<PAGE>
LETTER TO THE SHAREHOLDERS OF THE PIERPONT INTERNATIONAL EQUITY FUND
June 15, 1995
Dear Shareholder:
The unexpectedly strong performance of U.S. equities, coupled with the dollar's
substantial decline in value against the yen and other major currencies, created
a difficult environment for international investors during the six months ended
April 30, 1995, as evidenced by the Composite International Equity Fund Average*
of -4.80%. The Pierpont International Equity Fund had a slightly negative return
of -1.16% for the period, outperforming its competitive average.
At the same time, however, the Fund underperformed the Morgan Stanley Capital
International Europe, Australia, and Far East (MSCI EAFE) Index return of 1.24%.
While our overweighting of Japanese stocks relative to the MSCI EAFE Index
contributed to our underperformance for the period, our long-term outlook on
this market remains positive. Despite recent setbacks such as the Kobe
earthquake, we believe that our emphasis on Japanese stocks should eventually be
rewarded.
The Fund's net asset value declined from $11.50 per share to end at $10.85,
after paying $0.49 per share in dividends during the period. The Fund's net
assets stood at $194.6 million at the end of the reporting period, compared with
$210.4 million on October 31, 1994. The net assets of The Non-U.S. Equity
Portfolio, in which the Fund invests, totaled approximately $553.9 million at
April 30, 1995.
MARKET ENVIRONMENT
International equity markets weakened significantly during November, largely in
response to concerns about the higher interest and inflation rates that seemed
likely to occur within the U.S. When the Federal Reserve decided not to raise
short-term interest rates in December, however, some of the major non-U.S.
markets regained much of the ground they had lost in the fourth quarter of 1994,
and a small number of these markets were able to post marginally higher
quarterly returns.
Midway through the first quarter of 1995, international markets experienced a
fairly dramatic recovery. Here again, the key impetus came from U.S.-based
developments. Specifically, increasing evidence of a U.S. economic slowdown,
coupled with benign inflation levels, caused U.S. and international investor
sentiment to improve.
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
LETTER TO THE SHAREHOLDERS . . . 1 SPECIAL FUND-BASED SERVICES. . 6
FUND FACTS AND HIGHLIGHTS . . . . 4 FINANCIAL STATEMENTS . . . . . 8
FUND PERFORMANCE. . . . . . . . . 5
- -------------------------------------------------------------------------------
1
<PAGE>
Hopes of a stable recovery in Japan were dashed in January by the Kobe
earthquake, with market confidence additionally shaken by the government's delay
in delivering a reconstruction package. As the yen strengthened further against
the U.S. dollar, making imported Japanese products less attractive to foreign
consumers, corporate earnings outlooks were revised downward. Viewed overall,
Japanese stocks turned in a lackluster performance for the period, a situation
made worse by diminished trading volumes on the Tokyo exchange.
Market results were mixed elsewhere in the Pacific Basin and were largely
determined by the pace of each country's economic development along with
domestic political issues. For example, Singapore declined as its exports were
compromised by a strengthening currency, with its domestic consumption dampened
by rising interest rates. Hong Kong, Australia, and Malaysia, meanwhile, showed
increases for the period.
Turning to Europe, the relative strength of the deutsche mark had a similar
impact on German exports as the rising yen had on Japanese exports. However,
interest rate cuts by the Bundesbank and the central banks of other European
countries, including Switzerland, Belgium, and the Netherlands, helped to
counter some of the effects of the weaker U.S. dollar on the demand for European
imports.
It is significant to note that, as the period drew to a close, Europe's smaller
markets posted strong results, while core markets had solid returns despite
widespread concerns regarding the sluggish pace of economic recovery. In April,
for example, all European markets finished in positive territory by month end.
PORTFOLIO REVIEW
The Fund's investment process involves three key decisions, which are expected
to contribute to the Fund's long-term performance: COUNTRY ALLOCATION, STOCK
SELECTION and CURRENCY MANAGEMENT. This diversified approach is designed to help
consistently add value while controlling the Portfolio's risk exposure.
COUNTRY ALLOCATION. As mentioned earlier, country allocation detracted from
relative performance for the period as the Portfolio remained overweighted in
Japan. Although the Japanese market showed signs of improvement in April, other
markets, such as those in the U.K, Italy, and Switzerland, produced better
returns.
STOCK SELECTION. The Portfolio's stock selection had a neutral impact on overall
performance for the period, partially because holdings in Germany and France
underperformed. However, our stock selection seemed to gain steam as the period
drew to a close, especially in Japan, the U.K., and several of the smaller
European markets.
CURRENCY MANAGEMENT. Currency exposure is actively managed in conjunction with
country and stock selection, in an attempt to protect and possibly enhance the
Portfolio's market value. The Portfolio's foreign currency weightings are
adjusted to reduce its exposure to currencies deemed unattractive and, in
certain circumstances, increase exposure to currencies deemed attractive.
2
<PAGE>
At the beginning of the period, our analysis indicated that the then-strong
Japanese yen was likely to decline in value against the U.S. dollar in the
months ahead. Given this projection, we hedged from the yen into the dollar with
the goal of protecting the Portfolio from this anticipated decline.
The dollar's behavior, however, confounded our expectations and sank in value to
post-World War II lows against the yen. As the yen continued to increase in
value during the period -- becoming, in our view significantly overvalued
relative to the dollar -- our strategy of hedging into the U.S. currency served
to detract from performance. This blow was somewhat softened, however, by our
successful exposure to the Australian dollar, the French franc, and the Italian
lira.
INVESTMENT OUTLOOK
Our analysis indicates that Japanese equities are still more attractively valued
than those traded on major markets in the U.S. and Europe. Although the
near-term outlook is difficult to forecast, we believe that the bearish
sentiment stemming from the yen's strength against the U.S. dollar overestimates
the long-term impact of fluctuating currency values on corporate earnings. Given
this view, we plan to maintain the Portfolio's current overweighted exposure to
Japan.
Most of the core European markets also remain reasonably valued, and we expect
to maintain our relatively overweighted position in France and will continue to
increase our exposure to stocks in the U.K. Since the German market has
rebounded, German stocks are not as attractively "valued" or priced, and we are
therefore selling a portion of the Portfolio's holdings. We also believe the
strong deutsche mark and expected wage increases in Germany will cause corporate
profits to suffer in the near term.
We continue to believe that the yen is significantly overvalued relative to the
dollar. Accordingly, we expect to further reduce the Portfolio's yen exposure
going forward.
As always, we welcome your comments or questions. Please call J.P. Morgan Funds
Services toll free at (800) 521-5411.
Sincerely yours,
/s/ EVELYN E. GUERNSEY
Evelyn E. Guernsey
J.P. Morgan Funds Services
*THE COMPOSITE INTERNATIONAL EQUITY FUND AVERAGE PERFORMANCE IS COMPUTED ON ALL
FUNDS IN THE MORNINGSTAR UNIVERSE HAVING A FOREIGN STOCK OBJECTIVE, EXCLUDING
THOSE THAT INVEST PRIMARILY IN EMERGING MARKETS.
3
<PAGE>
FUND FACTS
INVESTMENT OBJECTIVE
The Pierpont International Equity Fund seeks to provide a high total return from
a portfolio of equity securities of foreign companies. It is designed for
investors with a long-term investment horizon who want to diversify their
portfolios by investing in an actively managed portfolio of non-U.S. securities
that seeks to outperform the MSCI EAFE Index. As an international investment,
the Fund is subject to foreign market, political, and currency risk.
- ---------------------------------------------
COMMENCEMENT OF OPERATIONS
6/1/90
- ---------------------------------------------
NET ASSETS AS OF 4/30/95
$194,595,121
- ---------------------------------------------
CAPITAL GAIN PAYABLE DATE (IF APPLICABLE)
12/26/95
EXPENSE RATIO
The Fund's current annualized expense ratio of 1.36% covers shareholders'
expenses for custody, tax reporting, investment advisory and shareholder
services, after reimbursement. The Fund is no-load and does not charge any
sales, redemption, or exchange fees. There are no additional charges for buying,
selling, or safekeeping Fund shares, or for wiring redemption proceeds from the
Fund.
FUND HIGHLIGHTS
ALL DATA AS OF APRIL 30, 1995
[PIE CHART]
PORTFOLIO ALLOCATION
(PERCENTAGE OF TOTAL INVESTMENTS)
Pie Chart depicting allocation of the Fund's investment securities held at
April 30, 1995 by country. The chart is segmented to represent the following
percentages:
JAPAN 50.6%
UNITED KINGDOM 11.8%
FRANCE 10.2%
GERMANY 4.4%
SWITZERLAND 3.1%
SINGAPORE/MALAYSIA 3.1%
HONG KONG 2.8%
OTHER COUNTRIES 8.6%
SHORT-TERM 5.4%
LARGEST HOLDINGS % OF PORTFOLIO
- --------------------------------------------------------
SUMITOMO METAL INDUSTRIES (JAPAN) 1.5
MATSUSHITA ELECTRIC WORKS (JAPAN) 1.3
NOMURA SECURITIES CO. LTD. (JAPAN) 1.3
HONDA MOTOR CO. LTD. (JAPAN) 1.2
NEC CORP. (JAPAN) 1.2
4
<PAGE>
FUND PERFORMANCE
EXAMINING PERFORMANCE
There are several ways to evaluate a mutual fund's historical performance
record. One approach is to look at the growth of a hypothetical investment
of $10,000. The chart at right shows that $10,000 invested at the Fund's
inception would have grown to $12,043 at April 30, 1995.
Another way to look at performance is to review a fund's average annual total
return. This figure takes the fund's actual (or cumulative) return and shows you
what would have happened if the fund had achieved that return by performing at a
constant rate each year. Average annual total returns represent the average
yearly change of a fund's value over various time periods, typically 1, 5, or 10
years (or since inception). Total returns for periods of less than one year are
not annualized and provide a picture of how a fund has performed over the short
term.
[LINE GRAPH]
GROWTH OF $10,000 SINCE INCEPTION*
JUNE 1, 1990 - APRIL 30, 1995
Line graph with two axes: the X-axis represents years of operations; the
Y-axis represents dollar value. The graph plots two lines: the first line
represents the growth of a ten thousand dollar investment in the Fund from
June 1, 1990 to April 30, 1995; the second line represents the growth of a
ten thousand dollar investment in a portfolio of securities reflecting the
composition of the MSCI EAFE index for the same time period. The graph points
are as follows:
<TABLE>
DATE FUND MSCI EAFE
- ----- -------- ---------
<S> <C> <C>
06/90 $ 10,000 $ 10,000
10/90 9,330 9,027
10/91 9,880 9,654
10/92 8,785 8,378
10/93 11,525 11,516
10/94 12,135 12,679
04/30 12,043 12,838
</TABLE>
<TABLE>
<CAPTION>
PERFORMANCE TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
----------------------------------------------------------------------
THREE YEAR ONE FIVE SINCE
AS OF APRIL 30, 1995 MONTHS TO DATE YEAR YEARS INCEPTION*
- --------------------------------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C>
The Pierpont Int'l Equity Fund 6.48% 2.36% 0.32% -- 3.85%
MSCI EAFE Index 9.92% 5.69% 5.59% -- 5.21%
Composite Int'l Equity Fund Average 6.60% 1.23% -1.49% -- 5.61%
As of March 31, 1995
- --------------------------------------------------------------- ----------------------------------------
The Pierpont Int'l Equity Fund -0.57% -0.57% 1.39% -- 3.30%
MSCI EAFE Index 1.86% 1.86% 6.08% -- 4.50%
Composite Int'l Equity Fund Average -1.88% -1.88% -2.18% -- 5.01%
<FN>
*6/1/90 -- COMMENCEMENT OF OPERATIONS
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. ALL RETURNS ASSUME THE
REINVESTMENT OF DISTRIBUTIONS AND REFLECT REIMBURSEMENT OF CERTAIN FUND AND
PORTFOLIO EXPENSES AS DESCRIBED IN THE PROSPECTUS. THE COMPOSITE INTERNATIONAL
EQUITY FUND AVERAGE PERFORMANCE IS COMPUTED ON ALL FUNDS IN THE MORNINGSTAR
UNIVERSE HAVING A FOREIGN STOCK OBJECTIVE, EXCLUDING THOSE THAT INVEST PRIMARILY
IN EMERGING MARKETS. MORNINGSTAR, INC. IS A LEADING RESOURCE FOR MUTUAL FUND
DATA. ALTHOUGH GATHERED FROM RELIABLE SOURCES, DATA ACCURACY AND COMPLETENESS
CANNOT BE GUARANTEED. THE PIERPONT INTERNATIONAL EQUITY FUND INVESTS ALL OF ITS
INVESTABLE ASSETS IN THE NON-U.S. EQUITY PORTFOLIO, A SEPARATELY REGISTERED
INVESTMENT COMPANY WHICH IS NOT AVAILABLE TO THE PUBLIC BUT ONLY TO OTHER
COLLECTIVE INVESTMENT VEHICLES SUCH AS THE FUND.
</TABLE>
5
<PAGE>
SPECIAL FUND-BASED SERVICES
PIERPONT ASSET ALLOCATION SERVICE (PAAS)
For many investors, a diversified portfolio -- including short-term instruments,
bonds, and stocks -- can offer an excellent opportunity to achieve one's
investment objectives. PAAS provides investors with a comprehensive management
program for their portfolios. Through this service, investors can:
- - create and maintain an asset allocation that is specifically targeted at
meeting their most critical investment objectives;
- - make ongoing tactical adjustments in the actual asset mix of their
portfolios to capitalize on shifting market trends;
- - make investments through The Pierpont Funds, a family of diversified mutual
funds.
PAAS is available to clients who invest a minimum of $500,000 in The Pierpont
Funds.
IRA MANAGEMENT SERVICE
As one of the few remaining investments that can help your assets grow
tax-deferred until retirement, the IRA enables more of your dollars to work for
you longer. Morgan offers an IRA Rollover plan that helps you to build well-
balanced long-term investment portfolios, diversified across a wide array of
mutual funds. From money markets to emerging markets, The Pierpont Funds
provide an excellent way to help you accumulate long-term wealth for retirement.
The IRA Rollover plan is available to clients who invest at least $10,000 in any
given Pierpont Fund.
KEOGH
In early 1995, Morgan introduced a Keogh program for its clients. Keoghs provide
another excellent vehicle to help individuals who are self-employed or are
employees of unincorporated businesses to accumulate retirement savings. A Keogh
is a tax-deferred pension plan that can allow you to contribute the lesser of
$30,000 or 25% of your annual earned gross compensation. The Pierpont Funds can
help you build a comprehensive investment program designed to maximize the
retirement dollars in your Keogh account. The Keogh plan also requires a
minimum investment of $10,000 in any given Pierpont Fund.
6
<PAGE>
SIGNATURE BROKER-DEALER SERVICES, INC. IS THE DISTRIBUTOR OF THE PIERPONT
INTERNATIONAL EQUITY FUND (THE "FUND").
MORGAN GUARANTY TRUST COMPANY OF NEW YORK ("MORGAN") SERVES AS PORTFOLIO
INVESTMENT ADVISOR AND MAKES THE FUND AVAILABLE SOLELY IN ITS CAPACITY AS
SHAREHOLDER SERVICING AGENT FOR CUSTOMERS. INVESTMENTS IN THE FUND ARE NOT
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, MORGAN OR ANY OTHER
BANK. SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENTAL
AGENCY. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND CAN
FLUCTUATE, SO AN INVESTOR'S SHARES WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN
THEIR ORIGINAL COST.
Performance data quoted herein represent past performance. Please remember that
past performance is not a guarantee of future performance. Fund returns are net
of fees, assume the reinvestment of Fund distributions, and reflect the
reimbursement of Fund expenses. Had expenses not been subsidized, returns would
have been lower. The Fund invests all of its investable assets in The Non-U.S.
Equity Portfolio, a separately registered investment company which is not
available to the public but only to other collective investment vehicles such as
the Fund.
MORE COMPLETE INFORMATION ABOUT THE FUND, INCLUDING MANAGEMENT FEES AND OTHER
EXPENSES, IS PROVIDED IN THE PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE
INVESTING. YOU MAY OBTAIN ADDITIONAL COPIES OF THE PROSPECTUS BY CALLING J.P.
MORGAN FUNDS SERVICES AT (800) 521-5411.
7
<PAGE>
THE PIERPONT INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investment in The Non-U.S. Equity Portfolio (Portfolio), at value $ 195,209,272
Receivable for Shares of Beneficial Interest Sold 192,174
Deferred Organization Expense (Note 1d) 608
Prepaid Expenses 1,073
-------------
Total Assets 195,403,127
-------------
LIABILITIES
Payable for Shares of Beneficial Interest Redeemed 431,541
Financial and Fund Accounting Services Fee Payable (Note 2b) 282,215
Shareholder Servicing Fee Payable (Note 2c) 39,753
Administration Fee Payable (Note 2a) 4,290
Fund Services Fee Payable (Note 2d) 1,661
Accrued Expenses 48,546
-------------
Total Liabilities 808,006
-------------
NET ASSETS
Applicable to 17,937,005 Shares of Beneficial Interest Outstanding $ 194,595,121
(unlimited shares authorized, par value $0.001)
-------------
-------------
Net Asset Value, Offering and Redemption Price Per Share $10.85
ANALYSIS OF NET ASSETS
Paid-in Capital $ 182,684,910
Undistributed Net Investment Income 1,796,950
Accumulated Net Realized Gain (Loss) on Investment and Foreign Currency (779,555)
Transactions
Net Unrealized Appreciation of Investment and Foreign Currency Translations 10,892,816
-------------
Net Assets $ 194,595,121
-------------
-------------
</TABLE>
See Accompanying Notes.
8
<PAGE>
THE PIERPONT INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME ALLOCATED FROM PORTFOLIO (NOTE 1B)
$ 1,283,988
Allocated Dividend Income (Net of Withholding Tax $190,071)
434,423
Allocated Interest Income (Net of Withholding Tax $4,437)
(846,725)
Allocated Portfolio Expenses
------------
871,686
Net Investment Income Allocated from Portfolio
FUND EXPENSES
Shareholder Servicing Fee (Note 2c) $ 238,633
Financial and Fund Accounting Services Fee (Note 2b) 102,423
Transfer Agent Fees 28,640
Administration Fee (Note 2a) 26,200
Printing 18,000
Fund Services Fee (Note 2d) 9,918
Professional Fees 8,230
Registration Fees 7,848
Organization Expense 3,569
Trustees' Fees and Expenses (Note 2e) 1,635
Miscellaneous 5,811
----------
Total Fund Expenses 450,907
Less: Reimbursement of Expenses (Note 2b) (1,272)
----------
449,635
Net Fund Expenses
------------
422,051
NET INVESTMENT INCOME
(153,384)
NET REALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS
ALLOCATED FROM PORTFOLIO
(3,190,738)
NET CHANGE IN UNREALIZED APPRECIATION OF INVESTMENT AND FOREIGN CURRENCY
TRANSLATIONS ALLOCATED FROM PORTFOLIO
------------
$ (2,922,071)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
------------
------------
</TABLE>
See Accompanying Notes.
9
<PAGE>
THE PIERPONT INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE FISCAL
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
------------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 422,051 $ 882,643
Net Realized Gain (Loss) on Investment and Foreign Currency
Transactions Allocated from Portfolio (153,384) 9,507,607
Net Change in Unrealized Appreciation of Investment and Foreign
Currency Translations Allocated from Portfolio (3,190,738) (879,392)
------------------- ----------------
Net Increase (Decrease) in Net Assets Resulting from Operations (2,922,071) 9,510,858
------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net Investment Income -- (552,097)
Net Realized Gain on Investments (8,815,321) (3,445,157)
------------------- ----------------
Total Distributions to Shareholders (8,815,321) (3,997,254)
------------------- ----------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (NOTE 3)
Proceeds from Shares of Beneficial Interest Sold 29,042,855 110,407,632
Reinvestment of Dividends and Distributions 8,519,540 3,815,592
Cost of Shares of Beneficial Interest Redeemed (41,665,016) (92,123,499)
------------------- ----------------
Net Increase (Decrease) from Transactions in Shares of Beneficial
Interest (4,102,621) 22,099,725
------------------- ----------------
Total Increase (Decrease) in Net Assets (15,840,013) 27,613,329
NET ASSETS
Beginning of Period 210,435,134 182,821,805
------------------- ----------------
End of Period (including undistributed net investment income of
$1,796,950 and $1,374,899, respectively) $ 194,595,121 $ 210,435,134
------------------- ----------------
------------------- ----------------
</TABLE>
See Accompanying Notes.
10
<PAGE>
THE PIERPONT INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected Data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED APRIL 30, FOR THE FISCAL YEAR ENDED OCTOBER 31,
1995 ---------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990**
------------------ --------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.50 $ 11.15 $ 8.58 $ $9.69 $ 9.33 $ 10.00
-------- --------- --------- -------- -------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.02 0.05 0.01 0.04 0.11 0.05
Net Realized and Unrealized Gain (Loss)
on Investment and Foreign Currency
Allocated from Portfolio (0.18) 0.57 2.64 (1.11) 0.42 (0.72)
-------- --------- --------- -------- -------- -----------
Total from Investment Operations (0.16) 0.62 2.65 (1.07) 0.53 (0.67)
-------- --------- --------- -------- -------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net Investment Income - (0.04) (0.08) (0.04) (0.05) -
Net Realized Gain (0.49) (0.23) - - (0.12) -
-------- --------- --------- -------- -------- -----------
Total Distributions to Shareholders (0.49) (0.27) (0.08) (0.04) (0.17) -
-------- --------- --------- -------- -------- -----------
NET ASSET VALUE, END OF PERIOD $ 10.85 $ 11.50 $ 11.15 $ 8.58 $ 9.69 $ 9.33
-------- --------- --------- -------- -------- -----------
-------- --------- --------- -------- -------- -----------
Total Return (1.16)%* 5.73% 31.18% (11.08)% 5.89% (6.70)%
RATIOS AND SUPPLEMENTAL DATA
Net Assets at end of Period
(in thousands) $ 194,595 $ 210,435 $ 182,822 $ 41,484 $ 27,426 $ 19,358
Ratios to Average Net Assets
Expenses 1.36%(a) 1.38% 1.38% 1.38% 1.38% 1.36%(a)
Net Investment Income 0.44%(a) 0.46% 0.79% 1.03% 1.34% 1.49%(a)
Decrease reflected in above Expense
Ratio due to Expense Reimbursements 0.00%(a) 0.07% 0.13% 0.45% 0.66% 1.52%(a)
Portfolio Turnover (b) - - 34.15% 30.12% 18.84% 0.00%
<FN>
** Commencement of operations June 1, 1990.
* Not Annualized
(a) Annualized
(b) 1993 Portfolio Turnover reflects the period November 1, to October 3, 1993.
After October 3, 1993, all the Funds investable assets were invested in The
Non-U.S. Equity Portfolio.
</TABLE>
See Accompanying Notes.
11
<PAGE>
THE PIERPONT INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Pierpont International Equity Fund (the "Fund") is a separate series of
The Pierpont Funds, a Massachusetts business trust (the "Trust") which was
organized on November 4, 1992. The Trust is registered under the Investment
Company Act of 1940, as amended, as a diversified open-end management
investment company. The Fund, prior to its tax-free reorganization on
October 3, 1993, to a series of the Trust, operated as a stand-alone mutual
fund. Costs related to the reorganization were borne by Morgan Guaranty
Trust Company of New York ("Morgan"). This report includes periods which
preceded the Fund's reorganization and reflects the operations of the
predecessor entity.
The Fund invests all of its investable assets in The Non-U.S. Equity
Portfolio (the "Portfolio"), a diversified open-end 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 (35.2% at April 30, 1995). The performance of the Fund is
directly affected by the performance of the Portfolio. The financial
statements of the Portfolio, including the schedule 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)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)The Fund records its share of net investment income, realized and
unrealized gain and loss and adjusts its investment in the Portfolio each
day. All the net investment income and realized and unrealized gain and
loss of the Portfolio is allocated pro rata among the Fund and other
investors in the Portfolio at the time of such determination.
c)Each series of the Trust is treated as a separate entity for federal
income tax purposes. The Fund intends 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 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)The costs incurred by the predecessor entity in connection with its
organization are being amortized over a period not to exceed 60 months
from its commencement of operations.
e)Expenses incurred by the Trust with respect to any two or more funds in
the Trust are allocated in proportion to the net assets of each fund in
the Trust, except where allocations of direct expenses to each fund can
otherwise be made fairly. Expenses directly attributable to a fund are
charged to that fund.
12
<PAGE>
THE PIERPONT INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH AFFILIATES
a)The Trust retains Signature Broker-Dealer Services, Inc. ("Signature") to
serve as Administrator and Distributor. Signature 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 Signature. The
agreement provides for a fee to be paid to Signature at an annual rate
determined by the following schedule: 0.04% of the first $1 billion of the
aggregate average daily net assets of the Trust, as well as the net assets
of two other affiliated fund families for which Signature acts as
administrator, 0.032% of the next $2 billion of such net assets, 0.024% of
the next $2 billion of such net assets, and 0.016% of such net assets in
excess of $5 billion. The daily equivalent of the fee rate is applied
daily to the net assets of the Fund. For the six months ended April 30,
1995, Signature's fee for these services amounted to $26,200.
b)The Trust, on behalf of the Fund, has a Financial and Fund Accounting
Services Agreement ("Services Agreement") with Morgan Guaranty Trust
Company of New York ("Morgan") under which Morgan receives a fee, based on
the percentages described below, for overseeing certain aspects of the
administration and operation of the Fund. The Services Agreement is also
designed to provide an expense limit for certain expenses of the Fund. If
total expenses of the Fund, excluding the shareholder servicing fee and
the fund services fee, exceed the expense limit of 0.223% of the Fund's
average daily net assets up to and including $100 million and 0.20% of any
excess over $100 million, Morgan will reimburse the Fund for the excess
expense amount and receive no fee. Should such expenses be less than the
expense limit, Morgan's fee would be limited to the difference between
such expenses and the fee calculated under the Services Agreement. For the
six months ended April 30, 1995, this fee amounted to $102,423. In
addition to the expenses that Morgan assumes under the Services Agreement,
Morgan has agreed to reimburse the Fund to the extent necessary to
maintain the total operating expenses of the Fund, including the expenses
allocated to the Fund from the Portfolio, at no more than 1.38% of the
average daily net assets of the Fund through at least May 31, 1995. For
the six months ended April 30, 1995, Morgan has agreed to reimburse the
Fund $1,272 for expenses which exceeded this limit.
c)The Trust, on behalf of the Fund, has a Shareholder Servicing Agreement
with Morgan. The Agreement provides for the Fund to pay Morgan a fee for
these services which is computed daily and may be paid monthly at an
annual rate of 0.25% of the average daily net assets of the Fund. For the
six months ended April 30, 1995, the fee for these services amounted to
$238,633.
d)The Trust, on behalf of the Fund, has a Fund Services Agreement with
Pierpont Group, Inc. ("Group") to assist the Trustees in exercising their
overall supervisory responsibilities for the Trust's affairs. The Trustees
of the Trust represent all the existing shareholders of Group. The Fund's
allocated portion of Group's costs in performing its services amounted to
$9,918 for the six months ended April 30, 1995.
13
<PAGE>
THE PIERPONT INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
e)An aggregate annual fee of $65,000 is paid to each Trustee for serving as
a Trustee of The Pierpont Funds, The JPM Institutional Funds, and their
corresponding Portfolios. The Trustees' Fees and Expenses shown in the
financial statements represents the Fund's allocated portion of the total
fees and expenses. Prior to April 1, 1995, the aggregate annual fee paid
to each Trustee was $55,000. The Trustee who serves as Chairman and Chief
Executive Officer of these funds and also serves as Chairman of Group and
received compensation and employee benefits from Group in his role as
Group's Chairman. The allocated portion of such compensation and benefits
included in the Funds Services Fee shown in the financial statements was
approximately $1,200.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest of one or more series.
Transactions in shares of beneficial interest of the Fund were as follows:
<TABLE>
<CAPTION>
FOR SIX MONTHS
ENDED FOR THE FISCAL
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
------------------- ----------------
<S> <C> <C>
Shares sold 2,778,370 9,910,952
Reinvestment of dividends and distributions 822,349 363,389
Shares redeemed (3,960,432) (8,371,377)
------------------- ----------------
Net increase (decrease) (359,713) 1,902,964
------------------- ----------------
------------------- ----------------
</TABLE>
14
<PAGE>
The Non-U.S. Equity Portfolio
Semi-Annual Report April 30, 1995
(unaudited)
(The following pages should be read in conjunction
with The Pierpont International Equity Fund
Semi-Annual Financial Statements)
15
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 1A)
- --------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
COMMON STOCKS (88.0%)
AUSTRALIA (2.6%)
Broken Hill Proprietary Co. Ltd. (Energy Sources)........................ 226,700 $ 3,297,694
CSR Ltd. (Multi-Industry)................................................ 217,000 694,451
Hardie (James) Industries (Building Materials)........................... 349,800 554,632
Holyman Ltd. (Materials & Commodities)................................... 39,200 59,873
Howard Smith (Multi-Industry)............................................ 120,000 533,275
National Australia Bank Ltd. (Banking)................................... 213,000 1,843,552
News Corporation Ltd. (Publishing)....................................... 387,400 1,882,197
North Broken Hill Peko Ltd. (Metals-Non Ferrous)......................... 211,500 513,790
Rothmans Holdings Ltd. (Beverages & Tobacco)............................. 95,000 366,899
Santos Ltd. (Energy Sources)............................................. 164,000 450,884
Southcorp Holdings Ltd. (Food)........................................... 637,000 1,408,452
TNT Ltd. (Transportation) (A)............................................ 511,700 729,458
Western Mining Corp. Holdings Ltd. (Metals & Mining)..................... 376,900 2,132,724
------------
14,467,881
------------
AUSTRIA (0.3%)
Bohler Udeholm (Iron/Steel) (A).......................................... 5,000 298,645
Oesterreichische El Wirtsch, Class A (Utilities)......................... 6,600 435,529
OMV AG (Energy Sources) (A).............................................. 4,550 470,690
VA Technologie AG (Materials & Commodities) (A).......................... 4,000 441,708
------------
1,646,572
------------
BELGIUM (0.9%)
Electrabel NPV (Utilities)............................................... 1,970 423,968
Fortis AG NPV (Insurance)................................................ 3,270 336,972
Generale De Banque SA (Banking).......................................... 3,300 1,037,539
Glaverbel (Building Materials)........................................... 3,700 518,752
Groupe Bruxelles Lambert NPV (Multi-Industry)............................ 11,700 1,521,451
Petrofina SA NPV (Energy Sources)........................................ 700 218,367
Tractebel Capital NPV (Multi-Industry)................................... 3,200 1,146,863
------------
5,203,912
------------
DENMARK (1.2%)
Danisco AS (Food & Household Products)................................... 49,000 1,953,590
Den Danske Bank (Banking)................................................ 12,700 763,008
Girobank AS (Banking) (A)................................................ 5,000 211,288
Iss International Service System, Series B (Business & Public
Services)............................................................... 17,000 484,657
Novo Nordisk AS, Series B (Health & Personal Care)....................... 9,000 927,648
Sophus Berendsen, Class A (Multi-Industry)............................... 5,000 462,078
Sophus Berendsen, Class B (Multi-Industry)............................... 7,500 693,118
Teledanmark, Series B (Telecommunications)............................... 20,910 1,091,063
------------
6,586,450
------------
</TABLE>
See Accompanying Notes.
16
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 1A)
- --------------------------------------------------------------------------- ----------- ------------
FRANCE (10.1%)
<S> <C> <C>
Air Liquide (Chemicals).................................................. 12,119 $ 1,948,313
Alcatel Alsthom (Electrical & Electronics)............................... 43,020 3,992,088
Axa (Multi-Industry) (A)................................................. 24,500 1,292,308
Banque Nationale de Paris (Banking)...................................... 12,400 603,093
Bouygues (Engineering & Construction).................................... 8,300 1,011,742
Carrefour Supermarkets (Merchandising)................................... 4,440 2,227,228
Casino Guichard Perrachon et Cie (Merchandising)......................... 225 6,639
Castorama Dubois Investissments (Merchandising).......................... 4,000 662,597
Christian Dior SA (Retail)............................................... 24,175 2,161,680
Compagnie Financiere de Cic Union Europ Certe de Invest (Banking)........ 21,777 1,431,415
Compagnie Financiere de Paribas, Class A (Banking)....................... 36,903 2,252,930
Compagnie Financiere de St. Gobain (Glass & Packaging)................... 17,408 2,253,050
Compagnie Generale de Eaux (Utilities)................................... 28,060 2,957,892
Credit Local de France (Financial Services).............................. 12,200 1,040,252
Docks de France (Merchandising).......................................... 2,875 429,436
Eridania Beghin-Say (Food & Household Products).......................... 6,500 1,005,291
Groupe Danone (Food Processing).......................................... 16,305 2,697,592
Havas (Business & Public Services)....................................... 11,432 988,261
Imetal (Metals Non-Ferous)............................................... 5,281 560,985
LOreal Coppe SA (Health & Personal Care)................................. 2,000 526,659
Lafarge Coppe SA (Building Materials).................................... 7,300 568,966
LaGardere Groupe (Leisure & Tourism)..................................... 31,880 715,581
LVMH Moet Hennessy (Beverages)........................................... 5,214 992,082
Lyonnaise des Eaux (Environmental Control) (A)........................... 5,500 547,090
Peugeot SA (Automotive) (A).............................................. 9,825 1,417,567
Pinault Printemps Redouto (Building Materials)........................... 210 47,521
Promodes (Merchandising)................................................. 6,560 1,504,501
Renault SA (Automotive) (A).............................................. 29,200 1,008,987
Rhone Poulenc SA, Class A (Chemicals).................................... 66,604 1,623,761
Roussel Uclaf (Pharmaceuticals).......................................... 7,076 1,015,177
Sanofi (Pharmaceuticals)................................................. 29,800 1,643,427
Seb AG ( Household Products)............................................. 5,000 548,433
SEITA (Tobacco) (A)...................................................... 25,600 780,399
SGS - Thomson Microelectronics N.V. (Electronics) (A).................... 30,000 1,129,426
Societe Generale (Banking)............................................... 22,330 2,453,846
Societe Nationale Elf Aquitaine (Energy Sources)......................... 26,388 2,108,785
Sommer-Allibert (Building Materials)..................................... 2,260 863,712
Sovac-Credit Mobilier Industrie (Financial Services)..................... 1,770 139,756
Synthelabo (Health & Personal Care)...................................... 21,000 1,057,692
Television Francaise (Broadcasting & Publishing)......................... 8,300 758,384
Total, Class B (Energy Sources).......................................... 69,515 4,345,748
Ugine SA (Iron/Steel).................................................... 6,500 460,317
------------
55,780,609
------------
GERMANY (4.1%)
Allianz AG Holdings (Insurance).......................................... 890 1,630,029
Ava Allgemeine Handels-Der Verbr (Merchandising)......................... 2,040 765,202
</TABLE>
See Accompanying Notes.
17
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 1A)
- --------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
GERMANY (CONTINUED)
Bayer AG (Chemicals)..................................................... 6,200 $ 1,525,067
Bank Gesellschaft Berlin AG (Banking).................................... 1,600 368,174
Bilfinger & Berger Bau AG (Construction & Housing)....................... 1,285 598,795
Colonia Konzern AG (Insurance) (A)....................................... 585 428,316
Continental AG (Industrial Components)................................... 3,330 494,828
Daimler-Benz AG (Automobiles)............................................ 1,688 772,951
Deutsche Bank AG (Banking) (A)........................................... 5,020 2,461,658
Deutsche Pfandbrief Und Hypotheken Bank (Banking)........................ 1,600 813,677
Hoechst AG (Chemicals)................................................... 4,300 916,887
Karstadt AG (Merchandising).............................................. 500 215,141
Lufthansa AG (Transportation) (A)........................................ 1,720 227,795
Man AG (Machinery & Engineering)......................................... 2,335 578,571
Mannesmann AG (Machinery & Engineering).................................. 1,500 406,838
Munchener Ruckversicherungs (Insurance).................................. 1,172 2,337,575
Rheinisch Westfalisches Elekt AG (Utilities)............................. 2,700 905,648
Schering AG (Health & Personal Care)..................................... 1,300 964,474
Siemens AG (Electrical & Electronics).................................... 4,000 1,941,860
Thyssen AG (Metals) (A).................................................. 5,400 1,001,861
Veba AG (Energy Sources)................................................. 4,860 1,808,959
Viag AG (Multi-Industry)................................................. 850 314,236
Volkswagen AG (Automotive)............................................... 4,430 1,235,083
------------
22,713,625
------------
HONG KONG (2.6%)
Citic Pacific Ltd. (Transportation)...................................... 593,000 1,451,667
Hang Seng Bank (Banking)................................................. 226,400 1,491,590
Hong Kong Electric Holdings Ltd. (Utilities)............................. 407,500 1,250,242
Hong Kong Telecommunications Ltd. (Telecommunications)................... 1,225,200 2,397,853
Jardine Matheson Holdings Ltd. (Multi-Industry).......................... 400 3,180
New World Development Co. Ltd. (Real Estate)............................. 336,000 872,445
Sing Tao Holdings (Publishing)........................................... 1,218,000 794,587
Sun Hung Kai Properties Ltd. (Real Estate)............................... 450,000 2,871,722
Swire Pacific Ltd. (Transportation)...................................... 340,000 2,272,962
Television Broadcasts Ltd. (Broadcasting & Publishing)................... 208,000 773,854
------------
14,180,102
------------
JAPAN (45.1%)
Achilles Corp. (Tire & Rubber)........................................... 400,000 1,808,770
Aichi Bank Ltd. (Banking)................................................ 4,700 526,852
Aichi Corp. (Machinery).................................................. 90,000 1,006,723
Aichi Machine Industry (Auto & Trucks)................................... 176,000 1,101,636
Asahi Bank Ltd. (Banking)................................................ 156,000 2,004,879
Asatsu Inc. (Commerical Services)........................................ 25,000 996,609
Asics Corp. (Recreation, Other Consumer Goods)........................... 400,000 1,489,855
Bank of Nagoya (Banking)................................................. 69,000 606,783
Central Glass Co. Ltd. (Materials & Commodities) (A)..................... 300,000 1,306,598
Chiyoda Fire & Marine Insurance Ltd. (Insurance)......................... 5,000 31,535
</TABLE>
See Accompanying Notes.
18
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 1A)
- --------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
JAPAN (CONTINUED)
Chou Trust & Banking Co. (Banking)....................................... 200,000 $ 2,903,552
Cosmo Oil Company Ltd. (Energy Sources).................................. 300,000 2,170,524
Daido Hoxan Corp. (Chemicals)............................................ 183,000 1,232,558
Daido Steel Co. (Iron/Steel)............................................. 500,000 2,760,754
Daiei Inc. (Retail)...................................................... 75,000 928,185
Daiichi Kangyo Bank Ltd. (Banking)....................................... 200,000 4,093,532
Daiichi Katei Denki Co. (Retail) (A)..................................... 101,000 522,818
Daikin Industries (Machinery & Engineering).............................. 220,000 1,884,929
Dainichiseika Color & Chemical Manufacturing Co. (Chemicals)............. 140,000 1,191,170
Daishi Bank (Banking).................................................... 150,000 1,054,918
Daiso Co (Chemicals)..................................................... 75,000 356,102
Daito Trust Construction Co. Ltd. (Construction & Housing)............... 95,000 960,909
Daiwa Bank (Banking)..................................................... 385,000 3,839,234
Daiwa Securities Co. Ltd. (Financial Services)........................... 150,000 1,892,069
Danto Corp. (Building Materials)......................................... 16,000 215,148
East Japan Railway Co. (Transportation).................................. 700 3,640,150
Fanuc Co. Ltd. (Electronics)............................................. 35,000 1,582,674
Fukui Bank (Banking)..................................................... 200,000 1,090,022
Fuji Denki Reiki (Retail)................................................ 110,250 1,574,344
Fuji Fire & Marine (Insurance)........................................... 230,000 1,258,999
Gakken Co. Ltd. (Broadcasting & Publishing) (A).......................... 300,000 2,356,161
Gunze Sangyo Inc. (Transportation)....................................... 200,000 935,325
Hitachi Ltd. (Electrical & Electronics).................................. 500,000 5,087,166
Hokkaido Can Co. Ltd. (Materials & Commodities).......................... 120,000 1,163,801
Hokkaido Takushoku Bank (Banking)........................................ 550,000 1,983,102
Honda Motor Co. Ltd. (Automotive)........................................ 400,000 6,473,493
Industrial Bank of Japan Ltd. (Banking).................................. 160,000 4,893,199
Ishikawajima-Harima Heavy Industries (Machinery & Engineering)........... 500,000 2,290,712
Ishizuka Glass Co. Ltd. (Materials & Commodities)........................ 130,000 942,107
Itoham Foods Inc (Food Processing)....................................... 100,000 840,126
Izumiya Co. Ltd. (Merchandising)......................................... 55,000 922,830
Japan Airport Terminals (Media & Leisure)................................ 31,000 383,650
Juroku Bank (Banking).................................................... 7,000 44,731
Kagawa Bank (Banking).................................................... 100,000 1,134,051
Kaken Pharmaceutical Co. (Health & Personal Care)........................ 280,000 3,431,903
Kanematsu Corp. (Wholesale & International Trade)........................ 250,000 1,169,156
Kansai Supermarket (Retail).............................................. 40,000 372,226
Kawasaki Kisen Kaisha Ltd. (Transportation & Shipping) (A)............... 600,000 2,149,105
Kitz Corp. (Machinery)................................................... 291,000 1,506,337
Kokusai Denshin Denwa (Media & Leisure).................................. 6,000 539,061
Konica Corp. (Recreation, Other Consumer Goods).......................... 300,000 2,491,819
Kurabo Industries (Textiles & Apparel)................................... 302,000 1,257,809
Maruetsu Inc. (Retail)................................................... 40,000 385,554
Maruha Corp. (Fishery) (A)............................................... 310,000 1,280,062
Marutomi Group Co. (Merchandising)....................................... 60,000 721,128
Matsui Construction Co. Ltd. (Engineering & Construction)................ 35,000 335,693
Matsumoto Yushi Seiyaku Co. (Chemicals).................................. 42,000 1,224,490
Matsushita Electric Industries Co. Ltd. (Consumer Electronics)........... 146,000 2,449,694
Matsushita Electric Works (Building & Contractors)....................... 620,000 7,451,657
</TABLE>
See Accompanying Notes.
19
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 1A)
- --------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
JAPAN (CONTINUED)
Mitsubishi Chemical Corp. (Chemicals).................................... 560,000 $ 3,285,298
Mitsubishi Electric Corp. Ltd. (Electrical & Electronics)................ 400,000 2,836,913
Mitsubishi Materials Corp. (Metals)...................................... 500,000 2,498,959
Mitsubishi Motors Corp. (Automotive)..................................... 500,000 4,646,873
Mitsubishi Pencil Co. Ltd. (Business & Public Services).................. 30,000 349,854
Mitsubishi Trust & Banking Corp. (Banking)............................... 98,000 1,098,542
Mitsukoshi Ltd. (Merchandising).......................................... 240,000 2,207,652
Morinaga Milk Industry Co. Ltd. (Food & Household Products).............. 230,000 1,272,684
Nagasakiya Co. (Merchandising) (A)....................................... 435,000 2,375,974
Naigai Co. (Textile & Apparel)........................................... 115,000 665,080
NEC Corp. (Electrical & Electronics)..................................... 605,000 6,695,425
Nichiei Construction Co. Ltd. (Building & Contractors)................... 80,000 872,970
Nichii Co. Ltd. (Merchandising).......................................... 140,000 1,599,334
Nihon Matai Co. (Wholesale & International Trade)........................ 94,600 683,313
Nippon Credit Bank (Banking)............................................. 185,000 1,065,508
Nippon Kinzoku Co. (Iron/Steel).......................................... 110,000 585,113
Nippon Koshuha Steel Co. (Iron/Steel) (A)................................ 350,000 1,282,799
Nippon Steel Corp. (Metals).............................................. 500,000 1,987,267
Nippon Suisan Kaisha (Food) (A).......................................... 210,000 1,097,043
Nissho Iwai Corp. (Wholesale & International Trade)...................... 655,000 3,351,580
Nissin Electric Co. Ltd. (Electronics)................................... 300,000 2,202,654
Nomura Securities Co. Ltd. (Financial Services).......................... 360,000 7,282,680
North Pacific Bank (Banking)............................................. 210,000 1,224,490
NSK Ltd. (Machinery)..................................................... 200,000 1,458,916
Okamura Corp. (Transportation)........................................... 90,000 803,237
Osaka Gas Co. Ltd. (Utilities)........................................... 519,000 2,130,719
Osaka Sanso Kogyo (Chemicals)............................................ 300,000 1,213,780
Parco Co. (Retail)....................................................... 77,000 884,215
Pioneer Electronic Corp. (Electronics)................................... 75,000 1,579,699
Ricoh Corp. Ltd. (Electronics)........................................... 270,000 2,522,163
Ryobi Ltd. (Metals)...................................................... 400,000 2,284,762
San-in Godo Bank Ltd. (Banking).......................................... 100,000 951,984
Sagami Co. Ltd. (Retail)................................................. 130,000 974,594
Sakura Bank Ltd. (Banking)............................................... 145,000 1,932,528
Sanden Corp. (Industrial Components)..................................... 118,000 734,385
Senko Co. Ltd. (Transportation).......................................... 250,000 1,680,847
Shibusawa Warehouse Co. (Storage/Warehousing)............................ 250,000 1,752,246
Shinobu Foods Products Co. (Food)........................................ 37,000 436,330
Shiga Bank Ltd. (Banking)................................................ 90,000 664,009
Shikoku Electric Power Inc. (Utilities).................................. 110,000 2,971,381
Shin Nippon Air Technologies Co. (Building & Contractors)................ 50,000 951,984
Shinmaywa Industries Ltd. (Machinery & Engineering)...................... 140,000 1,301,125
Showa Aluminium Co. (Metals)............................................. 120,000 604,034
Snow Brand Milk Products Co. Ltd. (Food & Household Products)............ 300,000 2,284,762
Sony Corp. (Electronics)................................................. 65,000 3,279,586
Sumitomo Bank Ltd. (Banking)............................................. 300,000 6,497,293
Sumitomo Corp. (Trade)................................................... 182,000 1,808,413
Sumitomo Forestry Co. (Engineering & Construction)....................... 120,000 2,127,685
Sumitomo Metal Industries (Metals & Mining) (A).......................... 2,563,000 8,417,778
</TABLE>
See Accompanying Notes.
20
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 1A)
- --------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
JAPAN (CONTINUED)
Suruga Bank Ltd. (Banking)............................................... 90,000 $ 687,571
Takasaki Paper Mfg Co. Ltd. (Forest Products) (A)........................ 57,000 195,347
TDK Corp. (Retail)....................................................... 70,000 3,198,667
Tec Corp. (Electronics) (A).............................................. 40,000 201,821
Toho Gas Co. Ltd. (Utilities)............................................ 247,000 1,043,434
Tohoku Electric Power Co. Inc. (Utilities)............................... 150,000 4,301,779
Tokai Bank Ltd. (Banking)................................................ 300,000 3,855,536
Tokai Rika Denki Co. (Automotive)........................................ 65,000 703,873
Tokio Marine & Fire Insurance Co. Ltd. (The) (Insurance)................. 250,000 2,974,951
Tokyo Electric Power (Utilities)......................................... 50,000 1,600,524
Tokyu Car Corp. (Automotive)............................................. 330,000 2,159,814
Tomiya Apparel Co. (Wholesale & International Trade)..................... 80,000 685,429
Toshiba Corp. (Electrical & Electronics)................................. 350,000 2,328,197
Toshiba Tungaloy Co. (Machinery) (A)..................................... 200,000 1,032,903
Toshiba Engineeering & Construction Co. (Engineering & Construction)..... 100,000 947,224
Toyo Ink Manufacturing Co. (Chemicals)................................... 133,000 876,801
Toyo Tire & Rubber Co. (Materials & Commodities) (A)..................... 400,000 1,965,848
Toyoda Gosei Co. (Automotive)............................................ 199,000 1,683,691
Toyota Motor Corp. (Automotive).......................................... 83,000 1,688,939
Uchida Yoko Co. (Wholesale & International Trade)........................ 170,000 1,041,828
Uni-Charm Corp. (Merchandising).......................................... 40,000 951,984
Yamaha Corp. (Merchandising)............................................. 81,000 1,089,189
Yamato Transport Co. Ltd. (Shipping)..................................... 30,800 352,953
Yasuda Trust & Banking Co. Ltd. (Financial Services)..................... 700,000 5,664,307
Zenchiku Co. (Wholesale & International Trade)........................... 281,000 1,250,598
Zexel Corp. (Machinery).................................................. 200,000 1,420,837
------------
249,569,484
------------
MALAYSIA (2.2%)
Hong Leong Industries (Multi-Industry)................................... 100,000 529,935
Malayan Cement Berhad (Building & Contractors)........................... 475,000 749,393
Malaysian International Shipping Corp. (Shipping)........................ 202,333 525,616
Public Bank Berhad (Banking)............................................. 430,000 734,062
Sime Darby Berhad (Multi-Industry)....................................... 1,428,400 3,649,160
Sime Uep Properties Berhad (Real Estate)................................. 465,000 934,338
Tan Chong Motor Holdings Berhad (Automotive)............................. 524,000 580,809
Tanjong Public Co. (Leisure & Tourism)................................... 615,000 1,753,944
Telekom Malaysia Berhad (Telecommunications)............................. 360,000 2,475,728
Tenaga Nasional Berhad (Utilities)....................................... 86,000 382,686
------------
12,315,671
------------
NETHERLANDS (1.4%)
Elsevier NV (Publishing)................................................. 91,000 996,714
Dutch State Mines (Chemicals)............................................ 10,700 899,652
Internationale Nederlanden Groep (Insurance)............................. 18,000 948,650
Philips Electronics (Appliances & Household Durables).................... 26,000 991,689
Royal Dutch Petroleum (Energy Sources)................................... 21,000 2,591,006
</TABLE>
See Accompanying Notes.
21
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 1A)
- --------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
NETHERLANDS (CONTINUED)
Unilever NV (Food & Household Products).................................. 9,300 $ 1,244,514
------------
7,672,225
------------
NEW ZEALAND (0.2%)
Fletcher Challenge Ltd. (Forest Products)................................ 250,000 671,862
Lion Nathan Ltd. (Beverages)............................................. 240,000 522,440
------------
1,194,302
------------
NORWAY (1.7%)
Aker AS, Series B (Building Materials & Components)...................... 58,000 735,473
Hafslund Nycomed, Series B (Health & Personal Care)...................... 68,300 1,485,498
Kvaerner AS, Series B (Machinery & Engineering).......................... 23,100 1,001,124
Norsk Hydro AS (Energy Sources).......................................... 105,000 4,272,472
Orkla AS, A Free (Multi-Industry)........................................ 13,500 579,655
Orkla AS, B Free (Multi-Industry)........................................ 36,600 1,483,387
------------
9,557,609
------------
SINGAPORE (0.8%)
Development Bank of Singapore (Banking).................................. 143,000 1,529,028
Public Bank Berhad (Banking)............................................. 560,000 968,496
Singapore Airlines Ltd. (Airline)........................................ 174,000 1,673,197
Singapore Telecommunications (Utilities)................................. 141,000 281,292
United Overseas Bank (Banking)........................................... 106,000 203,861
------------
4,655,874
------------
SWITZERLAND (3.1%)
Baer Holding AG (Banking)................................................ 490 512,910
BBC AG Brown Boveri & Cie (Machinery & Engineering)...................... 950 937,238
Bil GT Gruppe AG (Banking) (A)........................................... 850 392,969
CS Holding (Banking)..................................................... 1,900 793,877
Ciba Geigy AG (Chemicals)................................................ 3,315 2,267,062
Compagnie Financiere Richemont AG, Series A (Multi-Industry)............. 600 680,391
Holderbank FN Glarus (Building Materials & Components)................... 900 722,261
Nestle SA (Food & Household Products).................................... 2,135 2,083,972
Roche Holdings Genusscheine NPV (Health & Personal Care)................. 445 2,672,562
Sandoz AG (Health & Personal Care)....................................... 3,410 2,227,922
Schweizerische Bankgesellschaft (Banking)................................ 850 781,490
Schweizerische Bankverein (Banking)...................................... 3,620 1,190,457
Schweizerische Rueckversicherungs-Gesellschaft (Insurance)............... 790 550,602
Swissair AG (Transportation) (A)......................................... 880 537,334
Zurich Versicherungs (Insurance)......................................... 710 753,105
------------
17,104,152
------------
</TABLE>
See Accompanying Notes.
22
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 1A)
- --------------------------------------------------------------------------- ----------- ------------
UNITED KINGDOM (11.7%)
<S> <C> <C>
Abbey National PLC (Banking)............................................. 137,000 $ 1,027,390
Allied Colloids Group PLC (Chemicals).................................... 504,000 1,050,338
BAT Industries PLC (Beverages & Tobacco)................................. 290,000 2,188,767
BICC (Industrial Components)............................................. 136,000 700,354
BOC Group PLC (Chemicals)................................................ 68,100 827,414
Bowater PLC (Packaging).................................................. 99,000 713,743
British Gas PLC (Utilities).............................................. 258,000 1,249,726
British Petroleum Co. Ltd. (Energy Sources).............................. 214,000 1,541,117
British Steel PLC (Metals & Mining)...................................... 187,000 508,577
British Telecommunications PLC (Telecommunications)...................... 481,900 3,008,967
British Tire & Rubber PLC (Multi-Industry)............................... 312,000 1,646,862
Cable & Wireless PLC (Telecommunications)................................ 186,000 1,200,290
Dixon Group PLC (Retail)................................................. 208,000 805,021
Farnell Electronic PLC (Electronics)..................................... 92,000 863,148
Forte PLC (Leisure & Tourism)............................................ 150,000 550,370
General Electric Co. PLC (Electrical & Electronics)...................... 184,000 903,122
Glaxo Holdings PLC (Health & Personal Care).............................. 286,996 3,392,317
Glynwed International PLC (Metals)....................................... 207,200 1,055,340
Granada Group PLC (Leisure & Tourism).................................... 118,000 1,081,445
Grand Metropolitan PLC (Multi- Industry)................................. 242,000 1,553,878
Guardian Royal Exchange PLC (Insurance).................................. 675,000 2,047,594
Guinness PLC (Beverages)................................................. 192,000 1,452,205
Hanson Trust PLC (Multi-Industry)........................................ 337,000 1,282,596
Hillsdown Holdings PLC (Food & Household Products)....................... 358,000 1,060,058
HSBC Holdings (Banking).................................................. 130,520 1,538,556
Inchcape PLC (Commercial Services)....................................... 84,000 431,220
Kingfisher (Merchandising)............................................... 210,000 1,510,621
Lloyds Bank PLC (Banking)................................................ 178,100 1,831,443
MEPC (Real Estate)....................................................... 179,000 1,080,222
Marks & Spencer PLC (Merchandising)...................................... 93,300 631,359
National Westminster Bank (Banking)...................................... 125,700 1,092,340
NFC PLC (Transportation- Road & Rail).................................... 388,600 1,100,637
Pearson PLC (Multi-Industry)............................................. 115,000 1,060,428
Peninsular & Orient Steam Navigation Company (Transportation)............ 45,000 417,847
RTZ Corp. PLC (Metals)................................................... 56,300 716,661
Reckitt & Colman (Health & Personal Care)................................ 125,400 1,293,553
Redland PLC (Building Materials & Components)............................ 149,000 980,705
Reuters Holdings PLC (Publishing)........................................ 127,100 966,443
Rolls-Royce PLC (Machinery & Engineering)................................ 294,000 809,044
Scottish Hydro Electric PLC (Utilities).................................. 85,450 442,789
Sears Holdings (Merchandising)........................................... 893,000 1,501,746
Seeboard Electricity PLC (Utilities)..................................... 250,000 1,500,644
Shell Transport & Trading Co. (Energy Sources)........................... 179,000 2,120,116
Standard Chartered PLC (Financial Services).............................. 268,000 1,289,540
Tarmac PLC (Building Materials).......................................... 546,500 1,028,975
Tesco PLC (Merchandising)................................................ 390,000 1,754,184
Thorn EMI PLC (Appliances & Household Products).......................... 31,800 581,857
Tomkins (Multi-Industry)................................................. 241,000 907,531
</TABLE>
See Accompanying Notes.
23
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SECURITY DESCRIPTION SHARES (NOTE 1A)
- --------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
UNITED KINGDOM (CONTINUED)
Unilever PLC (Food & Household Products)................................. 35,000 $ 691,101
United Biscuits Holdings PLC (Food & Household Products)................. 198,900 1,117,092
Vickers PLC (Machinery & Engineering).................................... 328,500 999,139
Willis Corroon Group PLC (Insurance)..................................... 282,500 704,659
Yorkshire Water (Business & Public Services)............................. 185,000 1,625,523
Zeneca Group PLC (Health & Personal Care)................................ 90,000 1,308,577
------------
64,745,191
------------
Total Common Stocks (cost $462,505,225)................................ 487,393,659
------------
PREFERRED STOCKS (0.4%)
AUSTRIA (0.1%)
Creditanstalt Bankverein, 10.00 ATS (Banking)............................ 7,200 412,315
------------
FRANCE (0.0%)
Casino Guichard Perrachon, 5.25 FRF (Leisure & Tourism).................. 4,126 100,757
------------
GERMANY (0.3%)
GEA AG, 11.00 Dem (Machinery)............................................ 1,355 444,727
SAP AG, 9.00 Dem (Computer Software)..................................... 880 869,653
------------
1,314,380
------------
Total Preferred Stocks (cost $1,632,867) 1,827,452
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(IN HKD)
------------
<S> <C> <C>
CONVERTIBLE BONDS (5.0%)
HONG KONG (0.2%)
Amoy Properties IDR 5.50% due 12/29/49 (Real Estate)...................... 1,385,000 933,144
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(IN YEN)
------------
<S> <C> <C>
JAPAN (4.8%)
Bot Cayman Finance 4.25% due 03/31/03 (Banking)........................... 450,000,000 6,171,536
Daido Hoxan Inc. 1.60% due 03/29/02 (Chemicals)........................... 58,000,000 676,385
Daiwa International Finance 5.65% due 08/30/96 (Banking).................. 1,750,000 2,664,375
Daiwa International Finance 2.00% due 03/31/98 (Banking).................. 150,000,000 1,854,138
Mitsubishi Bank 3.50% due 03/31/04 (Banking).............................. 2,000,000 2,180,000
NEC Corp. 1.90% due 03/30/01 (Electrical & Electronics)................... 130,000,000 1,573,273
Nippon Oil Co. 2.80% due 03/31/00 (Energy Sources)........................ 150,000,000 1,852,799
Ryobi Ltd. 2.80% due 03/29/02 (Metals).................................... 33,000,000 414,292
Sagami Railway 3.80% due 09/30/99 (Transportation)........................ 35,000,000 445,648
</TABLE>
See Accompanying Notes.
24
<PAGE>
THE NON U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN YEN) (NOTE 1A)
- ---------------------------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Sakura Bank Ltd. 2.63% due 03/31/03 (Banking)............................. 1,500,000 $ 1,244,062
Sekisui House Ltd. 2.50% due 01/31/02 (Construction & Housing)............ 60,000,000 816,088
Toyota Motor Co. 1.70% due 05/31/96 (Automotive).......................... 75,000,000 1,044,208
Yamanouchi Pharmaceutical 1.25% due 03/31/14 (Health & Personal Care)..... 350,000,000 4,086,839
Yamato Transport 3.90% due 03/30/01 (Transportation)...................... 132,000,000 1,719,997
---------------
26,743,640
---------------
Total Convertible Bonds (cost $24,986,024) 27,676,784
---------------
WARRANTS (A) (0.1%)
FRANCE (0.0%)
LaGardere Groupe, Expiring 12/31/96 (Leisure & Tourism)................... 16,000 11,559
---------------
JAPAN (0.1%)
Kuraray Co. Ltd., Expiring 08/02/96 (Chemicals)........................... 200 155,000
Maeda Corp., Expiring 02/05/97 (Construction & Housing)................... 370 499,500
---------------
654,500
---------------
UNITED KINGDOM (0.0%)
British Tyre & Rubber Expiring 06/11/95 (Multi-Industry).................. 5,000 5,995
---------------
Total Warrants (cost $997,724) 672,054
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(IN US
DOLLARS)
------------
<S> <C> <C>
TIME DEPOSITS (5.3%)
UNITED STATES (5.3%)
State Street Bank (Banking) 5.75% due 05/01/95 (cost $29,419,000)......... 29,419,000 29,419,000
---------------
TOTAL INVESTMENTS (COST $519,540,840) (98.8%) 546,988,949
OTHER ASSETS NET OF LIABILITIES (1.2%) 6,879,782
---------------
NET ASSETS (100.00%) $ 553,868,731
---------------
---------------
<FN>
(A) Non-Income-Producing Security
The cost of investments for Federal Income Tax purposes at April 30, 1995,
was $519,668,598, the aggregate gross unrealized appreciation and
depreciation of investments was $40,855,561,and $13,535,210, respectively,
resulting in net unrealized appreciation of $27,320,351.
</TABLE>
See Accompanying Notes.
25
<PAGE>
THE NON U.S. EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
<TABLE>
<CAPTION>
PERCENT OF
PORTFOLIO
-------------
<S> <C>
Banking............................................................................................ 20.7%
Electrical & Electronics........................................................................... 7.4%
Metals & Mining.................................................................................... 5.1%
Energy Sources..................................................................................... 4.9%
Automotive......................................................................................... 4.4%
Health & Personal Care............................................................................. 4.2%
Utilities.......................................................................................... 4.0%
Food & Household Products.......................................................................... 4.0%
Chemicals.......................................................................................... 3.9%
Merchandising...................................................................................... 3.8%
Transportation..................................................................................... 3.7%
Multi-Industry..................................................................................... 3.6%
Machinery & Engineering............................................................................ 3.1%
Financial Services................................................................................. 3.1%
Building & Contractors............................................................................. 2.9%
Insurance.......................................................................................... 2.6%
Retail............................................................................................. 2.1%
Wholesale & International Trade.................................................................... 1.8%
Leisure & Tourism.................................................................................. 1.6%
Broadcasting & Publishing.......................................................................... 1.6%
Telecommunications................................................................................. 1.4%
Engineering & Construction......................................................................... 1.3%
Real Estate........................................................................................ 1.2%
Beverages & Tobacco................................................................................ 1.2%
Materials & Commodities............................................................................ 1.1%
Business & Public Services......................................................................... 0.6%
Glass & Packaging.................................................................................. 0.6%
Pharmaceuticals.................................................................................... 0.5%
Industrial Components.............................................................................. 0.3%
Textile & Apparel.................................................................................. 0.3%
Commercial Services................................................................................ 0.3%
Forest Products.................................................................................... 0.2%
Various Industries................................................................................. 1.3%
</TABLE>
See Accompanying Notes.
26
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Value (Cost $519,540,840) (Note 1a) $546,988,949
Foreign Currency at Value (Cost $12,035,929) 11,966,770
Cash 602
Receivable for Investments Sold 9,189,982
Dividends and Interest Receivable (Note 1d) 2,240,977
Unrealized Appreciation on Open Spot Foreign Currency Contracts (Note 1c) 1,829
Prepaid Expenses 2,021
------------
Total Assets 570,391,130
------------
LIABILITIES
Payable for Investments Purchased 13,493,384
Unrealized Depreciation on Open Forward Foreign Currency Contracts (Note 1,450,621
1c)
Custody Fee Payable 606,231
Financial and Fund Accounting Services Fee Payable (Note 2c) 505,221
Advisory Fee Payable (Note 2a) 433,074
Fund Services Fee Payable (Note 2d) 4,427
Adminstration Fee Payable (Note 2b) 2,698
Accrued Expenses 26,743
------------
Total Liabilities 16,522,399
------------
NET ASSETS
Applicable to Investors Beneficial Interests $553,868,731
------------
------------
</TABLE>
See Accompanying Notes.
27
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME (NOTE 1D)
Dividends (Net of Foreign Withholding Tax of $466,259) $ 3,125,436
Interest (Net of Foreign Withholding Tax of $10,516) 1,035,666
-------------
$ 4,161,102
Investment Income
EXPENSES
Advisory Fee (Note 2a) 1,334,988
Custodian Fees and Expenses 353,949
Financial and Fund Accounting Services Fees (Note 2c) 207,295
Professional Fees 29,733
Fund Services Fee (Note 2d) 22,668
Administration Fee (Note 2b) 14,216
Trustees Fees and Expenses (Note 2e) 3,825
Miscellaneous 4,948
-------------
1,971,622
Total Expenses
------------
2,189,480
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) ON
Investments Transactions 5,427,112
Foreign Currency Contracts and Foreign Exchange Transactions (10,626,411)
-------------
(5,199,299)
Net Realized Loss
NET CHANGE IN UNREALIZED APPRECIATION OF
Investments 3,387,821
Foreign Currency Contracts and Translations 1,185,340
-------------
4,573,161
Net Change in Unrealized Appreciation
------------
$ 1,563,342
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
------------
------------
</TABLE>
See Accompanying Notes.
28
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE FISCAL
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
---------------- -----------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 2,189,480 $ 2,975,662
Net Realized Gain (Loss) on Investments and Foreign Currency
Transactions (5,199,299) 11,298,758
Net Change in Unrealized Appreciation of Investments and Foreign
Currency Translations 4,573,161 6,493,611
---------------- -----------------
Net Increase in Net Assets Resulting from Operations 1,563,342 20,768,031
---------------- -----------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions 205,141,829 343,552,141
Withdrawals (76,412,261) (124,114,838)
---------------- -----------------
Net Increase from Investors' Transactions 128,729,568 219,437,303
---------------- -----------------
Total Increase in Net Assets 130,292,910 240,205,334
NET ASSETS
Beginning of Period 423,575,821 183,370,487
---------------- -----------------
End of Period $ 553,868,731 $ 423,575,821
---------------- -----------------
---------------- -----------------
<CAPTION>
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SUPPLEMENTARY DATA
<CAPTION>
- -------------------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE FISCAL
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
---------------- -----------------
<S> <C> <C> <C>
Ratios to Average Net Assets
Expenses 0.89%* 0.95%
Net Investment Income 0.98%* 0.93%
Portfolio Turnover 28% 56%
<FN>
- ------------------------
* Annualized.
</TABLE>
See Accompanying Notes.
29
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Non-U.S. Equity Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940, as amended, (the "Act") as a no-load,
diversified, open-end management investment company which was organized as a
trust under the laws of the State of New York. The Portfolio commenced
operations on October 4, 1993 and received a contribution of certain assets
and liabilities, including securities, with a value of $160,213,973 on that
date from the Pierpont International Equity Fund, Inc. in exchange for a
beneficial interest in the Portfolio. At that date, net unrealized
appreciation of $11,116,204 was included in the contributed securities. The
Declaration of Trust permits the Trustees to issue an unlimited number of
beneficial interests in the Portfolio.
The following is a summary of the significant accounting policies of the
Portfolio:
a)The value of each security for which readily available market quotations
exists is based on a decision as to the broadest and most representative
market for such security. The value of such security will be based either
on the last sale price on a national securities exchange, or, in the
absence of recorded sales, at the readily available closing bid price on
such exchanges, or at the quoted bid price in the over-the-counter market.
Securities listed on a foreign exchange are valued at the last quoted sale
price available before the time when net assets are valued. Unlisted
securities are valued at the average of the quoted bid and asked prices in
the over-the-counter market. Securities or other assets for which market
quotations are not readily available are valued at fair value in
accordance with procedures established by the Portfolio's Trustees. Such
procedures include the use of independent pricing services, which use
prices based upon yields or prices of securities of comparable quality,
coupon, maturity and type; indications as to values from dealers; and
general market conditions. All portfolio securities with a remaining
maturity of less than 60 days are valued by the amortized cost method.
Trading in securities on most foreign exchanges and over-the-counter
markets is normally completed before the close of the domestic market and
may also take place on days on which the domestic market is closed. If
events materially affecting the value of foreign securities occur between
the time when the exchange on which they are traded closes and the time
when the Portfolio's net asset value is calculated, such securities will
be valued at fair value in accordance with procedures established by and
under the general supervision of the Portfolio's Trustees.
b)The books and records of the Portfolio are maintained in U.S. dollars. The
market value of investment securities, other assets and liabilities and
forward currency contracts stated in foreign currencies are translated at
the prevailing exchange rates at the end of the period. Purchases, sales,
income and expense are translated at the exchange rate prevailing on the
respective dates of such transactions. Translation gains and losses
resulting from changes in the exchange rate during the reporting period
and gains and losses realized upon settlement of foreign currency
transactions are reported in the Statement of Operations.
30
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
Since the net assets of the Portfolio are presented at the exchange rates
and market values prevailing at the end of the period, the Portfolio does
not isolate the portion of the results of operations arising as a result
of changes in foreign exchange rates from the fluctuations arising from
changes in the market prices of securities during the period.
c)The Portfolio may enter into forward and spot foreign currency contracts
to protect securities and related receivables and payables against
fluctuations in future foreign currency rates. A forward contract is an
agreement to buy or sell currencies of different countries on a specified
future date at a specified rate. Risks associated with such contracts
include the movement in the value of the foreign currency relative to the
U.S. dollar and the ability of the counterparty to perform.
The market value of the contract will fluctuate with changes in currency
exchange rates. Contracts are valued daily based on procedures established
by and under the general supervision of the Portfolio's Trustees and the
change in the market value is recorded by the Portfolio as unrealized
appreciation or depreciation of foreign forward and spot currency contract
translations. At April 30, 1995 the Portfolio had open foreign forward and
spot currency contracts as follows:
SUMMARY OF OPEN CONTRACTS
<TABLE>
<CAPTION>
U.S. DOLLAR NET UNREALIZED
VALUE AT APPRECIATION
FOREIGN CURRENCY SALE CONTRACTS PROCEEDS 04/30/95 (DEPRECIATION)
- ------------------------------------------------------------- ------------- ------------- ---------------
<S> <C> <C> <C>
Japanese Yen, 7,256,674,039, expiring 07/11/95 $ 85,553,808 $ 87,004,429 $ (1,450,621)
Malaysian Ringgit, 1,143,272, expiring 05/02/95 463,652 462,489 1,163
<CAPTION>
FOREIGN CURRENCY BUY CONTRACTS COST
- ------------------------------------------------------------- -------------
<S> <C> <C> <C>
Singapore Dollar, 647,026, expiring 05/02/95 463,651 464,317 666
---------------
Net Unrealized Depreciation on Foreign Forward and Spot
Currency Contracts $ (1,448,792)
---------------
</TABLE>
d)Securities transactions are recorded on a trade date basis. Dividend
income is recorded on the ex-dividend date or at the time that the
relevant ex-dividend date and amount becomes known. Interest income, which
includes the amortization of premiums and discounts, if any, is recorded
on an accrual basis. For financial and tax reporting purposes, realized
gains and losses are determined on the basis of specific lot
identification.
e)The Portfolio will be treated as a partnership for federal income tax
purposes. As such, each investor in the Portfolio will be taxable 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. The Portfolio earns foreign income which may
be subject to foreign withholding taxes at various rates.
31
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH AFFILIATES
a)The Portfolio has an investment advisory agreement with Morgan Guaranty
Trust Company of New York ("Morgan"). Under the terms of the investment
advisory agreement, the Portfolio pays Morgan at an annual rate of 0.60%
of the Portfolio's average daily net assets. For the six months ended
April 30, 1995 such fees amounted to $1,334,988.
b)The Portfolio retains Signature Broker-Dealer Services, Inc. ("Signature")
to serve as Administrator and exclusive placement agent. Signature
provides 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 Signature. The agreement provides for a fee to be
paid to Signature at an annual rate determined by the following schedule:
0.01% of the first $1 billion of the aggregate average daily net assets of
the Portfolio and the other portfolios subject to the Administrative
Services Agreement, 0.008% of the next $2 billion of such net assets,
0.006% of the next $2 billion of such net assets, and 0.004% of such net
assets in excess of $5 billion. The daily equivalent of the fee rate is
applied to the daily net assets of the Portfolio. For the six months ended
April 30, 1995 such expenses amounted to $14,216.
c)The Portfolio has a Financial and Fund Accounting Services Agreement
("Services Agreement") with Morgan under which Morgan receives a fee,
based on the percentages described below, for overseeing certain aspects
of the administration and operation of the Portfolio. The Services
Agreement is also designed to provide an expense limit for certain
expenses of the Portfolio. If total expenses of the Portfolio, excluding
the advisory fee, custody expenses, fund services fee, and brokerage
costs, exceed the expense limit of 0.15% of the Portfolio's average daily
net assets up to $200 million, 0.10% on the next $200 million of average
daily net assets, 0.05% of the next $200 million of average daily assets
and 0.03% of net assets thereafter, Morgan will reimburse the Portfolio
for the excess expense amount and receive no fee. Should such expenses be
less than the expense limit, Morgan's fee would be limited to the
difference between such expenses and the fee calculated under the Services
Agreement. For the six months ended April 30, 1995, Morgan's fee amounted
to $207,295.
d)The Portfolio has a Fund Services Agreement with Pierpont Group, Inc.
("Group") to assist the Trustees in exercising their overall supervisory
responsibilities for the Portfolio's affairs. The Trustees of the
Portfolio represent all the existing shareholders of Group. The
Portfolio's allocated portion of Group's costs in performing its services
amounted to $22,668 for the six months ended April 30, 1995.
e)An aggregate annual fee of $65,000 is paid to each Trustee for serving as
a Trustee of the Pierpont Funds, The JPM Institutional Funds, and their
corresponding Portfolios. The Trustees' Fees and Expenses shown in the
financial statements represents the Portfolio's allocated portion of the
total fees and expenses. Prior to April 1, 1995, an aggregate annual fee
of $55,000 was paid to each Trustee. The Trustee who serves as Chairman
and Chief Executive Officer of these Funds and
32
<PAGE>
THE NON-U.S. EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1995
- --------------------------------------------------------------------------------
Portfolios also serves as Chairman of Group and received compensation and
employee benefits from Group in his role as Group's Chairman. The
allocated portion of such compensation and benefits included in the Fund
Services Fee shown in the financial statements was $2,700.
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) for the period
were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
- -------------- --------------
<S> <C>
$231,119,249 $118,404,314
</TABLE>
33
<PAGE>
THE PIERPONT MONEY MARKET FUND
THE PIERPONT TAX EXEMPT MONEY MARKET FUND
THE PIERPONT TREASURY MONEY MARKET FUND
THE PIERPONT SHORT TERM BOND FUND
THE PIERPONT BOND FUND
THE PIERPONT TAX EXEMPT BOND FUND
THE PIERPONT NEW YORK TOTAL RETURN BOND FUND
THE PIERPONT DIVERSIFIED FUND
THE PIERPONT EQUITY FUND
THE PIERPONT CAPITAL APPRECIATION FUND
THE PIERPONT INTERNATIONAL EQUITY FUND
THE PIERPONT EMERGING MARKETS EQUITY FUND
THE
PIERPONT
INTERNATIONAL
EQUITY FUND
FOR MORE INFORMATION ON HOW THE PIERPONT FAMILY OF FUNDS CAN HELP YOU PLAN FOR
YOUR FUTURE, CALL J.P. MORGAN FUNDS SERVICES AT (800) 521-5411.
SEMI-ANNUAL REPORT
APRIL 30, 1995
