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As filed with the Securities and Exchange Commission
on January 5, 1996
Registration No. 811-08140
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM N-1A
AMENDMENT NO. 4 TO
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
MANAGED SERIES INVESTMENT TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
111 Center Street, Little Rock, Arkansas 72201
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
_______________________________________
Registrant's Telephone Number, including Area Code:
(800) 643-9691
Richard H. Blank, Jr.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(NAME AND ADDRESS OF AGENT FOR SERVICE)
WITH A COPY TO:
Robert M. Kurucza, Esq.
Marco E. Adelfio, Esq.
Morrison & Foerster
2000 Pennsylvania Avenue, N.W., Suite 5500
Washington, D.C. 20006-1812
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EXPLANATORY NOTE
This amendment No. 4 to the Registration Statement of Managed Series
Investment Trust (the "Trust") relates only to the Growth Stock and
Short-Intermediate Term Master Series (the "Master Series") of the Trust. This
amendment is being filed to reflect the addition of a new investment adviser,
sub-investment adviser and custodian for each Master Series, to incorporate
into the Part B each Master Series' unaudited financial statements for the
six-month period ended August 31, 1995, to delete the description of certain
inactive Master Series from, and to reflect other non-material changes to, the
Registration Statement.
This amendment to the Registration Statement has been filed by
Registrant pursuant to Section 8(b) of the Investment Company Act of 1940.
However, beneficial interests in the Registrant are not being registered under
the Securities Act of 1933 (the "1933 Act") because such interests will be
issued solely in private placement transactions that do not involve any
"public offering" within the meaning of Section 4(2) of the 1933 Act.
Investments in the Registrant may only be made by registered broker/dealers or
by investment companies, insurance company separate accounts, common commingled
trust funds, group trusts or similar organizations or entities that are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This Registration Statement does not consitute an offer to sell, or the
solicitation of an offer to buy, any beneficial interest in the Registrant.
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MANAGED SERIES INVESTMENT TRUST
Growth Stock Master Series
Short-Intermediate Term Master Series
PART A
January 3, 1996
Responses to Items 1 through 3 have been omitted pursuant to paragraph F.4. of
the General Instructions to Form N-1A.
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.
Managed Series Investment Trust ("Trust") is a no-load, open-end
series investment company which was organized as a business trust under the
laws of Delaware on October 28, 1993. The Trust currently offers two series:
the Growth Stock Master Series and the Short-Intermediate Term Master
Series. Beneficial interests in the Master Series of the Trust are issued solely
in private placement transactions that do not involve any "public offering"
within the meaning of Section 4(2) of the Securities Act of 1933, as amended
(the "1933 Act"). Investments in the Series of the Trust may only be made by
registered broker/dealers or by investment companies, insurance company separate
accounts, common or commingled trust funds, group trusts or other "accredited
investors" within the meaning of Regulation D under the 1933 Act. This
registration statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any security within the meaning of the 1933 Act.
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The investment objective of the GROWTH STOCK MASTER SERIES is to
provide investors with above-average long-term total return, with a primary
focus on capital appreciation. Current income is a secondary consideration.
The Master Series seeks to provide investors with a rate of total return that,
over a three to five year time horizon, exceeds that of the S&P 500 Index
(before fees and expenses) over comparable periods by investing in a
diversified portfolio consisting primarily of growth-oriented common stocks.
The investment objective of the SHORT-INTERMEDIATE TERM MASTER SERIES
is to provide investors with a total return, before fees and expenses,
exceeding that of the Lehman Brothers Intermediate Government/Corporate Bond
Index ("LB Intermediate Bond Index"). The Master Series seeks to achieve its
investment objective by investing in a mix of the following types of
securities: U.S. Treasury and agency debt securities, corporate bonds,
collateralized mortgage obligations and mortgage-backed securities, other types
of asset-backed securities and money market instruments.
INVESTMENT POLICIES RELATING TO THE GROWTH STOCK MASTER SERIES:
The Master Series invests primarily in the common stocks of those
growth-oriented, small- and medium-sized corporations that the Master Series'
investment adviser believes have potential for above-average, long-term capital
appreciation. These growth-oriented stocks typically have some or all of the
following characteristics:
o Low or no dividends
o Relatively small market capitalizations
o Less market liquidity
o Relatively short operating histories
o High debt-to-equity ratios
o Involvement in rapidly growing/changing industries and/or new
technologies
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The Master Series invests in a diversified portfolio of
growth-oriented common stocks and does not concentrate its investments in a
particular industry. Under normal market conditions, the Master Series'
portfolio contains common stocks of at least 20 corporations in multiple
industry groups, with the majority of these holdings consisting of stocks of
established growth companies, turnaround or acquisition candidates, or larger
capitalization companies that present one or more of the above characteristics.
Additionally, the Master Series may, from time to time, acquire
securities through initial public offerings, and may acquire and hold common
stocks of smaller and newer issuers, which are subject to the additional risks
described below. It is expected that no more than 40% of the Master Series'
assets will be invested in these more aggressive securities at one time.
Investments in smaller companies may offer greater opportunities for
capital appreciation than larger, more established companies, but they also may
involve greater risk. For example, smaller companies may have limited product
lines, markets or financial and management resources. From time to time, the
Master Series' investment adviser or sub-adviser may determine that conditions
in the securities markets make pursuing the Master Series' basic investment
strategy inconsistent with the best interests of the Master Series' investors.
At such times, the adviser or sub-adviser may reduce the Master Series'
exposure to the stock market in order to reduce fluctuations in the value of
the Master Series' assets. The Master Series could invest up to 30% of its net
assets in preferred stocks, government obligations or in debt securities that
are convertible into common stock; it could also increase its investments in
money market securities. At most, 5% of the Master Series' net assets are
invested in convertible debt securities that are either rated below the four
highest rating categories by one or more nationally recognized statistical
rating organizations ("NRSROs"), such as Moody's Investors Service, Inc.
("Moody's") or S&P, or unrated securities determined by The Master Series'
investment adviser to be of comparable quality. Securities rated in the fourth
highest rating category (i.e., rated BBB by S&P or Baa by Moody's) are regarded
by S&P as having an adequate capacity to pay interest and repay principal, but
changes in economic conditions or other circumstances are more likely to lead
to a weakened capacity to make such repayments. Moody's considers such
securities as having speculative characteristics.
The Master Series pursues an active-trading investment strategy, and
the length of time the Master Series has held a particular security is not
generally a consideration in investment decisions. Accordingly, the Master
Series' portfolio turnover rate may be higher than that of other funds that do
not pursue an active-trading investment strategy. Portfolio turnover generally
involves some expense to the Master Series, including brokerage commissions or
dealer mark- ups, and other transaction costs on the sale of securities and the
reinvestment in other securities. Portfolio turnover also can generate
short-term capital gains tax consequences. The Master Series does not expect
to have a portfolio turnover rate exceeding 200%.
Although the Master Series holds a number of larger capitalization
stocks, under normal market conditions more than 50% of the Master Series'
total assets are invested in companies with smaller to medium capitalizations.
The Master Series invests primarily in companies with a market capitalization
of $50 million or greater, but may invest in companies with a market
capitalization under $50 million if the investment adviser to the Master Series
believes such investments to be in the best interests of the Master Series.
The majority of the Master Series' investments are currently in companies with
market capitalizations, at the time of acquisition, of
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up to $750 million. As a matter of strategy, the larger capitalized issues in
the Master Series are generally "core" positions that the Master Series may
hold for relatively long periods of time.
Under ordinary market conditions, at least 65% of the value of the
total assets of the Master Series will be invested in common stocks that are
expected by the Master Series' adviser or sub-adviser to have
better-than-average prospects for capital appreciation.
The Master Series may temporarily hold assets in cash or make
short-term investments to the extent appropriate to maintain adequate liquidity
for redemption requests or other cash management needs, or for temporary
defensive purposes. The short-term investments that the Master Series may
purchase for liquidity purposes include U.S. Treasury bills, shares of other
mutual funds and repurchase agreements (as described below).
INVESTMENT POLICIES RELATING TO THE SHORT-INTERMEDIATE TERM MASTER SERIES:
The Master Series seeks to maintain an overall average weighted
portfolio maturity generally in the 2-to-5 year range. Under normal market
conditions, the Master Series will invest at least 65% of its total assets in
securities having an average weighted portfolio maturity in the 2-to-5 year
range. Under unusual market conditions, the Master Series may shorten or
lengthen its average weighted portfolio maturity beyond the 2-to-5 year range.
The LB Intermediate Bond Index consists of government (Treasury and
agency) and corporate debt obligations with remaining maturities between one
and ten years. Each issue is represented in the LB Intermediate Bond Index in
proportion to its outstanding market value. The exact composition of the LB
Intermediate Bond Index varies according to the characteristics of the
securities outstanding in the marketplace.
Only investment-grade securities are considered for investment. These
securities are identified by their ratings according to one of two major rating
services, S&P and Moody's Investors Service, Inc. ("Moody's"). The rating
systems employed by each service are described in the Appendix to this
Prospectus. Each service classifies securities into broad categories starting
with "investment grade" at the top and ranging downward through more
speculative classes, including so-called "junk bonds," to securities that are
virtually worthless. The "investment grade" category is subdivided into four
rating groups by both services. The four rating groups are called "AAA"/"Aaa,"
"AA"/"Aa," "A/A," and "BBB"/"Baa" by S&P and Moody's, respectively. Obligations
with the lowest investment grade rating have speculative characteristics, and
changes in economic conditions or other circumstances are more likely to lead
to a weakened capacity to make principal and interest payments than in the case
of higher grade debt obligations. The Master Series may invest in securities
of all four rating groups; however, most of the Master Series' assets are
invested in securities that, at the time of purchase, are rated in the third
group or higher, denoted "A" or better by both rating services. Asset-backed
securities are further restricted to the top two rating groups at time of
purchase. Mortgage- related securities which are issued or guaranteed by U.S.
Government agencies are all currently considered to be in the highest rating
category. Subsequent to its purchase by the Master Series, an issue of
securities may cease to be rated or its rating may be reduced below the minimum
rating required for purchase by the Master Series. The adviser and
sub-adviser consider such an event in determining whether the Master Series
should continue to hold the obligation. To the extent the Master Series
continues to hold such obligations, it may be subject to additional risk of
default.
In the marketplace it is generally the case that higher-risk
securities carry higher yields-to-maturity. That is, investors tend to demand
higher returns for securities with longer maturities or lower credit quality
rating than for similar securities of shorter maturities or higher credit
quality ratings. The amount of increased return for increased risk, however,
changes from time to time. The Master Series seeks to emphasize those maturity
segments or rating groups that appear to
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offer the most favorable returns to their risks, within the maturity and
quality ranges described above.
The Master Series may invest some of its assets (no more than 10% of
total assets under normal market conditions) in high quality money market
instruments, which include U.S. Government obligations, obligations of domestic
and foreign banks, repurchase agreements, commercial paper (including variable
amount master demand notes) and short- term corporate debt obligations. Such
investments are made on an ongoing basis to provide liquidity and, to a greater
extent on a temporary basis, when there is an unexpected or abnormal level of
investor purchases or redemptions of Master Series shares or when "defensive"
strategies are appropriate.
The portfolio turnover rate for the Master Series is not expected to
exceed 300%. Portfolio turnover generally involves some expense to the Master
Series, including brokerage commissions or dealer mark-ups and other
transaction costs on the sale of securities and the reinvestment in other
securities. Portfolio turnover also can generate short- term capital gains tax
consequences.
ITEM 5. MANAGEMENT OF THE TRUST.
The Trust's Board of Trustees provides broad supervision over the
affairs of the Trust and its Master Series.
The Trust has retained the services of BZW Barclays Global Fund
Advisors ("BGFA") as investment adviser to each Master Series. Wells Fargo
Bank, N.A. ("Wells Fargo Bank") serves as sub-investment adviser to each Master
Series and, prior to January 1, 1996, served as investment adviser to each
Master Series. Stephens Inc. ("Stephens") serves as sponsor, distributor and
administrator. The Board of Trustees of the Trust is responsible for the
general management of the Trust and supervising the actions of BGFA, Wells
Fargo Bank and Stephens in these capacities.
INVESTMENT ADVISER AND SUB-INVESTMENT ADVISER
BGFA, pursuant to separate advisory contracts with each Master Series
(the "BGFA Advisory Contracts"), serves as investment adviser to each of the
Master Series. BGFA was created by the reorganization of Wells Fargo Nikko
Investment Advisors ("WFNIA") with and into an affiliate of Wells Fargo
Institutional Trust Company ("WFITC"). BGFA is now a wholly owned subsidiary of
WFITC which, effective January 1, 1996, changed its name to BZW Barclays Global
Investors, N.A. ("BGI"). BGFA is an indirect subsidiary of Barclays Bank PLC
("Barclays") and is located at 45 Fremont Street, San Francisco, CA 94105. As of
January 1, 1996, BGFA and its affiliates provide investment advisory services
for over $220 billion of assets under management.
The BGFA Advisory Contracts are identical in all material respects,
other than the identity of the parties, to the advisory contracts with Wells
Fargo Bank, the previous investment adviser to each Master Series. The BGFA
Advisory Contracts provide that BGFA shall furnish to each Master Series
investment guidance and policy direction in connection with the daily portfolio
management of such Master Series. Pursuant to the BGFA Advisory Contracts, BGFA
furnishes to the Board of Trustees of the Trust periodic reports on the
investment strategy and performance of each Master Series.
BGFA has retained Wells Fargo Bank as sub-investment adviser to each
Master Series. Prior to January 1, 1996, Wells Fargo Bank served as investment
adviser to each Master Series. As sub-investment adviser, Wells Fargo Bank is
responsible for the day-to-day portfolio management of each Master Series. The
same Wells Fargo Bank investment professionals that previously managed the
investment portfolio of each Master Series continue to manage, subject to the
overall supervision of BGFA, each Master Series' investment portfolio.
Currently, Wells Fargo Bank is the investment adviser or sub-investment adviser
to five other registered investment companies. Wells Fargo Bank, a wholly owned
subsidiary of Wells Fargo & Company, is located at 420 Montgomery Street, San
Francisco, California 94105. Wells Fargo Bank, one of the largest banks in the
United States, was founded in 1852 and is the oldest bank in the western United
States. As of January 1, 1996, Wells Fargo Bank provides investment advisory
services for approximately $33 billion of assets under management.
BGFA is entitled to receive monthly fees at the annual rate of 0.60%
and 0.45% of the average daily net assets of the Growth Stock and
Short-Intermediate Term Master Series, respectively, as compensation for its
advisory services. From time to time, BGFA may waive such fees in whole or in
part. Any such waiver will reduce the expenses of a Master Series and,
accordingly, have a favorable impact on the return and yield of such Master
Series. Wells Fargo Bank is entitled to receive from BGFA monthly fees at the
annual rate of 0.15% and 0.10% of the average daily net assets of the Growth
Stock and Short-Intermediate Term Master Series, respectively, as compensation
for its sub-advisory services.
For the period from May 26, 1994 to February 28, 1995, the Growth
Stock Master Series and the Short-Intermediate Term Master Series paid a fee
at the annual rate of 0.56% and 0.18%, respectively, of their average daily net
assets to Wells Fargo Bank for its services as investment adviser.
Purchase and sale orders of the securities held by the Master Series
may be combined with those of other accounts that Wells Fargo Bank manages or
advises, and for which it has brokerage placement authority, in the interest of
seeking the most favorable overall net results. When Wells Fargo Bank
determines that a particular security should be bought or sold for the Master
Series and other accounts managed by Wells Fargo Bank, it undertakes to
allocate those transactions among the participants equitably. From time to
time, a Master Series, to the extent consistent with its investment objective,
policies and restrictions, may invest in securities of companies with which
Wells Fargo Bank has a lending relationship.
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Morrison & Foerster, special counsel to Wells Fargo Bank and counsel
to the Trust, has advised Wells Fargo Bank and the Trust that Wells Fargo Bank
should be able to perform the services contemplated by the Sub-Advisory
Contracts and the Agency Agreement without violation of the Glass-Steagall Act.
Such counsel has pointed out, however, that there are no controlling judicial
or administrative interpretations or decisions and that future judicial or
administrative interpretations of, or decisions relating to, present federal or
state statutes and regulations relating to the permissible activities of banks
and their subsidiaries or affiliates, as well as future changes in federal or
state statutes and regulations and judicial or administrative decisions or
interpretations thereof, could prevent Wells Fargo Bank from continuing to
perform, in whole or in part, such services. If Wells Fargo Bank were
prohibited from performing any of such services, it is expected that new
agreements would be proposed or entered into with another entity or entities
qualified to perform such services.
PORTFOLIO MANAGERS
THE GROWTH STOCK MASTER SERIES
Jonathan Hickman has been primarily responsible for the day-to-day management
of the portfolio of the Master Series since its inception. Mr. Hickman manages
several Wells Fargo Bank collective funds with the same investment objective as
the Master Series, as well as equity and balanced portfolios for individuals
and employee benefit plans. He has approximately 10 years experience in the
investment management field and is a member of Wells Fargo's Equity Strategy
Committee. He has a B.A. and an M.B.A. in finance from Brigham Young
University.
THE SHORT-INTERMEDIATE TERM MASTER SERIES
Mr. Scott Smith has been co-manager of the portfolio of the Master Series since
June 28, 1995. He joined Wells Fargo Bank in 1988 as a taxable money market
portfolio specialist. His experience includes a position with a private money
management firm with mutual fund investment operations. Mr. Smith holds a B.A.
degree from the University of San Diego and is a chartered financial analyst.
Ms. Tamyra Thomas, who co-manages the portfolio of the Master Series with Mr.
Smith, has been both manager and co- manager of the portfolio of the Master
Series since its inception. Prior to joining Wells Fargo Bank in 1988, Ms.
Thomas was Vice President and Manager of the Investment Department of Valley
Bank and Trust in Utah. She holds a B.S. from the University of Utah.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT
BGI serves as custodian to each Master Series and is located at 45
Fremont Street, San Francisco, California 94105. BGI is a wholly owned
subsidiary of BZW Barclays Global Investors Holdings, Inc. (formerly, The Nikko
Building U.S.A., Inc.) and is also an indirect subsidiary of Barclays. Prior to
January 1, 1996, BGI was known as Wells Fargo Institutional Trust Company, N.A.
("WFITC") and WFNIA and Wells Fargo & Company together owned 100% of WFITC's
outstanding voting securities. Wells Fargo Bank acts as each Master Series'
Transfer and Dividend Disbursing Agent, and performs these agency activities at
525 Market Street, San Francisco, California 94105.
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Sponsor, Administrator and Placement Agent
Stephens, located at 111 Center Street, Little Rock, Arkansas 72201,
has entered into an agreement with the Trust under which Stephens acts as
administrator for the Master Series of the Trust. Stephens does not receive a
fee from the Trust for providing administrative services to the Master Series.
The Administration Agreement with the Trust states that Stephens shall
provide as administrative services, among other things: (i) general supervision
of the operation of the Master Series, including coordination of the services
performed by the investment adviser, transfer agent, custodian, independent
accountants and legal counsel; regulatory compliance, including the compilation
of information for documents such as reports to, and filings with, the
Securities and Exchange Commission ("SEC") and any state securities
commissions; and preparation of proxy statements and investor reports for the
Trust; and (ii) general supervision relative to the compilation of data
required for the preparation of periodic reports distributed to the Trust's
officers and Board of Trustees. Stephens also furnishes office space and
certain facilities required for conducting the business of the Trust and pays
the compensation of the trustees, officers and employees of the Trust who are
affiliated with Stephens.
Subject to the overall supervision of the Trust's Board of Trustees,
Stephens also acts as Placement Agent for the sale of interests of the Master
Series. Stephens is a full service broker/dealer and investment advisory firm.
Stephens and its predecessor have been providing securities and investment
services for more than 60 years, including discretionary portfolio management
services since 1983. Stephens currently manages investment portfolios for
pension and profit sharing plans, individual investors, foundations, insurance
companies and university endowments. The Trust will not purchase securities
from Stephens, BGFA, Wells Fargo Bank, or their respective affiliates, as
principal, without an exemptive order from the SEC.
MASTER SERIES EXPENSES
From time to time, BGFA and Stephens may waive their respective fees
in whole or in part and reimburse expenses payable to others. Any waivers or
reimbursements will reduce a Master Series expenses. Except for the expenses
borne by Stephens and BGFA each Master Series bears all costs of its operations.
The BGFA Advisory Contracts for each Master Series provide that if, in
any fiscal year, the total aggregate expenses of a series incurred by, or
allocated to, such Master Series and other investment companies investing in
the Master Series (excluding taxes, interest, brokerage commissions and other
portfolio transaction expenses, expenditures that are capitalized in accordance
with generally accepted accounting principles, extraordinary expenses and
amounts accrued or paid under any distribution plan) exceed the most
restrictive expense limitation applicable to such investment companies imposed
by the securities laws or regulations of the states in which such investment
companies' shares are registered for sale, BGFA shall waive its fees under the
BGFA Advisory Contracts for the fiscal year to the extent of the excess, or
reimburse the excess, but only to the extent of their fees. The BGFA Advisory
Contracts further provide that the total expenses shall be reviewed monthly so
that, to the extent the annualized expenses for such month exceed the most
restrictive applicable annual expense limitation, the monthly fees under the
Advisory Contracts shall be reduced as necessary. The most stringent
applicable state restriction for investment companies limits these expenses for
any fiscal year to 2.50% of the first $30 million of an investment company's
average net assets, 2.0% of the next $70 million of average net assets and
1.50% of the average net assets in excess of $100 million.
Except for the expenses borne by Stephens and BGFA, each Master
Series bears all costs of its operations, including the compensation of its
trustees who are not officers or
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employees of Stephens or BGFA or any of their affiliates; advisory and
administration fees; interest charges; taxes; fees and expenses of independent
auditors, legal counsel, transfer agent and dividend disbursing agent; expenses
of redeeming interests in the Trust; expenses of preparing and printing any
prospectuses; investor reports, notices, proxy statements and reports to
regulatory agencies; insurance premiums and certain expenses relating to
insurance coverage; trade association membership dues; brokerage and other
expenses connected with the execution of portfolio transactions; fees and
expenses of the custodian, including those for keeping books and accounts and
calculating the net asset value of investments in the Trust; expenses of
investor meetings; pricing services; organizational expenses; and any
extraordinary expenses. Extraordinary expenses of the Trust are allocated
among all the Master Series of the Trust in a manner proportionate to the net
assets of each Master Series on a transactional basis, or such other basis as
the Trust's Board of Trustees deem fair and equitable.
ITEM 6. CAPITAL STOCK AND OTHER SECURITIES.
ORGANIZATION AND INTERESTS
The Trust is organized as a trust under the laws of the State of
Delaware. Investors in the Trust are each liable for all obligations of the
Trust. However, the risk of an investor incurring financial loss on account of
such liability is limited to circumstances in which both inadequate insurance
exists and the Trust itself is unable to meet its obligations.
The Trust's Declaration of Trust permits the Board of Trustees to
issue beneficial interests in series of the Trust, and to permit investors to
increase or decrease their interest in the series of the Trust. The Trust has
no intention to hold annual meetings of investors, but will hold special
meetings of investors when, in the judgment of the Trustees, it is necessary or
desirable to submit matters for an investor vote. Investors holding 10% or
more of the shares outstanding and entitled to vote are entitled to call a
meeting of investors for purposes of voting on removal of a Trustee or Trustees
of the Trust.
Each investor is entitled to a vote in proportion to the amount of the
investor's investment in the Trust. Interests in a Master Series of the Trust
may not be transferred, but an investor may withdraw all or any portion of its
investment at any time at net asset value. All interests in a Master Series of
the Trust, when issued, will be fully paid and nonassessable, and investors
have no preemptive rights. A more detailed statement of the rights of
investors is contained in the SAI.
As of December 15, 1995, the Growth Stock Fund and the Short-
Intermediate Term Fund of Stagecoach Inc., 111 Center Street, Little Rock,
Arkansas 72201, owned approximately 100% of the voting securities of the Growth
Stock Master Series and approximately 100% of the voting securities of the
Short- Intermediate Term Master Series, respectively, and each Fund could be
considered a controlling person under the 1940 Act of the corresponding Master
Series.
MASTER SERIES SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR
ISSUED, ENDORSED OR GUARANTEED BY, WELLS FARGO BANK OR ANY OF ITS AFFILIATES.
SUCH SHARES ARE NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY. AN INVESTMENT IN THE MASTER SERIES INVOLVES CERTAIN RISKS, INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL.
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DIVIDENDS AND DISTRIBUTIONS
The net investment income of a Master Series generally will be
declared and paid as a dividend daily to all investors of record as of 1:00
p.m. (Pacific time) with respect to each Master Series. Net investment income
for a Saturday, Sunday or Holiday (as defined below) will be declared as a
dividend to investors of record as of 1:00 p.m. (Pacific time) on the previous
business day with respect to each Master Series. All the net investment income
of a Master Series so determined is allocated pro rata among the investors in
such Master Series at the time of such determination.
Dividends and capital gain distributions, if any, paid by a Master
Series will be reinvested in the investor's interest in such Master Series at
net asset value and credited to the investor's account on the payment date.
TAXES
Based upon the anticipated method of operation of each Master Series
of the Trust, the Trust believes that each Master Series will qualify for
federal income tax purposes as a partnership. The Trust therefore believes
that each Master Series will not be subject to any federal income tax on its
income and net capital gains (if any). However, each investor in a Master
Series of the Trust will be taxable on its distributive share of such Master
Series of the Trust's ordinary income and capital gain, if any, in determining
its federal income tax liability. The determination of such share will be made
in accordance with the Code and regulations promulgated thereunder.
It is intended that each Master Series' assets, income and
distributions will be managed in such a way that a regulated investment company
investing in such Master Series will be able to satisfy the requirements of
Subchapter M of the Code, assuming that the investment company invested all of
its assets in such Master Series.
Investor inquiries should be directed to the Managed Series Investment
Trust, 111 Center Street, Little Rock, Arkansas 72201.
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ITEM 7. PURCHASE OF SECURITIES.
Interests in a Master Series may be purchased on any day such Master
Series is open. Each Master Series is open for business each day the New York
Stock Exchange ("NYSE") is open for trading ("NYSE Business Day"). The NYSE
currently observes the following holidays: New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day (each, a "Holiday").
The Trust is a no-load open-end series investment company which was
organized as a business trust under the laws of Delaware on October 28, 1993.
Beneficial interests in a Master Series of the Trust are issued solely in
private placement transactions that do not involve any "public offering" within
the meaning of Section 4(2) of the 1933 Act. Investments in a Master Series of
the Trust may only be made by registered broker/dealers or by investment
companies, insurance company separate accounts, common or commingled trust
funds, group trusts or "accredited investors" within the meaning of Regulation
D under the 1933 Act. This registration statement does not constitute an offer
to sell, or the solicitation of an offer to buy, any "security" within the
meaning of the 1933 Act.
There is no minimum initial or subsequent purchase amount in a Master
Series of the Trust. The Trust on behalf of its Master Series reserves the
right to reject any purchase order. If accepted by a Master Series of the
Trust, investments in such Master Series may be made in exchange for securities
which are eligible for acquisition by such Master Series as described in this
Part A. All dividends, interest, subscription, or other rights pertaining to
such securities shall become the property of such Master Series and must be
delivered to such Master Series by the investor upon receipt from the issuer.
A Master Series will not accept securities in exchange for interests
unless: (1) such securities are, at the time of the exchange, eligible for
purchase by such Master Series; (2) the investor represents and agrees that all
securities offered to be exchanged are not subject to any restrictions upon
their sale by such Master Series under the 1933 Act or under the laws of the
country in which the principal market for such securities exists, or otherwise;
(3) the value of any such security (except U.S. Government securities) being
exchanged together with any other securities of the same issuer owned by a
Master Series will not exceed 5% of the net assets of such Master Series
immediately after the transaction; and (4) such securities are consistent with
the Master Series' investment objective and policies, as applied by BGFA.
Interests in a Master Series are offered continuously at the net asset
value next determined after a purchase order is effective without a sales load.
Purchase orders for interests in a Master Series will be effected by 1:00 p.m.
(Pacific time) on any NYSE Business Day.
Each investor in a Master Series may add to or reduce its investment
in such Master Series on any NYSE Business Day.
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The NAV of each Master Series is calculated at 1:00 p.m. on any NYSE Business
Day. The value of each investor's beneficial interest in a Master Series will
be determined by multiplying the net asset value of such Master Series by the
percentage, effective for that day, that represents that investor's share of
the aggregate beneficial interests in a Master Series. Any additions or
withdrawals, which are to be effected on that day, will then be effected. The
investor's percentage of the aggregate beneficial interests in a Master Series
will then be re-computed as the percentage equal to the fraction (i) the
numerator of which is the value of such investor's investment in a Master
Series as of 1:00 p.m. on such day plus or minus, as the case may be, the
amount of any additions to or withdrawals from the investor's investment in a
Master Series effected on such day, and (ii) the denominator of which is the
aggregate net asset value of such Master Series as of 1:00 p.m. on such day
plus or minus, as the case may be, the amount of the net additions to or
withdrawals from the aggregate investments in such Master Series by all
investors in a Master Series. The percentage so determined will then be
applied to determine the value of the investor's interest in a Master Series as
of 1:00 p.m. on the following NYSE Business Day.
By investing in the Trust, an investor appoints the Transfer Agent, as
agent, to establish an open account to which all investments will be credited,
together with any dividends and capital gain distributions that are paid in
additional interests in the Trust.
DETERMINATION OF NET ASSET VALUE
The net asset value of each Master Series is determined on any NYSE
Business Day.
Except for debt obligations with remaining maturities of 60 days or
less, which are valued at amortized cost, the other assets of each Master
Series are valued at current market prices, or, if such prices are not readily
available, at fair value as determined in good faith in accordance with
guidelines approved by the Trust's Board of Trustees. Prices used for such
valuations may be provided by independent pricing services.
The exclusive placement agent for the Trust is Stephens. Stephens
receives no additional compensation for serving as placement agent for the
Trust.
ITEM 8. REDEMPTION OR REPURCHASE.
An investor in a Master Series may withdraw all or a portion of its
investment on any NYSE Business Day at the net asset value next determined
after a withdrawal request in proper form is furnished by the investor to such
Master Series. The Master Series make no charge for redemption transactions.
The proceeds of a withdrawal will be paid by the Master Series in federal funds
normally on the day after the withdrawal is effected, but in any event within
seven days. At a Master Series'
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option, payment of redemption proceeds may be made in securities, subject to
regulation by some state securities commissions. Investments in a Master
Series may not be transferred.
The right of any investor to receive payment with respect to any
withdrawal may be suspended or the payment of the withdrawal proceeds postponed
during any period in which the NYSE is closed (other than weekends or Holidays)
or trading on the NYSE is restricted, or, to the extent otherwise permitted by
the 1940 Act, if an emergency exists.
ITEM 9. PENDING LEGAL PROCEEDINGS.
Not applicable.
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APPENDIX -- ADDITIONAL INVESTMENT POLICIES
The following describes certain instruments in which the Master Series
of the Trust may invest.
MUNICIPAL SECURITIES
Subject to the maturity and other restrictions under Rule 2a-7, the
Master Series may invest in Municipal Obligations. Municipal bonds generally
have a maturity at the time of issuance of up to 40 years. Medium-term
municipal notes are generally issued in anticipation of the receipt of tax
funds, of the proceeds of bond placements, or of other revenues. The ability
of an issuer to make payments on notes is therefore especially dependent on
such tax receipts, proceeds from bond sales or other revenues, as the case may
be. Municipal commercial paper is a debt obligation with a stated maturity of
270 days or less that is issued to finance seasonal working capital needs or as
short-term financing in anticipation of longer-term debt. From time to time,
the Master Series may invest 25% or more of the current value of its total
assets in certain "private activity bonds," such as pollution control bonds;
provided, however, that such investments will be made only to the extent they
are consistent with the Master Series' fundamental policy of investing, under
normal circumstances, at least 80% of its net assets in municipal obligations
that are exempt from federal income taxes and not subject to the federal
alternative minimum tax.
The Master Series will invest in the following municipal obligations
with remaining maturities not exceeding 13 months:
(i) long-term municipal bonds rated at the date of
purchase "As" or better by Moody's or "AA" or better
by S&P;
(ii) municipal notes rated at the date of purchase "MIG 1"
or "MIG 2" (or "VMIG 1" or "VMIG 2" in the case of an
issue having a variable rate with a demand feature)
by Moody's or "SP-1+", "SP-1" or "SP-2" by S&P; and
(iii) short-term municipal commercial paper rated at the
date of purchase "P-1" by Moody's or "A-1+", "A-1" or
"A-2" by S&P.
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U.S. GOVERNMENT OBLIGATIONS
Each Master Series each may invest in various types of U.S. Government
obligations with remaining maturities of up to thirteen months. U.S. Government
obligations include securities issued or guaranteed as to principal and
interest by the U.S. Government and supported by the full faith and credit of
the U.S. Treasury. U.S. Treasury obligations differ mainly in the length of
their maturities. Treasury bills, the most frequently issued marketable
government securities, have maturities of up to one year and are issued on a
discount basis. U.S. Government obligations also include securities issued or
guaranteed by federal agencies or instrumentalities, including
government-sponsored enterprises. Some obligations of such agencies or
instrumentalities of the U.S. Government are supported by the full faith and
credit of the United States or U.S. Treasury guarantees; others, by the right
of the issuer or guarantor to borrow from the U.S. Treasury; still others by
the discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, only by the credit of
the agency or instrumentality issuing the obligation. In the case of
obligations not backed by the full faith and credit of the United States, the
investor must look principally to the agency or instrumentality issuing or
guaranteeing the obligation for ultimate repayment, which agency or
instrumentality may be privately owned. There can be no assurance that the
U.S. Government would provide financial support to its agencies or
instrumentalities (including government-sponsored enterprises) where it is not
obligated to do so. In addition, U.S. Government obligations are subject to
fluctuations in market value due to fluctuations in market interest rates. As
a general matter, the value of debt instruments, including U.S. Government
obligations, declines when market interest rates increase and rises when market
interest rates decrease. Certain types of U.S. Government obligations are
subject to fluctuations in yield or value due to their structure or contract
terms.
SHORT-TERM CORPORATE DEBT INSTRUMENTS
The Growth Stock Master Series may invest in commercial paper
(including variable-amount master demand notes), which is short-term, unsecured
promissory notes issued by corporations to finance short-term credit needs.
Commercial paper is usually sold on a discount basis and has a maturity at the
time of issuance not exceeding nine months. Variable amount master demand
notes are demand obligations that permit the investment of fluctuating amounts
at varying market rates of interest pursuant to arrangements between the issuer
and a commercial bank acting as agent for the payee of such notes whereby both
parties have the right to vary the amount of the outstanding indebtedness on
the notes. Wells Fargo Bank, as sub-investment adviser, will monitor on an
ongoing basis the ability of an issuer of a demand instrument to pay principal
and interest on demand. Wells Fargo Bank, pursuant to the direction of the
Trust's Board of Trustees, will determine the liquidity of those instruments
which have a demand feature that is not exercisable within seven days, provided
an active secondary market exists.
The Growth Stock Master Series also may invest in non-convertible
corporate debt securities (e.g., bonds and debentures) with not more than one
year remaining to maturity at the date of settlement. The Master Series will
invest only in such corporate bonds and debentures that are rated at the time
of purchase at least "Aa" by Moody's or "AA" by S&P. Subsequent to its
purchase by the Master Series, an issue of securities may cease to be rated or
its rating may be reduced below the minimum rating required for purchase by the
Master Series. Wells Fargo Bank will consider such an event in determining
whether the Master Series should continue to hold the obligation. To the
extent the Master Series continues to hold such obligations, it may be subject
to additional risk of default.
The Master Series also may invest in non-convertible corporate debt
securities (e.g., bonds and debentures) with not more than one year remaining
to maturity at the date of settlement. The Master Series will invest only in
such corporate bonds and debentures that are rated at the time of purchase at
least "Aa" by Moody's or "AA" by S&P. Subsequent to its purchase by the Master
Series, an issue of securities may cease to be rated or its rating may be
reduced below the minimum rating required for purchase by the Master Series.
Wells Fargo Bank will consider such an event in determining whether the Master
Series should continue to hold the obligation. To the extent the Master Series
continues to hold such obligations, it may be subject to additional risk of
default.
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WHEN-ISSUED SECURITIES
Certain of the securities in which each Master Series invests are
purchased on a when- issued basis, in which case delivery and payment normally
take place within 45 days after the date of the commitment to purchase. Each
Master Series makes commitments to purchase securities on a when-issued basis
only with the intention of actually acquiring the securities, but may sell such
securities before the settlement date if it is deemed advisable. When-issued
securities are subject to market fluctuation, and no income accrues to the
purchaser during the period prior to issuance. The purchase price and the
interest rate that will be received on debt securities are fixed at the time
the purchaser enters into the commitment. Purchasing a security on a
when-issued basis can involve a risk that the market price at the time of
delivery may be lower than the agreed-upon purchase price, in which case there
could be an unrealized loss at the time of delivery.
Each Master Series segregates cash, U.S. Government obligations or
other high-quality debt instruments in an amount at least equal in value to
their commitments to purchase when-issued securities. If the value of these
assets declines, each Master Series segregates additional liquid assets on a
daily basis so that the value of the segregated assets is equal to the amount
of such commitments. The Master Series do not currently intend to invest more
than 5% of their net assets in when-issued securities during the coming year.
FLOATING- AND VARIABLE-RATE INSTRUMENTS
Certain of the debt instruments that each Master Series may purchase
bear interest at rates that are not fixed, but vary with, for example, changes
in specified market rates or indices or at specified intervals. These
instruments typically have maturities of more than thirteen months but may
carry a demand feature that would permit the holder to tender them back to the
issuer at par value prior to maturity. The floating- and variable-rate
instruments that each Master Series may purchase include certificates of
participation in such obligations purchased from banks.
Wells Fargo Bank, as sub-investment adviser to each Master Series,
monitors on an ongoing basis the ability of an issuer of a demand instrument to
pay principal and interest on demand. Events affecting the ability of the
issuer of a demand instrument to make payment when due may occur between the
time a Master Series elects to demand payment and the time payment is due,
thereby affecting such Master Series' ability to obtain payment at par. Wells
Fargo Bank in accordance with the guidelines approved by the Trust's Board of
Trustees, and subject to the overall supervision of BGFA as investment adviser,
determines the liquidity of those instruments which have a demand feature that
is not exercisable within seven days, provided that an active secondary market
exists.
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REPURCHASE AGREEMENTS
Each Master Series may enter into repurchase agreements wherein the
seller of a security to a Master Series agrees to repurchase that security from
such Master Series at a mutually agreed-upon time and price. This results in a
fixed rate of return insulated from market fluctuations during this period. The
period of maturity is usually quite short, often overnight or a few days,
although it may extend over a number of months. Each Master Series may enter
into repurchase agreements only with respect to obligations that could
otherwise be purchased by such Master Series. All repurchase agreements are
fully collateralized based on values that are marked to market daily. If the
seller defaults and the value of the underlying securities declines, the
participating Master Series may incur a loss. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the security, the
participating Master Series' disposition of the security may be delayed or
limited. Each Master Series enters into repurchase agreements only with
registered broker/dealers and commercial banks that meet guidelines established
by the Board of Trustees of the Trust and that are not affiliated with BGFA,
The Master Series' investment adviser, or Wells Fargo Bank, the Master Series'
sub-investment adviser. Each Master Series may enter into pooled repurchase
agreement transactions with other funds advised by Wells Fargo Bank.
FOREIGN OBLIGATIONS
The Growth Stock Master Series may invest up to 25% of its total
assets in high-quality, short-term (thirteen months or less) debt obligations
of foreign branches of U.S. banks or U.S. branches of foreign banks that are
denominated in and pay interest in U.S. dollars. Investments in foreign
obligations involve certain considerations that are not typically associated
with investing in domestic obligations. There may be less publicly available
information about a foreign issuer than about a domestic issuer. Foreign
issuers also are not generally subject to the same uniform accounting, auditing
and financial reporting standards or governmental supervision as domestic
issuers. In addition, with respect to certain foreign countries, interest may
be withheld at the source under foreign income tax laws, and there is a
possibility of expropriation or confiscatory taxation, political or social
instability or diplomatic developments that could adversely affect investments
in, the liquidity of, and the ability to enforce contractual obligations with
respect to, securities of issuers located in those countries.
LOANS OF PORTFOLIO SECURITIES
Each Master Series may lend securities from its portfolio to domestic
brokers, dealers and financial institutions (but not individuals) if cash, U.S.
Government obligations or other liquid high-quality debt obligations equal to
at least 100% of the current market value of the securities loaned (including
accrued interest thereon) plus the interest payable to the Master Series with
respect to the loan, is maintained with such Master Series. In determining
whether to lend a security to the particular broker, dealer or financial
institution, the Master Series' investment adviser or sub-adviser considers all
relevant facts and circumstances, including the size, creditworthiness and
reputation of the broker, dealer or financial institution. Any loans of
portfolio securities are fully collateralized based on values that are marked
to market daily. Any securities that a Master Series receives as collateral do
not become part of such Master Series' portfolio at the time of the loan and,
in the event of a default by the borrower, the Master Series, if permitted by
law, will dispose of such collateral except for such part thereof that is a
security in which such Master Series is permitted to invest. During the time
securities are on loan, the borrower pays the Master Series any accrued income
on those securities, and the Master Series may invest the cash
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collateral in high-quality money market instruments and earn additional income
or receive an agreed-upon fee from a borrower that has delivered
cash-equivalent collateral. The securities acquired with such collateral will
be segregated as discussed above.
In the event that the borrower defaults on its obligation to return
borrowed securities, because of insolvency or otherwise, the Master Series
could experience delays and costs in gaining access to the collateral and could
suffer a loss to the extent that the value of the collateral falls below the
market value of the securities borrowed. However, loans are made only to
borrowers deemed by Wells Fargo Bank as sub-investment adviser to be of good
standing and when, in its judgment, the income to be earned from the loan
justifies the attendant risks. The Master Series do not lend securities having
a value that exceeds 50% of the current value of their respective total assets.
Loans of securities by the Master Series are subject to termination at the
Master Series' or the borrower's option. The Master Series may pay reasonable
administrative and custodial fees in connection with a securities loan and may
pay a negotiated portion of the interest or fee earned with respect to the
collateral to the borrower or the placing broker. Borrowers and placing
brokers may not be affiliated, directly or indirectly, with the Trust, the
investment adviser, sub-investment adviser or the distributor.
MONEY MARKET INSTRUMENTS AND TEMPORARY INVESTMENTS
The Growth Stock Master Series may have temporary cash balances on
account of new purchases, dividends, interest and reserves for redemptions,
which the Master Series may invest in the following high-quality money market
instruments: (i) short-term obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; (ii) negotiable certificates of
deposit ("CDs"), bankers' acceptances, fixed time deposits and other
obligations of domestic banks (including foreign branches) that have more than
$1 billion in total assets at the time of investment and that are members of
the Federal Reserve System or are examined by the Comptroller of the Currency
or whose deposits are insured by the FDIC; (iii) commercial paper rated at the
date of purchase "Prime-1" by Moody's or "A-1+" or "A-1" by S&P, or, if
unrated, of comparable quality as determined by Wells Fargo Bank in its
discretion as sub-investment adviser; (iv) non-convertible corporate debt
securities (e.g., bonds and debentures) with remaining maturities at the date
of purchase of no more than one year that are rated at least "Aa" by Moody's or
"AA" by S&P; (v) repurchase agreements; and (vi) short-term, U.S.
dollar-denominated obligations of foreign banks (including U.S. branches) that,
at the time of investment: (a) have more than $10 billion, or the equivalent in
other currencies, in total assets; (b) are among the 75 largest foreign banks
in the world as determined on the basis of assets; and (c) in the opinion of
Wells Fargo Bank, as sub-investment adviser, are of comparable quality to
obligations of U.S. banks which may be purchased by the Master Series.
OBLIGATIONS OF CORPORATIONS AND FOREIGN ENTITIES
The Short-Intermediate Term Master Series may invest in debt
securities issued by domestic corporations, U.S. dollar-denominated debt
securities issued by Canadian corporations, Yankee bonds and supra-national
obligations. Yankee bonds are U.S. dollar-denominated obligations issued by
foreign governments or companies. Supra-national obligations are U.S.
dollar-denominated obligations issued by international entities such as the
World Bank and the Inter-American Development Bank.
SECURITIES BACKED BY MORTGAGES
The Short-Intermediate Term Master Series may purchase Mortgage-Backed
Securities ("MBSs"), which are pass- through certificates representing
interests in a pool of loans secured by mortgages. The resulting cash flow
from those mortgages is used to pay principal and interest on
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the certificates. The MBSs in which the Master Series may invest are issued or
guaranteed by the Government National Mortgage Association ("GNMA"), the
Federal National Mortgage Association ("FNMA") or the Federal Home Loan
Mortgage Corporation ("FHLMC"). MBS investors receive monthly payments based
on a pro-rata share of interest and principal payments (and prepayments) on the
underlying mortgage pool, less GNMA's, FNMA's or FHLMC's fees and any
applicable loan servicing fees.
GNMA guarantees the full and timely payment of principal and interest
on GNMA certificates. The GNMA guarantee is backed by the authority of GNMA to
borrow funds from the U.S. Treasury to meet payment obligations arising from
its guarantee. Since GNMA is a wholly-owned U.S. Government corporation within
the Department of Housing and Urban Development, GNMA guarantees are also
general obligations of the United States and, as such, are backed by the full
faith and credit of the federal government. In contrast, MBSs issued by FNMA
include FNMA Guaranteed Mortgage Pass- Through Certificates ("Fannie Maes")
which are solely the obligations of FNMA and are neither backed by, nor
entitled to, the full faith and credit of the United States. FHLMC also is a
government-sponsored enterprise whose MBSs are solely obligations of FHLMC.
Therefore, FHLMC MBSs are not guaranteed by the United States or by a Federal
Home Loan Bank and do not constitute a general obligation of the United States
or any Federal Home Loan Bank. FHLMC guarantees timely payment of interest and
ultimate payment of principal due under the obligations it issues. However,
because FNMA and FHLMC are government-sponsored enterprises, their securities
are considered to be high quality investments that present minimal credit
risks.
The mortgages underlying MBSs guaranteed by GNMA are fully insured or
guaranteed by the Federal Housing Administration, the Veterans Administration
or the Farmers Home Administration. Mortgages underlying MBSs issued by FNMA
or FHLMC are typically conventional residential mortgages which are not so
insured or guaranteed, but which conform to specific underwriting, size and
maturity standards.
The Master Series also may invest up to 25% of its total assets in
collateralized mortgage obligations ("CMOs") issued or guaranteed by U.S.
Government instrumentalities (including government-sponsored enterprises) or
collateralized by U.S. Government obligations. In a CMO, a series of bonds or
certificates is issued in multiple classes. Each class is issued at a
specified coupon rate with a stated maturity or final distribution date. The
principal and interest payments in the collateral pool may be allocated among
the classes of CMOs in several ways. Typically, payments of principal,
including any prepayments, on the underlying mortgages are applied to the
classes in the order of their respective stated maturities or final
distribution dates, so that no payment of principal will be made on CMOs of one
class until all CMOs of other classes having earlier stated maturities or final
distribution dates have been paid in full.
The Master Series may purchase CMOs that are:
(1) collateralized by fixed rate or adjustable rate mortgages that are
guaranteed, as to payment of principal and interest, by a U.S. Government
agency or instrumentality (including a government-sponsored enterprise);
(2) directly guaranteed, as to payment of principal and interest, by
the issuer, which guarantee is collateralized by U.S. Government securities; or
(3) collateralized by MBSs which are issued or guaranteed by the U.S.
Government, its agencies or instrumentalities (including government-sponsored
enterprises).
The coupon rate of one or more CMO classes may reset periodically
based on an index, such as the London Interbank Offered Rate ("LIBOR"). The
interest rates on the mortgages
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underlying the MBSs and the CMOs in which the Master Series may invest may be
adjustable. In this case, they generally are readjusted at intervals of one
year or less in response to changes in a predetermined interest rate index.
There are two main categories of indices: those based on U.S. Treasury
securities and those based on certain financial aggregates, such as a
cost-of-funds index or a moving average of mortgage rates. Commonly utilized
indices include the one-year and five-year constant maturity Treasury note
rates, the three- month Treasury bill rate, the 180-day Treasury bill rate,
rates on longer-term Treasury securities, the National Median Cost of Funds,
the one-month, three-month, six- month or one-year LIBOR, a published prime
rate, or commercial paper rates. Certain of these indices follow overall
market interest rates more closely than others.
The range of fluctuation of interest rates on certain adjustable rate
mortgages ("ARMs") may be limited by "caps" or "floors." A "cap" is a ceiling
or maximum interest rate under a mortgage note. A "floor" is a minimum
interest rate under a mortgage note. To the extent that the interest rates on
the ARMs underlying MBSs or CMOs cannot be adjusted in response to interest
rate changes due to the existence of "caps" or "floors" on interest rate
movements, the MBSs or CMOs are likely to respond to changes in market rates
more like fixed rate securities. In other words, interest rate increases in
excess of such caps can be expected to cause the CMOs or MBSs backed by
mortgages that have such caps to decline in value to a greater extent than
would be the case in the absence of such caps. Conversely, interest rate
decreases below such floors can be expected to cause the CMOs or MBSs backed by
mortgages that have such floors to increase in value to a greater extent than
would be the case in the absence of such floors. The value of MBSs, CMOs and
ARMs will fluctuate to the extent interest rates on the underlying ARMs differ
from prevailing market interest rates during interim periods between interest
rate reset dates. Accordingly, holders of MBSs, CMOs or ARMs could experience
some loss (or less gain than otherwise might be achieved) if they sell these
investments before the interest rates on the underlying mortgages are adjusted
to reflect prevailing market interest rates.
The holders of CMOs and MBSs not only receive scheduled payments of
principal and interest, but also receive additional principal payments
representing prepayments on the underlying mortgages. A certain level of
prepayments is factored into the price of most CMOs, since historical
experience shows that a certain percentage of mortgages will be repaid or
refinanced before maturity. When market interest rates change, however,
prepayment behavior changes. When market interest rates are high, homeowners
tend to refinance less, which slows the rate of prepayments. When market
interest rates are low, the rate of prepayments tends to accelerate. Lower
market interest rates are a positive influence on the value of a CMO, as they
are on any fixed-rate investments. At the same time, however, the risk that an
investor will receive more prepayments than anticipated and must therefore
reinvest at lower prevailing market rates is a negative influence on the CMO's
value. The net effect of falling interest rates on a CMO's price depends on
the relationship between interest rates and CMO prices which, in turn, depends
on a number of factors including whether the CMO was trading at a discount or a
premium before rates fell. Thus, it is possible for a move in interest rates
to impact different classes of the same CMO series differently. (See the
discussion of multiple classes, above.)
As a non-fundamental policy, the Master Series will not invest in
"interest only" or "principal only" securities.
OTHER ASSET-BACKED SECURITIES
The Short-Intermediate Term Master Series may invest in Asset-Backed
Securities ("ABSs"), which are pass- through securities representing ownership
interests in a pool of loans, leases, or installment contracts on personal
property such as computers and automobiles (but not real estate). They are
similar to MBSs in that they represent an undivided interest in a trust
established to hold the assets. Investors receive their pro rata share of
payments of interest and
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principal on the assets of the trust, less any servicing fees or interest
margin paid to the sponsor of the trust. ABS issuers include finance
companies, equipment leasing companies and banks. The life span of an ABS
depends on the rate at which the underlying obligations are paid down by the
borrowers. Faster prepayments of the underlying obligations will shorten the
life of an ABS.
All ABSs in which the Master Series may invest have one or more forms
of credit enhancement, such as over collateralization, recourse to issuer,
third party guaranty, a reserve fund, or a senior/subordinated security
structure. The Master Series is protected against default risk, but not market
risk, to the extent of such credit enhancements.
The Master Series invests only in ABSs rated "AA" or higher by S&P, or
"Aa" or higher by Moody's at the time of purchase. The Master Series does not
purchase subordinated ABSs.
BANK OBLIGATIONS
The Short-Intermediate Term Master Series may invest in bank
obligations, including, but not limited to, negotiable certificates of deposits
("CDs"), bankers' acceptances and fixed time deposits, subject to its
fundamental policy of not investing 25% or more of its total assets in any
particular industry. The Master Series limits its investments in U.S. bank
obligations to obligations of U.S. banks (including foreign branches) which
have more than $1 billion in total assets at the time of investment and are
members of the Federal Reserve System or are examined by the Comptroller of the
Currency or whose deposits are insured by the Federal Deposit Insurance
Corporation ("FDIC"). The Master Series limits its investments in foreign bank
obligations to U.S. dollar denominated obligations of foreign banks which at
the time of investment (i) have more than $10 billion, or the equivalent in
other currencies, in total assets and (ii) in the opinion of the Master Series'
investment manager, are of an investment quality comparable with obligations of
U.S. banks which may be purchased by the Master Series.
Fixed time deposits are obligations of foreign branches of U.S. banks
or foreign banks which are payable at a stated maturity date and bear a fixed
rate of interest. Generally fixed time deposits may be withdrawn on demand by
the investor, but they may be subject to early withdrawal penalties which vary
depending upon market conditions and the remaining maturity of the obligation.
Although fixed time deposits do not have a market, there are no contractual
restrictions on the Master Series' right to transfer a beneficial interest in
the deposit to a third party.
Obligations of foreign banks and foreign branches of U.S. banks
involve somewhat different investment risks from those affecting obligations of
U.S. banks, including the possibilities that liquidity could be impaired
because of future political and economic developments, that the obligations may
be less marketable than comparable obligations of U.S. banks, that a foreign
jurisdiction might impose withholding taxes on interest income payable on those
obligations, that foreign deposits may be seized or nationalized, that foreign
governmental restrictions (such as foreign exchange controls) may be adopted
which might adversely affect the payment of principal and interest on those
obligations and that the selection of those obligations may be more difficult
because there may be less publicly available information concerning foreign
banks or the accounting, auditing and financial reporting standards, practices
and requirements applicable to foreign banks may differ from those applicable
to U.S. banks. In that connection, foreign banks are not subject to
examination by any U.S. Government agency or instrumentality.
SHORT-TERM CORPORATE DEBT INSTRUMENTS
The Short-Intermediate Term Master Series may invest in commercial
paper (including variable amount master demand notes), which is short-term,
unsecured promissory notes issued by corporations to finance short-term credit
needs. Commercial paper is usually sold on a
20
<PAGE> 23
discount basis and has a maturity at the time of issuance not exceeding nine
months. Variable amount master demand notes are demand obligations that permit
the investment of fluctuating amounts at varying market rates of interest
pursuant to arrangements between the issuer and a commercial bank acting as
agent for the payees of such notes whereby both parties have the right to vary
the amount of the outstanding indebtedness on the notes.
The Master Series may also invest in non-convertible corporate debt
securities (e.g., bonds and debentures) with not more than one year remaining
to maturity at the date of settlement. Corporate debt securities with a
remaining maturity of less than one year tend to become extremely liquid and
are traded as money market securities.
The commercial paper investments of the Master Series at the time of
the purchase must be rated "A-1" by S&P or "Prime-1" by Moody's or, if not
rated, must be of comparable quality as determined by Wells Fargo Bank at its
discretion. Subsequent to its purchase by the Master Series, an issue of
securities may cease to be rated or its rating may be reduced below the minimum
rating required for purchase by the Master Series. Wells Fargo Bank will
consider such an event in determining whether the Master Series should continue
to hold the obligation. To the extent the Master Series continues to hold such
obligations, it may be subject to additional risk of default.
INVESTMENT POLICIES
As a matter of fundamental policy, each Master Series may: (i) not
purchase securities of any issuer (except U.S. Government obligations) if as a
result, with respect to 75% of its total assets, more than 5% of the value of
the Master Series' total assets would be invested in the securities of such
issuer or, with respect to 100% of its total assets, the Master Series would
own more than 10% of the outstanding voting securities of such issuer; (ii)
borrow from banks up to 10% of the current value of its net assets for
temporary purposes only in order to meet redemptions, and these borrowings may
be secured by the pledge of up to 10% of the current value of its net assets
(but investments may not be purchased while any such outstanding borrowing in
excess of 5% of its net assets exists); (iii) make loans of portfolio
securities in accordance with its investment policies; and (iv) not invest 25%
or more of its total assets (i.e., concentrate) in any particular industry,
except that the Master Series may invest 25% or more of its assets in U.S.
Government obligations. With respect to paragraph (i), it may be possible that
the Trust would own more than 10% of the outstanding voting securities of an
issuer.
21
<PAGE> 24
MANAGED SERIES INVESTMENT TRUST
Growth Stock Master Series
Short-Intermediate Term Master Series
PART B
January 3, 1996
__________________________________
ITEM 10. COVER PAGE.
Managed Series Investment Trust ("Trust") is a registered, open-end,
management investment company. This Part B is not a Part A and should be
read in conjunction with the Trust's Part A, dated January 3, 1996. All terms
used in this Part B that are defined in Part A have the meanings assigned in
Part A. A copy of Part A may be obtained without charge by writing Stephens
Inc. ("Stephens"), the Trust's sponsor, administrator and distributor, at 111
Center Street, Little Rock, Arkansas 72201, or by calling Stephens at
1-800-643-9691.
The Registration Statement of the Trust, including the Trust's Part
A, the Part B and the exhibits filed therewith, may be examined at the office
of the Securities and Exchange Commission ("SEC") in Washington, D.C.
Statements contained in the Trust's Part A or this Part B as to the contents of
any contract or other document referred to herein or in the Part A are not
necessarily complete, and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to these Registration
Statements, each such statement being qualified in all respects by such
reference.
ITEM 11. TABLE OF CONTENTS.
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
Item 12. General Information and History ...................... 2
Item 13. Investment Objective and Policies ...................... 2
Item 14. Management of the Trust ...................... 9
Item 15. Control Persons and Principal Holders of Securities ...................... 12
Item 16. Investment Advisory and Other Services ...................... 12
Item 17. Brokerage Allocation and Other Practices ...................... 14
Item 18. Capital Stock and Other Securities ...................... 15
Item 19. Purchase, Redemption and Pricing of Securities ...................... 17
Item 20. Tax Status ...................... 18
Item 21. Underwriters ...................... 18
Item 22. Calculation of Performance Data ...................... 18
Item 23. Financial Information ...................... 18
Appendix ...................... A-1
Financial Statements ...................... F-1
</TABLE>
1
<PAGE> 25
ITEM 12. GENERAL INFORMATION AND HISTORY.
Not applicable.
ITEM 13. INVESTMENT OBJECTIVES AND POLICIES.
The Growth Stock Master Series and the Short-Intermediate Term
Master Series are sometimes referred to hereafter as the "Master Series." The
Master Series are subject to the following investment restrictions, all of
which are fundamental policies.
INVESTMENT RESTRICTIONS
The Short-Intermediate Term Master Series and the Growth Stock Master
Series may not:
2
<PAGE> 26
(1) purchase the securities of issuers conducting their principal
business activity in the same industry if, immediately after the purchase and
as a result thereof, the value of the Short-Intermediate Term Master Series' or
the Growth Stock Master Series' investments in that industry would be 25% or
more of the current value of the Short- Intermediate Term Master Series' or the
Growth Stock Master Series' total assets, provided that there is no limitation
with respect to investments in (i) obligations of the U.S. Government, its
agencies or instrumentalities;
(2) purchase or sell real estate or real estate limited partnerships
(other than securities secured by real estate or interests therein or
securities issued by companies that invest in real estate or interests
therein);
(3) purchase commodities or commodity contracts (including futures
contracts), except that the Short- Intermediate Master Series and the Growth
Stock Master Series may purchase securities of an issuer which invests or deals
in commodities or commodity contracts;
(4) purchase interests, leases, or limited partnership interests in
oil, gas, or other mineral exploration or development programs;
(5) purchase securities on margin (except for short-term credits
necessary for the clearance of transactions and except for margin payments in
connection with options, futures and options on futures) or make short sales of
securities;
(6) underwrite securities of other issuers, except to the extent
that the purchase of permitted investments directly from the issuer thereof or
from an underwriter for an issuer and the later disposition of such securities
in accordance with the Short-Intermediate Term Master Series' or the Growth
Stock Master Series' investment program may be deemed to be an underwriting;
(7) make investments for the purpose of exercising control or
management;
(8) borrow money or issue senior securities as defined in the 1940
Act, except that each of the Short- Intermediate Term Master Series and Growth
Stock Master Series may borrow from banks up to 10% of the current value of its
net assets for temporary purposes only in order to meet redemptions, and these
borrowings may be secured by the pledge of up to 10% of the current value of
its net assets (but investments may not be purchased while any such outstanding
borrowing in excess of 5% of its net assets exists);
(9) write, purchase or sell puts, calls, straddles, spreads,
warrants, options or any combination thereof, except that the Growth Stock
Master Series may purchase securities with put rights in order to maintain
liquidity, and except that the Short-Intermediate Term Master Series and Growth
Stock Master Series may invest up to 5% of their net assets in warrants in
accordance with their investment policies stated below;
(10) purchase securities of any issuer (except securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities) if, as a
result, with respect to 75% of its
3
<PAGE> 27
total assets, more than 5% of the value of the Short-Intermediate Term Master
Series' and the Growth Stock Master Series' total assets would be invested in
the securities of any one issuer or, with respect to 100% of its total assets
the Short-Intermediate Term Master Series' and the Growth Stock Master Series'
ownership would be more than 10% of the outstanding voting securities of such
issuer; or
(11) make loans, except that the Short-Intermediate Term Master
Series and the Growth Stock Master Series may purchase or hold debt instruments
or lend its portfolio securities in accordance with its investment policies,
and may enter into repurchase agreements.
The Short-Intermediate Term Master Series and the Growth Stock Master
Series are subject to the following non-fundamental policies.
(1) Neither the Short-Intermediate Term Master Series nor the Growth
Stock Master Series may:
(a) purchase or retain securities of any issuer if the
officers or Trustees of the Trust or the investment adviser owning beneficially
more than one-half of one percent (0.5%) of the securities of the issuer
together owned beneficially more than 5% of such securities;
(b) purchase securities of issuers who, with their
predecessors, have been in existence less than three years, unless the
securities are fully guaranteed or insured by the U.S. Government, a state,
commonwealth, possession, territory, the District of Columbia or by an entity
in existence at least three years, or the securities are backed by the assets
and revenues of any of the foregoing if, by reason thereof, the value of its
aggregate investments in such securities will exceed 5% of its total assets;
(2) The Short-Intermediate Term Master Series and the Growth Stock
Master Series reserve the right to invest up to 15% of the current value of
their net assets in fixed time deposits that are subject to withdrawal
penalties and that have maturities of more than seven days, repurchase
agreements maturing in more than seven days or other illiquid securities.
However, as long as a feeder Fund's shares are registered for sale in a state
that imposes a lower limit on the percentage of a fund's assets that may be so
invested, the Short-Intermediate Term Master Series and the Growth Stock Master
Series will comply with such lower limit. The Short-Intermediate Term Master
Series and the Growth Stock Master Series presently are limited to investing
10% of their net asset in such securities due to limits applicable in several
states; and
(3) The Short-Intermediate Term Master Series and the Growth Stock
Master Series may invest in shares of other open-end, management investment
companies, subject to the limitations of Section 12(d)(1) of the 1940 Act,
provided that any such purchases will be limited to temporary investments in
shares of unaffiliated investment companies and the Investment Adviser will
waive its advisory fees for that portion of the Short-Intermediate Term Master
Series' or the Growth Stock Master Series' assets so invested, except when such
purchase is part of a plan of merger, consolidation, reorganization or
acquisition.
4
<PAGE> 28
ADDITIONAL PERMITTED INVESTMENT ACTIVITIES
Unrated, Downgraded and Below Investment Grade Investments. Each
Master Series may purchase instruments that are not rated if, in the opinion of
Wells Fargo Bank, as sub-investment adviser, such obligations are of
investment quality comparable to other rated investments that are permitted to
be purchased by such Master Series. Each Master Series may purchase unrated
instruments only if they are purchased in accordance with the Master Series'
procedures adopted by the Master Trust's Board of Trustees in accordance with
Rule 2a-7 under the 1940 Act. After purchase by a Master Series, a security
may cease to be rated or its rating may be reduced below the minimum required
for purchase by such Master Series. Neither event will require a sale of such
security by such Master Series. However, in no event will such securities
exceed 5% of the Master Series' net assets. To the extent the ratings given by
Moody's or S&P may change as a result of changes in such organizations or their
rating systems, each Master Series will attempt to use comparable ratings as
standards for investments in accordance with the investment policies contained
in its Part A and in this Part B. The ratings of Moody's and S&P are more
fully described in the Appendix.
Because each Master Series is not required to sell downgraded
securities, and because the Growth Stock Master Series is permitted to purchase
securities that are rated below investment grade or if unrated are of
comparable quality, each Master Series could hold up to 5% of its net assets in
debt securities rated below "Baa" by Moody's or below "BBB" by S&P or if
unrated, low credit quality (below investment grade) securities. The Master
Series may hold such securities even though only the Growth Stock Master Series
is permitted to purchase such securities.
Although they may offer higher yields than do higher rated
securities, low rated and unrated low credit quality debt securities generally
involve greater volatility of price and risk of principal and income, including
the possibility of default by, or bankruptcy of, the issuers of the securities.
In addition, the markets in which low rated and unrated low credit quality debt
securities are traded are more limited than those in which higher rated
securities are traded. The existence of limited markets for particular
securities may diminish a Master Series' ability to sell the securities at fair
value either to meet redemption requests or to respond to changes in the
economy or in the financial markets and could adversely affect and cause
fluctuations in the daily net asset value of a Master Series' shares.
Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of low rated or
unrated low quality debt securities, especially in a thinly traded market.
Analysis of the creditworthiness of issuers of low rated or unrated low quality
debt securities may be more complex than for issuers of higher rated
securities, and the ability of a Master Series to achieve its investment
objective may, to the extent it holds low rated or unrated low quality debt
securities, be more dependent upon such creditworthiness analysis than would be
the case if the Master Series held exclusively higher rated or higher quality
debt securities.
5
<PAGE> 29
Low rated or unrated low quality debt securities may be more
susceptible to real or perceived adverse economic and competitive industry
conditions than investment grade securities. The prices of such debt
securities have been found to be less sensitive to interest rate changes than
higher rated or higher quality investments, but more sensitive to adverse
economic downturns or individual corporate developments. A projection of an
economic downturn or of a period of rising interest rates, for example, could
cause a decline in low rated or unrated low quality debt securities prices
because the advent of a recession could dramatically lessen the ability of a
highly leveraged company to make principal and interest payments on its debt
securities. If the issuer of the debt securities defaults, the Master Series
may incur additional expenses to seek recovery.
Letters of Credit. Certain of the debt obligations (including
municipal securities, certificates of participation, commercial paper and other
short-term obligations) which the Master Series may purchase may be backed by
an unconditional and irrevocable letter of credit of a bank, savings and loan
association or insurance company which assumes the obligation for payment of
principal and interest in the event of default by the issuer. Only banks,
savings and loan associations and insurance companies which, in the opinion of
Wells Fargo Bank, as sub-investment adviser, are of comparable quality to
issuers of other permitted investments of each such Master Series may be used
for letter of credit-backed investments.
Pass-Through Obligations. Certain of the debt obligations which each
Master Series may purchase may be pass-through obligations that represent an
ownership interest in a pool of mortgages and the resultant cash flow from
those mortgages. Payments by homeowners on the loans in the pool flow through
to certificate holders in amounts sufficient to repay principal and to pay
interest at the pass-through rate. The stated maturities of pass- through
obligations may be shortened by unscheduled prepayments of principal on the
underlying mortgages. Therefore, it is not possible to predict accurately the
average maturity of a particular pass-through obligation. Variations in the
maturities of pass-through obligations will affect the yield of the Master
Series investing in such obligation. Furthermore, as with any debt obligation,
fluctuations in interest rates will inversely affect the market value of pass-
through obligations. Each Master Series may invest in pass-through
obligations that are supported by the full faith and credit of the U.S.
Government (such as those issued by the Government National Mortgage
Association) or those that are guaranteed by an agency or instrumentality of
the U.S. Government or government sponsored enterprise (such as the Federal
National Mortgage Association or the Federal Home Loan Mortgage Corporation) or
bonds collateralized by any of the foregoing.
When-Issued Securities. Certain of the securities in which
each Master Series may invest are purchased on a when-issued basis, in which
case delivery and payment normally take place within 45 days after the date of
the commitment to purchase. The Master Series make commitments to purchase
securities on a when-issued basis only with the intention of actually acquiring
the securities, but may sell them before the settlement date if it is
6
<PAGE> 30
deemed advisable. When-issued securities are subject to market fluctuation,
and no income accrues to the purchaser during the period prior to issuance.
The purchase price and the interest rate received on debt securities are fixed
at the time the purchaser enters into the commitment. Purchasing a security on
a when-issued basis can involve a risk that the market price at the time of
delivery may be lower than the agreed-upon purchase price, in which case there
could be an unrealized loss at the time of delivery. None of the Master Series
currently intends to invest more than 5% of its assets in when-issued
securities during the coming year. Each Master Series establishes a segregated
account in which it maintains cash or liquid, high-grade debt securities in an
amount at least equal in value to the Master Series' commitments to purchase
when-issued securities. If the value of these assets declines, the Master
Series will place additional liquid assets in the account on a daily basis so
that the value of the assets in the account is equal to the amount of such
commitments.
Loans of Portfolio Securities. Each Master Series may lend
securities from their portfolios to brokers, dealers and financial institutions
(but not individuals) if cash, U.S. Government securities or other high-quality
debt obligations equal to at least 100% of the current market value of the
securities loaned (including accrued interest thereon) plus the interest
payable to such Master Series with respect to the loan is maintained with the
Master Series. In determining whether or not to lend a security to a
particular broker, dealer or financial institution, the Master Series'
Investment Adviser considers all relevant facts and circumstances, including
the size, creditworthiness and reputation of the broker, dealer, or financial
institution. Any loans of portfolio securities are fully collateralized based
on values that are marked to market daily. The Master Series do not enter into
any portfolio security lending arrangements having a duration longer than one
year. Any securities that a Master Series receives as collateral do not become
part of the Master Series' portfolio at the time of the loan and, in the event
of a default by the borrower, such Master Series will, if permitted by law,
dispose of such collateral except for such part thereof that is a security in
which the Master Series is permitted to invest. During the time securities are
on loan, the borrower will pay the Master Series any accrued income on those
securities, and the Master Series may invest the cash collateral and earn
income or receive an agreed-upon fee from a borrower that has delivered
cash-equivalent collateral. None of the Master Series will lend securities
having a value that exceeds one-third of the current value of its total assets.
Loans of securities by any of the Master Series are subject to termination at
the Master Series' or the borrower's option. The Master Series may pay
reasonable administrative and custodial fees in connection with a securities
loan and may pay a negotiated portion of the interest or fee earned with
respect to the collateral to the borrower or the placing broker. Borrowers and
placing brokers are not permitted to be affiliated, directly or indirectly,
with the Trusts, the Investment Adviser or the Distributor.
Foreign Obligations. Investments in foreign obligations involve
certain considerations that are not typically associated with investing in
domestic obligations. There may be less publicly available information about a
foreign issuer than about a domestic issuer. Foreign issuers also are not
generally subject to uniform accounting, auditing and financial reporting
standards or governmental supervision comparable to those applicable to
domestic issuers. In addition, with respect to certain foreign countries,
interest may be withheld at the source under foreign income tax laws, and there
is a possibility of expropriation of confiscatory
7
<PAGE> 31
taxation, political or social instability or diplomatic developments that could
adversely affect investments in, the liquidity of, and the ability to enforce
contractual obligations with respect to, securities of issuers located in those
countries. None of the Master Series may invest 25% or more of its assets in
foreign obligations.
Obligations of foreign banks and foreign branches of U.S. banks
involve somewhat different investment risks from those affecting obligations of
U.S. banks, including the possibilities that liquidity could be impaired
because of future political and economic developments, that the obligations may
be less marketable than comparable obligations of U.S. banks, that a foreign
jurisdiction might impose withholding taxes on interest income payable on those
obligations, that foreign deposits may be seized or nationalized, that foreign
governmental restrictions (such as foreign exchange controls) may be adopted
which might adversely affect the payment of principal and interest on those
obligations and that the selection of those obligations may be more difficult
because there may be less publicly available information concerning foreign
banks or the accounting, auditing and financial reporting standards, practices
and requirements applicable to foreign banks may differ from those applicable
to U.S. banks. In that connection, foreign banks are not subject to
examination by any U.S. Government agency or instrumentality.
8
<PAGE> 32
Privately Issued Securities (Rule 144A). The Growth Stock Master
Series may invest in privately issued securities which may be resold only in
accordance with Rule 144A under the Securities Act of 1933 ("Rule 144A
Securities"). Rule 144A Securities are restricted securities that are not
publicly traded. Accordingly, the liquidity of the market for specific Rule
144A Securities may vary. Wells Fargo Bank, as sub-investment adviser,
pursuant to guidelines established by the Trust's Board of Trustees and
subject to the overall supervision of BGFA as investment adviser, evaluates the
liquidity characteristics of each Rule 144A Security proposed for purchase by
the Master Series on a case-by-case basis and considers the following factors,
among others, in its evaluation: (1) the frequency of trades and quotes for the
Rule 144A Security; (2) the number of dealers willing to purchase or sell the
Rule 144A Security and the number of other potential purchasers; (3) dealer
undertakings to make a market in the Rule 144A Security; and (4) the nature of
the Rule 144A Security and the nature of the marketplace trades (e.g., the time
needed to dispose of the Rule 144A Security, the method of soliciting offers
and the mechanics of transfer). The Growth Stock Master Series does not
intend to invest more than 5% of its net assets in Rule 144A Securities during
the coming year.
Municipal Bonds. The Master Series may invest in municipal bonds.
The two principal classifications of municipal bonds are "general obligation"
and "revenue" bonds. Municipal bonds are debt obligations issued to obtain
funds for various public purposes, including the construction of a wide range
of public facilities such as bridges, highways, housing, hospitals, mass
transportation, schools, streets, and water and sewer works. Other purposes
for
9
<PAGE> 33
which municipal bonds may be issued include the refunding of outstanding
obligations and obtaining funds for general operating expenses or to loan to
other public institutions and facilities. Industrial development bonds are a
specific type of revenue bond backed by the credit and security of a private
user. Certain types of industrial development bonds are issued by or on behalf
of public authorities to obtain funds to provide privately-operated housing
facilities, sports facilities, convention or trade show facilities, airport,
mass transit, port or parking facilities, air or water pollution control
facilities and certain local facilities for water supply, gas, electricity, or
sewage or solid waste disposal. Each Master Series may not invest 25% or more
of its assets in industrial development bonds. Assessment bonds, wherein a
specially created district or project area levies a tax (generally on its
taxable property) to pay for an improvement or project may be considered a
variant of either category. There are, of course, other variations in the
types of municipal bonds, both within a particular classification and between
classifications, depending on numerous factors.
Municipal Notes. Municipal notes include, but are not limited to,
tax anticipation notes ("TANs"), bond anticipation notes ("BANs"), revenue
anticipation notes ("RANs") and construction loan notes. Notes sold as interim
financing in anticipation of collection of taxes, a bond sale or receipt of
other revenues are usually general obligations of the issuer.
TANs. An uncertainty in a municipal issuer's capacity to raise taxes
as a result of a decline in its tax base or a rise in delinquencies could
adversely affect the issuer's ability to meet its obligations on outstanding
TANs. Furthermore, some municipal issuers mix various tax proceeds into a
general fund that is used to meet obligations other than those of the
outstanding TANs. Use of such a general fund to meet various obligations could
affect the likelihood of making payments on TANs.
BANs. The ability of a municipal issuer to meet its obligations on
its BANs is primarily dependent on the issuer's adequate access to the longer
term municipal bond market and the likelihood that the proceeds of such bond
sales will be used to pay the principal of, and interest on, BANs.
RANs. A decline in the receipt of certain revenues, such as
anticipated revenues from another level of government, could adversely affect
an issuer's ability to meet its obligations on outstanding RANs. In addition,
the possibility that the revenues would, when received, be used to meet other
obligations could affect the ability of the issuer to pay the principal of, and
interest on, RANs.
The values of outstanding municipal securities will vary as a result
of changing market evaluations of the ability of their issuers to meet the
interest and principal payments (i.e., credit risk). Such values also will
change in response to changes in the interest rates payable on new issues of
municipal securities (i.e., market risk). Should such interest rates rise, the
value of outstanding securities, including those held in a Master Series'
portfolio, will decline and (if purchased at par value) they would sell at a
discount. If interests rates fall, the value of outstanding securities will
generally increase and (if purchased at par value) they would sell at a
premium. Changes in the value of municipal securities held in a Master Series'
portfolio arising
10
<PAGE> 34
from these or other factors will cause changes in the net asset value per share
of the Master Series.
Investments in Warrants. Each Master Series may invest up to 5% of
its net assets at the time of purchase in warrants (other than those that have
been acquired in units or attached to other securities), and not more than 2%
of their net assets in warrants which are not listed on the New York or
American Stock Exchange. Warrants represent rights to purchase securities at a
specific price valid for a specific period of time. The prices of warrants do
not necessarily correlate with the prices of the underlying securities. The
Master Series only may purchase warrants on securities in which the Master
Series may invest directly.
11
<PAGE> 35
ITEM 14. MANAGEMENT OF THE TRUST.
The principal occupations during the past five years of the Trustees
and executive officers of the Trust are listed below. Each of the Officers and
Trustees of the Trust serve in the identical capacity as Officers and Directors
of Stagecoach Inc. The address of each, unless otherwise indicated, is 111
Center Street, Little Rock, Arkansas 72201. Trustees deemed to be "interested
persons" of the Trust for purposes of the 1940 Act are indicated by an
asterisk.
<TABLE>
<CAPTION>
Principal Occupations
Name, Address and Age Position During Past 5 Years
- --------------------- -------- ---------------------
<S> <C> <C>
Jack S. Euphrat, 73 Trustee Private Investor.
415 Walsh Road
Atherton, CA 94027.
*R. Greg Feltus, 44 Trustee, Senior Vice President
Chairman and of Stephens; Manager
President of Financial Services
Group; President of
Stephens Insurance
Services Inc.; Senior
Vice President of
Stephens Sports
Management Inc.; and
President of
Investors Brokerage
Insurance Inc.
Thomas S. Goho, 53 Trustee T. B. Rose Faculty
321 Beechcliff Court Fellow-Business,
Winston-Salem, NC 27104 Wake Forest University
Calloway School of
Business and Accounting;
Associate Professor
School of Business and
Accounting at Wake Forest
University since 1983.
*Zoe Ann Hines, 46 Trustee Senior Vice President of
Stephens and Director of
Brokerage Accounting; and
Secretary of Stephens Resource
Management.
*W. Rodney Hughes, 69 Trustee Private Investor.
31 Dellwood Court
San Rafael, CA 94901
Robert M. Joses, 77 Trustee Private Investor.
47 Dowitcher Way
San Rafael, CA 94901
</TABLE>
12
<PAGE> 36
<TABLE>
<S> <C> <C>
*J. Tucker Morse, 51 Trustee Private Investor; Real Estate
10 Legrae Street Developer; Chairman
Charleston, SC 29401 of Renaissance
Properties Ltd.;
President of Morse
Investment Corporation;
and Co-Managing Partner
of Main Street Ventures.
Richard H. Blank, Jr., 39 Chief Associate of Financial
Operating Services Group of
Officer, Stephens Sports Management
Secretary and Inc.; and Director of Capo Inc.
Treasurer
</TABLE>
13
<PAGE> 37
<TABLE>
<CAPTION>
COMPENSATION TABLE
------------------
For the Fiscal Year Ended
February 28, 1995
Total Compensation
Aggregate Compensation from Registrant
Name and Position from Registrant and Fund Complex
----------------- ---------------------- ------------------
<S> <C> <C>
Jack S. Euphrat $0 $34,188
Trustee
*R. Greg Feltus 0 0
Trustee
Thomas S. Goho 0 34,188
Trustee
*Zoe Ann Hines 0 0
Trustee
*W. Rodney Hughes 0 32,188
Trustee
Robert M. Joses 0 34,188
Trustee
*J. Tucker Morse 0 32,188
Trustee
</TABLE>
Trustees of the Trust who are not officers or employees of Stephens
or Wells Fargo are not compensated by the Trust for their services but are
reimbursed for all out-of-pocket expenses relating to attendance at board
meetings. Trustees who are affiliated with Stephens or Wells Fargo also do not
receive compensation from the Trust and also are reimbursed for all
out-of-pocket expenses relating to attendance at board meetings. Each of the
officers and Trustees of the Trust serves in the identical capacity as officers
and Directors of Overland Express Funds, Inc., Stagecoach Funds, Inc. and
Stagecoach Inc., and as Trustees and/or Officers of Stagecoach Trust, Master
Investment Portfolio, Master Investment Trust and Life & Annuity Trust, each of
which are registered open-end management investment companies and each of which
is considered to be in the same "fund complex", as such term is defined in Form
N-1A under the 1940 Act, as the Trust. The Trustees are compensated by other
Companies and Trusts within the fund complex for their services as
directors/trustees to such Companies and Trusts. Currently, the Trustees do
not receive any compensation from the Trust (although they are reimbursed for
out-of-pocket expenses) and do not receive any retirement benefits or deferred
compensation from the Trust or fund complex.
14
<PAGE> 38
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
As of December 15, 1995, the Growth Stock Fund and the
Short-Intermediate Term Fund of Stagecoach Inc., 111 Center Street, Little
Rock, Arkansas 72201, owned approximately 100% of the voting securities of the
Growth Stock Master Series and approximately 100% of the voting securities of
the Short-Intermediate Master Series, respectively, and each Fund could be
considered a controlling person under the 1940 Act of the corresponding master
series.
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.
INVESTMENT ADVISER
The Master Series of the Trust are advised by BGFA pursuant to
separate advisory contracts (the "BGFA Advisory Contracts"). The BGFA Advisory
Contracts provide that BGFA shall furnish to each Master Series investment
guidance and policy direction in connection with the daily portfolio
management of such Master Series. Pursuant to the BGFA Advisory Contracts,
BGFA furnishes to the Board of Trustees of the Trust periodic reports on the
investment strategy and performance of the Master Series.
BGFA has agreed to provide to the Master Series, among
other things, money market security and fixed- income research, analysis and
statistical and economic data and information concerning interest rate and
security market trends, portfolio composition and credit conditions
Each BGFA Advisory Contract will continue in effect for more than two
years from the date of execution provided the continuance is approved annually
(i) by the holders of a majority of the respective Master Series' outstanding
voting securities or by the Board of Trustees of the Trust and (ii) by a
majority of the Trustees of the Trust who are not parties to the Advisory
Contract or "interested persons" (as defined in the 1940 Act) of any such
party. The Advisory Contracts may be terminated on 60 days' written notice by
either party and will terminate automatically upon assignment (as defined in
the 1940 Act).
BGFA has engaged Wells Fargo Bank to provide sub-investment advisory
services to each Master Series pusuant to separate sub-advisory contracts
between each Master Series, BGFA and Wells Fargo Bank (each a "Sub-Advisory
Contract"). As to each Master Series, the applicable Sub-Advisory Contract is
subject to annual approval by (i) the Trust's Board of Trustees or (ii) vote of
a majority (as defined in the 1940 Act) of the outstanding securities of such
Master Series, provided that in either event the continuance also is approved
by a majority of the Trust's Board of Trustees who are not interested persons
(as defined in the 1940 Act) of the Master Series or WFNIA, by vote cast in
person at a meeting called for the purpose of voting on such approval. As to
each Master Series, the Sub-Advisory Contract is terminable without penalty
on 60 days' written notice by the Trust's Board of Trustees or by vote of the
holders of a majority of such Master Series' interests. Each Sub-Advisory
Contract terminates automatically upon assignment (as defined in the 1940 Act).
BGFA is entitled to receive monthly fees at the annual rate of 0.60%
and 0.45% of the average daily net assets of the Growth Stock Master Series
and Short-Intermediate Term Master Series, respectively, as compensation for
its advisory services. Wells Fargo Bank is entitled to receive from BGFA a
monthly fee at the annual rate of 0.15% and 0.10% of the average daily net
assets of the Growth Stock and Short-Intermediate Term Master Series
respectively, as compensation for its sub-advisory services.
Prior to January 1, 1996, Wells Fargo Bank served as investment
adviser to each Master Series. For the fiscal period from May 26, 1994
(commencement of operations) to February 28, 1995, the Master Series paid to
Wells Fargo Bank the advisory fees indicated below and Wells Fargo Bank waived
the indicated amounts:
15
<PAGE> 39
<TABLE>
<CAPTION>
Fees
Fees Paid Waived/Reimbursed
--------- -----------------
<S> <C> <C>
Short-Intermediate Term $ 10,673 $16,510
Master Series
Growth Stock Master Series $283,463 $16,451
</TABLE>
Morrison & Foerster, counsel to the Trust and special counsel to
Wells Fargo Bank, has advised Wells Fargo Bank and the Trust that Wells Fargo
Bank should be able to perform the services contemplated by the Sub-Advisory
Contracts and the Agency Agreement without violation of the Glass-Steagall Act.
Such counsel have pointed out, however, that there are no controlling judicial
or administrative interpretations or decisions and that future judicial or
administrative interpretations of, or decisions relating to, present federal or
state statutes and regulations relating to the permissible activities of banks
and their subsidiaries or affiliates, as well as future changes in federal or
state statutes and regulations and judicial or administrative decisions or
interpretations thereof, could prevent Wells Fargo Bank from continuing to
perform, in whole or in part, such services. If Wells Fargo Bank were
prohibited from performing any of such services, it is expected that new
agreements would be proposed or entered into with another entity or entities
qualified to perform such services.
ADMINISTRATOR
The Trust has retained Stephens as administrator on behalf of the
Trust. Under the Administration Agreement with the Trust, Stephens, in
connection therewith, furnishes the Trust with office facilities, together with
those ordinary clerical and bookkeeping services that are not being furnished
by Wells Fargo Bank. For the fiscal period from May 26, 1994 (commencement of
operations) to February 28, 1995, the Master Series did not pay any
administrative fees to Stephens.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT
BZW Barclays Global Investors, N.A., ("BGI"), a wholly-owned
subsidiary of BZW Barclays Global Investors Holdings Inc., acts as Custodian
for the Trust. The Custodian, among other things, maintains a custody account
or accounts in the name of the Trust; receives and delivers all assets for the
Trust upon purchase and upon sale or maturity; collects and receives all income
and other payments and distributions on account of the assets of the Trust and
pays all expenses of the Trust. BGI is compensated for its services as
Custodian under the Advisory Contracts for the Master Series. BGI is not
entitled to receive a fee for its services as Custodian. Wells Fargo Bank acts
as Transfer and Dividend Disbursing Agent for the Trust and is not entitled to
receive a fee for such services.
16
<PAGE> 40
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP has been selected as the independent auditors
for the Trust. KPMG Peat Marwick LLP provides audit services, tax return
preparation and assistance and consultation in connection with review of
certain SEC filings. KPMG Peat Marwick LLP's address is Three Embarcadero
Center, San Francisco, California 94111.
ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.
The Trust has no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to
policies established by the Trust's Board of Trustees and subject to the
overall supervision of BGFA, as investment adviser, Wells Fargo Bank, as
sub-investment adviser, is responsible for the Master Series' portfolio
decisions and the placing of portfolio transactions. In placing orders, it is
the policy of the Trust to obtain the best results taking into account the
dealer's general execution and operational facilities, the type of transaction
involved and other factors such as the dealer's risk in positioning the
securities involved. While Wells Fargo Bank generally seeks reasonably
competitive spreads or commissions, the Master Series will not necessarily be
paying the lowest spread or commission available.
Purchase and sale orders of the securities held by the Master Series
may be combined with those of other accounts that Wells Fargo Bank manages,
and for which it has brokerage placement authority, in the interest of seeking
the most favorable overall net results. When Wells Fargo Bank determines that
a particular security should be bought or sold for a Master Series and other
accounts managed by Wells Fargo Bank, Wells Fargo Bank undertakes to allocate
those transactions among the participants equitably.
Except for the Growth Stock Master Series, purchases and sales of
securities usually will be principal transactions. Portfolio securities
normally will be purchased or sold from or to dealers serving as market makers
for the securities at a net price. The Master Series also will purchase
portfolio securities in underwritten offerings and may purchase securities
directly from the issuer. Generally, municipal obligations, taxable money
market securities, adjustable rate mortgage securities ("ARMS") and
collateralized mortgage obligations ("CMOs") are traded on a net basis and do
not involve brokerage commissions. The cost of executing a Master Series'
portfolio securities transactions consists primarily of dealer spreads and
underwriting commissions. Under the 1940 Act, persons affiliated with the
Trust are prohibited from dealing with the Trust as a principal in the purchase
and sale of securities unless an exemptive order allowing such transactions is
obtained from the SEC or an exemption is otherwise available.
The Master Series may purchase municipal obligations from
underwriting syndicates of which Stephens, BGFA or Wells Fargo Bank is a
member under certain conditions in accordance with the provisions of a rule
adopted under the 1940 Act and in compliance with procedures adopted by the
Trust's Board of Trustees.
Wells Fargo Bank, as sub-investment adviser of each Master Series,
may, in circumstances in which two or more dealers are in a position to offer
comparable results for a
17
<PAGE> 41
Master Series portfolio transaction, give preference to a dealer that has
provided statistical or other research services to Wells Fargo Bank. By
allocating transactions in this manner, Wells Fargo Bank is able to supplement
its research and analysis with the views and information of securities firms.
Information so received will be in addition to, and not in lieu of, the
services required to be performed by Wells Fargo Bank under the Sub-Advisory
Contracts, and the expenses of Wells Fargo Bank will not necessarily be reduced
as a result of the receipt of this supplemental research information.
Furthermore, research services furnished by dealers through which Wells Fargo
Bank places securities transactions for each Master Series may be used by Wells
Fargo Bank in servicing its other accounts, and not all of these services may
be used by Wells Fargo Bank in connection with advising such Master Series.
On August 31, 1995, the Master Series owned securities of their
"regular brokers or dealers" or their parents, as defined in the 1940 Act, as
follows: Growth Stock Master Series and Short-Intermediate Term Master Series
owned $3,440,000 and $588,000 respectively, of Goldman Sachs Pooled Repurchase
Agreements.
PORTFOLIO TURNOVER. The portfolio turnover rates for the
Short-Intermediate Term Master Series and the Growth Stock Master Series are
generally not expected to exceed 300% and 200% respectively. The higher
portfolio turnover rates for the Short-Intermediate Term Master Series and the
Growth Stock Master Series may result in higher transaction (i.e. principal
markup/markdown, brokerage and other transaction) costs. The portfolio
turnover rate of a Master Series will not be a limiting factor when Wells Fargo
Bank deems portfolio changes appropriate.
ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.
The Trust is a business trust organized under the laws of Delaware on
October 28, 1993. In accordance with Delaware law and in connection with the
tax treatment sought by the Trust, the Trust's Declaration of Trust provides
that its investors would be personally responsible for Trust liabilities and
obligations, but only to the extent the Trust property is insufficient to
satisfy such liabilities and obligations. The Declaration of Trust also
provides that the Trust shall maintain appropriate insurance (for example,
fidelity bonding and errors and omissions insurance) for the protection of the
Trust, its investors, Trustees, Officers, employees and agents covering
possible tort and other liabilities, and that investors will be indemnified to
the extent they are held liable for a disproportionate share of Trust
obligations. Thus, the risk of an
18
<PAGE> 42
investor incurring financial loss on account of investor liability is limited
to circumstances in which both inadequate insurance exists and the Trust itself
is unable to meet its obligations.
The Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the property
of the Trust and that the Trustees will not be liable for any action or failure
to act, but nothing in the Declaration of Trust protects a Trustee against any
liability to which the Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of the Trustee's office.
All interests of a Master Series have equal voting rights and will
be voted in the aggregate, and not by series, except where voting by series is
required by law or where the matter involved only affects one series. For
example, a change in a Master Series' fundamental investment policy would be
voted upon only by shareholders of the Master Series involved. Additionally,
approval of an advisory contract is a matter to be determined separately by
Master Series. Approval by the shareholders of one Master Series is effective
as to that Master Series whether or not sufficient votes are received from the
shareholders of the other investment portfolios to approve the proposal as to
those investment portfolios. As used in Part A and in this SAI, the term
"majority," when referring to approvals to be obtained from shareholders of a
Master Series, means the vote of the lesser of (i) 67% of the shares of the
Master Series represented at a meeting if the holders of more than 50% of the
outstanding shares of the Master Series are present in person or by proxy, or
(ii) more than 50% of the outstanding shares of the Master Series. The term
"majority," when referring to the approvals to be obtained from shareholders of
the Trust as a whole, means the vote of the lesser of (i) 67% of the Trust's
shares represented at a meeting if the holders of more than 50% of the Trust's
outstanding shares are present in person or by proxy, or (ii) more than 50% of
the Trust's outstanding shares. Shareholders are entitled to one vote for each
full share held and fractional votes for fractional shares held.
The Trust may dispense with an annual meeting of shareholders in any
year in which it is not required to elect Trustees under the 1940 Act.
However, the Trust has undertaken to hold a special meeting of its shareholders
for the purpose of voting on the question of removal of a Trustee or Trustees
if requested in writing by the holders of at least 10% of the Trust's
outstanding voting securities, and to assist in communicating with other
shareholders as required by Section 16(c) of the 1940 Act.
The Trust may enter into a merger or consolidation, or sell all or
substantially all of its assets, if approved by the vote of two-thirds of its
investors (with the vote of each being in proportion to their respective
percentages of the beneficial interests in the Trust), except that if the
Trustees of the Trust recommend such sale of assets, the approval by vote of a
majority of the investors (with the vote of each being in proportion to their
respective percentages of the beneficial interests in the Trust) will be
sufficient. The Trust may also be terminated (i) upon liquidation and
distribution of its assets, if approved by the vote of two-thirds of its
investors (with the vote of each being in proportion to the amount of their
investment) or (ii) by the Trustees of the Trust by written notice to its
investors. In the event of the liquidation or
19
<PAGE> 43
dissolution of the Trust, investors are entitled to receive their pro rata
share of all assets available for distribution.
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.
Beneficial interests in the Trust are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"). Investments in the Trust may only be made by registered broker/dealers
or by investment companies, insurance company separate accounts, common or
commingled trust funds, group trusts or similar organizations or entities that
are "accredited investors" within the meaning of Regulation D under the 1933
Act. This registration statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the 1933
Act.
Net asset value of the Master Series of the Trust is determined by
the Custodian of the Trust on each day the relevant Master Series is open.
20
<PAGE> 44
Securities held by a Master Series for which market quotations are
available are valued at latest prices. Securities for which the primary market
is a national securities exchange or the National Association of Securities
Dealers Automated Quotations National Market System are valued at last sale
prices. In the absence of any sale of such securities on the valuation date
and in the case of other securities, including U.S. Government securities but
excluding money market instruments maturing in 60 days or less, the valuations
are based on latest quoted bid prices. Money market instruments maturing in 60
days or less are valued at amortized cost, with cost being the value of the
security on the preceding day (61st day). Futures contracts will be marked to
market daily at their respective settlement prices determined by the relevant
exchange. Options listed on a national exchange are valued at the last sale
price on the exchange on which they are traded at the close of the NYSE, or, in
the absence of any sale on the valuation date, at latest quoted bid prices.
Options not listed on a national exchange are valued at latest quoted bid
prices. Debt securities maturing in 60 days or less are valued at amortized
cost. In all cases, bid prices will be furnished by an independent pricing
service approved by the Board of Trustees. Prices provided by an independent
pricing service may be determined without exclusive reliance on quoted prices
and may take into account appropriate factors such as institutional-size
trading in similar groups of securities, yield, quality, coupon rate, maturity,
type of issue, trading characteristics and other market data. Securities held
under a repurchase agreement will be valued at a price equal to the amount of
the cash investment at the time of valuation on the valuation date. The market
value of the underlying securities shall be determined in accordance with the
applicable procedures, as described above, for the purpose of determining the
adequacy of collateral. All other securities and other assets of the Non-Money
Market Master Series for which current market quotations are not readily
available are valued at fair value as determined in good faith by the Trust's
Trustees and in accordance with procedures adopted by the Trustees.
ITEM 20. TAX STATUS.
Under the current method of operation of the Trust, the Trust is
intended to qualify as a partnership under the Internal Revenue Code of 1986,
as amended (the "Code"). However, each investor in the Trust will be taxable
on its share (as determined in accordance with the governing instruments of the
Trust) of the Trust's ordinary income and capital gain in determining the
investor's income tax liability. The determination of such share will be made
in accordance with the Code and regulations promulgated thereunder. The
Trust's taxable year-end is the last day of February.
21
<PAGE> 45
The Trust's assets, income and distributions are managed in such a
way that a regulated investment company investing in the Trust will be able to
satisfy the requirements of Subchapter M of the Code, assuming that the
investment company invested all of its assets in the Trust. The Trust is
treated as a non-publicly traded partnership rather than a regulated investment
company or a corporation under the Code. As a non-publicly traded partnership
under the Code, any interest, dividends and gains or losses of the Trust will
be deemed to have been "passed through" to investors in the Trust, regardless
of whether such interest, dividends or gains have been distributed by the Trust
or losses have been realized by the investors. Accordingly, if the Trust were
to accrue but not distribute any interest, dividends or gains, an investor
would be deemed to have realized and recognized its proportionate share of
interest, dividends, gains or losses without receipt of any corresponding
distribution. However, the Trust seeks to minimize recognition by investors of
interest, dividends, gains or losses without a corresponding distribution.
Investors' capital accounts will be adjusted on a daily basis to
reflect additional investments or withdrawals and any increase or decrease in
net asset value.
ITEM 21. UNDERWRITERS.
The distributor and exclusive placement agent for the Trust is
Stephens, which receives no additional compensation for serving in this
capacity. Registered broker/dealers and investment companies, insurance
company separate accounts, common and commingled trust funds, group trusts and
similar organizations and entities which constitute accredited investors, as
defined in the regulations adopted under the 1933 Act, may continuously invest
in the Trust.
ITEM 22. CALCULATIONS OF PERFORMANCE DATA.
Not applicable.
ITEM 23. FINANCIAL INFORMATION.
KPMG Peat Marwick LLP have been selected as the independent auditors
to the Trust. KPMG Peat Marwick LLP provides audit services, tax return
preparation and assistance and consultation in connection with the review of
certain SEC filings. KPMG Peat Marwick LLP's address is Three Embarcadero
Center, San Francisco, California 94111. The audited financial statements for
each of the Master Series for the year ended February 28, 1995, are
incorporated in this Part B by reference to the financial statements contained
in Amendment No. 2 to the Trust's Registration Statement on Form N-1A as filed
with the SEC on or about June 27, 1995. The unaudited financial statements for
the six-month period ended August 31, 1995, are incorporated by reference to
Amendment No. 4 to the Trust's Registration Statement on Form N-1A as filed
with the SEC on or about January 3, 1996.
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<PAGE> 46
APPENDIX
The following is a description of the ratings given by Moody's and
S&P to corporate and municipal bonds, municipal notes, and corporate and
municipal commercial paper.
Corporate and Municipal Bonds
Moody's: The four highest ratings for corporate and municipal bonds
are "Aaa," "Aa," "A" and "Baa." Bonds rated "Aaa" are judged to be of the
"best quality" and carry the smallest amount of investment risk. Bonds rated
"Aa" are of "high quality by all standards," but margins of protection or other
elements make long-term risks appear somewhat greater than "Aaa" rated bonds.
Bonds rated "A" possess many favorable investment attributes and are considered
to be upper medium grade obligations. Bonds rated "Baa" are considered to be
medium grade obligations; interest payments and principal security appear
adequate for the present, but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time. Such bonds
have speculative characteristics as well. Moody's applies numerical modifiers
"1," "2" and "3" in each rating category from "Aa" through "Baa" in its rating
system. The modifier "1" indicates that the security ranks in the higher end
of its category; the modifier "2" indicates a mid-range ranking; and the
modifier "3" indicates that the issue ranks in the lower end.
S&P: The four highest ratings for corporate and municipal bonds are
"AAA," "AA," "A" and "BBB." Bonds rated "AAA" have the highest ratings
assigned by S&P and have an extremely strong capacity to pay interest and repay
principal. Bonds rated "AA" have a "very strong capacity to pay interest and
repay principal" and differ "from the highest rated issued only in small
degree." Bonds rated "A" have a "strong capacity" to pay interest and repay
principal, but are "somewhat more susceptible" to adverse effects of changes in
economic conditions or other circumstances than bonds in higher rated
categories. Bonds rated "BBB" are regarded as having an "adequate capacity" to
pay interest and repay principal, but changes in economic conditions or other
circumstances are more likely to lead to a "weakened capacity" to make such
repayments. The ratings from "AA" to "BBB" may be modified by the addition of
a plus or minus sign to show relative standing within the category.
Municipal Notes
Moody's: The highest ratings for state and municipal short-term
obligations are "MIG 1," "MIG 2," and "MIG 3" (or "VMIG 1," "VMIG 2" and "VMIG
3" in the case of an issue having a variable rate demand feature). Notes rated
"MIG 1" or "VMIG 1" are judged to be of the "best quality." Notes rated "MIG
2" or "VMIG 2" are of "high quality," with margins of protections "ample
although not as large as in the preceding group." Notes rated "MIG 3" or "VMIG
3" are of "favorable quality," with all security elements accounted for, but
lacking the strength of the preceding grades.
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<PAGE> 47
S&P: The "SP-1" rating reflects a "very strong or strong capacity to
pay principal and interest." Notes issued with "overwhelming safety
characteristics" will be rated "SP-1+." The "SP-2" rating reflects a
"satisfactory capacity" to pay principal and interest.
Corporate and Municipal Commercial Paper
Moody's: The highest rating for corporate and municipal commercial
paper is "P-1" (Prime-1). Issuers rated "P-1" have a "superior capacity for
repayment of short-term promissory obligations." Issuers rated "P-2" (Prime-2)
"have a strong capacity for repayment of short-term promissory obligations,"
but earnings trends, while sound, will be subject to more variation.
S&P: The "A-1" rating for corporate and municipal commercial paper
indicates that the "degree of safety regarding timely payment is either
overwhelming or very strong." Commercial paper with "overwhelming safety
characteristics" will be rated "A-1+." Commercial paper with a strong capacity
for timely payments on issues will be rated "A-2."
Corporate Notes
S&P: The two highest ratings for corporate notes are "SP-1" and
"SP-2." The "SP-1" rating reflects a "very strong or strong capacity to pay
principal and interest." Notes issued with "overwhelming safety
characteristics" will be rated "SP-1+." The "SP-2" rating reflects a
"satisfactory capacity" to pay principal and interest.
24
<PAGE> 48
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS - 49.60%
32,791 Abbott Laboratories $ 991,989 $ 1,270,651
4,449 Advanced Micro Devices+ 123,461 150,154
4,629 Aetna Life & Casualty Co 266,937 315,929
4,775 Ahmanson (H F) & Co 89,381 113,406
4,581 Air Products & Chemicals Inc 203,319 245,656
20,240 Airtouch Communications+ 491,451 657,800
1,151 Alberto-Culver Co Class B 27,273 32,804
10,330 Albertson's Inc 288,545 329,269
9,132 Alcan Aluminium Ltd 206,145 297,932
2,249 Alco Standard Corp 125,196 181,045
1,801 Alexander & Alexander Services 38,778 41,648
2,591 Allergan Inc 64,338 78,702
11,609 Allied Signal Inc 428,352 515,149
18,483 Allstate Corp 508,485 626,112
7,690 Alltel Corp 233,421 217,243
7,336 Aluminum Co of America 274,579 419,069
3,356 ALZA Corp+ 77,767 79,705
4,648 Amdahl Corp+ 32,723 42,413
3,807 Amerada Hess Corp 192,129 180,357
7,755 American Brands Inc 266,065 325,710
7,520 American Electric Power Inc 268,596 256,620
20,312 American Express Corp 601,875 820,097
8,312 American General Corp 260,015 292,998
3,044 American Greetings Corp Class A 91,403 93,603
12,637 American Home Products Corp 818,926 973,049
19,422 American International Group Inc 1,244,507 1,565,899
6,071 American Stores Co 141,456 178,336
22,758 Ameritech Corp 945,833 1,166,348
10,868 Amgen Inc+ 260,780 520,306
20,399 Amoco Corp 1,186,176 1,300,436
8,848 AMP Inc 298,327 359,450
3,132 AMR Corp+ 200,351 220,806
1,524 Andrew Corp+ 38,968 88,773
10,624 Anheuser-Busch Inc 536,165 606,896
4,984 Apple Computer Inc 156,530 214,312
</TABLE>
45
<PAGE> 49
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
3,436 Applied Materials Inc+ $ 182,543 $ 357,344
22,198 Archer-Daniels-Midland Co 341,942 369,043
4,192 Armco Inc+ 27,182 26,200
1,546 Armstrong World Industries Inc 66,277 88,702
1,663 ASARCO Inc 37,487 53,840
2,495 Ashland Inc 84,192 81,711
65,005 AT & T Corp 3,637,160 3,672,783
6,573 Atlantic Richfield Corp 730,385 717,279
1,970 Autodesk Inc 55,527 90,866
5,928 Automatic Data Processing 324,725 385,320
2,207 Avery Dennison Corp 67,368 90,487
2,806 Avon Products Inc 156,400 198,174
5,739 Baker Hughes Inc 130,335 129,128
1,258 Ball Corp 37,874 42,772
1,940 Bally Entertainment Corp+ 16,863 23,523
5,998 Baltimore Gas & Electric Co 148,786 157,448
16,633 Banc One Corp 561,620 559,285
4,558 Bank of Boston Corp 121,521 200,552
7,873 Bank of New York Inc 264,725 342,476
15,362 BankAmerica Corp 700,743 867,953
3,176 Bankers Trust N Y Corp 224,605 218,747
2,073 Bard (C R) Inc 51,814 64,263
3,992 Barnett Banks Inc 176,134 228,043
14,458 Barrick Gold Corp 390,820 366,872
576 Bassett Furniture Industries 17,721 14,256
2,473 Bausch & Lomb Inc 106,940 98,302
11,494 Baxter International Inc 312,447 448,266
2,817 Becton Dickenson & Co 118,012 158,808
17,883 Bell Atlantic Corp 1,037,773 1,068,509
20,365 BellSouth Corp 1,198,807 1,400,094
2,095 Bemis Co Inc 49,722 60,755
2,181 Beneficial Corp 84,208 107,142
4,392 Bethlehem Steel Corp+ 76,158 64,233
4,015 Beverly Enterprises+ 48,665 53,199
4,727 Biomet Inc+ 54,745 76,223
</TABLE>
46
<PAGE> 50
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
3,450 Black & Decker Corp $ 76,763 $ 111,694
4,240 Block (H & R) Inc 172,090 165,360
5,255 Boatmen's Bancshares Inc 160,603 194,435
13,979 Boeing Co 600,857 891,161
1,866 Boise Cascade Corp 48,671 80,005
6,079 Boston Scientific Corp+ 130,245 241,640
1,170 Briggs & Stratton Corp 42,504 44,314
20,913 Bristol-Myers Squibb Co 1,220,230 1,435,155
707 Brown Group Inc 23,219 12,903
2,862 Brown-Forman Corp Class B 81,258 105,894
8,719 Browning-Ferris Industries Inc 247,848 293,176
88 Bruno's Inc 821 902
3,851 Brunswick Corp 68,841 77,501
3,689 Burlington Northern Inc 203,111 255,463
5,210 Burlington Resources Inc 222,189 212,959
2,926 Cabletron Systems Inc+ 155,068 154,712
10,197 Campbell Soup Co 426,773 466,513
6,299 Capital Cities/ABC Inc 431,323 724,385
6,380 Carolina Power & Light Co 192,870 195,388
8,219 Caterpillar Inc 388,933 551,700
2,460 CBS Inc 146,283 196,185
1,222 Centex Corp 42,534 35,744
7,739 Central & South West Corp 221,871 189,606
1,848 Ceridian Corp+ 42,693 80,850
3,821 Champion International Corp 130,745 216,364
4,109 Charming Shoppes Inc 43,096 21,572
7,316 Chase Manhattan Corp 256,750 420,670
9,956 Chemical Banking Corp Class A 399,697 579,937
26,752 Chevron Corp 1,247,218 1,294,128
15,116 Chrysler Corp 712,633 814,375
3,600 Chubb Corp 298,235 328,500
2,938 CIGNA Corp 197,143 284,252
1,446 Cincinnati Milacron Inc 33,289 47,899
6,333 Cinergy Corp 151,109 162,283
3,883 Circuit City Stores Inc 97,604 133,964
</TABLE>
47
<PAGE> 51
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
10,942 Cisco Systems Inc+ $ 359,780 $ 718,069
16,276 Citicorp 632,543 1,080,320
2,118 Clorox Co 115,415 143,230
4,226 Coastal Corp 118,576 138,402
52,014 Coca-Cola Co 2,432,365 3,341,900
5,934 Colgate-Palmolive Co 343,838 403,512
2,037 Columbia Gas System Inc+ 52,798 71,804
18,202 Columbia HCA Healthcare Corp 754,015 855,494
9,796 Comcast Corp Class A 192,606 209,390
1,756 Community Psychiatric Centers+ 22,336 20,633
10,723 Compaq Computer Corp+ 293,062 512,023
6,559 Computer Associates International Inc 273,704 455,851
2,283 Computer Sciences Corp+ 90,795 137,551
10,091 ConAgra Inc 285,273 382,197
3,215 Conrail Inc 180,108 216,209
9,608 Consolidated Edison Co 308,179 271,426
1,704 Consolidated Freightways 35,862 44,091
3,829 Consolidated Natural Gas Co 176,002 147,895
4,739 Cooper Industries Inc 215,842 180,082
3,438 Cooper Tire & Rubber Co 87,634 89,388
1,572 Coors (Adolph) Co Class B 28,950 26,724
5,917 CoreStates Financial Corp 166,252 218,929
9,330 Corning Inc 294,315 304,391
5,959 CPC International Inc 290,987 374,672
1,251 Crane Co 35,451 45,036
1,039 Cray Research Inc+ 23,244 24,157
3,652 Crown Cork & Seal Co+ 141,269 164,362
4,309 CSX Corp 335,106 355,493
6,994 CUC International Inc+ 184,175 238,670
1,677 Cummins Engine Co Inc 74,103 65,822
3,778 Cyprus Amax Minerals 102,564 105,784
4,049 Dana Corp 108,740 120,964
6,423 Darden Restaurants Inc+ 69,363 65,836
1,472 Data General Corp+ 13,147 14,352
2,913 Dayton-Hudson Corp 205,007 213,013
</TABLE>
48
<PAGE> 52
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
6,923 Dean Witter Discover & Co $ 274,335 $ 353,073
3,503 Deere & Co 259,096 299,507
2,071 Delta Air Lines Inc 111,942 154,031
3,412 Deluxe Corp 112,333 106,625
5,860 Detroit Edison Co 183,555 179,463
3,781 Dial Corp 80,754 90,744
5,959 Digital Equipment Corp+ 206,623 248,788
4,622 Dillard Department Stores Inc Class A 153,154 142,704
21,370 Disney (Walt) Co 951,608 1,199,391
7,013 Dominion Resources Inc 300,507 253,345
6,249 Donnelley (R R) & Sons Co 192,584 237,462
2,319 Dover Corp 130,932 184,940
11,373 Dow Chemical Co 717,717 841,602
3,986 Dow Jones & Co Inc 136,445 145,987
7,372 Dresser Industries Inc 160,298 176,928
4,634 DSC Communications Corp+ 146,815 243,285
8,331 Duke Power Co 339,555 338,447
6,893 Dun & Bradstreet Corp 412,099 398,932
22,672 DuPont (E I) de Nemours 1,233,122 1,482,182
896 Eastern Enterprises 23,664 27,440
3,401 Eastman Chemical Co 176,064 219,790
13,973 Eastman Kodak Co 681,496 805,194
3,178 Eaton Corp 162,464 172,009
2,449 Echlin Inc 77,815 84,491
4,523 Echo Bay Mines Ltd 51,152 46,926
2,767 Ecolab Inc 61,458 75,747
2,194 EG & G Inc 37,715 41,686
9,559 Emerson Electric Co 583,069 682,274
5,908 Engelhard Corp 105,778 166,901
10,361 Enron Corp 345,620 348,389
2,616 Enserch Corp 46,556 42,837
9,308 Entergy Corp 292,169 223,392
51,015 Exxon Corp 3,297,084 3,507,281
2,254 Federal Express Corp+ 143,671 161,725
7,421 Federal Home Loan Mortgage Corp 399,909 476,799
</TABLE>
49
<PAGE> 53
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
11,241 Federal National Mortgage Assoc $ 889,859 $ 1,072,110
1,758 Federal Paper Board Co 42,422 69,661
3,758 First Chicago Corp 178,760 238,163
4,863 First Data Corp 244,089 283,878
3,355 First Fidelity Bancorp 155,645 219,333
3,195 First Interstate Bancorp 221,941 305,123
866 First Mississippi Corp 14,179 28,686
7,182 First Union Corp 315,570 359,998
5,745 Fleet Financial Group Inc 189,046 212,565
1,902 Fleetwood Enterprises Inc 42,032 37,327
1,528 Fleming Co Inc 43,323 44,503
3,391 Fluor Corp 153,219 198,374
1,511 FMC Corp+ 79,376 116,347
42,158 Ford Motor Co 1,188,217 1,291,089
1,504 Foster Wheeler Corp 50,514 55,460
7,588 FPL Group Inc 283,021 294,984
8,421 Freeport McMoRan Copper & Gold Inc Class B 229,255 196,841
3,096 Fruit of the Loom Inc Class A+ 83,650 72,756
5,738 Gannett Co Inc 296,780 306,983
5,878 Gap Inc 192,090 188,831
2,586 General Dynamics Corp 113,887 136,088
69,578 General Electric Co 3,501,314 4,096,405
6,423 General Mills Inc 321,854 331,587
30,842 General Motors Corp 1,437,483 1,449,574
4,663 General Public Utilities 138,541 133,478
3,373 General Re Corp 417,316 501,312
1,927 General Signal Corp 65,925 68,409
4,987 Genuine Parts Co 186,362 196,363
3,698 Georgia-Pacific Corp 253,013 332,820
2,485 Giant Food Inc Class A 57,060 77,346
1,440 Giddings & Lewis Inc 29,573 23,580
18,170 Gillette Co 595,411 758,598
2,490 Golden West Financial 101,381 118,898
1,034 Goodrich (B F) Co 46,876 61,523
</TABLE>
50
<PAGE> 54
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
6,233 Goodyear Tire & Rubber Co $ 248,777 $ 249,320
3,847 Grace (W R) & Co 158,425 256,306
2,084 Grainger (W W) Inc 122,978 123,998
1,572 Great Atlantic & Pacific Tea Co 39,036 44,606
2,789 Great Lakes Chemical Corp 187,178 184,423
5,435 Great Western Financial Corp 98,847 127,043
39,806 GTE Corp 1,405,021 1,457,895
4,664 Halliburton Co 169,515 197,637
1,433 Handleman Co 15,882 13,614
3,170 Harcourt General Inc 121,818 131,951
1,201 Harland (John H) Co 29,312 26,572
1,942 Harnischfeger Industries Inc 47,673 71,369
4,193 Harrah's Entertainment Inc+ 125,645 133,652
1,609 Harris Corp 70,482 92,719
3,562 Hasbro Inc 124,208 115,320
9,954 Heinz (H J) Co 371,417 421,801
996 Helmerich & Payne Inc 30,214 28,511
4,774 Hercules Inc 170,292 265,554
3,191 Hershey Foods Corp 158,971 191,061
20,938 Hewlett Packard Co 914,822 1,675,040
1,964 Hilton Hotels Corp 108,592 130,606
19,518 Home Depot Inc 824,458 778,280
5,645 Homestake Mining Co 104,598 93,143
5,284 Honeywell Inc 188,547 231,175
3,972 Household International Inc 152,161 222,929
5,339 Houston Industries Inc 228,010 226,240
4,672 Illinois Tool Works Inc 189,547 286,160
4,755 Inco Ltd 114,607 166,425
4,325 Ingersoll-Rand Co 152,563 163,809
1,847 Inland Steel Industries Inc 56,692 50,562
34,006 Intel Corp 1,158,904 2,087,118
1,779 Intergraph Corp+ 19,377 22,015
23,883 International Business Machines Corp 1,402,069 2,468,905
4,601 International Flavors & Fragrances 190,500 220,273
5,206 International Paper Co 357,643 426,241
</TABLE>
51
<PAGE> 55
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
3,098 Interpublic Group Cos Inc $ 99,068 $ 120,435
4,372 ITT Corp 386,054 523,001
3,279 James River Corp 65,316 113,945
1,967 Jefferson-Pilot Corp 103,683 123,675
26,498 Johnson & Johnson 1,250,784 1,828,362
1,641 Johnson Controls Inc 87,536 99,896
1,802 Jostens Inc 34,891 43,248
18,655 K Mart Corp 359,395 254,174
1,304 Kaufman & Broad Home Corp 23,074 17,441
9,049 Kellogg Co 499,744 610,808
2,146 Kerr-McGee Corp 107,754 118,030
9,914 KeyCorp 302,445 307,334
6,588 Kimberly-Clark Corp 337,973 420,809
1,551 King World Productions+ 59,288 58,938
2,231 Knight-Ridder Inc 122,026 125,494
4,730 Kroger Co+ 107,894 154,316
11,160 Laidlaw Inc Class B 98,169 100,440
12,039 Lilly (Eli) & Co 683,977 985,693
14,624 Limited Inc 301,233 270,544
3,931 Lincoln National Corp 167,795 169,033
3,141 Liz Claiborne Inc 63,750 71,458
8,182 Lockheed Martin Corp 380,633 498,079
2,407 Loews Corp 266,328 316,220
885 Longs Drug Stores Corp 29,396 32,745
3,435 Loral Corp 123,685 188,066
1,423 Louisiana Land & Exploration Co 60,605 54,430
4,597 Louisiana-Pacific Corp 152,282 109,179
6,494 Lowe's Co Inc 183,426 215,926
1,017 Luby's Cafeterias Inc 23,355 20,213
3,133 Mallinckrodt Group Inc 100,709 117,879
2,522 Manor Care Inc 63,444 81,650
5,022 Marriott International 140,732 178,281
2,970 Marsh & McLennan Companies Inc 251,989 244,654
6,484 Masco Corp 190,342 181,552
9,058 Mattel Inc 185,301 262,682
</TABLE>
52
<PAGE> 56
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
10,127 May Co Department Stores Co $ 405,084 $ 429,132
4,377 Maytag Corp 73,340 67,844
6,029 MBNA Corp 146,556 214,030
2,235 McDermott International Inc 62,235 50,846
28,546 McDonald's Corp 841,053 1,041,929
4,867 McDonnell Douglas Corp 184,651 390,577
2,003 McGraw-Hill Inc 139,948 157,736
27,764 MCI Communications 676,758 668,071
2,465 Mead Corp 115,732 151,289
4,676 Medtronic Inc 208,147 441,298
6,061 Mellon Bank Corp 226,379 287,140
4,357 Melville Corp 177,397 145,415
1,529 Mercantile Stores Co Inc 55,163 70,143
50,753 Merck & Co Inc 1,816,330 2,531,306
1,192 Meredith Corp 25,086 46,786
7,208 Merrill Lynch & Co Inc 317,694 415,361
8,440 Micron Technology Inc 190,544 648,825
23,867 Microsoft Corp+ 1,388,610 2,207,698
2,102 Millipore Corp 42,892 73,307
17,183 Minnesota Mining & Manufacturing Co 925,785 938,621
16,284 Mobil Corp 1,340,034 1,551,051
4,795 Monsanto Co 342,640 454,926
4,095 Moore Corp Ltd 77,799 85,483
7,731 Morgan (J P) & Co Inc 529,883 563,397
1,399 Morrison Knudsen Corp 26,034 10,842
5,998 Morton International Inc 174,276 194,935
24,178 Motorola Inc 1,243,274 1,807,306
433 NACCO Industries Inc Class A 21,021 24,898
2,819 Nalco Chemical Co 96,912 98,665
5,996 National City Corp 164,519 178,381
5,076 National Semiconductor+ 90,512 143,397
1,968 National Service Industries Inc 50,900 57,072
11,261 NationsBank 561,187 691,144
3,072 Navistar International Corp+ 61,910 39,936
6,579 NBD Bancorp Inc 208,478 235,199
</TABLE>
53
<PAGE> 57
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
4,062 New York Times Co Class A $ 98,822 $ 101,042
6,417 Newell Co 132,765 160,425
3,499 Newmont Mining Corp 140,650 152,207
5,854 Niagara Mohawk Power Corp 114,667 70,248
2,078 NICOR Inc 56,753 53,249
3,034 Nike Inc Class B 179,511 281,024
4,867 NorAm Energy Corp 36,449 34,677
3,394 Nordstrom Inc 123,807 140,003
5,504 Norfolk Southern Corp 369,182 389,408
2,741 Northern States Power Co 121,903 116,835
10,337 Northern Telecom Ltd 313,537 379,885
2,062 Northrop Grumman Corp 82,504 125,524
13,270 Norwest Corp 343,487 399,759
14,970 Novell Inc+ 288,523 269,460
3,579 Nucor Corp 194,631 175,371
17,463 NYNEX Corp 733,553 785,835
13,029 Occidental Petroleum Corp 263,337 283,381
1,965 Ogden Corp 43,814 45,686
6,238 Ohio Edison Co 139,705 134,897
1,106 ONEOK Inc 21,649 24,194
17,674 Oracle Systems Corp+ 419,076 709,169
4,017 Oryx Energy Co+ 75,105 54,230
863 Outboard Marine Corp 16,845 18,447
2,024 Owens Corning Fiberglass+ 79,914 79,442
1,590 PACCAR Inc 80,922 78,705
3,354 Pacific Enterprises 82,992 80,496
17,719 Pacific Gas & Electric Co 554,974 509,421
17,323 Pacific Telesis Group 540,336 491,540
11,582 PacifiCorp 221,024 209,924
4,671 Pall Corp 89,177 102,178
6,116 Panhandle Eastern Corp 138,902 152,900
2,989 Parker Hannifin Corp 75,222 118,439
8,993 PECO Energy Co 262,634 239,439
9,475 Penney (J C) Co Inc 448,720 428,744
1,895 Pennzoil Co 107,468 83,380
</TABLE>
54
<PAGE> 58
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
1,470 Peoples Energy Corp $ 42,619 $ 40,058
2,495 Pep Boys-Manny Moe & Jack 69,616 68,613
32,339 Pepsico Inc 1,241,983 1,463,340
1,708 Perkin-Elmer Corp 54,607 58,286
25,924 Pfizer Inc 900,451 1,279,998
2,862 Phelps Dodge Corp 141,472 181,379
34,702 Philip Morris Co Inc 1,902,551 2,589,637
10,674 Phillips Petroleum Co 353,030 350,908
3,506 Pioneer Hi Bred International Inc 126,603 150,758
6,383 Pitney Bowes Inc 246,767 259,309
1,662 Pittston Services Group 40,640 42,173
9,791 Placer Dome Inc 216,445 255,790
9,562 PNC Bank Corp 269,277 251,003
1,948 Polaroid Corp 68,757 84,982
1,217 Potlatch Corp 51,063 48,224
8,532 PPG Industries Inc 307,809 364,743
5,564 Praxair Inc 101,532 144,664
2,604 Premark International Inc 96,920 136,385
7,844 Price/Costco Inc+ 136,636 132,368
28,202 Procter & Gamble Co 1,592,188 1,956,514
3,939 Providian Corp 150,000 151,159
10,024 Public Services Enterprise Group 316,741 275,660
1,067 Pulte Corp 33,476 28,809
5,432 Quaker Oats Co 186,391 188,762
4,097 Ralston-Purina Group 161,171 213,044
1,795 Raychem Corp 70,105 78,756
5,036 Raytheon Co 327,297 407,287
3,315 Reebok International Ltd 98,056 117,683
2,137 Republic New York Corp 125,130 120,206
2,593 Reynolds Metals Co 124,877 154,932
3,433 Rite Aid Corp 67,786 96,124
1,603 Roadway Services Inc 93,079 88,165
8,836 Rockwell International Corp 325,942 395,411
2,788 Rohm & Haas Co 153,931 166,583
3,320 Rowan Co Inc+ 28,384 26,975
</TABLE>
55
<PAGE> 59
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
22,030 Royal Dutch Petroleum Co $ 2,357,183 $ 2,627,078
6,567 Rubbermaid Inc 212,579 195,368
1,586 Russell Corp 45,343 43,615
2,198 Ryan's Family Steak House+ 17,596 16,485
3,161 Ryder System Inc 78,172 76,654
2,569 SAFECO Corp 149,102 166,022
2,320 Safety-Kleen Corp 36,184 31,320
4,288 Salomon Inc 189,041 164,552
3,571 Santa Fe Energy Resources Inc+ 34,823 33,925
6,139 Santa Fe Pacific Corp 110,960 174,194
5,343 Santa Fe Pacific Gold Corp 76,224 64,784
19,536 Sara Lee Corp 503,479 542,124
24,947 SBC Communication Inc 1,072,239 1,262,942
18,201 SCEcorp 364,029 302,592
15,534 Schering-Plough Corp 527,979 724,273
9,897 Schlumberger Ltd 605,816 638,357
3,070 Scientific-Atlanta Inc 57,463 61,400
6,116 Scott Paper Co 157,919 283,630
15,180 Seagram Co Ltd 438,117 561,660
15,862 Sears Roebuck & Co 446,660 513,532
3,895 Service Corp International 102,848 136,325
949 Shared Medical System Corp 25,548 34,994
5,314 Shawmut National Corp 124,407 172,041
3,543 Sherwin Williams Co 120,887 127,105
1,688 Shoney's Inc+ 30,692 19,623
2,081 Sigma Aldrich Corp 77,330 99,888
6,489 Silicon Graphics Inc+ 221,934 274,160
1,773 Snap-On Inc 68,191 72,693
3,537 Sonat Inc 112,544 112,300
27,276 Southern Co 583,502 576,206
5,776 Southwest Airlines Co 145,529 149,454
709 Springs Industries Inc Class A 25,883 30,576
14,293 Sprint Corp 485,181 507,402
1,897 St Jude Medical Inc+ 64,223 113,109
3,482 St Paul Co Inc 158,902 188,899
</TABLE>
56
<PAGE> 60
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
1,850 Stanley Works $ 76,188 $ 81,863
3,669 Stone Container Corp+ 52,493 79,801
2,010 Stride Rite Corp 28,716 22,613
3,094 Sun Co Inc 90,443 82,378
3,909 Sun Microsystems Inc+ 109,235 226,233
4,839 SunTrust Banks Inc 227,612 296,994
2,902 Super Value Inc 92,712 85,972
7,473 Sysco Corp 205,537 214,849
4,677 Tandem Computers Inc+ 60,368 57,293
3,005 Tandy Corp 123,452 186,686
1,249 Tektronix Inc 36,426 56,986
26,737 Tele-Communication Inc Class A+ 484,531 494,635
2,276 Teledyne Inc 53,874 54,391
3,584 Tellabs Inc+ 171,989 167,552
2,263 Temple-Inland Inc 100,848 117,110
8,197 Tenet Healthcare Corp+ 112,493 130,127
7,677 Tenneco Inc 380,533 372,335
10,638 Texaco Inc 692,746 688,811
7,696 Texas Instruments Inc 296,035 576,238
9,267 Texas Utilities Co 377,787 322,028
3,569 Textron Inc 199,118 244,477
824 Thomas & Betts Corp 52,540 55,620
15,550 Time Warner Inc 618,654 655,044
5,126 Times Mirror Co Class A 110,730 156,984
1,266 Timken Co 42,561 57,128
2,952 TJX Companies Inc 70,430 36,900
2,914 Torchmark Corp 139,930 116,560
11,501 Toys R Us Inc+ 396,403 299,026
2,887 Transamerica Corp 164,378 196,316
13,110 Travelers Inc 528,881 629,280
2,688 Tribune Co 146,909 180,096
1,163 Trinova Corp 34,620 42,740
2,615 TRW Inc 174,766 203,643
3,140 Tyco International Inc 152,942 185,653
3,976 U.S. Bancorp 102,011 113,813
</TABLE>
57
<PAGE> 61
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
6,552 U.S. Healthcare Inc $ 296,202 $ 209,664
951 U.S. Life Corp 37,139 41,012
19,276 U.S. West Inc 851,392 838,506
8,746 Unicom Corp 242,316 245,981
6,545 Unilever NV 741,204 809,126
2,850 Union Camp Corp 132,158 162,094
6,111 Union Carbide Corp 145,909 216,941
4,156 Union Electric Co 165,260 148,058
8,441 Union Pacific Corp 500,970 552,886
6,978 Unisys Corp+ 74,477 55,824
7,097 United Healthcare Corp 327,917 299,848
2,271 United States Surgical 51,194 57,627
5,117 United Technologies Corp 315,461 426,630
9,910 Unocal Corp 283,802 288,629
3,014 UNUM Corp 158,409 144,672
7,095 Upjohn Co 218,776 300,651
2,461 USAir Group Inc+ 26,527 19,996
4,507 USF & G Corp 68,301 81,689
8,230 UST Inc 231,333 224,268
12,104 USX - Marathon Group 223,069 249,645
3,330 USX - US Steel Group 115,397 109,058
1,728 Varity Corp+ 67,190 78,624
2,627 VF Corp 121,839 143,828
14,789 Viacom Inc Class B+ 603,504 719,115
6,978 Wachovia Corp 256,665 277,376
94,304 Wal Mart Stores Inc 2,371,527 2,322,236
10,122 Walgreen Co 211,605 247,989
5,493 Warner Lambert Co 395,295 496,430
2,176 Wells Fargo & Co 296,573 405,552
4,139 Wendy's International Inc 65,289 81,228
2,114 Western Atlas Inc+ 84,819 95,923
14,528 Westinghouse Electric Corp 207,069 197,944
2,764 Westvaco Corp 99,950 121,962
8,431 Weyerhaeuser Co 344,223 387,826
3,076 Whirlpool Corp 181,851 167,642
</TABLE>
58
<PAGE> 62
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
4,252 Whitman Corp $ 68,335 $ 85,040
2,258 Willamette Industries Inc 154,592 155,238
4,154 Williams Co Inc 126,405 152,140
3,075 Winn-Dixie Stores Inc 172,956 182,963
19,794 WMX Technologies Inc 557,193 581,449
5,336 Woolworth Corp 113,480 71,369
3,673 Worthington Industries Inc 72,715 73,460
4,768 Wrigley (Wm) Jr Co 212,312 215,104
4,407 Xerox Corp 402,527 532,145
1,092 Yellow Corp 23,599 15,425
1,782 Zenith Electronic Corp+ 15,611 15,147
528 Zurn Industries Inc 13,253 11,550
------------ ------------
TOTAL COMMON STOCKS $142,811,635 $169,747,960
</TABLE>
59
<PAGE> 63
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES - 20.22%
$ 3,300,000 U.S. Treasury Bonds 6.25 % 08/15/23 $ 3,093,750
2,250,000 U.S. Treasury Bonds 7.13 02/15/23 2,351,950
6,200,000 U.S. Treasury Bonds 7.25 05/15/16 6,535,178
1,900,000 U.S. Treasury Bonds 7.25 08/15/22 2,009,843
2,050,000 U.S. Treasury Bonds 7.50 11/15/24 2,247,313
1,750,000 U.S. Treasury Bonds 7.63 11/15/22 1,937,031
2,700,000 U.S. Treasury Bonds 7.63 02/15/25 3,011,340
2,500,000 U.S. Treasury Bonds 7.88 02/15/21 2,822,653
5,600,000 U.S. Treasury Bonds 8.00 11/15/21 6,424,242
3,100,000 U.S. Treasury Bonds 8.13 08/15/19 3,582,438
3,450,000 U.S. Treasury Bonds 8.13 05/15/21 4,000,917
1,500,000 U.S. Treasury Bonds 8.13 08/15/21 1,742,813
2,300,000 U.S. Treasury Bonds 8.50 02/15/20 2,762,875
5,200,000 U.S. Treasury Bonds 8.75 05/15/17 6,353,750
6,300,000 U.S. Treasury Bonds 8.75 08/15/20 7,764,750
3,400,000 U.S. Treasury Bonds 8.88 02/15/19 4,221,307
1,500,000 U.S. Treasury Bonds 9.00 11/15/18 1,884,375
1,700,000 U.S. Treasury Bonds 9.13 05/15/18 2,155,813
1,800,000 U.S. Treasury Bonds 9.25 02/15/16 2,292,750
1,500,000 U.S. Treasury Bonds 9.88 11/15/15 2,012,342
------------
TOTAL U.S. TREASURY SECURITIES $ 69,207,430
(Cost $61,940,998)
</TABLE>
60
<PAGE> 64
MASTER INVESTMENT PORTFOLIO -- ASSET ALLOCATION MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 30.02%
$ 1,157,000 U.S. Treasury Bills 5.20 % 09/28/95 $ 1,152,308
876,000 U.S. Treasury Bills 5.34 09/07/95 875,125
24,463,000 U.S. Treasury Bills 5.37 10/05/95 24,338,764
1,661,000 U.S. Treasury Bills 5.38 10/12/95 1,650,877
2,470,000 U.S. Treasury Bills 5.39 10/19/95 2,452,439
3,950,000 U.S. Treasury Bills 5.40 11/02/95 3,913,940
1,570,000 U.S. Treasury Bills 5.41 11/09/95 1,554,050
6,559,000 U.S. Treasury Bills 5.41 11/16/95 6,485,467
60,612,000 U.S. Treasury Bills 5.42 11/24/95 59,863,805
455,000 U.S. Treasury Bills 5.54 09/21/95 453,629
------------
TOTAL SHORT-TERM INSTRUMENTS $102,740,404
(Cost $102,736,329)
TOTAL INVESTMENTS IN SECURITIES
(Cost $307,488,962)*
(Notes 1 and 3) 99.84% $341,695,794
Other Assets and Liabilities, Net 0.16 561,195
------ ------------
TOTAL NET ASSETS 100.00% $342,256,989
------ ------------
------ ------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 37,399,052
Gross Unrealized Depreciation (3,192,220)
-------------
NET UNREALIZED APPRECIATION $ 34,206,832
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
61
<PAGE> 65
MASTER INVESTMENT PORTFOLIO -- BOND INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C>
CORPORATE BONDS & NOTES - 23.80%
BANK & FINANCE - 5.78%
$ 500,000 American Express Co 8.63 % 05/15/22 $ 538,997
500,000 BankAmerica Corp 7.20 04/15/06 504,375
750,000 Chrysler Financial Corp 5.38 10/15/98 727,175
1,500,000 CIT Group Holdings 6.63 06/15/05 1,468,437
1,000,000 Commercial Credit Corp 8.70 06/15/10 1,170,053
500,000 First Union Corp 6.63 07/15/05 486,215
500,000 General Electric Capital Corp 8.75 05/21/07 577,319
500,000 International Lease Finance 7.90 10/01/96 508,484
500,000 Lehman Brothers Inc 9.88 10/15/00 553,790
500,000 NationsBank Corp 6.88 02/15/05 493,124
------------
$ 7,027,969
INDUSTRIALS - 8.78%
$ 500,000 Anheuser Busch Co 8.75 % 12/01/99 $ 543,549
500,000 Archer-Daniels-Midland Co 8.38 04/15/17 555,400
500,000 Caterpillar Inc 8.00 02/15/23 523,199
500,000 Dow Chemical Co 8.63 04/01/06 565,555
500,000 DuPont (El) De Nemours 6.00 12/01/01 483,165
1,000,000 Eastman Chemicals Co 6.38 01/15/04 967,022
500,000 Ford Capital BV 9.00 08/15/98 533,477
500,000 Ford Motor Co 8.88 04/01/06 569,219
750,000 Ford Motor Credit Corp 7.75 10/01/99 780,989
750,000 General Motors Corp 8.13 04/15/16 754,955
500,000 Hertz Corp 6.38 10/15/05 478,494
500,000 Hertz Corp 6.50 04/01/00 494,733
500,000 International Business Machines 6.38 06/15/00 497,558
500,000 Kmart Corp 12.50 03/01/05 660,099
500,000 PepsiCo Inc 7.00 11/15/96 504,701
500,000 Philip Morris Co 7.13 10/01/04 499,575
500,000 Seagram (J) & Sons 9.75 06/15/00 514,988
750,000 Weyerhaeuser Co 7.50 03/01/13 766,308
------------
$ 10,692,986
</TABLE>
62
<PAGE> 66
MASTER INVESTMENT PORTFOLIO -- BOND INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C>
CORPORATE BONDS & NOTES (CONTINUED)
INTERNATIONAL AGENCIES - 0.38%
$ 500,000 International Bank of Reconstruction &
Development 5.25 % 09/16/03 $ 466,358
TELECOMMUNICATIONS - 1.37%
$ 750,000 GTE North Inc 6.00 % 01/15/04 $ 714,229
500,000 New York Telephone Co 5.88 09/01/03 468,990
500,000 Southwestern Bell Telephone Co 6.75 06/01/08 486,348
------------
$ 1,669,567
UTILITIES - 3.65%
$ 500,000 Alabama Power Co 8.50 % 05/01/22 $ 516,543
500,000 Hydro-Quebec 8.50 12/01/29 539,055
500,000 Pennsylvania Power & Light Co 7.75 05/01/02 519,571
750,000 Philadelphia Electric Co 8.75 04/01/22 802,142
500,000 Public Service Electric & Gas Co 6.13 08/01/02 480,443
500,000 Public Service Electric & Gas Co 8.75 11/01/21 525,440
500,000 Victoria (Province of) Public Authority 8.45 10/01/01 544,829
500,000 Virginia Electric & Power Co 7.38 07/01/02 518,024
------------
$ 4,446,047
YANKEE BONDS - 3.84%
$ 500,000 African Development Bank 7.75 % 12/15/01 $ 528,029
500,000 Finland (Republic of) 7.88 07/28/04 538,492
500,000 Hanson Overseas BV 7.38 01/15/03 511,728
500,000 Italy (Republic of) 6.00 09/27/03 468,988
500,000 Matsushita Electric Industry Co 7.25 08/01/02 515,511
750,000 Ontario (Province of) 7.63 06/22/04 788,804
500,000 Quebec (Province of) 11.00 06/15/15 587,355
750,000 Sweden (Kingdom of) 6.50 03/04/03 739,107
------------
$ 4,678,014
TOTAL CORPORATE BONDS & NOTES $ 28,980,941
(Cost $27,706,349)
</TABLE>
63
<PAGE> 67
MASTER INVESTMENT PORTFOLIO -- BOND INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES - 8.87%
FEDERAL AGENCY - OTHER - 4.11%
$ 800,000 Federal Home Loan Mortgage Corp 7.13 % 07/21/99 $ 825,986
300,000 Resolution Funding Corp 8.88 04/15/30 379,549
500,000 Resolution Funding Corp 9.38 10/15/20 647,374
500,000 Tennessee Valley Authority 4.60 12/15/96 489,935
1,000,000 Tennessee Valley Authority 6.13 07/15/03 960,496
200,000 Tennessee Valley Authority 7.75 12/15/22 200,189
100,000 Tennessee Valley Authority 8.25 04/15/42 108,138
1,000,000 Tennessee Valley Authority 8.38 10/01/99 1,072,657
300,000 Tennessee Valley Authority 8.63 11/15/29 321,032
------------
$ 5,005,356
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.76%
$ 300,000 Federal National Mortgage Assoc 5.25 % 05/13/98 $ 292,332
400,000 Federal National Mortgage Assoc 5.30 12/10/98 388,172
500,000 Federal National Mortgage Assoc 6.30 12/11/97 500,568
1,000,000 Federal National Mortgage Assoc 6.95 09/10/02 1,000,519
500,000 Federal National Mortgage Assoc 7.55 04/22/02 528,446
200,000 Federal National Mortgage Assoc 7.55 06/10/04 204,424
1,000,000 Federal National Mortgage Assoc 7.60 01/10/97 1,021,245
500,000 Federal National Mortgage Assoc 7.90 04/10/02 511,545
1,000,000 Federal National Mortgage Assoc 8.25 12/18/00 1,092,160
1,000,000 Federal National Mortgage Assoc 8.54 (F) 07/15/14 261,349
------------
$ 5,800,760
TOTAL U.S. GOVERNMENT AGENCY SECURITIES $ 10,806,116
(Cost $10,373,181)
</TABLE>
64
<PAGE> 68
MASTER INVESTMENT PORTFOLIO -- BOND INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES - 65.83%
U.S. TREASURY BONDS - 18.90%
$ 1,800,000 U.S. Treasury Bonds 6.25 % 05/31/00 $ 1,812,375
1,000,000 U.S. Treasury Bonds 7.25 08/15/22 1,057,812
2,000,000 U.S. Treasury Bonds 7.50 11/15/16 2,162,500
1,500,000 U.S. Treasury Bonds 7.63 11/15/22 1,660,313
400,000 U.S. Treasury Bonds 7.63 02/15/25 446,124
2,000,000 U.S. Treasury Bonds 7.88 02/15/21 2,258,122
1,450,000 U.S. Treasury Bonds 8.13 08/15/19 1,675,656
2,100,000 U.S. Treasury Bonds 8.13 08/15/21 2,439,938
375,000 U.S. Treasury Bonds 8.75 11/15/08 428,672
1,900,000 U.S. Treasury Bonds 8.75 08/15/20 2,341,750
500,000 U.S. Treasury Bonds 9.13 05/15/09 586,406
250,000 U.S. Treasury Bonds 10.63 08/15/15 356,015
1,290,000 U.S. Treasury Bonds 11.13 08/15/03 1,673,775
2,600,000 U.S. Treasury Bonds 12.00 08/15/13 3,800,875
190,000 U.S. Treasury Bonds 13.88 05/15/11 296,400
------------
$ 22,996,733
U.S. TREASURY NOTES - 46.93%
$ 1,000,000 U.S. Treasury Notes 4.38 % 08/15/96 $ 988,125
2,000,000 U.S. Treasury Notes 4.75 09/30/98 1,932,500
2,500,000 U.S. Treasury Notes 4.75 10/31/98 2,410,938
500,000 U.S. Treasury Notes 5.00 01/31/99 484,375
3,500,000 U.S. Treasury Notes 5.50 07/31/97 3,479,214
300,000 U.S. Treasury Notes 5.75 08/15/03 289,781
2,000,000 U.S. Treasury Notes 5.88 02/15/04 1,942,500
3,000,000 U.S. Treasury Notes 6.00 12/31/97 3,008,433
1,000,000 U.S. Treasury Notes 6.00 10/15/99 999,061
1,600,000 U.S. Treasury Notes 6.25 08/31/96 1,607,498
1,400,000 U.S. Treasury Notes 6.25 02/15/03 1,398,250
2,600,000 U.S. Treasury Notes 6.38 06/30/97 2,626,000
2,950,000 U.S. Treasury Notes 6.38 01/15/99 2,984,105
2,300,000 U.S. Treasury Notes 6.38 08/15/02 2,320,125
1,700,000 U.S. Treasury Notes 6.50 09/30/96 1,713,813
</TABLE>
65
<PAGE> 69
MASTER INVESTMENT PORTFOLIO -- BOND INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES (CONTINUED)
$ 1,000,000 U.S. Treasury Notes 6.50 % 08/15/97 $ 1,011,875
1,000,000 U.S. Treasury Notes 6.50 05/15/05 1,012,811
3,700,000 U.S. Treasury Notes 6.75 02/28/97 3,752,026
2,800,000 U.S. Treasury Notes 6.88 10/31/96 2,835,000
600,000 U.S. Treasury Notes 6.88 02/28/97 609,187
1,200,000 U.S. Treasury Notes 6.88 08/31/99 1,233,750
400,000 U.S. Treasury Notes 7.13 09/30/99 415,125
2,500,000 U.S. Treasury Notes 7.13 02/29/00 2,601,563
1,600,000 U.S. Treasury Notes 7.25 11/15/96 1,627,498
600,000 U.S. Treasury Notes 7.25 02/15/98 618,000
800,000 U.S. Treasury Notes 7.25 08/15/04 848,500
1,300,000 U.S. Treasury Notes 7.38 11/15/97 1,339,404
1,800,000 U.S. Treasury Notes 7.50 11/15/01 1,921,500
500,000 U.S. Treasury Notes 7.50 02/15/05 540,313
1,400,000 U.S. Treasury Notes 7.75 11/30/99 1,486,625
900,000 U.S. Treasury Notes 8.75 08/15/00 1,000,967
2,200,000 U.S. Treasury Notes 9.00 05/15/98 2,365,684
3,400,000 U.S. Treasury Notes 9.13 05/15/99 3,743,182
------------
$ 57,147,728
TOTAL U.S. TREASURY SECURITIES $ 80,144,461
(Cost $78,368,403)
SHORT-TERM INSTRUMENTS - 0.73%
U.S. TREASURY BILLS - 0.73%
$ 198,000 U.S. Treasury Bills 5.38 %(F) 10/12/95 $ 196,793
196,000 U.S. Treasury Bills 5.41 (F) 11/09/95 194,009
205,000 U.S. Treasury Bills 5.41 (F) 11/16/95 202,702
298,000 U.S. Treasury Bills 5.42 (F) 11/24/95 294,307
------------
TOTAL SHORT-TERM INSTRUMENTS $ 887,811
(Cost $887,738)
</TABLE>
66
<PAGE> 70
MASTER INVESTMENT PORTFOLIO -- BOND INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $117,335,671)*
(Notes 1 and 3) 99.23% $120,819,329
Other Assets and Liabilities, Net 0.77 940,688
------ ------------
TOTAL NET ASSETS 100.00% $121,760,017
------ ------------
------ ------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
(F) YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 4,025,279
Gross Unrealized Depreciation (541,621)
-------------
NET UNREALIZED APPRECIATION $ 3,483,658
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
67
<PAGE> 71
MANAGED SERIES INVESTMENT TRUST -- GROWTH STOCK MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS - 84.14%
AUTOMOBILE & RELATED - 0.30%
11,900 Wabash National Corp $ 400,613 $ 434,350
BASIC INDUSTRIES - 1.13%
28,500 Minerals Technologies Inc $ 906,587 $ 1,033,125
20,000 N-Viro International Corp+ 27,500 17,500
15,000 OM Group Inc 382,875 450,000
70,000 Quadrax Corp+ 257,751 126,875
------------ ------------
$ 1,574,713 $ 1,627,500
BIOTECHNOLOGY - 0.50%
6,500 Cell Genesys Inc+ $ 33,513 $ 43,875
10,000 Immunex Corp+ 163,125 155,000
15,000 Lifecore Biomedical Inc+ 131,375 191,250
22,000 Liposome Co Inc 234,532 327,250
------------ ------------
$ 562,545 $ 717,375
BUILDING MATERIALS & SERVICES - 0.65%
40,000 J Ray McDermott SA+ $ 835,592 $ 940,000
COMPUTER SOFTWARE - 13.48%
57,000 Acclaim Entertainment Inc+ $ 1,379,842 $ 1,439,250
13,500 ArcSys Inc+ 327,750 540,000
5,000 BDM International Inc 92,500 125,625
18,716 First Data Corp 1,257,311 1,092,547
4,000 Harbinger Corp+ 48,000 58,000
10,000 HCIA Inc+ 285,000 280,000
48,200 IKOS Systems Inc+ 420,450 548,275
55,000 Imnet Systems Inc+ 856,125 1,017,500
16,000 Mercury Interactive Corp+ 380,000 362,000
37,700 Metatec Corp Class A+ 362,088 523,088
11,000 Microsoft Corp+ 666,750 1,017,500
44,500 NETCOM On-Line Communication Services Inc+ 1,100,531 1,663,188
</TABLE>
68
<PAGE> 72
MANAGED SERIES INVESTMENT TRUST -- GROWTH STOCK MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
30,000 Open Environment Corp+ $ 587,500 $ 570,000
40,000 Oracle Systems Corp+ 1,364,938 1,605,000
75,000 Rational Software Corp+ 921,875 1,153,125
112,500 Sanctuary Woods Multimedia+ 651,623 745,313
16,500 Seventh Level Inc+ 82,500 292,875
10,000 Sierra On-Line Inc+ 197,500 390,000
18,000 Summit Medical System Inc+ 170,625 279,000
25,000 Syncronys Softcorp+ 337,500 656,250
29,000 Synopsys Inc+ 1,373,689 1,682,000
85,000 Veritas Software Corp+ 1,695,415 2,167,500
57,500 Viasoft Inc+ 648,987 603,750
20,000 VideoServer Inc+ 781,950 702,500
------------ ------------
$ 15,990,449 $ 19,514,286
COMPUTER SYSTEMS - 9.17%
20,000 3Com Corp+ $ 750,516 $ 780,000
70,000 Adaptec Inc+ 1,667,397 2,975,000
59,500 Cisco Systems Inc+ 1,706,625 3,904,688
48,000 Komag Inc+ 1,327,875 2,988,000
20,000 Quantum Corp+ 522,876 480,000
60,000 Solectron Corp+ 1,466,178 2,130,000
------------ ------------
$ 7,441,467 $ 13,257,688
ELECTRICAL EQUIPMENT - 3.91%
6,500 Belden Inc $ 156,332 $ 180,375
9,500 Computational Systems Inc+ 128,125 147,250
3,000 Innovex Inc 66,803 69,375
57,000 Integrated Device Technology Inc+ 2,111,188 3,284,625
75,000 Interlink Electronics Inc+ 375,000 759,375
35,000 Power (R F) Products Inc 233,780 266,875
30,000 Uniphase Corp+ 532,500 948,750
------------ ------------
$ 3,603,728 $ 5,656,625
</TABLE>
69
<PAGE> 73
MANAGED SERIES INVESTMENT TRUST -- GROWTH STOCK MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRONIC SEMICONDUCTORS - 4.73%
5,500 Clare (C P) Corp+ $ 88,000 $ 132,000
105,000 Genus Inc+ 1,469,111 1,443,750
34,000 Intel Corp 1,245,375 2,086,750
40,000 Lattice Semiconductor Corp+ 1,246,710 1,315,000
20,000 Microsemi Corp+ 251,250 255,000
32,000 OnTrak Systems Inc+ 881,554 860,000
30,000 Semtech Corp+ 516,250 750,000
------------ ------------
$ 5,698,250 $ 6,842,500
ENERGY & RELATED - 3.25%
30,000 Anadarko Petroleum Corp $ 1,395,765 $ 1,432,500
35,000 Ensco International Inc+ 582,801 630,000
50,000 Global Marine Inc+ 246,750 337,500
35,000 KCS Energy 714,087 507,500
20,000 Sonat Offshore Drilling Co 657,600 685,000
20,000 Tosco Corp 723,139 642,500
22,500 Trigen Energy Corp 395,548 469,688
------------ ------------
$ 4,715,690 $ 4,704,688
ENTERTAINMENT - 5.49%
44,500 Anchor Gaming+ $ 757,390 $ 1,168,125
72,000 Children's Discovery Centers of America Inc+ 1,075,166 972,000
48,000 Circus Circus Entertainment Inc+ 1,625,881 1,572,000
35,000 Mirage Resorts Inc+ 751,190 1,203,125
44,000 Regal Cinemas Inc+ 1,060,178 1,496,000
80,800 Sports Club Inc+ 622,853 368,650
60,000 Station Casino Inc+ 997,110 1,162,500
------------ ------------
$ 6,889,768 $ 7,942,400
</TABLE>
70
<PAGE> 74
MANAGED SERIES INVESTMENT TRUST -- GROWTH STOCK MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
ENVIRONMENTAL CONTROL - 2.53%
100,000 Molten Metal Technology Inc+ $ 1,944,916 $ 2,225,000
45,000 Sanifill Inc+ 1,248,096 1,434,375
------------ ------------
$ 3,193,012 $ 3,659,375
FINANCE & RELATED - 3.62%
35,000 Cole Taylor Financial Group Inc $ 723,235 $ 805,000
45,000 Countrywide Credit Industries Inc 895,700 990,000
129,500 Envoy (New) Corp+ 633,367 1,359,750
9,000 FelCor Suite Hotels Inc 226,000 247,500
2,500 First Financial Management Corp+ 179,833 225,313
20,000 NHP Inc+ 252,500 260,000
25,000 Student Loan Marketing Assoc 947,210 1,353,125
------------ ------------
$ 3,857,845 $ 5,240,688
FOOD & RELATED - 2.74%
40,000 Coca-Cola Femsa SA ADR $ 1,013,683 $ 925,000
29,000 General Nutrition Co Inc+ 764,250 1,210,750
20,000 Heinz (H J) Co 864,076 847,500
80,000 Whole Foods Market Inc+ 1,210,630 975,000
------------ ------------
$ 3,852,639 $ 3,958,250
GENERAL BUSINESS & RELATED - 0.85%
20,000 Action Performance Co Inc+ $ 281,250 $ 322,500
30,000 La Quinta Inns Inc 863,948 900,000
------------ ------------
$ 1,145,198 $ 1,222,500
HEALTHCARE - 9.59%
10,000 American Oncology Resources Inc+ $ 210,000 $ 377,500
52,500 Coram Healthcare+ 911,861 255,938
75,000 Genesis Health Ventures Inc+ 1,905,675 2,371,875
115,000 Healthsouth Corp+ 2,241,055 2,716,875
</TABLE>
71
<PAGE> 75
MANAGED SERIES INVESTMENT TRUST -- GROWTH STOCK MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
57,500 Mid Atlantic Medical Services+ $ 1,164,770 $ 1,070,938
65,000 Physician Corp of America+ 1,082,640 1,040,000
60,000 Renal Treatment Centers+ 1,178,875 1,950,000
65,000 Value Health Inc+ 2,409,123 2,250,625
49,000 Vencor Inc+ 1,532,047 1,451,625
120,000 Work Recovery Inc+ 452,036 382,500
------------ ------------
$ 13,088,082 $ 13,867,876
HOSPITAL & MEDICAL SUPPLIES - 2.88%
50,000 Angeion Corp+ $ 118,750 $ 387,500
80,000 Bioject Medical Technologies+ 306,665 170,000
65,000 Endosonics Corp+ 578,190 739,375
63,500 Heart Technology Inc+ 1,424,381 1,730,375
50,000 Sola International Inc+ 997,890 1,143,750
------------ ------------
$ 3,425,876 $ 4,171,000
MANUFACTURING PROCESSING - 2.15%
80,000 Lydall Inc+ $ 1,246,357 $ 1,910,000
54,500 Pall Corp 1,260,075 1,192,188
------------ ------------
$ 2,506,432 $ 3,102,188
PHARMACEUTICALS - 1.69%
25,000 Astra AB ADR Class A+ $ 834,375 $ 828,750
20,000 Genzyme Corp - General Division+ 850,000 1,117,500
75,000 Seragen Inc+ 514,332 496,875
------------ ------------
$ 2,198,707 $ 2,443,125
PUBLISHING & MEDIA - 0.28%
10,000 Edmark Corp+ $ 377,500 $ 400,000
</TABLE>
72
<PAGE> 76
MANAGED SERIES INVESTMENT TRUST -- GROWTH STOCK MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
RETAIL STORES - 2.22%
45,000 Barnes & Noble+ $ 1,279,194 $ 1,760,625
15,000 Claire's Stores Inc 277,334 324,375
32,000 Pacific Sunwear of California+ 442,375 208,000
30,000 PetSmart Inc+ 812,230 911,250
------------ ------------
$ 2,811,133 $ 3,204,250
TELECOMMUNICATIONS - 10.56%
55,000 California Microwave Inc+ $ 1,634,563 $ 1,443,750
45,000 DSC Communications Corp+ 1,846,563 2,362,500
46,000 DSP Communications Inc+ 610,290 1,173,000
60,000 Geotek Communications Inc+ 524,695 468,750
45,000 Harmonic Lightwaves Inc+ 827,657 680,625
60,000 LCI International Inc+ 1,285,963 2,392,500
38,000 Natural Microsystems Corp+ 849,551 940,500
50,000 Nokia Corp ADR Class A 1,829,750 3,468,750
46,500 Paging Network Inc+ 1,320,007 1,836,750
15,000 WorldCom Inc+ 453,750 505,313
------------ ------------
$ 11,182,789 $ 15,272,438
TRANSPORTATION - 2.42%
30,000 Atlantic Coast Airlines Inc+ $ 167,813 $ 228,750
30,000 Greenbrier Companies Inc 475,638 390,000
77,500 Landair Services Inc+ 1,403,448 1,065,625
70,000 Southwest Airlines Co 1,769,155 1,811,250
------------ ------------
$ 3,816,054 $ 3,495,625
TOTAL COMMON STOCKS $ 99,168,082 $121,674,727
</TABLE>
73
<PAGE> 77
MANAGED SERIES INVESTMENT TRUST -- GROWTH STOCK MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
PREFERRED STOCKS - 0.73%
TELECOMMUNICATIONS - 0.73%
20,000 LCI International Inc Convertible $ 500,000 $ 1,052,500
MUTUAL FUNDS - 0.38%
CLOSED-END MUTUAL FUNDS - 0.38%
15,000 Emerging Markets Infrastructure Fund $ 151,875 $ 148,125
25,000 Morgan Stanley India Investment Fund 345,910 259,375
15,000 The India Fund Inc 213,750 146,250
------------ ------------
TOTAL MUTUAL FUNDS $ 711,535 $ 553,750
WARRANTS - 3.21%
50,000 Angeion Corp Expires 03/12/1996 $ 0 $ 81,250
115,000 Intel Corp Expires 03/14/1998 830,719 3,838,125
5,000 Interlink Electronics Inc Expires 06/07/1996 0 16,875
100,000 Viacom Inc Class E Expires 07/07/1999 729,738 700,000
------------ ------------
TOTAL WARRANTS $ 1,560,457 $ 4,636,250
</TABLE>
74
<PAGE> 78
MANAGED SERIES INVESTMENT TRUST -- GROWTH STOCK MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C>
CORPORATE BONDS & NOTES - 1.94%
CONVERTIBLE CORPORATE BONDS - 1.94%
$ 600,000 Careline Inc 8.00 % 05/01/01 $ 591,000
500,000 First Financial Management 5.00 12/15/99 699,375
595,000 LDDS Communications Inc 5.00 08/15/03 627,725
227,200 Oryx Energy Co 7.50 05/15/14 193,688
500,000 Scholastic Co 5.00 08/15/05 505,000
150,000 Vencor Inc 6.00 10/01/02 186,370
------------
TOTAL CORPORATE BONDS & NOTES $ 2,803,158
(Cost $2,531,064)
SHORT-TERM INSTRUMENTS - 9.97%
U.S. TREASURY BILLS - 7.59%
$ 8,000,000 U.S. Treasury Bills 5.34 %(F) 09/07/95 $ 7,991,834
3,000,000 U.S. Treasury Bills 5.54 (F) 09/21/95 2,990,532
------------
$ 10,982,366
REPURCHASE AGREEMENTS - 2.38%
$ 3,440,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.80 % 09/03/95 $ 3,440,000
------------
TOTAL SHORT-TERM INSTRUMENTS $ 14,422,366
(Cost $14,423,673)
</TABLE>
75
<PAGE> 79
MANAGED SERIES INVESTMENT TRUST -- GROWTH STOCK MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $118,894,811)*
(Notes 1 and 3) 100.37% $145,142,751
Other Assets and Liabilities, Net (0.37) (533,996)
------ ------------
TOTAL NET ASSETS 100.00% $144,608,755
------ ------------
------ ------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
(F) YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 31,735,022
Gross Unrealized Depreciation (5,487,082)
-------------
NET UNREALIZED APPRECIATION $ 26,247,940
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
76
<PAGE> 80
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS - 90.26%
123,275 Abbott Laboratories $ 3,750,611 $ 4,776,906
15,936 Advanced Micro Devices+ 444,054 537,840
17,441 Aetna Life & Casualty Co 963,253 1,190,348
18,018 Ahmanson (H F) & Co 345,688 427,928
17,219 Air Products & Chemicals Inc 774,672 923,369
76,301 Airtouch Communications+ 1,920,374 2,479,783
4,247 Alberto-Culver Co Class B 102,160 121,040
39,228 Albertson's Inc 1,111,058 1,250,393
34,671 Alcan Aluminium Ltd 836,618 1,131,141
8,465 Alco Standard Corp 501,748 681,433
6,823 Alexander & Alexander Services 138,495 157,782
9,914 Allergan Inc 244,896 301,138
43,924 Allied Signal Inc 1,594,028 1,949,128
69,224 Allstate Corp 1,824,130 2,344,963
29,145 Alltel Corp 878,125 823,346
27,536 Aluminum Co of America 1,090,426 1,572,994
12,641 ALZA Corp+ 292,978 300,224
18,161 Amdahl Corp+ 135,639 165,719
14,348 Amerada Hess Corp 707,685 679,737
29,179 American Brands Inc 996,812 1,225,518
28,689 American Electric Power Inc 931,019 979,012
76,608 American Express Corp 2,212,971 3,093,048
31,606 American General Corp 936,637 1,114,112
11,502 American Greetings Corp Class A 333,169 353,687
47,630 American Home Products Corp 2,990,772 3,667,510
73,236 American International Group Inc 4,575,045 5,904,653
22,914 American Stores Co 575,193 673,099
85,429 Ameritech Corp 3,471,900 4,378,236
40,896 Amgen Inc+ 1,014,479 1,957,896
76,666 Amoco Corp 4,529,885 4,887,458
32,404 AMP Inc 1,122,895 1,316,413
11,780 AMR Corp+ 728,981 830,490
5,926 Andrew Corp+ 171,343 345,190
39,601 Anheuser-Busch Inc 2,058,702 2,262,207
18,676 Apple Computer Inc 643,125 803,068
</TABLE>
77
<PAGE> 81
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
13,010 Applied Materials Inc+ $ 741,823 $ 1,353,040
83,657 Archer-Daniels-Midland Co 1,273,775 1,390,792
16,345 Armco Inc+ 102,835 102,156
5,736 Armstrong World Industries Inc 262,729 329,103
6,525 ASARCO Inc 175,262 211,247
9,581 Ashland Inc 331,928 313,778
244,401 AT & T Corp 13,343,572 13,808,657
24,863 Atlantic Richfield Corp 2,670,591 2,713,175
7,373 Autodesk Inc 221,620 340,080
22,232 Automatic Data Processing 1,221,821 1,445,080
8,187 Avery Dennison Corp 257,417 335,667
10,571 Avon Products Inc 630,513 746,577
21,764 Baker Hughes Inc 466,202 489,690
4,665 Ball Corp 135,830 158,610
7,204 Bally Entertainment Corp+ 57,957 87,349
22,768 Baltimore Gas & Electric Co 533,701 597,660
60,975 Banc One Corp 2,069,497 2,050,284
17,197 Bank of Boston Corp 481,411 756,668
29,538 Bank of New York Inc 1,016,092 1,284,903
57,771 BankAmerica Corp 2,706,184 3,264,062
12,137 Bankers Trust N Y Corp 830,658 835,936
8,078 Bard (C R) Inc 203,838 250,418
14,969 Barnett Banks Inc 684,383 855,104
54,542 Barrick Gold Corp 1,394,570 1,384,003
2,197 Bassett Furniture Industries 62,447 54,376
9,032 Bausch & Lomb Inc 374,738 359,022
43,142 Baxter International Inc 1,193,821 1,682,538
10,391 Becton Dickenson & Co 452,311 585,793
67,407 Bell Atlantic Corp 3,736,652 4,027,568
76,631 BellSouth Corp 4,555,350 5,268,381
7,898 Bemis Co Inc 189,108 229,042
8,140 Beneficial Corp 315,241 399,878
16,968 Bethlehem Steel Corp+ 316,206 248,157
15,095 Beverly Enterprises+ 194,856 200,009
17,879 Biomet Inc+ 200,094 288,299
</TABLE>
78
<PAGE> 82
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
13,116 Black & Decker Corp $ 288,187 $ 424,631
16,139 Block (H & R) Inc 646,950 629,421
19,418 Boatmen's Bancshares Inc 617,126 718,466
52,752 Boeing Co 2,474,146 3,362,940
7,269 Boise Cascade Corp 191,310 311,658
23,173 Boston Scientific Corp+ 517,612 921,127
4,581 Briggs & Stratton Corp 154,471 173,505
78,331 Bristol-Myers Squibb Co 4,487,536 5,375,465
2,813 Brown Group Inc 94,722 51,337
10,611 Brown-Forman Corp Class B 312,842 392,607
32,852 Browning-Ferris Industries Inc 1,010,172 1,104,649
339 Bruno's Inc 4,030 3,475
14,749 Brunswick Corp 298,974 296,824
13,838 Burlington Northern Inc 766,184 958,282
19,578 Burlington Resources Inc 821,172 800,251
11,069 Cabletron Systems Inc+ 587,819 585,273
38,529 Campbell Soup Co 1,522,945 1,762,702
23,789 Capital Cities/ABC Inc 1,788,728 2,735,735
24,191 Carolina Power & Light Co 661,436 740,849
30,901 Caterpillar Inc 1,621,244 2,074,230
10,014 CBS Inc 625,450 798,617
4,367 Centex Corp 124,156 127,735
29,555 Central & South West Corp 741,093 724,098
7,069 Ceridian Corp+ 177,063 309,269
14,419 Champion International Corp 521,663 816,476
15,789 Charming Shoppes Inc 151,874 82,892
27,390 Chase Manhattan Corp 1,041,497 1,574,925
37,238 Chemical Banking Corp Class A 1,490,773 2,169,114
100,731 Chevron Corp 4,493,675 4,872,862
56,975 Chrysler Corp 2,725,607 3,069,528
13,480 Chubb Corp 1,077,715 1,230,050
11,181 CIGNA Corp 771,353 1,081,762
5,182 Cincinnati Milacron Inc 120,894 171,654
23,996 Cinergy Corp 557,310 614,898
14,942 Circuit City Stores Inc 370,019 515,499
</TABLE>
79
<PAGE> 83
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
41,451 Cisco Systems Inc+ $ 1,324,910 $ 2,720,222
61,401 Citicorp 2,576,213 4,075,491
8,192 Clorox Co 434,201 553,984
16,195 Coastal Corp 468,106 530,386
195,825 Coca-Cola Co 9,077,114 12,581,756
22,349 Colgate-Palmolive Co 1,308,213 1,519,732
7,760 Columbia Gas System Inc+ 217,815 273,540
68,457 Columbia HCA Healthcare Corp 2,782,100 3,217,479
37,022 Comcast Corp Class A 680,979 791,345
6,693 Community Psychiatric Centers+ 83,592 78,643
40,426 Compaq Computer Corp+ 1,338,915 1,930,342
24,765 Computer Associates International Inc 1,076,356 1,721,168
8,473 Computer Sciences Corp+ 358,912 510,498
37,877 ConAgra Inc 1,128,609 1,434,591
12,141 Conrail Inc 674,714 816,482
36,289 Consolidated Edison Co 1,067,584 1,025,164
6,661 Consolidated Freightways 153,370 172,353
14,415 Consolidated Natural Gas Co 589,056 556,779
17,098 Cooper Industries Inc 680,197 649,724
12,951 Cooper Tire & Rubber Co 322,059 336,726
5,879 Coors (Adolph) Co Class B 106,864 99,943
22,309 CoreStates Financial Corp 631,331 825,433
35,413 Corning Inc 1,159,962 1,155,349
22,579 CPC International Inc 1,124,549 1,419,655
4,699 Crane Co 133,785 169,164
3,872 Cray Research Inc+ 87,962 90,024
13,887 Crown Cork & Seal Co+ 540,682 624,925
16,284 CSX Corp 1,239,285 1,343,430
26,726 CUC International Inc+ 709,937 912,025
6,270 Cummins Engine Co Inc 272,852 246,098
14,238 Cyprus Amax Minerals 404,653 398,664
15,610 Dana Corp 428,908 466,349
24,365 Darden Restaurants Inc+ 250,719 249,741
5,684 Data General Corp+ 48,046 55,419
11,113 Dayton-Hudson Corp 837,888 812,638
</TABLE>
80
<PAGE> 84
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
26,081 Dean Witter Discover & Co $ 1,025,940 $ 1,330,131
13,377 Deere & Co 983,720 1,143,734
7,838 Delta Air Lines Inc 409,526 582,951
12,746 Deluxe Corp 386,256 398,313
22,319 Detroit Edison Co 633,753 683,519
14,295 Dial Corp 311,487 343,080
22,682 Digital Equipment Corp+ 692,850 946,974
17,417 Dillard Department Stores Inc Class A 550,480 537,750
80,418 Disney (Walt) Co 3,577,609 4,513,460
26,680 Dominion Resources Inc 1,043,883 963,815
23,471 Donnelley (R R) & Sons Co 703,953 891,898
8,722 Dover Corp 505,407 695,580
42,528 Dow Chemical Co 2,816,213 3,147,072
14,970 Dow Jones & Co Inc 492,538 548,276
28,114 Dresser Industries Inc 614,414 674,736
17,649 DSC Communications Corp+ 497,668 926,573
31,642 Duke Power Co 1,216,415 1,285,456
26,150 Dun & Bradstreet Corp 1,498,267 1,513,431
85,408 DuPont (E I) de Nemours 5,156,230 5,583,548
3,067 Eastern Enterprises 77,991 93,927
12,875 Eastman Chemical Co 638,246 832,047
52,605 Eastman Kodak Co 2,541,631 3,031,363
11,982 Eaton Corp 631,120 648,526
9,226 Echlin Inc 284,163 318,297
17,401 Echo Bay Mines Ltd 196,833 180,535
9,960 Ecolab Inc 218,567 272,655
8,169 EG & G Inc 133,264 155,211
36,099 Emerson Electric Co 2,209,882 2,576,566
21,977 Engelhard Corp 408,790 620,850
38,901 Enron Corp 1,265,552 1,308,046
10,291 Enserch Corp 160,615 168,515
35,191 Entergy Corp 992,624 844,584
191,889 Exxon Corp 12,024,680 13,192,369
8,679 Federal Express Corp+ 577,008 622,718
27,892 Federal Home Loan Mortgage Corp 1,632,581 1,792,061
</TABLE>
81
<PAGE> 85
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
42,103 Federal National Mortgage Assoc $ 3,527,083 $ 4,015,574
7,048 Federal Paper Board Co 189,644 279,277
13,956 First Chicago Corp 692,893 884,462
18,517 First Data Corp 942,130 1,080,930
12,503 First Fidelity Bancorp 599,480 817,384
11,714 First Interstate Bancorp 904,038 1,118,687
3,108 First Mississippi Corp 56,010 102,953
26,589 First Union Corp 1,213,160 1,332,774
21,764 Fleet Financial Group Inc 782,718 805,268
7,047 Fleetwood Enterprises Inc 147,484 138,297
5,813 Fleming Co Inc 161,522 169,304
12,737 Fluor Corp 633,625 745,115
5,663 FMC Corp+ 310,899 436,051
158,643 Ford Motor Co 4,584,258 4,858,442
5,494 Foster Wheeler Corp 196,274 202,591
28,636 FPL Group Inc 979,118 1,113,225
31,765 Freeport McMoRan Copper & Gold Inc Class B 863,013 742,507
11,721 Fruit of the Loom Inc Class A+ 311,376 275,444
21,616 Gannett Co Inc 1,109,135 1,156,456
22,254 Gap Inc 839,199 714,910
9,767 General Dynamics Corp 416,083 513,988
261,623 General Electric Co 13,090,754 15,403,054
24,377 General Mills Inc 1,169,602 1,258,463
115,408 General Motors Corp 5,648,714 5,424,176
17,805 General Public Utilities 531,923 509,668
12,694 General Re Corp 1,490,526 1,886,646
7,325 General Signal Corp 250,209 260,038
18,965 Genuine Parts Co 689,006 746,747
13,954 Georgia-Pacific Corp 940,425 1,255,860
9,098 Giant Food Inc Class A 208,238 283,175
5,271 Giddings & Lewis Inc 99,976 86,313
68,486 Gillette Co 2,344,338 2,859,291
9,024 Golden West Financial 364,204 430,896
4,044 Goodrich (B F) Co 184,335 240,618
</TABLE>
82
<PAGE> 86
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
23,446 Goodyear Tire & Rubber Co $ 901,122 $ 937,840
14,593 Grace (W R) & Co 636,840 972,259
7,872 Grainger (W W) Inc 487,675 468,384
5,878 Great Atlantic & Pacific Tea Co 148,138 166,788
10,269 Great Lakes Chemical Corp 625,285 679,038
20,831 Great Western Financial Corp 382,466 486,925
149,790 GTE Corp 4,909,416 5,486,059
17,638 Halliburton Co 620,889 747,410
5,182 Handleman Co 56,566 49,229
11,242 Harcourt General Inc 407,721 467,948
4,667 Harland (John H) Co 107,270 103,257
7,061 Harnischfeger Industries Inc 178,008 259,492
15,876 Harrah's Entertainment Inc+ 398,089 506,048
6,007 Harris Corp 268,489 346,153
13,587 Hasbro Inc 440,209 439,879
37,581 Heinz (H J) Co 1,343,115 1,592,495
3,857 Helmerich & Payne Inc 110,661 110,407
18,032 Hercules Inc 669,781 1,003,030
12,075 Hershey Foods Corp 562,908 722,991
78,796 Hewlett Packard Co 3,605,951 6,303,680
7,470 Hilton Hotels Corp 433,736 496,755
73,536 Home Depot Inc 3,185,018 2,932,248
21,276 Homestake Mining Co 400,133 351,054
19,693 Honeywell Inc 681,271 861,569
14,969 Household International Inc 557,770 840,135
20,322 Houston Industries Inc 767,084 861,145
17,652 Illinois Tool Works Inc 746,897 1,081,185
18,079 Inco Ltd 472,893 632,765
16,354 Ingersoll-Rand Co 586,680 619,408
7,499 Inland Steel Industries Inc 244,773 205,285
127,906 Intel Corp 4,469,651 7,850,231
7,021 Intergraph Corp+ 68,521 86,885
89,645 International Business Machines Corp 5,870,513 9,267,052
17,213 International Flavors & Fragrances 718,544 824,072
19,618 International Paper Co 1,391,619 1,606,224
</TABLE>
83
<PAGE> 87
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
12,130 Interpublic Group Cos Inc $ 388,508 $ 471,554
16,331 ITT Corp 1,447,942 1,953,596
12,654 James River Corp 242,733 439,727
7,526 Jefferson-Pilot Corp 384,983 473,197
99,670 Johnson & Johnson 4,781,971 6,877,230
6,303 Johnson Controls Inc 323,691 383,695
7,018 Jostens Inc 126,628 168,432
70,525 K Mart Corp 1,193,251 960,903
4,974 Kaufman & Broad Home Corp 78,827 66,527
33,910 Kellogg Co 1,899,524 2,288,925
7,964 Kerr-McGee Corp 388,838 438,020
36,726 KeyCorp 1,145,360 1,138,506
24,726 Kimberly-Clark Corp 1,333,287 1,579,373
5,689 King World Productions+ 219,210 216,182
7,719 Knight-Ridder Inc 417,242 434,194
17,165 Kroger Co+ 405,030 560,008
42,701 Laidlaw Inc Class B 379,271 384,309
45,134 Lilly (Eli) & Co 2,615,003 3,695,346
55,084 Limited Inc 1,068,843 1,019,054
14,653 Lincoln National Corp 593,165 630,079
11,563 Liz Claiborne Inc 266,623 263,058
30,871 Lockheed Martin Corp 1,432,331 1,879,272
9,057 Loews Corp 1,012,337 1,189,863
3,229 Longs Drug Stores Corp 111,026 119,473
13,095 Loral Corp 493,789 716,951
5,161 Louisiana Land & Exploration Co 213,646 197,408
16,655 Louisiana-Pacific Corp 523,315 395,556
24,650 Lowe's Co Inc 793,046 819,613
3,674 Luby's Cafeterias Inc 82,769 73,021
11,845 Mallinckrodt Group Inc 380,339 445,668
9,663 Manor Care Inc 251,919 312,840
18,952 Marriott International 536,618 672,796
11,280 Marsh & McLennan Companies Inc 943,863 929,190
24,216 Masco Corp 672,827 678,048
34,103 Mattel Inc 729,373 988,987
</TABLE>
84
<PAGE> 88
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
38,371 May Co Department Stores Co $ 1,510,275 $ 1,625,971
16,607 Maytag Corp 288,566 257,409
22,968 MBNA Corp 575,013 815,364
8,319 McDermott International Inc 210,052 189,257
107,169 McDonald's Corp 3,195,603 3,911,669
17,636 McDonnell Douglas Corp 773,153 1,415,289
7,707 McGraw-Hill Inc 526,892 606,926
104,965 MCI Communications 2,474,004 2,525,720
8,711 Mead Corp 406,001 534,638
17,844 Medtronic Inc 837,646 1,684,028
22,656 Mellon Bank Corp 866,973 1,073,328
16,238 Melville Corp 633,121 541,943
5,713 Mercantile Stores Co Inc 213,023 262,084
191,005 Merck & Co Inc 6,634,323 9,526,374
4,245 Meredith Corp 93,900 166,616
27,160 Merrill Lynch & Co Inc 1,097,293 1,565,095
31,745 Micron Technology Inc 758,036 2,440,397
89,751 Microsoft Corp+ 5,360,502 8,301,968
7,012 Millipore Corp 178,231 244,544
64,847 Minnesota Mining & Manufacturing Co 3,443,957 3,542,267
61,142 Mobil Corp 5,093,144 5,823,776
17,653 Monsanto Co 1,336,267 1,674,828
15,370 Moore Corp Ltd 282,951 320,849
28,936 Morgan (J P) & Co Inc 1,888,159 2,108,711
5,084 Morrison Knudsen Corp 95,423 39,401
22,878 Morton International Inc 642,361 743,535
90,872 Motorola Inc 4,693,843 6,792,682
1,348 NACCO Industries Inc Class A 71,686 77,510
10,442 Nalco Chemical Co 347,784 365,470
22,645 National City Corp 633,697 673,689
19,166 National Semiconductor+ 370,374 541,440
7,446 National Service Industries Inc 197,894 215,934
41,926 NationsBank 2,178,258 2,573,208
11,577 Navistar International Corp+ 198,332 150,501
24,705 NBD Bancorp Inc 778,501 883,204
</TABLE>
85
<PAGE> 89
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
14,993 New York Times Co Class A $ 368,782 $ 372,951
24,402 Newell Co 523,600 610,050
13,355 Newmont Mining Corp 558,851 580,943
22,222 Niagara Mohawk Power Corp 381,914 266,664
7,858 NICOR Inc 206,968 201,361
11,157 Nike Inc Class B 696,859 1,033,417
19,055 NorAm Energy Corp 129,945 135,767
12,734 Nordstrom Inc 508,909 525,278
20,349 Norfolk Southern Corp 1,318,590 1,439,692
10,438 Northern States Power Co 449,544 444,920
39,111 Northern Telecom Ltd 1,215,873 1,437,329
7,670 Northrop Grumman Corp 320,532 466,911
50,004 Norwest Corp 1,316,662 1,506,371
56,506 Novell Inc+ 1,072,437 1,017,108
13,505 Nucor Corp 803,252 661,745
65,767 NYNEX Corp 2,632,983 2,959,515
48,982 Occidental Petroleum Corp 982,762 1,065,359
7,542 Ogden Corp 170,557 175,352
23,519 Ohio Edison Co 474,703 508,598
4,152 ONEOK Inc 81,566 90,825
66,636 Oracle Systems Corp+ 1,726,607 2,673,770
15,936 Oryx Energy Co+ 255,038 215,136
3,068 Outboard Marine Corp 62,287 65,579
7,820 Owens Corning Fiberglass+ 278,616 306,935
5,962 PACCAR Inc 292,690 295,119
12,632 Pacific Enterprises 278,775 303,168
66,462 Pacific Gas & Electric Co 1,813,866 1,910,783
65,486 Pacific Telesis Group 1,981,455 1,858,165
43,914 PacifiCorp 791,255 795,941
17,917 Pall Corp 313,439 391,934
23,046 Panhandle Eastern Corp 506,007 576,150
11,395 Parker Hannifin Corp 325,497 451,527
34,203 PECO Energy Co 948,881 910,655
35,868 Penney (J C) Co Inc 1,778,365 1,623,027
7,150 Pennzoil Co 374,397 314,600
</TABLE>
86
<PAGE> 90
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
5,392 Peoples Energy Corp $ 147,510 $ 146,932
9,522 Pep Boys-Manny Moe & Jack 280,774 261,855
121,626 Pepsico Inc 4,376,518 5,503,577
6,437 Perkin-Elmer Corp 200,332 219,663
97,540 Pfizer Inc 3,367,452 4,816,038
10,793 Phelps Dodge Corp 603,471 684,006
130,466 Philip Morris Co Inc 7,283,707 9,736,025
40,422 Phillips Petroleum Co 1,307,844 1,328,873
13,108 Pioneer Hi Bred International Inc 467,188 563,644
23,334 Pitney Bowes Inc 893,813 947,944
6,406 Pittston Services Group 162,278 162,552
36,853 Placer Dome Inc 821,564 962,785
35,330 PNC Bank Corp 1,004,700 927,413
6,959 Polaroid Corp 239,660 303,586
4,548 Potlatch Corp 184,329 180,215
31,853 PPG Industries Inc 1,214,360 1,361,716
21,329 Praxair Inc 437,775 554,554
9,453 Premark International Inc 368,001 495,101
30,032 Price/Costco Inc+ 480,368 506,790
106,171 Procter & Gamble Co 6,140,576 7,365,613
14,859 Providian Corp 497,010 570,214
37,812 Public Services Enterprise Group 1,079,674 1,039,830
4,146 Pulte Corp 108,375 111,942
20,614 Quaker Oats Co 730,280 716,337
15,533 Ralston-Purina Group 612,973 807,716
6,737 Raychem Corp 252,120 295,586
19,027 Raytheon Co 1,260,170 1,538,809
12,348 Reebok International Ltd 397,329 438,354
8,056 Republic New York Corp 470,412 453,150
9,689 Reynolds Metals Co 485,015 578,918
12,984 Rite Aid Corp 273,919 363,552
6,031 Roadway Services Inc 364,508 331,705
33,488 Rockwell International Corp 1,254,735 1,498,588
10,500 Rohm & Haas Co 618,851 627,375
13,011 Rowan Co Inc+ 105,717 105,714
</TABLE>
87
<PAGE> 91
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
82,824 Royal Dutch Petroleum Co $ 8,959,408 $ 9,876,762
24,798 Rubbermaid Inc 696,179 737,741
6,070 Russell Corp 177,177 166,925
8,151 Ryan's Family Steak House+ 60,994 61,133
12,200 Ryder System Inc 306,783 295,850
9,737 SAFECO Corp 548,935 629,254
8,901 Safety-Kleen Corp 144,699 120,164
16,378 Salomon Inc 718,149 628,506
13,930 Santa Fe Energy Resources Inc+ 130,217 132,335
23,435 Santa Fe Pacific Corp 420,860 664,968
20,288 Santa Fe Pacific Gold Corp 306,618 245,992
74,067 Sara Lee Corp 1,746,062 2,055,359
93,916 SBC Communication Inc 3,982,383 4,754,498
68,993 SCEcorp 1,141,392 1,147,009
57,480 Schering-Plough Corp 1,955,536 2,680,005
37,446 Schlumberger Ltd 2,251,079 2,415,267
11,805 Scientific-Atlanta Inc 216,377 236,100
23,417 Scott Paper Co 661,930 1,085,963
57,558 Seagram Co Ltd 1,719,238 2,129,646
59,945 Sears Roebuck & Co 1,600,562 1,940,719
14,875 Service Corp International 391,969 520,625
3,581 Shared Medical System Corp 99,358 132,049
19,857 Shawmut National Corp 470,726 642,870
13,186 Sherwin Williams Co 432,300 473,048
6,360 Shoney's Inc+ 101,254 73,935
7,683 Sigma Aldrich Corp 293,371 368,784
24,506 Silicon Graphics Inc+ 847,951 1,035,379
6,297 Snap-On Inc 233,907 258,177
13,352 Sonat Inc 417,401 423,926
102,708 Southern Co 2,068,549 2,169,707
22,195 Southwest Airlines Co 595,540 574,296
3,123 Springs Industries Inc Class A 109,292 134,679
53,842 Sprint Corp 1,877,289 1,911,391
7,190 St Jude Medical Inc+ 256,919 428,704
13,062 St Paul Co Inc 555,386 708,614
</TABLE>
88
<PAGE> 92
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
6,838 Stanley Works $ 273,072 $ 302,582
14,752 Stone Container Corp+ 233,158 320,856
7,677 Stride Rite Corp 102,077 86,366
11,644 Sun Co Inc 332,754 310,022
14,764 Sun Microsystems Inc+ 424,937 854,467
17,754 SunTrust Banks Inc 873,301 1,089,652
10,773 Super Value Inc 326,554 319,150
28,163 Sysco Corp 712,428 809,686
17,931 Tandem Computers Inc+ 237,150 219,655
11,385 Tandy Corp 461,097 707,293
5,059 Tektronix Inc 168,411 230,817
100,797 Tele-Communication Inc Class A+ 1,689,575 1,864,745
8,528 Teledyne Inc 165,720 203,798
13,552 Tellabs Inc+ 648,260 633,556
8,664 Temple-Inland Inc 412,074 448,362
30,806 Tenet Healthcare Corp+ 462,308 489,045
27,982 Tenneco Inc 1,334,624 1,357,127
40,079 Texaco Inc 2,552,408 2,595,115
28,832 Texas Instruments Inc 1,233,467 2,158,796
34,844 Texas Utilities Co 1,250,080 1,210,829
13,137 Textron Inc 721,363 899,885
3,077 Thomas & Betts Corp 198,592 207,698
58,646 Time Warner Inc 2,205,815 2,470,463
17,285 Times Mirror Co Class A 380,632 529,353
4,775 Timken Co 167,071 215,472
11,208 TJX Companies Inc 247,036 140,100
11,054 Torchmark Corp 467,495 442,160
42,828 Toys R Us Inc+ 1,455,454 1,113,528
10,666 Transamerica Corp 571,915 725,288
49,407 Travelers Inc 1,804,891 2,371,536
10,149 Tribune Co 565,419 679,983
4,446 Trinova Corp 152,149 163,391
10,006 TRW Inc 678,982 779,217
11,747 Tyco International Inc 570,699 694,541
15,136 U.S. Bancorp 391,295 433,268
</TABLE>
89
<PAGE> 93
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
24,712 U.S. Healthcare Inc $ 1,010,879 $ 790,784
3,591 U.S. Life Corp 133,251 154,862
72,750 U.S. West Inc 3,050,630 3,164,625
33,116 Unicom Corp 829,816 931,388
24,749 Unilever NV 2,745,497 3,059,595
10,850 Union Camp Corp 511,425 617,094
21,151 Union Carbide Corp 583,128 750,861
15,816 Union Electric Co 567,604 563,445
31,684 Union Pacific Corp 1,823,704 2,075,302
26,398 Unisys Corp+ 276,072 211,184
26,705 United Healthcare Corp 1,221,762 1,128,286
8,823 United States Surgical 203,350 223,884
19,023 United Technologies Corp 1,237,175 1,586,043
37,730 Unocal Corp 1,076,668 1,098,886
11,183 UNUM Corp 549,483 536,784
26,722 Upjohn Co 835,394 1,132,345
9,528 USAir Group Inc+ 87,002 77,415
17,105 USF & G Corp 251,755 310,028
30,184 UST Inc 838,679 822,514
45,888 USX - Marathon Group 812,895 946,440
12,592 USX - US Steel Group 446,346 412,388
6,428 Varity Corp+ 242,903 292,474
9,817 VF Corp 482,786 537,481
55,560 Viacom Inc Class B+ 2,232,861 2,701,605
26,489 Wachovia Corp 924,712 1,052,938
354,915 Wal Mart Stores Inc 8,887,407 8,739,782
37,960 Walgreen Co 779,045 930,020
20,802 Warner Lambert Co 1,479,637 1,879,981
7,568 Wells Fargo & Co 1,133,974 1,410,486
15,723 Wendy's International Inc 252,496 308,564
8,192 Western Atlas Inc+ 356,239 371,712
55,177 Westinghouse Electric Corp 744,211 751,787
10,442 Westvaco Corp 367,966 460,753
31,805 Weyerhaeuser Co 1,342,571 1,463,030
11,395 Whirlpool Corp 627,993 621,028
</TABLE>
90
<PAGE> 94
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C>
COMMON STOCKS (CONTINUED)
16,178 Whitman Corp $ 260,336 $ 323,560
8,479 Willamette Industries Inc 580,516 582,931
15,691 Williams Co Inc 468,072 574,683
11,748 Winn-Dixie Stores Inc 596,955 699,006
74,693 WMX Technologies Inc 2,129,915 2,194,107
20,433 Woolworth Corp 374,614 273,291
14,028 Worthington Industries Inc 280,311 280,560
17,958 Wrigley (Wm) Jr Co 803,959 810,355
16,532 Xerox Corp 1,642,245 1,996,239
4,332 Yellow Corp 82,219 61,190
7,252 Zenith Electronic Corp+ 66,196 61,642
1,920 Zurn Industries Inc 44,187 42,000
------------ ------------
TOTAL COMMON STOCKS $536,013,067 $638,613,538
</TABLE>
91
<PAGE> 95
MASTER INVESTMENT PORTFOLIO -- S&P 500 INDEX MASTER SERIES -- AUGUST 31, 1995
(UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 9.95%
$ 471,000 U.S. Treasury Bills* 5.20 % 09/28/95 $ 469,090
2,348,000 U.S. Treasury Bills* 5.38 10/12/95 2,333,691
19,152,000 U.S. Treasury Bills* 5.39 10/19/95 19,015,831
16,991,000 U.S. Treasury Bills* 5.40 11/02/95 16,835,889
2,149,000 U.S. Treasury Bills* 5.41 11/09/95 2,127,168
26,969,000 U.S. Treasury Bills* 5.41 11/16/95 26,666,651
2,367,000 U.S. Treasury Bills* 5.42 11/24/95 2,337,746
626,000 U.S. Treasury Bills* 5.54 09/21/95 624,114
------------
TOTAL SHORT-TERM INSTRUMENTS $ 70,410,180
(Cost $70,399,099)
TOTAL INVESTMENTS IN SECURITIES
(Cost $606,412,166)** (Notes 1 and 3) 100.21 % $709,023,718
Other Assets and Liabilities, Net (0.21) (1,507,025)
------ ------------
TOTAL NET ASSETS 100.00 % $707,516,693
------ ------------
------ ------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
+ NON-INCOME EARNING SECURITIES.
* THESE U.S. TREASURY BILLS ARE PLEDGED AS COLLATERAL FOR SECURITY CONTRACTS.
SEE NOTE 1.
** COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 111,360,315
Gross Unrealized Depreciation (8,748,763)
-------------
NET UNREALIZED APPRECIATION $ 102,611,552
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
92
<PAGE> 96
MANAGED SERIES INVESTMENT TRUST -- SHORT-INTERMEDIATE TERM MASTER
SERIES -- AUGUST 31, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C>
CORPORATE BONDS & NOTES - 27.48%
CORPORATE NOTES - 23.14%
$ 500,000 Associates Corp of North America 7.80 % 03/13/00 $ 524,725
250,000 BankAmerica Corp 8.38 03/15/02 269,870
500,000 Comdisco Inc 7.25 04/15/98 509,330
250,000 First Union Bank 6.75 11/15/98 251,530
250,000 Ford Holdings 9.25 07/15/97 262,723
250,000 NBD Bancorp Inc 6.55 06/02/97 252,138
500,000 Norwest Financial Inc 7.88 02/15/02 531,390
198,000 Sears Roebuck & Co 9.25 08/01/97 208,292
------------
$ 2,809,998
YANKEE BONDS - 4.34%
$ 500,000 Westpac Banking (Australia) 7.88 % 10/15/02 $ 527,495
------------
TOTAL CORPORATE BONDS & NOTES $ 3,337,493
(Cost $3,289,502)
U.S. GOVERNMENT AGENCY SECURITIES - 15.43%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 15.43%
$ 900,784 Federal National Mortgage Assoc 7.00 % 06/01/09 $ 902,188
967,960 Federal National Mortgage Assoc 7.50 05/01/25 970,980
------------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES $ 1,873,168
(Cost $1,830,983)
U.S. TREASURY SECURITIES - 51.83%
U.S. TREASURY BONDS - 21.68%
$ 2,000,000 U.S. Treasury Bonds 10.75 % 08/15/05 $ 2,632,180
</TABLE>
93
<PAGE> 97
MANAGED SERIES INVESTMENT TRUST -- SHORT-INTERMEDIATE TERM MASTER
SERIES -- AUGUST 31, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES (CONTINUED)
U.S. TREASURY NOTES - 30.15%
$ 3,500,000 U.S. Treasury Notes 8.50 % 07/15/97 $ 3,661,315
------------
TOTAL U.S. TREASURY SECURITIES $ 6,293,495
(Cost $6,075,974)
SHORT-TERM INSTRUMENTS - 4.84%
REPURCHASE AGREEMENTS - 4.84%
$ 588,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.80 % 09/03/95 $ 588,000
(Cost $588,000)
TOTAL INVESTMENTS IN SECURITIES
(Cost $11,784,459)* (Notes 1 and 3) 99.58% $ 12,092,156
Other Assets and Liabilities, Net 0.42 50,861
------ ------------
TOTAL NET ASSETS 100.00% $ 12,143,017
------ ------------
------ ------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 338,072
Gross Unrealized Depreciation (30,375)
-------------
NET UNREALIZED APPRECIATION $ 307,697
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
94
<PAGE> 98
MASTER INVESTMENT PORTFOLIO -- U.S. TREASURY ALLOCATION MASTER SERIES -- AUGUST
31, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C>
U.S. TREASURY SECURITIES - 39.56%
U.S. TREASURY BONDS - 19.37%
$ 1,000,000 U.S. Treasury Bonds 7.13 % 02/15/23 $ 1,045,311
1,000,000 U.S. Treasury Bonds 7.25 05/15/16 1,054,061
500,000 U.S. Treasury Bonds 7.50 11/15/24 548,125
600,000 U.S. Treasury Bonds 7.63 11/15/22 664,125
3,100,000 U.S. Treasury Bonds 7.88 02/15/21 3,500,089
100,000 U.S. Treasury Bonds 8.00 08/15/01 101,906
800,000 U.S. Treasury Bonds 8.13 08/15/19 924,500
1,000,000 U.S. Treasury Bonds 8.13 08/15/21 1,161,875
800,000 U.S. Treasury Bonds 8.75 05/15/17 977,500
1,000,000 U.S. Treasury Bonds 9.00 11/15/18 1,256,250
700,000 U.S. Treasury Bonds 9.88 11/15/15 939,093
------------
$ 12,172,835
U.S. TREASURY NOTES - 20.19%
$ 2,900,000 U.S. Treasury Notes 7.50 % 11/15/01 $ 3,095,750
800,000 U.S. Treasury Notes 7.50 05/15/02 857,500
1,800,000 U.S. Treasury Notes 7.75 02/15/01 1,934,435
1,500,000 U.S. Treasury Notes 7.88 08/15/01 1,626,563
1,400,000 U.S. Treasury Notes 8.00 05/15/01 1,524,250
3,300,000 U.S. Treasury Notes 8.50 11/15/00 3,648,563
------------
$ 12,687,061
TOTAL U.S. TREASURY SECURITIES $ 24,859,896
(Cost $24,511,593)
</TABLE>
95
<PAGE> 99
MASTER INVESTMENT PORTFOLIO -- U.S. TREASURY ALLOCATION MASTER SERIES -- AUGUST
31, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 50.48%
U.S. TREASURY BILLS - 50.48%
$ 685,000 U.S. Treasury Bills 5.37 % 10/05/95 $ 681,521
61,000 U.S. Treasury Bills 5.38 10/12/95 60,628
422,000 U.S. Treasury Bills 5.39 10/19/95 419,000
5,921,000 U.S. Treasury Bills 5.40 11/02/95 5,866,947
632,000 U.S. Treasury Bills 5.41 11/09/95 625,580
12,344,000 U.S. Treasury Bills 5.41 11/16/95 12,205,611
91,000 U.S. Treasury Bills 5.42 11/24/95 89,877
11,803,000 U.S. Treasury Bills 5.54 09/21/95 11,767,431
------------
TOTAL SHORT-TERM INSTRUMENTS $ 31,716,595
(Cost $31,714,959)
TOTAL INVESTMENTS IN SECURITIES
(Cost $56,226,553)* 90.04% $ 56,576,491
(Notes 1 and 3)
Other Assets and Liabilities, Net 9.96 6,256,727
------ ------------
TOTAL NET ASSETS 100.00% $ 62,833,218
------ ------------
------ ------------
- -------------------------------------------------------------------------------------------------------
</TABLE>
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 350,353
Gross Unrealized Depreciation (415)
-------------
NET UNREALIZED APPRECIATION $ 349,938
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
96
<PAGE> 100
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
AUGUST 31, 1995
<TABLE>
<CAPTION>
MASTER MASTER
INVESTMENT INVESTMENT MANAGED SERIES
PORTFOLIO PORTFOLIO INVESTMENT TRUST
ASSET ALLOCATION BOND INDEX GROWTH STOCK
MASTER SERIES MASTER SERIES MASTER SERIES
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below)
(Note 1) $341,695,794 $120,819,329 $145,142,751
Cash 759,535 3,976 1,609
Receivables:
Dividends and interest 1,283,224 1,683,355 44,745
Investment securities sold 0 0 0
Variation margin on
futures contracts 0 0 0
Prepaid expenses 0 0 1,715
Organizational costs (Note
2) 0 0 8,615
TOTAL ASSETS 343,738,553 122,506,660 145,199,435
LIABILITIES
PAYABLES:
Investment securities
purchased 0 0 318,928
Allocation to beneficial
interest holders 1,280,805 707,858 33,449
Due to sponsor and
distributor 0 0 8,615
Due to WFB (Note 2) 200,759 22,602 225,482
Other 0 16,183 4,206
TOTAL LIABILITIES 1,481,564 746,643 590,680
TOTAL NET ASSETS $342,256,989 $121,760,017 $144,608,755
INVESTMENTS AT COST $307,488,962 $117,335,671 $118,894,811
- ----------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
97
<PAGE> 101
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
MASTER
MANAGED SERIES INVESTMENT
MASTER INVESTMENT TRUST PORTFOLIO
INVESTMENT SHORT- U.S.
PORTFOLIO INTERMEDIATE TREASURY
S&P 500 INDEX TERM ALLOCATION
MASTER SERIES MASTER SERIES MASTER SERIES
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below)
(Note 1) $709,023,718 $12,092,156 $56,576,491
Cash 27,981 1,390 1,130
Receivables:
Dividends and interest 1,753,979 122,510 481,198
Investment securities sold 0 0 11,753,406
Variation margin on
futures contracts 216,525 0 0
Prepaid expenses 0 0 0
Organizational costs (Note
2) 0 8,615 0
TOTAL ASSETS 711,022,203 12,224,671 68,812,225
LIABILITIES
PAYABLES:
Investment securities
purchased 400,289 0 5,637,219
Allocation to beneficial
interest holders 3,009,501 72,058 310,023
Due to sponsor and
distributor 0 8,615 0
Due to WFB (Note 2) 82,269 0 31,765
Other 13,451 981 0
TOTAL LIABILITIES 3,505,510 81,654 5,979,007
TOTAL NET ASSETS $707,516,693 $12,143,017 $62,833,218
INVESTMENTS AT COST $606,412,166 $11,784,459 $56,226,553
- ----------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
98
<PAGE> 102
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED AUGUST 31, 1995
<TABLE>
<CAPTION>
MASTER MASTER
INVESTMENT INVESTMENT MANAGED SERIES
PORTFOLIO PORTFOLIO INVESTMENT TRUST
ASSET ALLOCATION BOND INDEX GROWTH STOCK
MASTER SERIES MASTER SERIES MASTER SERIES
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends $ 2,031,277 $ 0 $ 166,342
Interest 5,641,150 4,140,373 314,028
TOTAL INVESTMENT INCOME 7,672,427 4,140,373 480,370
EXPENSES (NOTE 2)
Advisory fees 565,631 53,526 353,864
Legal and audit 0 10,083 10,889
Directors fees 0 3,277 736
TOTAL EXPENSES 565,631 66,886 365,489
Less:
Waived fees by WFB (Note
2) 0 (7,652) (10,890)
NET EXPENSES 565,631 59,234 354,599
NET INVESTMENT INCOME 7,106,796 4,081,139 125,771
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments (1,616,609) (180,711) 12,646,130
Net realized gain (loss)
on sale of futures
contracts 0 0 0
Net change in unrealized
appreciation of
investments 34,586,900 4,731,944 20,874,380
Net change in unrealized
appreciation of futures
contracts 0 0 0
NET GAIN ON INVESTMENTS 32,970,291 4,551,233 33,520,510
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $40,077,087 $8,632,372 $33,646,281
- ----------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
99
<PAGE> 103
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED AUGUST 31, 1995
<TABLE>
<CAPTION>
MASTER
MANAGED SERIES INVESTMENT
MASTER INVESTMENT TRUST PORTFOLIO
INVESTMENT SHORT- U.S.
PORTFOLIO INTERMEDIATE TREASURY
S&P 500 INDEX TERM ALLOCATION
MASTER SERIES MASTER SERIES MASTER SERIES
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends $ 7,142,129 $ 0 $ 0
Interest 1,364,006 482,096 2,017,329
TOTAL INVESTMENT INCOME 8,506,135 482,096 2,017,329
EXPENSES (NOTE 2)
Advisory fees 148,062 28,386 90,916
Legal and audit 10,939 10,889 0
Directors fees 3,291 125 0
TOTAL EXPENSES 162,292 39,400 90,916
Less:
Waived fees by WFB (Note
2) (14,230) (11,015) 0
NET EXPENSES 148,062 28,385 90,916
NET INVESTMENT INCOME 8,358,073 453,711 1,926,413
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments 1,112,985 13,758 1,225,869
Net realized gain (loss)
on sale of futures
contracts 5,024,364 0 0
Net change in unrealized
appreciation of
investments 74,002,262 300,619 795,344
Net change in unrealized
appreciation of futures
contracts 323,700 0 0
NET GAIN ON INVESTMENTS 80,463,311 314,377 2,021,213
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $88,821,384 $768,088 $3,947,626
- ----------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
100
<PAGE> 104
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MASTER INVESTMENT PORTFOLIO ASSET
ALLOCATION MASTER SERIES
----------------------------------
(UNAUDITED) FOR THE
FOR THE YEAR ENDED
SIX MONTHS ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
<S> <C> <C>
- ----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 7,106,796 $ 9,844,287
Net realized gain (loss)
on sale of investments (1,616,609) 292,999
Net realized gain on sale
of futures contracts 0 0
Net change in unrealized
appreciation
(depreciation) of
investments 34,586,900 (380,068)
Net change in unrealized
appreciation of futures
contracts 0 0
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 40,077,087 9,757,218
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
BENEFICIAL INTERESTS
TRANSACTIONS 8,435,809 283,986,875
INCREASE (DECREASE) IN NET
ASSETS 48,512,896 293,744,093
NET ASSETS:
Beginning net assets 293,744,093 0
ENDING NET ASSETS $342,256,989 $293,744,093
- ----------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
101
<PAGE> 105
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MASTER INVESTMENT PORTFOLIO BOND
INDEX MASTER SERIES
----------------------------------
(UNAUDITED) FOR THE
FOR THE YEAR ENDED
SIX MONTHS ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
<S> <C> <C>
- ----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 4,081,139 $ 4,037,719
Net realized gain (loss)
on sale of investments (180,711) (498,410)
Net realized gain on sale
of futures contracts 0 0
Net change in unrealized
appreciation
(depreciation) of
investments 4,731,944 (1,248,285)
Net change in unrealized
appreciation of futures
contracts 0 0
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 8,632,372 2,291,024
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
BENEFICIAL INTERESTS
TRANSACTIONS 5,119,165 105,717,456
INCREASE (DECREASE) IN NET
ASSETS 13,751,537 108,008,480
NET ASSETS:
Beginning net assets 108,008,480 0
ENDING NET ASSETS $121,760,017 $108,008,480
- ----------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
102
<PAGE> 106
<TABLE>
<CAPTION>
MANAGED SERIES INVESTMENT TRUST MASTER INVESTMENT PORTFOLIO S&P
GROWTH STOCK MASTER SERIES 500 INDEX MASTER SERIES
---------------------------------- ----------------------------------
(UNAUDITED) FOR THE (UNAUDITED) FOR THE
FOR THE YEAR ENDED FOR THE YEAR ENDED
SIX MONTHS ENDED FEBRUARY 28, SIX MONTHS ENDED FEBRUARY 28,
AUGUST 31, 1995 1995 AUGUST 31, 1995 1995
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 125,771 $ 89,980 $ 8,358,073 $ 8,827,173
Net realized gain (loss)
on sale of investments 12,646,130 2,269,409 1,112,985 2,143,795
Net realized gain on sale
of futures contracts 0 0 5,024,364 158,998
Net change in unrealized
appreciation
(depreciation) of
investments 20,874,380 5,373,560 74,002,262 28,609,290
Net change in unrealized
appreciation of futures
contracts 0 0 323,700 1,217,675
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 33,646,281 7,732,949 88,821,384 40,956,931
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
BENEFICIAL INTERESTS
TRANSACTIONS 14,079,220 89,150,305 133,089,935 444,648,443
INCREASE (DECREASE) IN NET
ASSETS 47,725,501 96,883,254 221,911,319 485,605,374
NET ASSETS:
Beginning net assets 96,883,254 0 485,605,374 0
ENDING NET ASSETS $144,608,755 $96,883,254 $707,516,693 $485,605,374
- ----------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
103
<PAGE> 107
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MANAGED SERIES INVESTMENT TRUST
SHORT-INTERMEDIATE TERM MASTER SERIES
-------------------------------------
(UNAUDITED) FOR THE
FOR THE YEAR ENDED
SIX MONTHS ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
<S> <C> <C>
- ----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 453,711 $ 434,074
Net realized gain (loss)
on sale of investments 13,758 (267,700)
Net realized gain on sale
of futures contracts 0 0
Net change in unrealized
appreciation
(depreciation) of
investments 300,619 7,078
Net change in unrealized
appreciation of futures
contracts 0 0
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 768,088 173,452
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
BENEFICIAL INTERESTS
TRANSACTIONS (2,915,084) 14,116,561
INCREASE (DECREASE) IN NET
ASSETS (2,146,996) 14,290,013
NET ASSETS:
Beginning net assets 14,290,013 0
ENDING NET ASSETS $12,143,017 $14,290,013
- ----------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
104
<PAGE> 108
<TABLE>
<CAPTION>
MASTER INVESTMENT PORTFOLIO U.S.
TREASURY ALLOCATION MASTER SERIES
----------------------------------
(UNAUDITED) FOR THE
FOR THE YEAR ENDED
SIX MONTHS ENDED FEBRUARY 28,
AUGUST 31, 1995 1995
<S> <C> <C>
- ----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 1,926,413 $ 2,996,075
Net realized gain (loss)
on sale of investments 1,225,869 (2,077,444)
Net realized gain on sale
of futures contracts 0 0
Net change in unrealized
appreciation
(depreciation) of
investments 795,344 (445,406)
Net change in unrealized
appreciation of futures
contracts 0 0
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 3,947,626 $ 473,225
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
BENEFICIAL INTERESTS
TRANSACTIONS 2,024,078 56,388,289
INCREASE (DECREASE) IN NET
ASSETS 5,971,704 56,861,514
NET ASSETS:
Beginning net assets 56,861,514 0
ENDING NET ASSETS $62,833,218 $56,861,514
- ----------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
105
<PAGE> 109
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Master Investment Portfolio ("Master Portfolio") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. Master Portfolio was organized on October 21,
1993 as a Delaware business trust pursuant to an Agreement and Declaration of
Trust dated May 14, 1993 and had no operations prior to May 26, 1994. Master
Portfolio is currently authorized to issue fourteen separate diversified
portfolios (the "Master Series"), of which the following have commenced
operations: LifePath 2000 Master Series, LifePath 2010 Master Series, LifePath
2020 Master Series, LifePath 2030 Master Series, LifePath 2040 Master Series,
Asset Allocation Master Series, Bond Index Master Series, S&P 500 Index Master
Series and U.S. Treasury Allocation Master Series. The following significant
accounting policies are consistently followed by Master Portfolio in the
preparation of its financial statements, and such policies are in conformity
with generally accepted accounting principles for investment companies. The
financial statements for each of the LifePath Master Series are presented
separately.
SECURITY VALUATION
The securities of each Master Series (except debt securities) are valued at
the last sale price on the primary securities exchange or national securities
market on which such securities are traded. Securities not listed on an exchange
or national securities market, or securities in which there were no
transactions, are valued at the most recent bid prices. Debt securities maturing
in 60 days or less are valued at amortized cost, which approximates market
value. Debt securities, other than those maturing in 60 days or less, are valued
at the latest quoted bid price. Any securities, restricted securities or other
assets for which recent market quotations are not readily available, are valued
at fair value as determined in good faith in accordance with policies approved
by Master Portfolio's Board of Trustees.
SECURITY TRANSACTIONS AND REVENUE RECOGNITION
Securities transactions are accounted for on the date the securities are
purchased or sold (trade date). Dividend income is recognized on the ex-
107
<PAGE> 110
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
dividend date, and interest income is recognized on a daily accrual basis.
Realized gains or losses are reported on the basis of identified cost of
securities delivered. Bond discounts and premiums are amortized as required by
the Internal Revenue Code of 1986 (the "Code").
FEDERAL INCOME TAXES
Each Master Series of Master Portfolio intends to qualify as a partnership
for federal income tax purposes. Each Master Series therefore believes that it
will not be subject to any federal income tax on its income and any net capital
gains. However, each investor in a Master Series will be taxable on its
allocable share of the partnership's income and capital gains. The determination
of such share will be made in accordance with the applicable sections of the
Code.
It is intended that each Master Series' assets, income and allocations will
be managed in such a way that a regulated investment company investing in a
Master Series will be able to satisfy the requirements of Subchapter M of the
Code, assuming that the investment company invests all of its assets in the
respective Master Series.
FUTURES CONTRACTS
The S&P 500 Index Master Series may purchase futures contracts to gain
exposure to market changes as this may be more efficient or cost effective than
actually buying the securities. A futures contract is an agreement between two
parties to buy and sell a security at a set price on a future date and is
exchange traded. Upon entering into such a contract, a Master Series is required
to pledge to the broker an amount of cash, U.S. government securities or other
high-quality debt securities equal to the minimum "initial margin" requirements
of the exchange. Pursuant to the contract, the Master Series agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
the value of the contract. Such receipts or payments are known as "variation
margin" and are recorded by the Master Series as unrealized gains or losses.
When the contract is closed, the Master Series records a realized gain or loss
equal to the difference between the value of the contract at the time it was
opened and the value at the time it was closed. Pursuant to regulations and/or
published positions of the
108
<PAGE> 111
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
Securities and Exchange Commission, the S&P 500 Index Master Series is required
to segregate cash or high quality, liquid debt instruments in connection with
futures transactions in an amount generally equal to the entire value of the
underlying contracts. Risks of entering into futures contracts include the
possibility that there may be an illiquid market and that a change in the value
of the contract may not correlate with changes in the value of the underlying
securities. As of August 31, 1995, the S&P 500 Index Master Series had the
following open futures contracts:
<TABLE>
<CAPTION>
NOTIONAL NET
CONTRACT UNREALIZED
NUMBER OF CONTRACTS TYPE EXPIRATION DATE VALUE APPRECIATION
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
127 S&P 500 Index December 1995 $ 36,033,075 $ 204,825
124 S&P 500 Index September 1995 34,896,700 1,336,550
</TABLE>
The S&P 500 Index Master Series has pledged to brokers U.S. Treasury Bills
for initial margin requirements with a par value of $2,810,000.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
Master Portfolio has entered into an investment advisory agreement on behalf
of the Master Series with Wells Fargo Bank, N.A. ("WFB"). Pursuant to the
agreement, WFB has agreed to provide investment guidance and policy direction in
connection with daily portfolio management of each Master Series. For the Asset
Allocation Master Series, the Bond Index Master Series, the S&P 500 Index Master
Series, and the U.S. Treasury Allocation Master Series, WFB is entitled to be
compensated monthly, at annual rates of 0.35%, 0.08%, 0.05% and 0.30% of the
respective average daily net assets of each of these Master Series.
In connection with the Asset Allocation Master Series, the Bond Index Master
Series, the S&P 500 Index Master Series and the U.S. Treasury Allocation Master
Series, the Master Portfolio and WFB have entered into sub-advisory agreements
with Wells Fargo Nikko Investment Advisors ("WFNIA"). WFNIA is an affiliate of
Wells Fargo & Company. Pursuant to Sub-Advisory Agreements, WFNIA, subject to
the supervision and approval of WFB, provides investment advisory assistance and
the day-to-day management of each Master Series' assets, subject to the overall
109
<PAGE> 112
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
authority of the Master Portfolio's Board of Trustees. For providing these
services, WFNIA is entitled to be compensated by WFB monthly at the annual rate
of 0.20%, 0.07%, 0.04% and 0.15% of the average daily net assets of the Asset
Allocation, Bond Index, S&P 500 Index and U.S. Treasury Allocation Master
Series, respectively.
In addition, Wells Fargo Institutional Trust Company N.A. ("WFITC"), a
subsidiary of WFNIA, acts as custodian for these Master Series. Custody fees are
paid to WFITC from the subadvisory fee paid to WFNIA.
On June 21, 1995, Wells Fargo & Co. and The Nikko Securities Co., Ltd.
signed a definitive agreement to sell their partnership interests in WFNIA to
Barclays Bank PLC ("Barclays") of the U.K.. The sale, which is subject to the
approval of appropriate regulatory authorities, is expected to close in the
fourth quarter of 1995.
Barclays is one of the oldest and largest financial institutions in the
world, with approximately $264 billion in total assets at June 30, 1995.
Barclays has indicated an intention to reorganize WFNIA into one of WFNIA's two
current partners, which would be renamed BZW Global Investors. Barclays and its
affiliates have considerable experience in managing fund assets and had
approximately $35 billion of quantitative fund assets under management, as of
June 30, 1995. The BZW Division of Barclays offers a full range of investment
banking, capital markets and asset management services.
Under the Investment Company Act of 1940, this proposed change in control of
WFNIA would result in an assignment and termination of the current Sub-
Investment Advisory Agreements among WFNIA, Wells Fargo Bank and the Master
Series. Subject to approval of the Company's Board of Directors, it is
contemplated that a special meeting of shareholders of the Master Series will be
convened to consider a new Advisory Agreement with WFNIA's successor as the
primary adviser to each Master Series, which will become effective only upon the
change in control of WFNIA. It is not anticipated that the proposed change in
control will change the investment objective or overall investment strategy of
the Master Series.
110
<PAGE> 113
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
ORGANIZATION EXPENSES
Stephens Inc. ("Stephens"), the administrator, sponsor and distributor for
the Master Series, has paid all expenses in connection with the Master Series'
organization and initial registration. Pursuant to the Administration Agreement,
Stephens has agreed to assume all operating expenses of the Asset Allocation
Master Series and the U.S. Treasury Allocation Master Series, except for
advisory fees, interest, brokerage fees and commissions, if any, costs of
independent pricing services and any extraordinary expenses.
Certain fees have been waived by WFB for the Bond Index Master Series and
S&P 500 Index Master Series for the six months ended August 31, 1995. Waived
fees continue at the discretion of WFB.
Certain officers and directors of Master Portfolio are also officers of
Stephens. As of August 31, 1995, these officers of Stephens collectively owned
less than 1% of the Master Series' outstanding beneficial interests.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities, for
each Master Series for the six months ended August 31, 1995 are as follows:
<TABLE>
<CAPTION>
ASSET U.S. TREASURY
AGGREGATE PURCHASES ALLOCATION BOND INDEX S&P 500 INDEX ALLOCATION
AND SALES OF: MASTER SERIES MASTER SERIES MASTER SERIES MASTER SERIES
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $ 13,722,922 $ 11,207,608 $ 0 $ 61,371,002
Sales proceeds 128,239,049 4,634,035 0 93,318,139
OTHER SECURITIES:
Purchases at cost 33,060,483 6,332,759 111,485,607 0
Sales proceeds 1,418,072 3,527,605 5,671,401 0
</TABLE>
111
<PAGE> 114
MASTER INVESTMENT PORTFOLIO
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
4. FINANCIAL HIGHLIGHTS
The portfolio turnover rates, excluding short-term securities, for the
Master Series are as follows:
<TABLE>
<CAPTION>
U.S.
S&P 500 TREASURY
ASSET BOND INDEX INDEX ALLOCATION
ALLOCATION MASTER MASTER MASTER
PORTFOLIO TURNOVER MASTER SERIES SERIES SERIES SERIES
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
For the Period from May 26, 1994
(commencement of operations) to
February 28, 1995 23% 37% 5% 87%
For the Six Months Ended August 31,
1995 (Unaudited) 19% 7% 1% 178%
</TABLE>
5. ORGANIZATION OF THE MASTER SERIES
At a special meeting held January 31, 1994, the shareholders of the Asset
Allocation Fund, Bond Index Fund, S&P 500 Stock Fund and U.S. Treasury
Allocation Fund (the "Funds") approved the reorganization of certain Funds into
a "master-feeder" structure, whereby the existing funds invest all of their
assets in a corresponding series of the Master Portfolio. As of May 25, 1994,
the Funds transferred their investments to the corresponding Master Series of
Master Portfolio in exchange for shares in the corresponding Master Series. The
transfer of assets was accomplished as a tax-free exchange. The investments
transferred had costs of $221,581,217, $16,556,893, $157,312,274 and
$51,537,523, and unrealized appreciation (depreciation) of $(9,431,883),
$(939,294), $1,692,082 and $(1,788,579), respectively.
112
<PAGE> 115
MANAGED SERIES INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Managed Series Investment Trust ("Master Trust") is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Master Trust was organized as a Delaware business trust pursuant to
an Agreement and Declaration of Trust dated October 28, 1993. The Master Trust
consists of eight separate portfolios (the "Master Series"): Growth Stock Master
Series, Short-Intermediate Term Master Series, Growth and Income Master Series,
California Tax-Free Intermediate Income Master Series, California Tax-Free Money
Market Master Series, California Tax-Free Short-Term Income Master Series,
Tax-Free Intermediate Income Master Series and the Tax-Free Money Market Master
Series. At August 31, 1995 the Growth and Income Master Series, California
Tax-Free Intermediate Income Master Series, California Tax-Free Money Market
Master Series, California Tax-Free Short-Term Income Master Series, Tax-Free
Intermediate Income Master Series and the Tax-Free Money Market Master Series
had not yet commenced operations. The following significant accounting policies
are consistently followed by the Master Trust in the preparation of its
financial statements, and such policies are in conformity with generally
accepted accounting principles for investment companies.
SECURITY VALUATION
The securities of each Master Series are valued at the last sale price on
the securities exchange or national securities market on which such securities
primarily are traded. Securities not listed on an exchange or national
securities market, or securities in which there were no transactions, are valued
at the most recent bid prices. Debt securities maturing in 60 days or less are
valued at amortized cost, which approximates market value. Any securities,
restricted securities or other assets for which recent market quotations are not
readily available are valued at fair value as determined in good faith in
accordance with policies approved by Master Trust's Board of Trustees.
113
<PAGE> 116
MANAGED SERIES INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
SECURITY TRANSACTIONS AND REVENUE RECOGNITION
Securities transactions are accounted for on the date the securities are
purchased or sold (trade date). Dividend income is recognized on the ex-dividend
date, and interest income is recognized on a daily accrual basis. Realized gains
or losses are reported on the basis of identified cost of securities delivered.
Bond discounts and premiums are amortized as required by the Internal Revenue
Code of 1986 (the "Code").
FEDERAL INCOME TAXES
Each Master Series of the Master Trust intends to qualify for federal income
tax purposes as a partnership. Each Master Series therefore believes that it
will not be subject to any federal income tax on its income and net capital
gains (if any). However, each investor in a Master Series will be taxable on its
allocable share of the partnership's income. The determination of such share
will be made in accordance with the Code. It is intended that each Master
Series' assets, income and allocations will be managed in such a way that a
regulated investment company investing in a Master Series will be able to
satisfy the requirements of Subchapter M of the Code, assuming that an
investment company invested all of its assets in a Master Series.
ORGANIZATION EXPENSES
Stephens has charged the Master Series for expenses incurred in connection
with organization and registration as investment companies under the Investment
Company Act of 1940. Such expenses are being amortized on a straight-line basis
over 60 months from the date the Master Series commenced operations. In the
event any of the initial beneficial interests are redeemed during the 60 month
amortization period, Stephens will reimburse the Series for the unamortized
balance of such organizational costs in the same proportion as the number of
beneficial interests reduced bears to the number of initial beneficial interests
outstanding at the time of redemption.
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell
("repurchase agreements") are treated as collateralized financing transactions
and are recorded at their contracted resale amounts. These repurchase
agreements, if
114
<PAGE> 117
MANAGED SERIES INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
any, are detailed in each Master Series' Portfolio of Investments. The adviser
to the Master Series pools the Master Series' cash and invests in repurchase
agreements entered into by the Master Series. The Master Series' prospectus
requires that the cash investments be fully collateralized based on values that
are marked to market daily. The collateral is held by an agent bank under a
tri-party agreement. It is the adviser's responsibility to value collateral
daily and to obtain additional collateral as necessary to maintain the value at
equal to or greater than 102% of market value. The repurchase agreements held in
the Master Series as of August 31, 1995 are collateralized by U.S. government
securities. The repurchase agreements were entered into on August 31, 1995.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Master Trust has entered into an advisory contract on behalf of the
Growth Stock Master Series and the Short-Intermediate Term Master Series with
Wells Fargo Bank, N.A. ("WFB"). Pursuant to the contract, WFB has agreed to
furnish each Master Series with investment guidance and policy direction in
connection with daily portfolio management. The advisory contracts for the
Growth Stock Master Series and the Short-Intermediate Term Master Series provide
for advisory fees, which are accrued daily and paid monthly, at annual rates of
0.60% and 0.45% of the average daily net assets of each of these Master Series,
respectively.
On June 21, 1995, Wells Fargo & Co. and The Nikko Securities Co., Ltd.
signed a definitive agreement to sell their partnership interests in Wells Fargo
Nikko Investment Advisors to Barclays Bank PLC of the United Kingdom. The sale,
which is subject to the approval of appropriate regulatory authorities, is
expected to close in the fourth quarter of 1995. In connection with the sale,
each of the interestholders of the Growth Stock and Short-Intermediate Term
Master Portfolios will be asked to approve a proposed investment advisory
contract appointing BZW Global Investors as the respective Master Portfolio's
investment adviser and a proposed sub-advisory contract appointing Wells Fargo
Bank as the respective Master Portfolio's sub-adviser. Interestholders will be
mailed additional information regarding the sale and the proposed advisory
arrangements later this year.
115
<PAGE> 118
MANAGED SERIES INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for
each series for the six months ended were as follows:
<TABLE>
<CAPTION>
SHORT-INTERMEDIATE
AGGREGATE PURCHASES GROWTH STOCK TERM
AND SALES OF: MASTER SERIES MASTER SERIES
<S> <C> <C>
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $ 0 $ 930,421
Sales proceeds 0 4,972,249
OTHER SECURITIES:
Purchases at cost 91,990,762 2,498,284
Sales proceeds 84,265,417 62,418
</TABLE>
4. FINANCIAL HIGHLIGHTS
The portfolio turnover rates, excluding short-term securities, for the
Master Series are as follows:
<TABLE>
<CAPTION>
SHORT-INTERMEDIATE
GROWTH STOCK TERM
PORTFOLIO TURNOVER MASTER SERIES MASTER SERIES
<S> <C> <C>
- --------------------------------------------------------------------------------------
For the Period from May 26, 1994 (commence-
ment of operations) to February 28, 1995 93% 96%
For the Six Months Ended August 31, 1995 (Unaudited) 78% 31%
</TABLE>
5. ORGANIZATION OF THE MASTER SERIES
At a special meeting held January 31, 1994, the shareholders of the Growth
Stock Fund and the Short-Intermediate Term Fund approved the reorganization of
the Funds into a "master-feeder" structure, whereby the existing funds invest
all of their assets in a corresponding series of the Managed Series Investment
Trust. As of May 25, 1994, the Funds transferred their investments to the
corresponding Master Series of Managed Series Investment Trust in exchange for
shares in the corresponding Master Series. The investments transferred had costs
of $48,121,213 and $7,401,856 and unrealized depreciation of $899,189 and
$285,454, respectively.
116
<PAGE> 119
MANAGED SERIES INVESTMENT TRUST
FILE NO. 811-8140
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
(1) The following unaudited Financial Statements for the Registrant's
Growth Stock and Short-Intermediate Term Master Series are included in Part B,
Item 23:
Portfolio of Investments - August 31, 1995
Statement of Assets and Liabilities - August 31, 1995
Statement of Operations for the period ended August 31, 1995
Statement of Changes in Net Assets for the period ended August 31, 1995
Notes to Financial Statements - August 31, 1995
(2) The audited Financial Statements for the Registrant's Growth Stock and
Short-Intermediate Term Master Series are incorporated by reference to
Amendment No. 2 to the Registration Statement, filed with the SEC on or about
June 27, 1995.
(b) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
1 - Declaration of Trust, incorporated by reference
to the Registration Statement on Form N-1A filed
November 8, 1993.
2 - By-Laws, incorporated by reference to the
Registration Statement on Form N-1A filed
November 8, 1993.
3 - Not Applicable
</TABLE>
C-1
<PAGE> 120
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
4 - Form of Certificate of Beneficial Interest,
incorporated by reference to the Registration
Statement on Form N-1A filed November 8, 1993.
5(a)(i) - Investment Advisory Contract between BZW Barclays
Global Fund Advisors and the Registrant on behalf of
the Growth Stock Master Series, filed herewith.
(a)(ii) - Investment Advisory Contract between BZW Barclays
Global Fund Advisors and the Registrant on behalf of
the Short-Intermediate Term Master Series, filed
herewith.
(a)(iii) - Sub-Advisory Contract by and among BZW Barclays
Global Fund Advisors, Wells Fargo Bank, N.A. and the
Registrant on behalf of the Growth Stock Master
Series,filed herewith.
(a)(iv) - Sub-Advisory Contract by and among BZW Barclays
Global Fund Advisors, Wells Fargo Bank, N.A. and the
Registrant on behalf of the Short-Intermediate Term
Master Series, filed herewith.
(a)(v) - Investment Advisory Contract between Wells Fargo
Bank, N.A. and the Registrant on behalf of the Growth
Stock Master Series dated March 1, 1994, incorporated
by reference to Amendment No. 2 to the Registration
Statement, filed June 27, 1995.
(a)(vi) - Investment Advisory Contract between Wells Fargo
Bank, N.A. and the Registrant on behalf of the
Short-Intermediate Term Master Series dated March 1,
1994, incorporated by reference to Amendment No. 2 to
the Registration Statement, filed June 27, 1995.
5(b) - Form of Administration Agreement with Stephens Inc.
on behalf of all the Series, incorporated by reference
to the Registration Statement on Form N-1A filed
November 8, 1993.
</TABLE>
C-2
<PAGE> 121
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
6 - Form of Placement Agent Agreement with Stephens Inc.,
incorporated by reference to the Registration
Statement on Form N-1A filed November 8, 1993.
7 - Not Applicable
8(a) - Form of Custody Agreement with Well Fargo Bank, N.A.,
incorporated by reference to the Registration
Statement on Form N-1A filed November 8, 1993.
(b) - Custody Agreement with BZW Barclays Global Investors,
N.A., filed herewith.
9 - Form of Agency Agreement with Wells Fargo Bank, N.A.,
incorporated by reference to the Registration
Statement on Form N-1A filed November 8, 1993.
10 - Not Applicable
11 - Not Applicable
12 - Not Applicable
13(a) - Investment Letter, incorporated by reference to
Amendment No. 2 to the Registration Statement, filed
June 27, 1995.
(b) - Investment Letter executed by Stephens,Inc.,
incorporated by reference to Amendment No. 3 to
the Registration Statement on Form N-1A filed
July 19, 1995.
(c) - Investment Letter executed by Stagecoach Inc. on
behalf of the National Tax-Free Money Market Mutual
Fund, incorporated by reference to Amendment
No. 3 to the Registration Statement on Form N-1A
filed July 19, 1995.
(d) - Investment Letter executed by Stagecoach, Inc. on
behalf of the Overland National Tax-Free
Institutional Money Market Fund, incorporated by
reference to Amendment No. 3 to the Registration
Statement on Form N-1A filed July 19, 1995.
14 - Not Applicable
15 - Not Applicable
</TABLE>
C-3
<PAGE> 122
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
16 - Not Applicable
27(a) - Financial Data Schedule - Growth Stock Master Series,
incorporated by reference to Amendment No. 2 to the
Registration Statement, filed June 27, 1995.
27(b) - Financial Data Schedule - Short-Intermediate Term
Master Series, incorporated by reference to
Amendment No. 2 to the Registration Statement, filed
June 27, 1995.
</TABLE>
Item 25. Persons Controlled by or under Common Control with
Registrant.
No person is controlled by or under common control
with Registrant.
Item 26. Number of Holders of Securities.
As of December 15, 1995, the number of record holders
of the Registrant were as follows:
Title of Class Number of Record Holders
Growth Stock Master Series 2
Short-Intermediate Term Master 2
Series
C-4
<PAGE> 123
Item 27. Indemnification.
Article V of the Registrant's Declaration of Trust limits the liability
and, in certain instances, provides for mandatory indemnification of the
Registrant's trustees, officers, employees, agents and holders of beneficial
interests in the Trust. In addition, the Trustees are empowered under Section
3.9 of the Registrant's Declaration of Trust to obtain such insurance policies
as they deem necessary.
Item 28. Business and Other Connections
of Investment Adviser.
BZW Barclays Global Fund Advisors ("BGFA") is a wholly owned
subsidiary of BZW Barclays Global Investors, N.A. ("BGI"; formerly, Wells Fargo
Institutional Trust Company). BGFA serves as investment adviser to the
Registrant's Growth Stock and Short-Intermediate Term Master Series, and to
certain other registered open-end management investment companies.
The directors and officers of BGFA consist primarily of persons who
during the past two years have been active in the investment management
business of the former sub-adviser to the Registrant, Wells Fargo Nikko
Investment Advisers ("WFNIA"), and, in some cases, the service business of BGI,
the custodian of the Registrant's Master Series. With the exception of Irving
Cohen, each of the directors and executive officers of BGFA will also have
substantial responsibilities as directors and/or officers of BGI. To the
knowledge of the Registrant, except as set forth below, none of the directors
or executive officers of BGFA is or has been at any time during the past two
fiscal years engaged in any other business, profession, vocation or employment
of a substantial nature.
<TABLE>
<CAPTION>
Name and Position Principal Business(es) During at
at BGFA Least the Last Two Fiscal Years
- ----------------- --------------------------------
<S> <C>
Frederick L.A. Grauer Chairman and Director of WFNIA and WFITC+
Chairman, Director
Donald L. Luskin Chief Executive Officer of WFNIA's Defined
Vice Chairman & Director Contribution Group+
Irving Cohen Chief Financial Officer and Chief Operating Officer of Barclays Bank
Director PLC, New York Branch and Chief Operating Officer of Barclays
Group, Inc. (USA)*: Previously Chief Financial Officer of Barclays
de Zoete Wedd Securities Inc. (1994)*
Andrea M. Zolberti Chief Financial Officer of WFNIA and WFTIC+
Chief Financial Officer
Chief Administrative
Officer
Vincent J. Bencivenga Previously Vice President at State Street Bank & Trust Company++
Chief Fiduciary Officer
</TABLE>
* 222 Broadway, New York, New York, 10038.
+ 45 Fremont Street, San Francisco, California 94105.
++ One Financial Center, Boston, Massachusetts 02111.
Wells Fargo Bank, N.A. ("Wells Fargo"), a wholly owned subsidiary of
Wells Fargo & Company, serves as sub-investment adviser to the Registrant and,
prior to January 1, 1996, served as investment adviser to the Registrant. Wells
Fargo currently serves as investment adviser or sub-investment adviser to
several other registered open-end management investment companies. Wells
Fargo's business is that of a national banking association with respect to
which it conducts a variety of commercial banking and trust activities.
To the knowledge of Registrant, none of the directors or executive
officers of Wells Fargo, except those set forth below, is or has been at any
time during the past two fiscal years engaged in any other business, profession,
vocation or employment of a substantial nature, except that certain executive
officers also hold various positions with and engage in business for Wells Fargo
& Company. Set forth below are the names and principal businesses of the
directors and executive officers of Wells Fargo who are or during the past two
fiscal years have been engaged in any other business, profession, vocation or
employment of a substantial nature for their own account or in the capacity of
director, officer, employee, partner or trustee. All the directors of Wells
Fargo also serve as directors of Wells Fargo & Company.
C-5
<PAGE> 124
<TABLE>
<CAPTION>
Name and Position Principal Business(es) and Address(es)
at Wells Fargo Bank During at Least the Last Two Fiscal Years
- ------------------- -----------------------------------------
<S> <C>
H. Jesse Arnelle Senior Partner of Arnelle & Hastie
Director 455 Market Street
San Francisco, CA 94105
Director of FPL Group, Inc.
700 Universe Blvd.
P.O. Box 14000
North Palm Beach, FL 33408
William R. Breuner General Partner in Breuner Associates, Breuner Properties and
Director Breuner-Pavarnick Real Estate Developers. Retired Chairman of
the Board of Directors of John Breuner Co.
2300 Clayton Road, Suite 1570
Concord, CA 94520
Vice Chairman of the California State Railroad
Museum Foundation
111 I Street
Old Sacramento, CA 95814
William S. Davila President and Director of The Vons Companies, Inc.
Director 618 Michillinda Avenue
Arcadia, CA 91007
Officer of Western Association of Food Chains
825 Colorado Blvd. #203
Los Angeles, CA 90041
Rayburn S. Dezember Director of CalMat Co.
Director 3200 San Fernando Road
Los Angeles, CA 90065
Director of Tejon Ranch Co.
P.O. Box 1000
Lebec, CA 93243
Director of Turner Casting Corp.
P.O. Box 1099
Cudahy, CA 90201
Director of The Bakersfield Californian
P.O. Box 440
1707 I Street
Bakersfield, CA 93302
Director of Kern County Economic Development Corp.
P.O. Box 1229
2700 M Street, Suite 225
</TABLE>
C-6
<PAGE> 125
<TABLE>
<S> <C>
Bakersfield, CA 93301
Chairman of the Board of Trustees of Whittier College
13406 East Philadelphia Avenue
P.O. Box 634
Whittier, CA 90608
Paul Hazen Chairman of the Board of Directors of
Chairman of the Wells Fargo & Company
Board of Directors 420 Montgomery Street
San Francisco, CA 94105
Director of Pacific Telesis Group
130 Kearny Street
San Francisco, CA 94108
Director of Phelps Dodge Corp.
2600 North Central Avenue
Phoenix, AZ 85004
Director of Safeway Inc.
Fourth and Jackson Streets
Oakland, CA 94660
Robert K. Jaedicke Accounting Professor and Dean Emeritus of
Director Graduate School of Business, Stanford University
MBA Admissions Office
Stanford, CA 94305
Director of Homestake Mining Co.
650 California Street
San Francisco, CA 94108
Director of California Water Service Company
1720 North First Street
San Jose, CA 95112
Director of Boise Cascade Corp.
1111 West Jefferson Street
P.O. Box 50
Boise, ID 83728
Director of Enron Corp.
1400 Smith Street
Houston, TX 77002
Director of GenCorp, Inc.
175 Ghent Road
Fairlawn, OH 44333
Paul A. Miller Chairman of Executive Committee and Director of
Director Pacific Enterprises
633 West Fifth Street
</TABLE>
C-7
<PAGE> 126
<TABLE>
<S> <C>
Los Angeles, CA 90071
Trustee of Mutual Life Insurance Company of New York
1740 Broadway
New York, NY 10019
Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355
Trustee of University of Southern California
University Park TGF 200
665 Exposition Blvd.
Los Angeles, CA 90089
Ellen M. Newman President of Ellen Newman Associates
Director 323 Geary Street, Suite 507
San Francisco, CA 94102
Chair of Board of Trustees of
University of California at San Francisco Foundation
250 Executive Park Blvd., Suite 2000
San Francisco, CA 94143
Director of American Conservatory Theater
30 Grant Avenue
San Francisco, CA 94108
Director of California Chamber of Commerce
1201 K Street, 12th Floor
Sacramento, CA 95814
Philip J. Quigley Chairman, Chief Executive Officer and
Director Director of Pacific Telesis Group
130 Kearney Street, Rm. 3700
San Francisco, CA 94108
Director of Varian Associates
3050 Hansen Way
P.O. Box 10800
Palo Alto, CA 94303
Carl E. Reichardt Chairman and Chief Executive Officer of the
Director Board of Directors of Wells Fargo & Company
420 Montgomery Street
San Francisco, CA 94105
Director of Ford Motor Company
The American Road
Dearborn, MI 48121
Director of Hospital Corporation of America,
HCA-Hospital Corp. of America
</TABLE>
C-8
<PAGE> 127
<TABLE>
<S> <C>
One Park Plaza
Nashville, TN 37203
Director of Pacific Gas and Electric Company
77 Beale Street
San Francisco, CA 94105
Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355
Donald B. Rice President, Chief Operating Officer and Director of
Director Teledyne, Inc.
2049 Century Park East
Los Angeles, CA 90067
Director of Vulcan Materials Company
One Metroplex Drive
Birmingham, AL 35209
Retired Secretary of the Air Force
Susan G. Swenson President and Chief Executive Officer of Cellular One
Director 651 Gateway Blvd.
San Francisco, CA 94080
Chang-Lin Tien Chancellor of University of California at Berkeley
Director UC at Berkeley
Berkeley, CA 94720
John A. Young President, Director and Chief Executive Officer of
Director Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 94304
Director of Chevron Corporation
225 Bush Street
San Francisco, CA 94104
William F. Zuendt Director of 3Com Corp.
President 5400 Bayfront Plaza
P.O. Box 58145
Santa Clara, CA 95052
Director of MasterCard International
888 Seventh Avenue
New York, NY 10106
Trustee of Golden Gate University
536 Mission Street
San Francisco, CA 94163
</TABLE>
C-9
<PAGE> 128
Item 29. Principal Underwriters.
(a) Stephens Inc., placement agent for the Registrant, does not
presently act as investment adviser for any other registered investment
companies, but does act a principal underwriter for Overland Express Funds,
Inc., Stagecoach Funds, Inc., Stagecoach Inc., Stagecoach Trust, Life & Annuity
Trust, Nations Fund, Inc., Nations Fund Trust, Nations Fund Portfolios, Inc.,
and Nations Institutional Reserves (formerly known as The Capitol Mutual
Funds), and is the exclusive placement agent for Master Investment Trust,
Master Investment Portfolio and Managed Series Investment Trust, all of which
are registered open-end management investment companies, and has acted as
principal underwriter for the Liberty Term Trust, Inc., the Nations
Government Income Term Trust 2003, Inc., the Nations Government Income Term
Trust 2004, Inc. and the Managed Balance Target Maturity Fund, Inc., which are
closed-end management investment companies.
(b) Information with respect to each director and officer of the
principal underwriter is incorporated by reference to Form ADV and Schedules A
and D filed by Stephens Inc. with the Securities and Exchange Commission
pursuant to The Investment Advisers Act of 1940 (file No. 501-15510).
C-10
<PAGE> 129
(c) Not applicable.
Item 30. Location of Accounts and Records.
(a) The Registrant maintains accounts, books and other documents
required by Section 31(a) of the 1940 Act and the Rules thereunder
(collectively, "Records") at the offices of Stephens Inc., 111 Center Street,
Little Rock, Arkansas 72201.
(b) BGFA maintains all Records relating to its services as investment
adviser at 45 Fremont Street, San Francisco, California 94105. BGI maintains
all Records relating to its services as custodian at the same address.
(c) Wells Fargo maintains all Records relating to its services as
sub-investment adviser beginning January 1, 1996, its services as investment
adviser and custodian for the period prior to January 1, 1996, and its services
as transfer and dividend disbursing agent at 525 Market Street, San Francisco,
California 94105.
(d) Stephens maintains all Records relating to its services as
sponsor, administrator and placement agent at 111 Center Street, Little Rock,
Arkansas 72201.
Item 31. Management Services.
Other than as set forth under the captions "Item 5. Management of the
Trust" in the Prospectus constituting Part A of this Registration Statement and
"Item 16. Investment Advisory and Other Services" in the Statement of
Additional Information constituting Part B of this Registration Statement,
Registrant is not a party to any management-related service contract.
Item 32. Undertakings.
(a) Not applicable.
(b) Not applicable.
(c) Registrant undertakes to hold a special meeting of its
shareholders for the purpose of voting on the question of removal
of a trustee or trustees if requested in writing by the holders
of at least 10% of each Master Portfolio, the outstanding voting
securities of Master Investment Trust and to assist in
communicating with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
C-11
<PAGE> 130
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940,
the Registrant has duly caused this Amendment No. 4 to the Registration
Statement on Form N-1A to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Little Rock, State of Arkansas on the 2nd day
of January, 1996.
MANAGED SERIES INVESTMENT TRUST
By: /s/ Richard H. Blank, Jr.
------------------------------
Name: Richard H. Blank, Jr.
Title: Chief Operating Officer, Secretary
and Treasurer
<PAGE> 131
MANAGED SERIES INVESTMENT TRUST -- FILE NO. 811-8140
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Number Description Page No.
- -------------- ----------- ----------
<S> <C> <C>
99.B5(a)(i) Investment Advisory Contract
between BZW Barclays Global
Fund Advisors and the Registrant
on behalf of the Growth
Stock Master Series
99.B5(a)(ii) Investment Advisory Contract
between BZW Barclays Global
Fund Advisors and the Registrant
on behalf of the Short-
Intermediate Term Master Series
99.B5(a)(iii) Sub-Advisory Contract by and
among BZW Barclays Global
Fund Advisors, Wells Fargo
Bank, N.A. and the Registrant
on behalf of the Growth
Stock Master Series
99.B5(a)(iv) Sub-Advisory Contract by and
among BZW Barclays Global
Fund Advisors, Wells Fargo
Bank, N.A. and the Registrant
on behalf of the Short-
Intermediate Term Master
Series
99.B8(b) Custody Agreement with BZW
Barclays Global Investors,
N.A.
</TABLE>
<PAGE> 1
EX-99.B5(a)(i)
INVESTMENT ADVISORY CONTRACT
MANAGED SERIES INVESTMENT TRUST
111 Center Street
Little Rock, Arkansas 72201
January 1, 1996
BZW Barclays Global Fund Advisors
45 Fremont Street
San Francisco, California 94105
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Trust") on behalf of the Growth Stock Master Portfolio (the "Master
Portfolio") and BZW Barclays Global Fund Advisors (the "Adviser") as follows:
1. The Trust is a registered open-end management investment
company currently consisting of eight investment portfolios, but which may from
time to time consist of a greater or lesser number of investment portfolios
(the "Master Portfolios"). The Growth Stock Master Portfolio is one of the
eight Master Portfolios. The Trust proposes to engage in the business of
investing and reinvesting the assets of the Master Portfolio in the manner and
in accordance with the investment objective and restrictions specified in the
Trust's Registration Statement, as amended from time to time (the "Registration
Statement"), filed by the Trust under the Investment Company Act of 1940 (the
"Act"). Copies of the Registration Statement have been furnished to the
Adviser. Any amendments to the Registration Statement shall be furnished to
the Adviser promptly.
2. The Trust is engaging the Adviser to manage the investing and
reinvesting of the Master Portfolio's assets and to provide the advisory
services specified elsewhere in this contract to the Master Portfolio, subject
to the overall supervision of the Board of Trustees of the Trust. Pursuant to
an administration agreement between the Trust and an administrator (the
"Administrator") on behalf of the Master Portfolio, the Trust has engaged the
Administrator to provide the administrative services specified therein.
3. (a) The Adviser shall make investments for the account of the
Master Portfolio in accordance with the Adviser's best judgment and consistent
with the investment objective and restrictions set forth in the Trust's
Registration Statement, the Act and the provisions of the Internal Revenue Code
of 1986 relating to regulated investment companies, subject to policy decisions
adopted by the Trust's Board of Trustees. The Adviser shall advise the Trust's
officers and Board of Trustees, at such times as the Trust's Board of Trustees
may specify, of investments made for the Master Portfolio and shall, when
requested by the Trust's officers or Board of Trustees, supply the reasons for
making particular investments.
(b) The Adviser shall provide to the Trust investment
guidance and policy direction in connection with its daily management of the
Master Portfolio's assets, including oral and written research, analysis,
advice, statistical and economic data and information and judgments, and shall
furnish to the Trust's Board of Trustees periodic reports on the investment
strategy and performance of the Master Portfolio and such additional reports
and information as the Trust's Board of Trustees and officers shall reasonably
request.
(c) The Adviser shall pay the costs of printing and
distributing all materials relating to the Master Portfolio prepared by it, or
prepared at its request, other than such costs relating to proxy statements,
prospectuses, reports for holders of beneficial interests ("Interests") of the
Master Portfolio ("Holders") and other materials distributed to existing or
prospective Holders on behalf of the Master Portfolio .
(d) The Adviser shall, at its expense, employ or associate
with itself such persons as the Adviser believes appropriate to assist it in
performing its obligations under this contract.
4. The Trust understands that the Adviser, in rendering its
services to the Master Portfolio hereunder, may delegate certain advisory
responsibilities hereunder to a sub-adviser (the "Sub-Adviser"), provided that
the Adviser shall continue to supervise and monitor the performance of the
duties delegated to the Sub-Adviser and provided that any such delegation will
not relieve the Adviser of its duties and obligations under this contract. The
Adviser will not seek to amend any such Sub-Advisory Contract to materially
alter the obligations of the parties unless the Adviser gives the Trust at
least 60 days' prior written notice thereof.
5. Except as provided in the Trust's advisory contracts and
administration agreement, the Trust shall bear all costs of its operations,
including the compensation of its Trustees who are not affiliated with the
<PAGE> 2
Adviser, the Administrator or any of their affiliates; advisory and
administration fees; governmental fees; interest charges; taxes; fees and
expenses of its independent auditors, legal counsel, transfer agent and
dividend disbursing agent; expenses of redeeming Interests; expenses of
preparing and printing Part As (except the expense of printing and mailing Part
As used for promotional purposes), Holders' reports, notices, proxy statements
and reports to regulatory agencies; travel expenses of trustees, officers and
employees; office supplies; insurance premiums and certain expenses relating to
insurance coverage; trade association membership dues; brokerage and other
expenses connected with the execution of portfolio securities transactions;
fees and expenses of any custodian, including those for keeping books and
accounts and calculating the net asset value per share of the Master Portfolio;
expenses of Holders' meetings; expenses relating to the issuance, and any
registration and qualification of, Interests of the Master Portfolio; pricing
services, if any; organizational expenses; and any extraordinary expenses.
Expenses attributable to one or more, but not all, of the Master Portfolios are
to be charged against the assets of the relevant Master Portfolio. General
expenses of the Trust are allocated among the Master Portfolios in a manner
proportionate to the net assets of each of the Master Portfolios, on a
transactional basis or on such other basis as the Board of Trustees deems
equitable.
6. The Adviser shall give the Trust and the Master Portfolio the
benefit of the Adviser's best judgment and efforts in rendering services under
this contract. As an inducement to the Adviser's undertaking to render these
services, the Trust agrees that the Adviser shall not be liable under this
contract for any mistake in judgment or in any other event whatsoever except
for lack of good faith, provided that nothing in this contract shall be deemed
to protect or purport to protect the Adviser against any liability to the Trust
or its Holders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
Adviser's duties under this contract or by reason of reckless disregard of its
obligations and duties hereunder.
7. In consideration of the services to be rendered by the
Adviser under this contract, the Trust shall pay the Adviser a monthly fee on
the first business day of each month, at the annual rate of 0.60% of the
average daily value (as determined on each day that such value is determined
for the Master Portfolio at the time set forth in the Registration Statement
for determining net asset value per share) of the Master Portfolio's net assets
during the preceding month. If the fee payable to the Adviser pursuant to this
paragraph 7 begins to accrue after the beginning of any month or if this
contract terminates before the end of any month, the fee for the period from
the effective date to the end of that month or from the beginning of that month
to the termination date, respectively, shall be prorated according to the
proportion that the period bears to the full month in which the effectiveness
or termination occurs. For purposes of calculating each such monthly fee, the
value of the Master Portfolio's net assets shall be computed in the manner
specified in the Registration Statement and the Trust's Declaration of Trust
for the computation of the value of the Master Portfolio's net assets in
connection with the determination of the net asset value of Master Portfolio
Interests.
8. If in any fiscal year the total expenses incurred by, or
allocated to, the Master Portfolio excluding taxes, interest, brokerage
commissions and other portfolio transaction expenses, other expenditures that
are capitalized in accordance with generally accepted accounting principles and
extraordinary expenses of the Master Portfolio, but including the fees provided
for in paragraph 7, exceed the most restrictive expense limitation applicable
to the Master Portfolio imposed by state securities laws or regulations
thereunder, as these limitations may be raised or lowered from time to time,
the Adviser shall waive or reimburse a pro rata portion of its fees hereunder.
9. This contract shall become effective on its execution date
and shall thereafter continue in effect, provided that this contract shall
continue in effect for a period of more than two years from the date hereof
only so long as the continuance is specifically approved at least annually (a)
by the vote of a majority of the Master Portfolio's outstanding voting
securities (as defined in the Act) or by the Trust's Board of Trustees and (b)
by the vote, cast in person at a meeting called for the purpose of voting on
such approval, of a majority of the Trust's Trustees who are not parties to
this contract or "interested persons" (as defined in the Act) of any such
party. This contract may be terminated at any time by the Trust, without the
payment of any penalty, by a vote of a majority of the Master Portfolio's
outstanding voting securities (as defined in the Act) or by a vote of a
majority of the Trust's entire Board of Trustees on 60 days' written notice to
the Adviser or by the Adviser on 60 days' written notice to the Trust. This
contract shall terminate automatically in the event of its assignment (as
defined in the Act).
10. Except to the extent necessary to perform the Adviser's
obligations under this contract, nothing herein shall be deemed to limit or
restrict the right of the Adviser, or any affiliate of the Adviser, or any
employee of the Adviser, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of
a similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
11. This contract shall be governed by and construed in
accordance with the laws of the State of California.
2
<PAGE> 3
12. This contract has been executed on behalf of the Trust by the
undersigned officer of the Trust in his capacity as an officer of the Trust.
The obligations of this contract shall only be binding upon the assets and
property of the Master Portfolio, as provided for in the Trust's Declaration of
Trust, and shall not be binding upon any trustee, officer or Holder of the
Trust or Master Portfolio individually.
If the foregoing correctly sets forth the agreement between the
Trust and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours,
MANAGED SERIES INVESTMENT TRUST,
on behalf of the Growth Stock Master Portfolio
By: /s/ RICHARD H. BLANK, JR.
-------------------------------------------
Name: Richard H. Blank, Jr.
-----------------------------------------
Title: Chief Operating Officer,
Secretary and Treasurer
---------------------------------------
ACCEPTED as of the date
set forth above:
BZW BARCLAYS GLOBAL FUND ADVISORS
By: /s/ JUDITH M. NOLTE
---------------------------------------
Name: Judith M. Nolte
-------------------------------------
Title: Senior Counsel, Assistant Secretary
------------------------------------
By: /s/ ANDREA M. ZOLBERTI
---------------------------------------
Name: Andrea M. Zolberti
-------------------------------------
Title: Chief Financial Officer
------------------------------------
3
<PAGE> 1
EX-99.B5(a)(ii)
INVESTMENT ADVISORY CONTRACT
MANAGED SERIES INVESTMENT TRUST
111 Center Street
Little Rock, Arkansas 72201
January 1, 1996
BZW Barclays Global Fund Advisors
45 Fremont Street
San Francisco, California 94105
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Trust") on behalf of the Short-Intermediate Term Master Portfolio (the "Master
Portfolio") and BZW Barclays Global Fund Advisors (the "Adviser") as follows:
1. The Trust is a registered open-end management investment
company currently consisting of eight investment portfolios, but which may from
time to time consist of a greater or lesser number of investment portfolios
(the "Master Portfolios"). The Short-Intermediate Term Master Portfolio is one
of the eight Master Portfolios. The Trust proposes to engage in the business
of investing and reinvesting the assets of the Master Portfolio in the manner
and in accordance with the investment objective and restrictions specified in
the Trust's Registration Statement, as amended from time to time (the
"Registration Statement"), filed by the Trust under the Investment Company Act
of 1940 (the "Act"). Copies of the Registration Statement have been furnished
to the Adviser. Any amendments to the Registration Statement shall be
furnished to the Adviser promptly.
2. The Trust is engaging the Adviser to manage the investing and
reinvesting of the Master Portfolio's assets and to provide the advisory
services specified elsewhere in this contract to the Master Portfolio, subject
to the overall supervision of the Board of Trustees of the Trust. Pursuant to
an administration agreement between the Trust and an administrator (the
"Administrator") on behalf of the Master Portfolio, the Trust has engaged the
Administrator to provide the administrative services specified therein.
3. (a) The Adviser shall make investments for the account of the
Master Portfolio in accordance with the Adviser's best judgment and consistent
with the investment objective and restrictions set forth in the Trust's
Registration Statement, the Act and the provisions of the Internal Revenue Code
of 1986 relating to regulated investment companies, subject to policy decisions
adopted by the Trust's Board of Trustees. The Adviser shall advise the Trust's
officers and Board of Trustees, at such times as the Trust's Board of Trustees
may specify, of investments made for the Master Portfolio and shall, when
requested by the Trust's officers or Board of Trustees, supply the reasons for
making particular investments.
(b) The Adviser shall provide to the Trust investment
guidance and policy direction in connection with its daily management of the
Master Portfolio's assets, including oral and written research, analysis,
advice, statistical and economic data and information and judgments, and shall
furnish to the Trust's Board of Trustees periodic reports on the investment
strategy and performance of the Master Portfolio and such additional reports
and information as the Trust's Board of Trustees and officers shall reasonably
request.
(c) The Adviser shall pay the costs of printing and
distributing all materials relating to the Master Portfolio prepared by it, or
prepared at its request, other than such costs relating to proxy statements,
prospectuses, reports for holders of beneficial interests ("Interests") of the
Master Portfolio ("Holders") and other materials distributed to existing or
prospective Holders on behalf of the Master Portfolio .
(d) The Adviser shall, at its expense, employ or associate
with itself such persons as the Adviser believes appropriate to assist it in
performing its obligations under this contract.
4. The Trust understands that the Adviser, in rendering its
services to the Master Portfolio hereunder, may delegate certain advisory
responsibilities hereunder to a sub-adviser (the "Sub-Adviser"), provided that
the Adviser shall continue to supervise and monitor the performance of the
duties delegated to the Sub-Adviser and provided that any such delegation will
not relieve the Adviser of its duties and obligations under this contract. The
Adviser will not seek to amend any such Sub-Advisory Contract to materially
alter the obligations of the parties unless the Adviser gives the Trust at
least 60 days' prior written notice thereof.
<PAGE> 2
5. Except as provided in the Trust's advisory contracts and
administration agreement, the Trust shall bear all costs of its operations,
including the compensation of its Trustees who are not affiliated with the
Adviser, the Administrator or any of their affiliates; advisory and
administration fees; governmental fees; interest charges; taxes; fees and
expenses of its independent auditors, legal counsel, transfer agent and
dividend disbursing agent; expenses of redeeming Interests; expenses of
preparing and printing Part As (except the expense of printing and mailing Part
As used for promotional purposes), Holders' reports, notices, proxy statements
and reports to regulatory agencies; travel expenses of trustees, officers and
employees; office supplies; insurance premiums and certain expenses relating to
insurance coverage; trade association membership dues; brokerage and other
expenses connected with the execution of portfolio securities transactions;
fees and expenses of any custodian, including those for keeping books and
accounts and calculating the net asset value per share of the Master Portfolio;
expenses of Holders' meetings; expenses relating to the issuance, and any
registration and qualification of, Interests of the Master Portfolio; pricing
services, if any; organizational expenses; and any extraordinary expenses.
Expenses attributable to one or more, but not all, of the Master Portfolios are
to be charged against the assets of the relevant Master Portfolio. General
expenses of the Trust are allocated among the Master Portfolios in a manner
proportionate to the net assets of each of the Master Portfolios, on a
transactional basis or on such other basis as the Board of Trustees deems
equitable.
6. The Adviser shall give the Trust and the Master Portfolio the
benefit of the Adviser's best judgment and efforts in rendering services under
this contract. As an inducement to the Adviser's undertaking to render these
services, the Trust agrees that the Adviser shall not be liable under this
contract for any mistake in judgment or in any other event whatsoever except
for lack of good faith, provided that nothing in this contract shall be deemed
to protect or purport to protect the Adviser against any liability to the Trust
or its Holders to which the Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
Adviser's duties under this contract or by reason of reckless disregard of its
obligations and duties hereunder.
7. In consideration of the services to be rendered by the
Adviser under this contract, the Trust shall pay the Adviser a monthly fee on
the first business day of each month, at the annual rate of 0.45% of the
average daily value (as determined on each day that such value is determined
for the Master Portfolio at the time set forth in the Registration Statement
for determining net asset value per share) of the Master Portfolio's net assets
during the preceding month. If the fee payable to the Adviser pursuant to this
paragraph 7 begins to accrue after the beginning of any month or if this
contract terminates before the end of any month, the fee for the period from
the effective date to the end of that month or from the beginning of that month
to the termination date, respectively, shall be prorated according to the
proportion that the period bears to the full month in which the effectiveness
or termination occurs. For purposes of calculating each such monthly fee, the
value of the Master Portfolio's net assets shall be computed in the manner
specified in the Registration Statement and the Trust's Declaration of Trust
for the computation of the value of the Master Portfolio's net assets in
connection with the determination of the net asset value of Master Portfolio
Interests.
8. If in any fiscal year the total expenses incurred by, or
allocated to, the Master Portfolio excluding taxes, interest, brokerage
commissions and other portfolio transaction expenses, other expenditures that
are capitalized in accordance with generally accepted accounting principles and
extraordinary expenses of the Master Portfolio, but including the fees provided
for in paragraph 7, exceed the most restrictive expense limitation applicable
to the Master Portfolio imposed by state securities laws or regulations
thereunder, as these limitations may be raised or lowered from time to time,
the Adviser shall waive or reimburse a pro rata portion of its fees hereunder.
9. This contract shall become effective on its execution date
and shall thereafter continue in effect, provided that this contract shall
continue in effect for a period of more than two years from the date hereof
only so long as the continuance is specifically approved at least annually (a)
by the vote of a majority of the Master Portfolio's outstanding voting
securities (as defined in the Act) or by the Trust's Board of Trustees and (b)
by the vote, cast in person at a meeting called for the purpose of voting on
such approval, of a majority of the Trust's Trustees who are not parties to
this contract or "interested persons" (as defined in the Act) of any such
party. This contract may be terminated at any time by the Trust, without the
payment of any penalty, by a vote of a majority of the Master Portfolio's
outstanding voting securities (as defined in the Act) or by a vote of a
majority of the Trust's entire Board of Trustees on 60 days' written notice to
the Adviser or by the Adviser on 60 days' written notice to the Trust. This
contract shall terminate automatically in the event of its assignment (as
defined in the Act).
10. Except to the extent necessary to perform the Adviser's
obligations under this contract, nothing herein shall be deemed to limit or
restrict the right of the Adviser, or any affiliate of the Adviser, or any
employee of the Adviser, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of
a similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
2
<PAGE> 3
11. This contract shall be governed by and construed in
accordance with the laws of the State of California.
12. This contract has been executed on behalf of the Trust by the
undersigned officer of the Trust in his capacity as an officer of the Trust.
The obligations of this contract shall only be binding upon the assets and
property of the Master Portfolio, as provided for in the Trust's Declaration of
Trust, and shall not be binding upon any trustee, officer or Holder of the
Trust or Master Portfolio individually.
If the foregoing correctly sets forth the agreement between the
Trust and the Adviser, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours,
MANAGED SERIES INVESTMENT TRUST
on behalf of the Short-Intermediate Term
Master Portfolio
By: /s/ RICHARD H. BLANK, JR.
-----------------------------------------
Name: Richard H. Blank, Jr.
---------------------------------------
Title: Chief Operating Officer,
Secretary and Treasurer
--------------------------------------
ACCEPTED as of the date
set forth above:
BZW BARCLAYS GLOBAL FUND ADVISORS
By: /s/ JUDITH M. NOLTE
---------------------------------------
Name: Judith M. Nolte
-------------------------------------
Title: Senior Counsel, Assistant Secretary
------------------------------------
By: /s/ ANDREA M. ZOLBERTI
---------------------------------------
Name: Andrea M. Zolberti
-------------------------------------
Title: Chief Financial Officer
------------------------------------
3
<PAGE> 1
EX-99.B5(a)(iii)
SUB-ADVISORY CONTRACT
Growth Stock Master Portfolio
a portfolio of
MANAGED SERIES INVESTMENT TRUST
111 Center Street
Little Rock, Arkansas 72201
January 1, 1996
Wells Fargo Bank, N.A.
45 Fremont Street
San Francisco, California 94105
Dear Sirs:
This will confirm the agreement by and among BZW Barclays Global Fund
Advisors (the "Adviser"), Managed Series Investment Trust (the "Trust"), on
behalf of the Growth Stock Master Portfolio (the "Master Portfolio"), and Wells
Fargo Bank, N.A. (the "Sub-Adviser") as follows:
1. The Trust is a registered open-end management investment
company currently consisting of eight investment portfolios, but which may from
time to time consist of a greater or lesser number of investment portfolios
(the "Master Portfolios"). The Growth Stock Master Portfolio is one of the
eight Master Portfolios. The Trust proposes to engage in the business of
investing and reinvesting the assets of the Master Portfolio in the manner and
in accordance with the investment objective and restrictions specified in the
Trust's Registration Statement, as amended from time to time (the "Registration
Statement"), filed by the Trust under the Investment Company Act of 1940 (the
"Act"). Copies of the Registration Statement have been furnished to the
Adviser. Any amendments to the Registration Statement shall be furnished to
the Adviser promptly.
2. The Trust has engaged the Adviser to manage the investing and
reinvesting of the Master Portfolio's assets and to provide the advisory
services specified in the Investment Advisory Contract between the Trust and
the Adviser, dated as of the date hereof, subject to the overall supervision of
the Board of Trustees of the Trust. Pursuant to an Administration Agreement
between the Trust, on behalf of the Master Portfolio, and an administrator (the
"Administrator"), the Trust has engaged the Administrator to provide the
administrative services specified therein.
3. (a) The Adviser hereby employs the Sub-Adviser to perform for
the Master Portfolio certain advisory services and the Sub-Adviser hereby
accepts such employment. The Adviser shall retain the authority to establish
and modify, from time to time, the investment strategies and approaches to be
followed by the Sub-Adviser, subject, in all respects, to the supervision and
direction of the Trust's Board of Trustees and subject to compliance with the
investment objective, policies and restrictions set forth in the Registration
Statement.
(b) Subject to the overall supervision and control of the
Adviser and the Trust, the Sub-Adviser shall be responsible for investing and
reinvesting the Master Portfolio assets in a manner consistent with the
investment strategies and approaches referenced in subparagraph (a), above. In
this regard, the Sub-Adviser, in accordance with the investment objective,
policies and restrictions set forth in the Registration Statement, the Act and
the provisions of the Internal Revenue Code of 1986 relating to regulated
investment companies, shall be responsible for furnishing to the Master
Portfolio investment guidance and policy direction in connection with the daily
portfolio management of the Master Portfolio and shall furnish to the Adviser
periodic reports on the investment activity and performance of the Master
Portfolio. The Sub-Adviser shall also furnish such additional reports and
information as the Adviser and the Trust's Board of Trustees and officers shall
reasonably request.
(c) The Sub-Adviser shall, at its expense, employ or
associate with itself such persons as the Sub- Adviser believes appropriate to
assist it in performing its obligations under this contract.
4. The Adviser shall be responsible for the Sub-Adviser's fees
for its services hereunder. The Sub- Adviser agrees that it shall have no
claim against the Trust or the Master Portfolio respecting compensation under
this contract. In consideration of the services to be rendered by the
Sub-Adviser under this contract, the Adviser shall pay the Sub-Adviser a
monthly fee on the first business day of each calendar month, at the annual
rate of 0.15% of the average daily value (as determined on each day that such
value is determined for the Master Portfolio at the time set forth in the
Registration Statement for determining net asset value per share) of the Master
Portfolio's net assets during the preceding month. If the fee payable to the
Sub-Adviser pursuant to this Paragraph
<PAGE> 2
4 begins to accrue on a day after the first day of any month or if this
contract terminates before the end of any month, the fee for the period from
the effective date to the end of the month, or from the beginning of that month
to the termination date, shall be prorated according to the proportion that
such period bears to the full month in which the effectiveness or termination
occurs. For purposes of calculating the monthly fee, the value of the Master
Portfolio's net assets shall be computed in the manner specified in the
Registration Statement and the Trust's Declaration of Trust for the computation
of the value of the Master Portfolio's net assets in connection with the
determination of the net asset value of Master Portfolio's interests.
5. The Sub-Adviser shall give the Trust the benefit of the
Sub-Adviser's best judgment and efforts in rendering services under this
contract. As consideration and as an inducement to the Sub-Adviser's
undertaking to render these services, the Trust and the Adviser agree that the
Sub-Adviser shall not be liable under this contract for any mistake in judgment
or in any other event whatsoever except for lack of good faith, provided that
nothing in this contract shall be deemed to protect or purport to protect the
Sub-Adviser against any liability to the Adviser, the Trust or its
interestholders to which the Sub-Adviser would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of the
Sub-Adviser's duties under this contract or by reason of reckless disregard of
its obligations and duties hereunder.
6. This contract shall become effective as of its execution date
and shall thereafter continue in effect, provided that this contract shall
continue in effect for a period of more than two years from the date hereof
only so long as the continuance is specifically approved at least annually (a)
by the vote of a majority of the Master Portfolio's outstanding voting
securities (as defined in the Act) or by the Trust's Board of Trustees and (b)
by the vote, cast in person at a meeting called specifically for the purpose of
continuing this Sub-Advisory Contract, of a majority of the Trust's Trustees
who are not parties to this contract or "interested persons" (as defined in the
Act) of any such party. This contract may be terminated, upon 60 days' written
notice to the Sub-Adviser, by the Trust, without the payment of any penalty, by
a vote of a majority of the Master Portfolio's outstanding voting securities
(as defined in the Act) or by a vote of a majority of the Trust's entire Board
of Trustees. The Sub-Adviser may terminate this contract on 60 days' written
notice to the Adviser and the Trust. This contract shall terminate
automatically in the event of its assignment (as defined in the Act).
7. Except to the extent necessary to perform the Sub-Adviser's
obligations under this contract, nothing herein shall be deemed to limit or
restrict the right of the Sub-Adviser, or any affiliate of the Sub-Adviser, or
any employee of the Sub-Adviser, to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, firm, individual or association.
8. This contract shall be governed by and construed in accordance
with the laws of the State of California.
9. This contract has been executed on behalf of the Trust by the
undersigned officer of the Trust in his capacity as an officer of the Trust.
The obligations of this contract shall only be binding upon the assets and
property of the Master Portfolio, as provided for in the Trust's Declaration of
Trust, and shall not be binding upon any trustee, officer or interestholder of
the Trust or Master Portfolio individually.
2
<PAGE> 3
If the foregoing correctly sets forth the agreement between the Trust,
the Adviser and the Sub-Adviser, please so indicate by signing and returning to
the Trust the enclosed copy hereof.
Very truly yours,
BZW BARCLAYS GLOBAL FUND ADVISORS
By: /s/ JUDITH M. NOLTE
---------------------------------------
Name: Judith M. Nolte
-------------------------------------
Title: Senior Counsel
Assistant Secetary
-----------------------------------
By: /s/ ANDREA M. ZOLBERTI
---------------------------------------
Name: Andrea M. Zolberti
-------------------------------------
Title: Chief Financial Officer
------------------------------------
ACCEPTED as of the date
set forth above:
MANAGED SERIES INVESTMENT TRUST
on behalf of Growth Stock Master Portfolio
By: /s/ RICHARD H. BLANK, JR.
--------------------------------------
Name: Richard H. Blank, Jr.
------------------------------------
Title: Chief Operating Officer,
Secretary and Treasurer
-----------------------------------
WELLS FARGO BANK, N.A.
By: /s/ ELIZABETH A. GOTTFRIED
--------------------------------------
Name: Elizabeth A. Gottfried
------------------------------------
Title: Vice President
----------------------------------
By: /s/ MIKE NIEDERMEYER
--------------------------------------
Name: Mike Niedermeyer
------------------------------------
Title: Executive Vice President
-----------------------------------
3
<PAGE> 1
EX-99.B5(a)(iv)
SUB-ADVISORY CONTRACT
Short-Intermediate Term Master Portfolio
a portfolio of
MANAGED SERIES INVESTMENT TRUST
111 Center Street
Little Rock, Arkansas 72201
January 1, 1996
Wells Fargo Bank, N.A.
45 Fremont Street
San Francisco, California 94105
Dear Sirs:
This will confirm the agreement by and among BZW Barclays Global Fund
Advisors (the "Adviser"), Managed Series Investment Trust (the "Trust"), on
behalf of the Short-Intermediate Term Master Portfolio (the "Master
Portfolio"), and Wells Fargo Bank, N.A. (the "Sub-Adviser") as follows:
1. The Trust is a registered open-end management investment
company currently consisting of eight investment portfolios, but which may from
time to time consist of a greater or lesser number of investment portfolios
(the "Master Portfolios"). The Short-Intermediate Term Master Portfolio is one
of the eight Master Portfolios. The Trust proposes to engage in the business
of investing and reinvesting the assets of the Master Portfolio in the manner
and in accordance with the investment objective and restrictions specified in
the Trust's Registration Statement, as amended from time to time (the
"Registration Statement"), filed by the Trust under the Investment Company Act
of 1940 (the "Act"). Copies of the Registration Statement have been furnished
to the Adviser. Any amendments to the Registration Statement shall be
furnished to the Adviser promptly.
2. The Trust has engaged the Adviser to manage the investing and
reinvesting of the Master Portfolio's assets and to provide the advisory
services specified in the Investment Advisory Contract between the Trust and
the Adviser, dated as of the date hereof, subject to the overall supervision of
the Board of Trustees of the Trust. Pursuant to an Administration Agreement
between the Trust, on behalf of the Master Portfolio, and an administrator (the
"Administrator"), the Trust has engaged the Administrator to provide the
administrative services specified therein.
3. (a) The Adviser hereby employs the Sub-Adviser to perform for
the Master Portfolio certain advisory services and the Sub-Adviser hereby
accepts such employment. The Adviser shall retain the authority to establish
and modify, from time to time, the investment strategies and approaches to be
followed by the Sub-Adviser, subject, in all respects, to the supervision and
direction of the Trust's Board of Trustees and subject to compliance with the
investment objective, policies and restrictions set forth in the Registration
Statement.
(b) Subject to the overall supervision and control of the
Adviser and the Trust, the Sub-Adviser shall be responsible for investing and
reinvesting the Master Portfolio assets in a manner consistent with the
investment strategies and approaches referenced in subparagraph (a), above. In
this regard, the Sub-Adviser, in accordance with the investment objective,
policies and restrictions set forth in the Registration Statement, the Act and
the provisions of the Internal Revenue Code of 1986 relating to regulated
investment companies, shall be responsible for furnishing to the Master
Portfolio investment guidance and policy direction in connection with the daily
portfolio management of the Master Portfolio and shall furnish to the Adviser
periodic reports on the investment activity and performance of the Master
Portfolio. The Sub-Adviser shall also furnish such additional reports and
information as the Adviser and the Trust's Board of Trustees and officers shall
reasonably request.
(c) The Sub-Adviser shall, at its expense, employ or
associate with itself such persons as the Sub- Adviser believes appropriate to
assist it in performing its obligations under this contract.
4. The Adviser shall be responsible for the Sub-Adviser's fees
for its services hereunder. The Sub- Adviser agrees that it shall have no
claim against the Trust or the Master Portfolio respecting compensation under
this contract. In consideration of the services to be rendered by the
Sub-Adviser under this contract, the Adviser shall pay the Sub-Adviser a
monthly fee on the first business day of each calendar month, at the annual
rate of 0.10% of the average daily value (as determined on each day that such
value is determined for the Master Portfolio at the time set forth in the
Registration Statement for determining net asset value per share) of the Master
<PAGE> 2
Portfolio's net assets during the preceding month. If the fee payable to the
Sub-Adviser pursuant to this Paragraph 4 begins to accrue on a day after the
first day of any month or if this contract terminates before the end of any
month, the fee for the period from the effective date to the end of the month,
or from the beginning of that month to the termination date, shall be prorated
according to the proportion that such period bears to the full month in which
the effectiveness or termination occurs. For purposes of calculating the
monthly fee, the value of the Master Portfolio's net assets shall be computed
in the manner specified in the Registration Statement and the Trust's
Declaration of Trust for the computation of the value of the Master Portfolio's
net assets in connection with the determination of the net asset value of
Master Portfolio's interests.
5. The Sub-Adviser shall give the Trust the benefit of the
Sub-Adviser's best judgment and efforts in rendering services under this
contract. As consideration and as an inducement to the Sub-Adviser's
undertaking to render these services, the Trust and the Adviser agree that the
Sub-Adviser shall not be liable under this contract for any mistake in judgment
or in any other event whatsoever except for lack of good faith, provided that
nothing in this contract shall be deemed to protect or purport to protect the
Sub-Adviser against any liability to the Adviser, the Trust or its
interestholders to which the Sub-Adviser would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of the
Sub-Adviser's duties under this contract or by reason of reckless disregard of
its obligations and duties hereunder.
6. This contract shall become effective as of its execution date
and shall thereafter continue in effect, provided that this contract shall
continue in effect for a period of more than two years from the date hereof
only so long as the continuance is specifically approved at least annually (a)
by the vote of a majority of the Master Portfolio's outstanding voting
securities (as defined in the Act) or by the Trust's Board of Trustees and (b)
by the vote, cast in person at a meeting called specifically for the purpose of
continuing this Sub-Advisory Contract, of a majority of the Trust's Trustees
who are not parties to this contract or "interested persons" (as defined in the
Act) of any such party. This contract may be terminated, upon 60 days' written
notice to the Sub-Adviser, by the Trust, without the payment of any penalty, by
a vote of a majority of the Master Portfolio's outstanding voting securities
(as defined in the Act) or by a vote of a majority of the Trust's entire Board
of Trustees. The Sub-Adviser may terminate this contract on 60 days' written
notice to the Adviser and the Trust. This contract shall terminate
automatically in the event of its assignment (as defined in the Act).
7. Except to the extent necessary to perform the Sub-Adviser's
obligations under this contract, nothing herein shall be deemed to limit or
restrict the right of the Sub-Adviser, or any affiliate of the Sub-Adviser, or
any employee of the Sub-Adviser, to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, firm, individual or association.
8. This contract shall be governed by and construed in accordance
with the laws of the State of California.
9. This contract has been executed on behalf of the Trust by the
undersigned officer of the Trust in his capacity as an officer of the Trust.
The obligations of this contract shall only be binding upon the assets and
property of the Master Portfolio, as provided for in the Trust's Declaration of
Trust, and shall not be binding upon any trustee, officer or interestholder of
the Trust or Master Portfolio individually.
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<PAGE> 3
If the foregoing correctly sets forth the agreement between the Trust,
the Adviser and the Sub-Adviser, please so indicate by signing and returning to
the Trust the enclosed copy hereof.
Very truly yours,
BZW BARCLAYS GLOBAL FUND ADVISORS
By: /s/ JUDITH M. NOLTE
---------------------------------------
Name: Judith M. Nolte
-------------------------------------
Title: Senior Counsel
Assistant Secetary
-----------------------------------
By: /s/ ANDREA M. ZOLBERTI
---------------------------------------
Name: Andrea M. Zolberti
-------------------------------------
Title: Chief Financial Officer
------------------------------------
ACCEPTED as of the date
set forth above:
MANAGED SERIES INVESTMENT TRUST
on behalf of Growth Stock Master Portfolio
By: /s/ RICHARD H. BLANK, JR.
--------------------------------------
Name: Richard H. Blank, Jr.
------------------------------------
Title: Chief Operating Officer,
Secretary and Treasurer
-----------------------------------
WELLS FARGO BANK, N.A.
By: /s/ ELIZABETH A. GOTTFRIED
--------------------------------------
Name: Elizabeth A. Gottfried
------------------------------------
Title: Vice President
----------------------------------
By: /s/ MIKE NIEDERMEYER
--------------------------------------
Name: Mike Niedermeyer
------------------------------------
Title: Executive Vice President
-----------------------------------
3
<PAGE> 1
EX-99.B8(b)
CUSTODY AGREEMENT
This Agreement is made as of the 1st day of January, 1996 (the "Agreement"), by
and between MANAGED SERIES INVESTMENT TRUST (the "Trust") on behalf of those
Portfolios named in the Appendix, as amended from time to time, (hereinafter
called the "Master Portfolios"), and BZW BARCLAYS GLOBAL INVESTORS, N.A., a
special purpose trust company (hereinafter called the "Custodian").
WITNESSETH:
that for and in consideration of the mutual promises hereinafter set forth the
Trust and the Custodian agree as follows:
1. Definitions
The word "securities" as used herein include stocks, shares,
bonds, debentures, notes, mortgages, or other obligations and any
certificates, receipts, warrants, options or other instruments
representing rights to receive, purchase, or subscribe for the same or
evidencing or representing any other rights or interests therein, or in
any property or assets.
The words "officers' certificate" shall mean a certification in
writing signed in the name of the Trust by those persons who are officers
of the Trust who are duly authorized to sign by the Board of Trustees of
the Trust (the "Board of Trustees").
The word "depository" shall mean The Depository Trust Company
("DTC"), Participants Trust Company ("PTC"), and any other clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, its successor(s) and
its nominee(s), provided the Custodian has received a certified copy of a
resolution of the Board of Trustees specifically approving deposits in
DTC, PTC or such other clearing agency. The Term "Depository" shall
further mean and include any person authorized to act as a depository
pursuant to Section 17, Rule 17f-4 or Rule 17f-5 thereunder, under the
Investment Company Act of 1940, its successor(s) and its nominee(s),
specifically identified in a certified copy of a resolution of the Board
of Trustees specifically approving deposits therein by the Custodian.
2. Names, Titles and Signatures of Trust's Officers
An officer of the Trust will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board
of Trustees, together with any charges which may occur from time to time.
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<PAGE> 2
3. Appointment and Authority of Custodian: Accounts, Receipt and
Disbursement of Money
A. The Trust hereby appoints Custodian as custodian of all
securities and moneys at any time owned by the Master
Portfolios during the term of this Agreement. Custodian
hereby accepts appointment as such custodian and agrees to
perform the duties thereof as hereinafter set forth.
B. Custodian shall open and maintain a separate account or
accounts in the name of the Master Portfolios. Custodian
shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the
account of the Master Portfolios. Custodian shall make
payments of cash to, or for the account of, the Master
Portfolios from such cash only (a) for the purchase of
securities for the portfolios of the Master Portfolios upon
the delivery of such securities to Custodian, registered in
the name of the Master Portfolios or in the name of the
nominee of Custodian referred to in Section 7 hereof or in the
proper form for transfer, (b) for the purchase or redemption
of shares of beneficial ownership of the Master Portfolios,
(c) for the payment of interest, dividends, taxes, Director's
fees or operating expenses (including, without limitation,
fees for legal, accounting and auditing services and expense
for printing and postage), (d) for payments in connection with
the conversion, exchange or surrender of securities owned or
subscribed to by the Master Portfolios held by or to be
delivered to Custodian, or (e) for other purposes certified by
resolution of the Trust's Board of Trustees. Before making
any such payment Custodian shall receive instructions from the
Trust requesting such payment.
C. Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money
received by Custodian for the account of the Master
Portfolios.
D. Subject to the requirements of the Investment Company Act
of 1940 and subject to the approval of the Trust's Board of
Trustees, the Custodian shall have the authority to keep and
maintain the Master Portfolios' securities with certain
sub-custodians, including, but not limited to, Bankers Trust
Company, the Federal Reserve Book-Entry System DTC, PTC and
other depositories as defined above.
4. Receipt of Securities
Custodian shall hold in a separate account, pursuant to the
provisions hereof, all securities received by it from or for the account of the
Master Portfolios. All such securities are to be held or disposed of by
Custodian for, and subject at all times to the instructions of, the Master
Portfolios pursuant to the terms of this Agreement. Custodian shall have no
power or authority to assign, hypothecate, pledge or otherwise dispose of any
such securities and investments, except pursuant to the direction of the Master
Portfolios and only for the account of such Master Portfolios as set forth in
Section 5 of this Agreement.
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<PAGE> 3
5. Transfer, Exchange, Redelivery, etc. of Securities
Custodian shall have power to release or deliver any securities of
the Master Portfolios held by it pursuant to this Agreement on the direction of
the Master Portfolios. Custodian agrees to transfer, exchange or deliver
securities held by it hereunder only (a) for sales of such securities for the
account of such Master Portfolios upon receipt by Custodian of payment
therefor, (b) when such securities are called, redeemed or retired or otherwise
become payable, (c) for examination by a broker selling any such securities in
accordance with "street delivery" custom, (d) in exchange for, or upon
conversion into, other securities alone or other securities and cash, whether
pursuant to any plan or merger, consolidation, reorganization, recapitalization
or readjustment, or otherwise, (e) upon conversion of such securities pursuant
to their terms into other securities, (f) upon exercise of subscription,
purchase or other similar rights represented by such securities, (g) for the
purpose of exchanging interim receipts or temporary securities for definitive
securities, (h) for other proper purposes. As to any deliveries made by
Custodian pursuant to items (a), (b), (d), (e), (f), or (g), securities or cash
receivable in exchange therefor shall be deliverable to Custodian. Before
making any such transfer, exchange or delivery, Custodian shall receive (and
may rely upon) an officers' certificate requesting such transfer, exchange or
delivery, and stating that it is for a purpose permitted under the terms of
items (a) through (g) inclusive of this Section 5 and also, in respect of item
(h), upon receipt of an officers' certificate specifying the securities to be
delivered, setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper purpose, and naming the person or persons
to whom delivery of such securities shall be made; provided, however, that an
officers' certificate need not precede any such transfer, exchange or delivery
of a money market instrument if an authorized officer of the Trust issues
appropriate oral instructions to Custodian and an appropriate officers'
certificate is received by Custodian within two business days thereafter.
6. Custodian's Acts Without Instructions
Unless and until Custodian receives an officers' certificate or
other written instructions to the contrary, Custodian shall: (a) present for
payment all coupons and other income items held by it for the account of the
Master Portfolios which call for payment upon presentation and hold the cash
received by it upon such payment for the account of the Master Portfolios; (b)
collect interest and cash dividends received, with notice to the Master
Portfolios, for the account of the Master Portfolios; (c) hold for the account
of the Master Portfolios hereunder all stock dividends, rights and similar
securities issued with respect to any securities held by it hereunder; and (d)
execute as agent on behalf of the Master Portfolios all necessary ownership
certificates required by the Internal Revenue Code or the Income Tax
Regulations of the United States Treasury Department or under the laws of any
state now or hereafter in effect, inserting the Master Portfolios' name on such
certificates as the owner of the securities covered thereby, to the extent it
may lawfully do so.
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7. Registration of Securities
Except as otherwise directed by an officers' certificate Custodian
shall register all securities, except such as are in bearer form, in nominee
form, and shall execute and deliver all such certificates in connection
therewith as may be required by such laws or regulations or under the laws of
any state. Custodian shall use its best efforts to insure that the specific
securities held by it hereunder shall be at all times identifiable in its
records.
The Trust shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of a nominee, any securities which it may hold for
the account of the Master Portfolios and which from time to time may be
registered in the name of the Master Portfolios.
8. Voting and Other Action
Neither Custodian nor any nominee of Custodian shall vote any of
the securities held hereunder by or for the account of the Master Portfolios,
except in accordance with the guidelines approved by the Trust.
9. Transfer Tax and Other Disbursements
The Trust shall pay or reimburse Custodian from time to time for
any transfer taxes payable upon transfers of securities made hereunder, and for
all other necessary, reasonable and proper disbursements and expenses made or
incurred by Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in
connection with securities delivered to it or by it under this Agreement as may
be required, under the provisions of the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, or under the laws of
any state, to exempt from taxation any exemptable transfers and/or deliveries
of any such securities.
10. Concerning Custodian
The Custodian shall not be entitled to compensation for providing
custody services to the Master Portfolios pursuant to this Agreement so long as
Custodian or BZW Barclays Global Fund Advisors receives fees for providing
investment advisory (or sub-advisory) services to the Master Portfolios. If it
or BZW Barclays Global Fund Advisors no longer receives compensation for
providing such services, Custodian shall be entitled to such compensation as it
may from time negotiate with the Trust.
Custodian shall not be liable for any action taken in good faith
upon any certificate herein described or certified copy of any resolution of
the Board of Trustees, and may rely on the
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<PAGE> 5
genuineness of any such document which it may in good faith believe to have
been validly executed.
The Trust agrees to reimburse and make Custodian and its nominee
whole from all taxes, charges, expenses, assessments, claims, and liabilities
(including reasonable attorney's fees) incurred or assessed against it or by
its nominee in connection with the performance of this Agreement, except such
as may arise from Custodian's or its nominee's own negligent action, negligent
failure to act or willful misconduct. In the event of any advance of cash for
any purpose made by Custodian resulting from orders or instructions of the
Master Portfolios, or in the event that Custodian or its nominee shall incur or
be assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement (except such as may arise
from Custodian or its nominee's own negligent action, negligent failure to act
or willful misconduct, and excluding any compensation payable by the Master
Portfolios to Custodian hereunder), any property at any time held for the
account of the Master Portfolios shall be security therefor.
Custodian shall reimburse, indemnify and make the Master
Portfolios whole for any actual loss or damages, including reasonable fees and
expenses of counsel, arising from Custodian's negligent action, negligent
failure to act or its willful misconduct.
11. Reports by Custodian
Custodian shall furnish the Master Portfolios from time to time
with a statement summarizing all transactions and entries for the account of
the Master Portfolios. Custodian shall furnish the Master Portfolios at the
end of every month with a list of the portfolio securities held for the Master
Portfolios showing the aggregate cost of each issue. Custodian shall furnish
the Master Portfolios, at the close of each quarter of the Master Portfolios'
fiscal year, with a list showing the cost of the securities held by it for the
Master Portfolios hereunder, adjusted for all commitments confirmed by the
Master Portfolios as of such close, certified by a duly authorized officer of
Custodian. The books and records of Custodian pertaining to its actions under
this Agreement shall be open to inspection and audit at reasonable times by
officers of, and auditors employed by, the Trust.
12. Termination of Agreement
This Agreement may be terminated by the Master Portfolios on
ninety (90) days notice, given in writing and sent by registered mail, to
Custodian at 45 Fremont Street, San Francisco, California 94105, or to the
Trust at 525 Market Street, Suite 1200, San Francisco, California 94163. Upon
termination of this Agreement, pending appointment of a successor to Custodian,
Custodian shall deliver cash, securities or other property of the Master
Portfolios only to a bank (as defined in the Investment Company Act of 1940, as
amended; the "1940 Act") located in San Francisco, California of its own
selection, having an aggregate capital, surplus and undivided profits, as shown
by its last published report of condition of not less than Two Million Dollars
($2,000,000) as custodian for the Master Portfolios to be held under terms
similar to those of this Agreement provided, however, that Custodian shall not
be required to make any
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<PAGE> 6
such delivery or payment until full payment shall have been made by the Master
Portfolios of all liabilities constituting a charge on or against Custodian,
and until full payment shall have been made to Custodian of all its fees,
compensation, costs and expenses, subject to the provisions of Section 10 of
this Agreement. This Agreement may not be assigned by Custodian without the
consent of the Trust, authorized or approved by a resolution of its Board of
Trustees.
13. Deposits of Securities in Securities Depositories
No provision of the Agreement shall be deemed to prevent the use
by Custodian of a central securities clearing agency or securities depository;
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and
regulations (including all applicable requirements of the 1940 Act and the
rules and regulations promulgated thereunder) and the Board of Trustees
approves by resolution the use of such central securities clearing agency or
securities depository.
14. Records
To the extent that Custodian in any capacity prepares or maintains
any records required to be maintained and preserved by the Trust pursuant to
the provisions of the 1940 Act or the rules and regulations promulgated
thereunder, Custodian agrees to make any such records available to the Trust
upon request and to preserve such records for the periods prescribed in Rule
31a-2 under the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date above- written by their respective
representatives thereunto duly authorized.
MANAGED SERIES INVESTMENT TRUST
By: /s/ Richard H. Blank, Jr.
-----------------------------------
Name: Richard H. Blank, Jr.
-----------------------------------
Title: Chief Operating Officer,
Secretary and Treasurer
-----------------------------------
6
<PAGE> 7
BZW BARCLAYS GLOBAL INVESTORS, N.A.
By: /s/ Judith M. Nolte
-----------------------------------
Name: Judith M. Nolte
-----------------------------------
Title: Senior Counsel, Assistant Secretary
-----------------------------------
By: /s/ Andrea M. Zolberti
-----------------------------------
Name: Andrea M. Zolberti
-----------------------------------
Title: Chief Financial Officer
-----------------------------------
7
<PAGE> 8
APPENDIX
Growth and Income Master Portfolio
Growth Stock Master Portfolio
Short-Intermediate Term Master Portfolio
Tax-Free Intermediate Income Master Portfolio
Tax-Free Money Market Master Portfolio
8
