<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND
AND JULIUS BAER GLOBAL INCOME FUND
ANNUAL REPORT
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
Once again, I am pleased to offer reports from the Fund's investment
advisors on the performance and economic outlook of the Julius Baer
International Equity Fund ("Equity Fund") and the Julius Baer Global Income Fund
("Income Fund") for the recently completed fiscal year. For the one-year period
ended October 31, 1999 the Equity Fund had a robust return of 44.86%,
significantly outperforming its benchmark index. The Income Fund, however,
underperformed its benchmark index and returned a negative 2.17% for the
reporting period.
JULIUS BAER INTERNATIONAL EQUITY FUND
The Equity Fund returned +17.14% for the past 6 months, +44.86% over the
past 12 months, and +97.92% over the past 3 years versus the MSCI EAFE Index
(the "benchmark") returns of +6.73%, +23.03%, and +41.15% over comparable
periods. Returns for the Lipper International Equity Fund Index (the
"competition"), a reasonable proxy for our competitors, were +7.89%, +23.05%,
and +45.97%, over comparable periods, respectively:
<TABLE>
<CAPTION>
TOTAL RETURN
-----------------------------------------------------------
6-MONTH 1-YEAR 3-YEAR
4/30/99-10/31/99 10/31/98-10/31/99 10/31/96-10/31/99
----------------- ----------------- -----------------
<S> <C> <C> <C>
Julius Baer International Equity Fund.............................. +17.14% +44.86% +97.96%
MSCI EAFE w net dividend reinvested................................ +6.73% +23.03% +41.15%
LIPPER International Equity Fund Index............................. +7.89% +23.05% +45.97%
Julius Baer International Equity Fund vs. EAFE..................... +10.41% +21.83% +56.81%
Julius Baer International Equity Fund vs. LIPPER................... +9.25% +21.81% +51.99%
</TABLE>
As can be seen from the table above, the Equity Fund has strongly and
consistently outperformed both the benchmark and the competition over the
6-month, 1-year, and 3-year periods. In the past, a significant portion of our
strong performance was due to our geographical and country
allocation--especially our under-exposure to Japanese equities. This fiscal
year, however, we can attribute a sizable part of our performance to our sector
and stock selection.
In Japan, we have increased our exposure to approximately 23%, although we
remain slightly underweight. Most of the additions to Japan have been funneled
towards "the new economy"--i.e. telecommunications and Internet-related sectors.
We also participated in the small cap rally by buying a few retailers. Also of
note, we have several stocks that increased more than 100%.
In Europe, we reduced our strong overweight position to approximately
neutral. However, we increased our exposure toward the new economy at the
expense of some cyclical and defensive stocks. We were overweight technology and
telecommunications, as in our Japanese positions. Again, as in Japan, several
stocks in these sectors were up more than 100%.
In Emerging Markets, we sold most of our positions in Greece after the
strong market rally--currently, our exposure is less than 1%. We shifted some of
these funds toward Turkey, where we see the government undertaking serious
efforts towards structural reforms. We also have allocated some funds toward
Thailand, Indonesia, and the Philippines. But the performance of these markets
has been dismal so far as progress on the cyclical and structural front have
been slow to materialize. We also sold our positions in Mexico and Brazil. Our
current exposure to emerging markets is approximately 6%.
We ended the fiscal year with a relatively high position in cash and other
assets--around 17%. This was due to a combination of two concerns--the high
valuations prevailing in the global equity markets as well as some late tax-loss
selling to minimize the tax bills
<PAGE>
to our taxable shareholders. However, most of that cash was reinvested in the
markets as bond yields started to fall, causing the stock markets around the
world to rally. Most of our foreign currency exposure is currently unhedged as
we feel that the current strength in the U.S. dollar is a little excessive.
We expect at least two major changes to our strategy in the next fiscal
year. The first change is that we anticipate an increase in our European small
cap exposure. We foresee many opportunities in that sector as the
entrepreneurial culture continues to evolve and the flow of venture capital
money continues to grow. To quote a co-founder of a very successful European
Internet consulting company with whom we met recently: "What the American
Internet consulting companies are doing today, we have been doing for three
years. The reason we were not able to grow as fast is because in Europe you
can't get funding unless you are highly profitable. When it comes to venture
capital, Europe is an emerging market." However, we believe that this is rapidly
changing and that the valuation gap between European small cap growth and their
U.S. counterparts is large and unjustified.
The second change to the Equity Fund's strategy is that we expect to
increase our exposure to Eastern Europe. We believe that several countries in
the region are serious candidates to join the European Union and, at a later
stage, the European Monetary Union ("EMU"). It will take several years before
that occurs, but markets may start to rally in anticipation. And for patient
investors, we expect the gains to be significant because an EMU membership will
cause a significant re-rating of the equity markets of those countries as the
inherent investment risks and the cost of funding are greatly reduced.
JULIUS BAER GLOBAL INCOME FUND
During the twelve months ended October 31, 1999, the Income Fund had a
negative aggregate total return of 2.17% compared with a negative 0.03% for the
customized benchmark index--(80% Merrill Lynch 1-10Yr US Government/Corporate
Bond Index and 20% JP Morgan Global Government Non-US in US$ Bond Index)--(the
"benchmark"). The primary reason for the shortfall versus the benchmark was the
absence of a position in Japan. We believed that the very low yields of the
Japanese bond market offered little value. While we were correct on our interest
rate view, the sharp rally in the Japanese yen hurt our performance and that of
our competitors, relative the benchmark. We believe our returns look attractive
compared to our competitive universe.
Global bond yields continued to rise during the period. The persistent
strength of the U.S. economy and signs of rising inflation caused the Federal
Reserve (the "Fed") to begin hiking interest rates in late June. Global bond
markets were generally unsettled by the beginning of U.S. rate hikes and feared
a prolonged cycle of interest rate tightening. The Fed has increased interest
rates 75 basis points since the summer from 4.75% to 5.50%. The 30-year U.S.
Treasury bond rose from a low of 4.95% to 6.38% during the period, hitting a
high of 6.38% in mid October.
The fear of higher interest rates and rumors of large upcoming corporate
issuance induced a marked widening of swap spreads over the summer. Corporate
bonds and all "spread products" underperformed core government bonds during this
period. In hindsight, this was a buying opportunity as spreads fell quickly
toward their earlier levels and our corporate bond and Greek bond (a form of
spread product) holdings outperformed in the preceding period.
In Europe, signs of economic health began to surface, and although no signs
of domestic pricing pressure existed, bond yields were driven higher in sympathy
with the U.S. market. The Euro rose quickly in late July on the encouraging
growth news, but suffered later in the period. In early December, the Euro was
trading at an all time low, falling below 1.00 to the U.S. dollar. We remained
neutral in our Euro positioning through most of the period, but as a positive
trend appeared to emerge, we began to build a position in October. We expect
that favorable fundamentals and more supportive market positioning will propel
the Euro in 2000.
The Japanese economy also began to show signs of acceleration during the
summer. On this positive fundamental development, 10 year bond yields rose from
1.2% to 2.0% and the Japanese yen rallied from 122 to 104 versus the U.S.
dollar. As mentioned earlier, we remain underweight the Japanese bond market and
the Japanese yen. We believe that a prolonged strengthening of the Japanese yen
will be detrimental to the still fragile recovery in Japan.
2
<PAGE>
We remained defensively positioned through June of this year. Our overall
duration was neutral, but we held positions that generally outperform in
negative bond market environments, such as TIPS (U.S. Treasury Inflation
Protected Securities) and U.S. Mortgage Backed Securities. This did help us to
outperform the index in negative months. The sell-off of European bonds in
sympathy with U.S. Treasuries caused European issues to look attractive on both
a relative and absolute basis. We thus added French bonds to the portfolio in
the latter half of the fiscal year and lengthened the total portfolio duration.
European bonds did in fact outperform in the following months and this added
positively to our performance. In mid-October the trend in yields again appeared
negative and we scaled back our long duration position and returned to neutral
ahead of the millennium. Thus far, we have accurately assessed the direction of
yields and will look for higher yield levels and weaker economic data before
increasing our interest rate risk.
Effective November 15, 1999 the Julius Baer International Equity Fund and
the Julius Baer Global Income Fund introduced a new "institutional share class"
("Class I shares") in addition to the current retail class ("Class A shares").
The Class I shares have a higher initial minimum investment and are only offered
to qualified financial institutions and individuals. The Class I shares are
essentially the same as the Class A shares in terms of investment objective and
portfolio investments. However, the Class I shares will have lower operating
expenses than the Class A shares.
In conclusion, on behalf of the management of the Julius Baer Investment
Funds I would like to express our appreciation to the shareholders for their
continued support. We will continue to strive to provide you with our best
professional management capabilities and look forward to the many great
challenges ahead as we approach the new millennium.
Sincerely,
Michael Quain
President
December 10, 1999
The views expressed in this shareholder letter reflect those of the President of
the Funds only through the end of the period covered by the report as stated on
the cover. This shareholder letter contains certain forward looking statements
regarding the intent, belief or current expectations of the President.
Shareholders are cautioned that such forward looking statements are not
guarantees of future performance and involve risks and uncertainties and that
actual results may differ materially from those in the forward looking
statements, as a result of various factors. The President's views are subject to
change based on market and other conditions.
3
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER GLOBAL INCOME FUND
- --------------------------------------------------------------------------------
It is the Income Fund's policy to declare and pay monthly dividends from
its net investment income and distribute net realized capital gains, if any,
annually.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN* (UNAUDITED)
- ---------------------------------------------------------------------------------
<S> <C>
Year Ended 10/31/99.............................................................. (2.17%)
Five Years Ended 10/31/99........................................................ 6.38%
Inception (7/1/92) through 10/31/99.............................................. 5.59%
</TABLE>
- ------------------
* All average annual total return figures shown reflect the reinvestment of
dividends and capital gains distributions. The Income Fund commenced
operations on July 1, 1992 and the service providers waived their advisory,
sub-advisory and administration fees from 7/1/92 to 10/31/92 and from 9/1/98
to 10/31/99; without such waivers and reimbursements, total returns would have
been lower.
Growth of $10,000 invested in
shares of Julius Baer Global Income Fund
vs. a Blended Merrill Lynch and JP Morgan Index
July 1, 1992-October 31, 1999+
[The following chart was represented by a line graph in the printed material.]
<TABLE>
<CAPTION>
Fund Combined
Merr/JP Morg
<S> <C> <C>
July 1992 10,000 10,000
Oct 1992 10,486 10,276
Apr 1993 10,781 10,852
Oct 1993 11,341 11,289
Apr 1994 11,018 11,106
Oct 1994 10,939 11,310
Apr 1995 11,690 12,124
Oct 1995 12,460 12,826
Apr 1996 12,755 12,949
Oct 1996 13,488 13,588
Apr 1997 13,385 13,595
Oct 1997 13,925 14,420
Apr 1998 14,276 14,770
Oct 1998 15,238 15,873
Apr 1999 15,150 15,813
Oct 1999 14,907 15,877
</TABLE>
- ------------------
+ Hypothetical illustration of $10,000 invested on July 1, 1992 assuming
reinvestment of dividends and capital gains distributions through October 31,
1999. This period was one in which stock and bond prices fluctuated and the
results should not be considered a representation of the 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 distributions. The Merrill Lynch and JP Morgan combined
benchmark index for performance comparison consists of 80% of the Merrill
Lynch 1-10 year U.S. Government/Corporate Index and 20% of the JP Morgan
Global Government (non-U.S.) Bond Index.
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 their
original cost.
4
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
It is the Equity Fund's policy to declare and pay annual dividends from its
net investment income and distribute net realized capital gains, if any,
annually.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN* (UNAUDITED)
- ---------------------------------------------------------------------------------
<S> <C>
Year Ended 10/31/99.............................................................. 44.84%
Five Years Ended 10/31/99........................................................ 14.86%
Inception (10/4/93) through 10/31/99............................................. 11.02%
</TABLE>
- ------------------
* All average annual total return figures shown reflect the reinvestment of
dividends and capital gains distributions. The Equity Fund commenced
operations on October 4, 1993. Total returns for the Fund reflect expenses,
waived and reimbursed, if applicable, by the Adviser and/or Administrator.
Without such waivers and reimbursements, total returns would have been lower.
Growth of $10,000 invested in
shares of Julius Baer International Equity Fund
vs. Morgan Stanley EAFE Index
October 4, 1993-October 31,1999+
<TABLE>
<CAPTION>
[Line Graph]
International Morgan
Equity Stanley
<S> <C> <C>
Oct 1993 10,000 10,000
Apr 1994 9,608 10,798
Oct 1994 9,440 11,261
Apr 1995 7,970 11,401
Oct 1995 8,462 11,219
Apr 1996 9,281 12,701
Oct 1996 9,540 12,394
Apr 1997 10,592 12,588
Oct 1997 11,227 12,968
Apr 1998 14,672 14,970
Oct 1998 13,035 14,219
Apr 1999 16,118 16,275
Oct 1999 18,880 17,252
</TABLE>
- ------------------
+ Hypothetical illustration of $10,000 invested on October 4, 1993 assuming
reinvestment of dividends and capital gains distributions through October 31,
1999.
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 distributions. 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 their
original cost.
5
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
FACE VALUE
CURRENCY VALUE (NOTE 1)
- --------- ------------- -----------
<S> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 28.6%
U.S. GOVERNMENT AGENCY MORTGAGE BACKED OBLIGATIONS -- 10.9%
Federal Home Loan Mortgage Corporation:
USD 981,510 6.500% due 04/01/2029............................................................. $ 941,329
USD 939,790 7.000% due 04/01/2029............................................................. 923,197
USD 180,194 7.000% due 06/01/2029............................................................. 177,013
-----------
2,041,539
-----------
Federal National Mortgage Association:
USD 303,057 6.500% due 05/01/2028............................................................. 290,414
-----------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 17.7%
Federal National Mortgage Association:
USD 220,000 5.625% due 03/15/2001............................................................. 218,625
USD 640,000 5.750% due 04/15/2003............................................................. 627,300
USD 400,000 5.750% due 07/15/2003............................................................. 391,375
-----------
1,237,300
-----------
US Treasury Note,
USD 775,000 6.625% due 06/30/2001............................................................. 784,688
-----------
U.S. Treasury Inflation Indexed Bond,
USD 1,250,000 3.625% due 04/15/2028............................................................. 1,185,616
-----------
U.S. Treasury Inflation Indexed Note,
USD 610,000 3.625% due 01/15/2008............................................................. 609,007
-----------
TOTAL U.S. GOVERNMENT AND AGENCY OBLIGATIONS (COST $6,324,217).................... 6,148,564
-----------
FOREIGN GOVERNMENT BONDS -- 28.0%
GREECE-6.6%
Hellenic Republic,
GRD 413,300,000 8.900% due 03/21/2004............................................................. 1,389,703
-----------
UNITED KINGDOM -- 3.1%
United Kingdom Gilts,
GBP 400,000 6.500% due 12/07/2003............................................................. 666,007
-----------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
FACE VALUE
CURRENCY VALUE (NOTE 1)
- --------- ------------- -----------
<S> <C>
AUSTRALIA -- 2.9%
Government of Australia,
AUD 890,000 10.000% due 10/15/2002............................................................ $ 627,305
-----------
FINLAND -- 1.7%
Republic of Finland,
USD 350,000 7.875% due 07/28/2004............................................................. 367,737
-----------
FRANCE -- 13.7%
Government of France,
EUR 3,100,000 4.000% due 10/25/2009............................................................. 2,946,774
-----------
TOTAL FOREIGN GOVERNMENT BONDS (COST $6,185,712).................................. 5,997,526
-----------
CORPORATE BONDS -- 24.9%
NETHERLANDS--5.5%
Household Netherlands BV (Yankee),
USD 1,225,000 6.200% due 12/01/2003............................................................. 1,186,323
-----------
MULTI-NATIONAL -- 1.5%
EUROFIMA,
GBP 200,000 7.250% due 12/30/2003............................................................. 332,675
-----------
SPAIN -- 0.9%
Instituto de Credito Official,
USD 200,000 6.000% due 05/19/2008............................................................. 189,315
-----------
UNITED STATES -- 17.0%
ABN-Amro Bank NV (Chicago),
USD 1,200,000 7.250% due 05/31/2005............................................................. 1,200,433
Conoco, Inc.,
USD 1,300,000 6.350%, 04/15/2009................................................................ 1,232,167
Ford Motor Credit Company,
USD 1,250,000 6.125% due 04/28/2003............................................................. 1,217,900
-----------
3,650,500
-----------
TOTAL CORPORATE BONDS (COST $5,523,383)........................................... 5,358,813
-----------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
FACE VALUE
CURRENCY VALUE (NOTE 1)
- --------- ------------- -----------
<S> <C>
COMMERCIAL PAPER -- 9.1%
UNITED STATES -- 9.1%
MetLife Funding, Inc.,
USD 2,000,000 5.980% due 02/04/2000 (Cost $1,967,110)........................................... $ 1,967,110
-----------
REPURCHASE AGREEMENTS -- 7.9%
UNITED STATES -- 7.9%
USD 1,699,312 Investors Bank & Trust Repurchase Agreement, dated 10/29/99, due 11/01/99, with a
maturity value of $1,699,951 and an effective yield of 4.51%, collateralized by a
Small Business Administration Obligation, with a rate of 8.250%, a maturity of
10/25/2021, and a market value of $1,784,278 (Cost $1,699,312).................... 1,699,312
-----------
TOTAL INVESTMENTS -- 98.5% (COST $21,699,734)*.................................... 21,171,325
OTHER ASSETS AND LIABILITIES (NET) -- 1.5%........................................ 328,860
-----------
TOTAL NET ASSETS -- 100.0%........................................................ $21,500,185
-----------
-----------
PORTFOLIO FOOTNOTES:
* Aggregate cost for federal income tax purposes $21,705,592
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER GLOBAL INCOME FUND
SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS
OCTOBER 31, 1999
FORWARD FOREIGN EXCHANGE CONTRACTS TO BUY
<TABLE>
<CAPTION>
CONTRACTS TO RECEIVE
--------------------------------- NET UNREALIZED
EXPIRATION LOCAL VALUE IN IN EXCHANGE APPRECIATION
DATE CURRENCY USD FOR USD (DEPRECIATION)
- ---------- -------------------- -------- ----------- --------------
<S> <C> <C> <C> <C> <C>
12/10/99.. EUR 400,000 422,175 423,520 $ (1,345)
12/10/99.. EUR 426,548 450,194 450,000 194
12/22/99.. EUR 426,771 450,908 450,000 908
02/04/00.. EUR 598,678 634,484 645,554 (11,070)
02/04/00.. EUR 550,000 582,895 597,657 (14,762)
02/04/00.. EUR 550,000 582,895 600,655 (17,760)
--------
Net unrealized depreciation on forward foreign
exchange contracts to buy......................... $(43,835)
--------
--------
</TABLE>
FORWARD FOREIGN EXCHANGE CONTRACTS TO SELL
<TABLE>
<CAPTION>
CONTRACTS TO DELIVER
---------------------------------- NET UNREALIZED
EXPIRATION LOCAL VALUE IN IN EXCHANGE APPRECIATION
DATE CURRENCY USD FOR USD (DEPRECIATION)
- ---------- -------------------- --------- ----------- --------------
<S> <C> <C> <C> <C> <C>
12/10/99.. EUR 400,000 422,174 424,260 $ 2,086
12/10/99.. EUR 426,548 450,194 443,056 (7,138)
12/22/99.. EUR 426,771 450,908 453,039 2,131
02/04/00.. EUR 1,698,678 1,800,276 1,826,792 26,516
--------
Net unrealized appreciation on forward foreign
exchange contracts to sell......................... $ 23,595
--------
--------
</TABLE>
GLOSSARY OF CURRENCIES
AUD -- Australian Dollar GRD -- Greek Drachma
EUR -- Euro USD -- United States Dollar
GBP -- British Pound Sterling
See Notes to Financial Statements.
9
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ----------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- 82.1%
JAPAN-23.4%
Acom Co Ltd........................................................................ 8,000 $ 875,030
Canon Sales Co Inc................................................................. 400 6,329
Circle K Japan Co Ltd.............................................................. 66 2,647
Daiwa Securities Co Ltd............................................................ 59,000 630,050
Daiwabo Information System Co Ltd.................................................. 6,200 154,665
DDI Corporation.................................................................... 700 765,651
Fast Retailing Co Ltd.............................................................. 1,800 431,758
Fuji Soft ABC Inc.................................................................. 7,000 641,401
Fujitsu Ltd........................................................................ 25,500 768,242
Honda Motor Co Ltd................................................................. 8,000 337,731
Internet Initiative Japan Inc ADR*................................................. 500 26,875
Ito-Yokado Co Ltd.................................................................. 5,000 400,096
Japan Telecom Co Ltd............................................................... 400 1,373,951
Japan Tobacco Inc.................................................................. 320 353,082
Kao Corp........................................................................... 27,000 823,795
KDD Corporation.................................................................... 5,500 691,293
Kirin Brewery Co Ltd............................................................... 46,000 526,975
Matsushita Communication Industrial Co Ltd......................................... 4,000 672,391
Nikko Securities Co Ltd............................................................ 75,000 705,205
Nippon Telegraph & Telephone Corporation ADR....................................... 5,375 415,891
Nippon Telegraph & Telephone Corporation........................................... 160 245,622
Nomura Securities Co Ltd........................................................... 30,000 495,371
NTT Data Corporation............................................................... 670 1,060,686
NTT Mobile Communication Network, Inc. (a)......................................... 450 1,195,970
Ryohin Keikaku Co Ltd.............................................................. 7,000 1,347,278
Sakura Bank Ltd.................................................................... 100,000 859,679
Sankyo Co Ltd...................................................................... 10,000 284,960
Softbank Corp...................................................................... 3,000 1,246,342
Sony Corp.......................................................................... 5,400 842,447
Takeda Chemical Industries......................................................... 16,000 919,549
The Bank of Tokyo-Mitsubishi Ltd................................................... 24,000 397,908
The Furukawa Electric Co Ltd....................................................... 88,000 641,689
The Sanwa Bank Ltd................................................................. 32,000 476,201
-----------
20,616,760
-----------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ----------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
UNITED KINGDOM-13.2%
ARM Holdings Plc ADR*.............................................................. 48,560 $ 4,115,460
British Airport Authority Plc...................................................... 176 1,292
British Telecommunications Plc..................................................... 31,011 562,468
BP Amoco Plc....................................................................... 100,498 975,409
Colt Telecom Group Plc ADR*........................................................ 10,000 1,185,000
Glaxo Wellcome Plc................................................................. 14,521 428,659
HSBC Holdings Plc.................................................................. 44,244 545,049
Lloyds TSB Group Plc............................................................... 26,752 370,015
National Westminster Bank Plc...................................................... 25,900 584,919
Psion Plc.......................................................................... 20,825 523,704
Royal & Sun Alliance Insurance Group Plc........................................... 560 3,811
Smithkline Beecham Plc............................................................. 42,494 547,587
Tesco Plc.......................................................................... 146,227 435,026
Unilever Plc....................................................................... 48,918 453,881
Vodafone AirTouch Plc.............................................................. 183,485 853,486
-----------
11,585,766
-----------
FRANCE--10.9%
Accor SA........................................................................... 2,031 457,278
Aerospatiale Matra*................................................................ 7,755 189,290
Alcatel Alsthom.................................................................... 5,000 781,184
Axa-UAP............................................................................ 4,200 592,564
Banque National De Paris........................................................... 4,347 381,885
Canal Plus......................................................................... 7,200 499,958
Cap Gemini SA (a).................................................................. 3,294 499,049
Carrefour SA....................................................................... 3,870 716,606
Castorama Dubois................................................................... 1,470 440,468
Credit Lyonnais SA*................................................................ 10,000 302,479
France Telecom SA.................................................................. 7,380 713,169
L'Oreal............................................................................ 1 668
Societe Generale................................................................... 1,937 421,849
Total Fina SA Class B.............................................................. 15,290 2,067,160
Unilog SA.......................................................................... 6,000 411,582
Vivendi............................................................................ 14,529 1,101,352
-----------
9,576,541
-----------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ----------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
GERMANY--7.4%
AVA Allgemeine Handelsgesellschaft der Verbraucher AG.............................. 940 $ 432,182
Bayer AG........................................................................... 9,100 372,433
Buderus AG......................................................................... 27,060 456,941
Deutsche Bank AG................................................................... 6,000 430,519
Emprise Management Consulting AG*.................................................. 8,000 191,061
Epcos AG*.......................................................................... 11,430 468,754
Karstadt AG........................................................................ 7,000 316,682
Mannesmann AG (Registered)......................................................... 5,000 786,445
Medion AG.......................................................................... 1,800 481,020
Metro AG........................................................................... 8,560 460,205
Preussag AG........................................................................ 7,000 379,282
PrimaCom AG*....................................................................... 8,225 409,312
Siemans AG......................................................................... 5,500 493,882
Steag Hamatech AG*................................................................. 31,600 781,289
Telegate AG*....................................................................... 200 7,154
-----------
6,467,161
-----------
NETHERLANDS--6.1%
Benckiser NV....................................................................... 12,078 714,148
Equant NV*......................................................................... 6,350 617,977
Heineken NV........................................................................ 12,175 621,124
ING Groep NV....................................................................... 11,194 660,466
Koninklijke (Royal) Philips Electronics NV......................................... 5,520 566,240
Laurus NV.......................................................................... 26,514 589,987
United Pan-Europe Communications NV*............................................... 10,250 788,312
Vendex NV.......................................................................... 8,099 236,457
Versatel Telecom International NV*................................................. 45,440 564,128
Wolters Kluwer NV.................................................................. 36 1,203
-----------
5,360,042
-----------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ----------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
SWITZERLAND--3.0%
Adecco SA (Registered)............................................................. 1,139 $ 690,371
Nestle SA (Registered)............................................................. 300 578,569
Novartis AG (Registered)........................................................... 320 478,599
Roche Holdings AG.................................................................. 210 366,427
Zurich Allied AG................................................................... 880 498,173
-----------
2,612,139
-----------
FINLAND--2.7%
Nokia Oyj.......................................................................... 10,000 1,144,790
Raisio Group Plc................................................................... 33,100 215,564
Sonera Group Oyj................................................................... 20,000 600,749
UPM-Kymmene Oyj.................................................................... 12,500 394,538
Metso Oyj*......................................................................... 181 2,047
-----------
2,357,688
-----------
SWEDEN--1.7%
Ericsson AB Class B................................................................ 12,420 516,572
Mandamus AB........................................................................ 625 3,306
Modern Times Group MTG AB*......................................................... 19,100 617,871
Nordenbanken Holding AB*........................................................... 69,000 399,272
-----------
1,537,021
-----------
ITALY--1.7%
Assicurazioni Generali............................................................. 12,000 386,962
Gucci Group........................................................................ 3,000 242,250
Istituto Nazionale delle Assicurazioni............................................. 150,000 455,612
Telecom Italia Mobile.............................................................. 61,000 382,181
-----------
1,467,005
-----------
PORTUGAL--1.3%
Banco Espirito Santo (Registered).................................................. 23,025 598,832
Portugal Telecom................................................................... 4,500 200,741
Telecel Comunicacoes Pessoai....................................................... 2,850 370,013
-----------
1,169,586
-----------
SPAIN--1.0%
Banco Popular Espanol SA........................................................... 6,000 404,006
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ----------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
SPAIN -- CONTINUED
Sogecable SA*...................................................................... 2,100 $ 57,798
Telefonica SA...................................................................... 25,140 413,675
-----------
875,479
-----------
TURKEY--0.9%
Aksigorta AS....................................................................... 3,874,000 118,854
Haci Omer Sabanci Holding AS....................................................... 11,200,000 331,967
Turkiye Garanti Bankasi AS*........................................................ 14,908,400 127,139
Yapi Ve Kredi Bankasi.............................................................. 12,124,400 176,531
-----------
754,491
-----------
INDONESIA--0.8%
Pt Bank Negara Indonesia*.......................................................... 1,100,000 56,163
Pt Bank International Indonesia--Foreign*.......................................... 2,400,000 52,516
Pt Indocement Tunggal Prakarsa*.................................................... 178,000 85,689
Pt Indofood Sukses Makmur*......................................................... 46,000 54,354
Pt Indostat........................................................................ 18,500 29,956
Pt Kalbe Farma..................................................................... 1,375,000 170,496
Pt Lippo Bank--Foreign*............................................................ 5,020,000 164,770
Pt Semen Gresik.................................................................... 23,000 40,934
Pt Telekomunikasi Indonesia........................................................ 177,120 83,974
-----------
738,852
-----------
DENMARK--0.8%
Tele Danmark AS.................................................................... 11,400 692,171
-----------
GREECE--0.8%
Hellenic Telecommunication Organization SA......................................... 18,102 383,847
Interamerican SA................................................................... 5,490 185,212
National Bank of Greece............................................................ 1,481 106,255
-----------
675,314
-----------
MALAYSIA--0.7%
Arab-Malaysian Merchant Bank....................................................... 358 773
Commerce Asset-Holding Berhad...................................................... 110,000 243,158
Malayan Banking Berhad............................................................. 70,000 237,632
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ----------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
MALAYSIA -- CONTINUED
RHB Capital Berhad*................................................................ 171,000 $ 153,900
-----------
635,463
-----------
IRELAND--0.7%
Bank of Ireland.................................................................... 43,289 340,041
Eircom Plc*........................................................................ 66,700 277,893
-----------
617,934
-----------
THAILAND--0.7%
Bangkok Bank Public Company Ltd (Foreign Shares) (Registered)*..................... 67,000 156,197
Siam Commercial Bank (Foreign Shares)*............................................. 199,000 216,500
Thai Farmers Bank Public Company Ltd (Foreign Shares)*............................. 146,000 206,113
-----------
578,810
-----------
UNITED STATES--0.6%
Global TeleSystems Group Inc*...................................................... 22,000 526,625
-----------
SINGAPORE--0.6%
DBS Group Holdings Ltd............................................................. 16,282 184,066
Singapore Press Holdings Ltd....................................................... 9,000 154,239
Singapore Telecommunications Ltd................................................... 86,000 163,416
-----------
501,721
-----------
NORWAY--0.4%
Christiania Bank Og Kreditkasse.................................................... 79,600 387,447
-----------
PHILIPPINES--0.4%
Ayala Land Inc..................................................................... 205,000 52,400
Bank of the Philippine Islands..................................................... 47,500 125,561
Metropolitan Bank & Trust Company.................................................. 20,906 156,400
Philippine Long Distance Telephone Company......................................... 2,440 50,808
-----------
385,169
-----------
HUNGARY--0.4%
Egis Rt............................................................................ 780 23,258
Magyar Tavkozlesi Rt ADR........................................................... 8,980 258,736
Mol Magyar Olaj-Es Gazipari........................................................ 1,950 39,298
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ----------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
HUNGARY -- CONTINUED
Pick Szeged Rt..................................................................... 534 $ 18,361
-----------
339,653
-----------
AUSTRALIA--0.4%
Australia & New Zealand Bank Group................................................. 1,200 7,925
The News Corporation Ltd........................................................... 43,397 314,048
-----------
321,973
-----------
CANADA--0.3%
Canadian Imperial Bank of Commerce................................................. 64 1,377
Royal Bank of Canada............................................................... 6,740 290,348
-----------
291,725
-----------
HONG KONG--0.3%
China Everbright Ltd............................................................... 21,000 15,004
China Telecom (Hong Kong) Ltd*..................................................... 74,000 253,399
-----------
268,403
-----------
ESTONIA--0.2%
AS Eesti Telekom GDR (Registered).................................................. 13,600 215,560
-----------
CZECH REPUBLIC--0.2%
Komercni Banka AS*................................................................. 8,000 202,177
-----------
POLAND--0.1%
Bank Rozwoju Eksportu SA........................................................... 1,560 42,517
Elektrim SA*....................................................................... 5,000 43,252
Mostostal-Export SA................................................................ 10,558 8,608
-----------
94,377
-----------
CHILE--0.1%
Vina Concha Y Toro ADR............................................................. 2,500 86,250
-----------
MAURITIUS--0.1%
New Mauritius Hotels Ltd........................................................... 23,500 41,840
State Bank of Mauritius Ltd........................................................ 72,000 43,869
-----------
85,709
-----------
NEW ZEALAND--0.1%
Lion Nathan........................................................................ 27,000 58,167
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ----------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
NEW ZEALAND -- CONTINUED
Sky Network Television Ltd ADR*.................................................... 1,000 $ 15,625
-----------
73,792
-----------
SOUTH AFRICA--0.1%
Edgars Consolidated Stores Ltd..................................................... 100 977
Nedcor Investment Bank Holdings*................................................... 2,946 1,727
Nedcor Ltd......................................................................... 2,979 58,586
-----------
61,290
-----------
BRAZIL--0.0%
Telecomunicacoes Brasileiras ADR*.................................................. 5,000 156
-----------
BELGIUM--0.0%
Algemene Maatschappij voor Nijverheidskredit NV*................................... 90 5
-----------
PERU--0.0%
Cementos Lima SA--Trabajo.......................................................... 1 2
-----------
TOTAL COMMON STOCKS (COST $46,444,587)............................................. 72,160,257
-----------
PREFERRED STOCKS--0.6%
GERMANY--0.6%
Marschollek, Lautenschlaeger und Partner AG (Cost $463,222)........................ 2,400 506,271
-----------
INVESTMENT FUNDS--0.0%
POLAND--0.0%
NFI Drugi SA*...................................................................... 1,500 825
NFI Foksal SA*..................................................................... 1,500 949
NFI Fortuna SA*.................................................................... 1,500 1,042
NFI Hetman SA*..................................................................... 1,500 1,386
NFI Jedenasty SA*.................................................................. 1,500 1,066
NFI Kwiatkowski SA*................................................................ 1,500 1,795
NFI Magna Polonia SA*.............................................................. 1,500 1,543
NFI Octava SA*..................................................................... 1,500 2,204
NFI Piast SA*...................................................................... 1,500 782
NFI Pierwszy SA.................................................................... 1,500 1,059
NFI Progress SA*................................................................... 1,500 1,113
NFI Siodmy Kazimierza Wielkiego SA*................................................ 1,500 828
NFI Trzeci SA*..................................................................... 1,500 1,038
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ----------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
INVESTMENT FUNDS -- CONTINUED
NFI Victoria SA*................................................................... 1,500 $ 967
NFI Zachodni SA*................................................................... 1,500 1,525
-----------
TOTAL INVESTMENT FUNDS (COST $74,520).............................................. 18,122
-----------
WARRANTS--0.0%
THAILAND--0.0%
Siam Commercial Bank Public Company Ltd Warrants, expire 06/22/2004*............... 2,100 734
-----------
BRAZIL--0.0%
Brahma Warrants, expire 4/30/2003*................................................. 9,993 205
-----------
TOTAL WARRANTS (COST $507)......................................................... 939
-----------
<CAPTION>
FACE
CURRENCY VALUE
- ----------------------------------------------------------------------------------- -----------
<S> <C> <C>
CORPORATE BONDS--0.0%
GERMANY--0.0%
Preussag AG 2.125%, due 06/17/2004............................................ EUR 21,000 21,899
-----------
PORTUGAL--0.0%
Jeronimo Martins 0.000%, due 12/30/2004....................................... PTE 2,879,000 17,564
-----------
TOTAL CORPORATE BONDS (COST $36,876)............................................... 39,463
-----------
REPURCHASE AGREEMENTS--11.9%
UNITED STATES--11.9%
Investors Bank & Trust Repurchase Agreement, dated 10/29/1999, due 11/01/1999,
with a maturity value of $10,513,058 and an effective yield of 4.510%,
collateralized by U.S. Government and Agency Obligations with rates ranging
from 6.302% to 8.125%, with maturity dates ranging from 8/20/2025 to 4/25/2022
and an aggregate market value of $11,034,564 (Cost $10,509,108)................ USD 10,509,108 10,509,108
-----------
TOTAL INVESTMENTS--94.6% (COST $57,528,820)**...................................... 83,234,160
OTHER ASSETS AND LIABILITIES (NET)--5.4% 4,718,511
-----------
TOTAL NET ASSETS--100.0%........................................................... $87,952,671
-----------
-----------
</TABLE>
(Footnotes on next page)
See Notes to Financial Statements.
18
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND -- (CONTINUED)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
PORTFOLIO FOOTNOTES:
ADR American Depository Receipt
GDR Global Depository Receipt
(a) Securities that may be resold to "qualified institutional buyers"
under Rule 144A or securities offered pursuant to Section 4 (2)
of the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the
Board of Trustees.
* Non-income producing security.
** Aggregate cost for federal income tax purposes was $58,008,948.
See Notes to Financial Statements.
19
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS--INDUSTRY SECTOR (UNAUDITED)
OCTOBER 31, 1999
(PERCENTAGE OF NET ASSETS)
At October 31, 1999, sector diversification of the Fund's investments was as
follows:
<TABLE>
<CAPTION>
MARKET
% OF NET VALUE
ASSETS (NOTE 1)
---------- -----------
<S> <C> <C>
INDUSTRY SECTOR:
Telephone Systems............................................................................ 12.7% $11,144,075
Banking...................................................................................... 8.6 7,532,919
Electronics.................................................................................. 8.5 7,489,833
Communications............................................................................... 6.7 5,933,859
Financial Services........................................................................... 6.7 5,924,015
Retailers.................................................................................... 5.5 4,806,047
Computers and Information.................................................................... 3.9 3,389,869
Oil and Gas.................................................................................. 3.5 3,081,867
Insurance.................................................................................... 3.3 2,901,654
Pharmaceuticals.............................................................................. 2.9 2,544,890
Beverages, Food and Tobacco.................................................................. 2.9 2,530,215
Media, Broadcasting and Publishing........................................................... 2.4 2,070,054
Commercial Services.......................................................................... 2.0 1,791,723
Food Retailers............................................................................... 2.0 1,741,619
Computer Software and Processing............................................................. 1.9 1,691,029
Chemicals.................................................................................... 1.4 1,219,486
Industrial--Diversified...................................................................... 1.1 980,752
Heavy Machinery.............................................................................. 0.9 788,492
Cosmetics and Personal Care.................................................................. 0.8 714,816
Health....................................................................................... 0.7 651,387
Metals....................................................................................... 0.7 641,689
Other........................................................................................ 3.6 3,154,762
------ -----------
TOTAL INVESTMENTS, EXCLUDING REPURCHASE AGREEMENTS............................................. 82.7 72,725,052
OTHER ASSETS AND LIABILITIES (NET)............................................................. 17.3 15,227,619
------ -----------
NET ASSETS..................................................................................... 100.0% $87,952,671
------ -----------
------ -----------
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND
SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS
OCTOBER 31, 1999
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>
11/29/99 JPY 206,811,375 1,993,505 1,986,470 $ (7,035)
----------
Net unrealized depreciation on forward foreign
exchange contracts to sell......................... $ (7,035)
----------
----------
</TABLE>
<TABLE>
<CAPTION>
GLOSSARY OF CURRENCIES
<S> <C> <C> <C>
EUR -- Euro PTE -- Portuguese Escudo
JPY -- Japanese Yen USD -- United States Dollar
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
JULIUS BAER INVESTMENT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
<TABLE>
<CAPTION>
JULIUS BAER JULIUS BAER
GLOBAL INCOME INTERNATIONAL EQUITY
FUND FUND
------------- --------------------
<S> <C> <C>
ASSETS:
Investments in securities, at value (Cost $20,000,422 and $47,019,712
respectively).................................................................... $19,472,013 $ 72,725,052
Repurchase agreements, at cost...................................................... 1,699,312 10,509,108
Foreign currency, at value (Cost $149,528 and $49,833, respectively)................ 156,038 62,125
Receivables:
Investments sold................................................................. -- 4,485,846
Fund shares sold................................................................. 3,712 400,171
Interest and dividends........................................................... 245,418 30,468
Tax reclaims..................................................................... -- 58,842
Unrealized appreciation on forward foreign exchange contracts....................... 31,835 --
Prepaid expenses.................................................................... 2,723 13,316
----------- ------------
Total Assets..................................................................... 21,611,051 88,284,928
----------- ------------
LIABILITIES:
Payables:
Fund shares repurchased.......................................................... 2,265 --
Investment advisory fee.......................................................... 17,000 192,277
Distribution and shareholder servicing fees (Note 3)............................. 13,202 47,973
Unrealized depreciation on forward foreign exchange contracts....................... 52,075 7,035
Accrued expenses and other payables................................................. 26,324 84,972
----------- ------------
Total Liabilities................................................................ 110,866 332,257
----------- ------------
NET ASSETS............................................................................ $21,500,185 $ 87,952,671
----------- ------------
----------- ------------
NET ASSETS CONSIST OF:
Par value........................................................................... $ 1,873 $ 4,035
Paid in capital in excess of par value.............................................. 22,538,799 54,966,175
Undistributed net investment income................................................. 13,731 292,968
Accumulated net realized gain (loss) on security transactions, forward foreign
exchange contracts and foreign currency transactions............................. (506,321) 6,975,370
Net unrealized appreciation (depreciation) on securities, forward foreign exchange
contracts and foreign currency related transactions.............................. (547,897) 25,714,123
----------- ------------
NET ASSETS............................................................................ $21,500,185 $ 87,952,671
----------- ------------
----------- ------------
SHARES OUTSTANDING.................................................................... 1,873,276 4,035,406
----------- ------------
----------- ------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE........................................ $ 11.48 $ 21.80
----------- ------------
----------- ------------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
JULIUS BAER INVESTMENT FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1999
<TABLE>
<CAPTION>
JULIUS BAER JULIUS BAER
GLOBAL INCOME INTERNATIONAL EQUITY
FUND FUND
------------- --------------------
<S> <C> <C>
INVESTMENT INCOME (LOSS):
Interest............................................................................ $ 950,523 $ 131,784
Dividends+.......................................................................... -- 887,106
----------- ------------
950,523 1,018,890
EXPENSES:
Investment advisory fee (Note 2).................................................... 112,462 688,556
Custody and administration fees..................................................... 42,065 235,408
Distribution and shareholder servicing fees (Note 3)................................ 43,254 172,139
Professional fees................................................................... 30,540 133,802
Trustees' fees and expenses (Note 2)................................................ 12,807 12,807
Transfer agent fees................................................................. 19,745 25,541
Registration and filing fees........................................................ 15,320 16,582
Shareholder reports................................................................. 11,156 48,900
Insurance premium................................................................... 4,717 18,327
Miscellaneous fees.................................................................. 1,236 1,988
----------- ------------
Total gross expenses............................................................. 293,302 1,354,050
Less: Fees paid indirectly (Note 2).............................................. (198) (1,305)
Less: Fees waived by investment adviser (Note 2)................................. (56,231) --
----------- ------------
Net expenses..................................................................... 236,873 1,352,745
----------- ------------
NET INVESTMENT INCOME (LOSS).......................................................... 713,650 (333,855)
----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 4):
Realized gain (loss) on:
Security transactions............................................................ (21,471) 7,140,895
Forward foreign exchange contracts............................................... (64,491) 495,354
Foreign currency transactions.................................................... (27,714) (155,933)
----------- ------------
Net realized gain (loss) on investments........................................ (113,676) 7,480,316
----------- ------------
Net change in unrealized appreciation (depreciation) on:
Securities....................................................................... (915,101) 18,729,396
Forward foreign exchange contracts............................................... (18,030) (100,255)
Currencies and net other assets.................................................. (5,119) 32,385
----------- ------------
Net change in unrealized appreciation (depreciation) of investments............ (938,250) 18,661,526
----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................................ (1,051,926) 26,141,842
----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....................... $ (338,276) $ 25,807,987
----------- ------------
----------- ------------
</TABLE>
- ------------------
+ Net of foreign withholding taxes of $104,136 for the International Equity
Fund.
See Notes to Financial Statements.
23
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER GLOBAL INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
---------------- ----------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income................................................................. $ 713,650 $ 475,074
Net realized gain (loss) on investments............................................... (113,676) 499,745
Net change in unrealized appreciation (depreciation) of investments................... (938,250) 149,604
------------ ------------
Net increase (decrease) in net assets resulting from operations....................... (338,276) 1,124,423
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1):
Distributions from net investment income............................................ (573,809) (564,298)
Distributions from capital.......................................................... (135,854) --
FUND SHARE TRANSACTIONS:
Net increase from Fund share transactions (Note 5).................................. 7,293,770 2,804,874
------------ ------------
Net increase in net assets.......................................................... 6,245,831 3,364,999
NET ASSETS:
Beginning of year..................................................................... 15,254,354 11,889,355
------------ ------------
End of year (including undistributed (distributions in excess of) net investment
income of $13,731 and ($102,745), respectively)..................................... $ 21,500,185 $ 15,254,354
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
---------------- ----------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment loss................................................................... $ (333,855) $ (88,611)
Net realized gain on investments...................................................... 7,480,316 4,953,520
Net change in unrealized appreciation of investments.................................. 18,661,526 2,362,835
------------ ------------
Net increase in net assets resulting from operations.................................. 25,807,987 7,227,744
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1):
Distributions from net realized gains on investments.................................. (1,455,339) --
Distributions in excess of net investment income...................................... -- (501,882)
FUND SHARE TRANSACTIONS:
Net increase from Fund share transactions (Note 5).................................... 6,882,287 5,690,137
------------ ------------
Net increase in net assets............................................................ 31,234,935 12,415,999
NET ASSETS:
Beginning of year..................................................................... 56,717,736 44,301,737
------------ ------------
End of year (including undistributed (distributions in excess of) net investment
income of $292,968 and ($640,399), respectively).................................... $ 87,952,671 $ 56,717,736
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER GLOBAL INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period............... $ 12.22 $ 11.70 $ 12.01 $ 12.11 $ 11.16
-------- -------- -------- ------- -------
Income (Loss) from investment operations:
Net investment income............................ 0.51 0.48 0.50 0.59 0.59 (1)
Net realized and unrealized gain (loss) on
investments................................... (0.77) 0.59 (0.13) 0.36 0.92
-------- -------- -------- ------- -------
Total income (loss) from investment
operations.................................. (0.26) 1.07 0.37 0.95 1.51
-------- -------- -------- ------- -------
Less distributions:
From net investment income....................... (0.41) (0.55) (0.58) (1.05) (0.56)
From capital (Note 1)............................ (0.07) -- (0.10) -- --
-------- -------- -------- ------- -------
Total distributions........................... (0.48) (0.55) (0.68) (1.05) (0.56)
-------- -------- -------- ------- -------
Net Asset Value, end of period..................... $ 11.48 $ 12.22 $ 11.70 $ 12.01 $ 12.11
-------- -------- -------- ------- -------
-------- -------- -------- ------- -------
Total Return....................................... (2.17)% 9.43% 3.24% 8.25% 13.90%
-------- -------- -------- ------- -------
-------- -------- -------- ------- -------
Ratios/Supplemental Data:
Net assets, end of period (in 000's)............... $ 21,500 $ 15,254 $ 11,889 $14,584 $17,327
Ratio of net investment income to
average net assets............................... 4.11% 3.93% 4.32% 4.71% 5.19%
Ratio of total expenses to average net assets...... 1.36%(2)(3) 1.77%(2)(3) 1.99% 2.53%(2) 2.15%(2)
Portfolio turnover rate............................ 136% 269% 162% 219% 319%
</TABLE>
- ------------------
(1) 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.
(2) Includes indirectly paid expenses. Excluding indirectly paid expenses the
ratio of total expenses to average net assets would have been 1.36%, 1.77%,
2.43% and 2.05% for the years ended October 31, 1999, 1998, 1996 and 1995,
respectively.
(3) Net of the voluntary expense waiver by the Adviser. Excluding this waiver,
the ratio would have been 1.69% and 1.83% for the years ended October 31,
1999 and 1998, respectively.
See Notes to Financial Statements.
26
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period............. $ 15.39 $ 13.41 $ 11.43 $ 10.13 $ 11.30
Income from investment operations:
Net investment income (loss)..................... (0.07) (0.03) 0.00(1) (0.02) (0.06)(1)
Net realized and unrealized gain (loss) on
investments................................... 6.87 2.16 2.02 1.32 (1.11)
-------- -------- -------- ------- -------
Total income (loss) from investment operations... 6.80 2.13 2.02 1.30 (1.17)
-------- -------- -------- ------- -------
Less distributions:
From net realized gains on investments........... (0.39) -- -- -- --
In excess of net investment income............... -- (0.15) (0.04) -- --
-------- -------- -------- ------- -------
Net Asset Value, end of period................... $ 21.80 $ 15.39 $ 13.41 $ 11.43 $ 10.13
-------- -------- -------- ------- -------
-------- -------- -------- ------- -------
Total Return..................................... 44.86% 16.10% 17.68% 12.73% (10.35)%
-------- -------- -------- ------- -------
-------- -------- -------- ------- -------
Ratios/Supplemental Data:
Net assets, end of period (in 000's)............. $ 87,953 $ 56,718 $ 44,302 $19,161 $ 9,643
Ratio of net investment income (loss)
to average net assets............................ (0.48)% (0.15)% 0.00% (0.58)% (0.63)%
Ratio of total expenses to average net assets...... 1.96%(3) 1.85%(2)(3) 1.79%(2) 2.46%(2)(3) 2.84%(2)(3)
Portfolio turnover rate............................ 73% 134% 94% 67% 116%
</TABLE>
- ------------------
(1) 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.
(2) Net of the voluntary expense waiver and reimbursement by the Adviser.
Excluding this waiver and reimbursement, the ratio would have been 2.09%,
2.29%, 2.96% and 3.36% for the years ended October 31, 1998, 1997, 1996 and
1995, respectively.
(3) Includes indirectly paid expenses. Excluding indirectly paid expenses the
ratio would have been 1.96%, 1.87%, 2.37% and 2.67% for the years ended
October 31, 1999, 1998, 1996 and 1995, respectively.
See Notes to Financial Statements.
27
<PAGE>
JULIUS BAER INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Julius Baer 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. The
Trust currently offers two investment funds: Julius Baer Global Income Fund (the
"Income Fund") and Julius Baer International Equity Fund (the "Equity Fund")
(individually, a "Fund" and collectively, the "Funds"). The Trust is a
Massachusetts business trust.
The Income Fund's investment objective is to maximize current income
consistent with the protection of principal by investing in a non-diversified
portfolio of fixed income securities of governmental, supranational and
corporate issuers denominated in various currencies, including United States
(U.S.) dollars. The Equity Fund's investment objective is long-term growth of
capital from investing in a diversified portfolio of common stocks of foreign
issuers of all sizes.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
presentation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from these estimates.
Portfolio valuation: Generally, each Fund's investments are valued at
market value. 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. In the absence of a readily available market
value, fair value is determined by or under the direction of the Trust's Board
of Trustees. 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, in return for the use of the Funds
available cash, 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 accrued
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, 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
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, purchases and sales of investment securities and 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 trade date and settlement date on investment securities transactions,
gains and losses from foreign currency transactions and the gains and losses
from differences between the amounts of interest and dividends recorded on the
books of the Funds and the amounts 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.
28
<PAGE>
JULIUS BAER INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
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 a Fund as an unrealized gain or loss. When the contract is
closed, a 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 a 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, a 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, a Fund will realize a loss equal to the premium paid. When a
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 which 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 that 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 that 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. 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.
Amortization of bond premium and accretion of bond discount: Any premium
resulting from the purchase of securities in excess of maturity value is
amortized on a yield-to-maturity basis. Discounts on original issue discount
bonds are accreted according to the yield-to-maturity basis.
Dividends and distributions 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 taxable income. The Income Fund
declares and pays monthly dividends. The Equity Fund declares and pays dividends
from its net investment income, if any, annually. Both Funds will distribute net
realized capital gains, if any, annually. 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, as amended, for certain
undistributed amounts. Income distributions and capital gain distributions are
determined in accordance with
29
<PAGE>
JULIUS BAER INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
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 the Funds, timing
differences and differing characterization of distributions made by the Funds as
a whole.
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.
2. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS
Bank Julius Baer & Co., Ltd., New York Branch ("Bank Julius Baer") serves
as the investment adviser. The Income Fund pays Bank Julius Baer a quarterly fee
calculated at an annual rate of 0.65% of average daily net assets. The adviser
has voluntarily agreed to waive half of its advisory fee on the first
$25 million of the Income Fund's average daily net assets. The waiver can be
terminated at any time. The Equity Fund pays Bank Julius Baer a quarterly fee
calculated at an annual rate of 1.00% of average daily net assets.
No director, officer or employee of Bank Julius Baer or any affiliates
receives any compensation from the Trust for serving as an officer or Trustee of
the Funds.
The Funds have entered into expense offset arrangements as part of their
custody agreement with Investors Bank & Trust Company. Under this arrangement,
the Fund's custody fees are reduced when the Fund maintains cash on deposit at
the custodian.
For the year ended October 31, 1999, the Equity Fund incurred total
brokerage commissions of $225,208, of which $26,666 was paid to affiliates of
the adviser.
3. DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Services Plan and a Distribution Plan
(the "Plans") pursuant to Rule 12b-1 of the 1940 Act. Under the Plans, the Funds
may compensate certain financial institutions, including the distributor, for
certain distribution, shareholder servicing, administrative and accounting
services for their clients and customers who are beneficial owners of each of
the Funds' shares. 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 the Fund.
The adviser and the administrator may pay additional marketing costs out of
their profits.
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, 1999, were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
----------- -----------
<S> <C> <C>
Income Fund................................................................................. $15,256,999 $ 7,150,710
Equity Fund................................................................................. 49,405,646 49,241,940
</TABLE>
Cost of purchases and proceeds from sales of long-term U.S. Government
securities during the year ended October 31, 1999, were $10,836,114 and
$14,919,801, respectively for the Income Fund.
At October 31, 1999, 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................................................................................. $ 1,212 $ 535,479
Equity Fund................................................................................. 26,618,259 1,393,047
</TABLE>
30
<PAGE>
JULIUS BAER 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 outstanding shares of
beneficial interest on the Income Fund and the Equity Fund were as follows:
<TABLE>
<CAPTION>
YEAR ENDED 10/31/99 YEAR ENDED 10/31/98
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
INCOME FUND:
Sold.............................................................. 1,114,316 $ 13,085,932 503,318 $ 5,984,704
Issued as reinvestment of dividends............................... 51,781 609,359 38,218 450,479
Redeemed.......................................................... (541,028) (6,401,521) (309,148) (3,630,309)
---------- ------------ ---------- ------------
Net increase...................................................... 625,069 $ 7,293,770 232,388 $ 2,804,874
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
<CAPTION>
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
EQUITY FUND:
Sold.............................................................. 2,012,216 $ 37,678,745 1,863,767 $ 29,548,855
Issued as reinvestment of dividends............................... 59,878 1,019,125 36,110 497,235
Redeemed.......................................................... (1,722,047) (31,815,583) (1,517,046) (24,355,953)
---------- ------------ ---------- ------------
Net increase...................................................... 350,047 $ 6,882,287 382,831 $ 5,690,137
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
6. 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.
7. FEDERAL TAX INFORMATION
At October 31, 1999, the Income Fund had $500,463 available as capital loss
carryforwards which expire in 2002.
The Equity Fund has designated 100% (unaudited) of the distribution paid
during the year ended October 31, 1999 as a long term capital gain dividend.
8. SUBSEQUENT EVENTS
Effective November 15, 1999, a new class of shares, Class I, was offered
for both Funds in addition to the existing Class A shares. The two classes of
shares are offered to different types of investors and have different expense
structures, as outlined in the Trust's Prospectus.
Also, effective November 15, 1999, Bank Julius Baer began serving as
Co-Administrator and will be paid a fee for providing administrative and
shareholder services at an annual rate of 0.25% and 0.15% of average daily net
assets of the International Equity and Global Income Fund's Class A shares. Bank
Julius Baer also decreased its investment advisory fee to an annual rate of
0.75% and 0.50% of average daily net assets and has contractually agreed to
waive, until November 15, 2000, 0.15% and 0.325% of average daily net assets of
the International Equity and Global Income Funds, respectively.
9. YEAR 2000 (UNAUDITED)
Like other funds and business organizations around the world, the Funds
could be adversely affected if the computer systems used by the Adviser and the
Funds' other service providers do not properly process and calculate
date-related information for the year 2000 and beyond. The Funds have been
informed that the Adviser, and the Funds' other service providers (i.e.,
Administrator, Transfer Agent, Fund Accounting Agent, Distributor and Custodian)
have developed and are implementing clearly defined and documented plans to
31
<PAGE>
JULIUS BAER INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
minimize the risk associated with the Year 2000 problem. These plans include the
following activities: inventorying of software systems, determining inventory
items that may not function properly after December 31, 1999, reprogramming or
replacing such systems and retesting for Year 2000 readiness. In addition, the
service providers are obtaining assurances from their vendors and suppliers in
the same manner. Non-compliant Year 2000 systems upon which the Funds are
dependent may result in errors and account maintenance failures. The Funds have
no reason to believe that (1) the Year 2000 plans of the Adviser and the Funds'
other service providers will not be completed by December, 1999, and (2) the
costs currently associated with the implementation of their plans will have a
material adverse impact on the business, operations or financial condition of
the Funds or their service providers.
In addition, the Year 2000 problem may adversely affect the companies in
which the Funds invest. For example, these companies may incur substantial costs
to correct the problem and may suffer losses caused by data processing errors.
Since the ultimate costs or consequences of incomplete or untimely resolution of
the Year 2000 problem by the Funds' service providers are unknown to the Funds
at this time, no assurance can be made that such costs or consequences will not
have a material adverse impact on the Funds or their service providers.
The Funds and the Adviser will continue to monitor developments relating to
the Year 2000 problem, including the development of contingency plans for
providing back-up computer services in the event of a systems failure.
32
<PAGE>
JULIUS BAER INVESTMENT FUNDS
JULIUS BAER GLOBAL INCOME FUND
AND JULIUS BAER INTERNATIONAL EQUITY FUND
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees
Julius Baer Investment Funds:
We have audited the accompanying statements of assets and liabilities of
Julius Baer Global Income Fund and Julius Baer International Equity Fund,
portfolios of Julius Baer Investment Funds, including the portfolios of
investments and schedules of forward foreign exchange contracts, as of
October 31, 1999, and the related statements of operations for the year then
ended, statements of changes in net assets for each of the years in the two-year
period then ended and the financial highlights for each of the years in the
five-year period then ended. 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, 1999 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
Julius Baer Global Income Fund and Julius Baer International Equity Fund as of
October 31, 1999, the results of their operations for the year then ended,
changes in their net assets for each of the years in the two-year period then
ended and financial highlights for each of the years in the five-year period
then ended, in conformity with generally accepted accounting principles.
/s/ KPMG LLP
Boston, Massachusetts
December 10, 1999
33
<PAGE>
[This page intentionally left blank]
<PAGE>
JULIUS BAER
INVESTMENT FUNDS
Julius Baer
Global
Income
Fund
Julius Baer
International
Equity
Fund
October 31, 1999
This report is sent to the shareholders
of the Julius Baer Investment Funds for
their information. It is not a Prospectus,
circular or representation intended for
use in the purchase or sale of shares of
the Funds or of any securities
mentioned in the report.
