The U.S. Small Company Portfolio
Annual Report May 31, 1995
(The following pages should be read in conjunction
with The Pierpont Capital Appreciation Fund
Annual Financial Statements)
16
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1a)
------------- -------------
COMMON STOCKS (91.3%)
<S> <C> <C>
BASIC INDUSTRIES (7.6%)
AGRICULTURE (0.6%)
Dekalb Genetics Corp...................................... 93,700 $ 3,507,894
-------------
CHEMICALS (2.4%)
Albemarle Corp............................................ 164,300 2,526,113
Georgia Gulf Corp. (a).................................... 96,400 2,928,150
Wellman, Inc.............................................. 366,900 9,218,362
-------------
14,672,625
-------------
METALS & MINING (4.3%)
Allegheny Ludlum Corp..................................... 375,700 7,420,075
Commercial Metals Co...................................... 216,366 5,923,019
Freeport McMoRan Copper & Gold Inc. Class A............... 172,000 3,526,000
Kaiser Aluminum Corp. (a)................................. 153,700 1,786,762
Maverick Tube Corp. (a)................................... 128,400 1,139,550
Minera Rayrock, Inc.* (a)................................. 781,100 912,500
Oregon Steel Mills, Inc................................... 97,500 1,560,000
Steel Technologies, Inc................................... 386,800 4,593,250
-------------
26,861,156
-------------
PAPER & FOREST PRODUCTS (0.3%)
Glatfelter (P.H.) Co...................................... 106,300 2,019,700
-------------
TOTAL BASIC INDUSTRIES................................ 47,061,375
-------------
CONSUMER GOODS & SERVICES (16.3%)
AUTOMOTIVE SUPPLIES (1.6%)
Cooper Tire & Rubber Co................................... 148,900 3,610,825
Excel Industries, Inc..................................... 199,500 2,743,125
Simpson Industries, Inc................................... 364,000 3,731,000
-------------
10,084,950
-------------
BEVERAGES, FOOD, SOAP & TOBACCO (1.2%)
Bush Boake Allen, Inc. (a)................................ 55,000 1,560,625
Dreyer's Grand Ice Cream, Inc............................. 29,000 917,125
Eskimo Pie Corp........................................... 35,400 542,063
Nabisco Holdings Corp. Class A............................ 30,000 783,750
Riviana Foods Inc......................................... 68,800 868,600
Sanfilippo, John B. and Son Inc. (a)...................... 26,300 243,275
Universal Foods Corp...................................... 85,000 2,698,750
-------------
7,614,188
-------------
</TABLE>
See Accompanying Notes.
17
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1a)
------------- -------------
<S> <C> <C>
ENTERTAINMENT, LEISURE & MEDIA (2.7%)
Boyd Gaming Corp. (a)..................................... 273,300 $ 3,962,850
Cinergi Pictures Entertainment, Inc. (a).................. 130,000 926,250
Comcast UK Cable Partners Ltd.* (a)....................... 31,400 474,925
Heritage Media Corp. (a).................................. 65,000 1,803,750
IMAX Corp. (a)............................................ 75,400 885,950
Lottery Enterprises, Inc.................................. 18,605 32,559
Paging Network, Inc. (a).................................. 154,800 4,257,000
People's Choice TV Corp. (a).............................. 42,000 1,018,500
Sports Club Company, Inc. (a)............................. 45,400 227,000
Starbucks Corp. (a)....................................... 32,600 945,400
Telewest Communications PLC (ADR) (a)..................... 48,300 1,243,725
Videotron Holdings PLC (ADR) (a).......................... 55,100 730,075
-------------
16,507,984
-------------
HOME CONSTRUCTION (0.4%)
Bush Industries, Inc...................................... 31,500 370,125
D.R. Horton, Inc.......................................... 195,982 2,253,793
-------------
2,623,918
-------------
MERCHANDISING (4.9%)
Borders Group Inc. (a).................................... 27,700 405,112
Catherines Stores Corp. (a)............................... 203,900 2,051,744
Charming Shoppes, Inc..................................... 549,800 2,388,194
Fastenal Co............................................... 52,000 1,469,000
First Brands Corp......................................... 38,000 1,567,500
Fruit of the Loom, Inc. Class A (a)....................... 169,100 4,502,287
Garden Ridge Corp. (a).................................... 8,700 154,425
Hannaford Brothers Co..................................... 32,600 872,050
Holson Burnes Group, Inc. (a)............................. 100,000 437,500
Kohls Corp. (a)........................................... 50,100 2,173,087
Leslie's Poolmart (a)..................................... 27,000 405,000
Nine West Group, Inc. (a)................................. 43,400 1,513,575
Office Depot Inc. (a)..................................... 31,300 751,200
One Price Clothing Stores, Inc............................ 294,700 1,418,244
Penn Traffic Co. (a)...................................... 89,800 2,963,400
Safety 1st, Inc. (a)...................................... 56,200 1,060,775
St. John Knits, Inc....................................... 22,000 852,500
Stop and Shop Companies, Inc. (a)......................... 32,400 874,800
TJX Companies, Inc........................................ 157,800 2,110,575
Trans World Entertainment (a)............................. 207,400 790,712
Urban Outfitters, Inc. (a)................................ 40,100 736,838
Vons Companies Inc. (a)................................... 50,500 1,047,875
-------------
30,546,393
-------------
</TABLE>
See Accompanying Notes.
18
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
MISCELLANEOUS (0.9%) SHARES (NOTE 1a)
------------- -------------
<S> <C> <C>
Congoleum Corp. (a)....................................... 23,700 $ 343,650
DeVRY, Inc. (a)........................................... 54,600 2,122,575
Johnson Worldwide Associates, Inc. (a).................... 135,979 2,872,556
-------------
5,338,781
-------------
PERSONAL SECURITY (1.8%)
ADT Ltd. (a).............................................. 793,300 9,023,788
Pinkerton's, Inc. (a)..................................... 120,000 1,890,000
-------------
10,913,788
-------------
PERSONAL SERVICES (0.8%)
Equity Corp. International (a)............................ 11,600 187,050
Service Corp. International............................... 175,000 5,009,375
-------------
5,196,425
-------------
RESTAURANTS & HOTELS (2.0%)
Argosy Gaming Corp. (a)................................... 36,000 474,750
Brinker International, Inc. (a)........................... 75,300 1,270,688
Equity Inns Inc........................................... 69,000 750,375
Players International, Inc. (a)........................... 60,000 1,256,250
Royal Caribbean Cruises Ltd.*............................. 121,400 3,035,000
Sbarro, Inc............................................... 248,000 5,704,000
-------------
12,491,063
-------------
TOTAL CONSUMER GOODS & SERVICES....................... 101,317,490
-------------
ENERGY (5.1%)
OIL & GAS PRODUCTION (3.6%)
Anadarko Petroleum Corp................................... 65,200 2,828,050
Devon Energy Corp......................................... 117,500 2,526,250
Noble Affiliates, Inc..................................... 32,300 876,138
Oryx Energy Co. (a)....................................... 458,000 6,583,750
Tesoro Petroleum Corp. (a)................................ 52,900 575,288
TransCanada Pipelines Ltd................................. 367,200 4,865,400
Vintage Petroleum, Inc.................................... 202,300 3,995,425
-------------
22,250,301
-------------
OIL-SERVICES (1.5%)
Dreco Energy Services Ltd. Class A (a).................... 111,700 1,521,912
Global Marine, Inc. (a)................................... 121,200 651,450
Holly Corp................................................ 72,700 1,781,150
Noble Drilling Corp. (a).................................. 448,300 3,334,231
Oceaneering International, Inc. (a)....................... 208,100 2,028,975
-------------
9,317,718
-------------
TOTAL ENERGY.......................................... 31,568,019
-------------
</TABLE>
See Accompanying Notes.
19
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1a)
------------- -------------
<S> <C> <C>
FINANCE (17.0%)
BANKING (8.1%)
Banknorth Group, Inc...................................... 81,600 $ 2,111,400
Bay View Capital Corp..................................... 70,300 1,827,800
Charter One Financial Inc................................. 141,900 3,565,237
Cole Taylor Financial Group, Inc.......................... 14,900 271,925
Colonial Bancgroup, Inc. Class A.......................... 75,700 1,911,425
Commerce Bancorp, Inc..................................... 104,900 1,881,644
Community First Bankshares, Inc........................... 59,100 919,744
First Commerce Corp....................................... 308,500 8,580,156
FirstFed Financial Corp. (a).............................. 64,500 1,080,375
First National Bancorp-Gainesville........................ 55,700 1,155,775
Firstar Corp.............................................. 179,800 5,686,175
First Virginia Banks, Inc................................. 72,200 2,590,175
GBC Bancorp............................................... 63,000 779,625
HUBCO, Inc................................................ 57,200 979,550
National Commerce Bancorporation.......................... 25,400 631,825
Roosevelt Financial Group, Inc............................ 118,600 2,031,025
Silicon Valley Bancshares (a)............................. 69,900 1,179,562
Southern National Corp.................................... 216,120 4,700,610
Sterling Bancshares, Inc.................................. 52,650 671,288
Trustco Bank Corp. of New York............................ 81,500 1,670,750
Westamerica Bancorporation................................ 71,400 2,543,625
Wilmington Trust Corp..................................... 129,600 3,369,600
-------------
50,139,291
-------------
FINANCIAL SERVICES (0.5%)
Payco American Corp. (a).................................. 78,000 560,625
SPS Transaction Services, Inc............................. 32,000 988,000
Southwest Securities Group, Inc........................... 195,300 1,647,844
-------------
3,196,469
-------------
INSURANCE (4.2%)
AMBAC Inc................................................. 132,300 5,292,000
Capital Re Corp........................................... 303,300 7,468,763
First Colony Corp......................................... 175,900 4,155,638
Fremont General Corp...................................... 59,500 1,502,375
Hilb, Rogal & Hamilton Co................................. 49,600 620,000
MMI Companies, Inc........................................ 207,200 3,833,200
Mid Ocean Limited*........................................ 29,100 822,075
Partner Re Limited*....................................... 107,200 2,452,200
-------------
26,146,251
-------------
REAL ESTATE INVESTMENT TRUSTS (4.2%)
Cali Realty Corp.......................................... 25,700 456,175
Capstone Capital Trust Inc................................ 73,800 1,273,050
</TABLE>
See Accompanying Notes.
20
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1a)
------------- -------------
<S> <C> <C>
Chelsea GCA Realty, Inc................................... 49,900 $ 1,316,113
Colonial Properties Trust................................. 38,800 877,850
Developers Diversified Realty Corp........................ 58,100 1,641,325
FelCor Suite Hotels Inc................................... 25,500 647,062
Gables Residential Trust.................................. 33,100 649,588
Health & Retirement Property Trust........................ 335,800 4,995,025
Healthcare Realty Trust, Inc.............................. 128,500 2,521,812
Home Properties of New York, Inc.......................... 61,100 1,038,700
Liberty Property Trust.................................... 32,600 631,625
MerryLand & Investment Company, Inc....................... 35,300 745,712
RFS Hotel Investments, Inc................................ 77,500 1,181,875
ROC Communities, Inc...................................... 98,000 2,143,750
Security Capital Pacific Trust............................ 114,200 2,041,325
Southwest Property Trust.................................. 115,800 1,433,025
Storage Trust Realty (a).................................. 46,600 937,825
Sun Commodities, Inc...................................... 28,400 678,050
Wellsford Residential Property Trust...................... 39,700 853,550
-------------
26,063,437
-------------
TOTAL FINANCE......................................... 105,545,448
-------------
HEALTH CARE (9.2%)
BIOTECHNOLOGY (3.0%)
Allergan, Inc............................................. 38,100 1,014,413
Amylin Pharmaceuticals, Inc. (a).......................... 66,500 498,750
Athena Neurosciences, Inc. (a)............................ 141,100 1,084,706
Bergen Brunswig Corp. Class A............................. 57,800 1,329,400
Centocor, Inc. (a)........................................ 36,600 496,388
Human Genome Sciences, Inc. (a)........................... 23,500 352,500
Inhale Therapeutic Systems (a)............................ 80,600 589,388
IVAX Corp................................................. 43,800 1,133,325
Mylan Laboratories........................................ 34,500 987,563
Northfield Laboratories, Inc. (a)......................... 61,600 839,300
Oncor, Inc. (a)........................................... 229,600 1,018,850
Perseptive Biosystems, Inc. (a)........................... 359,600 3,034,125
SangStat Medical Corp. (a)................................ 88,100 429,487
Targeted Genetics Corp. (a)............................... 108,400 447,150
Univax Biologics, Inc. (a)................................ 145,400 754,262
Vertex Pharmaceuticals, Inc. (a).......................... 121,300 1,955,962
Vical, Inc. (a)........................................... 141,300 1,139,231
Watson Pharmaceuticals, Inc. (a).......................... 37,900 1,388,087
-------------
18,492,887
-------------
HEALTH SERVICES (3.7%)
Advocat, Inc. (a)......................................... 156,300 1,738,837
Caremark International, Inc............................... 41,500 741,812
Community Health Systems, Inc. (a)........................ 47,000 1,656,750
Health Care & Retirement Corp............................. 173,600 5,121,200
Health Management Associates, Inc. Class A................ 189,400 5,184,825
</TABLE>
See Accompanying Notes.
21
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1a)
------------- -------------
<S> <C> <C>
Healthsource, Inc. (a).................................... 16,200 $ 639,900
Mariner Health Group, Inc. (a)............................ 205,200 2,962,575
OccuSystems, Inc. (a)..................................... 13,000 234,000
PhyCor, Inc. (a).......................................... 40,600 1,228,150
Summit Care Corp. (a)..................................... 108,600 2,110,912
Vivra, Inc. (a)........................................... 58,400 1,649,800
-------------
23,268,761
-------------
HOSPITAL SUPPLIES (2.5%)
Bard (CR), Inc............................................ 31,500 929,250
Bioject Medical Technologies, Inc. (a).................... 103,900 181,825
Biomet, Inc. (a).......................................... 32,400 477,900
CellPro, Inc. (a)......................................... 225,700 2,355,744
Corvita Corp. (a)......................................... 67,000 268,000
Fresenius USA, Inc. (a)................................... 254,300 2,527,106
Owens & Minor, Inc. Holding Co............................ 202,000 2,626,000
St. Jude Medical, Inc..................................... 28,700 1,300,469
Stryker Corp.............................................. 20,900 799,425
Sunrise Medical, Inc. (a)................................. 26,100 874,350
Vital Signs, Inc. (a)..................................... 198,900 3,145,106
-------------
15,485,175
-------------
TOTAL HEALTHCARE...................................... 57,246,823
-------------
INDUSTRIAL PRODUCTS & SERVICES (12.0%)
CAPITAL GOODS (0.3%)
Gardner Denver Machinery, Inc. (a)........................ 133,800 1,956,825
-------------
COMMERCIAL SERVICES (1.8%)
Advo, Inc................................................. 72,000 1,530,000
Banta Corp................................................ 120,800 4,016,600
Consolidated Graphics, Inc. (a)........................... 93,300 1,352,850
Emmis Broadcasting Corp. Class A (a)...................... 29,100 611,100
Hooper Holmes, Inc........................................ 105,000 945,000
Leasing Solutions, Inc.................................... 20,400 188,700
Nu-Kote Holding, Inc. (a)................................. 34,900 968,475
Robert Half International, Inc............................ 31,000 666,500
US Office Products Co. (a)................................ 55,500 613,969
-------------
10,893,194
-------------
DIVERSIFIED MANUFACTURING (3.0%)
Apogee Enterprises, Inc................................... 79,700 1,364,863
Brady (WH) Co., Class A Non-Voting........................ 102,400 6,451,200
Collins & Aikman Corp. (a)................................ 128,600 900,200
Greenfield Industries, Inc................................ 30,500 892,125
Kaydon Corp............................................... 177,727 4,887,493
Kuhlman Corp.............................................. 26,600 322,525
Libbey, Inc............................................... 116,900 2,250,325
</TABLE>
See Accompanying Notes.
22
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1a)
------------- -------------
<S> <C> <C>
PACCAR, Inc............................................... 30,400 $ 1,457,300
Pentech International, Inc. (a)........................... 6,800 19,550
Worldtex, Inc. (a)........................................ 51,600 296,700
-------------
18,842,281
-------------
ELECTRICAL EQUIPMENT (0.4%)
Charter Power Systems, Inc................................ 62,200 1,407,275
Encore Wire Corp. (a)..................................... 68,200 971,850
-------------
2,379,125
-------------
MACHINERY (5.1%)
Applied Power, Inc........................................ 136,200 3,507,150
Black & Decker Corp....................................... 280,400 9,253,200
Coltec Industries, Inc. (a)............................... 325,500 5,777,625
General Signal Corp....................................... 122,500 4,532,500
Intermet Corp. (a)........................................ 429,300 3,756,375
Regal-Beloit Corp......................................... 91,300 1,403,737
Sundstrand Corp........................................... 66,600 3,696,300
-------------
31,926,887
-------------
POLLUTION CONTROL (1.4%)
Dames & Moore, Inc........................................ 411,800 4,890,125
Mid-American Waste Systems, Inc........................... 288,100 1,512,525
Sevenson Environmental Services, Inc...................... 4,500 85,500
Tetra Technologies, Inc. (a).............................. 153,400 1,821,625
-------------
8,309,775
-------------
TOTAL INDUSTRIAL PRODUCTS & SERVICES.................. 74,308,087
-------------
TECHNOLOGY (16.3%)
AEROSPACE (1.0%)
Orbital Sciences Corp. (a)................................ 142,000 2,556,000
Rohr Industries, Inc. (a)................................. 260,400 3,222,450
Watkins-Johnson Co........................................ 14,100 630,975
-------------
6,409,425
-------------
COMPUTER-PERIPHERALS (2.3%)
Pinnacle Systems, Inc. (a)................................ 59,500 1,160,250
Quantum Corp. (a)......................................... 309,400 6,632,763
Radius, Inc............................................... 88,000 918,500
Read-Rite Corp. (a)....................................... 236,800 5,342,800
-------------
14,054,313
-------------
</TABLE>
See Accompanying Notes.
23
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1a)
------------- -------------
<S> <C> <C>
COMPUTER-SOFTWARE (4.2%)
Adobe Systems, Inc........................................ 48,100 $ 2,495,187
Autodesk, Inc............................................. 76,600 2,853,350
Avid Technology, Inc. (a)................................. 39,700 1,473,863
Baan Co., N.V.* (a)....................................... 7,800 184,275
Cheyenne Software, Inc. (a)............................... 42,600 644,325
Compuware Corp............................................ 25,900 767,287
Concentra Corp. (a)....................................... 22,000 228,250
Davidson & Associates, Inc. (a)........................... 24,900 725,213
Electronic Arts, Inc. (a)................................. 76,800 1,987,200
General Magic, Inc. (a)................................... 11,800 131,275
Inso Corp. (a)............................................ 26,500 1,484,000
Intersolv (a)............................................. 48,300 796,950
Maxis, Inc. (a)........................................... 7,200 143,100
McAfee Associates, Inc. (a)............................... 29,100 811,163
Mentor Graphics Corp. (a)................................. 81,200 1,370,250
Microtec Research, Inc. (a)............................... 171,900 2,277,675
Parametric Technology Corp. (a)........................... 26,000 1,098,500
Phoenix Technologies Ltd. (a)............................. 101,000 915,313
Project Software & Development, Inc. (a).................. 77,100 2,033,512
Quarterdeck Corp. (a)..................................... 119,300 868,653
Symantec Corp. (a)........................................ 115,900 2,665,700
-------------
25,955,041
-------------
ELECTRONICS (1.0%)
Amphenol Corp. (a)........................................ 38,100 1,052,512
Dynamics Corp. of America................................. 20,200 464,600
Perkin-Elmer Corp......................................... 32,800 1,139,800
Solectron Corp. (a)....................................... 37,400 1,126,675
Symbol Technologies, Inc. (a)............................. 53,600 1,809,000
Vishay Intertechnology, Inc. (a).......................... 7,800 515,775
-------------
6,108,362
-------------
INFORMATION PROCESSING (0.8%)
America Online, Inc. (a).................................. 94,200 3,344,100
Network Computing Devices, Inc. (a)....................... 127,100 921,475
Tandem Computers, Inc. (a)................................ 49,300 653,225
-------------
4,918,800
-------------
SEMICONDUCTORS (3.2%)
Advanced Technology Materials, Inc. (a)................... 159,500 1,256,063
Asyst Technologies, Inc. (a).............................. 23,900 743,887
Brooktree Corp. (a)....................................... 134,600 2,195,662
Credence Systems Corp. (a)................................ 44,800 1,551,200
Helix Technology Corp..................................... 28,400 1,075,650
Integrated Silicon Solution, Inc. (a)..................... 15,400 623,700
Micrel, Inc. (a).......................................... 146,600 3,096,925
</TABLE>
See Accompanying Notes.
24
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1a)
------------- -------------
<S> <C> <C>
Micrion Corp. (a)......................................... 70,300 $ 1,036,925
Microchip Technolgoy, Inc. (a)............................ 30,400 906,300
Nexgen, Inc. (a).......................................... 7,100 168,625
Oak Technology, Inc. (a).................................. 27,100 772,350
Opal, Inc. (a)............................................ 5,000 73,125
S3, Inc. (a).............................................. 109,700 2,968,756
SDL, Inc. (a)............................................. 48,300 1,249,763
Xilinx, Inc. (a).......................................... 24,200 2,041,875
-------------
19,760,806
-------------
TELECOMMUNICATIONS-EQUIPMENT (3.8%)
Applied Digital Access, Inc. (a).......................... 160,000 2,020,000
Arch Communications Group (a)............................. 26,100 541,575
Bay Networks Inc.......................................... 18,500 674,094
Ceridian Corp. (a)........................................ 24,600 793,350
Comdial Corp. (a)......................................... 168,800 506,400
Dialogic Corp. (a)........................................ 68,200 1,687,950
Harris Corp............................................... 138,400 7,352,500
MFS Communications Co. (a)................................ 31,400 918,450
MFS Communications Co. (Depository Shares) (a)............ 14,300 447,769
Network Express, Inc. (a)................................. 26,600 340,813
Network General Corp. (a)................................. 90,700 2,188,138
Network Peripherals, Inc. (a)............................. 67,300 1,472,187
Security Dynamics Technologies, Inc. (a).................. 62,900 2,539,588
Tellabs, Inc. (a)......................................... 33,800 1,111,175
UUNET Technologies, Inc. (a).............................. 8,000 192,000
XcelleNet, Inc. (a)....................................... 51,000 1,122,000
-------------
23,907,989
-------------
TOTAL TECHNOLOGY...................................... 101,114,736
-------------
TRANSPORTATION (1.9%)
AIRLINES (1.1%)
Comair Holdings, Inc...................................... 27,800 778,400
Mesa Airlines, Inc. (a)................................... 986,300 6,410,950
-------------
7,189,350
-------------
TRUCKING & FREIGHT CARRIERS (0.8%)
American Freightways Corp. (a)............................ 28,500 587,812
Heartland Express, Inc. (a)............................... 32,800 889,700
USA Truck, Inc. (a)....................................... 14,200 223,650
Werner Enterprises, Inc................................... 165,400 3,163,275
-------------
4,864,437
-------------
TOTAL TRANSPORTATION.................................. 12,053,787
-------------
</TABLE>
See Accompanying Notes.
25
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1a)
------------- -------------
<S> <C> <C>
UTILITIES (5.9%)
ELECTRIC (3.4%)
Allegheny Power Systems, Inc.............................. 106,700 $ 2,654,162
California Energy Co., Inc. (a)........................... 115,500 1,848,000
Central Hudson Gas & Electric Corp........................ 151,300 4,104,012
Central Louisiana Electric................................ 51,500 1,229,563
Illinova Corp............................................. 48,100 1,190,475
Maine Public Service Co................................... 38,100 809,625
Pinnacle West Capital Corp................................ 208,400 4,793,200
Potomac Electric Power Co................................. 57,000 1,161,375
Washington Water Power Co................................. 215,400 3,284,850
-------------
21,075,262
-------------
NATURAL GAS (1.2%)
Atlanta Gas Light Co...................................... 64,300 2,202,275
Brooklyn Union Gas Co..................................... 69,000 1,742,250
Chesapeake Utilities Corp................................. 12,400 156,550
El Paso Natural Gas Co.................................... 27,300 764,400
EnergyNorth, Inc.......................................... 2,000 32,000
Providence Energy Corp.................................... 76,800 1,248,000
United Cities Gas Co...................................... 53,900 842,188
Wicor, Inc................................................ 14,500 407,812
-------------
7,395,475
-------------
WATER (1.3%)
American Water Works Inc.................................. 161,700 4,830,788
Aquarion Co............................................... 41,500 954,500
E'Town Corp............................................... 43,800 1,133,325
SJW Corp.................................................. 6,000 207,000
Southern California Water Co.............................. 72,100 1,333,850
-------------
8,459,463
-------------
TOTAL UTILITIES....................................... 36,930,200
-------------
TOTAL COMMON STOCKS (COST $561,486,674)............... 567,145,965
-------------
CONVERTIBLE PREFERRED STOCK (0.0%+)
TECHNOLOGY -- ELECTRONICS (0.0%+)
Comptronix Corp., Series A (a)............................ 471 942
-------------
TOTAL CONVERTIBLE PREFERRED STOCK (COST $722)......... 942
-------------
</TABLE>
See Accompanying Notes.
26
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
RIGHTS (NOTE 1a)
------------- -------------
<S> <C> <C>
RIGHTS (0.0%+)
HEALTHCARE (0.0%+)
BIOTECHNOLOGY (0.0%+)
Allergan Ligand Retinoid Therapeutics Inc. - (expire
6/29/95)................................................. 1,199 $ 1,011
-------------
TOTAL RIGHTS.......................................... 1,011
-------------
<CAPTION>
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
CORPORATE OBLIGATIONS (0.3%)
Boston Chicken, Inc., 4.50% due 02/01/04, callable
02/01/96................................................. $ 1,782,000 1,612,710
-------------
TOTAL CORPORATE OBLIGATIONS (COST $1,522,704)......... 1,612,710
-------------
SHORT TERM INVESTMENTS (8.3%)
U.S. TREASURY OBLIGATIONS (8.3%)
U.S. Treasury Bills
5.72% due 6/22/95......................................... 42,926,000 42,683,229
5.61% due 6/1/95.......................................... 3,378,000 3,378,000
5.55% due 6/29/95......................................... 5,915,000 5,889,467
-------------
TOTAL U.S. TREASURY OBLIGATIONS....................... 51,950,696
-------------
TOTAL SHORT TERM INVESTMENTS (COST $51,950,696)....... 51,950,696
-------------
TOTAL INVESTMENTS (99.9%) (COST $614,960,796) 620,711,324
OTHER ASSETS NET OF LIABILITIES (0.1%) 341,885
-------------
NET ASSETS (100.0%) $ 621,053,209
-------------
-------------
</TABLE>
Note: Based on the cost of investments of $615,927,936 for Federal Income Tax
purposes at May 31, 1995, the aggregate gross unrealized appreciation and
depreciation was $53,485,313 and $48,701,926 respectively, resulting in net
unrealized appreciation of $4,783,387.
(a) Non-income producing security.
* Foreign Security.
(ADR) - Securities whose value is determined or significantly influenced by
trading on exchanges not located in the United States or Canada. ADR
after the name of a foreign holdings stands for American Depository
Receipt, representing ownership of foreign securities on deposit with a
domestic custodian bank.
+ Less than 0.1%
See Accompanying Notes.
27
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Value (Cost $614,960,796) (Note 1a) $ 620,711,324
Cash 705
Receivable for Investments Sold 12,263,967
Dividends Receivable 661,773
Interest Receivable 26,582
Prepaid Insurance 2,223
-------------
Total Assets 633,666,574
-------------
LIABILITIES
Payable for Securities Purchased 10,634,680
Advisory Fee Payable (Note 2a) 1,204,864
Financial and Fund Accounting Services Fee Payable (Note 2c) 445,137
Custody Fee Payable 293,357
Administration Fee Payable (Note 2b) 3,157
Fund Services Fee Payable (Note 2d) 2,703
Accrued Expenses 29,467
-------------
Total Liabilities 12,613,365
-------------
NET ASSETS
Applicable to Investors' Beneficial Interests $ 621,053,209
-------------
-------------
</TABLE>
See Accompanying Notes.
28
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED MAY 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividend Income (Net of Foreign Withholding Tax of $48,073) $ 9,914,055
Interest Income 1,336,749
-----------
Investment Income 11,250,804
EXPENSES
Advisory Fee (Note 2a)
$3,514,331
Custodian Fees and Expenses
255,180
Financial and Fund Accounting Services Fees (Note 2c)
241,373
Fund Services Fee (Note 2d)
62,256
Professional Fees
52,457
Administration Fee (Note 2b)
38,215
Trustees' Fees and Expenses (Note 2e)
15,238
Insurance
8,094
Miscellaneous
341
----------
Total Expenses 4,187,485
-----------
NET INVESTMENT INCOME 7,063,319
NET REALIZED GAIN ON INVESTMENTS 28,881,980
NET CHANGE IN UNREALIZED APPRECIATION OF INVESTMENTS 31,665,894
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $67,611,193
-----------
-----------
</TABLE>
See Accompanying Notes.
29
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 19, 1993
(COMMENCEMENT
FOR THE FISCAL OF
YEAR ENDED OPERATIONS) TO
INCREASE (DECREASE) IN NET ASSETS MAY 31, 1995 MAY 31, 1994
-------------- --------------
<S> <C> <C>
FROM OPERATIONS
Net Investment Income $ 7,063,319 $ 4,807,224
Net Realized Gain on Investments 28,881,980 33,091,201
Net Change in Unrealized Appreciation (Depreciation) of
Investments 31,665,894 (55,373,439)
-------------- --------------
Net Increase (Decrease) in Net Assets Resulting from
Operations 67,611,193 (17,475,014)
-------------- --------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions 162,456,578 903,848,399
Withdrawals (243,561,586) (251,926,461)
-------------- --------------
Net Increase (Decrease) from Investors' Transactions (81,105,008) 651,921,938
-------------- --------------
Total Increase (Decrease) in Net Assets (13,493,815) 634,446,924
NET ASSETS
Beginning of Period 634,547,024 100,100
-------------- --------------
End of Period $ 621,053,209 $ 634,547,024
-------------- --------------
-------------- --------------
</TABLE>
- - --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE JULY 19, 1993
FISCAL (COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
MAY 31, 1995 MAY 31, 1994
------------- ----------------
<S> <C> <C>
Ratios to Average Net Assets:
Expenses 0.71% 0.72%(a)
Net Investment Income 1.21% 0.99%(a)
Portfolio Turnover 75% 97%+
<FN>
- - ------------------------
(a) Annualized.
(+) Portfolio turnover is for the twelve month period ended May 31, 1994, and
includes the portfolio activity of the Portfolio's predecessor entity, The
Pierpont Capital Appreciation Fund, for the period June 1, 1993 to July 18,
1993.
</TABLE>
See Accompanying Notes.
30
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995
- - --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The U.S. Small Company Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940, as amended, 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 July 19, 1993 and
received a contribution of certain assets and liabilities, including securities,
with a value of $200,358,103 on that date from The Pierpont Capital Appreciation
Fund in exchange for a beneficial interest in the Portfolio. At that date, net
unrealized appreciation of $29,458,073 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 average of readily available closing bid
and asked prices on such exchanges. 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 at amortized cost.
b)Securities transactions are recorded on a trade date basis. Dividend
income is recorded on the ex-dividend date or as of 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.
c)The Portfolio intends to be treated as a partnership for federal income
tax purposes. As such, each investor in the Portfolio will be subject to
taxation 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.
d)The Portfolio's custodian takes possession of the collateral pledged for
investments in repurchase agreements on behalf of the Portfolio. It is the
policy of the Portfolio to value the underlying collateral daily on a
mark-to-market basis to determine that the value, including accrued
interest, is at least equal to the repurchase price plus accrued interest.
In the event of default of the obligation to repurchase, the Portfolio has
the right to liquidate the collateral and apply the proceeds in
31
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 1995
- - --------------------------------------------------------------------------------
satisfaction of the obligation. Under certain circumstances, in the event
of default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral or proceeds may be subject to legal
proceedings.
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 fiscal year ended May
31, 1995, this fee amounted to $3,514,331
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 fiscal year
ended May 31, 1995, Signature's fee for these services amounted to
$38,215.
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 0.10% of the Portfolio's average daily
net assets up to $200 million, 0.05% of the next $200 million of average
daily net assets, and 0.03% of average daily net sssets 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 fiscal year ended May 31,
1995, this fee amounted to $241,373.
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 $62,256 for the fiscal year ended May 31, 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, their
corresponding Portfolios and The Series Portfolio. 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,
the aggregate annual Trustee Fee was $55,000. The Trustee who serves as
Chairman and Chief Executive Officer of these Funds and
32
<PAGE>
THE U.S. SMALL COMPANY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 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 $7,300.
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) for the fiscal year
ended May 31, 1995 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
------------ ------------
<S> <C> <C>
$430,534,951 $511,722,242
</TABLE>
33
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Investors of
The U.S. Small Company Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the supplementary data present fairly, in all material
respects, the financial position of The U.S. Small Company Portfolio (the
"Portfolio") at May 31, 1995, the results of its operations for the year then
ended, and the changes in its net assets and its supplementary data for the year
then ended and for the period July 19, 1993 (commencement of operations) through
May 31, 1994, in conformity with generally accepted accounting principles. These
financial statements and supplementary data (hereafter referred to as "financial
statements") are the responsibility of the Portfolio's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at May 31,
1995 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
July 26, 1995
34
