DEKALB TRUST
DEKALB SHORT DURATION U.S. GOVERNMENT FUND
SEMIANNUAL REPORT
FOR THE SIX MONTHS ENDED APRIL 30, 1995
<PAGE>
DEKALB TRUST -
DEKALB SHORT DURATION U.S. GOVERNMENT FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1995 (Unaudited)
ASSETS:
Investment in Managed U.S. Government
Portfolio ("Portfolio"), at value ........................ $13,712,080
Deferred organization expenses (Note 1) .................... 22,874
Prepaid expenses ........................................... 2,689
-----------
Total Assets ................................... 13,737,643
-----------
LIABILITIES:
Distributions payable to shareholders ...................... 469
Accrued expenses ........................................... 27,504
-----------
Total Liabilities .............................. 27,973
-----------
NET ASSETS ................................................. $13,709,670
===========
NET ASSETS CONSIST OF:
Paid-in capital ............................................ $14,573,823
Undistributed net investment income ........................ 7,870
Accumulated net realized loss from Portfolio ............... (832,395)
Net unrealized appreciation from Portfolio due to security
transactions ............................................. 167,100
Net unrealized depreciation from Portfolio due to futures
transactions ............................................. (206,728)
-----------
Net Assets ................................................. $13,709,670
===========
Shares Outstanding ......................................... 1,453,333
===========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE ............................... $9.43
=====
See Notes to Financial Statements
<PAGE>
DEKALB TRUST -
DEKALB SHORT DURATION U.S. GOVERNMENT FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 1995 (Unaudited)
INVESTMENT INCOME FROM PORTFOLIO (NOTE 1):
Interest income ................................................ $493,921
Expenses ....................................................... (35,048)
--------
Net Investment Income .............................. 458,873
EXPENSES (NOTE 1):
Transfer agent fees ................................ $ 9,326
Registration fees .................................. 1,498
Custody and accounting fees ........................ 7,350
Shareholder servicing agent fees (Note 2) .......... 10,469
Distribution fees (Note 2) ......................... 17,448
Trustees' fees and expenses (Note 2) ............... 5,000
Audit fees ......................................... 1,400
Legal .............................................. 5,316
Printing and postage ............................... 4,014
Insurance .......................................... 9,714
Amortization of organization expenses (Note 1) ..... 4,409
Miscellaneous expenses ............................. 1,332
-------
Total Expenses ............................... 77,276
Less: Waiver of expenses (Note 3) ........... (27,917)
Reimbursement of expenses (Note 3) .... (7,574)
Net Expenses ............................................. 41,785
--------
NET INVESTMENT INCOME .......................................... 417,088
REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO:
Net realized loss from Portfolio on security
transactions ..................................... (313,781)
Net realized loss from Portfolio on futures
transactions ..................................... (51,825)
Net unrealized appreciation from Portfolio due to
securities transactions .......................... 1,020,705
Net unrealized depreciation from Portfolio due to
futures transactions ............................. (638,426)
NET REALIZED AND UNREALIZED GAIN ............................... 16,673
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........... $433,761
========
See Notes to Financial Statements
<PAGE>
DEKALB TRUST -
DEKALB SHORT DURATION U.S. GOVERNMENT FUND
STATEMENT OF CHANGES IN NET ASSETS
For the
six months ended For the
April 30, 1995 year ended
(Unaudited) October 31, 1994
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ................. $ 417,088 $ 637,673
Net realized gain (loss) from
Portfolio ........................... (365,606) 331,602
Net unrealized appreciation
(depreciation) from Portfolio ....... 382,279 (454,714)
------------ ------------
Net increase in net assets
resulting from operations ....... 433,761 514,561
------------ ------------
Dividends and Distributions:
Dividends paid to shareholders
from net investment income .......... (410,420) (636,471)
Distributions to shareholders
from net realized gain .............. (342,338) --
------------ ------------
Total dividends and distributions
to shareholders ............... (752,758) (636,471)
------------ ------------
Capital Share Transactions:
Proceeds from sale of Fund shares ..... 82,705 6,494,368
Reinvestment of dividends and
distributions from net investment
income and net realized gain ........ 747,656 633,766
Cost of Fund shares redeemed .......... (2,121,251) (2,512,509)
------------ ------------
Net increase (decrease) in net assets
resulting from capital
share transactions ........... (1,290,890) 4,615,625
------------ ------------
Increase (Decrease) in Net Assets (1,609,887) 4,493,715
NET ASSETS:
Beginning of period ................... 15,319,557 10,825,842
------------ ------------
End of period (including undistributed
net investment income of $7,870 and
$1,202, respectively) ................. $ 13,709,670 $ 15,319,557
============ ============
OTHER INFORMATION:
Share transactions: (unlimited
number of shares authorized with
a par value $0.00001 per share):
Sold .................................. 8,707 667,109
Issued to shareholders in connection
with reinvestment of dividends and
distributions from net investment
income and net realized gain ........ 78,966 65,317
Redeemed .............................. (221,992) (258,661)
------------ ------------
Net Increase (Decrease) in Shares
Outstanding .................. (134,319) 473,765
============ ============
See Notes to Financial Statements
<PAGE>
DEKALB TRUST -
DEKALB SHORT DURATION U.S. GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For a share outstanding throughout each period shown:
For the For the period
six months ended For the November 25, 1992*
April 30, 1995 year ended to
(Unaudited) October 31, 1994 October 31, 1993
---------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value,
beginning of period ...................................... $ 9.65 $ 9.72 $ 10.00
------ ------ ------
Income from investment
operations:
Net investment income** .................................. 0.28 0.45 0.39
Net realized and
unrealized gain
(loss) from Portfolio .................................... 0.01 (0.07) (0.28)
------ ------ ------
Total from investment
operations ........................................... 0.29 0.38 0.11
------ ------ ------
Less dividends and distributions:
Dividends to shareholders
from net investment income ............................... (0.28) (0.45) (0.39)
Distributions to shareholders
from net realized gains .................................... (0.23) -- --
------ ------ ------
Total dividends and
distributions ............................................ (0.51) (0.45) (0.39)
====== ====== ======
Net asset value, end of period ............................. $ 9.43 $ 9.65 $ 9.72
====== ====== ======
Total return ............................................... 3.02%(b) 3.92% 1.20%(a)
Ratios/supplemental data:
Net assets, end of period
(in 000's) ............................................. $13,710 $15,320 $10,826
Ratio of expenses to
average net assets** ..................................... 1.10%(a) 1.10% 0.73%(a)
Ratio of net
investment income to
average net assets** ..................................... 5.98%(a) 4.67% 4.94%(a)
<FN>
* Commencement of operations (see Note 1).
** Includes the Fund's share of Managed U.S. Government Portfolio's
expenses. EBC reimbursed the Portfolio and the Fund for certain expenses
under an expense reimbursement agreement. If this agreement had not been
in place, the ratios of expenses to average net assets and net investment
income to average net assets for the six months ended April 30, 1995, the
year ended October 31, 1994, and the period November 25, 1992 to October
31, 1993, would have been 2.60% and 4.48%, 2.67% and 3.10%, and 3.51% and
2.16%, respectively. (See Note 3.)
(a) Annualized.
(b) Not annualized.
</FN>
</TABLE>
See Notes to Financial Statements
<PAGE>
DEKALB TRUST -
DEKALB SHORT DURATION U.S. GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. Dekalb Short Duration
U.S. Government Fund (the "Fund") is a separate series of Dekalb Trust (the
"Trust"), which is a Massachusetts business trust. The Trust was organized on
May 6, 1992, and commenced operations on November 25, 1992. The Trust is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, diversified management investment company. The
Declaration of Trust permits the Trustees to create an unlimited number of
series within the Trust, each of which issues a separate class of shares. As of
April 30, 1995, the Fund was the only active series in the Trust.
The Fund invests all of its investable assets in Managed U.S. Government
Portfolio (the "Portfolio"), an open-end, diversified management investment
company having the same investment objectives as the Fund. The value of such
investment reflects the Fund's proportionate interest in the net assets of the
Portfolio (99% at April 30, 1995). The financial statements of the Portfolio,
including the portfolio of investments, are included elsewhere in this report
and should be read in conjunction with the Fund's financial statements. The
following is a summary of the significant accounting policies of the Fund:
A. INVESTMENT VALUATION. Valuation of securities by the Portfolio is
discussed in Note 1 of the Portfolio's Notes To Financial Statements which are
included elsewhere in this report.
B. INVESTMENT INCOME AND DIVIDENDS TO SHAREHOLDERS. The Fund earns income,
net of Portfolio expenses, daily on its investment in the Portfolio. Dividends
to shareholders are declared daily and paid monthly from net investment income.
Distributions to shareholders of net realized capital gains, if any, will be
made annually.
C. FEDERAL TAXES. The Fund's policy is to comply with the provisions of the
Internal Revenue Code of 1986, as amended, applicable to regulated investment
companies and to distribute substantially all of its taxable income, including
net realized capital gains, if any, within the prescribed time periods.
Accordingly, no provision for federal income or excise tax is necessary.
D. DEFERRED ORGANIZATION EXPENSES. Organizational costs are being amortized
on a straight-line basis over a five-year period. The amount paid by the Fund on
any redemption representing initial seed capital investments ("initial shares")
will be reduced by the pro rata portion of any unamortized organization expenses
which the number of the initial shares redeemed bears to the total number of
initial shares outstanding immediately prior to such redemption.
E. OTHER. All net investment income of the Portfolio is allocated pro rata
among the Fund and any other investors in the Portfolio.
<PAGE>
DEKALB TRUST -
DEKALB SHORT DURATION U.S. GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS--Continued
2. ADMINISTRATION AND TRUSTEES' FEES.
A. ADMINISTRATION FEES. The Trust retains EBC Distributors, Inc. ("EBC") to
serve as administrator (the "Administrator") of the Trust. The Administrator
provides administrative services necessary for the operations of the Fund,
furnishes office space and facilities required for conducting the business of
the Fund and pays the compensation of the Fund's officers affiliated with EBC.
For its services under an Administrative Services Agreement, EBC receives no
fees from the Fund. (See Note 3.)
B. TRUSTEES' FEES AND EXPENSES. The fees and expenses of the Trustees for
the six months ended April 30, 1995 amounted to $5,000. Trustees affiliated with
EBC or Eastbridge Asset Management, Inc., the Portfolio's adviser, receive no
fees for their services.
C. SHAREHOLDER SERVICING AGENT FEES. The Trust may enter into shareholder
servicing agreements with banks, savings and loans or other financial
institutions ("Shareholder Servicing Agents"). For services, each Shareholder
Servicing Agent receives a fee from the Fund equal on an annual basis to 0.25%
of the average daily net assets of the Fund represented by shares owned by that
Shareholder Servicing Agent's customers. Shareholder Servicing Agents may waive
all or a portion of their shareholder servicing agent fees. Currently, the Trust
does not expect the Fund's shareholder servicing fees to exceed on an annual
basis 0.15% of the Fund's average daily net assets. For the six months ended
April 30, 1995, the Fund accrued fees aggregating $10,469. All accrued
shareholder servicing fees were waived.
D. DISTRIBUTION FEES. Under the Trust's distribution plan pursuant to Rule
12b-1 under the 1940 Act, the Trust may pay EBC, as the Fund's distributor (the
"Distributor"), as reimbursement for expenses incurred by the Distributor in
connection with the sale of shares of the Fund, a fee not to exceed on an annual
basis 0.25% of the average daily net assets of the Fund. Long-term shareholders
may pay more than the economic equivalent for the maximum charges permitted by
the National Association of Securities Dealers, Inc. For the six months ended
April 30, 1995, the Fund accrued fees aggregating $17,448. EBC acting as
distributor has waived all accrued fees for the six months ended April 30, 1995.
3. REIMBURSEMENT OF EXPENSES. Pursuant to a voluntary undertaking, EBC, the
administrator of both the Fund and the Portfolio, has agreed to waive all or a
portion of its fees and reimburse certain expenses such that, following such
waivers and reimbursements, the aggregate operating expense (including
amortization of organization expenses but exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, if any) of the Fund and the
Portfolio will not exceed 1.10% of the average daily net assets of the Fund.
<PAGE>
DEKALB TRUST -
DEKALB SHORT DURATION U.S. GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS--Continued
For the six months ended April 30, 1995, the total amount reimbursed to the
Fund was $7,574.
4. INVESTMENT TRANSACTIONS. Additions and reductions in the Fund's
investment in the Portfolio amounted to $576,626 and $2,182,846, respectively.
<PAGE>
INCOME PORTFOLIO TRUST
MANAGED U.S. GOVERNMENT PORTFOLIO
SEMIANNUAL REPORT
FOR THE SIX MONTHS ENDED APRIL 30, 1995
<PAGE>
INCOME PORTFOLIO TRUST -
MANAGED U.S. GOVERNMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Description Date Rate Value
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 80.8%
<S> <C> <C> <C> <C>
10,669,484 Government National Mortgage Association
Pool 405842 (cost - $10,922,885) 2/15/25 9.000% $11,086,261
-----------
SHORT-TERM INVESTMENTS - 17.5%
2,397,000 Repurchase agreement dated 4/28/95
with State Street Bank, market value of
collateral $2,448,569, representing $2,405,000
U.S. Treasury Notes, 7.750%, due 3/31/96,
maturity value: $2,397,999 5/01/95 5.000% 2,397,000
-----------
Total Investments (cost - $13,319,885) - 98.3% ............................ 13,483,261
Other Assets Less Liabilities - 1.7% .................................... 229,278
-----------
Total Net Assets - 100% .................................................... $13,712,539
</TABLE>
See Notes to Financial Statements
<PAGE>
INCOME PORTFOLIO TRUST -
MANAGED U.S. GOVERNMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1995 (Unaudited)
ASSETS:
Investments in securities, at value
(Cost $13,319,885) (Note 1) ................................ $13,483,261
Cash ......................................................... 948
Cash - Initial margin deposit (Note 1) ....................... 57,500
Interest receivable .......................................... 81,020
Receivable from affiliate (Note 3) ........................... 70,613
Deferred organization expenses (Note 1) ...................... 21,347
Prepaid expenses ............................................. 14,064
-----------
Total Assets ........................................... 13,728,753
-----------
LIABILITIES:
Accrued expenses ............................................. 16,214
-----------
Total Liabilities ...................................... 16,214
-----------
NET ASSETS APPLICABLE TO INVESTORS'
BENEFICIAL INTERESTS ...................................... $13,712,539
===========
See Notes to Financial Statements
<PAGE>
INCOME PORTFOLIO TRUST -
MANAGED U.S. GOVERNMENT PORTFOLIO
STATEMENT OF OPERATIONS
For the six months ended April 30, 1995 (Unaudited)
INTEREST INCOME ............................................ $493,921
EXPENSES:
Investment advisory fees (Note 2) .............. $24,534
Custody fees and expenses ...................... 23,458
Trustees' fees and expenses (Note 2) ........... 5,773
Administration fees (Note 2) ................... 10,514
Audit fees ..................................... 10,963
Legal fees ..................................... 3,299
Printing fees .................................. 1,563
Insurance ...................................... 9,714
Amortization of organization expenses (Note 1) . 4,115
Miscellaneous expenses ......................... 10,146
-------
Total Expenses ............................. 104,079
Less: Waiver of expenses (Note 3) .......... (35,048)
Reimbursement of expenses (Note 3) ... (33,984)
-------
Net Expenses .......................................... 35,047
--------
NET INVESTMENT INCOME ....................................... 458,874
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT AND FUTURES TRANSACTIONS (NOTE 4):
Net realized loss on investments ............... (313,781)
Net realized loss on futures transactions ...... (51,825)
Net unrealized appreciation of investments...... 1,020,705
Net unrealized depreciation of futures ......... (638,426)
--------
NET REALIZED AND UNREALIZED GAIN ............................ 16,673
--------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ................................................ $475,547
========
See Notes to Financial Statements
<PAGE>
INCOME PORTFOLIO TRUST -
MANAGED U.S. GOVERNMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the
six months ended For the
April 30, 1995 year ended
(Unaudited) October 31, 1994
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ................ $ 458,874 $ 719,452
Net realized gain (loss) on
investments and futures ............ (365,606) 331,605
Net unrealized appreciation
(depreciation) on investments
and futures ........................ 382,279 (454,717)
----------- -----------
Net increase in net assets
resulting from operations ........ 475,547 596,340
----------- -----------
Transactions in Investors' Beneficial
Interests:
Additions .......................... 82,705 6,494,368
Reductions ......................... (2,164,461) (2,617,014)
----------- -----------
Net increase (decrease) in net assets
resulting from transactions in
investors' beneficial interests .. (2,081,756) 3,877,354
----------- -----------
Total Increase (Decrease) in Net Assets (1,606,209) 4,473,694
NET ASSETS:
Beginning of period ................ 15,318,748 10,845,054
----------- -----------
End of period ...................... $13,712,539 $15,318,748
=========== ===========
See Notes to Financial Statements
<PAGE>
INCOME PORTFOLIO TRUST -
MANAGED U.S. GOVERNMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. Managed U.S. Government
Portfolio (the "Portfolio"), a series of Income Portfolio Trust (the "Trust"),
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as a no-load, diversified, open-end management investment company. The
Portfolio was organized as a trust under the laws of the State of New York on
September 16, 1992 and commenced operations on November 25, 1992. Pursuant to an
amended and restated declaration of trust dated as of June 8, 1993 (the
"Declaration of Trust"), the Portfolio was reorganized as a series of the Trust.
The Declaration of Trust permits the Trustees to issue an unlimited number of
beneficial interests in the Portfolio and other series of the Trust which may be
created from time to time. The following is a summary of the significant
accounting policies of the Portfolio.
A. VALUATION OF INVESTMENTS. Where market quotations are readily
available, portfolio securities are valued based upon the current bid price. The
Portfolio values Mortgage-Backed Securities and other debt securities for which
market quotations are not readily available at their fair value as determined in
good faith, utilizing procedures approved by the Board of Trustees of the
Portfolio, on the basis of information provided by dealers in such securities.
Some of the general factors which may be considered in determining fair value
include the fundamental analytic data relating to the investment and an
evaluation of the forces which influence the market in which these securities
are purchased and sold. Determination of fair value involves subjective
judgment, as the actual market value of a particular security can be established
only by negotiations between the parties in a sales transaction. Debt securities
having a remaining maturity of sixty days or less when purchased and debt
securities originally purchased with maturities in excess of sixty days but
which currently have maturities of sixty days or less are valued at amortized
cost.
B. INTEREST INCOME. Interest income is determined on the basis of
interest accrued and original issue discount earned, adjusted for amortization
of premium or accretion of discount and amortization of market premium when
required or elected for federal income tax purposes.
C. REPURCHASE AGREEMENTS. The Portfolio may invest in repurchase
agreements, which are agreements pursuant to which securities are acquired by
the Portfolio from a third party with the commitment that they will be
repurchased by the seller at a fixed price on an agreed upon date. The Portfolio
may enter into repurchase agreements with banks or lenders meeting the
creditworthiness standards established by the Trust's Board of Trustees. The
resale price reflects the purchase price plus an agreed upon market rate of
interest which is unrelated to the coupon rate or date of maturity of the
purchased security.
The use of repurchase agreements involves certain risks. For example, if the
seller of securities under a repurchase agreement defaults on its obligation to
repurchase the underlying securities, the Portfolio will seek to dispose of such
securities, which action could involve costs or delays. To minimize this risk,
<PAGE>
INCOME PORTFOLIO TRUST -
MANAGED U.S. GOVERNMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS - Continued
the securities collateralizing the repurchase agreement will be held by the
custodian at all times in an amount at least equal to the repurchase price,
including accrued interest. The collateral is marked-to-market daily.
D. BORROWINGS: REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLL
AGREEMENTS. The Portfolio may enter into reverse repurchase agreements and
dollar roll agreements with the same parties with whom it may enter into
repurchase agreements. A dollar roll agreement is identical to a reverse
repurchase agreement except for the fact that substantially identical securities
may be repurchased. Under a reverse repurchase agreement or a dollar roll
agreement, the Portfolio sells securities and agrees to repurchase them, or
substantially similar securities in the case of a dollar roll agreement, at a
mutually agreed-upon date and price. Under the 1940 Act reverse repurchase
agreements and dollar roll agreements will be regarded as a form of borrowing by
the Portfolio unless, at the time it enters into a reverse repurchase agreement
or a dollar roll agreement, it establishes and maintains a segregated account
with its custodian containing securities from its portfolio having a value not
less than the repurchase price (including accrued interest). The Portfolio has
established and maintained such an account for each of its reverse repurchase
agreements and dollar roll agreements. Reverse repurchase agreements and dollar
roll agreements involve the risk that the market value of the securities
retained in lieu of sale by the Portfolio may decline below the price of the
securities the Portfolio has sold but is obligated to repurchase. In the event
the buyer of securities under a reverse repurchase agreement or a dollar roll
agreement files for bankruptcy or becomes insolvent, such buyer or its trustee
or receiver may receive an extension of time to determine whether to enforce the
Portfolio's obligation to repurchase the securities, and the Portfolio's use of
the proceeds of the reverse repurchase agreement or the dollar roll agreement
may effectively be restricted pending such decision.
During the six months ended April 30, 1995, the Portfolio did not enter into any
reverse repurchase agreements or dollar roll agreements.
E. FUTURES. A futures contract is an agreement between two parties to
buy and sell a security at a set price on a future date. Upon entering into such
a contract the Portfolio is required to pledge to the broker an amount of cash
and/or securities equal to the minimum "initial margin" requirements of the
exchange. Pursuant to the contract, the Portfolio agrees to receive from or pay
to the broker an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as "variation margin" and are
recorded by the Portfolio as unrealized gains or losses. When the contract is
closed, the Portfolio 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.
<PAGE>
INCOME PORTFOLIO TRUST -
MANAGED U.S. GOVERNMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS - Continued
F. FEDERAL TAXES. The Portfolio will be treated as a partnership for
federal income tax purposes. As such, each investor in the Portfolio will be
taxed on its share of the Portfolio's ordinary income and capital gains. It is
intended that the Portfolio's assets will be managed in such a way that an
investor in the Portfolio will be able to satisfy the requirements of Subchapter
M of the Internal Revenue Code.
G. DEFERRED ORGANIZATION EXPENSES. Expenses incurred by the Portfolio
in connection with its organization are being amortized by the Portfolio on a
straight-line basis over a five-year period.
H. OTHER. Investment transactions are accounted for on trade date (the date
the security is purchased or sold). Gains and losses are determined on the basis
of identified cost.
2. ADVISORY, ADMINISTRATION AND TRUSTEES' FEES.
A. INVESTMENT ADVISORY FEES. The Portfolio has retained Eastbridge Asset
Management, Inc. ("Eastbridge") to make investment decisions for the Portfolio.
For its services under the Investment Advisory Agreement, Eastbridge receives
from the Portfolio a fee accrued daily and paid monthly at an annual rate equal
to 0.35% of the Portfolio's average daily net assets. Eastbridge is currently
waiving its investment advisory fee. For the six months ended April 30, 1995,
the Portfolio incurred advisory fees aggregating $24,534, all of which were
waived. (See Note 3.)
B. ADMINISTRATION FEES. The Portfolio has retained EBC Distributors, Inc.
("EBC") to serve as Administrator. Certain officers of EBC serve as officers to
the Portfolio. Under the Administrative Services Agreement, EBC provides
management and administrative services necessary for the operations of the
Portfolio, furnishes office space and facilities required for conducting the
business of the Portfolio and pays the compensation of the Portfolio's officers
affiliated with EBC.
For these services, EBC receives from the Portfolio a fee accrued daily and paid
monthly at an annual rate equal to 0.15% of the Portfolio's average daily net
assets, up to $100 million of net assets; 0.10% of such assets from $100 to 200
million; and 0.05% of such assets over $200 million. For the six months ended
April 30, 1995, the Portfolio accrued administration fees aggregating $10,514,
all of which were waived. (See Note 3.)
C. TRUSTEES' FEES AND EXPENSES. The fees and expenses of the Trustees
amounted to $5,773 for the six months ended April 30, 1995. Trustees affiliated
with EBC or Eastbridge receive no fees for their services.
<PAGE>
INCOME PORTFOLIO TRUST -
MANAGED U.S. GOVERNMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS - Continued
3. EXPENSE REIMBURSEMENT AND WAIVERS. Eastbridge and EBC have each agreed to
voluntarily waive all or a portion of their fees during the initial start up
period. For the six months ended April 30, 1995, all such fees, totaling
$35,048, were waived. In addition, EBC has voluntarily agreed to reimburse the
Portfolio for certain expenses, such that, following the aforementioned waivers
and reimbursement, the total operating expenses (excluding taxes, brokerage,
interest expense and extraordinary expenses) of the Portfolio will not exceed on
an annual basis 0.50% of the average daily net assets of the Portfolio. For the
six months ended April 30, 1995, this reimbursement amounted to $33,984.
4. INVESTMENTS IN SECURITIES. Purchases and sales of investment securities,
other than short-term obligations, aggregated $22,960,148 and $30,102,111,
respectively.
Treasury futures transactions during the period are summarized as follows:
Sales of Futures Contracts
Number of Principal Amount
Contracts of Contracts
U.S. Treasury Bonds and Notes
Contracts open at beginning of period ..... 184 $18,400,000
Contracts opened .......................... 374 37,400,000
Contracts closed .......................... (493) (49,300,000)
---- -----------
Open at end of period ..................... 65 $ 6,500,000
==== ===========
Open futures contracts sold as of April 30, 1995 consist of the following:
Expiration Number of Unrealized
Description Date Contracts Sold* Gain/Loss
June 10 Year Treasury
Note Future ............... Jun. 1995 30 $(117,367)
June 5 Year Treasury
Note Future . ............. Jun. 1995 35 (83,257)
-- ---------
65 $(200,624)
== =========
*All contracts above are denominated in principal amounts of $100,000 per
contract.
For federal income tax purposes, the cost of securities owned at April 30, 1995,
was $13,319,885.
<PAGE>
INCOME PORTFOLIO TRUST -
MANAGED U.S. GOVERNMENT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS - Continued
At April 30, 1995, the components of net unrealized appreciation of investments
were as follows:
Gross appreciation ............................................. $ 163,377
Gross depreciation ............................................. -0-
-------
Net unrealized appreciation .................................... $ 163,377
=========
FINANCIAL HIGHLIGHTS
For the For the period
six months ended For the November 25, 1992*
April 30, 1995 year ended to
(Unaudited) October 31, 1994 October 31, 1993
---------------- ----------------- -----------------
Ratios/Supplementary Data:
Net assets at end of
period (in 000's) ...... $13,713 $15,319 $10,845
Net investment income to
average net assets ..... 6.55%(a)(b) 5.26%(a) 5.05%(a)(b)
Expenses to average
net assets ............. 0.50%(a)(b) 0.50%(a) 0.50%(a)(b)
Portfolio turnover ....... 145% 255% 292%
* Commencement of operations. Investment activity commenced on November 25,
1992. (See Note 1.)
(a) Reflects a voluntary waiver and reimbursement of expenses by the Adviser
and EBC. If these waivers and reimbursements had not been in place, for
the six months ended April 30, 1995, the year ended October 31, 1994, and
the period November 25, 1992 through October 31, 1993, the ratios of net
investment income and expenses to average net assets would have been
5.56% and 1.49%, 4.27% and 1.49%, and 3.71% and 1.84%, respectively. (See
Note 3.) (b) Annualized.
<PAGE>
PORTFOLIO INVESTMENT ADVISER
Eastbridge Asset Management, Inc.
(A Majority Owned Subsidiary of
The Nippon Credit Bank, Ltd.)
135 East 57th Street
New York, New York 10022
ADMINISTRATOR AND DISTRIBUTOR
EBC Distributors, Inc.
6 St. James Avenue
Boston, Massachusetts 02116
CUSTODIAN AND TRANSFER AGENT
State Street Bank & Trust Company
225 Franklin Street
Boston, Massachusetts 02110
LEGAL COUNSEL
Kirkpatrick & Lockhart
1800 M Street, N.W.
Washington, DC 20036
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
TRANSFER AGENT
Fundamental Shareholder Services, Inc.
90 Washington Street
New York, New York 10006
