<PAGE>
BJB INVESTMENT FUNDS
ANNUAL REPORT
BJB GLOBAL INCOME FUND
AND BJB INTERNATIONAL EQUITY
FUND
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
I am pleased to be able to report that the performance of both BJB
Investment Funds improved significantly during the second half of the fiscal
year just ended. In particular, the BJB International Equity Fund's new
portfolio manager and his team have made major changes in Fund holdings that
have enhanced returns, as reported below.
Overall, the past 12 months have not been a period when international
investing has proved especially advantageous for U.S. investors. The domestic
stock and bond markets have performed especially well, while foreign markets
have been relatively sluggish in the aggregate. The weaker dollar, however, has
provided some boost to international returns for dollar based investors. In any
event, we believe the case for international diversification does not rest on
the relative performance of domestic versus foreign markets over any period as
short as a year or two, but rather turns on the potential for enhanced returns
and reduced volatility shown by such portfolios over longer time periods. We
continue to view the Funds as appropriate parts of a more generally diversified
portfolio of domestic and international issues.
BJB INTERNATIONAL EQUITY FUND
The BJB International Equity Fund ('Equity Fund') experienced two quite
distinct performance periods for the 12 months ending October 31, 1995. For the
first six months through April 1995, the Equity Fund decreased 15.75% and
underperformed the Morgan Stanley EAFE index which had a negative performance of
0.44% for the same period. This underperformance was largely due to an
overweighting in the emerging markets and an underweighting in Japan. Subsequent
to the restructuring implemented by the new management team in April 1995, the
Equity Fund's return was up 5.97% during a period when the EAFE index lost over
2% of its value. During the latter period, the Equity Fund also outperformed the
Lipper International Equity Fund average by 1.32%. A key ingredient in the
Equity Fund's outperformance over the past six months has been a major
underweighting in the Japanese stock market in favor of European exposure during
a period when European equity markets dramatically outperformed Japan in dollar
terms.
To date, 1995 has been a spectacular period for the US stock market with
the Standard & Poors 500 Index up over 29% during a period when the EAFE index
has returned less than 4%. We believe that international equities are poised to
demonstrate once again to US investors the benefits of international
diversification. The Japanese stock market is by far the largest equity market
after the United States and it is finally showing signs of life, driven both by
dramatic plunges in interest rates, and by an increasingly pragmatic response by
its government to the banking crisis. The Equity Fund increased its exposure to
Japanese equities from just above 10% in Mid September to 18% currently.
Although we remain well below the relative weighting of Japan in the EAFE index
(over 40%), we are increasingly finding what we believe are high quality
investments that are available at unusually reasonable valuations.
We continue to view European markets as our most fertile area for Equity
Fund investments. At fiscal year-end, 50% of the Equity Fund's assets were
invested in equities in 15 different Western European nations. We find
valuations for many European companies very attractive, particularly on a price
to cash flow basis. However, buying value can sometimes be a fruitless exercise
without a catalyst to turn value into return. We see two major factors which
should drive European equity prices higher in the future: declining interest
rates and corporate productivity enhancement. In recent weeks, there are growing
signs across the Continent that Central Banks, including the critical German
Bundesbank, will reduce interest rates in an effort to prevent incipient signs
of weaker growth from derailing the economic recovery. For the corporate sector,
a weak dollar has put pressure on competitiveness and profits, particularly in
the hard currency countries in the European core. Strong currencies, however,
are spurring a general drive to reduce costs and enhance productivity.
Consequently, we envision an eventual rise in European corporate profitability,
not unlike the US process that recently has been such a positive stimulus to
stock prices here.
We hold just over 8% of the Equity Fund's assets in emerging market
equities, primarily in Asia. This is well below what we would view as a full
weighting to developing country stocks, at around 20% of assets. Although we
maintain a longer term view that emerging economies will grow faster than OECD
countries, with commensurate relative returns for emerging stock markets, we are
cautious
<PAGE>
currently. In Latin America, we have minimal exposure as we remain wary of the
deep recessions in Mexico and Argentina and of the deflation of speculative
bubbles in some of the smaller markets (i.e., Columbia, Peru). In Asia, we find
deteriorating liquidity in many markets, and rising short term interest rates.
Many Asian markets are quite sensitive to the behavior of leveraged local
investors and we do not think they will be a positive influence in the near
future. A notable exception is the Korean market, where attractive valuations
and coming market reforms greatly increase our comfort level.
The Equity Fund currently has investments in roughly 100 international
equity securities, in 27 different countries. We believe this broad geographic
and company diversification, among high quality global leaders in many
industries, positions the shareholders of the Equity Fund not just to enjoy
potentially attractive future returns, but to do so in a much more consistent
manner going forward.
BJB GLOBAL INCOME FUND
The BJB Global Income Fund returned 13.90% for the fiscal year ended
October 31, 1995. This compares to a return of 10.33% on an equally blended
Salomon Brothers World Government Bond Index and Lehman Brothers Intermediate
Government/Corporate Index.
The fund's underperformance occurred in the first six months of the
reporting period when the return was 1.81%, which was less than the global index
at 6.78%. The Japanese bond market, for the six months to April 30th , in US
dollar terms returned 25.86%, a market your fund had sold due to our assessment
of negative economic fundamentals. While the Japanese sales were too early, over
the subsequent six months to October 30th, the Japanese bond market declined
13.25%, thus confirming our strategy to be out of this market.
Towards the latter half of 1994 the fund maintained a defensive stance in
an environment of rising interest rates, which began with the Federal Reserve's
decision to raise Fed Funds in February 1994. Over the course of one year,
culminating in February 1995, the Federal Reserve raised the Fed Funds rate by
225 basis points. While performance was mixed, bond markets began to recover in
the fourth quarter of 1994. The fund moved to increased duration during the
first quarter of 1995; this was accomplished through the purchase of long dated
European bonds.
During the second quarter of 1995, the US dollar began to consolidate at
lower levels versus the yen and deutsche mark. The Bank of Japan began to
intervene aggressively in the forex markets during June and July, and was joined
by the US Federal Reserve on July 7th. We began to hedge back to the US dollar
during July. US dollar exposure was increased to 50%, while total 'dollar-block'
exposure, including Canada and New Zealand, totaled 65%.
Economic data releases continue to suggest the G-7 economies are weaker
than originally forecast. This is a very positive environment for bonds,
especially as inflation pressures continue to abate. Our forecast could change
as we enter 1996, especially if domestic demand in Japan and Germany
accelerates, but to date there is little to suggest that this will occur.
Our bond strategy is currently long duration at 5.5 years. The portfolio is
overweighted in the European bond markets and underweighted in the Japanese and
dollar markets. However, overweighted exposure to Europe has been hedged back to
the US dollar so that our 'dollar-block' exposure currently is 68% of the total
portfolio. With our forecast for further dollar strength, we expect the high
yield markets to perform well and our holdings in Italy and Spain to remain
unhedged.
We wish to thank the Fund's shareholders for their continued support and
assure you that the management will make every effort to sustain the improving
performance.
Sincerely,
David E. Bodner
President
December 8, 1995
2
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
- ------------------------------------------------------------------------------
It is the Income Fund's policy to distribute dividends of net investment
income monthly and capital gains, if any, annually.
AVERAGE ANNUAL TOTAL RETURN* (UNAUDITED) WITHOUT SALES CHARGE WITH SALES CHARGE
- ---------------------------------------- -------------------- -----------------
Year Ended 10/31/95..................... 13.90% 9.35%
Inception (7/1/92) through 10/31/95..... 6.80% 5.50%
- ------------------
* All average annual total return figures shown reflect the reinvestment of
dividends and capital gains. Average annual total return figures shown with
sales charge assume the deduction of the maximum 4.00% sales charge which
applied to sales of Class A shares until September 28, 1995, the effective
date of the Board of Trustees vote to eliminate all front-end sales charges
and discontinue for an indefinite period of time the marketing and sale of
Class B shares. (See Note 1 in the Notes to Financial Statements.) The
Income Fund shares commenced operation on July 1, 1992 and the service
providers waived their advisory, sub-advisory and administration fees from
7/1/92 to 10/31/92; without such waivers and reimbursements, total returns
would be lower.
Growth of $10,000 invested in
Class A shares of BJB Global Income Fund
vs. Salomon Brothers 3-7 Year World Government Bond Index
and vs. a Blended Lehman Brothers and Salomon Brothers Index
July 1, 1992-October 31, 1995+
Salomon Brothers Lehman
Income Fund 3-7 Yr World Gov't & Salomon
Class A Shares Bond Index Combined
-------------- ------------------ ---------
July 1992 10,000 10,000 10,000
Oct. 1992 10,486 10,383 10,442
Apr. 1993 10,781 10,967 10,840
Oct. 1993 11,341 11,459 11,130
Apr. 1994 11,018 11,612 10,751
Oct. 1994 10,939 12,104 10,776
Apr. 1995 11,690 13,608 11,542
Oct. 1995 12,460 13,867 11,889
- ------------------
+ Hypothetical illustration of $10,000 invested on July 1, 1992 assuming
reinvestment of dividends and capital gains through October 31, 1995.
This period was one in which stock and bond prices fluctuated and the
results should not be considered as a representation of the dividend income
or capital gain or loss which may be realized from an investment in the
Income Fund today. No adjustment has been made for shareholder tax liability
on dividends or capital gains.
Effective August 1, 1995, the Income Fund changed its benchmark index for
performance comparison from Salomon Brothers 3-7 Year World Government Bond
Index to a blended benchmark consisting of 50% of the Salomon Brothers
Government Bond Index and 50% of the Lehman Brothers Intermediate
Government/Corporate Index. The benchmark was changed to a more comparable
index given the portfolio composition of the Income Fund.
NOTE: All figures cited here and on the following pages represent past
performance of the Income Fund and do not guarantee future results.
Investment return and principal value of an investment will fluctuate so
that an investor's shares upon redemption may be worth more or less than
original cost.
3
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
- ------------------------------------------------------------------------------
It is the Equity Fund's policy to distribute dividends of net investment
income annually and capital gains, if any, annually.
AVERAGE ANNUAL TOTAL RETURN* (UNAUDITED) WITHOUT SALES CHARGE WITH SALES CHARGE
- ---------------------------------------- -------------------- -----------------
Year Ended 10/31/95..................... (10.35)% (13.94)%
Inception (10/4/93) through 10/31/95.... (7.73)% (9.53)%
- ------------------
* All average annual total return figures shown reflect the reinvestment of
dividends and capital gains. Average annual total return figures shown with
sales charge assume the deduction of the maximum 4.00% sales charge which
applied to sales of Class A shares until September 28, 1995, the effective
date of the Board of Trustees vote to eliminate all front-end sales charges
and discontinue for an indefinite period of time the marketing and sale of
Class B shares. (See Note 1 in the Notes to Financial Statements.) The
Equity Fund shares commenced operation on October 4, 1993. Total returns for
the Fund reflect expenses, waived and reimbursed, if applicable, by the
Advisor and/or Administrator. Without such waivers and reimbursements, total
returns would be lower.
Growth of $10,000 invested in
Class A shares of BJB International Equity Fund
vs. Morgan Stanley EAFE Index
October 4, 1993-October 31, 1995+
Equity Fund Morgan Stanley
Class A Shares EAFE Index
-------------- --------------
Oct. 1993 10,000 10,000
Jan. 1994 13,067 10,802
Apr. 1994 9,608 10,708
July 1994 9,433 10,862
Oct. 1994 9,440 11,087
Apr. 1995 7,970 11,136
July 1995 8,663 11,436
Oct. 1995 8,463 10,869
- ------------------
+ Hypothetical illustration of $10,000 invested on October 4, 1993 assuming
reinvestment of dividends and capital gains through October 31, 1995.
This period was one in which stock and bond prices fluctuated and the
results should not be considered as a representation of dividend income or
capital gain or loss which may be realized from an investment in the Equity
Fund today. No adjustment has been made for shareholder tax liability on
dividends or capital gains. The Morgan Stanley EAFE Index is a composite
portfolio consisting of equity total returns for the countries of Europe,
Australia, New Zealand and countries in the Far East, weighted based on each
country's gross domestic product.
NOTE: All figures cited here and on the following pages represent past
performance of the Equity Fund and do not guarantee future results.
Investment return and principal value of an investment will fluctuate so
that an investor's shares upon redemption may be worth more or less than
original cost.
4
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
FACE VALUE
CURRENCY VALUE (NOTE 1)
- --------- ------------- -----------
<S> <C> <C> <C>
FOREIGN GOVERNMENT BONDS -- 51.5%
FRANCE -- 11.0%
French Treasury Bill:
FRF 1,658,000 4.750% due 04/12/1999............................................................. $ 323,131
4,000,000 7.000% due 10/12/2000............................................................. 832,387
1,100,000 Government of France (STRIP),
0.000% due 10/25/2019............................................................. 32,427
3,330,000 Government of France (B-TAN),
8.000% due 05/12/1998............................................................. 710,686
-----------
1,898,631
-----------
ITALY -- 9.3%
Government of Italy:
ITL 1,480,000,000 8.500% due 08/01/1999............................................................. 855,421
500,000,000 9.500% due 12/01/1999............................................................. 297,252
USD 500,000 Republic of Italy (Global),
6.875% due 09/27/2023............................................................. 460,000
-----------
1,612,673
-----------
GERMANY -- 7.3%
Deutschland BundesRepublic:
DEM 566,000 7.375% due 01/03/2005............................................................. 425,996
497,000 6.000% due 06/20/2016............................................................. 309,368
849,000 6.250% due 01/04/2024............................................................. 532,998
-----------
1,268,362
-----------
NETHERLANDS -- 6.4%
Government of Netherlands:
NLG 400,000 7.750% due 03/01/2005............................................................. 275,639
1,277,000 7.000% due 06/15/2005............................................................. 837,374
-----------
1,113,013
-----------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
OCTOBER 31, 1995
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
FACE VALUE
CURRENCY VALUE (NOTE 1)
- --------- ------------- -----------
FOREIGN GOVERNMENT BONDS -- CONTINUED
<S> <C> <C> <C>
UNITED KINGDOM -- 8.1%
United Kingdom Gilts:
GBP 364,000 9.500% due 10/25/2004 (Conversion)................................................ $ 632,533
270,000 6.750% due 11/26/2004 (Treasury).................................................. 393,012
216,000 9.500% due 04/18/2005 (Conversion)................................................ 375,242
-----------
1,400,787
-----------
DENMARK -- 3.9%
DKK 3,900,000 Kingdom of Denmark,
7.000% due 12/15/2004............................................................. 676,010
-----------
SPAIN -- 3.5%
ESP 69,500,000 Government of Spain,
12.250% due 03/25/2000............................................................ 601,948
-----------
AUSTRALIA -- 2.0%
AUD 500,000 Government of Australia,
7.5% due 07/15/2005............................................................... 350,783
-----------
TOTAL FOREIGN GOVERNMENT BONDS (COST $8,650,208).................................. 8,922,207
-----------
FOREIGN CORPORATE BONDS -- 6.4%
FRANCE -- 4.4%
CAD 1,000,000 Banque National de Paris,
8.750% due 07/29/2002............................................................. 763,068
-----------
MULTINATIONAL -- 2.0%
USD 300,000 International Bank for Reconstruction & Development,
9.000% due 06/29/2004............................................................. 349,125
-----------
TOTAL FOREIGN CORPORATE BONDS (COST $1,093,121)................................... 1,112,193
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 11.3%
Federal National Mortgage Association:
USD 1,000,000 5.300% due 12/10/1998............................................................. 982,500
USD 1,000,000 6.250% due 08/12/2003............................................................. 981,250
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $1,817,308)........................ 1,963,750
-----------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
OCTOBER 31, 1995
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
FACE VALUE
CURRENCY VALUE (NOTE 1)
- --------- ------------- -----------
U.S. TREASURY OBLIGATIONS -- 21.1%
<S> <C> <C> <C>
USD 625,000 U.S. Treasury Bond,
7.625% due 02/15/2025............................................................. $ 725,644
U.S. Treasury Notes:
USD 800,000 5.875% due 07/31/1997............................................................. 803,072
USD 500,000 7.125% due 02/29/2000............................................................. 524,765
USD 500,000 5.500% due 04/15/2000............................................................. 495,030
USD 1,100,000 5.875% due 06/30/2000............................................................. 1,103,267
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $3,553,205)................................. 3,651,778
-----------
U.S. CORPORATE BONDS -- 7.7%
USD 350,000 Ford Motor Credit Co.,
6.250% due 11/08/2000............................................................. 348,907
USD 250,000 Prudential Plc,
7.125% due 08/16/2005............................................................. 256,563
USD 700,000 SmithKline Beecham--Euro Medium Term Note,
7.375% due 11/10/1997............................................................. 717,500
-----------
TOTAL U.S. CORPORATE BONDS (COST $1,320,680)...................................... 1,322,970
-----------
TOTAL INVESTMENTS -- 98.0% (COST $16,434,522)*.............................................................. 16,972,898
OTHER ASSETS AND LIABILITIES (NET) -- 2.0%.................................................................. 353,739
-----------
NET ASSETS -- 100.0%........................................................................................ $17,326,637
-----------
-----------
</TABLE>
- ------------------
* Aggregate cost for federal tax purposes is $16,470,479.
GLOSSARY OF CURRENCIES
AUD -- Australian Dollar FRF --
CAD -- Canadian Dollar GBP --
DEM -- German Deutsche Mark ITL --
DKK -- Danish Krone NLG --
ESP -- Spanish Peseta USD --
French Franc
Great Britain Pound Sterling
Italian Lira
Netherland Guilder
United States Dollar
See Notes to Financial Statements.
7
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS
OCTOBER 31, 1995
FORWARD FOREIGN EXCHANGE CONTRACTS TO SELL
<TABLE>
<CAPTION>
CONTRACTS TO DELIVER
--------------------
EXPIRATION LOCAL VALUE IN IN EXCHANGE NET UNREALIZED
DATE CURRENCY USD FOR USD DEPRECIATION
- ---------- -------------------- -------- ----------- --------------
<S> <C> <C> <C> <C>
11/13/95 DKK 2,879,000 526,587 521,700 $ (4,887)
11/16/95 DEM 800,000 568,279 562,984 (5,295)
11/17/95 DEM 600,000 426,231 423,131 (3,100)
11/20/95 DEM 610,000 433,401 432,318 (1,083)
11/20/95 NLG 775,000 491,181 487,437 (3,744)
11/20/95 NLG 610,000 386,606 385,673 (933)
01/12/96 FRF 4,028,836 823,771 805,252 (18,519)
--------------
Net Unrealized Depreciation of Forward Foreign
Exchange Contracts............................................. $(37,561)
--------------
--------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- --------------------------------------------------------------------------------------- --------- ----------
<S> <C> <C>
COMMON STOCKS -- 89.1%
AUSTRALIA-2.5%
Australia & New Zealand Bank Group..................................................... 23,000 $ 96,412
Lend Lease............................................................................. 45 626
The News Corporation Ltd............................................................... 19,064 96,186
Western Manufacturing Corp Holding Ltd*................................................ 7,500 48,130
----------
241,354
----------
AUSTRIA-1.4%
Flughafen Wien AG...................................................................... 1,200 77,025
Mayr-Melnhof*.......................................................................... 1,000 58,334
----------
135,359
----------
BELGIUM-2.3%
Electrabel............................................................................. 350 78,530
Petrofina SA........................................................................... 200 62,824
Solvay Et Cie, Class A................................................................. 150 75,854
----------
217,208
----------
BRAZIL-2.2%
Cia Cervejaria Brahma.................................................................. 250,000 91,751
Telecomunicacoes Brasileiras........................................................... 3,000 120,563
----------
212,314
----------
CANADA-1.5%
Barrick Gold Corp...................................................................... 3,000 69,375
Seagrams Co. Ltd....................................................................... 2,200 79,475
----------
148,850
----------
DENMARK-0.8%
Tele Danmark, Class B.................................................................. 1,500 78,182
----------
FINLAND-3.8%
Nokia (ORD)............................................................................ 3,000 171,634
Repola................................................................................. 6,000 116,118
Valmet, Class A........................................................................ 3,000 83,345
----------
371,097
----------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
OCTOBER 31, 1995
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- --------------------------------------------------------------------------------------- --------- ----------
COMMON STOCKS -- CONTINUED
<S> <C> <C>
FRANCE-5.4%
Alcatel Alsthom........................................................................ 700 $ 59,843
Compagnie Financiere de Paribas........................................................ 82 4,516
Comptoirs Modernes..................................................................... 250 80,352
Credit Local de France................................................................. 900 71,322
Imetal................................................................................. 700 82,543
Lafarge Coppee......................................................................... 990 65,686
Michelin, Class B (REGD)............................................................... 2,000 80,864
SGS-Thomson Microelectronics*.......................................................... 1,600 73,863
----------
518,989
----------
GERMANY-7.0%
Allianz AG Holdings.................................................................... 3 5,547
Altana Ind-Aktien...................................................................... 100 58,095
BASF AG................................................................................ 200 43,864
BMW AG................................................................................. 100 53,588
Commerzbank AG......................................................................... 350 80,935
Kaufhof AG............................................................................. 150 51,317
Merck KGAA*............................................................................ 4,000 166,939
Sap.................................................................................... 500 79,211
Siemens AG............................................................................. 100 52,381
Veba AG................................................................................ 2,000 82,036
----------
673,913
----------
HONG KONG-2.6%
First Pacific Co....................................................................... 50,000 57,555
Henderson Investment Ltd............................................................... 115,000 93,704
Swire Pacific Ltd, Class A............................................................. 13,000 97,519
----------
248,778
----------
INDIA-0.9%
Morgan Stanley India Fund.............................................................. 9,400 82,250
----------
IRELAND-1.7%
Bank of Ireland........................................................................ 14,347 95,277
Smurfit (Jefferson).................................................................... 24,000 66,444
----------
161,721
----------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
OCTOBER 31, 1995
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- --------------------------------------------------------------------------------------- --------- ----------
COMMON STOCKS -- CONTINUED
<S> <C> <C>
ITALY-2.7%
Benetton............................................................................... 6,000 $ 62,150
Fiat SPA............................................................................... 25,000 81,488
Telecom Italia Mobile*................................................................. 35,000 58,932
Telicom Italia SPA (ORD)............................................................... 35,000 53,679
----------
256,249
----------
JAPAN-18.9%
Canon Inc.............................................................................. 6,000 102,684
Fanuc Company.......................................................................... 4,000 173,292
Hitachi Ltd............................................................................ 10,000 102,684
Honda Motor Co Ltd..................................................................... 6,000 104,445
Jusco Co............................................................................... 5,000 117,354
Komatsu Ltd............................................................................ 22,000 172,119
Kurita Water Industries................................................................ 4,000 111,486
Nintendo Corp.......................................................................... 1,500 110,312
Nippon Telegraph & Telephone Corp...................................................... 14 114,870
Nissan Motors.......................................................................... 25,000 168,696
Rohm Corp.............................................................................. 2,000 120,874
Sankyo Co Ltd.......................................................................... 5,000 110,019
Toshiba Corporation.................................................................... 42,000 304,357
----------
1,813,192
----------
MEXICO-0.5%
Grupo Posadas SA, Class L*............................................................. 180,000 52,800
----------
NETHERLANDS-4.2%
Baan Company NV*....................................................................... 1,200 51,279
Heineken NV............................................................................ 600 106,356
International Nederlanden Group........................................................ 1,500 89,358
KLM Royal Dutch*....................................................................... 2,560 84,437
Philips Gloeilampen Gem Bezit.......................................................... 2,000 77,235
----------
408,665
----------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
OCTOBER 31, 1995
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- --------------------------------------------------------------------------------------- --------- ----------
COMMON STOCKS -- CONTINUED
<S> <C> <C>
NEW ZEALAND-1.8%
Carter Holt Harvey Ltd................................................................. 24,000 $ 57,349
Lion Nathan............................................................................ 27,000 61,310
Telecom New Zealand.................................................................... 14,000 58,128
----------
176,787
----------
NORWAY-1.7%
Christiania Bank Og Kreditk............................................................ 40,000 93,008
Norsk Hydro............................................................................ 1,800 71,584
----------
164,592
----------
PHILIPPINES-0.5%
San Miguel Corporation, Class B (ORD).................................................. 15,000 49,596
----------
PORTUGAL-0.8%
Banco Commercial Portuguese (REGD)..................................................... 6,000 81,381
----------
SINGAPORE-0.6%
First Capital Corporation.............................................................. 20,000 54,069
----------
SOUTH KOREA-2.7%
Korea Electric Power--ADR.............................................................. 5,000 122,500
Korea Fund............................................................................. 6,250 135,156
----------
257,656
----------
SPAIN-3.5%
Banco Popular Espanola................................................................. 500 79,379
Empresa Nacional de Electricidad....................................................... 1,500 74,549
Repsol SA.............................................................................. 2,000 59,688
Telefonica de Espana (ORD)............................................................. 10,000 126,090
----------
339,706
----------
SWEDEN-2.9%
Asea, Class A.......................................................................... 700 70,063
Astra AB, Class A...................................................................... 2,000 73,449
Ericsson Ab B.......................................................................... 3,600 76,399
Ericsson Lm-B New*..................................................................... 360 7,640
SKF AB B............................................................................... 3,000 56,893
----------
284,444
----------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
OCTOBER 31, 1995
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- --------------------------------------------------------------------------------------- --------- ----------
COMMON STOCKS -- CONTINUED
<S> <C> <C>
SWITZERLAND-5.9%
Holderbank Financiere Glarus, Class B*................................................. 100 $ 80,243
Nestle SA (REGD)....................................................................... 190 198,935
Roche Holdings AG...................................................................... 10 127,579
Winterthur (REGD)...................................................................... 250 164,313
----------
571,070
----------
THAILAND-2.2%
Krung Thai Bank Ltd (Foreign).......................................................... 30,000 119,213
National Finance & Securities.......................................................... 20,000 92,589
----------
211,802
----------
UNITED KINGDOM-8.1%
3I Group Plc (ORD)..................................................................... 10,000 64,667
British Aerospace Plc (ORD)............................................................ 7,000 78,470
British Airways Plc (ORD).............................................................. 10,000 71,940
British Petroleum Co Plc (ORD)......................................................... 10,081 74,196
British Sky Broadcasting Plc (ORD)..................................................... 15,000 89,648
Granada Group Plc (ORD)................................................................ 7,000 74,762
Lloyds Bank Plc (ORD).................................................................. 8,098 99,677
Siebe Plc (ORD)........................................................................ 7,083 84,272
Telewest Communications Plc (ORD)*..................................................... 25,000 69,964
Tesco Plc (ORD)........................................................................ 15,000 71,150
----------
778,746
----------
TOTAL COMMON STOCKS (COST $8,412,636).................................................. 8,590,770
----------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
OCTOBER 31, 1995
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
PAR/SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- --------------------------------------------------------------------------------------- --------- ----------
<S> <C> <C>
WARRANTS -- 0.1%
HONG KONG
Henderson Investment Ltd, expires 3/31/96*............................................. 37,000 $ 211
----------
SWITZERLAND
Holderbank Financiere Glarus, expires 12/20/95*........................................ 500 572
----------
THAILAND
National Finance & Securities, expires 11/15/99*....................................... 20,000 11,921
----------
TOTAL WARRANTS (COST $0)............................................................... 12,704
----------
CORPORATE CONVERTIBLE BOND--0.2%
SWITZERLAND
Winterthur -- (Virgin Island)......................................2.50% 12/31/98 CHF 15,360 15,981
----------
TOTAL CORPORATE CONVERTIBLE BOND (COST $13,199)........................................ 15,981
----------
TOTAL INVESTMENTS -- 89.4% (COST $8,425,835)**......................................... 8,619,455
OTHER ASSETS AND LIABILITIES (NET) -- 10.6%............................................ 1,023,859
----------
NET ASSETS -- 100%..................................................................... $9,643,314
----------
----------
</TABLE>
- ------------------
PORTFOLIO FOOTNOTES:
ADR American Depository Receipt
ORD Ordinary Shares
REGD Registered Shares
* Non-income producing security.
** Aggregate cost for Federal income tax purposes was $8,428,047.
GLOSSARY OF CURRENCIES
JPY -- Japanese Yen
CHF -- Swiss Franc
USD -- United States Dollar
See Notes to Financial Statements.
14
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS--INDUSTRY SECTOR (UNAUDITED)
OCTOBER 31, 1995
(PERCENTAGE OF NET ASSETS)
At October 31, 1995, sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
MARKET
% OF NET VALUE
ASSETS (NOTE 1)
-------- ----------
<S> <C> <C>
INDUSTRY SECTOR:
Electronics................................................................................... 10.8% $1,043,740
Communications................................................................................ 9.8 947,547
Banking....................................................................................... 9.5 910,478
Transportation................................................................................ 7.2 696,508
Food and Beverage............................................................................. 6.2 597,263
Utilities..................................................................................... 5.9 568,684
Health........................................................................................ 5.8 560,444
Construction.................................................................................. 5.6 542,784
Finance....................................................................................... 5.0 484,939
Retail Trade.................................................................................. 5.0 479,639
Paper and Forest Products..................................................................... 3.4 324,241
Equipment..................................................................................... 3.3 319,718
Metals and Mining............................................................................. 3.2 308,282
Other......................................................................................... 2.3 221,798
Insurance..................................................................................... 1.9 185,841
Chemicals..................................................................................... 1.7 166,939
Diversified................................................................................... 1.2 111,624
Publishing.................................................................................... 1.0 96,186
Lodging....................................................................................... 0.6 52,800
-------- ----------
TOTAL INVESTMENTS............................................................................... 89.4 8,619,455
OTHER ASSETS AND LIABILITIES (NET).............................................................. 10.6 1,023,859
-------- ----------
NET ASSETS...................................................................................... 100% $9,643,314
-------- ----------
-------- ----------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS
OCTOBER 31, 1995
FORWARD FOREIGN EXCHANGE CONTRACTS TO BUY
<TABLE>
<CAPTION>
CONTRACTS TO RECEIVE
---------------------
EXPIRATION LOCAL VALUE IN IN EXCHANGE NET UNREALIZED
DATE CURRENCY USD FOR USD (DEPRECIATION)
- ---------- --------------------- --------- ----------- --------------
<S> <C> <C> <C> <C>
11/02/95 JPY 74,209,223 725,960 726,473 $ (513)
--------------
</TABLE>
FORWARD FOREIGN EXCHANGE CONTRACTS TO SELL
<TABLE>
<CAPTION>
CONTRACTS TO DELIVER
---------------------
EXPIRATION LOCAL VALUE IN IN EXCHANGE NET UNREALIZED
DATE CURRENCY USD FOR USD APPRECIATION
- ---------- --------------------- --------- ----------- --------------
<S> <C> <C> <C> <C>
11/02/95 JPY 74,209,223 725,960 749,894 $ 23,934
--------------
Net Unrealized Appreciation of Forward Foreign Exchange Contracts................ $ 23,421
--------------
--------------
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
BJB INVESTMENT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
<TABLE>
<CAPTION>
BJB BJB
GLOBAL INCOME INTERNATIONAL EQUITY
FUND FUND
------------- --------------------
<S> <C> <C>
ASSETS:
Investments in securities, at value (Cost $16,434,522 and $8,425,835,
respectively).................................................................... $16,972,898 $ 8,619,455
Cash and foreign currency, at value (Cost $743,539 and $1,098,182, respectively).... 743,539 1,099,321
Receivables:
Investments sold................................................................. 411,336 --
Interest and dividends........................................................... 433,186 11,885
Tax reclaim...................................................................... -- 17,003
Net unrealized appreciation of forward foreign exchange contracts................ -- 23,421
Miscellaneous.................................................................... -- 20,704
Other Assets:
Unamortized organization costs (Note 6).......................................... 37,676 15,289
Prepaid expense.................................................................. 11,830 5,224
------------- --------------------
Total Assets..................................................................... 18,610,465 9,812,302
------------- --------------------
LIABILITIES:
Payables:
Investments purchased............................................................ 1,097,275 94,425
Investment advisory fee payable (Note 2)......................................... 28,529 11,909
Custody and administration fee payable........................................... 58,873 35,422
Distribution and shareholder servicing fees payable (Note 3)..................... 11,356 5,556
Net unrealized depreciation of forward foreign exchange contracts................ 37,561 --
Accrued expenses and other payables.............................................. 50,234 21,676
------------- --------------------
Total Liabilities................................................................ 1,283,828 168,988
------------- --------------------
NET ASSETS............................................................................ $17,326,637 $ 9,643,314
------------- --------------------
------------- --------------------
NET ASSETS CONSIST OF:
Undistributed net investment income.............................................. $ 672,807 $ (48,428)
Accumulated net realized loss on investments sold, forward foreign exchange
contracts and foreign currency transactions..................................... (1,506,423) (4,735,181)
Net unrealized appreciation on investments, forward foreign exchange contracts,
foreign currency transactions and net other assets.............................. 508,223 218,298
Par value........................................................................ 1,431 952
Paid in capital in excess of par value........................................... 17,650,599 14,207,673
------------- --------------------
NET ASSETS............................................................................ $17,326,637 $ 9,643,314
------------- --------------------
------------- --------------------
SHARES OUTSTANDING.................................................................... 1,430,581 952,390
------------- --------------------
------------- --------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE........................................ $ 12.11 $ 10.13
------------- --------------------
------------- --------------------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
BJB INVESTMENT FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1995
<TABLE>
<CAPTION>
BJB BJB
GLOBAL INCOME INTERNATIONAL EQUITY
FUND FUND
------------- --------------------
<S> <C> <C>
INVESTMENT INCOME (LOSS):
Interest............................................................................ $ 1,452,007 $ 12,264
Dividends+.......................................................................... -- 179,223
------------- --------------------
1,452,007 191,487
EXPENSES:
Investment advisory fee (Note 2).................................................... 130,501 93,521
Custody and administration fees..................................................... 105,564 81,483
Distribution and shareholder servicing fees (Note 3)
Class A.......................................................................... 50,114 23,382
Class B.......................................................................... 231 113
Transfer agent fees................................................................. 31,439 35,345
Shareholder reports................................................................. 29,148 18,760
Auditing fees....................................................................... 21,400 14,500
Legal fees.......................................................................... 18,120 12,189
Amortization of organization costs (Note 6)......................................... 22,697 5,552
Insurance premium expense........................................................... 17,393 7,875
Trustees' fees and expenses (Note 2)................................................ 4,256 7,044
Registration and filing fees........................................................ 732 14,952
Reimbursement from investment advisor (Note 2)...................................... -- (48,264)
------------- --------------------
Total Gross Expenses............................................................. 431,595 266,452
Less: Fees paid indirectly (Note 2).............................................. (20,723) (16,447)
------------- --------------------
Net Expenses..................................................................... 410,872 250,005
------------- --------------------
NET INVESTMENT INCOME (LOSS).......................................................... 1,041,135 (58,518)
------------- --------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 4):
Realized gain (loss) on:
Security transactions++.......................................................... 906,994 (1,850,818)
Forward foreign exchange contracts............................................... 224,831 (273,608)
Foreign currency transactions.................................................... (201,403) 55,172
------------- --------------------
Net realized gain (loss) on investments........................................ 930,422 (2,069,254)
------------- --------------------
Net change in unrealized appreciation (depreciation) of:
Securities....................................................................... 492,835 339,469
Forward foreign exchange contracts............................................... (37,516) 170,466
Currencies and net other assets.................................................. (15,816) (30,492)
------------- --------------------
Net change in unrealized appreciation (depreciation) of investments............ 439,503 479,443
------------- --------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................................ 1,369,925 (1,589,811)
------------- --------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $ 2,411,060 $ (1,648,329)
------------- --------------------
------------- --------------------
</TABLE>
- ------------------
+ Net of foreign withholding tax of $26,756 for the Equity Fund.
++ Net of foreign capital gains withholding tax of $18,317 for the Equity Fund.
See Notes to Financial Statements.
18
<PAGE>
BJB INVESTMENT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED OCTOBER 31, 1995
<TABLE>
<CAPTION>
BJB BJB
GLOBAL INCOME INTERNATIONAL EQUITY
FUND FUND
------------- --------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss).......................................................... $ 1,041,135 $ (58,518)
Net realized gain (loss) on securities, forward foreign exchange contracts and foreign
currency transactions............................................................... 930,422 (2,069,254)
Net change in unrealized appreciation of securities, forward foreign exchange
contracts, foreign currency and net other assets.................................... 439,503 479,443
------------- -----------
Net increase (decrease) in net assets resulting from operations....................... 2,411,060 (1,648,329)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A shares................................................................... (950,161) --
Class B shares................................................................... (903) --
FUND SHARE TRANSACTIONS:
Net increase (decrease) from Fund share transactions (Note 5):
Class A shares................................................................... (12,750,548) (3,540,598)
Class B shares................................................................... (26,996) (13,361)
------------- -----------
Net decrease in net assets.......................................................... (11,317,548) (5,202,288)
NET ASSETS:
Beginning of period................................................................... 28,644,185 14,845,602
------------- -----------
End of period (including undistributed net investment income/(distributions in excess
of net investment income) of $672,807 and $(48,428), respectively).................. $17,326,637 $9,643,314
------------- -----------
------------- -----------
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
BJB INVESTMENT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED OCTOBER 31, 1994
<TABLE>
<CAPTION>
BJB BJB
GLOBAL INCOME INTERNATIONAL EQUITY
FUND FUND
------------- --------------------
<S> <C> <C>
DECREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss).......................................................... $ 1,667,845 $ (279,543)
Net realized loss on securities, forward foreign exchange contracts and foreign
currency transactions............................................................... (4,194,338) (3,653,744)
Net unrealized appreciation (depreciation) of securities, forward foreign exchange
contracts, foreign currency and net other assets.................................... 5,766 (1,125,235)
------------- --------------------
Net decrease in net assets resulting from operations.................................. (2,520,727) (5,058,522)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A shares................................................................... (929,096) --
Class B shares................................................................... (160) --
Excess of net investment income:
Class A shares................................................................... -- (39,853)
Class B shares................................................................... -- (35)
Capital (Note 1):
Class A shares................................................................... (2,195,555) (44)
Class B shares................................................................... (377) --
FUND SHARE TRANSACTIONS:
Net increase (decrease) from Fund share transactions (Note 5):
Class A shares................................................................... (23,416,935) 8,636,152
Class B shares................................................................... 25,426 15,685
------------- --------------------
Net increase (decrease) in net assets............................................... (29,037,424) 3,553,383
NET ASSETS:
Beginning of year..................................................................... 57,681,609 11,292,219
------------- --------------------
End of year (including (distributions in excess of net investment
income)/undistributed net investment income of ($1,697) and $146,420,
respectively)....................................................................... $28,644,185 $ 14,845,602
------------- --------------------
------------- --------------------
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
10/31/95# 10/31/94# 10/31/93 10/31/92*
--------- --------- -------- ---------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period......................................... $ 11.16 $ 12.28 $ 12.36 $ 12.00
--------- --------- -------- ---------
Income (Loss) from investment operations:
Net investment income++.................................................... 0.59 0.39 0.37 0.16
Net realized and unrealized gain (loss) on securities...................... 0.92 (0.81) 0.58 0.42
--------- --------- -------- ---------
Total income (loss) from investment operations.......................... 1.51 (0.42) 0.95 0.58
Less Distributions:
Dividends from net investment income......................................... (0.56) (0.27) (0.37) (0.16)
Distributions from net realized capital gains................................ -- -- (0.66) --
Distributions from Capital (Note 1).......................................... -- (0.43) -- (0.06)
--------- --------- -------- ---------
Total distributions..................................................... (0.56) (0.70) (1.03) (0.22)
--------- --------- -------- ---------
Net Asset Value, end of period............................................... $ 12.11 $ 11.16 $ 12.28 $ 12.36
--------- --------- -------- ---------
--------- --------- -------- ---------
Total Return ***............................................................. 13.90% (3.54)% 8.15% 4.86%
--------- --------- -------- ---------
--------- --------- -------- ---------
Ratios/Supplemental Data:
Net assets, end of period (in 000's)......................................... $17,327 $28,619 $ 57,682 $28,647
Ratio of net investment income to average net assets......................... 5.19% 3.29% 2.24% 3.95%+
Ratio of total expenses to average net assets**.............................. 2.15%## 1.66% 1.78% 1.00%+
Portfolio turnover rate...................................................... 319% 320% 291% 43%
</TABLE>
- ------------------------------
<TABLE>
<S> <C>
* The BJB Global Income Fund commenced operations on July 1, 1992. On November 30, 1993, the Fund commenced selling
Class B shares. Those shares in existence prior to November 30, 1993 were designated as Class A shares.
** Annualized operating expenses before waiver of fees by the investment adviser, sub-investment adviser or
administrator was 1.75% for the period ended October 31, 1992.
*** Total return represents aggregate total return for the periods indicated and does not reflect any applicable sales
charge.
+ Annualized.
++ Net investment income before waiver of fees by the investment adviser, sub-investment adviser or administrator was
$0.13 for the period ended October 31, 1992.
# Per share amounts have been calculated using the monthly average share method, which more appropriately presents the
per share data for the period since the use of the undistributed method does not accord with results of operations.
## 'Ratio of total expenses to average net assets' for the year ended October 31, 1995 includes indirectly paid
expenses. Excluding indirectly paid expenses the expense ratio would have been 2.05% for the year ended October 31,
1995.
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
PERIOD PERIOD
ENDED ENDED
9/19/95** 10/31/94*
--------- ---------
<S> <C> <C>
Net Asset Value, beginning of period..................................................... $ 11.16 $ 12.18
--------- ---------
Income (Loss) from investment operations:
Net Investment income#................................................................. 0.33 0.29
Net realized and unrealized gain (loss) on securities.................................. 0.92 (0.73)
--------- ---------
Total income (loss) from investment operations.................................... 1.25 (0.44)
--------- ---------
Less Distributions:
Dividends from net investment income..................................................... (0.40) (0.23)
Distributions from Capital (Note 1) -- (0.35)
--------- ---------
Total distributions............................................................... (0.40) (0.58)
--------- ---------
Net Asset Value, end of period........................................................... $ 12.01 $ 11.16
--------- ---------
--------- ---------
Total Return***.......................................................................... 11.39% (3.72)%
--------- ---------
--------- ---------
Ratios/Supplemental Data:
Net assets, end of period (in 000's)..................................................... $ 0 $ 25
Ratio of net investment income to average net assets+.................................... 2.56% 2.56%
Ratio of total expenses to average net assets+........................................... 2.37%## 2.38%
Portfolio turnover rate.................................................................. 319% 320%
</TABLE>
- ------------------
<TABLE>
<S> <C>
* The BJB Global Income Fund commenced selling Class B shares on November 30, 1993.
** Class B shares were completely redeemed as of September 19, 1995. The net asset value of $12.01 represents the final
stated number at which shares were redeemed on that date.
*** Total return represents aggregate total return for the periods indicated and does not reflect any applicable sales
charge.
+ Annualized.
# Per share amounts have been calculated using the monthly average share method, which more appropriately presents the
per share data for the period since the use of the undistributed income method does not accord with results of
operations.
## 'Ratio of total expenses to average net assets' for the period ended September 19, 1995 includes indirectly paid
expenses. Excluding indirectly paid expenses the expense ratio would have been 2.28% for the period ended September
19, 1995.
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/95# 10/31/94 10/31/93*
--------- -------- ---------
<S> <C> <C> <C>
Net Asset Value, beginning of period................................................ $ 11.30 $ 13.10 $ 12.00
--------- -------- ---------
Income from investment operations:
Net investment loss............................................................... (0.06)++ (0.21) (0.02)
Net realized and unrealized gain (loss) on securities............................. (1.11) (1.56) 1.12
--------- -------- ---------
Total income (loss) from investment operations................................. (1.17) (1.77) 1.10
--------- -------- ---------
Less distributions:
In excess of net investment income.................................................. -- (0.03) --
--------- -------- ---------
Net Asset Value, end of period...................................................... $ 10.13 $ 11.30 $ 13.10
--------- -------- ---------
--------- -------- ---------
Total Return**...................................................................... (10.35)% (13.53)% 9.17%
--------- -------- ---------
--------- -------- ---------
Ratios/Supplemental Data:
Net assets, end of period (in 000's)................................................ $ 9,643 $ 14,831 $11,292
Ratio of net investment loss to average net assets.................................. (0.63)% (1.26)% (3.83)%+
Ratio of total expenses to average net assets....................................... 2.84%(b)(c) 2.16% 2.09%+
Portfolio turnover rate............................................................. 116% 169% 20%
</TABLE>
- ------------------
<TABLE>
<S> <C>
* The BJB International Equity Fund commenced operations on October 4, 1993. On November 30, 1993, the Fund commenced
selling Class B shares. Those shares in existence prior to November 30, 1993 were designated as Class A shares.
** Total return represents aggregate total return for the periods indicated and does not reflect any applicable sales
charge.
+ Annualized
++ Net investment loss before waiver of fees by the investment adviser and/or administrator was ($0.11) for the year
ended October 31, 1995.
# Per share amounts have been calculated using the monthly average share method, which more appropriately presents the
per share data for the period since the use of the undistributed method does not accord with results of operations.
(b) Figures are net of the expense reimbursement by the Adviser in connection with the voluntary and involuntary expense
limitation. Before the expense reimbursement the 'Ratio of total expenses to average net assets' would have been
3.36% for the year ended October 31, 1995.
(c) 'Ratio of total expenses to average net assets' for the year ended October 31, 1995 includes indirectly paid
expenses. Excluding indirectly paid expenses the expense ratio would have been 2.67% for the year ended October 31,
1995.
</TABLE>
See Notes to Financial Statements.
23
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
PERIOD PERIOD
ENDED ENDED
9/19/95**# 10/31/94*
---------- ---------
<S> <C> <C>
Net Asset Value, beginning of period......................................................... $11.30 $ 13.01
---------- ---------
Income from investment operations:
Net investment loss........................................................................ (0.03)++ (0.13)
Net realized and unrealized gain (loss) on securities...................................... (1.02) (1.55)
---------- ---------
Total loss from investment operations................................................... (1.05) (1.68)
---------- ---------
Less Distributions:
In excess of net investment income........................................................... -- (0.03)
---------- ---------
Net Asset Value, end of period............................................................... $10.25 $ 11.30
---------- ---------
---------- ---------
Total Return***.............................................................................. (9.29)% (12.93)%
---------- ---------
---------- ---------
Ratios/Supplemental Data:
Net assets, end of period (in 000's)......................................................... $ 0 $ 15
Ratio of net investment loss to average net assets+.......................................... (0.27)% (1.97)%
Ratio of total expenses to average net assets+............................................... 2.48%(b)(c) 2.86%
Portfolio turnover rate...................................................................... 116% 169%
</TABLE>
- ------------------
<TABLE>
<S> <C>
* The BJB International Equity Fund commenced selling Class B shares on November 30, 1993.
** Class B shares were completely redeemed as of September 19, 1995. The net asset value of $10.25 represents the final
stated number at which shares were redeemed on that date.
*** Total return represents aggregate total return for the periods indicated and does not reflect any applicable sales
charge.
+ Annualized
++ Net investment loss before waiver of fees by the investment adviser and/or administrator was ($0.07) for the period
ended September 19, 1995.
# Per share amounts have been calculated using the monthly average share method, which more appropriately presents the
per share data for the period since the use of the undistributed method does not accord with results of operations.
(b) Figures are net of the expense reimbursement by the Adviser in connection with the voluntary and involuntary expense
limitation. Before the expense reimbursement the 'Ratio of total expenses to average net assets' would have been
2.89% for the period ended September 19, 1995.
(c) 'Ratio of total expenses to average net assets' for the period ended September 19, 1995 includes indirectly paid
expenses. Excluding indirectly paid expenses the expense ratio would have been 2.34% for the period ended September
19, 1995.
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
BJB Investment Funds (the 'Trust') is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended (the
'1940 Act'), as an open-end management investment company that currently offers
two investment funds: BJB Global Income Fund (the 'Income Fund') and BJB
International Equity Fund (the 'Equity Fund') (individually, a 'Fund' and
collectively, the 'Funds'). The Trust was organized as a Massachusetts business
trust under the laws of the Commonwealth of Massachusetts on April 30, 1992. The
Income Fund commenced operations on July 1, 1992 and the Equity Fund commenced
operations on October 4, 1993.
Each Fund offered two classes of shares, Class A and Class B, to the
general public until September 19, 1995, when the Class B shares of each Fund
were completely redeemed. The Funds have discontinued for an indefinite period
of time the marketing and sale of Class B shares. In addition, effective
September 28, 1995, the Global Income Fund and the International Equity Fund
eliminated all front-end and contingent deferred sales charges previously
imposed on Class A and Class B shares, respectively, of the Funds. Prior to
these changes, Class A shares sold with a front-end sales charge and Class B
shares sold subject to a potential contingent deferred sales charge. Both
classes of shares had identical rights and privileges except with respect to the
effect of the respective sales charges on each class, if any, the distribution
and/or service fees borne by each class, expenses allocable exclusively to each
class, voting rights on matters affecting a single class and the exchange
privilege of each class. The following is a summary of significant accounting
policies consistently followed by the Funds in the preparation of their
financial statements.
Portfolio valuation: Generally, each Fund's investments are valued at
market value or, in the absence of a market value, at fair value as determined
by or under the direction of the Trust's Board of Trustees. A security which is
traded primarily on a United States or foreign stock exchange is valued at the
last sale price on that exchange or, if there were no sales during the day, at
the mean of the current quoted bid and asked prices. Portfolio securities which
are traded primarily on foreign securities exchanges are generally valued at the
preceding closing values of such securities on their respective exchanges,
except that when an occurrence subsequent to the time that a value was so
established is likely to have changed such value, then the fair value of those
securities will be determined by consideration of other factors by or under the
direction of the Trust's Board of Trustees or its delegates. Debt securities
(other than government securities and short-term obligations) are valued by
independent pricing services approved by the Trust's Board of Trustees.
Investments in government securities (other than short-term securities) are
valued at the mean of the quoted bid and asked prices in the over-the-counter
market. Short-term investments that mature in 60 days or less are valued at
amortized cost.
Repurchase agreements: The Funds may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, a Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during a Fund's holding period. The value of the collateral at all
times is equal to at least 100% of the total amount of the repurchase
obligations, including interest. In the event of counterparty default, the Fund
has the right to use the collateral to offset losses incurred. There is
potential loss to a Fund in the event the Fund is delayed or prevented from
exercising its rights to dispose of the collateral securities, including the
risk of a possible decline in the value of the underlying securities during the
period while the Fund seeks to assert its rights. The Funds' investment adviser,
acting under the supervision of the Board of Trustees, reviews the value of the
collateral and the creditworthiness of those banks and dealers with which the
Funds enter into repurchase agreements to evaluate potential risks.
Foreign currency: The books and records of the Funds are maintained in
United States (U.S.) dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars at the exchange rates
prevailing at the end of the period, and purchases and sales of investment
securities, income and expenses are translated on the respective dates of such
transactions. Unrealized gains or losses on investments which result from
changes in foreign currencies have been included in the net unrealized
appreciation (depreciation) of investments. Net realized currency gains and
losses include foreign currency gains and losses between
25
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
trade date and settlement date on investment securities transactions, foreign
currency transactions and the difference between the amounts of interest and
dividends recorded on the books of the Funds and the amount actually received.
The portion of foreign currency gains and losses related to fluctuations in
exchange rates between the purchase trade date and sale trade date is included
in realized gains and losses on security transactions.
Forward foreign currency contracts: Forward foreign currency contracts are
valued at the forward rate and are marked-to-market daily. The change in market
value is recorded by the Funds as an unrealized gain or loss. When the contract
is closed, the Fund records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at the
time it was closed.
The use of forward foreign currency contracts does not eliminate
fluctuations in the underlying prices of the Fund's portfolio securities, but it
does establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts limit the risk of loss due to a decline in
the value of the currency holdings, they also limit any potential gain that
might result should the value of the currency increase. In addition, the Fund
could be exposed to risks if the counterparties to the contracts are unable to
meet the terms of their contracts.
Option contracts: Purchase of put and call options are recorded as an
investment, the value of which is marked-to-market daily. When a purchased
option expires, the Fund will realize a loss equal to the premium paid. When the
Fund enters into a closing sale transaction, the Fund will realize a gain or
loss depending on whether the sales proceeds from the closing sale transaction
are greater or less than the premium paid. When a Fund exercises a put option,
it will realize a gain or loss from the sale of the underlying security and the
proceeds from such sale will be decreased by the premium originally paid. When a
Fund exercises a call option, the cost of the security which the Fund purchases
upon exercise will be increased by the premium originally paid.
When a Fund writes a call option or a put option, an amount equal to the
premium received by a Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, a Fund realizes a gain
equal to the amount of the premium received. When a Fund enters into a closing
purchase transaction the Fund realizes a gain (or loss if the cost of the
closing purchase transaction exceeds the premium received when the option was
sold) without regard to any unrealized gain or loss on the underlying security,
and the liability related to such option is eliminated. When a call option is
exercised, a Fund realizes a gain or loss from the sale of the underlying
security and the proceeds from such sale are increased by the premium originally
received. When a put option is exercised, the amount of the premium originally
received will reduce the cost of the security that a Fund purchased upon
exercise.
Unlike options on specific securities, all settlements of options on stock
indices are in cash and gains or losses depend on general movements in the
stocks included in the index rather than price movements on a particular stock.
There is no physical delivery of securities.
The risk associated with purchasing options is limited to the premium
originally paid. The risk in writing a call option is a Fund may forego the
opportunity of profit if the market price of the underlying security increases
and the option is exercised. The risk in writing a put option is that a Fund may
incur a loss if the market price of the underlying security decreases and the
option is exercised. There is also the risk a Fund may not be able to enter into
a closing transaction because of an illiquid secondary market. In addition, the
Fund could be exposed to risks if the counterparties to the transactions are
unable to meet the terms of the contracts.
Securities transactions and investment income: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date.
Dividends and distribution to shareholders: Distributions to shareholders
are recorded on the ex-dividend date. Each Fund intends to distribute annually
to its shareholders substantially all of its investment company taxable income.
The Income Fund declares and pays monthly dividends from its net investment
income. The Equity Fund intends to declare and pay annually dividends from its
net investment income. Both Funds will determine annually whether to distribute
any net realized long-term capital gains in excess of net
26
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
realized short-term capital losses; however, each Fund currently expects to
distribute any excess annually to its shareholders. Additional distributions of
net investment income and capital gains may be made at the discretion of the
Board of Trustees to avoid the application of the excise tax imposed under
Section 4982 of the Internal Revenue Code of 1986 for certain undistributed
amounts. Income distributions and capital gain distributions on a Fund and class
level are determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These differences are primarily
due to differing treatments of income and gains on various investment securities
held by a Fund, timing differences and differing characterization of
distributions made by a Fund as a whole. Permanent differences incurred during
the year ended October 31, 1995 resulting from differences in book and tax
accounting have been reclassified at year-end to undistributed net investment
income, accumulated net realized loss, and paid-in capital as follows:
<TABLE>
<CAPTION>
INCREASE/(DECREASE)
IN UNDISTRIBUTED INCREASE/(DECREASE) DECREASE
NET INVESTMENT IN ACCUMULATED IN PAID-IN
INCOME REALIZED LOSS CAPITAL
------------------- ------------------- ----------
<S> <C> <C> <C>
Income Fund.......................................................... $ 584,433 $ 118,603 $ (703,036)
Equity Fund.......................................................... (136,330) 236,755 (100,425)
</TABLE>
Federal income taxes: The Trust intends that each Fund separately qualify
as a regulated investment company for U.S. Federal income tax purposes.
Accordingly, the Funds do not anticipate that any income taxes will be paid. It
is expected that certain capital gains earned by the Funds and certain dividends
and interest received by the Funds will be subject to foreign withholding taxes.
2. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS
Julius Baer Investment Management Inc. ('Julius Baer Investment
Management') serves as the Income Fund's investment adviser pursuant to an
investment advisory agreement. The Income Fund pays Julius Baer Investment
Management a quarterly fee for its investment advisory services calculated at an
annual rate of 0.65% of the Income Fund's average daily net assets. Bank Julius
Baer & Co., Ltd.--New York Branch ('Bank Julius Baer') serves as the Income
Fund's servicing agent pursuant to a servicing agent agreement with Julius Baer
Investment Management. Out of its advisory fee, Julius Baer Investment
Management pays Bank Julius Baer a quarterly fee calculated at an annual rate of
0.15% of the Income Fund's average daily net assets.
Bank Julius Baer serves as the Equity Fund's investment adviser pursuant to
an investment advisory agreement. The Equity Fund pays Bank Julius Baer a
quarterly fee for its investment advisory services calculated at an annual rate
of 1.00% of the Equity Fund's average daily net assets. Beginning March 13,
1995, the adviser agreed to waive 0.50% of its fee.
The Advisers have agreed that if, in any fiscal year, the expenses borne by
a Fund exceed applicable expense limitations imposed by the securities
regulations of any state in which shares of a Fund are registered or qualified
for sale to the public, each of them would reduce the fees paid to them by such
Fund to the extent required by such regulations in the proportion that the fee
it retains bears to total management fees. The most restrictive annual expense
limit applicable limits each Fund's allowable operating expenses (excluding
interest, taxes, a portion of a Fund's 12b-1 distribution fees, a portion of a
Fund's custodian expenses attributable to investments in foreign securities,
brokerage commissions and extraordinary expenses) to 2.5% of the first $30
million of the average net assets of the Fund, 2% of the next $70 million of the
average net assets of the Fund and 1.5% of the remaining average net assets of
the Fund. For the year ended October 31, 1995, Bank Julius Baer was entitled to
management fees of $93,521 from the Equity Fund. Of these fees, Bank Julius Baer
waived $48,264.
No director, officer or employee of Julius Baer Investment Management, Bank
Julius Baer or any affiliates of those entities received any compensation from
the Trust for serving as an officer or Trustee of the Funds. The Funds pay each
of the Trustees who is not a director, officer or employee of Julius Baer
Investment Management, Bank Julius Baer or any affiliate thereof an annual fee
of $5,000 plus $250 for each Board of Trustees meeting attended. In addition,
the Funds reimburse these Trustees for travel and out-of-pocket expenses
incurred in connection with the Board of Trustees meetings.
27
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The Funds have entered into an expense offset arrangement as part of its
custody agreement with Investors Bank & Trust. Under this arrangement, the
Funds' custody fees are reduced when the Funds maintain cash on deposit at the
custodian. For the year ended October 31, 1995, the Income Fund incurred net
custody fees in the amount of $84,841, after receiving a credit of $20,723,
pursuant to the expense offset arrangement, resulting in a total expense of
$105,564. For the year ended October 31, 1995, the Equity Fund incurred net
custody fees in the amount of $65,036, after receiving a credit of $16,447,
pursuant to the expense offset arrangement, resulting in a total expense of
$81,483. The assets deposited with Investors Bank & Trust under the expense
offset arrangement could have been invested in an income-producing asset.
For the year ended October 31, 1995, the Funds incurred total brokerage
commissions of $95,165 of which $2,518 in total was paid to Bank Julius Baer,
Frankfurt and Bank Julius Baer, Zurich (affiliates of the Adviser).
3. DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Services and Distribution Plan (the
'Plans') pursuant to Rule 12b-1 of the 1940 Act with respect to each class of
shares of the Funds. Under the Plans, the Funds compensate certain financial
institutions, including Funds Distributor Inc., for certain distribution,
shareholder servicing, administrative and accounting services for their clients
and customers who are beneficial owners of each of the Funds' shares. With
respect to Class A shares of each Fund, a Fund may expend an aggregate amount on
an annual basis not to exceed 0.25% of the value of the average daily net assets
of that class. For the year ended October 31, 1995 the Income Fund and Equity
Fund incurred $50,114 and $23,382, respectively, in service and distribution
fees for Class A shares. With respect to Class B shares of each Fund, a Fund
could expend an aggregate amount on an annual basis not to exceed 0.75% of the
value of the average daily net assets for that class. The Trust also approved a
shareholder services plan, with respect to Class B Shares of each Fund. With
respect to Class B Shares of each Fund, the Funds could expend an aggregate
amount on an annual basis not to exceed 0.25% of the value of the average daily
net assets for that class. For the period ended September 19, 1995, the Income
Fund and Equity Fund incurred $231 and $113, respectively, in service and
distribution fees for Class B shares.
Under their terms, the Plans shall remain in effect from year to year,
provided such continuance is approved annually by a vote of a majority of the
Trustees and a majority of those Trustees who are not 'interested persons' of
the Trust and who have no direct or indirect financial interest in the operation
of the Plans or in any agreement related to the Plans.
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities, excluding U.S.
government securities and short-term investments, during the year ended October
31, 1995, were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
----------- -----------
<S> <C> <C>
Income Fund................................................................................. $49,120,400 $57,347,461
Equity Fund................................................................................. 10,023,398 13,002,211
</TABLE>
Cost of purchases and proceeds from sales of long-term U.S. government
securities, excluding short-term investments, during the year ended October 31,
1995, were $10,520,840 and $9,592,418, respectively for the Income Fund.
At October 31, 1995, aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost, and aggregate
gross unrealized depreciation for all securities in which there was an excess of
tax cost over value was:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION
------------ ------------
<S> <C> <C>
Income Fund................................................................................... $513,940 $ 11,521
Equity Fund................................................................................... 647,987 456,579
</TABLE>
28
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
5. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest of
each Fund, with a par value of $.001 per share. Changes in shares of beneficial
interest on the Income Fund and the Equity Fund which are divided into Class A
shares and Class B shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED 10/31/95 YEAR ENDED 10/31/94
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Income Fund Class A shares:
Sold.............................................................. 58,447 $ 652,663 2,493,634 $ 30,076,574
Issued as reinvestment of dividends............................... 49,173 566,530 183,678 2,181,133
Redeemed.......................................................... (1,241,882) (13,969,741) (4,809,613) (55,674,642)
---------- ------------ ---------- ------------
Net decrease...................................................... (1,134,262) $(12,750,548) (2,132,301) $(23,416,935)
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED 9/19/95** PERIOD ENDED 10/31/94*
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Income Fund Class B shares:
Sold.............................................................. -- -- 3,097 $ 35,024
Issued as reinvestment of dividends............................... 78 $ 901 25 281
Redeemed.......................................................... (2,319) (27,897) (881) (9,879)
---------- ------------ ---------- ------------
Net increase (decrease)........................................... (2,241) $ (26,996) 2,241 $ 25,426
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED 10/31/95 YEAR ENDED 10/31/94
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Equity Fund Class A shares:
Sold.............................................................. 267,288 $ 2,763,238 2,632,331 $ 36,577,636
Issued as reinvestment of dividends............................... -- -- 237 2,703
Redeemed.......................................................... (627,941) (6,303,836) (2,181,597) (27,944,187)
---------- ------------ ---------- ------------
Net increase (decrease)........................................... (360,653) $ (3,540,598) 450,971 $ 8,636,152
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED 9/19/95** PERIOD ENDED 10/31/94*
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Equity Fund Class B shares:
Sold.............................................................. -- -- 3,021 $ 34,976
Issued as reinvestment of dividends............................... -- -- 1 11
Redeemed.......................................................... (1,304) $ (13,361) (1,718) (19,302)
---------- ------------ ---------- ------------
Net increase (decrease)........................................... (1,304) $ (13,361) 1,304 $ 15,685
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
- ------------------
* The Income Fund and Equity Fund commenced selling Class B shares on November
30, 1993.
** The Income Fund's and Equity Fund's Class B shares were completely redeemed
as of September 19, 1995.
29
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
6. ORGANIZATIONAL COSTS
All costs in connection with the organization of the Funds, including the
fees and expenses of registering and qualifying their shares for distribution
under federal and state securities regulations, are being amortized on the
straight-line method over a period of sixty months from July 1, 1992, the date
that the Income Fund commenced operations, and from October 4, 1993, the date
the Equity Fund commenced operations. In the event that any of the initial
shares of the Funds are redeemed during such amortization period, the Funds will
be reimbursed for any unamortized costs in the same proportion as the number of
initial shares outstanding bears to the total numbers of shares outstanding at
the time of redemption.
7. FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in U.S. companies and the United States government. These risks
include revaluation of currencies and future adverse political and economic
developments. Moreover, securities of many foreign companies and foreign
governments and their markets may be less liquid and their prices more volatile
than those of securities of comparable U.S. companies and the United States
government.
8. CAPITAL LOSS CARRYFORWARD
At October 31, 1995, the Funds had the following available capital loss
carryforwards:
<TABLE>
<CAPTION>
EXPIRING IN EXPIRING IN EXPIRING IN
2001 2002 2003
----------- ----------- -----------
<S> <C> <C> <C>
Income Fund........................................................................ $-- $ 1,470,465 $ --
Equity Fund........................................................................ 83,928 2,818,754 1,830,291
</TABLE>
30
<PAGE>
BJB INVESTMENT FUNDS
INDEPENDENT AUDITORS' REPORT
BJB GLOBAL INCOME FUND
AND BJB INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
The Board of Trustees
BJB Investment Funds
We have audited the accompanying statements of assets and liabilities of
the BJB Global Income Fund and BJB International Equity Fund, portfolios of the
BJB Investment Funds, including the portfolios of investments and schedules of
forward foreign exchange contracts as of October 31, 1995, and the related
statements of operations for the year then ended, and the statements of changes
in net assets for each of the years in the two-year period ended October 31,
1995, and the financial highlights for each of the years or periods in the
three-year period ended October 31, 1995, and for the period from July 1, 1992
(commencement of operations) to October 31, 1992, for the BJB Global Income
Fund, and the financial highlights for each of the years or periods in the
two-year period ended October 31, 1995, and for the period from October 4, 1993
(commencement of operations) to October 31, 1993 for the BJB International
Equity Fund. 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 generally accepted auditing
standards. 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
October 31, 1995 by correspondence with the custodian and brokers. 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
BJB Global Income Fund and BJB International Equity Fund as of October 31, 1995,
the results of their operations, the changes in their net assets and the
financial highlights for each of the years or periods referred to in the first
paragraph above in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Boston, Massachusetts
December 8, 1995
31
<PAGE>
ANNUAL REPORT
[LOGO]
BJB
Global
Income
Fund
BJB
International
Equity
Fund
October 31, 1995
