SEMI-ANNUAL REPORT
MARCH 31, 1997
THE BERGER FUNDS
BERGER ONE HUNDRED FUND
BERGER GROWTH & INCOME FUND
BERGER SMALL COMPANY GROWTH FUND
BERGER NEW GENERATION FUND
Dear Berger Funds Investor,
The Berger Funds are presenting a combined semi-annual report which includes the
Berger One Hundred Fund, Berger Growth & Income Fund, Berger Small Company
Growth Fund and Berger New Generation Fund.
The report reflects the financial position of each Fund at March 31, 1997, and
the results of their operations for the six months then ended and changes in
their net assets for the six months ended March 31, 1997, and for the fiscal
year ended September 30, 1996, in a single document.
TABLE OF CONTENTS
A Message From the Founder
Bill Berger, Shareholder & Director 2
An Economic and Market Perspective
A look at the past six months and
what lies ahead for investors 4
Berger One Hundred Fund
Portfolio Manager's Letter 7
Schedule of Investments 10
Berger Growth & Income Fund
Portfolio Manager's Letter 14
Schedule of Investments 17
Berger Small Company Growth Fund
Portfolio Manager's Letter 20
Schedule of Investments 23
Berger New Generation Fund
Portfolio Manager's Letter 27
Schedule of Investments 30
Financial Statements 33
Notes to Financial Statements 37
Financial Highlights 40
<PAGE>
A MESSAGE FROM THE FOUNDER
Dear Fellow Berger Funds Shareholder:
As investors, we have experienced extraordinary times recently. Since 1990, the
overall stock market has not dropped more than 10%. That's the longest period
the market has ever gone without a decline of that magnitude. On the up side,
the average annual total return for the Standard & Poor's (S&P) 500 Composite
Stock Index* for the two-year period 1995-1996 was 30.1%. That is one of the
highest returns in any two-year period in the past 70 years.
RECENT MARKET PERFORMANCE CAN CREATE UNREALISTIC EXPECTATIONS
The problem with extraordinary times is that they can create extraordinary
expectations for the future. Expectations that cannot be met. A 30.1% average
annual total return on the S&P 500 is nearly three times the historical average
annual total return of 10.7% earned by large capitalization (cap) stocks from
1926-1996 (Source: Ibbotson Associates). When stocks return to their more normal
performance levels, which I believe they will, investors run the risk of being
disappointed with those results. Furthermore, concentrating solely on broad
market averages like the S&P 500 or the Dow Jones Industrial Average (the one
your evening news reports to you every business day), can lead you to believe,
often erroneously, that every stock and stock mutual fund is soaring.
The high market volatility we experienced during the first quarter of 1997 was a
strong reminder to all of us to keep our expectations in line with reality and
remember our investment basics. No one can predict what the market will do in
the future beyond that it will go up and it will go down. How much and when are
questions that can't be answered. So what is an investor to do?
TAKE THE LONG-TERM VIEW
After more than 45 years in the investing business I can say with certainty that
only steady, long-term investors are successful investors. But, it isn't always
easy to be that kind of investor. At times, it will take all the patience and
courage you can muster.
History has proven that patient investors who take the long-term view are
rewarded. Of course, it's easier to be patient when you have confidence in the
future. You invested in stocks at least partially because you believed in
capitalism, the American economy, and the quality and strength of American
companies. Do you still believe in them? I certainly do--and for several
reasons:
1. American corporations are more profitable today, as measured by return
on shareholder's equity, than ever before.
2. The quality of the American workforce is unsurpassed. We can compete
with any nation's workforce in higher value work.
3. More and more markets are opening up to American products and
services.
IT MAY NOT BE EASY
Patience and an optimistic outlook will not make you a successful investor,
however, unless they are accompanied by a large dollop of courage. It's been
easy to be a stock market investor recently. But, the market has a tendency to
revert towards its long-term averages. Periods of very high returns, like those
we've recently enjoyed, tend to be followed by periods of lower returns, though
not necessarily losses. Likewise, and this may be encouraging to those of you
who have been battered in the small cap market, higher returns tend to follow
periods of historically low returns. Riding out those cycles takes courage and
rational expectations.
2
<PAGE>
THE LESSON OF THE TORTOISE
The best advice I can give to you is this: Examine your investment goals, time
frames, and commitment. If you are committed to the market for the long-term,
consider buying into it regularly, especially when stock prices are falling.
Dollar cost averaging can help you accumulate more shares with less price risk
than buying a large block of shares all at once.** Be the tortoise in the famous
fable, not the hare, and you may find that extraordinary times are not just
behind you--they also lie ahead.
Sincerely,
Bill Berger
Shareholder & Director
* The S&P 500 is an unmanaged index, with dividends reinvested, which
consists of the common stock of 500 publicly traded U.S. companies. One
cannot invest directly in an index.
** Periodic investment plans do not ensure a profit or protect against a loss
in declining markets, or against a loss if you stop a program when the
value of your account is less than the value of the shares you purchased.
3
<PAGE>
THE BERGER FUNDS
MARKET PERSPECTIVE: A CONVERSATION WITH BERGER PORTFOLIO MANAGER, BILL KEITHLER
PAT ADAMS RECENTLY JOINED YOU AS MANAGER OF THE BERGER 100 FUND AND MARK
MCKINNEY, A SENIOR ANALYST, WAS PROMOTED TO WORK WITH PAT AS CO-MANAGER OF THE
BERGER GROWTH AND INCOME FUND. WHAT CHANGES HAVE THEY MADE AND WHAT CAN WE
EXPECT OF THESE FUNDS IN THE FUTURE?
Between February 3, 1997, when they took over management responsibilities for
these Funds, and March 31, Pat and Mark restructured Fund holdings in order to
improve quality and long-term performance. You'll find a detailed description of
the changes they made in their Funds in the Portfolio Managers Letters for the
Berger 100 Fund and Berger Growth and Income Fund.
Our goal is for these Funds to, once again, be among the long-term performance
leaders in their categories. But we don't expect that to happen right away. Pat
and Mark are laying the groundwork necessary for improved performance, but the
market has been a difficult and highly volatile one, particularly during the
first quarter of 1997. We are confident, however, that Berger's
growth-at-a-reasonable-price philosophy, consistently implemented by our two
newest managers, will continue to reward patient shareholders.
WE CERTAINLY EXPERIENCED A GREAT DEAL OF MARKET VOLATILITY THE LAST SEVERAL
MONTHS. WHAT CONTRIBUTED TO THAT VOLATILITY AND WHAT ADVICE DO YOU HAVE FOR
INVESTORS DURING THESE PERIODS OF MARKET VOLATILITY?
One of the key contributors to the market's volatility was the Federal Reserve
Board's decision to raise interest rates on March 25. Even though the market had
anticipated and adjusted itself for the increase, it remained uncertain about
the possibility of future increases. This situation made the market very edgy
because it combined two things the market hates the most--uncertainty and rising
interest rates.
The edgy market became a defensive market. Investors turned to the most liquid
stocks because they believe they can sell these stocks quickly in a downturn.
These tend to be the large capitalization (cap) companies, i.e., those that
dominate the Dow Jones Industrial Average and Standard & Poor's 500 Index.
Indeed, it was these indices that registered the highest gains in the recent
past. Smaller companies and small company indices, in contrast, registered much
lower gains or even losses. Thus, the market rally became a very narrow one,
almost the equivalent of the "Nifty Fifty" stocks that were so favored in the
early 1970s.
The slightest positive news about earnings in these large companies sent the
market upwards by 40, 50, or more points in a single day. The slightest negative
news sent it into a tailspin. Investors were caught on a dizzying roller-coaster
ride, wondering if they should get off.
Bill Berger offers investors advice about coping with volatile markets in the
opening letter of this report. In brief, he counsels that investors not be
sidetracked by short-term volatility in the market, but remain focused on the
long-term benefits of participating in the stock market. Admittedly, it's been
more difficult to retain that focus recently than at almost any other time since
the Bull Market of the 1990s began to roar. But we believe the steady,
consistent, long-term investor is the only successful investor throughout the
market's inevitable cycles.
SMALL COMPANY STOCKS HAVE TAKEN THEIR LUMPS SINCE LAST FALL. WHAT HAPPENED AND
WHAT DO YOU SEE AHEAD FOR THESE STOCKS?
From September 30, 1996 through March 31, 1997, the Dow Jones Industrial Average
rose by 13.1% and the S&P 500 was up 11.2%. Over the same period, the Russell
2000 Index*, a diversified index of smaller cap companies, fell by (1.1)%. Why
did the small cap market perform so poorly?
Small cap stocks actually have underperformed the overall stock market since the
first major interest rate hike in this business cycle in February 1994. While
they have had moments of glory, smaller stocks have failed to keep pace on the
upside compared with larger cap stocks and, they also have suffered more on the
downside during market declines. Small stocks had outstanding relative and
absolute performance in the early part of 1996 and had what now appears to have
been a speculative "blow-off" in the March - May 1996 period. Coming out of the
summer correction last year, however, they trailed the big cap stocks.
4
<PAGE>
A significant portion of new money flowing into the market since last summer was
directed into index funds, which are designed to replicate the composition and
performance of an index, usually the S&P 500. This caused a sharp increase in
demand for S&P type stocks and a corresponding decline in demand for smaller
cap, "non-index" stocks. Indeed, selling small cap stocks has likely been a
source of funds for the purchase of larger cap stocks. Lack of demand, coupled
with selling pressure, caused small stocks to move down sharply.
Demand for S&P type stocks also was fueled by investors seeking the liquidity of
larger stocks. Finally, there was concern about the Fed's increase in interest
rates and about the prospects of additional increases. Rising rates, while
negative for the market as a whole, tend to hurt small stocks more, partly
because small stocks usually have no dividend income to cushion the impact
higher rates have in determining a company's valuation.
What lies ahead for small stocks? First, let's take a look at history. As a
group, small company stocks have outperformed large company stocks over the past
40 years (Source: Leuthold, Weeden & Associates). However, there have been
periods, like the current one, in which small stocks have lagged. Will this
period continue?
On what should be a positive note, the economy seems to be perking along at a
reasonable clip. This fact, however, is, for the most part, what is behind the
Fed's intention to raise rates. Therefore, economic strength is a mixed
blessing. While a strong economy helps assure continued progress in earnings
growth, it also puts upward pressure on interest rates, which is a negative for
stocks. Valuations of smaller stocks relative to big stocks, notwithstanding the
recent pullback in index stocks, have improved greatly and we believe there are
now available in the market many excellent smaller companies selling at prices
that haven't been seen for several years. Better valuations are no guarantee
that investors will rush back to a stock, but it is providing improved
opportunities for small cap stock investors.
IT CAN BE A GOOD IDEA TO BROADEN THE SCOPE OF ONE'S INVESTMENTS IN PERIODS OF
MARKET VOLATILITY. WHAT OPPORTUNITIES DOES BERGER OFFER?
The Berger Funds recently broadened its fund offerings to give investors more
choice and opportunities for diversification of their portfolios. Two of those
new funds may be of particular benefit to shareholders who have invested a
majority of their portfolios in U.S. growth stocks and are concerned about the
market's near-term prospects.
The Berger/BIAM International Fund can add an important element of geographic
diversification to a largely U.S. stock portfolio. Nearly two-thirds of the
global economy lies beyond U.S. borders, creating a wide range of investment
opportunities outside the U.S. with long-term growth potential. While
international investing involves special risks, such as currency fluctuations
and political uncertainty, we believe it offers a distinct advantage. Since
global markets don't always move in lockstep with the U.S. market, strong
performance in markets outside the U.S. can help balance slower performance in
the U.S. and vice versa. In order to give shareholders a chance to take
advantage of international investment opportunities, we linked up with one of
the world's most respected and successful international investment
managers--Bank of Ireland Asset Management (U.S.) Limited (BIAM). A consistently
strong performer, the portfolio management team, based in Dublin, offers a level
of expertise in international investing that is rare anywhere in the world.**
The Berger Small Cap Value Fund can diversify an investor's portfolio into a
type of stock that performs differently than growth stocks. These are value
stocks. While past performance is no guarantee of future results, Bob Perkins,
the portfolio manager, has guided the Fund since its inception and has developed
an enviable track record of performance for shareholders by following a
disciplined strategy of stock selection. Bob takes a common sense view of the
market, recognizing that even the strongest companies occasionally may stumble.
When stock prices of fundamentally sound companies have been pushed down, Bob
sees opportunity. He believes there is little potential for further declines in
stock price and tremendous upside potential for increases in price as the
company recovers. Bob's strategy for investing in small company stocks, which
tend to be more volatile, can help moderate the risks involved in such an
investment, yet still provides the potential to earn above-average returns.
Please call 1-800-333-1001 for a prospectus with more complete information about
these, or any of the Berger Funds, including charges and expenses. Read the
prospectus carefully before you invest.
5
<PAGE>
* The Russell 2000 Index is an unmanaged index, with dividends reinvested,
which consists of common stocks of 2000 U.S. companies with market
capitalization of $25 million to $275 million. It is a generally recognized
indicator used to measure overall performance of small company stocks. One
cannot invest directly in an index.
** Past performance does not guarantee future results. Investments in the
Berger/BIAM International Fund are not insured by the Federal Deposit
Insurance Corporation, are not deposits, and are not obligations of,
endorsed or guaranteed in any way, by any bank. Mutual Fund investments are
subject to investment risks, including possible loss of the principal
invested.
Berger Distributors, Inc. - Distributor.
6
<PAGE>
THE BERGER FUNDS
BERGER 100 FUND
Portfolio Manager's Letter
Dear Shareholder:
It was my privilege to assume portfolio management responsibilities for the
Berger 100 Fund on February 3, 1997. As a professional money manager, previously
with Kemper and Founders Funds, I have long respected the Berger philosophy,
which is that profitable, successful companies are more apt to be profitable,
successful investments. By adhering to this proven philosophy and seeking out
reasonably valued, high quality, predictable growth companies, I believe we can
return this Fund to its proper place as a performance leader among its peers.
The market fluctuated wildly in the first quarter of 1997. The Fund's first
quarter 1997 performance fluctuated also, and underperformed over the six-month
period due to our sizable position in technology stocks. From September 30, 1996
through March 31, 1997, the Dow Jones Industrial Average rose by 13.1% and the
Standard & Poor's (S&P) 500 increased by 11.2%. Your Fund declined by (1.3)%*.
However, since taking over the Fund, I have made numerous changes in the
portfolio that I believe will improve quality and maintain the long-term growth
rate target for the portfolio.
PORTFOLIO REPOSITIONING
We increased the number of stocks in the portfolio from 53 in early February to
90 on March 31, adding more diversification to the Fund overall. We not only
added new holdings, but we also "weeded the garden," eliminating about 20% of
existing stocks. These were stocks in sectors that we were shifting away from
and poor performers that were dragging down Fund performance.
Our biggest sector shift was away from energy and into consumer products. Energy
service holdings were reduced from 18% of Fund assets in early February to 3.6%
on March 31. Consumer holdings increased from 6% to 22% over the same period.
We took these actions for the following reasons:
1. In our opinion, the Fund was overexposed in the energy services
sector. These stocks have performed well but valuations now are high
and the business outlook for this sector is not as strong going
forward. Because this sector makes up only about 1% of the S&P 500
Stock Index, we felt these holdings made the portfolio more volatile.
2. We also believed that the Fund was very much underexposed in the
important consumer sector, which makes up 25% of the S&P 500.
3. The consumer sector held a number of attractively valued stocks that
fit our selection criteria.
We held steady on the technology sector. Although we added some new technology
stocks to the portfolio and reduced position sizes in existing holdings during
the quarter, we ended with approximately the same percentage (30%) of Fund
assets invested in this important, though volatile growth sector of the economy.
GROWTH RATES AND VALUATION
As a result of these restructuring efforts, the long-term growth rate of stocks
in the Fund was about 20% and the near-term growth rate was 24% on March 31.
Valuations averaged 15 times `98 earnings estimates. We believe the Fund has
been repositioned appropriately and, going forward in 1997, has the
characteristics of a high quality, growth-at-a-reasonable price portfolio.
Our key challenge in the future is to carefully monitor the fundamentals of the
stocks in the portfolio. If we see negative changes, which is highly likely
given normal market conditions, we will not hesitate to eliminate those stocks
from our holdings. Market pullbacks will give us opportunities to increase
positions in securities in which we have the most confidence.
7
<PAGE>
There have been many changes in your Fund this quarter. But the most important
aspect of the Fund--its proven investment philosophy--has not changed. Indeed, I
believe the Fund is well-positioned for the long-term. On behalf of myself, and
the dedicated team of analysts and shareholder service people who work with me,
thank you for your investment in the Berger 100 Fund.
Patrick Adams
Portfolio Manager
*Performance figures are based on historical results and are not intended to be
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
8
<PAGE>
<TABLE>
<CAPTION>
% of Funds % of Fund's
TOP TEN HOLDINGS investment investment
in these holdings in these holdings
on 3/31/97 on 9/30/96
<S> <C> <C>
1. Cadence Design Systems, Inc. (Computer - Graphics) 3.4% 0.0%
2. Intel Corp. (Electronic - Semiconductor Manufacturing) 3.0% 2.4%
3. Microsoft Corp. (Computer - Software) 2.2% 2.3%
4. Ascend Communications, Inc. (Computer - Local Networks) 1.9% 0.0%
5. Conseco, Inc. (Insurance - Life) 1.9% 2.5%
6. BMC Software, Inc. (Computer - Software) 1.8% 1.2%
7. Parametric Technology Corp. (Computer - Software) 1.7% 0.0%
8. Cardinal Health, Inc. (Medical - Wholesale Drug/Sundries) 1.7% 0.0%
9. Columbia HCA Healthcare (Medical - Hospitals) 1.6% 0.0%
10. Boeing Co. (Aerospace/Defense) 1.5% 1.9%
</TABLE>
(DESCRIPTION OF BERGER 100 FUND PERFORMANCE CHART)
The following table reflects data presented in a line chart at this point in the
Semi-Annual Report to Shareholders. The chart compares the value of shares
invested in the Berger 100 Fund to the S&P 500 Index and to the Cost of Living
Index. The chart is based on an initial investment of $10,000 on March 31, 1987,
with all dividends and capital gains reinvested. Also included is a smaller
chart reflecting the Berger 100 Fund's Average Annual Total Return as of March
31, 1997, for 1 year-.7%, 5 years--10.4% and 10 years--14.7%.
TOTAL VALUE
DATE BERGER 100 FUND S&P 500 INDEX COST OF LIVING INDEX
- -------------------------------------------------------------------------------
3/31/87 $10,000 $10,000 $10,000
3/31/88 9,223 9,163 10,393
3/31/89 10,320 10,814 10,910
3/31/90 13,432 12,888 11,481
3/31/91 17,147 14,739 12,043
3/31/92 23,972 16,360 12,426
3/31/93 26,850 18,845 12,810
3/31/94 31,041 19,124 13,131
3/31/95 30,790 22,095 13,506
3/31/96 39,110 29,166 13,889
3/31/97 39,382 34,939 14,237
Past performance is not predictive of future performance.
SIX MONTH COMPARISON OF TOP FIVE MARKET SECTORS
SEPTEMBER 30, 1996 MARCH 31, 1997
- -------------------------------- -----------------------------------
27% Technology 1 Technology 31%
17% Consumer Cyclicals 2 Healthcare 14%
14% Energy 3 Cash and Cash Equivalents 13%
12% Healthcare 4 Financials 10%
9% Financials 5 Consumer Cyclicals 10%
9
<PAGE>
BERGER ONE HUNDRED FUND
SCHEDULE OF INVESTMENTS /MARCH 31, 1997
<TABLE>
<CAPTION>
Shares, Units or
PRINCIPAL AMOUNT MARKET VALUE
---------------- ------------
COMMON STOCK - 85.5%
<S> <C> <C>
Aerospace/Defense - 1.5%
270,000 Boeing Co. $ 26,628,750
------------------
Auto/Truck - Original Equipment - 0.7%
370,000 Lear Corp.* 12,348,750
------------------
Banks - Money Center - 2.3%
200,000 Chase Manhattan Corp. 18,725,000
200,000 Citicorp 21,650,000
------------------
40,375,000
------------------
Banks - Super Regional - 1.0%
60,000 Wells Fargo & Co. 17,047,500
------------------
Beverages - Soft Drinks - 1.1%
600,000 Pepsico, Inc. 19,575,000
------------------
Chemicals - Fertilizers - 1.0%
500,000 IMC Global, Inc.* 18,062,500
------------------
Chemicals - Specialty - 0.4%
168,500 Praxair Inc. 7,561,437
------------------
Commercial Services - Miscellaneous - 0.6%
600,000 Accustaff, Inc.* 10,050,000
------------------
Computer Graphics - 3.7%
1,715,000 Cadence Design Systems, Inc.* 58,953,125
300,000 Silicon Graphics* 5,850,000
------------------
64,803,125
------------------
Computer - Local Networks - 4.4%
829,000 Ascend Communications, Inc.* 33,781,750
325,000 Cisco Systems, Inc.* 15,640,625
535,000 Fore Systems, Inc.* 8,025,000
200,000 Pacificare Health Systems, Inc. - Class B* 17,250,000
50,000 3Com Corp.* 1,637,500
------------------
76,334,875
------------------
Computer - Mainframes - 1.1%
140,000 International Business Machines Corp. 19,232,500
------------------
Computer - Mini/Micro - 0.9%
285,000 Hewlett-Packard Co. 15,176,250
------------------
Computer - Peripheral Equipment - 0.5%
223,000 Adaptec, Inc.* 7,972,250
------------------
Computer - Services - 1.3%
490,000 HBO & Co. 23,275,000
------------------
Computer - Software - 6.9%
700,000 BMC Software, Inc.* 32,287,500
400,000 Computer Associates International, Inc. 15,550,000
420,000 Microsoft Corp.* 38,508,750
663,000 Parametric Technology Corp.* 29,917,875
122,800 Peoplesoft, Inc.* 4,912,000
------------------
121,176,125
------------------
Diversified Operations - 1.2%
190,000 Du Pont (E.I.) De Nemours 20,140,000
------------------
Electronic - Miscellaneous Components - 0.9%
320,000 Solectron Corp.* 16,040,000
------------------
Electronic - Semiconductor Equipment - 0.7%
245,000 Applied Materials, Inc.* 11,361,875
------------------
10
<PAGE>
Electronic - Semiconductor Manufacturing - 9.4%
300,000 Altera Corp.* $ 12,900,000
333,333 Analog Devices, Inc.* 7,499,993
378,000 Intel Corp. 52,589,250
282,000 Linear Technology Corp. 12,478,500
157,500 Maxim Integrated Products* 7,619,063
410,000 Motorola, Inc. 24,753,750
600,000 National Semiconductor Corp.* 16,500,000
395,000 Sanmina Corp.* 17,676,250
270,000 Xilinx, Inc.* 13,162,500
------------------
165,179,306
------------------
Electrical - Equipment - 1.1%
200,000 General Electric Co.* 19,850,000
------------------
Finance - Mortgage & Related Services -- 2.3%
630,000 Federal Home Loan Mortgage Corp.* 17,167,500
510,000 Federal National Mortgage Assn.* 18,423,750
251,300 Money Store, Inc. 5,277,300
------------------
40,868,550
------------------
Financial Services - Miscellaneous - 1.0%
150,000 American Express Co. 8,981,250
222,700 Sunamerica, Inc. 8,379,087
------------------
17,360,337
------------------
Insurance - Life - 1.9%
929,000 Conseco, Inc. 33,095,625
------------------
Insurance - Multi Line - 0.8%
205,000 MGIC Investment Corp. 14,503,750
------------------
Insurance - Property/Casualty/Title - 0.8%
125,000 American International Group, Inc. 14,671,875
------------------
Leisure - Hotels & Motels - 1.6%
220,000 HFS, Inc.* 12,952,500
300,000 Marriott International, Inc. 14,925,000
------------------
27,877,500
------------------
Leisure - Services - 1.2%
280,000 Walt Disney Co. 20,440,000
------------------
Leisure - Toys/Games/Hobby - 1.1%
675,000 Hasbro, Inc. 18,478,125
------------------
Machinery - Farm - 1.1%
700,000 Agco Corp. 19,337,500
------------------
Medical - Biomedics/Genetics - 1.9%
100,000 Biochem Pharma, Inc.* 4,300,000
400,000 Biogen, Inc.* 14,950,000
470,000 Centocor, Inc.* 14,335,000
------------------
33,585,000
------------------
Medical - Drug/Diversified - 1.0%
210,000 Warner-Lambert Co. 18,165,000
------------------
Medical - Ethical Drugs - 2.4%
200,000 Eli Lilly Co. 16,450,000
300,000 Pfizer, Inc. 25,237,500
------------------
41,687,500
------------------
Medical - Health Maintenance Organizations - 1.1%
320,000 Oxford Health Plans* 18,760,000
------------------
Medical - Hospitals - 1.6%
840,000 Columbia HCA Healthcare 28,245,000
------------------
Medical - Instruments - 0.4%
490,000 IDEXX Laboratories, Inc.* 6,860,000
------------------
11
<PAGE>
Medical - Products - 1.2%
330,000 Boston Scientific Corp.* $ 20,377,500
------------------
Medical - Wholesale Drug/Sundries - 2.6%
358,900 Amerisource Health - Class A* 15,701,875
540,000 Cardinal Health, Inc. 29,362,500
------------------
45,064,375
------------------
Medical/Dental Supplies - 1.0%
720,000 Omnicare Inc. 16,920,000
------------------
Oil & Gas - Drilling - 2.6%
250,000 Diamond Offshore Drilling, Inc.* 17,125,000
332,300 Falcon Drilling, Inc.* 12,295,100
300,000 Transocean Offshore, Inc. 16,837,500
------------------
46,257,600
------------------
Oil & Gas - Field Services - 1.2%
124,000 BJ Services Co.* 5,936,500
350,000 Petroleum Geo-Services (Norway) - ADR* 15,050,000
------------------
20,986,500
------------------
Oil & Gas - Machinery/Equipment - 0.3%
130,000 Baker Hughes, Inc. 4,988,750
------------------
Pollution Control - Equipment - 0.2%
109,000 U.S. Filter Corp.* 3,365,375
------------------
Pollution Control - Services- 1.1%
550,000 U.S.A. Waste Services, Inc.* 19,525,000
------------------
Retail - Apparel/Shoes - 2.3%
300,000 Gap, Inc. 10,050,000
217,000 Gucci Group N.V. (Netherlands) 15,651,125
890,000 Just for Feet, Inc.* 15,352,500
------------------
41,053,625
------------------
Retail - Department Stores - 0.4%
200,000 Federated Department Stores, Inc.* 6,575,000
------------------
Retail - Drug Stores - 0.2%
64,900 CVS Corp. 2,993,513
------------------
Retail - Major Discount Chains- 0.5%
300,000 Wal-Mart Stores, Inc. 8,362,500
------------------
Retail - Restaurants - 2.0%
820,000 Boston Chicken, Inc.* 25,010,000
450,000 Lone Star Steakhouse* 10,293,750
------------------
35,303,750
------------------
Retail/Wholesale - Building Products - 2.5%
395,000 Home Depot Inc. 21,132,500
600,000 Lowes Cos., Inc. 22,425,000
------------------
43,557,500
------------------
Telecommunications - Equipment - 2.9%
392,300 ECI Telecom Ltd. 7,257,550
360,000 Nokia Corp. (Finland) - ADR 20,970,000
100,000 Pairgain Technologies* 2,962,500
543,000 Tellabs* 19,615,875
------------------
50,805,925
------------------
Telecommunications - Services - 1.9%
1,650,000 Paging Network, Inc.* 13,406,250
880,000 WorldCom, Inc.* 19,360,000
------------------
32,766,250
------------------
Tobacco - 0.6%
90,000 Philip Morris Companies 10,271,250
------------------
12
<PAGE>
Transportation - Airline - 1.1%
230,000 AMR Corp.* $ 18,975,000
------------------
TOTAL COMMON STOCK (Cost $1,397,765,628) 1,494,275,418
------------------
U.S. GOVERNMENT OBLIGATIONS - 9.5%
$ 24,500,000 U.S. Treasury Bills due 4/24/97 24,423,614
36,500,000 U.S. Treasury Bills due 5/1/97 36,348,579
43,800,000 U.S. Treasury Bills due 5/8/97 43,571,786
47,000,000 U.S. Treasury Bills due 5/22/97 46,656,097
16,000,000 U.S. Treasury Bills due 5/29/97 15,866,987
------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Amortized Cost $166,867,063) 166,867,063
------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES - 3.2%
4,000,000 FNMA Discount Notes due 4/11/97 3,994,222
30,000,000 FNMA Discount Notes due 4/14/97 29,943,992
22,000,000 FNMA Discount Notes due 5/2/97 21,896,374
------------------
TOTAL FNMA DISCOUNT NOTES (Amortized Cost $55,834,588) 55,834,588
------------------
TOTAL INVESTMENTS (Cost $1,620,467,279+) - 98.2% 1,716,977,069
OTHER ASSETS, LESS LIABILITIES - 1.8% 30,993,284
------------------
NET ASSETS - 100% $ 1,747,970,353
==================
</TABLE>
ADR - American Depository Receipt
* Non-Income Producing Security.
+ Also represents cost for tax purposes.
The Investment Company Act of 1940 defines affiliates as those companies in
which a fund holds 5% or more of the outstanding voting securities. Following is
a summary of the transactions with each such affiliate for the period ended
March 31, 1997:
<TABLE>
<CAPTION>
PANAMSAT CORP. TRUMP HOTELS & CASINO RESORTS INC.
<S> <C> <C>
Market Value at 9/30/96 $13,906 $ 23,250
Purchases at Cost 0 0
Sales at Cost 11,456 30,089
Change in Unrealized Appreciation
(Depreciation) (2,450) 6,839
Market Value at 3/31/97 0 0
Dividend Income 0 0
Realized Gain (Loss) 2,780 (16,191)
See notes to financial statements.
</TABLE>
13
<PAGE>
THE BERGER FUNDS
BERGER GROWTH AND INCOME FUND
Portfolio Manager's Letter
Dear Shareholder:
The past six months has generally been good to investors in large cap stocks,
although the volatility in the market has increased dramatically versus the
previous few years. While the S&P 500 and other large cap indices continued to
rise, the Nasdaq and other growth indices actually suffered losses. This
divergence in performance of big cap slower growth companies to faster growth
companies was the primary reason the Berger Growth & Income Fund has
underperformed the market over the past six months. For the previous six months
the Dow Jones Industrial Average has returned 13.1 %, the S&P 500 11.2 %, the
Nasdaq Composite lost over 4% and the Berger Growth & Income Fund gained 7.2 %*.
We began the fiscal year with a neutral view of the market, not overly bullish
or bearish. The Fund remains well diversified across various growth industries
with two notable exceptions. First the sector weighting in oil services was very
high due to the outperformance of the group over the past year. We have been
selling assorted names and reducing the exposure to others in the group since
valuations are now relatively high and the business outlook is not as favorable
as it was last year. The other exception is in healthcare. The Fund remains
underexposed to the healthcare group due to the extremely high valuations and
the uncertainty which the second Clinton administration brings to healthcare
reform.
One of the best performing sectors of the Fund was the financial area. This
sector contains two distinct subsectors in our opinion, traditional interest
rate sensitive stocks such as banks and insurance companies, and real estate
investment trusts (REITs). Both sectors performed very well, although it was the
REITs which shined the brightest. The majority of the REIT holdings are focused
on the full-service hotel sector where there has been relatively scant new
construction since the mid-1980's and the demand is catching up with the
available rooms, thus driving up occupancy and daily rates. These companies also
are actively acquiring other full-service hotels for 60%-70% of replacement
cost, further ensuring that relatively little new construction will occur over
the next couple years, as it is cheaper to buy than to build.
Looking forward, the Berger Growth and Income Fund is very well diversified in
premier companies with above-market rates of growth and steady dividend streams.
The individual sectors within the Fund will probably remain in line with the
current percentages. Our areas of interest and/or concern are the consumer,
healthcare and technology sectors. If the market continues its recent swoon, the
big-cap defensive stocks probably will outperform on a relative basis. Even
though stocks such as Coke, Procter & Gamble, Gillette, Merck, Pfizer, etc., are
trading at huge premiums to their growth rates, they tend to be viewed as safe
havens in market falls.
While we work continuously to reduce risk in the Fund, we refuse to overpay for
any company, leaving us underexposed to these household names. Therefore if
money starts to rotate into these "defensive" stocks the Fund may continue to be
somewhat vulnerable in the short run, although such a market reaction should
create great opportunities in other growth stocks. As far as technology stocks
are concerned, the Fund is currently slightly underweighted versus the index due
to the high valuations of the premier technology franchises. This said,
technology is clearly driving the U.S. and the world economies, and your Fund,
like any growth-oriented fund, needs to constantly monitor the technology sector
for compelling buying opportunities. We would like to increase our holdings in
the technology sector and, if it continues to weaken in the near future, we will
be adding selectively to this area.
The charter of this Fund is to invest in high quality growth companies that also
generally offer modest current income. The Fund also will look to increase its
overall yield by purchasing convertible bonds when appropriate. The Fund focuses
only on the growth areas of the stock market such as technology, healthcare,
telecommunications, finance and retail, ignoring sectors such as commodities,
utilities and heavy cyclicals. The Fund will continue its quest of finding
reasonably priced leading growth companies and avoiding expensive, slower growth
index companies.
14
<PAGE>
While the short-term performance has not been as strong as we would like, we
remain committed to achieving outstanding long-term performance. Thank you for
the investment in the Berger Growth & Income Fund and for your continued
confidence.
Patrick Adams Mark McKinney
Co-Portfolio Manager Co-Portfolio Manager
*Performance figures are based on historical results and are not intended to be
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
15
<PAGE>
<TABLE>
<CAPTION>
% of Fund's % of Fund's
investment investment
TOP TEN HOLDINGS in these holdings in these holdings
on 3/31/97 on 9/30/96
<S> <C> <C>
1. McKesson Corp. (Medical - Wholesale Drug/Sundries) 3.1% 0.0%
2. Innkeepers USA Trust (Finance - Equity Real Estate Investment Trust) 2.8% 0.0%
3. Rockwell International Corp. (Aerospace/Defense) 2.6% 0.0%
4. Sunbeam Corp. (Household - Housewares) 2.4% 1.8%
5. Starwood Lodging Trust (Finance - Equity Real Estate Investment Trust) 2.3% 3.0%
6. Patriot American Hospitality (Finance - Equity Real Estate Investment Trust) 2.3% 2.7%
7. Adaptec, Inc. (Computer - Peripheral Equipment) 2.3% 1.9%
8. U.S. Filter Corp. (Medical - Products) 2.3% 0.0%
9. General Electric (Electrical - Equipment) 2.2% 0.0%
10. State Street Corp. ( Banks - Northeast) 2.2% 0.0%
</TABLE>
(DESCRIPTION OF BERGER GROWTH & INCOME FUND PERFORMANCE CHART)
The following table reflects data presented in a line chart at this point in the
Semi-Annual Report to Shareholders. The chart compares the value of shares
invested in the Berger Growth & Income Fund to the S&P 500 Index and to the Cost
of Living Index. The chart is based on an initial investment of $10,000 on March
31, 1987, with all dividends and capital gains reinvested. Also included is a
smaller chart reflecting the Berger Growth & Income Fund's Average Annual Total
Return as of March 31, 1997, for 1 year--12.0%, 5 years--11.2% and 10
years--10.3%.
Total Value
---------------------------------------------------------------------
Berger Growth
Date & Income Fund S&P 500 Index Cost Of Living Index
- --------------------------------------------------------------------------------
3/31/87 $10,000 $10,000 $10,000
3/31/88 8,624 9,163 10,393
3/31/89 9,055 10,814 10,910
3/31/90 10,250 12,888 11,481
3/31/91 11,510 14,739 12,043
3/31/92 15,769 16,360 12,426
3/31/93 17,276 18,845 12,810
3/31/94 19,239 19,124 13,131
3/31/95 18,986 22,095 13,506
3/31/96 23,896 29,166 13,889
3/31/97 26,758 34,939 14,237
Past performance is not predictive of future performance.
SIX MONTH COMPARISON OF TOP FIVE MARKET SECTORS
SEPTEMBER 30, 1996 MARCH 31, 1997
- -------------------------------- ------------------------------
16% Financials 1 Financials 22%
13% Capital Goods 2 Capital Goods 22%
11% Technology 3 Technology 15%
10% Consumer Staples 4 Consumer Cyclicals 12%
8% Health Care 5 Cash and Cash Equivalents 10%
16
<PAGE>
<TABLE>
<CAPTION>
BERGER GROWTH AND INCOME FUND
SCHEDULE OF INVESTMENTS / MARCH 31, 1997
Shares, Units or
Principal Amount Market Value
---------------- ------------
COMMON STOCK - 69.3%
<S> <C> <C>
Aerospace/Defense - 4.3%
55,000 Boeing Co. $ 5,424,375
125,000 Rockwell International Corp. 8,109,375
-------------------
13,533,750
-------------------
Aerospace/Defense Equipment - 1.9%
165,000 B. F. Goodrich Co. 6,043,125
-------------------
Banks - Money Center - 1.7%
50,000 Citicorp 5,412,500
-------------------
Banks - Northeast - 2.2%
100,000 State Street Corp. 6,937,500
-------------------
Beverages - Alcoholic - 1.9%
140,000 Anheuser-Busch Companies, Inc. 5,897,500
-------------------
Commercial Services - Security/Safety - 2.1%
175,000 Diebold, Inc. 6,584,375
-------------------
Computer - Integrated Systems- 1.8%
175,000 Verifone, Inc.* 5,731,250
-------------------
Computer - Memory Devices - 1.9%
200,000 Microchip Technology, Inc.* 6,000,000
-------------------
Computer - Peripheral Equipment - 2.3%
200,000 Adaptec, Inc.* 7,150,000
-------------------
Diversified Operations - 5.9%
80,000 Allied Signal, Inc. 5,700,000
150,000 American Standard* 6,750,000
175,000 Ikon Office Solutions 5,862,500
-------------------
18,312,500
-------------------
Electronic - Semiconductor Manufacturing - 3.5%
35,000 Intel Corp. 4,869,375
75,000 Texas Instruments, Inc. 5,615,625
-------------------
10,485,000
-------------------
Electrical - Equipment - 2.2%
70,000 General Electric Co. 6,947,500
-------------------
Finance - Equity Real Estate Investment Trust - 12.3%
125,000 Beacon Properties Corp. 4,140,625
227,200 Crescent Real Estate Equities Trust 6,077,600
600,000 Innkeepers USA Trust 8,775,000
300,000 Patriot American Hospitality 7,275,000
100,000 Reckson Associates Realty Corp. 4,612,500
187,500 Starwood Lodging Trust 7,312,500
-------------------
38,193,225
-------------------
Household - Housewares - 2.4%
250,000 Sunbeam Corp. 7,500,000
-------------------
Insurance - Life - 1.1%
100,000 Conseco, Inc. 3,562,500
-------------------
Insurance - Property/Casualty/Title - 2.0%
100,000 Mercury General Corp. 6,100,000
-------------------
Medical - Ethical Drugs - 2.1%
80,000 Eli Lilly & Co. 6,580,000
-------------------
Medical - Wholesale Drug/Sundries - 3.1%
150,000 McKesson Corp. 9,600,000
-------------------
17
<PAGE>
Oil & Gas - Drilling - 1.6%
75,000 Diamond Offshore Drilling, Inc.* $ 5,137,500
-------------------
Oil & Gas - Field Services - 3.1%
255,000 McDermott International, Inc. 5,450,625
40,000 Schlumberger Ltd. 4,290,000
-------------------
9,740,625
-------------------
Oil & Gas - Machinery/Equipment - 2.8%
125,000 Baker Hughes, Inc. 4,796,875
125,000 Dresser Industries, Inc. 3,781,250
-------------------
8,578,125
-------------------
Retail/Wholesale - Computers - 2.1%
130,000 Tandy Corp. 6,516,250
-------------------
Shoes & Related Apparel - 1.6%
80,000 Nike, Inc. - Class B 4,960,000
-------------------
Telecommunications - Equipment - 1.8%
300,000 ECI Telecom Ltd. 5,550,000
-------------------
Utility - Telephone - 1.6%
90,000 Cincinnati Bell Inc. 5,085,000
-------------------
TOTAL COMMON STOCK (Cost $181,592,586) 216,138,225
-------------------
CONVERTIBLE PREFERRED STOCK - 2.1%
Funeral Services & Related - 2.1%
65,000 SCI Finance LLC $3.125 Cv Pfd Series A 6,630,000
-------------------
TOTAL CONVERTIBLE PREFERRED STOCK (Cost $5,500,516) 6,630,000
-------------------
CONVERTIBLE DEBENTURES - 10.8%
Commercial Services - Miscellaneous - 1.8%
$ 3,500,000 Career Horizons, Inc. -7% due 11/1/02 5,499,375
-------------------
Commercial Services - Security/Safety - 1.6%
4,500,000 Checkpoint Systems - 5.25% due 11/1/05 4,989,375
-------------------
Electronic - Semiconductor Manufacturing - 1.6%
4,000,000 Analog Devices - 3.5% due 12/1/00 5,055,000
-------------------
Medical - Products - 2.3%
4,000,000 U.S. Filter Corp. - 6% due 9/1/05 7,110,000
-------------------
Pollution Control - Services - 3.5%
4,000,000 United Waste Systems** - 4.5% due 6/1/01 5,135,000
4,000,000 CB Sanifill, Inc. - 5% due 3/1/06 5,655,000
-------------------
10,790,000
-------------------
TOTAL CONVERTIBLE DEBENTURES (Cost $35,499,911) 33,443,750
-------------------
FOREIGN GOVERNMENT OBLIGATIONS - 0.4%
A$700,000 Queensland Treasury-Global Note 8% due 8/14/01 (Australia) 558,350
A$700,000 Queensland Treasury-Global Note 12% due 8/15/01 (Australia) 639,153
-------------------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS (Cost $1,132,486) 1,197,503
-------------------
U.S. GOVERNMENT OBLIGATIONS - 4.5 %
450,000 U.S. Treasury Bills due 4/3/97 449,877
3,400,000 U.S. Treasury Bills due 5/1/97 3,385,734
2,900,000 U.S. Treasury Bills due 5/8/97 2,885,038
7,400,000 U.S. Treasury Bills due 5/15/97 7,353,275
-------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Amortized Cost $14,073,924) 14,073,924
-------------------
18
<PAGE>
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES - 4.1%
$ 3,300,000 FNMA Discount Notes due 4/3/97 $ 3,299,050
9,600,000 FNMA Discount Notes due 5/2/97 9,554,782
------------------
TOTAL FNMA DISCOUNT NOTES (Amortized Cost $12,853,832) 12,853,832
------------------
TOTAL INVESTMENTS (Cost $250,653,255) - 91.2%
(Cost for federal income tax purposes $250,655,045) 284,337,234
OTHER ASSETS, LESS LIABILITIES - 8.8% 27,370,171
------------------
NET ASSETS - 100% $ 311,707,405
==================
</TABLE>
ADR - American Depository Receipt
*Non-Income Producing Security.
**Pursuant to Rule 144A, resale is restricted to qualified institutional buyers.
A$ Australian Dollars
See notes to financial statements.
19
<PAGE>
THE BERGER FUNDS
BERGER SMALL COMPANY GROWTH FUND
Portfolio Manager's Letter
Dear Shareholder:
The past six months have been very trying for investors in the Fund as well as
for investors in the entire emerging growth sector of the market. Larger
capitalization (cap) stock prices went up as the Dow Jones Industrial Average
hit new highs and soared to over 7100 as recently as March 11, 1997. Small cap
prices, however, declined. From September 30, 1996 through March 31, 1997, the
Dow Jones Industrial Average rose by 13.1% and the Standard & Poor's (S&P) 500
increased by11.2%. The Russell 2000 Index, a diversified index of small cap
companies, fell by (1.1)% over that same period. The Russell 2000 Growth Index,
a sub-index of small cap growth stocks similar to many of the stocks held in the
Berger Small Company Growth Fund, declined by (10.3)%. Your Fund declined by
(16.8)% for the period.*
SMALL CAP MARKET DRIVEN DOWN
While no one wants to see the value of their holdings decline, it must be
recognized that the market does not move only in one direction. Investors who
entered the market the past two years, may believe otherwise since they have
only seen the market move upwards.
The correction that occurred in the summer of 1996 was the first major one in
several years and was in line with the extreme bounds of previous declines. At
this writing, the market has started to rally. We hope that the market has
driven small stocks down to the point where investors are once again beginning
to realize that some excellent long-term values have been created by the rather
indiscriminate carnage that occurred in the past six months.
We saw a sharp decline in the price of many of our holdings this past six
months. With few exceptions, however, these declines have not been caused by
fundamental disappointments in the companies themselves. If there is a silver
lining in this scenario it is that, by and large, our investment research has
kept us from investing in companies that have failed to deliver earnings growth.
TECHNOLOGY
What hurt the Fund's performance? In a word--technology. Technology has been the
largest sector weighting in the Fund, accounting for about 30% of total assets
on March 31. That percentage fluctuated during this reporting period from the
low 20s to the high 30s. We have long believed that technology should only
rarely be absent from an investor's portfolio, even though we are fully aware
that technology stocks tend to be extremely volatile, are attractive to momentum
investors, and generally are fraught with risk because the business environment
changes rapidly and without warning. But the future of this country and the
world is being created and shaped by developments in technology. Much of today's
earnings growth and wealth creation is occurring in this sector.
That being said, the performance of technology stocks recently has been very
poor, despite what appear to us to be very good industry fundamentals. We
acknowledge that, in some cases, valuations got out of hand, but we
underestimated the viciousness of the sell off that took place in technology
stocks this year. While we continue to avoid certain segments of this industry,
technology offers investors the chance to participate in high quality, rapid
growth segments of the economy.
CONSUMER GROWTH
Consumer stocks made up approximately 19% of the Fund's holdings at the end of
this reporting period. Investors apparently looked past disappointing Christmas
sales because retail stocks were surprisingly good performers in the first
quarter of 1997. Stocks moved up as valuations became attractive and prospects
brightened for increased consumer spending. Among the winners in the Fund:
Michael's Stores, a craft retailer, and two apparel retailers, The Men's
Wearhouse and The Wet Seal. Other stocks that performed well included long-term
Fund holding, Clear Channel Communications, and other radio broadcasters; and
Fairfield Communities, a vacation company. The North Face, a leading
retailer/wholesaler of outdoor apparel and equipment, was a poor performing
stock despite strong sales and earnings performance and an attractive valuation.
20
<PAGE>
HEALTH CARE
Stocks in this sector were a mixed bag the past six months. Biotechnology stocks
were generally good, but faded sharply by the end of the period. Agouron
Pharmaceuticals and BioChem Pharma, leading participants in the AIDS and
infectious disease markets, were very strong contributors to performance and we
took profits in both companies. Health Maintenance Organizations (HMOs) remain a
small portion of the Fund's health care investments, but have made a positive
contribution, largely due to the announced buyout of Healthsource, one of the
Fund's two HMO stocks. Poor performers during this period included information
service companies HCIA and Envoy Corporation, kidney dialysis service providers
Renal Care Group and Total Renal Care, and pharmacy benefit managers Omnicare
and NCS Healthcare.
OIL SERVICE AND COMMERCIAL SERVICES
Oil service companies, which were strong in 1996, corrected early in 1997 and
have modestly rebounded. Although we reduced our exposure, we still feel the
sector merits some attention. Commercial services, particularly computer service
companies, delivered good earnings growth, but the market crushed the stocks,
deflating high valuations and generalizing problems occurring in one or two
companies to the entire industry.
Obviously, time will tell where we are in the market cycle. We believe we are
getting close to a denouement in the sell off among small cap stocks and in the
market. Despite the rampant enthusiasm that tends to dominate most fund manager
letters to shareholders, we must caution that, although we believe there is
long-term value in small cap stocks, the market may well continue to prefer
large cap stocks. (See "Questions and Answers" on page 4 of this report for
reasons why large cap stocks have been favored.) History has shown that a
sustained Bull Market in small cap stocks (in which these stocks outperform
large cap stocks significantly and for an extended period of time) rarely occurs
without being preceded by a period of sustained underperformance. As painful as
this recent period has been, I don't think we have yet seen sufficient
underperformance. Despite this, we could well see a burst of glory for the small
caps, much as occurred in early 1996. It would be well worth participating in
such an event.
Thank you for your trust and your patience.
Respectfully submitted,
William Keithler
President and Portfolio Manager.
*Performance figures are based on historical results and are not intended to be
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
21
<PAGE>
<TABLE>
<CAPTION>
% of Fund's % of Fund's
investment investment
TOP TEN HOLDINGS in these holdings in these holdings
on 3/31/97 on 9/30/96
<S> <C> <C>
1. Healthsource, Inc. (Medical - Health Maintenance Organizations) 1.8% 0.0%
2. Miller Herman, Inc. (Household/Office Furniture) 1.6% 0.9%
3. Sirrom Capital Corp. (Finance- Small Business Investment Co. & Commercial) 1.6% 1.0%
4. Baan Co. N.V. (Netherlands) (Computer - Software) 1.5% 1.0%
5. Maxim Integrated Products, Inc. (Electronic - Semiconductor Manufacturing) 1.5% 0.6%
6. Hollywood Entertainment Corp. (Retail - Misc./Diversified) 1.5% 1.0%
7. MDL Information Systems, Inc. (Computer - Software) 1.4% 1.0%
8. Michaels Stores, Inc. (Retail - Misc./Diversified) 1.4% 0.0%
9. Healthsouth Corp. (Medical - Outpatient/Home Care) 1.3% 1.0%
10. Stewart Enterprises, Inc. Class A (Funeral Services & Related) 1.3% 0.9%
</TABLE>
(DESCRIPTION OF SMALL COMPANY GROWTH FUND CHART)
The following table reflects data presented in a line chart at this point in the
Semi-Annual Report to Shareholders. The chart compares the value of shares
invested in the Berger Small Company Growth Fund to the Russell 2000 Index and
the Cost of Living Index. The chart presents semi-annual data based on an
initial investment of $10,000 on December 30, 1993 (inception date of Fund) with
all dividends and capital gains reinvested. Also included is a smaller chart
reflecting the Berger Small Company Growth Fund's average annual total return
from inception, December 30, 1993, to March 31, 1997--15.1% and for 1
year--(2.3%).
Total Value
-----------------------------------------------------------------
Berger Small Company Russell
Date Growth Fund 2000 Index Cost of Living Index
- --------------------------------------------------------------------------------
12/30/93 $10,000 $10,000 $10,000
06/30/94 9,440 9,353 10,151
12/31/94 11,373 9,818 10,267
06/30/95 12,414 11,234 10,460
12/31/95 15,218 12,611 10,528
06/30/96 18,742 13,917 10,748
12/31/96 17,770 14,691 10,878
03/31/97 15,800 13,931 10,947
Past performance is not predictive of future performance.
SIX MONTH COMPARISON OF TOP FIVE MARKET SECTORS
September 30, 1996 March 31, 1997
- -------------------------------- ---------------------------------
20% Healthcare 1 Computer 22%
18% Consumer 2 Consumer 19%
17% Technology 3 Healthcare 17%
14% Business Services 4 Cash and Cash Equivalents 15%
8% Industrial 5 Commercial Services 11%
22
<PAGE>
<TABLE>
<CAPTION>
BERGER SMALL COMPANY GROWTH FUND
SCHEDULE OF INVESTMENTS / MARCH 31, 1997
Shares, Units or
Principal Amount Market Value
---------------- ------------
<S> <C> <C>
COMMON STOCK - 86.6%
Commercial Services - Miscellaneous -2.4%
250,000 Billing Information Concepts* $ 6,000,000
160,000 CMG Information Services* 1,940,000
400,000 FPA Medical Management, Inc.* 7,700,000
-------------------
15,640,000
-------------------
Commercial Services - Schools - 0.2%
90,000 Youth Services International, Inc.* 1,350,000
-------------------
Commercial Services - Security/Safety - 0.6%
216,000 Ultrak Inc.* 3,888,000
-------------------
Computer - Integrated Systems - 1.5%
210,000 HCIA, Inc.* 3,517,500
200,000 Medic Computer Systems, Inc.* 3,200,000
135,000 Wind River Systems, Inc.* 3,189,375
-------------------
9,906,875
-------------------
Computer - Local Networks - 0.8%
126,000 Ascend Communications, Inc.* 5,134,500
-------------------
Computer - Memory Devices - 1.5%
240,000 Microchip Technology, Inc.* 7,200,000
75,000 Zitel Corp.* 2,259,375
-------------------
9,459,375
-------------------
Computer - Services - 7.6%
325,000 American Management Systems, Inc.* 7,150,000
12,500 Envoy Corp.* 292,188
30,000 Gartner Group - Class A 648,750
105,000 HBO & Co. 4,987,500
300,000 Lycos, Inc.* 4,218,750
175,000 National Data Corp. 6,190,625
310,000 National Techteam, Inc. 4,805,000
192,000 Quick Response Services, Inc.* 5,064,000
262,000 Technology Solutions Co.* 7,237,750
400,000 Whittman-Hart, Inc. 8,500,000
-------------------
49,094,563
-------------------
Computer - Software - 6.5%
225,000 Baan Co. N.V.* (Netherlands) 10,040,625
100,000 Cambridge Technology Partners, Inc.* 2,312,500
160,000 CBT Group PLC - ADR* (Ireland) 7,980,000
15,000 Cognos, Inc.* 390,000
300,000 MDL Information Systems, Inc.* 9,375,000
247,500 Scopus Technology, Inc.* 7,425,000
170,000 VIASOFT, Inc.* 5,525,000
-------------------
43,048,125
-------------------
Cosmetics/Personal Care - 1.2%
300,000 Rexall Sundown, Inc.* 7,687,500
-------------------
Diversified Operations - 0.8%
115,650 Pittway Corp. - Class A 5,609,025
-------------------
Electronic - Miscellaneous Components - 1.8%
350,000 Chicago Miniature Lamp, Inc.* 6,868,750
240,000 Leitch Technology Corp.* (Canada) 4,596,538
-------------------
11,465,288
-------------------
Electronic - Parts Distributors - 1.1%
320,000 Kent Electronics 7,360,000
-------------------
Electronic - Semiconductor Equipment - 4.8%
200,000 Etec Systems, Inc. $6,325,000
350,000 Kulicke & Soffa Industries, Inc.* 7,393,750
175,000 Lam Research Corp.* 5,906,250
100,000 Lattice Semiconductor 4,575,000
320,000 Silicon Valley Group* 6,880,000
-------------------
31,080,000
-------------------
Electronic - Semiconductor Manufacturing - 5.0%
300,000 Cypress Semiconductor 3,750,000
106,400 Dallas Semiconductor Corp. 2,819,600
380,000 DSP Communications, Inc.* 3,657,500
252,500 ESS Technology, Inc.* 6,123,125
200,000 Maxim Integrated Products, Inc. 9,675,000
650,000 Tower Semiconductor Ltd.*# 6,093,750
-------------------
32,118,975
-------------------
Electrical - Connectors - 0.7%
155,000 Level One Communications, Inc.* 4,262,500
-------------------
Finance - Consumer Loans - 0.4%
160,000 Delta Financial Corp.* 2,900,000
-------------------
Finance - Small Business Investment Company & Commercial - 2.5%
290,000 Safeguard Scientifics, Inc.* 5,727,500
280,000 Sirrom Capital Corp. 10,150,000
-------------------
15,877,500
-------------------
Financial Services - Miscellaneous - 1.1%
462,000 Pre-Paid Legal Services, Inc.* 6,872,250
-------------------
Funeral Services & Related - 1.3%
235,000 Stewart Enterprises, Inc. - Class A 8,577,500
-------------------
Household/Office Furniture - 1.6%
150,000 Miller Herman, Inc. 10,237,500
-------------------
Leisure - Products - 0.7%
275,000 North Face, Inc.* 4,571,875
-------------------
Media - Radio/TV - 4.1%
120,000 Chancellor Corp. - Class A* 3,180,000
150,000 Clear Channel Communications, Inc.* 6,431,250
112,500 Emmis Broadcasting Corp. - Class A* 4,352,345
285,000 Evergreen Media Corp. - Class A* 8,318,438
170,000 Sinclair Broadcast Group, Inc.* 4,462,500
-------------------
26,744,533
-------------------
Medical - Biomedics/Genetics - 1.9%
50,000 BioChem Pharma, Inc.* (Canada) 2,150,000
105,000 Incyte Pharmaceuticals, Inc.* 5,460,000
115,000 Vertex Pharmaceuticals Corp.* 4,628,750
-------------------
12,238,750
-------------------
Medical - Ethical Drugs - 1.1%
120,000 Medicis Pharmaceutical Corp. - Class A* 3,570,000
250,000 Theragenics Corp.* 4,062,500
-------------------
7,632,500
-------------------
Medical - Health Maintenance Organizations - 2.7%
500,000 Coventry Corp.* 5,687,500
580,000 Healthsource, Inc.* 11,890,000
-------------------
17,577,500
-------------------
Medical - Outpatient/Home Care - 4.7%
125,000 American HomePatient, Inc.* 2,781,250
450,000 Healthsouth Corp. 8,606,250
15,000 PhyCor, Inc.* 408,750
260,000 Renal Care Group, Inc.* 8,255,000
24
<PAGE>
400,000 RoTech Medical Corp.* $ 7,300,000
100,000 Total Renal Care Holdings, Inc.* 3,037,500
-------------------
30,388,750
-------------------
Medical - Products - 1.1%
305,000 PAREXEL International Corp.* 7,015,000
-------------------
Medical - Wholesale Drug/Sundries - 0.8%
220,000 NCS HealthCare, Inc. - Class A* 4,977,500
-------------------
Medical/Dental - Supplies - 2.1%
250,000 Omnicare, Inc. 5,875,000
120,000 Target Therapeutics, Inc.* 7,890,000
-------------------
13,765,000
-------------------
Oil & Gas - Drilling - 2%
275,000 Global Marine, Inc.* 5,912,500
400,000 Marine Drilling Companies, Inc.* 7,100,000
-------------------
13,012,500
-------------------
Oil & Gas - Field Services - 2.4%
100,000 BJ Services Co.* 4,787,500
75,000 Tidewater, Inc. 3,450,000
150,000 Trico Marine Services* 7,125,000
-------------------
15,362,500
-------------------
Oil & Gas - U.S. Exploration & Production - 0.8%
170,000 Barrett Resources Corp.* 5,078,750
-------------------
Pollution Control - Services - 1.2%
100,000 Newpark Resources, Inc. 4,375,000
250,000 Tetra Tech, Inc.* 3,656,250
-------------------
8,031,250
-------------------
Real Estate Operations - 1.1%
275,000 Fairfield Communities, Inc.* 6,875,000
-------------------
Retail - Apparel/Shoes - 5%
280,000 Finish Line, Inc. - Class A* 6,230,000
230,000 Footstar, Inc.* 6,813,750
300,000 Men's Wearhouse, Inc.* 8,250,000
250,000 Ross Stores, Inc. 6,343,750
200,000 Wet Seal, Inc. - Class A* 4,800,000
-------------------
32,437,500
-------------------
Retail - Mail Order & Direct - 1.4%
85,000 Black Box Corp.* 2,284,375
500,000 Micro Warehouse, Inc.* 6,562,500
-------------------
8,846,875
-------------------
Retail - Miscellaneous/Diversified - 5.2%
400,000 Cross-Continent Auto Retailers, Inc.* 7,300,000
276,000 Guitar Center, Inc.* 4,416,000
390,000 Hollywood Entertainment Corp.* 9,506,250
500,000 Michaels Stores, Inc.* 9,187,500
150,000 Petco Animal Supplies, Inc.* 3,525,000
-------------------
33,934,750
-------------------
Retail/Wholesale - Building Products - 0.7%
240,000 Eagle Hardware & Garden, Inc.* 4,320,000
-------------------
Telecommunications - Equipment - 3.3%
10,000 Cascade Communications Corp.* 263,750
165,000 Comverse Technology, Inc.* 6,517,500
300,000 P-COM, Inc.* 7,800,000
225,000 PairGain Technologies, Inc.* 6,665,625
-------------------
21,246,875
-------------------
25
<PAGE>
Tobacco - 0.9%
250,000 Consolidated Cigar Holdings, Inc.* 5,906,250
-------------------
TOTAL COMMON STOCK (Cost $479,339,728) $ 561,533,134
-------------------
PREFERRED STOCK - 0.6%
Computer - Peripheral Equipment - 0.6%
665,000 Candescent Technologies Corp.^@ 3,657,500
-------------------
TOTAL PREFERRED STOCK (Cost $3,657,500)
U.S. GOVERNMENT OBLIGATIONS - 8.1%
$ 53,000,000 U.S. Treasury Bills due 4/17/97 52,880,271
-------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Amortized Cost $52,880,271) 52,880,271
-------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES - 3.8%
24,400,000 FNMA Discount Notes due 4/3/97 24,392,978
-------------------
TOTAL FNMA DISCOUNT NOTES (Amortized Cost $24,392,978) 24,392,978
-------------------
TOTAL INVESTMENTS (Cost $560,270,477+) - 99.1% 642,463,883
OTHER ASSETS, LESS LIABILITIES - .9% 5,826,921
-------------------
NET ASSETS - 100% $ 648,290,804
===================
</TABLE>
ADR - American Depository Receipt
*Non-Income Producing Security.
+Also represents cost for tax purposes.
^ Valued in good faith (Note 1)
The Investment Company Act of 1940 defines affiliates as those companies in
which a fund holds 5% or more of the outstanding voting securities. Following
is a summary of the transactions with each such affiliate for the period ended
March 31, 1997 (in thousands):
<TABLE>
<CAPTION>
Tower
Alrenco Semi-conductor Vidamed
------- -------------- -------
<S> <C> <C> <C>
Market Value at 9/30/96 $ 7,350 $ 0 $ 5,342
Purchases at Cost 0 6,696 0
Sales at Cost 7,553 0 2,503
Change in Unrealized Apprreciation
(Depreciation) 203 (602) (2,839)
Market Value at 3/31/97 0 6,094 0
Dividend Income 0 0 0
Realized Gain (Loss) (3,605) 0 1,663
</TABLE>
@Schedule of Restricted or Illiquid Securities (in thousands):
<TABLE>
<CAPTION>
Fair Value as a %
Security name Date Acquired Cost Fair Value of Net Assets
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Candescent Technologies Corp. Pfd Series E 05/01/96 $ 3,658 $ 3,658 0.6%
==============================================
</TABLE>
See notes to financial statements.
26
<PAGE>
THE BERGER FUNDS
BERGER NEW GENERATION FUND
Portfolio Manager's Letter
Dear Shareholder:
The past six months have been difficult for investors in the Fund as well as for
investors in the entire emerging growth sector of the market. Larger
capitalization (cap) stock prices went up as the Dow Jones Industrial Average
hit new highs and soared to over 7100 as recently as March 11, 1997. Small cap
stocks and aggressive growth stocks, however, faltered. From September 30, 1996
through March 31, 1997, the Dow Jones Industrial Average rose by 13.1% and the
Standard & Poor's (S&P) 500 increased by 11.2%. The Russell 2000 Index, a
diversified index of small cap companies, fell by (1.1)% over that same period.
The Russell 2000 Growth Index, a sub-index of small cap growth stocks similar to
many of the stocks held in the Berger New Generation Fund, declined by (10.3)%.
Your Fund declined by (18.4)% for the period.*
SMALL STOCKS FALL OUT OF FAVOR
The correction that occurred in the summer of 1996 was the first major one in
several years. Since that time, the focus of the market has shifted away from
small stocks and aggressive growth stocks to large cap, liquid, defensive
stocks. The market has been unwilling to look out very far or pay up for
rewards, large though they might be, if those rewards are too far in the future.
Many aggressive growth stocks, especially technology stocks, have declined
30-50% despite suffering no apparent or significant changes in their long-term
earnings outlook. Where there have been revisions in forecasted growth rates for
some aggressive growth stocks, the price declines have overshot reasonable
value. Many of these companies are now selling at a significant discount to
their expected growth rate of earnings.
Investor psychology has become nearly toxic. We believe this is constructive for
the long term, but, for the time being, aggressive growth stocks will likely
remain out of favor until the market shifts. The timing of that shift is
difficult to predict.
This market backdrop has worked to the disadvantage of funds such as the Berger
New Generation Fund, which seeks out companies that are developing and marketing
products that are changing, or that we believe have the potential to change, the
way things are done in their particular industry. We saw a sharp decline in the
price of many of our holdings this past six months. With few exceptions,
however, these declines have not been caused by fundamental disappointments in
the stocks themselves.
Following is a review of the major sector exposure in the Fund.
TECHNOLOGY
Technology has been the largest sector weighting in the Fund, accounting for
about 35% of total assets on March 31. That percentage fluctuated during this
reporting period from the low 30s to the high 40s. We have long believed that
technology should only rarely be absent from an investor's portfolio, even
though we are fully aware that technology stocks tend to be extremely volatile,
are attractive to momentum investors, and generally are fraught with risk
because the business environment changes rapidly and unpredictably. But
technology is shaping the future of this country and the world. Much of today's
earnings growth and wealth creation is occurring in this sector.
That being said, the performance of technology stocks recently has been very
poor, despite what appear to us to be very good industry fundamentals. We
acknowledge that, in some cases, valuations got out of hand, but we
underestimated the viciousness of the sell off that took place in technology
stocks this year. While we continue to avoid certain segments of this industry,
technology offers investors the chance to participate in high quality, rapid
growth segments of the economy.
HEALTH CARE
Health care stocks have been difficult performers. Biotechnology stocks were
generally good, but faded sharply by the end of the period. Agouron
Pharmaceuticals and BioChem Pharma, leading participants in the AIDS and
infectious disease markets, were very strong contributors to performance and we
took profits in both companies. Most of the remaining holdings in the portfolio
are relatively early stage companies that have been seriously out of favor with
the market. Two
27
<PAGE>
examples: Creative Biomolecules is an early stage biotech company that has, in
our opinion, outstanding long-term prospects, and Photoelectron Corp. is a
similarly early stage firm with a new treatment for brain tumors. These are
representative of the type of stocks in this Fund--early in their development as
companies, with promising, but yet-unproved products. The market has simply not
wanted to own these stocks over the past six months or longer. Taking a
longer-term point of view, we realize that not all of these companies will be
successful. But many will be successful, and, in a better market environment,
could sell at sharply high prices.
OUTSOURCING
While outsourcing is still a major trend in this country, many companies
benefiting from it have had their stocks come under sharp selling pressure.
Again, this has been primarily a valuation correction, not the reflection of a
fundamental change in the fortunes of these companies. With one exception,
Employee Solutions, companies held in the Fund have met or exceeded the earnings
expectations of investors.
Obviously, time will tell where we are in the market cycle. While it's always
risky to make projections, we believe the market is getting close to a near-term
bottom. Whether the market will favor more aggressive stocks in the next rally
is difficult to predict. The likelihood is high that the Federal Reserve Board
will raise rates again and that investors will remain comfortable with larger,
more established companies. If that is the case, this Fund is likely to continue
to test the patience of its shareholders. We feel very strongly that
shareholders should clearly understand the nature of this Fund, and the fact
that not all mutual funds have the same objectives or performance. It is only
natural that some shareholders, seeing the Dow Jones Industrial Average at high
levels, will believe that their aggressive growth stock fund, such as the Berger
New Generation Fund, is at those same levels. When they compare their fund's
performance to that of the major market averages, however, they may be in for
statement shock.
As we have emphasized since the inception of this Fund one year ago, the Berger
New Generation Fund is for long-term investment in the future. There will be
periods, such as the current one, when investors avoid the type of stocks we
invest in, and sell them off. There also will be periods marked by a high level
of investor enthusiasm and by a willingness to take risks and look out into the
future. In those times, we believe investors will place their money in what
could be a cure for a serious disease instead of in a soft drink. The history of
the market is one of cycles of caution and exuberance. It takes patience to
maintain a long-term perspective through tough times. But time has shown that a
long-term perspective can pay off.
Thank you for your trust and your patience.
Respectfully submitted,
William Keithler
President and Portfolio Manager.
*Performance figures are based on historical results and are not intended to be
indicative of future performance. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
28
<PAGE>
<TABLE>
<CAPTION>
% of Fund's % of Fund's
investment investment
TOP TEN HOLDINGS in these holdings in these holdings
on 3/31/97 on 9/30/96
<S> <C> <C>
1. Life Technologies, Inc. (Medical - Biomedics/Genetics) 2.2% 1.7%
2. Keane, Inc. (Computer - Software) 2.1% 1.1%
3. Fairfield Communities (Real Estate Operations) 1.9% 1.0%
4. Whittman-Hart, Inc. (Computer - Services) 1.9% 2.0%
5. NCO Group, Inc. (Commercial Services - Misc.) 1.8% 0.0%
6. Worthington Foods, Inc. (Food - Misc. Preparation) 1.7% 0.5%
7. Warrantech Corp. (Financial Services - Misc.) 1.7% 1.3%
8. QIAGEN NV (Netherlands) (Medical - Biomedics/Genetics) 1.7% 0.0%
9. Linear Techology Corp. (Electronic - Semiconductor Manufacturing) 1.7% 1.0%
10. Brightpoint, Inc. (Telecommunications - Equipment) 1.5% 1.7%
</TABLE>
(DESCRIPTION OF NEW GENERATION FUND CHART)
The following table reflects data presented in a line chart at this point in the
Semi-Annual Report to Shareholders. The chart compares the value of shares
invested in the Berger New Generation Fund to the S&P 500 Index and the Cost of
Living Index. The chart presents quarterly data based on an initial investment
of $10,000 on March 29, 1996 (inception date of Fund) with all dividends and
capital gains reinvested. Also included is a smaller chart reflecting the Berger
New Generation Fund's average annual total return from inception, March 29,
1996, to March 31, 1997 -- (3.5)% and for 1 year -- (3.6)%.
Total Value
----------------------------------------------------------------
Berger New
Date Generation Fund S&P 500 Index Cost Of Living Index
- -------------------------------------------------------------------------------
03/29/96 $10,000 $10,000 $10,000
06/30/96 11,290 10,504 10,064
09/30/96 11,820 10,826 10,135
12/31/96 11,555 11,727 10,186
3/31/97 9,643 12,043 10,250
Past performance is not predictive of future performance
SIX MONTH COMPARISON OF TOP FIVE MARKET SECTORS
SEPTEMBER 30, 1996 MARCH 31, 1997
- ------------------------------- -------------------------------
20% Computer 1 Healthcare 19%
18% Health Care 2 Computer 18%
15% Telco Equipment 3 Commercial Services 15%
13% Business Services 4 Cash and Cash Equivalents 11%
9% Consumer 5 Consumer 10%
29
<PAGE>
BERGER NEW GENERATION FUND
SCHEDULE OF INVESTMENTS / MARCH 31, 1997
<TABLE>
<CAPTION>
Shares, Units or
Principal Amount Market Value
---------------- ------------
COMMON STOCK - 86.5%
<S> <C> <C> <C>
Auto/Truck - Original Equipment - 1.0%
40,000 Gentex Corp.* $ 790,000
-------------------
Commercial Services - Miscellaneous - 5.9%
27,000 Administaff, Inc.* 448,875
55,000 CMG Information Services, Inc.* 666,875
35,000 EmCare Holdings, Inc.* 940,625
65,000 NCO Group, Inc.* 1,421,875
15,000 The Registry, Inc.* 532,500
25,000 Vincam Group* 684,375
-------------------
4,695,125
-------------------
Commercial Services - Schools - 1.4%
75,000 Youth Services International, Inc.* 1,125,000
-------------------
Commercial Services - Security/Safety - 3.1%
60,000 Childrens Comprehensive Services, Inc.* 690,000
40,000 Ultrak, Inc.* 720,000
70,000 Vivid Technologies* 1,120,000
-------------------
2,530,000
-------------------
Computer Graphics - 1.4%
65,000 Silicon Gaming, Inc.* 1,072,500
-------------------
Computer - Local Networks - 1.8%
17,500 Ascend Communications, Inc.* 713,124
2,500 Cisco Systems, Inc.* 120,313
37,500 Fore Systems, Inc.* 562,500
-------------------
1,395,937
-------------------
Computer - Memory Devices - 1.0%
85,000 SanDisk Corp.* 839,375
-------------------
Computer - Mini/Micro - 0.9%
10,000 Dell Computer Corp.* 676,250
-------------------
Computer - Peripheral Equipment - 2.0%
25,000 Micros Systems, Inc.* 871,875
30,000 Security Dynamics Technology, Inc.* 735,000
-------------------
1,606,875
-------------------
Computer - Services - 6.3%
20,000 America Online, Inc.* 847,500
45,000 Metro Information Services, Inc.* 568,125
50,000 National TechTeam, Inc.* 775,000
32,000 Technology Solutions Co.* 884,000
30,000 Trusted Information Systems* 390,000
70,000 Whittman-Hart, Inc.* 1,487,500
-------------------
4,952,125
-------------------
Computer - Software - 8.3%
26,500 Cooper & Chyan Technology, Inc.* 742,000
40,000 Enterprise Systems, Inc.* 900,000
50,000 Iona Technology PLC-ADR* 900,000
50,200 Keane, Inc.* 1,650,325
32,000 Rogue Wave Software* 292,000
30,000 Transaction Systems Architects, Inc.* 825,000
50,000 Versant Object Technology* 443,750
25,000 VIASOFT, Inc.* 812,500
-------------------
6,565,575
-------------------
30
<PAGE>
Electronic - Semiconductor Equipment - 4.3%
20,000 Applied Materials* $ $ 927,500
10,000 ASM Lithography Holding N.V.* 750,000
100,000 FEI Company* 850,000
50,000 Integrated Process Equipment* 837,500
-------------------
3,365,000
-------------------
Electronic - Semiconductor Manufacturing - 5.5%
45,000 Analog Devices* 1,012,500
50,000 Credence Systems Corp.* 975,000
30,000 Linear Technology Corp. 1,327,500
25,000 Micron Technology, Inc. 1,012,500
-------------------
4,327,500
-------------------
Finance - Small Business Investment Company & Commercial - 0.9%
38,000 Safeguard Scientifics, Inc.* 750,500
-------------------
Financial Services - Miscellaneous - 3.4%
62,500 Checkfree Corp.* 757,813
36,600 Hambrecht & Quist Group, Inc.* 613,050
150,000 Warrantech Corp.* 1,350,000
-------------------
2,720,863
-------------------
Food - Miscellaneous Preparation - 1.7%
70,001 Worthington Foods, Inc. 1,365,020
-------------------
Insurance - Life - 1.3%
100,000 AHL Services, Inc.* 1,000,000
-------------------
Leisure - Products - 1.0%
50,000 North Face, Inc.* 831,250
-------------------
Media - Cable TV - 2.0%
75,000 Lodgenet Entertainment Corp.* 787,500
100,000 TCI Satellite Entertainment* 775,000
-------------------
1,562,500
-------------------
Medical - Biomedics/Genetics - 8.1%
20,000 Biogen, Inc.* 747,500
33,000 Centocor, Inc.* 1,006,500
90,000 Creative Biomolecules, Inc.* 675,000
65,000 Life Technologies, Inc. 1,706,250
75,000 Napro Biotherapeutics, Inc.* 975,000
40,000 QIAGEN N.V.* (Netherlands) 1,330,000
-------------------
6,440,250
-------------------
Medical - Ethical Drugs - 3.2%
50,000 Neose Technologies* 687,500
40,000 PathoGenesis Corp.* 1,000,000
50,000 Theragenics Corp.* 812,500
-------------------
2,500,000
-------------------
Medical - Instruments - 4.8%
35,000 Biopsys Medical, Inc.* 866,250
75,000 Cambridge Heart, Inc.* 853,125
100,000 Eclipse Surgical Technologies, Inc.* 600,000
95,000 Photoelectron Corp.* 688,750
55,000 Ventana Medical Systems* 770,000
-------------------
3,778,125
-------------------
Medical - Outpatient/Home Care - 0.5%
20,000 Healthsouth Corp.* 382,500
-------------------
Medical - Products - 1.1%
45,000 Cytyc Corp.* 843,750
-------------------
31
<PAGE>
Pollution Control - Services - 2.8%
30,000 United Waste Systems** $ 1,117,500
32,000 U.S.A. Waste Services, Inc.* 1,136,000
-------------------
2,253,500
-------------------
Real Estate Operations - 1.9%
60,000 Fairfield Communities, Inc.* 1,500,000
-------------------
Retail - Restaurants - 1.0%
150,000 Roadhouse Grill, Inc.* 768,750
-------------------
Steel - Specialty Alloys - 0.7%
60,000 Alyn Corp.* 562,500
-------------------
Telecommunications - Equipment - 7.8%
30,000 Adtran, Inc.* 750,000
75,000 Brightpoint, Inc.* 1,218,750
45,000 ECI Telecom Ltd.* 832,500
40,000 P-COM, Inc.* 1,040,000
25,000 Pairgain Technologies* 740,625
15,000 Qualcomm, Inc.* 845,625
35,000 Remec, Inc.* 752,500
-------------------
6,180,000
-------------------
Telecommunications - Services - 1.4%
50,000 WorldCom, Inc.* 1,100,000
-------------------
TOTAL COMMON STOCK (Cost $70,801,063) 68,480,770
-------------------
U.S. GOVERNMENT OBLIGATIONS - 12.1%
$ 250,000 U.S. Treasury Bills due 4/3/97 249,933
700,000 U.S. Treasury Bills due 4/10/97 699,155
1,070,000 U.S. Treasury Bills due 4/17/97 1,067,690
525,000 U.S. Treasury Bills due 4/24/97 523,356
3,070,000 U.S. Treasury Bills due 5/1/97 3,057,098
3,980,000 U.S. Treasury Bills due 5/8/97 3,958,797
-------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Amortized Cost $9,556,029) 9,556,029
-------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES - 1.6%
1,300,000 FNMA Discount Notes due 5/2/97 1,293,877
-------------------
TOTAL FNMA DISCOUNT NOTES (Amortized Cost $1,293,877) 1,293,877
-------------------
TOTAL INVESTMENTS (Cost $81,650,969+) - 100.2% 79,330,676
OTHER ASSETS, LESS LIABILITIES - (0.2)% (156,715)
-------------------
NET ASSETS - 100% $ 79,173,961
===================
+Also represents cost for tax purposes.
*Non-Income Producing Security.
ADR - American Depository Receipts.
See notes to financial statements.
</TABLE>
32
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
(in thousands)
<TABLE>
<CAPTION>
BERGER
MARCH 31, 1997 (UNAUDITED) BERGER BERGER SMALL BERGER
ONE GROWTH & COMPANY NEW
HUNDRED INCOME GROWTH GENERATION
FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C>
Investments at cost $1,620,467 $250,653 $560,270 $81,651
==============================================================================================================
Investments at value $1,716,977 $284,337 $642,464 $79,331
Cash 5,356 804 2,091 937
Receivables:
Investment securities sold 78,032 44,996 8,332 3,760
Fund shares sold 353 56 1,202 471
Dividends and interest 777 905 32 5
- --------------------------------------------------------------------------------------------------------------
Total Assets 1,801,495 331,098 654,121 84,504
- --------------------------------------------------------------------------------------------------------------
LIABILITIES
Payables:
Investment securities purchased 50,551 18,825 4,580 5,157
Accrued investment advisory fees 1,191 208 530 66
Accrued transfer agent fees 900 195 343 40
Accrued 12b-1 distribution & advertising fees 397 69 146 18
Other accrued expenses 486 94 231 49
- --------------------------------------------------------------------------------------------------------------
Total Liabilities 53,525 19,391 5,830 5,330
- --------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $1,747,970 $311,707 $648,291 $79,174
==============================================================================================================
Capital Shares:
Authorized (Par Value $0.01) 200,000 100,000 unlimited unlimited
==============================================================================================================
Shares Outstanding 104,111 23,317 171,863 8,660
==============================================================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE $16.79 $13.37 $3.77 $9.13
==============================================================================================================
See notes to financial statements.
</TABLE>
33
<PAGE>
STATEMENTS OF OPERATIONS
(in thousands)
FOR THE SIX MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
BERGER
BERGER BERGER SMALL BERGER
ONE GROWTH & COMPANY NEW
HUNDRED INCOME GROWTH GENERATION
FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Income:
<S> <C> <C> <C> <C>
Dividends $4,836 $3,000 $354 $17
Interest 4,073 1,297 1,841 159
- --------------------------------------------------------------------------------------------------------------
Total Income 8,909 4,297 2,195 176
- --------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees (Note 2) 7,454 1,207 3,538 474
12b-1 distribution & advertising fees 2,485 402 983 132
Transfer agent fees 2,531 535 1,240 242
Postage, printing & reports 1,044 215 560 122
Registration fees 36 19 64 21
Custodian fees 81 15 41 9
Directors'/Trustees' fees & expenses 84 13 34 5
Accounting fees 103 19 44 6
Administrative services (Note 2) 99 16 39 5
Legal fees 38 8 15 2
Insurance & bonds 21 5 11 2
Audit fees 15 9 9 5
Other 66 11 19 1
- --------------------------------------------------------------------------------------------------------------
Total Expenses 14,057 2,474 6,597 1,026
Less fees paid indirectly (Note 2) (48) 0 (7) 0
Less expenses reimbursed by advisor (Note 2) 0 0 0 (22)
Less earnings credits (Note 2) (122) (19) (43) (8)
- --------------------------------------------------------------------------------------------------------------
Expenses - Net 13,887 2,455 6,547 996
- --------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) (4,978) 1,842 (4,352) (820)
- --------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on securities and foreign
currency transactions 352,889 39,071 72,225 (871)
Net change in unrealized appreciation (depreciation)
on securities and foreign currency transactions (357,669) (18,510) (206,256) (16,584)
- --------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on
Investment and Foreign Currency Transactions (4,780) 20,561 (134,031) (17,455)
- --------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from
Operations $(9,758) $22,403 $(138,383) $(18,275)
==============================================================================================================
See notes to financial statements.
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
BERGER ONE HUNDRED FUND
Six Months Ended Year Ended
3/31/97 (unaudited) 9/30/96
- --------------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
<S> <C> <C>
Net investment income (loss) $ (4,978) $ (8,721)
Net realized gain (loss) on securities and foreign currency
transactions 352,889 318,175
Net change in unrealized appreciation (depreciation)
on securities and foreign currency transactions (357,669) (100,483)
Net realized gain (loss) on futures transactions 0 (28,569)
- --------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting From Operations (9,758) 180,402
- --------------------------------------------------------------------------------------------------------------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income 0 0
Net realized gains on investments (270,499) (106,043)
Net Decrease in Net Assets from Distributions to Shareholders (270,499) (106,043)
FROM FUND SHARE TRANSACTIONS:
Proceeds from shares sold 124,467 323,649
Net asset value of shares issued in reinvestment of dividends 263,484 103,262
- --------------------------------------------------------------------------------------------------------------
Total 387,951 426,911
Payments for shares redeemed (372,430) (694,242)
- --------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived From
Fund Share Transactions 15,521 (267,331)
- --------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS (264,736) (192,972)
NET ASSETS:
Beginning of period 2,012,706 2,205,678
- --------------------------------------------------------------------------------------------------------------
End of period $1,747,970 $2,012,706
==============================================================================================================
Undistributed netinvestment income (loss) included
in the above $ (4,978) $ 0
==============================================================================================================
COMPONENTS OF NET ASSETS:
Capital (par value and paid in surplus) $1,332,710 $1,317,189
Undistributed net investment income (loss) (4,978) 0
Undistributed net realized gain (loss ) from investments 323,729 241,339
Unrealized appreciation (depreciation) on investments 96,509 454,178
- --------------------------------------------------------------------------------------------------------------
Total $1,747,970 $2,012,706
==============================================================================================================
TRANSACTIONS IN FUND SHARES:
Shares sold 6,483 17,279
Shares issued to shareholders in reinvestment of dividends 4,695 5,759
- --------------------------------------------------------------------------------------------------------------
Total 21,178 23,038
Shares repurchased (19,561) (37,281)
- --------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares 1,617 (14,243)
Shares outstanding, beginning of period 102,494 116,737
- --------------------------------------------------------------------------------------------------------------
Shares outstanding, end of period 104,111 102,494
==============================================================================================================
*Date operations commenced.
See notes to financial statements.
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
BERGER NEW
BERGER GROWTH & BERGER SMALL COMPANY GENERATION
INCOME FUND GROWTH FUND FUND
- ------------------------------------------------------------------------------------------------------------------
For the Period
Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended 3/29/96* to
3/31/97 (unaudited) 9/30/96 3/31/97 (unaudited) 9/30/96 3/31/97 (unaudited) 9/30/96
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1,842 $4,686 $ (4,352) $ (6,306) $(820) $5,577
39,071 49,901 72,225 28,859 (871) (12,961)
(18,510) (17,526) (206,256) 152,013 (16,584) 14,263
0 (3,748) 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------
22,403 33,313 (138,383) 174,566 (18,275) 6,879
- ------------------------------------------------------------------------------------------------------------------
(1,564) (4,785) 0 0 (5,574) 0
(35,161) 0 (34,716) 0 0 0
- ------------------------------------------------------------------------------------------------------------------
(36,725) (4,785) (34,716) 0 (5,574) 0
- ------------------------------------------------------------------------------------------------------------------
26,609 50,365 219,649 670,186 48,710 152,836
35,296 4,558 33,944 0 5,405 0
61,905 54,923 253,593 670,186 54,115 152,836
(51,414) (122,309) (303,670) (495,952) (68,004) (42,803)
- ------------------------------------------------------------------------------------------------------------------
10,491 (67,386) (50,077) 174,234 (13,889) 110,033
- ------------------------------------------------------------------------------------------------------------------
(3,831) (38,858) (223,176) 348,800 (37,738) 116,912
315,538 354,396 871,467 522,667 116,912 0
- ------------------------------------------------------------------------------------------------------------------
$311,707 $315,538 $648,291 $871,467 $79,174 $116,912
==================================================================================================================
$255 $(23) $(4,352) $0 $(817) $5,577
==================================================================================================================
$245,654 $235,163 $515,089 $565,166 $96,144 $110,033
255 (23) (4,352) 0 (817) 5,577
32,114 28,204 55,361 17,852 (13,832) (12,961)
33,684 52,194 82,193 288,449 (2,321) 14,263
- ------------------------------------------------------------------------------------------------------------------
$311,707 $315,538 $648,291 $871,467 $79,174 $116,912
==================================================================================================================
1,876 3,798 49,327 157,794 4,241 13,724
12,637 339 8,062 0 499 0
- ------------------------------------------------------------------------------------------------------------------
4,513 4,137 57,389 157,794 4,740 13,724
(3,637) (9,196) (69,230) (118,706) (5,970) (3,834)
- ------------------------------------------------------------------------------------------------------------------
876 (5,059) (11,841) 39,088 (1,230) 9,890
22,441 27,500 183,704 144,616 9,890 0
- ------------------------------------------------------------------------------------------------------------------
23,317 22,441 171,863 183,704 8,660 9,890
==================================================================================================================
</TABLE>
36
<PAGE>
NOTES TO FINANCIAL STATEMENTS / MARCH 31, 1997 (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The One Hundred Fund, Inc. ("Berger 100") and the Berger One Hundred and
One Fund, Inc., doing business as the Berger Growth & Income Fund, Inc. ("Berger
G&I") were incorporated in March, 1966 in the state of Maryland. The Berger
Investment Portfolio Trust ("Trust") is a Delaware business trust organized on
August 23, 1993. The Trust is authorized to issue an unlimited number of shares
of beneficial interest in series or portfolios. Currently, the Berger Small
Company Growth Fund ("Berger SCG"), which commenced operations on December 30,
1993, and Berger New Generation Fund ("Berger NG"), which commenced operations
on March 29, 1996, are the only portfolios established under the Trust, although
others may be added in the future.
The Berger 100 and Berger G&I Funds and the Trust (individually the "Fund"
or collectively the "Funds") are registered under the Investment Company Act of
1940 (the "Act"), as amended, as open-end management investment companies. Each
Fund is diversified as defined in the Act. Shares of each Fund are fully paid
and non-assessable when issued. All shares issued by a particular Fund
participate equally in dividends and other distributions by that Fund.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles.
Investment Valuation
Securities are valued at the close of the regular trading session of the
New York Stock Exchange (the "Exchange") on each day that the Exchange is open.
Securities listed on national exchanges, the Nasdaq Stock Market and foreign
exchanges are valued at the last sale price on such markets, or, if no last sale
price is available, they are valued using the mean between their current bid and
asked prices. Securities that are traded on the over-the-counter market are
valued at the mean between their current bid and asked prices. Short-term
obligations maturing within sixty days are valued at amortized cost, which
approximates market value. Foreign securities are converted to U.S. dollars
using exchange rates determined prior to the close of the Exchange. Securities
for which quotations are not readily available are valued at fair values
determined in good faith pursuant to consistently applied procedures established
by the directors or trustees.
Federal Income Taxes
It is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of their taxable income to shareholders. Therefore, no income tax provision is
required.
Security Gains and Losses
Gains and losses are computed on the identified cost basis for both
financial statement and Federal income tax purposes for all securities. Assets
and liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars at the prevailing market rates as quoted by one or
more banks or dealers on the date of valuation. The cost of securities is
translated into U.S. dollars at the rates of exchange prevailing when such
securities were acquired. Income and expenses are translated into U.S. dollars
at rates of exchange prevailing when accrued.
Investment Transactions and Investment Income
Investment transactions are accounted for on the date investments are
purchased or sold. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis and includes amortization of discounts.
Common Expenses
Certain expenses which are not directly allocable to a specific fund are
allocated to the Funds on the basis of relative net assets.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of
37
<PAGE>
contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
2. AGREEMENTS
Berger Associates, Inc. ("Berger") renders investment advisory services to
the Berger 100 and Berger G&I Funds pursuant to agreements which provide for an
investment advisory fee to be paid to Berger at the annual rate of .75 of 1% of
each Fund's average daily net assets. Berger also renders investment advisory
services to the Berger SCG and Berger NG Funds pursuant to an agreement with the
Trust which provides for the monthly payment of a fee computed at the annual
rate of .9 of 1% of average daily net assets of each Fund. Berger has also
agreed to waive its advisory fee for the Berger NG Fund to the extent that the
Fund's normal operating expenses in any fiscal year (including the management
fee and the 12b-1 fee, but excluding brokerage commissions, interest, taxes and
extraordinary expenses) exceeds 1.90% of the Fund's average daily net assets for
that fiscal year.
In addition, Berger has agreed to reimburse each Fund to the extent that
the Fund's normal operating expenses (exclusive of brokerage commissions, 12b-1
fees, interest, taxes and extraordinary expenses) exceed the most restrictive
expense limitation imposed by any applicable state, which is currently 2.5% of
the first $30,000,000, 2% of the next $70,000,000 and 1.5% of the balance of the
Fund's average daily net assets for its fiscal year. Each Fund has entered into
an administrative services agreement with Berger. The administrative services
agreement provides for an annual fee of .01 of 1% of the average daily net
assets of the Fund, computed daily and payable monthly. The Funds have also
entered into a recordkeeping and pricing agreement with Investors Fiduciary
Trust Company ("IFTC"), who also serves as each Fund's custodian and transfer
agent. The recordkeeping and pricing agreement provides for the monthly payment
of a base fee per Fund plus a fee computed as a percentage of average daily net
assets on a total relationship basis. IFTC's fees for custody, recordkeeping and
pricing, or transfer agency services are subject to reduction by credits earned
by each Fund, based on the cash balances of the Fund held by IFTC as custodian
or by credits received from directed brokerage transactions. For the six months
ended March 31, 1997, the Berger 100, Berger G&I, the Berger SCG and the Berger
NG Funds received $170,273, $19,432, $50,249 and $7,611, respectively, in
earnings and brokerage credits and paid IFTC fees (after earnings and brokerage
credits) of $2,544,369, $549,836, $1,275,176 and $249,664, respectively, for
services rendered.
The Funds have adopted plans pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "Plans"). The Plans provide for the payment to Berger
of a 12b-1 fee of .25 of 1% per annum of each Fund's average daily net assets to
finance activities primarily intended to result in the sale of each Fund's
shares. The Plans provide that such payments will be made to Berger as
compensation rather than as reimbursements for actual expenses incurred to
promote the sale of shares of the Funds. Payments made by the Funds pursuant to
their Rule 12b-1 Plans are excluded from the expenses subject to the most
restrictive state expense limitations, as noted above, contained in the
agreement with Berger. Payments made by the Berger NG Fund pursuant to its Rule
12b-1 Plan are included in the expenses subject to the voluntary expense
limitation, also noted above, contained in the agreement with Berger.
Certain officers and directors of Berger are also officers and
directors/trustees of the Funds. Directors/trustees who are not affiliated with
Berger received directors'/trustees' fees from the Berger 100 Fund, Berger G&I
Fund, Berger SCG Fund and Berger NG Fund of $84,044, $13,382, $33,821 and
$4,552, respectively, for the six months ended March 31, 1997.
3. INVESTMENT TRANSACTIONS
A. Purchases and Sales
Purchases and sales of investment securities (in thousands) during the six
months ended March 31, 1997 were as follows:
<TABLE>
<CAPTION>
BERGER BERGER BERGER BERGER
100 FUND G&I FUND SCG FUND NG FUND
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases of investment securities
(excluding short-term securities) $1,598,271 $ 254,483 $ 453,763 $ 69,208
====================================================================================================
Sales of investment securities
(excluding short-term securities) $2,001,543 $ 304,400 $ 538,481 $ 96,322
====================================================================================================
</TABLE>
There were no purchases or sales of long-term U.S. Government securities
during the period.
38
<PAGE>
At March 31, 1997, the composition of unrealized appreciation (the excess
of value over tax cost) and unrealized depreciation (the excess of tax cost over
value) for securities (in thousands) was as follows:
<TABLE>
<CAPTION>
BERGER BERGER BERGER BERGER
100 FUND G&I FUND SCG FUND NG FUND
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Appreciation $195,536 $39,854 $124,159 $ 7,391
Depreciation (99,027) (6,170) (41,966) (9,712)
-------------------------------------------------------------------------------------------------------
Net $ 96,509 $33,684 $ 82,193 $(2,321)
=======================================================================================================
</TABLE>
The Funds may hold certain types of futures, forwards and options for the
purpose of hedging the portfolio against exposure to market value fluctuations.
The use of such instruments may involve certain risks as a result of
unanticipated movements in the market. A lack of correlation between the value
of such instruments and the assets being hedged, or unexpected adverse price
movements, could render the Funds' hedging strategy unsuccessful. In addition,
there can be no assurance that a liquid secondary market will exist for the
instrument. Realized gains or losses on these securities are included in Net
Realized Gain (Loss) on Securities Transactions in the Statements of Operations.
B. Federal Income Tax Status
Dividends paid by the Funds from net investment income and distributions of
net realized short-term capital gains are, for Federal income tax purposes,
taxable as ordinary income to shareholders. Of the ordinary income distributions
declared for the year ended September 30, 1996, 100% qualified for the dividends
received deduction available to the corporate shareholders of the Berger G&I
Fund.
The Funds distribute net realized capital gains, if any, to their
shareholders at least annually, if not offset by capital loss carryovers. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to the differing treatment for
net operating losses. Accordingly, these permanent differences in the character
of income and distributions between financial statements and tax basis have been
reclassified to paid-in-capital.
The Berger NG incurred and elected to defer $12,651,134 of post-October 31
net capital losses to the year ended September 30, 1997.
4. TRANSACTIONS WITH AFFILIATES
During the six month period ended March 31, 1997, pursuant to a policy
adopted by the Funds' directors/trustees, Berger reimbursed Berger 100 Fund
$794,000 as a result of a security trading error.
39
<PAGE>
FINANCIAL HIGHLIGHTS / MARCH 31, 1997
<TABLE>
<CAPTION>
BERGER ONE HUNDRED FUND
For a Share Outstanding Throughout the Period Ended
(Unaudited)
March 31, SEPTEMBER 30,
1997* 1996* 1995* 1994* 1993* 1992*
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 19.64 $ 18.89 $ 15.96 $ 16.54 $ 11.73 $ 11.13
- ------------------------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income
(loss) (.05) (.08) (.04) (.12) (.14) (.09)
Net realized and unrealized
gains (losses) on
securities (.03) 1.76 2.97 (.46) 4.95 .86
- ------------------------------------------------------------------------------------------------------------------------
Total from investment
operations (.08) 1.68 2.93 (.58) 4.81 .77
- ------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net
investment income) .00 .00 .00 .00 .00 .00
Distributions (from
capital gains) (2.77) (.93) .00 .00 .00 (.17)
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions (2.77) (.93) .00 .00 .00 (.17)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 16.79 $ 19.64 $ 18.89 $ 15.96 $ 16.54 $ 11.73
========================================================================================================================
Total return (1.30)% 9.36% 18.36%# (3.51)%# 41.01%# 6.97%
========================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $1,747,970 $2,012,706 $2,205,678 $2,228,743 $1,407,849 $ 384,089
Ratio of expenses to
average net assets 1.42%~+ 1.42%+ 1.48%#+ 1.70%# 1.69%# 1.89%
Ratio of net income (loss)
to average net assets (.50)%~ (.43)% (.28)%# (.74)%# (1.00)%# (.75)%
Portfolio turnover rate 89% 122% 114% 64% 74% 51%
Average commission rate $ .0597 $ .0624 --- --- --- ---
</TABLE>
* Per share calculations for the period were based on average shares
outstanding.
~ Annualized.
+Ratio reflects total expenses, including fees paid indirectly with brokerage
commissions and fees offset by earnings credits, for 1995, 1996 and 1997 only.
#Ratios are net of a voluntary waiver made under the Fund's former 12b-1 Plan,
which reduced 12b-1 payments from 1.0% to .75% during the period February 1,
1993 to October 13, 1994. Effective October 14, 1994, a new 12b-1 Plan was
adopted with shareholder approval that reduced payments under the Plan to .25%
per year. Had the waiver not been made, the Ratio of Expenses to Average Net
Assets would have been 1.49% in 1995, 1.95% in 1994 and 1.88% in 1993. Absent
the waiver, the Ratio of Net Income (Loss) to Average Net Assets would have been
(.29)% in 1995, (.99)% in 1994 and (1.19)% in 1993. The Total Return would have
remained 18.36% in 1995, and would have been (3.63)% in 1994 and 40.84% in 1993.
See notes to financial statements.
40
<PAGE>
FINANCIAL HIGHLIGHTS / MARCH 31, 1997
<TABLE>
BERGER GROWTH & INCOME FUND
For a Share Outstanding Throughout the Period Ended
<CAPTION>
(Unaudited)
March 31, SEPTEMBER 30,
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 14.06 $ 12.89 $ 11.48 $ 11.27 $ 8.96 $ 9.20
- ------------------------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income
(loss) .08 .20 .16 .12 .08 .13
Net realized and unrealized
gains (losses) on
securities .93 1.17 1.43 .21 2.29 .54
- ------------------------------------------------------------------------------------------------------------------------
Total from investment
operations 1.01 1.37 1.59 .33 2.37 .67
- ------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net
investment income) (.07) (.20) (.18) (.12) (.06) (.17)
Distributions (from
capital gains) (1.63) .00 .00 .00 .00 (.74)
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions (1.70) (.20) (.18) (.12) (.06) (.91)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 13.37 $ 14.06 $ 12.89 $ 11.48 $ 11.27 $ 8.96
========================================================================================================================
Total return 7.22% 10.66% 14.05%# 2.91%# 26.48%# 7.96%
========================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $ 311,707 $ 315,538 $ 354,396 $ 391,570 $ 112,932 $ 32,942
Ratio of expenses to
average net assets 1.54%*~ 1.56%* 1.63%#+ 1.81%# 2.10%# 2.56%
Ratio of net income (loss)
to average net assets 1.14%~ 1.39% 1.33%# 1.19%# 1.05%# 1.05%
Portfolio turnover rate 88% 112% 85% 23% 62% 42%
Average commission rate $ .0620 $ .0613 --- --- --- ---
</TABLE>
*Ratio reflects total expenses, including fees paid indirectly with brokerage
commissions and fees offset by earnings credits, for 1996 and 1997 only.
~Annualized.
+Ratio reflects total expenses, including fees offset by earnings credits, for
1995 only.
# Ratios are net of a voluntary waiver made under the Fund's former 12b-1 Plan,
which reduced 12b-1 payments from 1.0% to .75% during the period February 1,
1993 to October 13, 1994. Effective October 14, 1994, a new 12b-1 Plan was
adopted with shareholder approval that reduced payments under the Plan to .25%
per year. Had the waiver not been made, the Ratio of Expenses to Average Net
Assets would have been 1.64% in 1995, 2.06% in 1994 and 2.29% in 1993. Absent
the waiver, the Ratio of Net Income (Loss) to Average Net Assets would have been
1.32% in 1995, .94% in 1994 and .86% in 1993. The Total Return would have
remained 14.05% in 1995, and would have been 2.73% in 1994 and 26.34% in 1993.
See notes to financial statements.
41
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS / MARCH 31, 1997
BERGER SMALL COMPANY GROWTH FUND
For a Share Outstanding Throughout the Period Ended
<CAPTION>
(Unaudited)
March 31, SEPTEMBER 30,
-------------------------------------------
1997 1996 1995 1994*
---- ---- ---- -----
<S> <C> <C> <C> <C>
Net asset value, beginning
of period $ 4.74 $ 3.61 $ 2.74 $ 2.50
- ----------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income
(loss) (.03) (.03) (.02) .00
Net realized and unrealized
gains (losses) on
securities (.74) 1.16 .89 .24
- ----------------------------------------------------------------------------------------------------------
Total from investment
operations (.77) 1.13 .87 .24
- ----------------------------------------------------------------------------------------------------------
Less distributions:
Dividends (from net
investment income) .00 .00 .00^ .00
Distributions (from
capital gains) (.20) .00 .00 .00
- ----------------------------------------------------------------------------------------------------------
Total Distributions (.20) .00 .00 .00
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 3.77 $ 4.74 $ 3.61 $ 2.74
==========================================================================================================
Total return (16.76)% 31.30% 31.90% 9.60%
===========================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $ 648,291 $ 871,467 $ 522,667 $ 211,852
Ratio of expenses to
average net assets 1.68%#~ 1.68%#+ 1.89%+ 2.10%~@
Ratio of net income (loss)
to average net assets (1.11)%~ (.97)% (.74)% .32%~
Portfolio turnover rate 64 % 91 % 109 % 108%
Average commission rate $ .0583 $ .0584 --- ---
</TABLE>
*For the period December 30, 1993 (commencement of operations) to September 30,
1994.
^Dividend from net investment income less than $.01 per share.
~Annualized.
#Ratio reflects total expenses, including fees paid indirectly with brokerage
commissions and fees offset by earnings credits, for 1996 and 1997 only. +Ratio
reflects total expenses, including fees offset by earnings credits for 1995
only.
@Restated.
See notes to financial statements.
42
<PAGE>
FINANCIAL HIGHLIGHTS / MARCH 31, 1997
BERGER NEW GENERATION FUND
For a Share Outstanding Throughout the Period Ended
(Unaudited)
March 31, September 30,
1997 1996*
---- ----
Net asset value, beginning
of period $ 11.82 $ 10.00
- --------------------------------------------------------------------------
Income from investment
operations:
Net investment income
(loss) (.05) .56
Net realized and unrealized
gains (losses) on
securities (2.03) 1.26
- --------------------------------------------------------------------------
Total from investment
operations (2.08) 1.82
- --------------------------------------------------------------------------
Less distributions:
Dividends (from net
investment income) (.61) .00
Distributions (from
capital gains) .00 .00
- --------------------------------------------------------------------------
Total Distributions (.61) .00
- --------------------------------------------------------------------------
Net asset value, end of
period $ 9.13 $ 11.82
==========================================================================
Total return (18.42)% 18.20%
===========================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $ 79,174 $ 116,912
Ratio of expenses to
average net assets 1.95%~+ 2.09%~+
Ratio of net income (loss)
to average net assets (1.56)%~ 12.35%~
Portfolio turnover rate 71 % 474%#
Average commission rate $ .0554 $ .0291
*For the period March 29, 1996 (commencement of operations) to September 30,
1996.
~Annualized.
#The Fund experienced higher than anticipated turnover during this period as a
result of portfolio transactions undertaken in response to volatile markets and
the short tax year for its initial period of operations.
+Ratio reflects total expenses, including fees offset by earnings credits and
investment advisory fee waivers.
See notes to financial statements.
43
<PAGE>
DIRECTORS OF BERGER ONE HUNDRED FUND AND BERGER GROWTH & INCOME FUND
AND TRUSTEES OF BERGER INVESTMENT PORTFOLIO TRUST
MICHAEL OWEN, CHAIRMAN * DENNIS E. BALDWIN
WILLIAM M.B. BERGER * LOUIS R. BINDNER, P.E. * KATHERINE A. CATTANACH
LUCY BLACK CREIGHTON * PAUL R. KNAPP * GERARD M. LAVIN
HARRY T. LEWIS, JR. * WILLIAM SINCLAIRE
OFFICERS:
GERARD M. LAVIN
President of Berger One Hundred Fund and
Berger Growth & Income Fund
President of Berger Investment Portfolio Trust
PATRICK S. ADAMS
Executive Vice President of Berger 100 Fund
and Berger Growth and Income Fund
WILLIAM R. KEITHLER
President of Berger Small
Company Growth Fund and
Berger New Generation Fund
MARK R. MCKINNEY
Vice President of
Berger Growth and Income Fund
KEVIN R. FAY
Vice President, Secretary and Treasurer of
the Berger Funds
JANICE M. TEAGUE
Assistant Secretary of the Berger Funds
DAVID J. SCHULTZ
Assistant Treasurer of the Berger Funds
INVESTMENT ADVISER
Berger Associates, Inc.
P.O. Box 5005
Denver, Colorado 80217
1-303-329-0200 or 1-800-333-1001
THE BERGER FUNDS (logo)
Together we can move mountains.(TM)
(C)1997 Berger Associates, Inc.
44
