<PAGE> PAGE 1
000 B000000 10/31/96
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000 F000000 Y
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000 J000000 A
001 A000000 THE U.S. FIXED INCOME PORTFOLIO
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001 C000000 8099496644
002 A000000 ELIZABETHAN SQUARE, 2ND FL, SHEDDEN ROAD
002 B000000 GEORGE TOWN
002 E010000 GRAND CAYMAN
002 E020000 E9
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008 A000001 MORGAN GUARANTY TRUST COMPANY OF NEW YORK
008 B000001 A
008 C000001 801-999999
008 D010001 NEW YORK
008 D020001 NY
008 D030001 10036
010 A000001 FUNDS DISTRIBUTOR, INC.
010 B000001 8-420518
010 C010001 BOSTON
010 C020001 MA
010 C030001 02116
010 A000002 MORGAN GUARANTY TRUST COMPANY OF NEW YORK
010 B000002 8-49999
010 C010002 NEW YORK
010 C020002 NY
010 C030002 10036
010 A000003 PIERPONT GROUP,INC.
010 C010003 NEW YORK
010 C020003 NY
<PAGE> PAGE 2
010 C030003 10017
011 A000001 FUNDS DISTRIBUTOR, INC.
011 B000001 8-420518
011 C010001 BOSTON
011 C020001 MA
011 C030001 02116
012 A000001 STATE STREET BANK & TRUST CO.
012 B000001 85-50003
012 C010001 BOSTON
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013 A000001 PRICE WATERHOUSE LLP
013 B010001 NEW YORK
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013 B030001 10036
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014 A000003 JP MORGAN SECURITIES LTD.
014 B000003 8-99999
015 A000001 STATE STREET BANK & TRUST COMPANY
015 B000001 C
015 C010001 BOSTON
015 C020001 MA
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022 B000001 13-5108880
022 C000001 8864791
022 D000001 135344
022 A000002 MORGAN STANLEY & CO.
022 B000002 13-2655998
022 C000002 396326
022 D000002 288854
022 A000003 LEHMAN, INC.
<PAGE> PAGE 3
022 C000003 197776
022 D000003 237096
022 A000004 SALOMON BROTHERS INC.
022 C000004 231860
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022 A000005 GREENWICH CAPITAL MARKETS
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022 A000006 PAINE WEBBER INC.
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022 A000007 MERRILL LYNCH, PIERCE, FENNER & SMITH
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022 C000008 101560
022 D000008 68056
022 A000009 HSBC SECURITIES INC.
022 C000009 148698
022 D000009 8277
022 A000010 BEAR, STEARNS & CO.
022 C000010 109788
022 D000010 24400
023 C000000 10713852
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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SIGNATURE LENORE J. MCCABE
TITLE ASSISTANT TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA EXTRACTED FROM THE ANNUAL
REPORT DATED 10/31/96 FOR THE US FIXED INCOME PORTFOLIO AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH ANNUAL REPORT.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 969776
<INVESTMENTS-AT-VALUE> 977566
<RECEIVABLES> 20040
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 6059
<TOTAL-ASSETS> 997611
<PAYABLE-FOR-SECURITIES> 10963
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 344
<TOTAL-LIABILITIES> 11306
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 986305
<DIVIDEND-INCOME> 53939
<INTEREST-INCOME> 118
<OTHER-INCOME> 0
<EXPENSES-NET> 2997
<NET-INVESTMENT-INCOME> 51060
<REALIZED-GAINS-CURRENT> 2644
<APPREC-INCREASE-CURRENT> (9808)
<NET-CHANGE-FROM-OPS> 43896
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 404425
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2997
<AVERAGE-NET-ASSETS> 800597
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .37
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
1177 Avenue of the Americas
New York, NY 10036
Telephone 212 596-7000
Facsimile 212 596-8910
Price Waterhouse LLP [logo]
December 18, 1996
To the Trustees of
The U.S. Fixed Income Portfolio
In planning and performing our audit of the financial statements of The U.S.
Fixed Income Portfolio (the "Portfolio") for the year ended October 31, 1996, we
considered its internal control structure, including procedures for safeguarding
securities, in order to determine our auditing procedures for the purposes of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, and not to provide assurance on the internal control
structure.
The management of the Portfolio is responsible for establishing and maintaining
an internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of internal control structure policies and procedures. Two of the
objectives of an internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are appropriately
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and may not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it may
become inadequate because of changes in conditions or that the effectiveness of
the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
October 31, 1996.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
