35 0.35 0.35
Portugal 1.52 0.00 0.44 0.00
Singapore 0.71 0.92 0.92 0.92
Spain 1.91 0.00 2.51 0.00
Sweden 3.41 3.18 3.18 3.18
Switzerland 3.60 5.49 5.49 5.49
U.K 22.02 10.53 18.53 18.53
---------------------------------------------------
100.00% 100.00% 100.00% 100.00%
Top Ten Global (Ex-U.S.) Equity Holdings
As of June 30, 2000
Percent of
Net Assets
------------------------------------------------------
1. Glaxo Wellcome PLC 2.02%
2. Nippon Telegraph & Telephone Corp. 1.86
3. BP Amoco PLC 1.61
4. Total Fina S.A., Class B 1.50
5. Heineken NV 1.47
6. Fujitsu 1.32
7. Allianz AG 1.27
8. Marconi PLC 1.26
9. NEC Corp. 1.25
10. Ericsson, B Shares 1.25
-----------------------------------------------------
=======================================================
76
<PAGE>
Global (ex-U.S.) Equity Fund-- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
-------- -----------
Global (Ex-U.S.) Equities -- 96.78%
Australia -- 4.40%
Amcor Ltd......................................... 76,940 $ 269,823
Amp Ltd........................................... 82,400 841,038
Boral Ltd......................................... 138,300 174,374
Brambles Industries Ltd........................... 27,140 836,511
Broken Hill Proprietary Co., Ltd.................. 105,320 1,248,871
CSR Ltd........................................... 82,190 228,969
Howard Smith Ltd.................................. 64,800 317,472
Lend Lease Corp., Ltd............................. 69,396 887,803
National Australia Bank Ltd....................... 101,748 1,704,271
National Australia Bank Ltd., Preferred........... 29,800 843,712
News Corp., Ltd................................... 183,588 2,535,198
News Corp., Ltd., Preferred....................... 80,079 969,520
Origin Energy Ltd. (b)............................ 158,600 153,309
Qantas Airways Ltd................................ 106,438 216,000
QBE Insurance Group Ltd........................... 160,688 788,409
Rio Tinto Ltd..................................... 45,960 762,128
Santos Ltd........................................ 139,861 427,419
Telstra Corp., Ltd................................ 519,710 2,115,585
Westpac Banking Corp., Ltd........................ 276,541 2,000,720
WMC Ltd........................................... 79,870 358,359
Woolworth's Ltd................................... 188,760 698,687
-----------
18,378,178
-----------
Austria -- 0.10%
Austria Tabakwerke AG............................. 11,280 419,544
-----------
Belgium -- 1.19%
Electrabel S.A.................................... 8,820 2,188,957
Fortis B.......................................... 95,867 2,801,049
-----------
4,990,006
-----------
Canada -- 2.45%
Agrium, Inc....................................... 71,480 612,672
Alcan Aluminum Ltd................................ 19,140 594,209
Bank of Montreal.................................. 7,510 316,782
Canadian National Railway Co...................... 37,380 1,087,317
Canadian Pacific Ltd.............................. 44,414 1,151,041
Hudson's Bay Co................................... 82,220 871,198
Imperial Oil Ltd.................................. 21,460 523,574
Magna International, Inc., Class A................ 16,560 777,315
NOVA Chemicals Corp............................... 45,321 951,261
Potash Corporation of Saskatchewan, Inc........... 8,760 478,882
Royal Bank of Canada.............................. 23,420 1,197,317
Shaw Communications, Inc., Class B................ 40,260 991,760
TransCanada Pipelines Ltd......................... 18,976 144,718
Westcoast Energy, Inc............................. 35,520 546,572
-----------
10,244,618
-----------
Denmark -- 0.60%
Tele Danmark A/S.................................. 36,750 2,483,874
-----------
Finland -- 2.36%
Metso Oyj......................................... 55,191 666,615
Nokia Oyj......................................... 86,792 4,446,968
Sampo Insurance Co., Ltd., Series A............... 70,692 2,880,022
UPM-Kymmene Corp.................................. 74,989 1,868,992
-----------
9,862,597
-----------
--------------------------------------------------------------------------
Shares Value
-------- -----------
France -- 9.89%
Air France (b).................................... 65,770 $ 1,141,151
Air Liquide....................................... 20,315 2,660,138
Alcatel........................................... 46,755 3,079,083
Alcatel S.A. ADR.................................. 37,673 2,505,255
Aventis S.A. Class A.............................. 39,162 2,869,980
Axa............................................... 4,401 696,100
Banque Nationale de Paris......................... 45,847 4,430,044
Cie de Saint Gobain............................... 12,488 1,695,090
CSF Thomson....................................... 37,581 1,486,395
France Telecom S.A................................ 22,831 3,204,074
Groupe Danone..................................... 17,792 2,370,698
L'Oreal S.A....................................... 1,773 1,541,532
Schneider Electric S.A............................ 22,268 1,558,263
Societe Generale.................................. 55,160 3,331,205
Suez Lyonnaise des Eaux S.A....................... 6,066 1,067,026
Total Fina S.A., Class B.......................... 40,799 6,281,041
Vivendi........................................... 15,932 1,411,932
-----------
41,329,007
-----------
Germany -- 4.64%
Allianz AG........................................ 14,878 5,309,751
Bayer AG.......................................... 98,866 3,800,388
Bayerische Motoren Werke AG....................... 50,110 1,532,328
Continental AG.................................... 51,890 875,453
E.on AG........................................... 75,928 3,675,614
SAP AG............................................ 9,420 1,430,351
Siemens AG........................................ 17,850 2,683,001
Volkswagen AG..................................... 1,800 69,537
-----------
19,376,423
-----------
Hong Kong -- 0.32%
Henderson Land Development Co., Ltd............... 307,000 1,350,827
-----------
Ireland -- 0.76%
Bank of Ireland................................... 195,955 1,231,305
Eircom PLC........................................ 719,030 1,929,930
-----------
3,161,235
-----------
Italy -- 3.63%
Assicurazioni Generali............................ 61,446 2,114,583
ENI Spa........................................... 666,000 3,862,479
ENI Spa ADR....................................... 10,352 602,357
Rinascente Spa.................................... 129,140 735,333
San Paolo-imi Spa................................. 165,610 2,951,226
Telecom Italia Mobile Spa......................... 266,000 2,728,362
Telecom Italia Spa................................ 156,000 2,153,395
-----------
15,147,735
-----------
Japan -- 26.23%
Acom Co., Ltd..................................... 22,200 1,871,594
Asahi Bank Ltd.................................... 153,000 644,941
Bank of Tokyo-Mitsubushi Ltd...................... 236,000 2,857,294
Benesse Corp...................................... 9,900 687,727
Bridgestone Corp.................................. 53,000 1,124,569
Canon, Inc........................................ 87,000 4,341,572
Dai Nippon Printing Co., Ltd...................... 61,000 1,077,539
Dai-Ichi Kangyo Bank.............................. 92,000 699,967
Daikin Industries Ltd............................. 39,000 908,605
Denso Corp........................................ 48,000 1,170,455
East Japan Railway Co............................. 294 1,711,677
Fanuc............................................. 22,200 2,263,957
==========================================================================
77
<PAGE>
Global (Ex-U.S.) Equity Fund--Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
--------- ------------
Fuji Bank Ltd. 149,000 $ 1,135,050
Fuji Photo Film Co., Ltd. 37,000 1,517,698
Fujitsu 159,000 5,515,146
Hitachi Ltd. 142,000 2,053,400
Honda Motor Co. 87,000 2,968,385
Hoya Corp. 18,000 1,616,181
Ito Yokado Co., Ltd. 18,000 1,085,393
Kamigumi Co., Ltd. 176,000 929,861
Kao Corp. 71,000 2,174,188
Kirin Brewery Co., Ltd. 79,000 989,320
Kuraray Co., Ltd. 139,000 1,597,505
Kyocera Corp. 2,700 459,080
Matsushita Electric Industrial Co. 135,000 3,508,813
Mitsubishi Corp. 91,000 824,810
Mitsubishi Estate Co., Ltd. 201,000 2,370,852
Mitsubishi Trust and Banking Corp. 67,000 521,157
Murata Manufacturing Co., Inc. 8,000 1,150,796
NEC Corp. 166,000 5,224,517
NGK Insulators 119,000 1,477,870
Nintendo Corp., Ltd. 16,100 2,818,128
Nippon Steel Co. 757,000 1,595,492
Nippon Telegraph & Telephone Corp. 584 7,782,619
Nissin Food Products Co. 35,500 905,912
Nomura Securities Co., Ltd. 166,000 4,071,358
Omron Corp 25,000 680,497
Orix Corp. 13,200 1,952,460
Rohm Co 2,600 761,779
Sankyo Pharm Co., Ltd. 77,000 1,742,970
Santen Pharmaceutical Co., Ltd. 45,000 1,088,795
Secom Co., Ltd. 29,000 2,124,191
Shin-Etsu Chemical Co., Ltd. 25,000 1,271,206
Softbank Corp. 7,600 1,034,356
Sony Corp. 50,000 4,678,418
Sumitomo Bank 147,000 1,806,153
Sumitomo Chemical Co. 295,000 1,778,838
Sumitomo Electric Industries 62,000 1,065,318
Taiheiyo Cement Corp. 600 1,259
Takeda Chemical Industries 45,000 2,960,163
Takefuji Corp. 8,500 1,029,110
TDK Corp. 20,000 2,880,771
Tokio Marine & Fire Insurance Co. 104,000 1,203,119
Tokyo Electric Power 13,600 332,272
Tokyo Gas Co., Ltd. 434,000 1,222,362
Toyoda Automatic Loom Works 18,000 390,435
Toyota Motor Corp. 83,000 3,788,951
Yamanouchi Pharmaceutical Co., Ltd. 18,000 985,020
Yamato Transport Co., Ltd. 46,000 1,145,598
------------
109,577,469
------------
Netherlands -- 6.42%
ABN AMRO Holdings NV 85,487 2,102,777
Aegon NV 101,708 3,633,717
Elsevier NV 320,850 3,903,015
Heineken NV 100,500 6,141,619
ING Groep NV 52,923 3,591,818
Philips Electronics NV 34,900 1,652,681
TNT Post Group NV 55,421 1,500,823
Wolters Kluwer NV 160,799 4,300,551
------------
26,827,001
------------
New Zealand -- 0.21%
Auckland International Airport Ltd. 104,810 $ 124,349
Carter Holt Harvey Ltd. 163,140 142,092
Lion Nathan Ltd. 122,170 273,209
Telecom Corp. of New Zealand Ltd. 97,890 343,346
------------
882,996
------------
Portugal -- 1.56%
Brisa-Auto Estradas de Portugal S.A 176,007 1,521,854
Electricidade de Portugal S.A 81,894 1,493,135
Portugal Telecom 309,345 3,487,282
------------
6,502,271
------------
Singapore -- 0.74%
DBS Group Holdings Ltd. 58,000 744,708
SIA Engineering Co., Ltd. (b) 188,000 210,943
Singapore Airport Terminal Services Ltd. (b) 67,000 81,376
Singapore Press Holdings Ltd. 27,975 436,857
United Overseas Bank Ltd 250,360 1,636,245
------------
3,110,129
------------
Spain -- 2.95%
Altadis S.A 182,292 2,811,643
Banco Popular Espanol S.A 85,452 2,654,018
Banco Santander Central Hispano S.A 216,733 2,295,746
Endesa S.A 69,958 1,360,680
Telefonica S.A. (b) 148,026 3,192,693
------------
12,314,780
------------
Sweden -- 3.33%
Electrolux AB, B Shares 135,090 2,102,358
Ericsson, B Shares 262,560 5,223,660
Investor AB, B Shares 128,160 1,760,720
Nordic Baltic Holdings AB 435,550 3,302,255
Swedish Match AB 496,670 1,540,238
------------
13,929,231
------------
Switzerland -- 3.75%
Givaudan (b) 269 82,134
Nestle S.A. (Reg.) 1,976 3,967,554
New ABB Ltd. 16,203 1,945,536
Novartis AG (Reg.) 3,039 4,829,209
Roche Holding AG (Gen.) 269 2,626,973
Swisscom AG (Reg.) 6,343 2,203,920
------------
15,655,326
------------
United Kingdom -- 21.25%
Allied Zurich PLC 140,194 1,658,642
AstraZeneca PLC 41,094 1,919,234
BP Amoco PLC 701,884 6,736,726
British Airways PLC 291,879 1,679,116
British Telecommunications PLC 360,551 4,661,427
Charter PLC 320,907 1,850,966
De Vere Group PLC 80,888 377,163
Diageo PLC 302,322 2,714,056
FKI PLC 332,763 1,183,851
Glaxo Wellcome PLC 288,962 8,429,790
House of Fraser PLC 357,685 261,001
HSBC Holdings PLC 139,884 1,599,915
Invensys PLC 133,000 499,341
Kelda Group PLC 383,011 1,872,872
================================================================================
78
<PAGE>
Global (Ex-U.S.) Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
Shares Value
------ -----
Lloyds TSB Group PLC............................. 539,725 $ 5,098,606
Marconi PLC...................................... 405,269 5,276,381
Marks & Spencer PLC.............................. 356,624 1,253,893
National Power PLC............................... 383,314 2,443,043
Nycomed Amersham PLC............................. 227,876 2,263,063
Peninsular & Oriental Steam Navigation Co........ 108,517 929,841
Powergen PLC..................................... 201,812 1,726,194
Prudential Corp. PLC............................. 160,964 2,358,840
Reckitt & Benckiser PLC.......................... 102,497 1,148,252
Reed International PLC........................... 307,307 2,675,067
RJB Mining PLC................................... 262,602 222,628
Royal & Sun Alliance Insurance Group PLC......... 442,733 2,875,368
Royal Bank of Scotland Group PLC................. 197,168 3,301,307
Scottish & Newcastle PLC......................... 50,000 408,372
Scottish & Southern Energy PLC................... 305,875 2,806,150
Shell Transport & Trading Co..................... 289,404 2,416,264
SmithKline Beecham PLC........................... 105,000 1,374,991
Tesco PLC........................................ 782,592 2,434,678
Thames Water PLC................................. 94,744 1,226,343
Trinity Mirror PLC............................... 177,566 1,594,075
Unilever PLC..................................... 413,082 2,501,443
United News & Media PLC.......................... 177,609 2,554,365
Vodafone Group PLC............................... 1,105,309 4,467,754
------------
88,801,018
------------
Total Global (Ex-U.S.) Equities
(Cost $310,362,667).............................. 404,344,265
------------
Face
Amount Value
------ -----
Convertible Bonds -- 0.03%
Australia -- 0.03%
Burns Philp Food North America, Inc.,
7.500%, due 08/15/03
(Cost $65,332).......................... AUD 1,228,664 $ 132,046
------------
Shares
--------
Warrants -- 0.04%
Australia -- 0.04%
Burns, Philip & Co., Ltd. (b)
(Cost $82,131).......................... 1,228,664 165,980
------------
Short-Term Investments -- 1.23%
Investment Companies -- 1.23%
Brinson Supplementary Trust U.S. Cash
Management Prime Fund
(Cost $5,129,357)....................... 5,129,357 5,129,357
------------
Total Investments
(Cost $315,639,487) -- 98.08% (a)....... 409,771,648
Cash and other assets,
less liabilities -- 1.92%............... 8,032,897
------------
Net Assets -- 100%....................... $417,804,545
============
See accompanying notes to schedule of investments.
================================================================================
79
<PAGE>
Global (Ex-U.S.) Equity Fund -- Schedule of Investments
June 30, 2000
--------------------------------------------------------------------------------
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $320,511,470; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation.................................. $107,013,078
Gross unrealized depreciation.................................. (17,752,900)
------------
Net unrealized appreciation.............................. $ 89,260,178
============
</TABLE>
(b) Non-income producing security
FORWARD FOREIGN CURRENCY CONTRACTS
The Global (Ex-U.S.) Equity Fund had the following open forward foreign currency
contracts as of June 30, 2000:
<TABLE>
<CAPTION>
Settlement Local Current Unrealized
Date Currency Value Gain/(Loss)
---------- ---------- --------- ------------
<S> <C> <C> <C> <C>
Forward Foreign Currency Buy Contracts
Australian Dollar............................ 08/08/00 41,200,000 $ 24,752,327 $ (797,456)
British Pound................................ 08/08/00 12,350,000 18,710,420 5,189
Canadian Dollar.............................. 08/08/00 13,800,000 9,322,435 (200,752)
Euro......................................... 08/08/00 90,900,000 87,351,771 (1,985,349)
Japanese Yen................................. 08/08/00 2,320,000,000 22,085,399 (2,988)
Swedish Krona................................ 08/08/00 120,000,000 13,722,786 (361,721)
Swiss Franc.................................. 08/08/00 14,000,000 8,641,869 (126,216)
Forward Foreign Currency Sale Contracts
British Pound................................ 08/08/00 40,850,000 61,888,313 2,500,938
Canadian Dollar.............................. 08/08/00 3,900,000 2,634,601 (4,087)
Euro......................................... 08/08/00 29,200,000 28,060,195 (436,190)
Japanese Yen................................. 08/08/00 7,670,000,000 73,015,089 (271,531)
Swedish Krona................................ 08/08/00 120,000,000 13,722,786 192,113
Swiss Franc.................................. 08/08/00 4,500,000 2,777,743 (94,860)
-------------
Total.................................. $ (1,582,910)
=============
</TABLE>
================================================================================
80 See accompanying notes to financial statements.
<PAGE>
This page intentionally left blank.
81
<PAGE>
UBS Investment Funds -- Financial Statements
--------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2000
<TABLE>
<CAPTION>
Global Global
Global Global Equity Technology Biotech Global Bond
Fund Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at cost:
Unaffiliated issuers............................ $ 301,007,938 $ 56,332,868 $ 499,543 $ 638,088 $ 45,532,378
Affiliated issuers.............................. 40,410,397 2,453,941 -- -- 5,419,195
Foreign currency, at cost......................... 231,280 66,558 -- -- 133,064
------------- ------------ ---------- --------- ------------
$ 341,649,615 $ 58,853,367 $ 499,543 $ 638,088 $ 51,084,637
============= ============ ========== ========= ============
Investments, at value:
Unaffiliated issuers............................ $ 297,391,988 $ 64,620,012 $ 546,279 $ 738,295 $ 43,089,980
Affiliated issuers.............................. 47,160,789 2,453,941 -- -- 5,419,195
Foreign currency, at value........................ 231,198 67,086 -- -- 135,332
Cash.............................................. -- -- -- -- 995
Receivables:
Investment securities sold...................... 1,770,059 1,841,960 21,621 17,575 5,678,145
Due from Advisor................................ -- -- 4,090 3,257 --
Dividends....................................... 193,493 107,552 46 -- --
Interest........................................ 1,356,426 1,236 177 317 675,892
Fund shares sold................................ 2,069,859 31,893 27,791 101,961 301,765
Variation margin................................ -- -- -- -- --
Other assets...................................... 2,184 1,383 -- -- --
Net unrealized appreciation on forward
foreign currency contracts...................... -- 413,613 -- -- --
------------- ------------ ---------- --------- ------------
TOTAL ASSETS.................................... 350,175,996 69,538,676 600,004 861,405 55,301,304
------------- ------------ ---------- --------- ------------
LIABILITIES:
Payables:
Securities loaned............................... 51,691,365 -- -- -- --
Investment securities purchased................. 2,309,632 201,585 18,310 10,188 213,960
Investment advisory fees........................ 194,797 40,447 -- -- 22,948
Fund shares redeemed............................ 1,661,002 359,432 -- -- 9,370,003
Variation margin................................ 272,146 -- -- -- --
Due to custodian bank........................... -- -- -- 8,854 --
Accrued expenses................................ 142,980 73,929 3,034 1,925 58,262
Net unrealized depreciation on forward
foreign currency contracts...................... 689,875 -- -- -- 54,907
------------- ------------ ---------- --------- ------------
TOTAL LIABILITIES............................... 56,961,797 675,393 21,344 20,967 9,720,080
------------- ------------ ---------- --------- ------------
NET ASSETS.......................................... $ 293,214,199 $ 68,863,283 $ 578,660 $ 840,438 $ 45,581,224
============= ============ ========== ========= ============
NET ASSETS CONSIST OF:
Paid in capital................................... $ 287,633,867 $ 55,848,764 $ 530,572 $ 732,490 $ 55,033,793
Accumulated undistributed net investment income... -- -- -- -- 335,909
Accumulated net realized gain (loss).............. 2,362,694 4,303,083 1,352 7,741 (7,333,042)
Net unrealized appreciation (depreciation)........ 3,217,638 8,711,436 46,736 100,207 (2,455,436)
------------- ------------ ---------- --------- ------------
NET ASSETS...................................... $ 293,214,199 $ 68,863,283 $ 578,660 $ 840,438 $ 45,581,224
============= ============ ========== ========= ============
BRINSON CLASS I
Net assets........................................ $ 284,228,604 $ 40,538,328 $ 223,553 $ 691,460 $ 43,466,600
============= ============ ========== ========= ============
Shares outstanding................................ 25,255,651 3,249,678 19,786 57,263 4,825,867
============= ============ ========== ========= ============
Net asset value, offering and redemption
price per share................................. $ 11.25 $ 12.47 $ 11.30 $ 12.08 $ 9.01
============= ============ ========== ========= ============
BRINSON CLASS N:
Net assets........................................ $ 202,037 $ 224,292 $ 1,130 $ 1,207 $ 782
============= ============ ========== ========= ============
Shares outstanding................................ 18,035 18,033 100 100 86
============= ============ ========== ========= ============
Net asset value, offering and redemption
price per share................................. $ 11.20 $ 12.44 $ 11.30 $ 12.07 $ 9.09
============= ============ ========== ========= ============
UBS INVESTMENT FUNDS CLASS:
Net assets........................................ $ 8,783,558 $ 28,100,663 $ 353,977 $ 147,771 $ 2,113,842
============= ============ ========== ========= ============
Shares outstanding................................ 786,388 2,264,523 31,355 12,240 235,559
============= ============ ========== ========= ============
Net asset value, offering and redemption
price per share................................. $ 11.17 $ 12.41 $ 11.29 $ 12.07 $ 8.97
============= ============ ========== ========= ============
</TABLE>
================================================================================
82 See accompanying notes to financial statements.
<PAGE>
UBS Investment Funds -- Financial Statements
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. U.S. U.S. Global
U.S. Balanced U.S. Equity Large Cap Large Cap Small Cap U.S. Bond High Yield (Ex-U.S)
Fund Fund Equity Fund Growth Fund Growth Fund Fund Fund Equity Fund
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 11,777,644 $164,986,101 $ 15,674,981 $ 11,049,729 $ 33,685,619 $ 62,291,605 $ 49,824,626 $310,510,130
623,691 849,414 1,215,982 -- 2,503,641 217,046 10,185,196 5,129,357
-- -- -- -- -- -- -- 1,590,185
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 12,410,335 $165,835,515 $ 16,890,963 $ 11,049,729 $ 36,189,260 $ 62,508,651 $ 60,009,822 $317,229,672
============ ============ ============ ============ ============ ============ ============ ============
$ 11,679,583 $187,707,771 $ 14,681,033 $ 12,599,299 $ 49,928,176 $ 60,006,339 $ 46,293,624 $404,642,291
623,691 849,414 1,215,982 -- 2,503,641 217,046 10,185,196 5,129,357
-- -- -- -- -- -- -- 1,587,725
74,669 -- 56,250 18,750 -- -- -- --
425,781 1,637,443 222,055 -- 837,682 760,531 -- 2,539,311
-- -- 5,193 2,191 -- -- -- --
6,282 212,488 20,888 4,431 2,259 -- -- 740,368
59,354 27,281 730 3,189 2,400 727,982 980,928 34,963
9,979 160,436 24,481 1,250,964 2,057,388 2,144,030 146,988 8,306,076
-- 12,625 7,575 -- -- -- -- --
-- -- -- -- -- 451 -- --
-- -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
12,879,339 190,607,458 16,234,187 13,878,824 55,331,546 63,856,379 57,606,736 422,980,091
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- -- -- -- -- -- --
419,328 1,301,715 170,722 708,750 391,228 1,105,361 1,016,965 1,141,416
7,460 66,878 -- -- 35,597 4,380 17,752 280,841
5,810 1,585,937 81,864 14,023 215,243 1,064,617 3,523,751 2,052,645
17,745 -- -- 953 -- -- -- --
-- -- -- -- -- 1,709 -- --
54,615 88,831 30,766 85,831 41,304 32,473 38,754 117,734
-- -- -- -- -- -- -- 1,582,910
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
504,958 3,043,361 283,352 809,557 683,372 2,208,540 4,597,222 5,175,546
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 12,374,381 $187,564,097 $ 15,950,835 $ 13,069,267 $ 54,648,174 $ 61,647,839 $ 53,009,514 $417,804,545
============ ============ ============ ============ ============ ============ ============ ============
$ 14,375,291 $166,431,820 $ 23,039,476 $ 10,447,588 $ 30,141,261 $ 66,462,617 $ 58,700,942 $312,288,833
178,497 4,239,650 -- -- -- 1,417,249 1,495,285 --
(2,206,054) (5,824,621) (6,086,797) 1,073,930 8,264,356 (3,946,761) (3,655,711) 12,982,737
26,647 22,717,248 (1,001,844) 1,547,749 16,242,557 (2,285,266) (3,531,002) 92,532,975
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 12,374,381 $187,564,097 $ 15,950,835 $ 13,069,267 $ 54,648,174 $ 61,647,839 $ 53,009,514 $417,804,545
============ ============ ============ ============ ============ ============ ============ ============
$ 11,136,032 $167,870,183 $ 15,758,324 $ 5,885,011 $ 50,974,940 $ 58,121,065 $ 50,844,798 $411,984,628
============ ============ ============ ============ ============ ============ ============ ============
1,296,639 10,448,418 2,106,508 385,178 3,132,204 5,813,445 5,529,623 30,355,206
============ ============ ============ ============ ============ ============ ============ ============
$ 8.59 $ 16.07 $ 7.48 $ 15.28 $ 16.27 $ 10.00 $ 9.19 $ 13.57
============ ============ ============ ============ ============ ============ ============ ============
$ 1,106 $ 7,191,363 $ 35,006 $ 1,368 $ 1,847 $ 1,169 $ 1,028 $ 1,208
============ ============ ============ ============ ============ ============ ============ ============
129 450,175 4,662 90 114 117 112 89
============ ============ ============ ============ ============ ============ ============ ============
$ 8.57 $ 15.97 $ 7.51 $ 15.20 $ 16.20 $ 9.99 $ 9.18 $ 13.57
============ ============ ============ ============ ============ ============ ============ ============
$ 1,237,243 $ 12,502,551 $ 157,505 $ 7,182,888 $ 3,671,387 $ 3,525,605 $ 2,163,688 $ 5,818,709
============ ============ ============ ============ ============ ============ ============ ============
145,236 783,650 21,200 476,113 228,312 354,856 236,022 435,360
============ ============ ============ ============ ============ ============ ============ ============
$ 8.52 $ 15.95 $ 7.43 $ 15.09 $ 16.08 $ 9.94 $ 9.17 $ 13.37
============ ============ ============ ============ ============ ============ ============ ============
</TABLE>
================================================================================
83
<PAGE>
UBS Investment Funds -- Financial Statements
--------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED
JUNE 30, 2000
<TABLE>
<CAPTION>
Global* Global**
Global Global Equity Technology Biotech Global Bond
Fund Fund Fund Fund Fund
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 2,749,313 $ 1,261,596 $ 46 $ -- $ 43,183
Interest........................................ 8,012,042 79,263 358 317 4,268,523
Securities lending-net.......................... 239,626 -- -- -- --
Foreign tax withheld............................ (208,685) (90,155) -- -- (18,681)
------------ ----------- ----------- -------- ------------
TOTAL INCOME............................... 10,792,296 1,250,704 404 317 4,293,025
------------ ----------- ----------- -------- ------------
EXPENSES:
Advisory........................................ 2,899,741 639,859 549 480 597,228
Administration.................................. 250,979 -- -- -- --
Professional.................................... 145,844 49,112 2,556 2,059 48,296
Printing........................................ 123,158 83,429 504 406 55,840
Distribution.................................... 103,485 288,672 256 7 17,645
Custodian....................................... 69,831 36,245 13 14 28,308
Registration.................................... 34,880 29,350 1,188 957 53,690
Other........................................... 71,705 22,654 441 366 55,557
------------ ----------- ----------- -------- ------------
TOTAL EXPENSES............................. 3,699,623 1,149,321 5,507 4,289 856,564
------------ ----------- ----------- -------- ------------
Expenses waived by Advisor................. -- (54,359) (4,639) (3,737) (91,069)
Earnings credits........................... (2,276) (6,515) -- -- (428)
------------ ----------- ----------- -------- ------------
NET EXPENSES............................... 3,697,347 1,088,447 868 552 765,067
------------ ----------- ----------- -------- ------------
NET REALIZED INVESTMENT INCOME (LOSS)...... 7,094,949 162,257 (464) (235) 3,527,958
------------ ----------- ----------- -------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Investments..................................... 18,961,366 9,939,571 1,624 9,364 (2,820,354)
Futures contracts............................... (3,937,165) (36,304) -- -- --
Foreign currency transactions................... (6,047,250) (1,428,985) -- (1,388) (5,716,144)
------------ ----------- ----------- -------- ------------
Net realized gain (loss)................... 8,976,951 8,474,282 1,624 7,976 (8,536,498)
------------ ----------- ----------- -------- ------------
Change in net unrealized appreciation
or depreciation on:
Investments and foreign currency................ (22,852,102) (7,942,884) 46,736 100,207 2,567,911
Futures contracts............................... 3,453,796 -- -- -- 661,078
Forward contracts............................... (2,097,895) 282,864 -- -- 1,270,002
Translation of other assets and liabilities
denominated in foreign currency............ 51,494 13,066 -- -- 86,792
------------ ----------- ----------- -------- ------------
Change in net unrealized appreciation
or depreciation.......................... (21,444,707) (7,646,954) 46,736 100,207 3,924,705
------------ ----------- ----------- -------- ------------
Net realized and unrealized gain (loss)............ (12,467,756) 827,328 48,360 108,183 (4,611,793)
------------ ----------- ----------- -------- ------------
Net increase (decrease) in net assets resulting
from operations................................. $ (5,372,807) $ 989,585 $ 47,896 $107,948 $ (1,083,835)
============ =========== =========== ======== ============
</TABLE>
* Commencement of investment operations was May 26, 2000
** Commencement of investment operations was June 2, 2000
================================================================================
84 See accompanying notes to financial statements.
<PAGE>
UBS Investment Funds -- Financial Statements
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. U.S. U.S. Global
U.S. Balanced U.S. Equity Large Cap Large Cap Small Cap U.S. Bond High Yield (Ex-U.S.)
Fund Fund Equity Fund Growth Fund Growth Fund Fund Fund Equity Fund
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 219,595 $ 7,423,217 $ 404,074 $ 67,519 $ 122,738 $ 79,168 $ -- $ 8,949,581
865,703 907,483 53,714 23,453 120,571 6,069,432 5,703,173 735,552
-- -- -- -- -- -- -- 147,942
-- -- -- -- -- -- -- (807,226)
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
1,085,298 8,330,700 457,788 90,972 243,309 6,148,600 5,703,173 9,025,849
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
199,072 3,376,519 163,052 71,140 445,220 452,989 336,440 3,822,993
-- 29,949 -- -- -- -- -- 358,405
28,500 197,716 37,014 32,278 39,299 41,267 36,805 125,346
9,211 234,243 38,830 22,085 25,990 46,542 28,651 59,963
7,529 221,543 3,407 50,192 13,614 23,917 36,379 55,727
718 12,587 2,597 6,767 1,229 3,924 3,158 253,105
34,546 54,881 42,214 32,432 36,281 39,484 38,132 34,858
16,771 119,773 10,474 24,809 34,449 21,988 38,648 107,368
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
296,347 4,247,211 297,588 239,703 596,082 630,111 518,213 4,817,765
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
(57,436) (160,099) (108,284) (101,585) (69,313) (60,829) (87,728) --
(7) (528) (15) (6,513) (69) (1,659) (1,756) --
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
238,904 4,086,584 189,289 131,605 526,700 567,623 428,729 4,817,765
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
846,394 4,244,116 268,499 (40,633) (283,391) 5,580,977 5,274,444 4,208,084
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
(1,183,394) 12,361,736 (4,203,112) 1,333,599 14,184,229 (2,898,299) (3,589,002) 48,286,353
(819,701) (1,065,527) 33,037 (26,358) -- -- -- (477)
-- -- -- -- -- -- -- (6,868,873)
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
(2,003,095) 11,296,209 (4,170,075) 1,307,241 14,184,229 (2,898,299) (3,589,002) 41,417,003
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
(2,957,865) (145,728,152) (3,189,824) 497,407 12,102,689 218,149 (1,386,533) 16,453,119
661,078 (4,422) (7,896) (1,821) -- -- -- --
-- -- -- -- -- -- -- (1,101,620)
-- -- -- -- -- -- -- 19,644
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
(2,296,787) (145,732,574) (3,197,720) 495,586 12,102,689 218,149 (1,386,533) 15,371,143
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
(4,299,882) (134,436,365) (7,367,795) 1,802,827 26,286,918 (2,680,150) (4,975,535) 56,788,146
------------ -------------- ------------ ----------- ------------ ------------ ------------ ------------
$ (3,453,488) $ (130,192,249) $ (7,099,296) $ 1,762,194 $ 26,003,527 $ 2,900,827 $ 298,909 $ 60,996,230
============ ============== ============ =========== ============ ============ ============ ============
</TABLE>
================================================================================
85
<PAGE>
UBS Investment Funds -- Financial Statements
--------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Global
Fund
---------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net decrease in net assets resulting from operations......................................... $ (5,372,807)
Adjustments to reconcile net decrease in net assets resulting from
operations to net cash used for operating activities:
Net realized and unrealized loss on investments............................................. 12,467,756
Decrease in receivable for investment securities sold....................................... 7,123,722
Decrease in dividends and interest receivable............................................... 1,684,342
Increase in other assets.................................................................... (2,184)
Decrease in payable for securities purchased................................................ (22,903,530)
Decrease in payable for investment advisory fee............................................. (126,514)
Decrease in accrued expenses................................................................ (62,552)
Decrease in variation margin................................................................ (252,979)
Net amortization of premium................................................................. 523,499
---------------
Net cash used for operating activities................................................... (6,921,247)
---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments..................................................................... (759,492,570)
Proceeds from sales of investments........................................................... 1,010,245,660
Net realized loss on futures contracts....................................................... (3,937,165)
Net realized loss on foreign currency transactions........................................... (6,047,250)
Change in net unrealized appreciation or depreciation on futures contracts................... 3,453,796
Change in net unrealized appreciation or depreciation on other assets and liabilities........ 51,494
Net decrease in foreign currency............................................................. 2,144,534
---------------
Net cash provided by investing activities................................................ 246,418,499
---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net capital shares transactions.............................................................. (193,609,810)
Net decrease from securities lending......................................................... (45,782,809)
Dividends and capital gain distributions paid................................................ (1,895,986)
---------------
Net cash used for financing activities................................................... (241,288,605)
---------------
Net decrease in cash.......................................................................... (1,791,353)
CASH AT BEGINNING OF YEAR..................................................................... 1,791,353
---------------
CASH AT END OF YEAR........................................................................... $ --
===============
</TABLE>
================================================================================
86 See accompanying notes to financial statements.
<PAGE>
This page intentionally left blank.
87
<PAGE>
UBS Investment Funds -- Financial Statements
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Global Fund Global Equity Fund
-------------------------------- ------------------------------
Year Ended June 30, Year Ended June 30,
2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............................. $ 7,094,949 $ 12,109,444 $ 162,257 $ 497,109
Net realized gain (loss)................................. 8,976,951 44,693,620 8,474,282 5,596,677
Change in net unrealized appreciation or depreciation.... (21,444,707) (37,993,047) (7,646,954) 1,132,303
------------- ------------- ------------- --------------
Net increase (decrease) in net assets from operations.... (5,372,807) 18,810,017 989,585 7,226,089
------------- ------------- ------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS BY CLASS:
Brinson Class I:
Distributions from net investment income.............. (4,971,880) (17,500,696) (229,745) (384,423)
Distributions from net realized gains................. (14,468,448) (31,201,392) (3,607,561) (352,100)
------------- ------------- ------------- --------------
Total Class I distributions.............................. (19,440,328) (48,702,088) (3,837,306) (736,523)
------------- ------------- ------------- --------------
Brinson Class N:
Distributions from net investment income.............. (18,729) (52,645) (986) (2,181)
Distributions from net realized gains................. (59,854) (97,443) (19,859) (2,950)
------------- ------------- ------------- --------------
Total Class N distributions.............................. (78,583) (150,088) (20,845) (5,131)
------------- ------------- ------------- --------------
UBS Investment Funds Class:
Distributions from net investment income.............. (181,202) (753,377) (77,666) (219,326)
Distributions from net realized gains................. (720,519) (1,710,286) (3,756,176) (713,059)
------------- ------------- ------------- --------------
Total UBS Investment Funds Class distributions........... (901,721) (2,463,663) (3,833,842) (932,385)
------------- ------------- ------------- --------------
Decrease in net assets from distributions................ (20,420,632) (51,315,839) (7,691,993) (1,674,039)
------------- ------------- ------------- --------------
CAPITAL SHARE TRANSACTIONS BY CLASS:
Brinson Class I:
Shares sold........................................... 378,057,007 404,497,836 31,965,448 30,206,170
Shares issued on reinvestment of distributions........ 17,592,753 45,438,730 3,143,195 661,376
Shares redeemed....................................... (556,236,057) (617,784,220) (33,431,209) (14,484,716)
------------- ------------- ------------- --------------
Total Brinson Class I transactions....................... (160,586,297) (167,847,654) 1,677,434 16,382,830
------------- ------------- ------------- --------------
Brinson Class N:
Shares sold........................................... 85,811 401,372 -- 200,000
Shares issued on reinvestment of distributions........ 68,059 148,599 20,844 5,130
Shares redeemed....................................... (1,405,050) (53,226) (1,198) --
------------- ------------- ------------- --------------
Total Brinson Class N transactions....................... (1,251,180) 496,745 19,646 205,130
------------- ------------- ------------- --------------
UBS Investment Funds Class:
Shares sold........................................... 385,340 5,622,287 3,098,087 4,402,461
Shares issued on reinvestment of distributions........ 863,834 2,326,850 3,281,750 795,940
Shares redeemed....................................... (13,120,314) (14,718,874) (18,879,433) (22,842,212)
------------- ------------- ------------- --------------
Total UBS Investment Funds Class transactions............ (11,871,140) (6,769,737) (12,499,596) (17,643,811)
------------- ------------- ------------- --------------
Net increase (decrease) in net assets resulting from
capital share transactions............................ (173,708,617) (174,120,646) (10,802,516) (1,055,851)
------------- ------------- ------------- --------------
Increase (Decrease) in Net Assets........................ (199,502,056) (206,626,468) (17,504,924) 4,496,199
Net Assets, Beginning of Period.......................... 492,716,255 699,342,723 86,368,207 81,872,008
------------- ------------- ------------- --------------
Net Assets, End of Period................................ $ 293,214,199 $ 492,716,255 $ 68,863,283 $ 86,368,207
============= ============= ============= ==============
Net assets include accumulated undistributed
net investment income............................ $ -- $ 753,116 $ -- $ 302,311
============= ============= ============= ==============
Share Transactions:
Brinson Class I:
Shares sold........................................... 33,602,761 33,634,272 2,577,643 2,413,314
Shares issued on reinvestment of distributions........ 1,590,665 3,914,936 257,009 54,126
Shares redeemed....................................... (48,975,929) (50,809,625) (2,721,479) (1,142,595)
------------- ------------- ------------- --------------
Total Brinson Class I transactions....................... (13,782,503) (13,260,417) 113,173 1,324,845
------------- ------------- ------------- --------------
Brinson Class N:
Shares sold........................................... 7,386 31,878 -- 15,911
Shares issued on reinvestment of distributions........ 6,165 12,826 1,707 426
Shares redeemed....................................... (127,026) (4,388) (98) --
------------- ------------- ------------- --------------
Total Brinson Class N transactions....................... (113,475) 40,316 1,609 16,337
------------- ------------- ------------- --------------
UBS Investment Funds Class:
Shares sold........................................... 33,492 469,115 243,526 352,164
Shares issued on reinvestment of distributions........ 78,388 201,293 268,566 66,261
Shares redeemed....................................... (1,170,744) (1,220,493) (1,533,100) (1,860,700)
------------- ------------- ------------- --------------
Total UBS Investment Funds Class transactions............ (1,058,864) (550,085) (1,021,008) (1,442,275)
------------- ------------- ------------- --------------
</TABLE>
* Commencement of investment operations
================================================================================
88 See accompanying notes to financial statements.
<PAGE>
UBS Investment Funds -- Financial Statements
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Global
Technology Fund Biotech Fund Global Bond Fund U.S. Balanced Fund
--------------- ------------- ------------------------------ ----------------------------
May 26, 2000* June 2, 2000*
Through Through Year Ended June 30, Year Ended June 30,
June 30, 2000 June 30, 2000 2000 1999 2000 1999
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ (464) $ (235) $ 3,527,958 $ 5,139,936 $ 846,394 $ 1,558,422
1,624 7,976 (8,536,498) 1,499,627 (2,003,095) 4,257,213
46,736 100,207 3,924,705 (6,052,418) (2,296,787) (5,162,345)
--------------- ------------- ------------- ------------- ------------ -------------
47,896 107,948 (1,083,835) 587,145 (3,453,488) 653,290
--------------- ------------- ------------- ------------- ------------ -------------
-- -- (1,118,342) (5,705,972) (815,029) (2,554,055)
-- -- (82,557) (925,451) (225,248) (9,074,452)
--------------- ------------- ------------- ------------- ------------ -------------
-- -- (1,200,899) (6,631,423) (1,040,277) (11,628,507)
--------------- ------------- ------------- ------------- ------------ -------------
-- -- -- (13,166) (31) (68)
-- -- (1) (811) (7) (243)
--------------- ------------- ------------- ------------- ------------ -------------
-- -- (1) (13,977) (38) (311)
--------------- ------------- ------------- ------------- ------------ -------------
-- -- (43,991) (180,397) (37,261) (123,921)
-- -- (4,026) (35,005) (10,418) (483,100)
--------------- ------------- ------------- ------------- ------------ -------------
-- -- (48,017) (215,402) (47,679) (607,021)
--------------- ------------- ------------- ------------- ------------ -------------
-- -- (1,248,917) (6,860,802) (1,087,994) (12,235,839)
--------------- ------------- ------------- ------------- ------------ -------------
208,013 87,520 25,700,559 110,539,879 11,292,015 12,704,822
-- -- 1,040,704 4,679,150 1,016,548 11,512,192
-- -- (73,843,125) (107,591,860) (34,385,369) (56,107,946)
--------------- ------------- ------------- ------------- ------------ -------------
208,013 87,520 (47,101,862) 7,627,169 (22,076,806) (31,890,932)
--------------- ------------- ------------- ------------- ------------ -------------
-- -- 1,912 1,120,104 -- 15,306
-- -- 1 5,581 38 311
-- -- (1,106,396) (871) (96) (15,210)
--------------- ------------- ------------- ------------- ------------ -------------
-- -- (1,104,483) 1,124,814 (58) 407
--------------- ------------- ------------- ------------- ------------ -------------
320,741 144,960 366,668 4,222,107 147,189 1,464,212
-- -- 38,350 187,579 41,422 523,561
-- -- (2,630,429) (4,202,489) (588,978) (1,558,776)
--------------- ------------- ------------- ------------- ------------ -------------
320,741 144,960 (2,225,411) 207,197 (400,367) 428,997
--------------- ------------- ------------- ------------- ------------ -------------
528,754 232,480 (50,431,756) 8,959,180 (22,477,231) (31,461,528)
--------------- ------------- ------------- ------------- ------------ -------------
576,650 340,428 (52,764,508) 2,685,523 (27,018,713) (43,044,077)
2,010 500,010 98,345,732 95,660,209 39,393,094 82,437,171
--------------- ------------- ------------- ------------- ------------ -------------
$ 578,660 $ 840,438 $ 45,581,224 $ 98,345,732 $ 12,374,381 $ 39,393,094
=============== ============= ============= ============= ============ =============
$ -- $ -- $ 335,909 $ 1,161,994 $ 178,497 $ 200,223
=============== ============= ============= ============= ============ =============
19,785 7,462 2,835,427 11,338,295 1,279,917 1,174,303
-- -- 113,243 484,490 119,214 1,235,079
-- -- (8,240,771) (11,403,020) (4,112,896) (4,977,791)
--------------- ------------- ------------- ------------- ------------ -------------
19,785 7,462 (5,292,101) 419,765 (2,713,765) (2,568,409)
--------------- ------------- ------------- ------------- ------------ -------------
-- -- 210 117,021 -- 1,652
-- -- -- 579 4 33
-- -- (118,588) (90) (10) (1,641)
--------------- ------------- ------------- ------------- ------------ -------------
-- -- (118,378) 117,510 (6) 44
--------------- ------------- ------------- ------------- ------------ -------------
31,255 12,140 40,841 432,357 16,973 135,474
-- -- 4,177 19,366 4,883 56,474
-- -- (292,883) (434,492) (68,563) (154,266)
--------------- ------------- ------------- ------------- ------------ -------------
31,255 12,140 (247,865) 17,231 (46,707) 37,682
--------------- ------------- ------------- ------------- ------------ -------------
</TABLE>
================================================================================
89
<PAGE>
UBS Investment Funds -- Financial Statements
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. Large Cap
U.S Equity Fund Equity Fund
------------------------------ ----------------------------
Year Ended June 30, Year Ended June 30,
2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............................... $ 4,244,116 $ 5,562,471 $ 268,499 $ 185,687
Net realized gain (loss)................................... 11,296,209 53,949,031 (4,170,075) 339,283
Change in net unrealized appreciation or depreciation...... (145,732,574) 51,667,938 (3,197,720) 2,374,562
------------- ------------- ------------ ------------
Net increase (decrease) in net assets from operations...... (130,192,249) 111,179,440 (7,099,296) 2,899,532
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS BY CLASS:
Brinson Class I:
Distributions from net investment income................. (1,354,937) (5,223,351) (260,485) (87,626)
Distributions from net realized gains.................... (46,078,258) (36,404,562) (2,112,124) --
------------- ------------- ------------ ------------
Total Brinson Class I distributions........................ (47,433,195) (41,627,913) (2,372,609) (87,626)
------------- ------------- ------------ ------------
Brinson Class N:
Distributions from net investment income................. (12,687) (28,171) (3,358) (69,880)
Distributions from net realized gains.................... (773,650) (234,496) (67,254) --
------------- ------------- ------------ ------------
Total Brinson Class N distributions........................ (786,337) (262,667) (70,612) (69,880)
------------- ------------- ------------ ------------
UBS Investment Funds Class:
Distributions from net investment income................. -- (190,578) (854) (12)
Distributions from net realized gains.................... (5,191,383) (3,937,537) (6,269) --
------------- ------------- ------------ ------------
Total UBS Investment Funds Class distributions............. (5,191,383) (4,128,115) (7,123) (12)
------------- ------------- ------------ ------------
Decrease in net assets from distributions.................. (53,410,915) (46,018,695) (2,450,344) (157,518)
------------- ------------- ------------ ------------
CAPITAL SHARE TRANSACTIONS BY CLASS:
Brinson Class I:
Shares sold.............................................. 122,681,959 272,587,287 20,498,512 24,164,112
Shares issued on reinvestment of distributions........... 46,438,462 40,726,871 1,882,863 77,433
Shares redeemed.......................................... (549,708,344) (265,910,621) (20,540,523) (3,862,037)
------------- ------------- ------------ ------------
Total Brinson Class I transactions......................... (380,587,923) 47,403,537 1,840,852 20,379,508
------------- ------------- ------------ ------------
Brinson Class N:
Shares sold.............................................. 6,190,218 8,022,220 23,427 684,700
Shares issued on reinvestment of distributions........... 39,033 239,980 70,611 69,880
Shares redeemed.......................................... (4,286,205) (1,768,705) (3,038,230) (13,638,399)
------------- ------------- ------------ ------------
Total Brinson Class N transactions......................... 1,943,046 6,493,495 (2,944,192) (12,883,819)
------------- ------------- ------------ ------------
UBS Investment Funds Class:
Shares sold................................................ 885,348 26,390,598 184,571 4,617
Shares issued on reinvestment of distributions............. 1,938,596 1,678,518 7,113 11
Shares redeemed............................................ (43,062,328) (18,175,221) (17,573) --
------------- ------------- ------------ ------------
Total UBS Investment Funds Class transactions................ (40,238,384) 9,893,895 174,111 4,628
------------- ------------- ------------ ------------
Net increase (decrease) in net assets resulting from
capital share transactions................................. (418,883,261) 63,790,927 (929,229) 7,500,317
------------- ------------- ------------ ------------
Increase (Decrease) in Net Assets............................ (602,486,425) 128,951,672 (10,478,869) 10,242,331
Net Assets, Beginning of Period.............................. 790,050,522 661,098,850 26,429,704 16,187,373
------------- ------------- ------------ ------------
Net Assets, End of Period.................................... $ 187,564,097 $ 790,050,522 $ 15,950,835 $ 26,429,704
============= ============= ============ ============
Net assets include accumulated undistributed
net investment income...................................... $ 4,239,650 $ 1,363,158 $ -- $ 81,256
============= ============= ============ ============
Share Transactions:
Brinson Class I:
Shares sold................................................ 7,021,481 14,157,093 2,464,710 2,384,176
Shares issued on reinvestment of distributions............. 2,790,780 2,164,601 231,926 7,506
Shares redeemed............................................ (32,569,089) (13,543,224) (2,626,652) (370,824)
------------- ------------- ------------ ------------
Total Brinson Class I transactions........................... (22,756,828) 2,778,470 69,984 2,020,858
------------- ------------- ------------ ------------
Brinson Class N:
Shares sold................................................ 355,231 417,980 952 61,091
Shares issued on reinvestment of distributions............. 2,356 12,904 8,644 7,094
Shares redeemed............................................ (260,962) (90,831) (342,514) (1,369,240)
------------- ------------- ------------ ------------
Total Brinson Class N transactions........................... 96,625 340,053 (332,918) (1,301,055)
------------- ------------- ------------ ------------
UBS Investment Funds Class:
Shares sold................................................ 44,999 1,317,474 22,263 427
Shares issued on reinvestment of distributions............. 116,996 89,839 884 1
Shares redeemed............................................ (2,612,305) (950,265) (2,479) --
------------- ------------- ------------ ------------
Total UBS Investment Funds Class transactions................ (2,450,310) 457,048 20,668 428
------------- ------------- ------------ ------------
</TABLE>
*Reflects the Fund's change in fiscal year end from December 31 to June 30
================================================================================
See accompanying notes to financial statements.
90
<PAGE>
UBS Investment Funds -- Financial Statements
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Large Cap U.S. Small Cap
Growth Fund Growth Fund U.S. Bond Fund
-------------------------------------- --------------------------------------- -------------------------------
Year Ended Six Months Ended* Year Ended Six Months Ended* Year Ended June 30,
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ (40,633) $ (123) $ (283,391) $ (68,177) $ 5,580,977 $ 4,517,147
1,307,241 408,525 14,184,229 (633,451) (2,898,299) (338,906)
495,586 463,877 12,102,689 1,970,811 218,149 (3,036,340)
------------- ------------ ------------- ------------- ------------- -------------
1,762,194 872,279 26,003,527 1,269,183 2,900,827 1,141,901
------------- ------------ ------------- ------------- ------------- -------------
-- -- -- -- (4,678,165) (3,583,162)
(226,909) -- -- -- -- (1,038,553)
------------- ------------ ------------- ------------- ------------- -------------
(226,909) -- -- -- (4,678,165) (4,621,715)
------------- ------------ ------------- ------------- ------------- -------------
-- -- -- -- (71) (46)
(80) -- -- -- -- (16)
------------- ------------ ------------- ------------- ------------- -------------
(80) -- -- -- (71) (62)
------------- ------------ ------------- ------------- ------------- -------------
-- -- -- -- (374,662) (229,168)
(376,172) -- -- -- -- (68,968)
------------- ------------ ------------- ------------- ------------- -------------
(376,172) -- -- -- (374,662) (298,136)
------------- ------------ ------------- ------------- ------------- -------------
(603,161) -- -- -- (5,052,898) (4,919,913)
------------- ------------ ------------- ------------- ------------- -------------
4,048,482 451,776 29,765,229 22,702,120 70,180,980 165,316,122
217,384 -- -- -- 4,552,534 4,042,561
(1,701,110) (2,143,629) (38,928,066) (11,346,801) (106,749,956) (112,692,202)
------------- ------------ ------------- ------------- ------------- -------------
2,564,756 (1,691,853) (9,162,837) 11,355,319 (32,016,442) 56,666,481
------------- ------------ ------------- ------------- ------------- -------------
-- -- -- -- -- 25,964
80 -- -- -- 71 62
-- -- -- -- -- (25,905)
------------- ------------ ------------- ------------- ------------- -------------
80 -- -- -- 71 121
------------- ------------ ------------- ------------- ------------- -------------
5,084,906 4,781,902 2,415,418 858,153 1,492,544 6,222,123
376,172 -- -- -- 310,529 229,364
(4,200,579) (26,217) (459,900) (240,000) (4,032,375) (2,612,918)
------------- ------------ ------------- ------------- ------------- -------------
1,260,499 4,755,685 1,955,518 618,153 (2,229,302) 3,838,569
------------- ------------ ------------- ------------- ------------- -------------
3,825,335 3,063,832 (7,207,319) 11,973,472 (34,245,673) 60,505,171
------------- ------------ ------------- ------------- ------------- -------------
4,984,368 3,936,111 18,796,208 13,242,655 (36,397,744) 56,727,159
8,084,899 4,148,788 35,851,966 22,609,311 98,045,583 41,318,424
------------- ------------ ------------- ------------- ------------- -------------
$ 13,069,267 $ 8,084,899 $ 54,648,174 $ 35,851,966 $ 61,647,839 $ 98,045,583
============= ============= ============= ============= ============= =============
$ -- $ -- $ -- $ -- $ 1,417,249 $ 961,121
============= ============= ============= ============= ============= =============
276,574 35,111 2,526,985 2,641,837 6,936,124 15,463,879
15,996 -- -- -- 461,106 386,462
(119,266) (173,449) (3,231,011) (1,375,470) (10,539,673) (10,568,875)
------------- ------------ ------------ ------------ ------------ ------------
173,304 (138,338) (704,026) 1,266,367 (3,142,443) 5,281,466
------------- ------------ ------------- ------------- ------------- -------------
-- -- -- -- -- 2,379
6 -- -- -- 7 6
-- -- -- -- -- (2,379)
------------- ------------ ------------- ------------- ------------- -------------
6 -- -- -- 7 6
------------- ------------ ------------- ------------- ------------- -------------
363,462 372,727 193,136 99,579 146,887 582,475
27,906 -- -- -- 31,628 22,041
(286,213) (1,853) (34,814) (29,703) (411,376) (248,522)
------------- ------------ ------------- ------------- ------------- -------------
105,155 370,874 158,322 69,876 (232,861) 355,994
------------- ------------ ------------- ------------- ------------- -------------
</TABLE>
================================================================================
91
<PAGE>
UBS Investment Funds -- Financial Statements
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Global (Ex-U.S.) Equity
High Yield Fund Fund
----------------------------------- ----------------------------------
Year Ended Six Months Ended* Year Ended June 30,
June 30, 2000 June 30, 1999 2000 1999
-------------- ---------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income.................................. $ 5,274,444 $ 2,487,185 $ 4,208,084 $ 6,208,221
Net realized gain (loss)............................... (3,589,002) 420,129 41,417,003 (1,916,922)
Change in net unrealized appreciation or depreciation.. (1,386,533) (1,916,114) 15,371,143 19,559,006
------------ ------------ --------------- -------------
Net increase in net assets from operations............. 298,909 991,200 60,996,230 23,850,305
------------ ------------ --------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS BY CLASS:
Brinson Class I:
Distributions from net investment income......... (3,997,434) (1,845,754) (2,727,974) (4,564,403)
Distributions from net realized gains............ (384,243) -- (5,283,152) (4,498,729)
------------ ------------ --------------- -------------
Total Brinson Class I distributions.................... (4,381,677) (1,845,754) (8,011,126) (9,063,132)
------------ ------------ --------------- -------------
Brinson Class N:
Distributions from net investment income......... (74) (30) -- (121)
Distributions from net realized gains............ (7) -- (13) (126)
------------ ------------ --------------- -------------
Total Brinson Class N distributions.................... (81) (30) (13) (247)
------------ ------------ --------------- -------------
UBS Investment Funds Class:
Distributions from net investment income......... (315,019) (167,575) (9,831) (23,356)
Distributions from net realized gains............ (40,374) -- (74,353) (52,439)
------------ ------------ --------------- -------------
Total UBS Investment Funds Class distributions......... (355,393) (167,575) (84,184) (75,795)
------------ ------------ --------------- -------------
Decrease in net assets from distributions........ (4,737,151) (2,013,359) (8,095,323) (9,139,174)
------------ ------------ --------------- -------------
CAPITAL SHARE TRANSACTIONS BY CLASS:
Brinson Class I:
Shares sold...................................... 75,679,660 46,327,741 1,049,008,547 857,199,838
Shares issued on reinvestment of distributions... 3,943,554 1,658,538 7,708,071 8,514,975
Shares redeemed.................................. (84,709,596) (22,018,291) (1,187,345,955) (829,422,705)
------------ ------------ --------------- -------------
Total Brinson Class I transactions..................... (5,086,382) 25,967,988 (130,629,337) 36,292,108
------------ ------------ --------------- -------------
Brinson Class N:
Shares sold...................................... -- -- 373 4,263
Shares issued on reinvestment of distributions... 81 30 13 247
Shares redeemed.................................. -- -- (14,890) (487)
------------ ------------ --------------- -------------
Total Brinson Class N transactions..................... 81 30 (14,504) 4,023
------------ ------------ --------------- -------------
UBS Investment Funds Class:
Shares sold...................................... 484,592 6,368,108 1,895,728 6,909,236
Shares issued on reinvestment of distributions... 274,449 139,258 81,724 68,163
Shares redeemed.................................. (4,562,131) (18,000) (3,506,844) (5,556,938)
------------ ------------ --------------- -------------
Total UBS Investment Funds Class transactions.......... (3,803,090) 6,489,366 (1,529,392) 1,420,461
------------ ------------ --------------- -------------
Net increase (decrease) in net assets resulting from
capital share transactions....................... (8,889,391) 32,457,384 (132,173,233) 37,716,592
------------ ------------ --------------- -------------
Increase (Decrease) in Net Assets...................... (13,327,633) 31,435,225 (79,272,326) 52,427,723
Net Assets, Beginning of Period........................ 66,337,147 34,901,922 497,076,871 444,649,148
------------ ------------ --------------- -------------
Net Assets, End of Period.............................. $ 53,009,514 $ 66,337,147 $ 417,804,545 $ 497,076,871
============ ============ =============== =============
Net assets include accumulated undistributed
net investment income............................ $ 1,495,285 $ 611,744 $ -- $ 2,738,174
============ ============ =============== =============
SHARE TRANSACTIONS:
Brinson Class I:
Shares sold...................................... 8,072,340 4,509,034 80,245,905 72,650,740
Shares issued on reinvestment of distributions... 416,227 166,520 575,659 726,832
Shares redeemed.................................. (8,988,112) (2,144,630) (90,203,629) (69,803,887)
------------ ------------ --------------- -------------
Total Brinson Class I transactions..................... (499,545) 2,530,924 (9,382,065) 3,573,685
------------ ------------ --------------- -------------
Brinson Class N:
Shares sold...................................... -- -- 30 365
Shares issued on reinvestment of distributions... 9 3 1 21
Shares redeemed.................................. -- -- (1,174) (41)
------------ ------------ --------------- -------------
Total Brinson Class N transactions..................... 9 3 (1,143) 345
------------ ------------ --------------- -------------
UBS Investment Funds Class:
Shares sold...................................... 50,427 620,093 146,606 587,229
Shares issued on reinvestment of distributions... 28,713 13,996 6,167 5,917
Shares redeemed.................................. (475,553) (1,754) (269,636) (481,376)
------------ ------------ --------------- -------------
Total UBS Investment Funds Class transactions.......... (396,413) 632,335 (116,863) 111,770
------------ ------------ --------------- -------------
</TABLE>
*Reflects the Fund's change in fiscal year end from December 31 to June 30
================================================================================
92 See accompanying notes to financial statements.
<PAGE>
Global Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
<TABLE>
<CAPTION>
July 31, 1995*
Year Ended June 30, Through
--------------------------------------------------
UBS Investment Funds Class 2000 1999 1998 1997 June 31, 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period....................... $ 11.95 $ 12.71 $ 13.05 $ 12.18 $ 11.60
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income.................................... 0.17** 0.20 0.30 0.34 0.39
Net realized and unrealized gain (loss).................. (0.30) 0.25 0.61 1.75 1.10
---------- ---------- ---------- ---------- ----------
Total income (loss) from investment operations...... (0.13) 0.45 0.91 2.09 1.49
---------- ---------- ---------- ---------- ----------
Less distributions:
Distributions from and in excess of
net investment income............................... (0.13) (0.37) (0.55) (0.57) (0.59)
Distributions from net realized gains.................... (0.52) (0.84) (0.70) (0.65) (0.32)
---------- ---------- ---------- ---------- ----------
Total distributions................................. (0.65) (1.21) (1.25) (1.22) (0.91)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year............................... $ 11.17 $ 11.95 $ 12.71 $ 13.05 $ 12.18
========== ========== ========== ========== ==========
Total return (non-annualized).............................. (1.00)% 3.92% 7.60% 18.13% 13.24%
Ratios/Supplemental data:
Net assets, end of year (in 000s)........................ $ 8,784 $ 22,060 $ 30,436 $ 26,303 $ 14,030
Ratio of expenses to average net assets.................. 1.64% 1.61% 1.59% 1.64% 1.69%***
Ratio of net investment income to average net assets..... 1.34% 1.58% 2.05% 2.38% 3.04%***
Portfolio turnover rate.................................. 98% 105% 88% 150% 142%
</TABLE>
* Commencement of UBS Investment Funds Class
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
See accompanying notes to financial statements. 93
<PAGE>
Global Equity Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
<TABLE>
<CAPTION>
July 31, 1995*
Year Ended June 30, Through
---------------------------------------------------------
UBS Investment Funds Class 2000 1999 1998 1997 June 31, 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............. $ 13.40 $ 12.51 $ 12.73 $ 11.57 $ 10.35
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss)................... (0.03)** 0.04 0.07 0.08 (0.01)
Net realized and unrealized gain............... 0.27 1.09 0.83 2.13 1.93
---------- ---------- ---------- ---------- ----------
Total income from investment operations... 0.24 1.13 0.90 2.21 1.92
---------- ---------- ---------- ---------- ----------
Less distributions:
Distributions from net investment income....... (0.02) (0.06) (0.07) (0.06) (0.01)
Distributions from net realized gains.......... (1.21) (0.18) (1.05) (0.99) (0.69)
---------- ---------- ---------- ---------- ----------
Total distributions....................... (1.23) (0.24) (1.12) (1.05) (0.70)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period................... $ 12.41 $ 13.40 $ 12.51 $ 12.73 $ 11.57
========== ========== ========== ========== ==========
Total return (non-annualized).................... 1.96% 9.28% 8.15% 20.34% 19.25%
Ratios/Supplemental data:
Net assets, end of period (in 000s)............ $ 28,101 $ 44,042 $ 59,147 $ 61,680 $ 33,012
Ratio of expenses to average net assets:
Before expense reimbursement................. 1.83% 1.81% 1.78% 2.00% 2.53%***
After expense reimbursement.................. 1.76% 1.76% 1.76% 1.75% 1.76%***
Ratio of net investment income (loss) to
average net assets:
Before expense reimbursement................. (0.27)% 0.29% 0.53% 0.60% (0.19)%***
After expense reimbursement.................. (0.20)% 0.34% 0.55% 0.85% 0.58%***
Portfolio turnover rate........................ 111% 86% 46% 32% 74%
</TABLE>
* Commencement of UBS Investment Funds Class
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
94 See accompanying notes to financial statements.
<PAGE>
Global Technology Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
May 26, 2000*
Through
UBS Investment Funds Class June 30, 2000
--------------------------------------------------------------------------------
Net asset value, beginning of period.......................... $ 10.00
-------
Income from investment operations:
Net investment loss...................................... (0.01)
Net realized and unrealized gain......................... 1.30
-------
Total income from investment operations............... 1.29
-------
Net asset value, end of period................................ $ 11.29
=======
Total return (non-annualized)................................. 12.90%
Ratios/Supplemental data:
Net assets, end of period (in 000s)......................... $ 354
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits.......... 14.28%**
After expense reimbursement and earnings credits........... 2.55%**
Ratio of net investment loss to average net assets:
Before expense reimbursement and earnings credits.......... (13.26)%**
After expense reimbursement and earnings credits........... (1.53)%**
Portfolio turnover rate..................................... 14%
* Commencement of investment operations
** Annualized
================================================================================
See accompanying notes to financial statements. 95
<PAGE>
Global Biotech Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
June 2, 2000*
Through
UBS Investment Funds Class June 30, 2000
--------------------------------------------------------------------------------
Net asset value, beginning of period........................... $ 10.00
-------
Income from investment operations:
Net investment loss........................................ (0.01)**
Net realized and unrealized gain........................... 2.08
-------
Total income from investment operations................. 2.07
-------
Net asset value, end of period................................. $ 12.07
=======
Total return (non-annualized).................................. 20.70%
Net assets, end of period (in 000s).......................... $ 148
Ratio of expenses to average net assets:
Before expense reimbursement and earnings credits.......... 11.10%***
After expense reimbursement and earnings credits........... 2.30%***
Ratio of net investment loss to average net assets:
Before expense reimbursement and earnings credits.......... (10.29)%***
After expense reimbursement and earnings credits........... (1.49)%***
Portfolio turnover rate...................................... 19%
* Commencement of investment operations was June 2, 2000
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
96 See accompanying notes to financial statements.
<PAGE>
GLOBAL BOND FUND -- FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
<TABLE>
<CAPTION>
July 31, 1995*
Year Ended June 30, Through
--------------------------------------------------
UBS Investment Funds Class 2000 1999 1998 1997 June 30, 1996
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................... $ 9.16 $ 9.39 $ 9.61 $ 10.02 $ 10.56
-------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income................................. 0.36** 0.34** 0.38** 0.62 0.78
Net realized and unrealized gain (loss)............... (0.43) (0.07) (0.18) 0.10 0.15
-------- -------- -------- -------- --------
Total income (loss) from investment operations.... (0.07) 0.27 0.20 0.72 0.93
-------- -------- -------- -------- --------
Less distributions:
Distributions from and in excess of
net investment income............................. (0.11) (0.42) (0.25) (0.94) (1.37)
Distributions from net realized gains................. (0.01) (0.08) (0.17) (0.19) (0.10)
-------- -------- -------- -------- --------
Total distributions............................... (0.12) (0.50) (0.42) (1.13) (1.47)
-------- -------- -------- -------- --------
Net asset value, end of period.......................... $ 8.97 $ 9.16 $ 9.39 $ 9.61 $ 10.02
======== ======== ======== ======== ========
Total return (non-annualized)........................... (0.84)% 2.58% 2.28% 7.20% 9.17%
Ratios/Supplemental data:
Net assets, end of period (in 000s)................... $ 2,114 $ 4,429 $ 4,377 $ 4,110 $ 3,653
Ratio of expenses to average net assets:
Before expense reimbursement........................ 1.54% 1.39% 1.45% 1.81% 2.14%***
After expense reimbursement......................... 1.43%**** N/A 1.39% 1.39% 1.39%***
Ratio of net investment income to average net assets:
Before expense reimbursement........................ 3.85% 3.56% 3.98% 4.41% 4.49%***
After expense reimbursement......................... 3.96% N/A 4.04% 4.83% 5.24%***
Portfolio turnover rate................................. 87% 138% 151% 135% 184%
</TABLE>
* Commencement of investment operations
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
**** The ratio of net operating expenses to average net assets was 1.39%.
N/A = Not Applicable
================================================================================
See accompanying notes to financial statements. 97
<PAGE>
U.S. Balanced Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
<TABLE>
<CAPTION>
July 31, 1995*
Year Ended June 30, Through
--------------------------------------------------
UBS Investment Funds Class 2000 1999 1998 1997 June 30, 1996
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period..................... $ 9.32 $ 12.19 $ 12.46 $ 11.67 $ 11.38
-------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income.................................. 0.22** 0.27** 0.42** 0.38 0.42
Net realized and unrealized gain (loss)................ (0.74) 0.18 0.95 1.31 0.86
-------- -------- -------- -------- --------
Total income (loss) from investment operations..... (0.52) 0.45 1.37 1.69 1.28
-------- -------- -------- -------- --------
Less distributions:
Distributions from net investment income............... (0.22) (0.67) (0.70) (0.36) (0.42)
Distributions from net realized gains.................. (0.06) (2.65) (0.94) (0.54) (0.57)
-------- -------- -------- -------- --------
Total distributions................................ (0.28) (3.32) (1.64) (0.90) (0.99)
-------- -------- -------- -------- --------
Net asset value, end of period........................... $ 8.52 $ 9.32 $ 12.19 $ 12.46 $ 11.67
======== ======== ======== ======== ========
Total return (non-annualized)............................ (5.57)% 4.13% 11.79% 14.99% 11.54%
Ratios/Supplemental data:
Net assets, end of period (in 000s).................... $ 1,237 $ 1,789 $ 1,880 $ 1,649 $ 779
Ratio of expenses to average net assets:
Before expense reimbursement......................... 1.51% 1.46% 1.31% 1.38% 1.51%***
After expense reimbursement.......................... 1.31%**** 1.30% 1.30% 1.30% 1.30%***
Ratio of net investment income to average net assets:
Before expense reimbursement......................... 2.30% 2.50% 3.38% 3.28% 3.26%***
After expense reimbursement.......................... 2.50% 2.66% 3.39% 3.36% 3.47%***
Portfolio turnover rate................................ 96% 113% 194% 329% 240%
</TABLE>
* Commencement of UBS Investment Funds Class
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
**** The ratio of net operating expenses to average net assets was 1.30%
===============================================================================
98 See accompanying notes to financial statements.
<PAGE>
U.S. Equity Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
July 31, 1995*
Year Ended June 30, Through
-------------------------------------------------------
UBS Investment Funds Class 2000 1999 1998 1997 June 30, 1996
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $ 21.39 $ 19.83 $ 17.59 $ 14.58 $ 11.94
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income........................ 0.08** 0.06** 0.09 0.11 0.10
Net realized and unrealized gain (loss)...... (3.75) 2.67 3.38 4.22 2.92
------- ------- ------- ------- -------
Total income (loss) from investment
operations............................. (3.67) 2.73 3.47 4.33 3.02
------- ------- ------- ------- -------
Less distributions:
Distributions from net investment income..... -- (0.05) (0.10) (0.09) (0.13)
Distributions from net realized gains........ (1.77) (1.12) (1.13) (1.23) (0.25)
------- ------- ------- ------- -------
Total distributions..................... (1.77) (1.17) (1.23) (1.32) (0.38)
------- ------- ------- ------- -------
Net asset value, end of period.................. $ 15.95 $ 21.39 $ 19.83 $ 17.59 $ 14.58
======= ======= ======= ======= =======
Total return (non-annualized)................... (17.47)% 14.63% 20.80% 31.28% 25.70%
Ratios/Supplemental data:
Net assets, end of period (in 000s).......... $12,503 $69,167 $55,063 $35,039 $ 5,387
Ratio of expenses to average net assets:
Before expense reimbursement............... 1.36% 1.32% 1.32% 1.41% 1.66%***
After expense reimbursement................ 1.32% N/A N/A 1.32% 1.32%***
Ratio of net investment income to average
net assets:
Before expense reimbursement............... 0.37% 0.30% 0.60% 0.54% 0.61%***
After expense reimbursement................ 0.41% N/A N/A 0.63% 0.95%***
Portfolio turnover rate...................... 55% 48% 42% 43% 36%
</TABLE>
* Commencement of UBS Investment Funds Class
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
N/A = Not Applicable
================================================================================
See accompanying notes to financial statements. 99
<PAGE>
U.S. Large Cap Equity Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
April 6, 1998*
Year Ended Year Ended Through
UBS Investment Funds Class June 30, 2000 June 30, 1999 June 30, 1998
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period.................. $ 11.07 $ 9.79 $ 10.00
------- ------- -------
Income (loss) from investment operations:
Net investment income............................... 0.08** 0.04** 0.02
Net realized and unrealized gain (loss)............. (2.68) 1.31 (0.22)
------- ------- -------
Total income (loss) from investment operations.. (2.60) 1.35 (0.20)
------- ------- -------
Less distributions:
Distributions from net investment income............ (0.09) (0.07) (0.01)
Distributions from net realized gains............... (0.95) -- --
------- ------- -------
Total distributions............................. (1.04) (0.07) (0.01)
------- ------- -------
Net asset value, end of period........................ $ 7.43 $ 11.07 $ 9.79
======= ======= =======
Total return (non-annualized)......................... (24.20)% 13.86% (2.06)%
Ratios/Supplemental data:
Net assets, end of period (in 000s)................. $ 158 $ 6 $ 1
Ratio of expenses to average net assets:
Before expense reimbursement...................... 1.79% 1.81% 2.11%***
After expense reimbursement....................... 1.32% 1.32% 1.32%***
Ratio of net investment income to average net
assets:
Before expense reimbursement...................... 0.18% 0.05% 0.00%***
After expense reimbursement....................... 0.65% 0.54% 0.79%***
Portfolio turnover rate............................. 174% 88% 12%
</TABLE>
* Commencement of investment operations
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
100 See accompanying notes to financial statements.
<PAGE>
U.S. Large Cap Growth Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Year Ended Period Ended
UBS Investment Funds Class June 30, 2000 June 30, 1999*
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 13.85 $ 11.84
--------- ---------
Income from investment operations:
Net investment loss....................................... (0.10)** (0.04)
Net realized and unrealized gain.......................... 2.29 2.05
--------- ---------
Total income from investment operations.............. 2.19 2.01
--------- ---------
Less distributions:
Distributions from net realized gain...................... (0.95) --
--------- ---------
Total distributions.................................. (0.95) --
--------- ---------
Net asset value, end of period.............................. $ 15.09 $ 13.85
========= =========
Total return (non-annualized)............................... 16.62% 16.98%
Ratios/Supplemental data:
Net assets, end of period (in 000s)....................... $ 7,183 $ 5,136
Ratio of expenses to average net assets:
Before expense reimbursement............................ 2.63% 3.15%***
After expense reimbursement............................. 1.57% 1.57%***
Ratio of net investment loss to average net assets:
Before expense reimbursement............................ (1.74)% (2.03)%***
After expense reimbursement............................. (0.68)% (0.45)%***
Portfolio turnover rate................................... 86% 51%
</TABLE>
* Commencement of UBS Investment Funds Class was December 31, 1998.
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
See accompanying notes to financial statements. 101
<PAGE>
U.S. Small Cap Growth Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Year Ended Period Ended
UBS Investment Funds Class June 30, 2000 June 30, 1999*
---------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period......................... $ 9.14 $ 8.80
--------- ---------
Income from investment operations:
Net investment loss........................................ (0.18)** (0.06)
Net realized and unrealized gain........................... 7.12 0.40
--------- ---------
Total income from investment operations.............. 6.94 0.34
--------- ---------
Net asset value, end of period............................... $ 16.08 $ 9.14
========= =========
Total return (non-annualized)................................ 75.93% 3.86%
Ratios/Supplemental data:
Net assets, end of period (in 000s)........................ $ 3,671 $ 640
Ratio of expenses to average net assets:
Before expense reimbursement............................. 2.08% 2.09%***
After expense reimbursement.............................. 1.92% 1.92%***
Ratio of net investment loss to average net assets:
Before expense reimbursement............................. (1.53)% (1.39)%***
After expense reimbursement.............................. (1.37)% (1.22)%***
Portfolio turnover rate.................................... 104% 71%
</TABLE>
* Commencement of UBS Investment Funds Class was December 31, 1998.
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
102 See accompanying notes to financial statements.
<PAGE>
U.S. Bond Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
<TABLE>
<CAPTION>
August 31, 1995*
Year Ended June 30, Through
--------------------------------------------
UBS Investment Funds Class 2000 1999 1998 1997 June 30, 1996
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period...................... $ 10.23 $ 10.54 $ 10.22 $ 9.92 $ 10.00
------- ------- ------- ------- -------
Income from investment operations:
Net investment income................................. 0.58** 0.52** 0.50 0.46** 0.46
Net realized and unrealized gain (loss)............... (0.25) (0.26) 0.49 0.32 (0.13)
------- ------- ------- ------- -------
Total income from investment operations........... 0.33 0.26 0.99 0.78 0.33
------- ------- ------- ------- -------
Less distributions:
Distributions from net investment income.............. (0.62) (0.42) (0.53) (0.48) (0.38)
Distributions in excess of net realized gains......... -- (0.15) (0.14) -- (0.03)
------- ------- ------- ------- -------
Total distributions............................... (0.62) (0.57) (0.67) (0.48) (0.41)
------- ------- ------- ------- -------
Net asset value, end of period............................ $ 9.94 $ 10.23 $ 10.54 $ 10.22 $ 9.92
======= ======= ======= ======= =======
Total return (non-annualized)............................. 3.33% 2.45% 9.97% 7.91% 3.24%
Ratios/Supplemental data:
Net assets, end of period (in 000s)................... $ 3,526 $ 6,015 $ 2,444 $ 1,399 $ 636
Ratio of expenses to average net assets:
Before expense reimbursement........................ 1.14% 1.08% 1.31% 2.12% 4.10%***
After expense reimbursement......................... 1.07% 1.07% 1.07% 1.07% 1.07%***
Ratio of net investment income to average net assets:
Before expense reimbursement........................ 5.65% 4.95% 5.14% 4.67% 2.53%***
After expense reimbursement......................... 5.72% 4.96% 5.38% 5.72% 5.56%***
Portfolio turnover rate............................... 170% 260% 198% 410% 363%
</TABLE>
* Commencement of investment operations
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
See accompanying notes to financial statements. 103
<PAGE>
High Yield Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
<TABLE>
<CAPTION>
Year Ended Period Ended
UBS Investment Funds Class June 30, 2000 June 30, 1999*
--------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period...................... $ 9.95 $ 9.98
--------- --------
Income (loss) from investment operations:
Net investment income................................. 0.84** 0.41**
Net realized and unrealized loss...................... (0.90) (0.15)
--------- --------
Total income (loss) from investment operations.... (0.06) 0.26
--------- --------
Less distributions:
Distributions from net investment income.............. (0.65) (0.29)
Distributions from net realized gains................. (0.07) --
--------- --------
Total distributions............................... (0.72) (0.29)
--------- --------
Net asset value, end of period............................ $ 9.17 $ 9.95
========= ========
Total return (non-annualized)............................. (0.68)% 2.61%
Ratios/Supplemental data:
Net assets, end of period (in 000s)................... $ 2,164 $ 6,292
Ratio of expenses to average net assets:
Before expense reimbursement........................ 1.70% 1.68%***
After expense reimbursement......................... 1.55% 1.55%***
Ratio of net investment income to average net assets:
Before expense reimbursement........................ 8.47% 7.69%***
After expense reimbursement......................... 8.62% 7.82%***
Portfolio turnover rate............................... 73% 77%
</TABLE>
* Commencement of UBS Investment Funds Class was December 31, 1998.
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
================================================================================
104 See accompanying notes to financial statements.
<PAGE>
Global (Ex-U.S.) Equity Fund -- Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of
capital stock outstanding throughout each period presented.
<TABLE>
<CAPTION>
July 31, 1995*
Year Ended June 30, Through
---------------------------------------------
UBS Investment Funds Class 2000 1999 1998 1997 June 30, 1996
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period...................... $ 12.20 $ 12.05 $ 12.49 $ 11.12 $ 10.26
------- ------- ------- ------- --------
Income from investment operations:
Net investment income.................................. --** 0.05 0.08 0.11 0.12
Net realized and unrealized gain....................... 1.33 0.27 0.30 1.93 1.45
------- ------- ------- ------- --------
Total income from investment operations........... 1.33 0.32 0.38 2.04 1.57
------- ------- ------- ------- --------
Less distributions:
Distributions from investment income................... (0.02) (0.05) (0.08) (0.11) (0.15)
Distributions from net realized gain................... (0.14) (0.12) (0.74) (0.56) (0.56)
------- ------- ------- ------- --------
Total distributions............................... (0.16) (0.17) (0.82) (0.67) (0.71)
------- ------- ------- ------- --------
Net asset value, end of period............................ $ 13.37 $ 12.20 $ 12.05 $ 12.49 $ 11.12
======= ======= ======= ======= ========
Total return (non-annualized)............................. 10.94% 2.78% 3.90% 19.32% 15.78%
Ratios/Supplemental data:
Net assets, end of period (in 000s).................... $ 5,819 $ 6,739 $ 5,310 $ 7,797 $ 1,262
Ratio of expenses to average net assets:
Before expense reimbursement......................... 1.84%**** 1.83% 1.84% 1.81% 2.04%***
After expense reimbursement.......................... N/A N/A N/A N/A 1.84%***
Ratio of net investment income to average net assets:
Before expense reimbursement......................... 0.05% 0.51% 0.68% 1.02% 0.83%***
After expense reimbursement.......................... N/A N/A N/A N/A 1.03%***
Portfolio turnover rate................................ 59% 74% 49% 25% 20%
</TABLE>
* Commencement of UBS Investment Funds Class
** The net investment income per share data was determined by using average
shares outstanding throughout the period.
*** Annualized
**** The ratio of net operating expenses to average net assets was 1.83%.
N/A = Not Applicable
================================================================================
See accompanying notes to financial statements. 105
<PAGE>
UBS Investment Funds -- Notes To Financial Statements
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Brinson Funds (the "Trust") is an open-end, management investment company
registered under the Investment Company Act of 1940, as amended, as a series
company. The Trust currently offers shares of thirteen series: Global Fund,
Global Equity Fund, Global Technology Fund, Global Biotech Fund, Global Bond
Fund, U.S. Balanced Fund, U.S. Equity Fund, U.S. Large Cap Equity Fund
(formerly, U.S. Large Capitalization Equity Fund), U.S. Large Cap Growth Fund
(formerly, U.S. Large Capitalization Growth Fund), U.S. Small Cap Growth Fund
(formerly, U.S. Small Capitalization Growth Fund), U.S. Bond Fund, High Yield
Fund and Global (Ex-U.S.) Equity Fund (each a "Fund" and collectively, the
"Funds"). Each Fund has three classes of shares outstanding, Brinson Class I,
Brinson Class N and UBS Investment Funds Class. There are an unlimited number of
shares of each class with par value of $0.001 authorized. Each share represents
an identical interest in the investments of the Funds and has the same rights.
The financial highlights of the Brinson Class I and the Brinson Class N are
presented separately. The following is a summary of significant accounting
policies followed by the Funds in the preparation of their financial statements.
A. Investment Valuation: Securities for which market quotations are readily
available are valued at the last available sales price on the exchange or market
on which they are principally traded, or lacking any sales, at the last
available bid price on the exchange or market on which such securities are
principally traded. U.S. equity securities traded over-the-counter are valued at
the most recent bid price. Investments in affiliated investment companies are
valued at the daily closing net asset value of the respective fund. Debt
securities are valued at the most recent bid price by using market quotations or
independent pricing services. Securities for which market quotations are not
readily available, including restricted securities which are subject to
limitations on their sale, are valued at fair value as determined in good faith
by or under the direction of the Trust's Board of Trustees.
Futures contracts are valued at the settlement price established each day on the
exchange on which they are traded. Forward foreign currency contracts are valued
daily using quoted forward exchange rates. Short-term obligations with a
maturity of 60 days or less are valued at amortized cost, which approximates
market value.
B. Foreign Currency Translation: Investment securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollars
using the WM/Reuters closing spot rates as of 4:00 p.m. London time. Purchases
and sales of portfolio securities, commitments under forward foreign currency
contracts and income receipts are translated at the prevailing exchange rate as
of the date of each transaction. Realized and unrealized foreign exchange gains
or losses on investments are included as a component of net realized and
unrealized gain or loss on investments in the statement of operations.
C. Investment Transactions: Investment transactions are accounted for on a
trade date basis. Gains and losses on securities sold are determined on an
identified cost basis.
D. Investment Income: Interest income, which includes the amortization of
premiums and discounts, is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date, except that certain dividends from foreign
securities are recorded as the information becomes available.
E. Federal Income Taxes: It is the policy of the Funds to comply with all
requirements of the Internal Revenue Code (the "Code") applicable to regulated
investment companies and to distribute substantially all of their taxable income
to their shareholders. The Funds met the requirements of the Code applicable to
regulated investment companies for the year ended June 30, 2000, therefore, no
federal income tax provision was required. At June 30, 2000, the following Funds
had capital loss carryforwards for Federal income tax purposes available to
offset future net capital gains through the indicated expiration dates:
<TABLE>
<CAPTION>
Fund Expiration Date Amount
---- --------------- ------
<S> <C> <C>
Global Bond Fund.......................... June 30, 2008 $ 1,109,176
U.S. Bond Fund............................ June 30, 2008 1,664,910
High Yield Fund........................... June 30, 2008 861,570
</TABLE>
--------------------------------------------------------------------------------
106
<PAGE>
UBS Investment Funds -- Notes To Financial Statements
-------------------------------------------------------------------------------
F. Distributions to Shareholders: It is the policy of the Funds to distribute
their respective net investment income on a semi-annual basis and net capital
gains, if any, annually. Distributions to shareholders are recorded on the ex-
dividend date. Income and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions. Differences in dividends per share
between the classes are due to distribution expenses. The percentage of
dividends paid that qualify for the dividends received deduction available to
corporate shareholders for the year ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
Dividends Received
Fund Deduction
---- ---------
<S> <C>
Global Fund.................................................... 16.77%
Global Equity Fund............................................. 32.26
U. S. Balanced................................................. 23.37
U. S. Equity................................................... 100.00
U. S. Large Cap Equity......................................... 31.75
U. S. Large Cap Growth......................................... 10.18
U. S. Bond..................................................... 0.11
</TABLE>
G. Income and Expense Allocation: All income earned and expenses incurred by
each Fund will be borne on a pro rata basis by each of the classes, except that
the Brinson Class I will not incur any of the distribution expenses of the
Brinson Class N nor the UBS Investment Funds Class.
H. Earnings Credits: The Funds have entered into an arrangement with their
custodian whereby interest earned on uninvested cash balances are used to offset
a portion of the Fund's expenses. These amounts are reflected in the statements
of operations.
I. 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 amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.
2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Brinson Partners, Inc. (the "Advisor"), a registered investment advisor,
provides the Funds with investment management services. As compensation for
these services, each Fund pays the Advisor a monthly fee based on each Fund's
respective average daily net assets. The Advisor has agreed to waive its fees
and reimburse each Fund to the extent that total annualized operating expenses
exceed a specified percentage of each Fund's respective average daily net
assets. The Advisor may recapture any amounts waived or reimbursed with respect
to the Global Technology Fund and Global Biotech Fund subject to the following
conditions: (1) the Advisor must request reimbursement within five years from
the date on which the waiver and/or reimbursement was made, and (2) the Fund
must be able to reimburse the Advisor and remain within the operating expense
limits noted in the following chart. No amounts were recaptured by the Advisor
during the period ended June 30, 2000. Investment advisory fees and other
transactions for the year ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
UBS
Brinson Investment
Advisory Brinson Class I Class N Funds Class Advisory Fees
Fund Fee Expense Cap Expense Cap Expense Cap Fees Waived
---- -------- --------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Global Fund...................................... 0.80% 1.10% 1.35% 1.75% $2,899,741 $ --
Global Equity Fund............................... 0.80 1.00 1.25 1.76 639,859 54,359
Global Technology Fund........................... 1.40 1.55 1.80 2.55 549 4,639
Global Biotech Fund.............................. 1.15 1.30 1.55 2.30 480 3,737
Global Bond Fund................................. 0.75 0.90 1.15 1.39 597,228 91,069
U.S. Balanced Fund............................... 0.70 0.80 1.05 1.30 199,072 57,436
U.S. Equity Fund................................. 0.70 0.80 1.05 1.32 3,376,519 160,099
U.S. Large Cap Equity Fund....................... 0.70 0.80 1.05 1.32 163,052 108,284
U.S. Large Cap Growth Fund....................... 0.70 0.80 1.05 1.57 71,140 101,585
U.S. Small Cap Growth Fund....................... 1.00 1.15 1.40 1.92 445,220 69,313
U.S. Bond Fund................................... 0.50 0.60 0.85 1.07 452,989 60,829
High Yield Fund.................................. 0.60 0.70 0.95 1.55 336,440 87,728
Global (Ex-U.S.) Equity Fund..................... 0.80 1.00 1.25 1.84 3,822,993 --
</TABLE>
--------------------------------------------------------------------------------
107
<PAGE>
UBS Investment Funds -- Notes to Financial Statements
--------------------------------------------------------------------------------
Certain officers of the Funds are also officers of the Advisor. All officers
serve without direct compensation from the Funds. Trustees' fees paid to
unaffiliated trustees for the year ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
Fees Paid
---------
<S> <C>
Global Fund........................................................... $ 8,272
Global Equity Fund.................................................... 4,414
Global Technology Fund................................................ 360
Global Biotech Fund................................................... 290
Global Bond Fund...................................................... 4,392
U.S. Balanced Fund.................................................... 4,246
U.S. Equity Fund...................................................... 15,374
U.S. Large Cap Equity Fund............................................ 4,246
U.S. Large Cap Growth Fund............................................ 3,649
U.S. Small Cap Growth Fund............................................ 4,117
U.S. Bond Fund........................................................ 4,370
High Yield Fund....................................................... 4,365
Global (Ex-U.S.) Equity Fund.......................................... 8,264
</TABLE>
The Global Fund invests in shares of certain affiliated investment companies
also sponsored by the Advisor. These investments represented 16.08% of the
Fund's net assets at June 30, 2000. Amounts relating to those investments at
June 30, 2000 and for the year then ended, were as follows:
<TABLE>
<CAPTION>
Net Change in
Sales Realized Net Unrealized
Affiliates Purchases Proceeds Gain/(Loss) Gain/(Loss) Value
---------- ------------ -------------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Brinson U.S. Small Capitalization Equity Fund............ $ -- $ -- $ -- $ 479,608 $ 8,140,053
Brinson High Yield Fund.................................. 9,500,000 8,000,000 1,240,415 (958,356) 16,003,393
Brinson Emerging Markets Equity Fund..................... -- 10,509,950 (472,848) 3,382,681 9,943,169
Brinson Emerging Markets Debt Fund....................... -- 18,100,000 4,035,383 594,382 11,243,315
Brinson Supplementary Trust U.S. Cash
Management Prime Fund.................................. 452,709,674 482,973,495 -- -- 1,830,859
</TABLE>
The following Funds invest in shares of the Brinson Supplementary Trust U.S.
Cash Management Prime Fund ("Supplementary Trust"). The Supplementary Trust is
an investment company managed by the Advisor. The Supplementary Trust is offered
as a cash management option only to mutual funds and other accounts managed by
the Advisor. The Supplementary Trust pays no management fees. Distributions
received from the Supplementary Trust are reflected as interest income in the
statement of operations. Amounts relating to those investments at June 30, 2000
and for the year then ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
% of
Sales Interest Net
Fund Purchases Proceeds Income Value Assets
---- ------------ ------------ ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
Global Fund................................................ $452,709,674 $482,973,494 $ 732,300 $ 1,830,859 0.63%
Global Equity Fund......................................... 51,279,587 49,847,833 77,639 2,453,941 3.56
Global Technology Fund..................................... -- -- -- -- --
Global Biotech Fund........................................ -- -- -- -- --
Global Bond Fund........................................... 46,252,518 46,972,556 91,982 5,419,195 11.89
U.S. Balanced Fund......................................... 23,615,731 23,228,119 36,392 623,691 5.04
U.S. Equity Fund........................................... 324,163,891 360,999,461 885,159 849,414 0.45
U.S. Large Cap Equity Fund................................. 42,642,990 42,960,013 53,714 1,215,982 7.62
U.S. Large Cap Growth Fund................................. -- -- -- -- --
U.S. Small Cap Growth Fund................................. 43,005,104 42,635,680 120,511 2,503,641 4.58
U.S. Bond Fund............................................. 87,525,697 92,813,027 273,586 217,046 0.35
High Yield Fund............................................ 85,172,972 77,233,925 194,207 10,185,196 19.21
Global (Ex-U.S.) Equity Fund............................... 807,825,648 806,997,127 708,393 5,129,357 1.23
</TABLE>
================================================================================
108
<PAGE>
UBS Investment Funds -- Notes to Financial Statements
--------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Investment transactions for the year ended June 30, 2000, excluding short-term
investments, were as follows:
<TABLE>
<CAPTION>
Proceeds
Fund Purchases From Sales
---- ------------ ------------
<S> <C> <C>
Global Fund........................................ $340,289,160 $510,377,106
Global Equity Fund................................. 86,434,670 109,260,719
Global Technology Fund............................. 547,609 58,675
Global Biotech Fund................................ 704,861 113,026
Global Bond Fund................................... 66,489,929 129,362,852
U.S. Balanced Fund................................. 26,024,597 47,524,289
U.S. Equity Fund................................... 254,397,613 714,232,204
U.S. Large Cap Equity Fund......................... 37,900,184 40,675,202
U.S. Large Cap Growth Fund......................... 10,468,677 8,415,371
U.S. Small Cap Growth Fund......................... 43,729,341 52,864,256
U.S. Bond Fund..................................... 141,682,053 167,767,766
High Yield Fund.................................... 37,576,913 50,920,592
Global (Ex-U.S.) Equity Fund....................... 274,569,893 410,021,861
</TABLE>
4. FORWARD FOREIGN CURRENCY CONTRACTS
The Funds may engage in portfolio hedging with respect to changes in currency
exchange rates by entering into forward foreign currency contracts to purchase
or sell currencies. Forward foreign currency contracts are also used to achieve
currency allocation strategies. A forward foreign currency contract is a
commitment to purchase or sell a foreign currency at a future date at a
negotiated forward rate. Risks associated with such contracts include movement
in the value of the foreign currency relative to the U.S. dollar and the ability
of the counterparty to perform. The unrealized gain, if any, represents the
credit risk to each Fund on a forward foreign currency contract. Fluctuations in
the value of forward foreign currency contracts are recorded daily as net
unrealized gains or losses. The Funds realize a gain or loss upon settlement of
the contracts. The statement of operations reflects net realized and net
unrealized gains and losses on these contracts. The counterparty to all forward
foreign currency contracts during the year ended June 30, 2000, was the Funds'
custodian.
5. FUTURES CONTRACTS
The Funds may purchase or sell exchange-traded futures contracts, which are
contracts that obligate the Funds to make or take delivery of a financial
instrument or the cash value of a securities index at a specified future date at
a specified price. The Funds enter into such contracts to hedge a portion of
their portfolio. Risks of entering into futures contracts include the
possibility that there may be an illiquid market or that a change in the value
of the contract may not correlate with changes in the value of the underlying
securities. Upon entering into a futures contract, the Funds are required to
deposit either cash or securities (initial margin). Subsequent payments
(variation margin) are made or received by the Funds, generally on a daily
basis. The variation margin payments are equal to the daily changes in the
contract value and are recorded as unrealized gains or losses. The Funds
recognize a realized gain or loss when the contract is closed or expires. The
statement of operations reflects net realized and net unrealized gains and
losses on these contracts.
================================================================================
109
<PAGE>
UBS Investment Funds -- Notes to Financial Statements
--------------------------------------------------------------------------------
6. SECURITY LENDING
The Global Fund and Global (Ex-U.S.) Equity Fund loaned securities to certain
brokers, with the Fund's custodian acting as the Funds' lending agent. The Funds
earned negotiated lenders' fees, which are included in interest income in the
statements of operations. The Global Fund receives cash as collateral against
the loaned securities. The cash is then generally invested in interest-bearing
securities which are included in the schedule of investments. The Global (Ex-
U.S.) Equity Fund receives securities, which are not reflected in the statement
of assets and liabilities, as collateral against the loaned securities. The
Funds' monitor the market value of securities loaned on a daily basis and
initially require collateral against the loaned securities in an amount at least
equal to 102% of the value of domestic securities loaned and 105% of the value
of foreign securities loaned. The value of loaned securities and related
collateral outstanding at June 30, 2000, were as follows:
<TABLE>
<CAPTION>
Value of Loaned Value of
Securities Collateral
--------------- ----------
<S> <C> <C>
Global Fund...................................... $50,587,586 $51,691,365
Global (Ex-U.S.) Equity Fund..................... 15,980,918 16,163,433
</TABLE>
7. DISTRIBUTION PLANS
The Trust has adopted distribution plans (the "Plans") pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended, for the Brinson Class N
and the UBS Investment Funds Class. Each Plan governs payments made for the
expenses incurred in the promotion and distribution of the Brinson Class N and
the UBS Investment Funds Class. Annual fees under the Brinson Class N Plan shall
not exceed 0.25% of the average daily net assets of the Brinson Class N of each
of the Funds. Annual fees under the UBS Investment Funds Plan, which include a
0.25% service fee, are as follows as a percentage of the average daily net
assets of the UBS Investment Funds Class of each of the Funds:
<TABLE>
<CAPTION>
% of
Fund Net Assets
---- ----------
<S> <C>
Global Fund......................................................... 0.65%
Global Equity Fund.................................................. 0.76
Global Technology Fund.............................................. 1.00
Global Biotech Fund................................................. 1.00
Global Bond Fund.................................................... 0.49
U.S. Balanced Fund.................................................. 0.50
U.S. Equity Fund.................................................... 0.52
U.S. Large Cap Equity Fund.......................................... 0.52
U.S. Large Cap Growth Fund.......................................... 0.77
U.S. Small Cap Growth Fund.......................................... 0.77
U.S. Bond Fund...................................................... 0.47
High Yield Fund..................................................... 0.85
Global (Ex-U.S.) Equity Fund........................................ 0.84
</TABLE>
================================================================================
110
<PAGE>
UBS Investment Funds -- Notes to Financial Statements
--------------------------------------------------------------------------------
8. LINE OF CREDIT
The Trust has entered into an agreement with Chase Manhattan Bank to provide a
364-day $100 million committed line of credit to the Funds. Borrowings will be
made for temporary purposes. Interest on amounts borrowed is calculated based on
the Federal Funds Rate plus 0.50%. The Funds pay an annual commitment fee of
0.10% (prior to April 14, 2000 the commitment fee was 0.08%) of the average
daily balance of the line of credit not utilized. The average borrowings under
the agreement for the year then ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
Average Number of Days
Fund Borrowings Outstanding
---- ---------- --------------
<S> <C> <C>
Global Fund.......................................... $ 4,750,000 2
Global Bond Fund..................................... 18,940,000 10
U.S. Balanced Fund................................... 2,925,000 8
U.S. Equity Fund..................................... 7,442,857 7
Global (Ex-U.S.) Equity Fund......................... 16,050,000 14
</TABLE>
================================================================================
111
<PAGE>
Report of Independent Auditors
--------------------------------------------------------------------------------
The Board of Trustees and Shareholders
The Brinson Funds
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of The Brinson Funds--Global Fund, Global Equity
Fund, Global Technology Fund, Global Biotech Fund, Global Bond Fund, U.S.
Balanced Fund, U.S. Equity Fund, U.S. Large Cap Equity Fund, U.S. Large Cap
Growth Fund, U.S. Small Cap Growth Fund, U.S. Bond Fund, High Yield Fund, and
Global (Ex-U.S.) Equity Fund as of June 30, 2000, and the related statements of
operations, cash flows (Global Fund only), changes in net assets and financial
highlights for the periods indicated therein. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of June 30, 2000, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Brinson Funds--Global Fund, Global Equity Fund, Global Technology Fund, Global
Biotech Fund, Global Bond Fund, U.S. Balanced Fund, U.S. Equity Fund, U.S. Large
Cap Equity Fund, U.S. Large Cap Growth Fund, U.S. Small Cap Growth Fund, U.S.
Bond Fund, High Yield Fund, and Global (Ex-U.S.) Equity Fund at June 30, 2000
and the results of their operations, cash flows (Global Fund only), changes in
their net assets and the financial highlights for the periods indicated therein
in conformity with accounting principles generally accepted in the United
States.
/s/ Ernest & Young LLP
Chicago, Illinois
August 11, 2000
================================================================================
112
<PAGE>
Distributed by:
Funds Distributor, Inc.
60 State Street
Boston, MA 02109
This report is submitted for the general information of the shareholders of the
Funds. It is not authorized for distribution to prospective investors in the
Funds unless preceded or accompanied by an effective Prospectus which includes
details regarding the Fund's objectives, policies, expenses and other
information.
<PAGE>
[LOGO] UBS
Investment Funds
P.O. Box 2798, Boston, Massachusetts 02208-9915 . Tel: (800) 794-7753
