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<PAGE> PAGE 2
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<PAGE> PAGE 3
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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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<PAGE> PAGE 10
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<PAGE> PAGE 11
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SIGNATURE GEORGE A RIO
TITLE TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial data extracted from the annual report
dated June 30, 1999 for the Diversified Portolio and is qualified in its
entirety by reference to such annual report.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> JUN-30-1999
<INVESTMENTS-AT-COST> 710641
<INVESTMENTS-AT-VALUE> 836058
<RECEIVABLES> 15054
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<NET-ASSETS> 873881
<DIVIDEND-INCOME> 6989
<INTEREST-INCOME> 15291
<OTHER-INCOME> 0
<EXPENSES-NET> 4532
<NET-INVESTMENT-INCOME> 17748
<REALIZED-GAINS-CURRENT> 34831
<APPREC-INCREASE-CURRENT> 37911
<NET-CHANGE-FROM-OPS> 90490
<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> 314816
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3835
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4716
<AVERAGE-NET-ASSETS> 697222
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
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[AVG-DEBT-OUTSTANDING] 0
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</TABLE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Common
--------------------- Stock - 16,200,000 Shares
Issuer: Keebler Foods Company
--------------------- Offering Type: U.S. Registered
---------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date Jan. 20,1999 None N/A
2. Trade Date Jan. 20,1999 Must be the same as #1 YES
------------ ---
3. Unit Price of Offering $33.4375 None N/A
-------- ---
4. Price Paid per Share $33.4375 Must not exceed #3 YES
-------- ---
5. Years of Issuer's Operations 146 Must be at least three years * YES
--- ---
6. Underwriting Type Firm Must be firm YES
7. Underwriting Spread $1.00 Investment Adviser determination to YES
----- be made ---
8. Total Price paid by Portfolio $240,750 None N/A
-------- ---
9. Total Size of Offering $541,687,500 None N/A
------------ ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** YES
by the same investment adviser for other $5,687,719 ---
investment companies ----------
11. Underwriter(s) from whom the Portfolio Lehman Bros
purchased (attach a prospectus or First Must not include Investment Adviser
offering circular for a list of all BostonCorp. affiliates *** YES
syndicate members)
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" YES
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Common Stock
--------------------- - 7,000,000 Shares
------------------
Issuer: American Axle & Mfg. Hldgs.,Inc. Offering Type: U.S. Registered
------------------------------- (US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date Jan. 28,1999 None N/A
2. Trade Date Jan. 28,1999 Must be the same as #1 YES
------------ ---
3. Unit Price of Offering $17.00 None N/A
------ ---
4. Price Paid per Share $17.00 Must not exceed #3 YES
------ ---
5. Years of Issuer's Operations 75 Must be at least three years * YES
-- ---
6. Underwriting Type Firm Must be firm YES
7. Underwriting Spread $1.19 Investment Adviser determination to YES
----- be made ---
8. Total Price paid by Portfolio $52,700 None N/A
------- ---
9. Total Size of Offering $119,000,000 None N/A
------------ ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** YES
by the same investment adviser for other $1,237,600 ---
investment companies ----------
11. Underwriter(s) from whom the Portfolio Merrill Lynch
purchased (attach a prospectus or Must not include Investment Adviser
offering circular for a list of all affiliates *** YES
syndicate members)
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" YES
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description:
------------- --------- Common Stock - 5,587,000 Shares
-------------------------------
Issuer: Mettler - Toledo International,Inc.
---------------------------------- Offering
Type: Secondary - U.S. Registered
---------------------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date Jan. 28,1999 None N/A
2. Trade Date Jan. 28,1999 Must be the same as #1 YES
------------ ---
3. Unit Price of Offering $26.375 None N/A
------- ---
4. Price Paid per Share $26.375 Must not exceed #3 YES
------- ---
5. Years of Issuer's Operations 54 Must be at least three years * YES
-- ---
6. Underwriting Type Firm Must be firm YES
7. Underwriting Spread $1.25 Investment Adviser determination to YES
----- be made ---
8. Total Price paid by Portfolio $92,313 None N/A
------- ---
9. Total Size of Offering $147,357,125 None N/A
------------ ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** YES
by the same investment adviser for other $2,110,000 ---
investment companies ----------
11. Underwriter(s) from whom the Portfolio Merrill Lynch
purchased (attach a prospectus or Must not include Investment Adviser
offering circular for a list of all affiliates *** YES
syndicate members)
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" YES
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Notes
Issuer: AT & T Corp. 6.0% due 3/15/09 Offering Type: US Registered
----------------------------- -------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date March 23, 1999 None N/A
-------------- ---
2. Trade Date March 23, 1999 Must be the same as #1 Yes
-------------- ---
3. Unit Price of Offering 99.765% None N/A
---
4. Price Paid per Unit 99.765% Must not exceed #3 Yes
---
5. Years of Issuer's Operations 114 Must be at least three years * Yes
--- ---
6. Underwriting Type Firm Must be firm Yes
7. Underwriting Spread . 450% Investment Adviser determination to Yes
be made ---
8. Total Price paid by Portfolio $1,596,240 None N/A
---------- ---
9. Total Size of Offering $2,992,950,000 None N/A
-------------- ---
10. Total Price Paid by Portfolio plus Total $29,630,205 #10 divided by #9 must not exceed
Price Paid for same securities purchased ----------- 25% ** Yes
by the same investment adviser for other ---
investment companies
11. Underwriter(s) from whom the Portfolio Merrill Lynch
purchased (attach a prospectus or Must not include Investment Adviser
offering circular for a list of all affiliates *** Yes
syndicate members)
12.
If the affiliate was lead or co-lead Yes
manager, was the instruction listed below Must be "Yes" or "N/A" Yes
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Class A
--------------------- Common Stock - 4,200,000 Shares
-------------------------------
Issuer: i Turf Inc. Offering Type: U.S. Registered
---------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date April 9, 1999 None N/A
------------- ---
2. Trade Date April 9, 1999 Must be the same as #1 YES
-------------- ---
3. Unit Price of Offering $22.00 None N/A
------ ---
4. Price Paid per Share $22.00 Must not exceed #3 YES
------ ---
5. Years of Issuer's Operations 4 Must be at least three years * YES
- ---
6. Underwriting Type Firm Must be firm YES
7. Underwriting Spread $1.54 Investment Adviser determination to YES
----- be made ---
8. Total Price paid by Portfolio $17,600 None N/A
------- ---
9. Total Size of Offering $92,400,000 None N/A
----------- ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** YES
by the same investment adviser for other $635,800 ---
investment companies --------
11. Underwriter(s) from whom the Portfolio BT Alex Brown
purchased (attach a prospectus or Must not include Investment Adviser
offering circular for a list of all affiliates *** YES
syndicate members)
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" N/A
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Common
--------------------- Stock - 3,500,000 Shares
------------------------
Issuer: 24/7 Media,Inc. Offering Type: U.S. Registered
---------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date April 27,1999 None N/A
2. Trade Date April 27,1999 Must be the same as #1 YES
------------- ---
3. Unit Price of Offering $46.00 None N/A
------ ---
4. Price Paid per Share $46.00 Must not exceed #3 YES
------ ---
5. Years of Issuer's Operations 5 Must be at least three years * YES
- ---
6. Underwriting Type Firm Must be firm YES
7. Underwriting Spread $2.53 Investment Adviser determination to YES
----- be made ---
8. Total Price paid by Portfolio $59,800 None N/A
------- ---
9. Total Size of Offering $161,000,000 None N/A
------------ ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** YES
by the same investment adviser for other $1,223,600 ---
investment companies ----------
11. Underwriter(s) from whom the Portfolio Merrill Lynch
purchased (attach a prospectus or Must not include Investment Adviser
offering circular for a list of all affiliates *** YES
syndicate members)
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" N/A
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Common
---------------------- Stock - 4,500,000 Shares
------------------------
Issuer: Comps.Com,Inc. Offering Type: U.S. Registered
---------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date May 5, 1999 None N/A
----------- ---
2. Trade Date May 5, 1999 Must be the same as #1 YES
- ----------- ---
3. Unit Price of Offering $15.00 None N/A
------ ---
4. Price Paid per Share $15.00 Must not exceed #3 YES
------ ---
5. Years of Issuer's Operations 17 Must be at least three years * YES
-- ---
6. Underwriting Type Firm Must be firm YES
7. Underwriting Spread $1.05 Investment Adviser determination to YES
----- be made ---
8. Total Price paid by Portfolio $7,500 None N/A
------ ---
9. Total Size of Offering $67,500,000 None N/A
----------- ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** YES
by the same investment adviser for other $246,000 ---
investment companies --------
11. Underwriter(s) from whom the Portfolio Volpe Brown
purchased (attach a prospectus or Whelan & Co Must not include Investment Adviser
offering circular for a list of all ----------- affiliates *** YES
syndicate members) ---
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" N/A
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Common Stock
--------------------- - 4,000,000 Shares
------------------
Issuer: CapRock Communications Corp. Offering Type: U.S. Registered
----------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date May 6, 1999 None N/A
----------- ---
2. Trade Date May 6, 1999 Must be the same as #1 YES
----------- ---
3. Unit Price of Offering $22.00 None N/A
------ ---
4. Price Paid per Share $22.00 Must not exceed #3 YES
------ ---
5. Years of Issuer's Operations 4 Must be at least three years * YES
- ---
6. Underwriting Type Firm Must be firm YES
7. Underwriting Spread $1.32 Investment Adviser determination to YES
----- be made ---
8. Total Price paid by Portfolio $99,000 None N/A
------- ---
9. Total Size of Offering $88,000,000 None N/A
----------- ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** YES
by the same investment adviser for other $2,930,400 ---
investment companies ----------
11. Underwriter(s) from whom the Portfolio Merrill Lynch
purchased (attach a prospectus or Must not include Investment Adviser
offering circular for a list of all affiliates *** YES
syndicate members)
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" N/A
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Common Stock
--------------------- - 3,000,000 Shares
------------------
Issuer: Media Metrix, Inc. Offering Type: U.S. Registered
----------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date May 7, 1999 None N/A
----------- ---
2. Trade Date May 7, 1999 Must be the same as #1 YES
- ----------- ---
3. Unit Price of Offering $17.00 None N/A
------ ---
4. Price Paid per Share $17.00 Must not exceed #3 YES
------ ---
5. Years of Issuer's Operations 4 Must be at least three years * YES
- ---
6. Underwriting Type Firm Must be firm YES
7. Underwriting Spread $1.19 Investment Adviser determination to YES
----- be made ---
8. Total Price paid by Portfolio $3,400 None N/A
------ ---
9. Total Size of Offering $51,000,000 None N/A
----------- ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** YES
by the same investment adviser for other $111,775 ---
investment companies --------
11. Underwriter(s) from whom the Portfolio Donaldson
purchased (attach a prospectus or Lufkin & Must not include Investment Adviser
offering circular for a list of all Jenrette affiliates *** YES
syndicate members)
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" N/A
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Class A-
--------------------- Common Stock - 25,000,000 Shares
--------------------------------
Issuer: barnesandnoble.com inc. Offering Type: U.S. Registered
----------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date May 25, 1999 None N/A
------------ ---
2. Trade Date May 25, 1999 Must be the same as #1 YES
- ------------ ---
3. Unit Price of Offering $18.00 None N/A
------ ---
4. Price Paid per Share $18.00 Must not exceed #3 YES
------ ---
5. Years of Issuer's Operations 13 Must be at least three years * YES
-- ---
6. Underwriting Type Firm Must be firm YES
7. Underwriting Spread $1.08 Investment Adviser determination to YES
----- be made ---
8. Total Price paid by Portfolio $39,600 None N/A
------- ---
9. Total Size of Offering $450,000,000 None N/A
------------ ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** YES
by the same investment adviser for other $1,193,400 ---
investment companies ----------
11. Underwriter(s) from whom the Portfolio Goldman
purchased (attach a prospectus or Sachs Must not include Investment Adviser
offering circular for a list of all affiliates *** YES
syndicate members)
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" N/A
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Common Stock
--------------------- - 16,000,000 Shares
-------------------
Issuer: DLJdirect Inc. Offering Type: U.S. Registered
----------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date May 25, 1999 None N/A
------------ ---
2. Trade Date May 25, 1999 Must be the same as #1 YES
------------ ---
3. Unit Price of Offering $20.00 None N/A
------ ---
4. Price Paid per Share $20.00 Must not exceed #3 YES
------ ---
5. Years of Issuer's Operations 10 Must be at least three years * YES
-- ---
6. Underwriting Type Firm Must be firm YES
7. Underwriting Spread $1.35 Investment Adviser determination to YES
----- be made ---
8. Total Price paid by Portfolio $14,000 None N/A
------- ---
9. Total Size of Offering $320,000,000 None N/A
------------ ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** YES
by the same investment adviser for other $393,000 ---
investment companies --------
11. Underwriter(s) from whom the Portfolio Donaldson
purchased (attach a prospectus or Lufkin & Must not include Investment Adviser
offering circular for a list of all Jenrette affiliates *** YES
syndicate members)
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" N/A
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
<PAGE>
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Diversified Portfolio Security Description: Notes
Issuer: Household Finance Corp. 5.875% 2/1/09 Offering Type: US Registered
-------------------------------------- -------------
(US Registered, Eligible Muni,
Eligible Foreign, Eligible 144A)
<TABLE>
<CAPTION>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C> <C> <C>
1. Offering Date Jan. 29, 1999 None N/A
------------- ---
2. Trade Date Jan. 29, 1999 Must be the same as #1 Yes
------------- ---
3. Unit Price of Offering 99.435% None N/A
---
4. Price Paid per Unit 99.435% Must not exceed #3 Yes
---
5. Years of Issuer's Operations 121 Must be at least three years * Yes
--- ---
6. Underwriting Type Firm Must be firm Yes
7. Underwriting Spread .450% Investment Adviser determination to Yes
be made ---
8. Total Price paid by Portfolio $1,590,960 None N/A
---------- ---
9. Total Size of Offering $1,292,655,000 None N/A
-------------- ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** Yes
by the same investment adviser for other $13,622,595 ---
investment companies -----------
11. Underwriter(s) from whom the Portfolio Must not include Investment Adviser
purchased (attach a prospectus or ABN AMRO affiliates ***
offering circular for a list of all Salomon Bros Yes
syndicate members) ---
12. If the affiliate was lead or co-lead N/A Must be "Yes" or "N/A"
manager, was the instruction listed below Yes
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings.
Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that
the purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to
the Investment Adviser's affiliate.
Report of Independent Accountants
To the Investors and Trustees of
The Diversified Portfolio
In planning and performing our audit of the financial statements of The
Diversified Portfolio (the "Portfolio") for the year ended June 30, 1999, we
considered its internal control, including control activities for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on internal control.
The management of the Portfolio is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit pertain to the
entity's objective of preparing financial statements for external purposes that
are fairly presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control 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 internal control would not necessarily disclose all matters
in internal control 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 one or more
of the internal control components does not reduce to a relatively low level the
risk that misstatements caused by error or fraud 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 internal control and its operation,
<PAGE>
including controls for safeguarding securities, that we consider to be material
weaknesses as defined above as of June 30, 1999.
This report is intended solely for the information and use of management and the
Trustees of the Portfolio and the Securities and Exchange Commission.
August 18, 1999
