As filed with the Securities and Exchange Commission on February 28, 1997.
File No. 811-8454
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
----
Amendment No. 4 / X /
GLOBAL INVESTMENT PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
50 California Street, 27th Floor
San Francisco, California 94111
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 415-392-6181
David J. Thelander, Esq.
Vice President & Assistant General Counsel
Chancellor LGT Asset Management, Inc.
50 California Street, 27th Floor
San Francisco, California 94111
(Name and Address of Agent for Service)
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<PAGE>
EXPLANATORY NOTE
This Amendment to the Registration Statement of Global Investment
Portfolio has been filed by the Registrant pursuant to Section 8(b) of the
Investment Company Act of 1940, as amended (the "1940 Act"). However, beneficial
interests in the Registrant have not been registered under the Securities Act of
1933, as amended (the "1933 Act"), since such interests are offered 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 investment companies, insurance company separate accounts,
common or commingled trust funds or similar organizations or entities which are
"accredited investors" as defined in Regulation D under the 1933 Act. This
Amendment to the Registration Statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any beneficial interests in the Registrant.
<PAGE>
GLOBAL INVESTMENT PORTFOLIO
CONTENTS OF REGISTRATION STATEMENT
This registration statement of Global Investment Portfolio contains the
following documents:
Facing Sheet
Contents of Registration Statement
Part A
Part B
Part C
Signature Page
Exhibits
<PAGE>
PART A
Responses to Items 1 through 3 and 5A have been omitted pursuant to
paragraph 4 of Instruction F of the General Instructions to Form N-1A.
Responses to certain Items required to be included in Part A of this
Registration Statement are incorporated herein by reference from Post-Effective
Amendment No. 47 to the Registration Statement of G.T. Investment Funds, Inc.
("GT Investment Funds") (1940 Act File No. 811-5426), as filed with the
Securities and Exchange Commission ("SEC") on February 26, 1997 ("Feeder
Registration Statement"). Part A of the Feeder Registration Statement includes
the joint prospectus of the GT Global Theme Funds ("Feeder's Part A").
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.
Global Investment Portfolio ("Master Portfolio") is a diversified,
open-end management investment company which was organized as a New York common
law trust pursuant to a Declaration of Trust dated as of January 11, 1994.
Beneficial interests in the Master Portfolio are divided currently into
four separate subtrusts or "series"--Global Financial Services Portfolio, Global
Infrastructure Portfolio, Global Natural Resources Portfolio and Global Consumer
Products and Services Portfolio (individually, "Portfolio," collectively,
"Portfolios") -- each having a distinct investment objective and distinct
investment policies and limitations. The Global Financial Services Portfolio,
Global Infrastructure Portfolio and Global Natural Resources Portfolio commenced
operations on May 31, 1994. The Global Consumer Products and Services Portfolio
commenced operations on December 30, 1994. Additional subtrusts to the Master
Portfolio may be organized at a later date. The assets of each Portfolio belong
only to that Portfolio, and the liabilities of each Portfolio are borne solely
by that Portfolio and no other.
Beneficial interests in the Portfolios are offered solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolios may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities which are
"accredited investors" as defined in Regulation D under the 1933 Act. The
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.
Each Portfolio's investment manager and administrator is Chancellor LGT
Asset Management, Inc. ("Chancellor LGT Asset Management"). Chancellor LGT Asset
Management and its worldwide affiliates are part of Liechtenstein Global Trust,
a provider of global asset management and private banking products and services
to individual and institutional investors.
Information on the Portfolios' investment objectives, the kinds of
securities in which the Portfolios principally invest, other investment
practices of the Portfolios and the risk factors associated with investments in
the Portfolios are incorporated herein by reference from the sections entitled
"Investment Objectives and Policies" and "Risk Factors" in the Feeder's Part A.
Additional investment techniques, features and limitations concerning the
Portfolios' investment program are described in Part B of this Registration
Statement.
A-2
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ITEM 5. MANAGEMENT OF THE MASTER PORTFOLIO.
A description of how the business of the Portfolios is managed is
incorporated herein by reference from the section entitled "Management" in the
Feeder's Part A. The following list identifies the specific sections of the
Feeder's Part A under which the information required by Item 5 of Form N-1A may
be found; each listed section is incorporated herein by reference.
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Item 5(a) Management
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Item 5(b) Management--Investment Management and Administration
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Item 5(c) Management
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Item 5(d) Management
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Item 5(e) Other Information--Transfer Agent
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Item 5(f) Management; Prospectus Summary
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Item 5(g) Management
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ITEM 6. CAPITAL STOCK AND OTHER SECURITIES.
The Master Portfolio is organized as a New York common law trust. Under
the Declaration of Trust, the Trustees are authorized to issue beneficial
interests in separate subtrusts or "series" of the Master Portfolio. The Master
Portfolio currently has four series (i.e., the Portfolios). The Master Portfolio
reserves the right to create and issue additional series. Each investor in a
Portfolio is entitled to participate equally in the Portfolio's earnings and
assets and to vote in proportion to the amount of its investment in the
Portfolio. Investments in a Portfolio may not be transferred, but an investor
may withdraw all or any portion of its investment at any time at net asset
value. Each investor in a Portfolio (e.g., investment companies and common and
commingled trust funds) will be liable for all obligations of that Portfolio,
but not of the other Portfolios. However, because a Portfolio will indemnify
each investor therein with respect to any liability to which the investor may
become subject by reason of being such an investor, the risk of an investor in a
Portfolio incurring financial loss on account of such liability would be limited
to circumstances in which that Portfolio had inadequate insurance and was unable
to meet its obligations (including indemnification obligations) out of its
assets.
As of the date of this Registration Statement, GT Investment Funds owns
a majority interest in the Master Portfolio and each Portfolio. However, GT
Investment Funds has undertaken that, with respect to most matters on which the
Master Portfolio seeks a vote of its interestholders, GT Investment Funds will
seek a vote of its shareholders and will vote its interest in the Master
Portfolio in accordance with their instructions.
Investments in a Portfolio have no preemptive or conversion rights. The
Master Portfolio is not required to hold annual meetings of investors but the
Master Portfolio 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 have the right to communicate with other investors to the extent
provided in Section 16(c) of the 1940 Act in connection with requesting a
meeting of investors for the purpose of removing one or more Trustees, which
removal requires a two-thirds vote of the Master Portfolio's beneficial
interests. Investors also have under certain circumstances the right to remove
one or more Trustees without a meeting. Upon liquidation of a Portfolio,
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<PAGE>
investors would be entitled to share pro rata in that Portfolio's net assets
available for distribution to investors.
Each Portfolio annually declares as a dividend all of its net
investment income, if any, which includes dividends, accrued interest and earned
discount (including both original issue and market discounts) less applicable
expenses. Each Portfolio also annually distributes substantially all of its
realized net short-term capital gain (the excess of short-term capital gains
over short-term capital losses), net capital gain (the excess of net long-term
capital gain over net short-term capital loss) and net gains from foreign
currency transactions, if any. Each Portfolio may make an additional dividend or
other distribution if necessary to avoid a 4% excise tax on certain
undistributed income and gain.
Under the current method of the Portfolios' operation they are not
subject to any income tax. However, each investor in a Portfolio is taxable on
its share (as determined in accordance with the governing instruments of the
Master Portfolio and the Internal Revenue Code of 1986, as amended ("Code") and
the regulations promulgated thereunder) of that Portfolio's income, gains,
losses, deductions, and credits in determining its income tax liability. The
determination of such share will be made in accordance with the Code and the
regulations promulgated thereunder. It is intended that each Portfolio's assets,
income, and distributions will be managed in such a way that an investor in a
Portfolio will be able to satisfy the requirements of Subchapter M of the Code,
assuming that the investor invested all of its assets in the Portfolio. See Part
B for a discussion of the foregoing tax matters and certain other matters.
Investor inquiries may be directed to Chancellor LGT Asset Management
at the following address: 50 California Street, 27th Floor, San Francisco, CA
94111.
ITEM 7. PURCHASE OF SECURITIES.
Beneficial interests in each Portfolio 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. See "General Description of Registrant"
above.
An investment in a Portfolio may be made without a sales load at the
net asset value next determined after an order is received in "good order" by a
Portfolio. There is no minimum initial or subsequent investment in a Portfolio.
However, investments must be made in federal funds (i.e., monies credited to the
account of a Portfolio's custodian bank by a Federal Reserve Bank). Each
investor in a Portfolio may add to or reduce its investment in the Portfolio on
each day the New York Stock Exchange ("NYSE") is open for trading.
Information on the time and method of valuation of the Portfolios'
assets is incorporated by reference from the section entitled "Calculation of
Net Asset Value" in the Feeder's Part A.
Each Portfolio reserves the right to cease accepting investments at any
time or to reject any investment order.
ITEM 8. REDEMPTION OR REPURCHASE.
An investor in a Portfolio may reduce any portion or all of its
investment at any time at the net asset value next determined after a request in
"good order" is furnished by the investor to that Portfolio. The proceeds of a
reduction will be paid by a Portfolio in federal funds normally on the next
business day after the reduction is effected, but in any event within seven
days. Investments in a Portfolio may not be transferred.
The right of any investor to receive payment with respect to any
reduction may be suspended or the payment of the proceeds therefrom postponed
A-4
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during any period (1) when the NYSE is closed (other than customary weekend or
holiday closings) or trading on the NYSE is restricted as determined by the SEC,
(2) when an emergency exists, as defined by the SEC, which would prohibit a
Portfolio in disposing of its portfolio securities or in fairly determining the
value of its assets, or (3) as the SEC may otherwise permit.
ITEM 9. PENDING LEGAL PROCEEDINGS.
Not applicable.
A-5
<PAGE>
PART B
Part B of this Registration Statement should be read only in
conjunction with Part A. Capitalized terms used in Part B and not otherwise
defined have the meanings given them in Part A of this Registration Statement.
Responses to certain Items required to be included in Part B of this
Registration Statement are incorporated herein by reference from the Feeder
Registration Statement. Part B of the Feeder Registration Statement includes the
joint statement of additional information of the GT Global Financial Services
Fund, GT Global Infrastructure Fund, GT Global Natural Resources Fund and GT
Global Consumer Products and Services Fund (collectively, "Feeder's Part B").
ITEM 10. COVER PAGE.
Not applicable.
ITEM 11. TABLE OF CONTENTS.
Page
General Information and History......................B-1
Investment Objectives and Policies...................B-1
Management of the Master Portfolio...................B-2
Control Persons and Principal Holders of Interests...B-2
Investment Advisory and Other Services...............B-3
Brokerage Allocation and Other Practices.............B-3
Capital Stock and Other Securities...................B-4
Purchase, Redemption and Pricing of Securities.......B-5
Tax Status...........................................B-5
Underwriters.........................................B-6
Calculation of Performance Data......................B-6
Financial Statements.................................B-6
ITEM 12. GENERAL INFORMATION AND HISTORY.
Not applicable.
ITEM 13. INVESTMENT OBJECTIVES AND POLICIES.
Part A contains basic information about the investment objectives,
policies and limitations of Global Financial Services Portfolio, Global
Infrastructure Portfolio, Global Natural Resources Portfolio and Global Consumer
Products and Services Portfolio (individually, a "Portfolio," collectively, the
"Portfolios"), each a subtrust or "series" of Global Investment Portfolio
("Master Portfolio"). This Part B supplements the discussion in Part A of the
investment objectives, policies and limitations of the Portfolios.
Information on the fundamental investment limitations and the non-
fundamental investment policies and limitations of the Portfolios, the types of
securities bought and investment techniques used by the Portfolios, and certain
risks attendant thereto, as well as other information on the Portfolios'
investment programs, is incorporated by reference from the sections entitled
"Investment Objectives and Policies," "Options, Futures and Currency
Strategies," "Risk Factors," "Investment Limitations" and "Execution of
Portfolio Transactions" in the Feeder's Part B.
B-1
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ITEM 14. MANAGEMENT OF THE MASTER PORTFOLIO.
Information about the Trustees and officers of the Master Portfolio,
and their roles in management of the Portfolios and other GT Global Funds, is
incorporated herein by reference from the section entitled "Directors and
Executive Officers" in the Feeder's Part B.
The Board of Trustees has a Nominating and Audit Committee, composed of
Ms. Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Master
Portfolio and its Portfolios and recommending firms to serve as independent
auditors of the Master Portfolio. Each of the Trustees and officers of the
Master Portfolio is also a Director and officer of G.T. Investment Funds, Inc.,
G.T. Global Developing Markets Fund, Inc. and G.T. Global Floating Rate Fund,
Inc. and G.T. Investment Portfolios, Inc. and a Trustee and officer of G.T.
Global Growth Series, G.T. Global Eastern Europe Fund, G.T. Global Variable
Investment Trust, G.T. Global Variable Investment Series, Growth Portfolio and
Global High Income Portfolio, which also are registered investment companies
managed by Chancellor LGT Asset Management. Each Trustee and Officer serves in
total as a Director and or Trustee and Officer, respectively, of 11 registered
investment companies with 41 series managed or administered by Chancellor LGT
Asset Management.
Each Trustee who is not a director, officer or employee of Chancellor
LGT Asset Management or any affiliated company is paid an annual fee of $5,000 a
year, plus $300 for each meeting of the Board attended, and is reimbursed travel
and other expenses incurred in connection with attending Board meetings. Other
Trustees and officers receive no compensation or expense reimbursement from the
Master Portfolio. For the fiscal year ended October 31, 1996, the Global
Financial Services Portfolio, Global Infrastructure Portfolio, Global Natural
Resources Portfolio and the Global Consumer Products and Services Portfolio each
paid Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms. Quigley Trustees' fees and
expense reimbursements of $2700, $2700, $2200, and $2700 each. For the fiscal
year ended October 31, 1996, Mr. Anderson, Mr. Bayley, Mr. Patterson and Ms.
Quigley, who are not directors, officers or employees of Chancellor LGT Asset
Management or any affiliated company, each received total compensation of
$80,100, $80,100, $72,600 and $80,100, respectively, from the investment
companies managed or administered by Chancellor LGT Asset Management for which
he or she serves as a Director or Trustee. Fees and expenses disbursed to the
Trustees contained no accrued or payable pension, or retirement benefits.
As of the date of this filing, the officers and Trustees and their
families as a group owned in the aggregate beneficially or of record less than
1% of the outstanding interests of each Portfolio.
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF BENEFICIAL INTERESTS.
As of the date of this filing, GT Global Financial Services Fund, GT
Global Natural Resources Fund, GT Global Infrastructure Fund and GT Global
Consumer Products and Services Fund (each a "Fund," collectively, "Funds") owned
99.9%, 99.9%, 99.9% and 99.9% of the value of the outstanding beneficial
interests in Global Financial Services Portfolio, Global Natural Resources
Portfolio, Global Infrastructure Portfolio and Global Consumer Products and
Services Portfolio, respectively. Because currently each Fund controls its
corresponding Portfolio, each Fund may take actions affecting its corresponding
Portfolio without the approval of any other investor.
Each Fund has informed its corresponding Portfolio that whenever a Fund
is requested to vote on any proposal of its corresponding Portfolio, it will
hold a meeting of shareholders and will cast its vote as instructed by its
shareholders. It is anticipated that other investors in each Portfolio will
follow the same or a similar practice.
B-2
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ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.
Information on the investment management and other services provided
for or on behalf of the Portfolios is incorporated herein by reference from the
sections entitled "Management," "Directors and Executive Officers" and
"Additional Information" in the Feeder's Part B. The following list identifies
the specific sections in the Feeder's Part B under which the information
required by Item 16 of Form N-1A may be found; each section is incorporated
herein by reference.
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Item 16(a) Management; Additional Information
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Item 16(b) Management
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Item 16(c) Not applicable
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Item 16(d) Management
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Item 16(e) Not applicable
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Item 16(f) Not applicable
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Item 16(g) Not applicable
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Item 16(h) Additional Information
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Item 16(i) Not applicable
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For the fiscal period May 31, 1994 (commencement of operations) to
October 31, 1994, the Financial Services Portfolio, Infrastructure Portfolio and
Natural Resources Portfolio paid investment management and administration fees
to Chancellor LGT Asset Management in the amounts of $8,249, $51,922 and
$28,500, respectively. For the fiscal years ended October 31, 1995 and 1996, the
Financial Services Portfolio, Infrastructure Portfolio and Natural Resources
Portfolio paid investment management and administration fees to Chancellor LGT
Asset Management in the amounts of $51,353, $601,421 and $213,856; and $99,991,
$635,456 and $425,745, respectively. For the fiscal period December 30, 1994
(commencement of operations) to October 31, 1995, and for the fiscal year ended
October 31, 1996, the Consumer Products and Services Portfolio paid investment
management and administration fees to Chancellor LGT Asset Management in the
amounts of $16,284 and $422,640.
For the fiscal period May 31, 1994 (commencement of operations) to
October 31, 1994, Chancellor LGT Asset Management reimbursed the Financial
Services Portfolio, Infrastructure Portfolio and Natural Resources Portfolio for
their respective investment management and administration fees in the amounts of
$8,249, $48,901, and $28,500, respectively. For the fiscal years ended October
31, 1995 and 1996, Chancellor LGT Asset Management reimbursed the Financial
Services Portfolio, Infrastructure Portfolio and Natural Resources Portfolio for
their respective investment management and administration fees in the amounts of
$51,353, $601,421 and $213,856; and $99,991, $0 and $0, respectively. For the
fiscal period December 30, 1994 (commencement of operations) to October 31,
1995, and for the fiscal year ended October 31, 1996, Chancellor LGT Asset
Management reimbursed the Consumer Products and Services Portfolio for
investment management and administration fees in the amounts of $16,284 and $0,
respectively. All expense reimbursements, if any, are made at the Fund level.
ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.
A description of the Portfolios' brokerage allocation and other
practices is incorporated herein by reference from the section entitled
"Execution of Portfolio Transactions" in the Feeder's Part B.
B-3
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ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.
Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in each Portfolio. An investor in a Portfolio is entitled
to participate pro rata in distributions of the Portfolio's income and gains and
to be allocated a pro rata share of the Portfolio's income, gains, losses,
deductions, and credits. Upon liquidation or dissolution of a Portfolio,
investors are entitled to share pro rata in that Portfolio's net assets
available for distribution to its investors. Investments in a Portfolio have no
preference, preemptive, conversion or similar rights. Investments in each
Portfolio may not be transferred.
Each investor in a Portfolio is entitled to vote in proportion to the
amount of its investment in that Portfolio. Investors in the Portfolios will all
vote together in certain circumstances (e.g., election of the Trustees and
auditors, and as required by the 1940 Act and the rules thereunder). Investors
in a Portfolio do not have cumulative voting rights, and investors holding more
than 50% of the aggregate beneficial interest in the Master Portfolio or in a
Portfolio, as the case may be, may control the outcome of these votes. The
Master Portfolio is not required to hold annual meetings of investors but the
Master Portfolio will hold special meetings of investors when (1) a majority of
the Trustees determines to do so; or (2) investors holding at least 10% of the
interests in the Master Portfolio (or a Portfolio) request in writing a meeting
of investors in the Master Portfolio (or Portfolio). No material amendment may
be made to the Master Portfolio's Declaration of Trust without the affirmative
majority vote of investors (with the vote of each being in proportion to the
amount of its investment).
The Master Portfolio may enter into a merger or consolidation, or sell
all or substantially all of its (or a Portfolio's) assets, if approved by the
vote of two-thirds of the beneficial interests in the Master Portfolio (or in
the Portfolio affected by such action, as the case may be) with the vote of each
interestholder being in proportion to the amount of its investment, except that
if the Trustees recommend such sale of assets, the approval by vote of a
majority of the beneficial interests in the Master Portfolio (or in the
Portfolio affected by such action, as the case may be) with the vote of each
interestholder being in proportion to the amount of their investment, will be
sufficient. A Portfolio may also be terminated (i) upon liquidation and
distribution of its assets, if approved by the vote of two-thirds of the
beneficial interests in such Portfolio (with the vote of each being in
proportion to the amount of their investment), or (ii) by the Trustees by
written notice to its investors.
The Master Portfolio is organized as a New York common law trust.
Investors in each Portfolio will be held personally liable for its obligations
and liabilities, subject, however, to indemnification by that Portfolio in the
event that there is imposed upon an investor a greater portion of the
liabilities and obligations of that Portfolio than its proportionate beneficial
interest in such Portfolio. The Declaration of Trust also provides that each
Portfolio shall maintain appropriate insurance (for example, fidelity bonding
and errors and omissions insurance) covering certain kinds of potential
liabilities. Thus, the risk of an investor incurring financial loss on account
of investor liability is limited to circumstances in which both inadequate
insurance existed and the investor's Portfolio itself was unable to meet its
obligations.
The Declaration of Trust further provides that obligations of each
Portfolio are not binding upon the Trustees individually but only upon the
property of that Portfolio 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 he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office. The Declaration of Trust
provides that the Trustees and officers will be indemnified by the Master
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Portfolio against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices with the
Master Portfolio, unless, as to liability to the Master Portfolio or its
investors, it is finally adjudicated that they engaged in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
their offices, or unless with respect to any other matter it is finally
adjudicated that they did not act in good faith in the reasonable belief that
their actions were in the best interests of the Master Portfolio. In the case of
settlement, such indemnification will not be provided unless it has been
determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees or in a written
opinion of independent counsel, that such officers or Trustees have not engaged
in willful misfeasance, bad faith, gross negligence or reckless disregard of
their duties.
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.
Beneficial interests in each Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended.
Information on the method followed by the Portfolios in determining
their net asset value and the timing of such determination is incorporated by
reference from the section entitled "Valuation of Fund Shares" in the Feeder's
Part B. See also Items 7 and 8 in Part A.
Each Portfolio reserves the right, if conditions exist which make cash
payments undesirable, to honor any request for redemption or repurchase order by
making payment in whole or in part in readily marketable securities chosen by
that Portfolio and valued as they are for purposes of computing the Portfolio's
net asset value (a redemption in kind). If payment is made in securities, an
investor may incur transaction expenses in converting these securities into
cash. Each Portfolio has elected, however, to be governed by Rule 18f-1 under
the 1940 Act as a result of which each Portfolio is obligated to redeem
beneficial interests with respect to any one investor during any 90 day period,
solely in cash up to the lesser of $250,000 or 1% of the net asset value of that
Portfolio at the beginning of the period.
Each investor in a Portfolio may add to or reduce its investment in
that Portfolio on each day that the NYSE is open for trading. At the close of
trading, on each such day, the value of each investor's interest in a Portfolio
will be determined by multiplying the net asset value of such Portfolio by the
percentage representing that investor's share of the aggregate beneficial
interests in that Portfolio. Any additions or reductions which are to be
effected on that day will then be effected. The investor's percentage of the
aggregate beneficial interests in a Portfolio will then be recomputed as the
percentage equal to the fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the close of trading on such day
plus or minus, as the case may be, the amount of net additions to or reductions
in the investor's investment in that Portfolio effected on such day, and (ii)
the denominator of which is the aggregate net asset value of the Portfolio as of
the close of trading on such day plus or minus, as the case may be, the amount
of the net additions to or reductions in the aggregate investments in that
Portfolio by all investors in that Portfolio. The percentage so determined will
then be applied to determine the value of the investor's interest in that
Portfolio as of the close of trading on the following day the NYSE is open for
trading.
ITEM 20. TAX STATUS.
Information on the taxation of the Portfolios is incorporated by
reference from the section entitled "Taxes" in the Feeder's Part B.
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ITEM 21. UNDERWRITERS.
Not applicable.
ITEM 22. CALCULATION OF PERFORMANCE DATA.
Not applicable.
ITEM 23. FINANCIAL STATEMENTS.
The audited financial statements of the Financial Services Portfolio,
the Infrastructure Portfolio, the Natural Resources Portfolio and the Consumer
Products and Services Portfolio for the fiscal year ended October 31, 1996, are
included herein, in reliance on the report of Coopers & Lybrand L.L.P.,
independent auditors, given on the authority of said firm as experts in auditing
and accounting.
B-6
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COOPERS
&LYBRAND Coopers & Lybrand L.L.P.
a professional services firm
Report of Independent Accountants
ANNUAL REPORT
To the Shareholders and Board of Trustees of Global
Consumer Products and Services Portfolio, Global Financial Services Portfolio,
Global Infrastructure Portfolio, Global Natural Resources Portfolio.
We have audited the accompanying statement of assets and liabilities of Global
Consumer Products and Services Portfolio, Global Financial Services Portfolio,
Global Infrastructure Portfolio, and Global Natural Resources Portfolio,
including the portfolio of investments as of October 31, 1996, the related
statement of operations for the year then ended, the statements of changes in
net assets and supplementary data for each of the periods indicated herein.
These financial statements and the supplementary data are the responsibility of
the Portfolios' management. Our responsibility is to express an opinion on these
financial statements and the supplementary data based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and supplementary
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the supplementary data referred to
above present fairly, in all material respects, the financial position of Global
Consumer Products and Services Portfolio, Global Financial Services Portfolio,
Global Infrastructure Portfolio, and Global Natural Resources Portfolio as of
October 31, 1996, the results of their operations for the year then ended the
changes in their net assets and the supplementary data for each of the periods
indicated herein in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
December 13, 1996
Coopers & Lybrand L.L.P. is a member of Coopers & Lybrand International, a
limited liability association incorporated in Switzerland.
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SERVICES (51.7%)
Vons Cos., Inc. ! US 134,500 7,447,937 4.4
RETAILERS-FOOD
Central Garden and Pet Co. ! US 273,400 6,459,075 3.8
WHOLESALE & INTERNATIONAL TRADE
Footstar, Inc. ! US 280,000 6,160,000 3.6
RETAILERS-APPAREL
TJX Cos., Inc. US 147,200 5,888,000 3.5
RETAILERS-APPAREL
Jones Apparel Group, Inc. ! US 186,000 5,812,500 3.4
RETAILERS-APPAREL
Tiffany & Co. US 155,300 5,746,100 3.4
RETAILERS-OTHER
Ross Stores, Inc. US 132,200 5,486,300 3.2
RETAILERS-APPAREL
Sun International Hotels Ltd. ! US 114,100 5,391,225 3.2
LEISURE & TOURISM
The Finish Line, Inc. ! US 124,200 5,278,500 3.1
RETAILERS-APPAREL
Seattle Filmworks, Inc. ! US 276,500 5,253,500 3.1
CONSUMER SERVICES
Vans, Inc. ! US 311,100 5,172,038 3.0
RETAILERS-APPAREL
Safeway, Inc. ! US 109,500 4,694,813 2.8
RETAILERS-FOOD
Universal Outdoor Holdings, Inc. ! US 127,400 3,742,375 2.2
BUSINESS & PUBLIC SERVICES
Imax Corp. ! T CAN 96,100 3,459,600 2.0
CONSUMER SERVICES
Tuesday Morning Corp. ! US 173,600 3,363,500 2.0
RETAILERS-OTHER
Borders Group, Inc. ! US 84,600 2,664,900 1.6
RETAILERS-OTHER
United Auto Group, Inc. ! US 60,000 2,062,500 1.2
CONSUMER SERVICES
Dominick's Supermarkets, Inc. ! US 80,000 1,590,000 0.9
RETAILERS-FOOD
Abercrombie & Fitch Co. ! US 68,800 1,513,600 0.9
RETAILERS-APPAREL
Lamar Advertising Co. ! US 22,700 624,250 0.4
BUSINESS & PUBLIC SERVICES
------------------
87,810,713
------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONSUMER NON-DURABLES (36.3%)
Philip Morris Cos., Inc. US 66,500 6,159,563 3.6
FOOD
Coachmen Industries, Inc. US 212,300 5,944,400 3.5
RECREATION
Wet Seal, Inc. "A" ! US 183,400 5,777,100 3.4
TEXTILES & APPAREL
Eagle Hardware & Garden, Inc. ! US 198,400 5,679,200 3.3
HOUSEHOLD PRODUCTS
Nike, Inc. "B" US 93,600 5,510,700 3.2
TEXTILES & APPAREL
Gucci Group - NY Registered Shares T ITLY 77,000 5,313,000 3.1
TEXTILES & APPAREL
Adidas AG - 144A ADR ) ! T GER 121,100 5,177,025 3.0
TEXTILES & APPAREL
Cannondale Corp. ! US 266,500 5,130,125 3.0
RECREATION
Fila Holding S.p.A. - ADR T ITLY 66,200 4,766,400 2.8
TEXTILES & APPAREL
Harley-Davidson, Inc. US 72,400 3,267,050 1.9
OTHER CONSUMER GOODS
Barco N.V. (Barco Industries) BEL 17,320 2,850,549 1.7
OTHER CONSUMER GOODS
K2, Inc. ! US 109,000 2,507,000 1.5
RECREATION
Consolidated Cigar Holdings, Inc. ! US 75,000 2,043,750 1.2
TOBACCO
Noble China ! # CHNA 341,200 954,352 0.6
BEVERAGES - ALCOHOLIC
Rally's Hamburgers, Inc. ! US 190,400 833,000 0.5
FOOD
------------------
61,913,214
------------------
MULTI-INDUSTRY/MISCELLANEOUS
(3.2%)
Bulgari SpA ITLY 314,000 5,474,098 3.2
MULTI-INDUSTRY
---------
FINANCE (3.1%)
Amer Group Ltd. FIN 231,600 5,239,010 3.1
INVESTMENT MANAGEMENT
Metris Cos., Inc. ! US 1,000 23,750 0.0
CONSUMER FINANCE
---------
5,262,760
---------
CONSUMER DURABLES (1.2%)
Boyds Wheels, Inc. US 151,200 2,097,900 1.2
AUTO PARTS
---------
TECHNOLOGY (1.1%)
Ingram Micro, Inc. "A" ! US 95,000 1,710,000 1.0
COMPUTERS & PERIPHERALS
CyberMedia, Inc. ! US 5,800 129,050 0.1
SOFTWARE
---------
1,839,050
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MATERIALS/BASIC INDUSTRY (0.8%)
Kevco, Inc. ! US 115,000 1,380,000 0.8
MISC. MATERIALS &
COMMODITIES
---------
TOTAL EQUITY INVESTMENTS
------------------
(cost $156,514,774) 165,777,735 97.4
------------------
Value % of Net
Repurchase Agreement (Note 1) Assets
----------------------------------------------------------------------------------------------------
Dated October 31, 1996, with State Street Bank 10,575,630 6.2
& Trust Co., due November 1, 1996, for an effective yield of 5.55%,
collateralized by $9,665,000 U.S. Treasury Bond, 7.875% due 11/15/07
(market value of collateral is $10,791,312, including accrued
interest).
(cost $10,575,630)
----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $167,090,404) * 176,353,365 103.6
Other Assets and Liabilities (6,060,483) (3.6)
-----------------------------------------------------------------------------------========---------
NET ASSETS 170,292,882 100.0
====================================================================================================
# Security is denominated in Canadian Dollars.
! Non-income producing security.
T U.S. currency denominated.
) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $167,206,893 and appreciation
(depreciation) is as follows:
Unrealized 13,635,691
appreciation:
Unrealized (4,489,219)
depreciation:
---------
Net unrealized appreciation: $9,146,472
=========
The Portfolio's Portfolio of Investments at October 31, 1996, was
concentrated in the following countries:
Percentage of Net Assets-D
-----------------------------------
Fixed Income,
Rights Short-term
&
COUNTRY (COUNTRY Equity Warrants& Other Total
CODE/CURRENCY CODE)
--------------- -----------------------------------
Belgium (BEL/BEF) 1.7 1.7
Canada (CAN/CAD) 2.0 2.0
China (CHNA/RMB) 0.6 0.6
Finland (FIN/FIM) 3.1 3.1
Germany (GER/DEM) 3.0 3.0
Italy (ITLY/ITL) 9.1 9.1
United States & Other (US/USD) 77.9 2.6 80.5
===================================
Total 97.4 0.0 2.6 100.0
===================================
D Percentages indicated are based on net assets of $170,292,882.
</TABLE>
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO
Portfolio of Investments
October 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BANKS-REGIONAL (39.6%)
BankAmerica Corp. US 6,200 567,300 3.4
Zagrebacka Banka - 144A GDR ) ! T CRT 20,000 387,500 2.4
Sovereign Bancorp, Inc. US 31,000 364,250 2.2
First Tennessee National Corp. US 10,000 363,750 2.2
Anglo-Irish Bank Corp., PLC: IRE 2.2
Common % 259,000 299,203
Common 50,000 58,168
Sparbanken Sverige AB "A" SWDN 21,000 332,648 2.0
NationsBank Corp. US 3,300 311,025 1.9
Banco Commercial S.A. - 144A ADR ) T URGY 18,400 303,600 1.8
Commerce Bancorp, Inc. US 9,150 253,913 1.5
Bank of Nova Scotia CAN 7,700 242,653 1.5
Bank of Montreal CAN 8,000 241,963 1.5
Banco BHIF - ADR ! T CHLE 13,300 239,400 1.5
Canadian Imperial Bank of Commerce CAN 5,700 236,809 1.4
Bank of Boston Corp. US 3,300 211,200 1.3
Norbanken AB ! SWDN 7,700 202,894 1.2
LLoyds TSB Group PLC UK 31,400 199,252 1.2
Christiania Bank Og Kreditkasse ! NOR 66,600 182,749 1.1
Sydbank A/S DEN 4,500 164,920 1.0
Mellon Bank Corp. US 2,500 162,813 1.0
Mark Twain Bancshares, Inc. US 3,500 160,563 1.0
Zions Bancorp. US 1,700 153,850 0.9
Cullen/Frost Bankers, Inc. US 5,000 150,313 0.9
PT Bank Internasional Indonesia - Foreign INDO 180,658 145,485 0.9
Jyske Bank DEN 2,000 144,197 0.9
Grupo Financiero Banorte "B" ! MEX 120,000 119,701 0.7
Westpac Banking Corp., Ltd. AUSL 20,000 114,077 0.7
Allied Irish Bank PLC % IRE 17,794 112,769 0.7
Amalgamated Banks of South Africa ! SAFR 18,000 91,747 0.6
----------
6,518,712
----------
BANKS-MONEY CENTER (18.1%)
Citicorp US 4,500 445,500 2.7
Unidanmark AS "A" DEN 9,000 415,039 2.5
Den Danske Bank DEN 5,280 378,863 2.3
HSBC Holdings PLC HK 13,000 264,819 1.6
Chase Manhattan Corp. US 3,000 257,250 1.6
Bank Hapoalim Ltd. ! ISRL 158,000 214,480 1.3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Bank of New York Co., Inc. US 6,000 198,750 1.2
Bank of Tokyo - Mitsubishi JPN 8,750 178,493 1.1
Bangkok Bank Co., Ltd. - Foreign THAI 14,300 152,593 0.9
Bank of Ireland IRE 18,000 147,901 0.9
Security Bank Corp. ! PHIL 70,000 130,716 0.8
Thai Farmers Bank Ltd. - Foreign THAI 14,100 107,866 0.7
Commercial Bank of Korea KOR 9,900 85,303 0.5
----------
2,977,573
----------
CONSUMER FINANCE (10.1%)
First Chicago NBD Corp. US 9,000 459,000 2.8
Green Tree Financial Corp. US 6,600 261,525 1.6
Promise Co., Ltd. JPN 5,000 233,448 1.4
Dean Witter, Discover & Co. US 3,600 211,950 1.3
Nichiei Co., Ltd. JPN 3,000 199,947 1.2
Acom Co., Ltd. JPN 4,000 153,697 0.9
First Financial Caribbean Corp. US 5,100 131,325 0.8
Metris Cos., Inc. ! US 500 11,875 0.1
----------
1,662,767
----------
SECURITIES BROKER (7.3%)
Peregrine Investment Holdings Ltd. HK 245,000 394,512 2.4
Hambrecht & Quist Group ! US 8,500 168,938 1.0
Nomura Securities Co., Ltd. JPN 10,000 165,304 1.0
Daiwa Securities Co., Ltd. JPN 14,000 151,411 0.9
Nikko Securities Co., Ltd. JPN 15,000 143,762 0.9
Yamaichi Securities Co., Ltd. JPN 22,000 122,641 0.8
Dongwon Securities Co. KOR 3,500 54,794 0.3
----------
1,201,362
----------
OTHER FINANCIAL (6.6%)
Banco LatinoAmericano de Exportaciones S.A. T PAN 7,200 376,200 2.3
(Bladex) "E"
Shohkoh Fund JPN 1,200 252,176 1.5
Investors Financial Services Corp. US 7,000 181,125 1.1
Transaction Network Service ! US 11,050 150,556 0.9
JACCS Co., Ltd. JPN 16,000 127,178 0.8
----------
1,087,235
----------
INVESTMENT MANAGEMENT (6.0%)
Invesco PLC: UK 2.5
ADR T 9,000 336,375
Common 23,300 88,143
Alliance Capital Management L.P. US 14,200 395,825 2.4
Franklin Resources, Inc. US 2,500 176,250 1.1
----------
996,593
----------
REAL ESTATE (2.5%)
Alexander Haagen Properties, Inc. US 15,400 227,150 1.4
Beacon Properties Corp. US 5,500 161,563 1.0
Tornet Fastighets AB ! SWDN 1,700 21,621 0.1
----------
410,334
----------
INSURANCE - MULTI-LINE
(2.3%)
Corporacion Mapfre SPN 4,000 197,601 1.2
Axa Group FR 2,940 183,689 1.1
----------
381,290
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TELECOM - OTHER (1.6%)
Gilat Satellite Networks Ltd. ! T ISRL 9,000 175,500 1.1
Olivetti Group ! ITLY 303,000 87,956 0.5
----------
263,456
----------
CABLE TELEVISION (1.0%)
Matav-Cable Systems Media Ltd. - ADR ! T ISRL 11,000 166,375 1.0
CONGLOMERATE (0.5%)
First National Bank Holdings Ltd. ! SAFR 14,000 76,882 0.5
TOTAL EQUITY INVESTMENTS
-------------------
(cost $14,352,751) 15,742,579 95.6
-------------------
No. of Value % of Net
Rights Country Rights (Note 1) Assets
-------------------------------------------------------------------------------------------
Security Bank Corp. Rights, expire 12/19/96 ! PHIL 28,000 25,610 0.1
Banks-Money Center
(cost $28,521)
No. of Value % of Net
Warrants Country Warrants (Note 1) Assets
-------------------------------------------------------------------------------------------
Peregrine Investment Holdings Ltd. Warrants, ! HK 24,500 4,595 0.0
expire 5/15/98
Securities Broker
(cost $0)
Value % of Net
Repurchase Agreement (Note 1) Assets
-------------------------------------------------------------------------------------------
Dated October 31, 1996, with State Street 523,081 3.2
Bank & Trust Co., due November 1, 1996, for an effective yield of 5.55%,
collateralized by $510,000 U.S. Treasury Bonds, 7.125% due 2/15/23 (market
value of collateral is $538,660, including accrued interest).
(cost $523,081)
-------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $14,904,353) * 16,295,865 98.9
Other Assets and Liabilities 177,412 1.1
------------------------------------------------------------------------==========---------
NET ASSETS $16,473,277 100.0
===========================================================================================
</TABLE>
% Security denominated in Great Britain Pounds.
T U.S. currency denominated.
! Non-income producing security.
) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $15,004,209 and appreciation
(depreciation) is as follows:
<PAGE>
Unrealized appreciation: $1,748,260
Unrealized depreciation: (456,604)
---------
Net unrealized $1,291,656
appreciation:
=========
Abbreviations:
ADR --American Depository
Receipt
GDR --Global Depository Receipt
The Portfolio's Portfolio of Investments at October 31, 1996, was
concentrated in the following countries:
<TABLE>
<CAPTION>
Percentage of Net Assets-D
------------------------------------
Fixed Income,
Rights & Short-term
Country (Country Equity Warrants & Other Total
Code/Currency Code)
-------------------------------------
<S> <C> <C> <C> <C> <C>
Australia (AUSL/AUD) 0.7 0.7
Canada (CAN/CAD) 4.4 4.4
Chile (CHLE/CLP) 1.5 1.5
Croatia (CRT/HRK) 2.4 2.4
Denmark (DEN/DKK) 6.7 6.7
France (FR/FRF) 1.1 1.1
Hong Kong (HK/HKD) 4.0 4.0
Indonesia (INDO/IDR) 0.9 0.9
Ireland (IRE/IEP) 3.8 3.8
Israel (ISRL/ILS) 3.4 3.4
Italy (ITLY/ITL) 0.5 0.5
Japan (JPN/JPY) 10.5 10.5
Korea (KOR/KRW) 0.8 0.8
Mexico (MEX/MXN) 0.7 0.7
Norway (NOR/NOK) 1.1 1.1
Panama (PAN/PND) 2.3 2.3
Philippines (PHIL/PHP) 0.8 0.1 0.9
South Africa (SAFR/ZAR) 1.1 1.1
Spain (SPN/ESP) 1.2 1.2
Sweden (SWDN/SEK) 3.3 3.3
Thailand (THAI/THB) 1.6 1.6
United Kingdom (UK/GBP) 3.7 3.7
United States & Other (US/USD) 37.3 4.3 41.6
Uruguay (URGY/UYP) 1.8 1.8
=====================================
Total 95.6 0.1 4.3 100.0
=====================================
</TABLE>
D Percentages indicated are based on net assets of $16,473,277.
<PAGE>
GLOBAL INFRASTRUCTURE PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ENERGY (31.0%)
Edison S.p.A. ITLY 450,000 2,682,589 2.9
ELECTRICAL & GAS UTILITIES
Compania Boliviana de Energia Electrica T BOL 62,300 2,632,175 2.9
ELECTRICAL & GAS UTILITIES
Companhia Energetica de Minas Gerais (Cemig) T BRZL 81,174 2,536,688 2.8
- ADR
ELECTRICAL & GAS UTILITIES
Enron Global Power & Pipelines L.L.C. US 90,000 2,531,250 2.8
ELECTRICAL & GAS UTILITIES
IES Industries, Inc. US 81,000 2,490,750 2.7
ELECTRICAL & GAS UTILITIES
Empresa Nacional de Electridad S.A. - ADR T SPN 40,000 2,460,000 2.7
ELECTRICAL & GAS UTILITIES
EVN Energie-Versorgung Niederoesterreich AG ASTRI 16,800 2,279,651 2.5
ELECTRICAL & GAS UTILITIES
Hub Power Co. ! PAK 2,400,000 2,053,897 2.2
ELECTRICAL & GAS UTILITIES
BSES Ltd. IND 2.1
ELECTRICAL & GAS UTILITIES
GDR ! T 80,600 1,491,100
Reg. S GDR ! T 24,400 451,400
Capex S.A. ARG 260,000 1,885,377 2.1
ELECTRICAL & GAS UTILITIES
Korea Electric Power Corp.: KOR 1.7
ELECTRICAL & GAS UTILITIES
Common 31,000 914,199
ADR T 38,000 684,000
MetroGas S.A. - ADR T ARG 100,000 925,000 1.0
ELECTRICAL & GAS UTILITIES
AES China Generating Co., Ltd. ! US 54,100 723,588 0.8
"A"
ELECTRICAL & GAS UTILITIES
Hafslund ASA "A" NOR 80,800 633,467 0.7
ELECTRICAL & GAS UTILITIES
Edelnor S.A. "B" PERU 490,200 532,000 0.6
ELECTRICAL & GAS UTILITIES
Metzler Group, Inc. ! US 21,400 498,888 0.5
ENERGY EQUIPMENT & SERVICES
------------
28,406,019
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SERVICES (27.2%)
Mannesmann AG GER 7,500 2,913,969 3.2
WIRELESS COMMUNICATIONS
Tranz Rail Holdings Ltd. - ADR ! T NZ 147,200 2,410,400 2.6
TRANSPORTATION - ROAD & RAIL
DDI Corp. JPN 295 2,217,753 2.4
WIRELESS COMMUNICATIONS
Telefonica de Espana - ADR T SPN 34,000 2,048,500 2.2
TELEPHONE NETWORKS
SPT Telecom ! CZCH 19,000 2,034,175 2.2
TELEPHONE NETWORKS
Hellenic Telecommunications - 144A ) GREC 110,000 1,944,713 2.1
TELEPHONE NETWORKS
Philippine Long Distance Telephone Co. - ADR T PHIL 30,000 1,796,250 2.0
TELEPHONE NETWORKS
ABC Rail Products Corp. ! US 115,100 1,740,888 1.9
TRANSPORTATION - ROAD & RAIL
Canadian National Railway Co. T CAN 60,900 1,674,750 1.8
TRANSPORTATION - ROAD & RAIL
Paging Network, Inc. ! US 97,000 1,661,125 1.8
WIRELESS COMMUNICATIONS
PT Indonesia Satellite (Indosat) - ADR T INDO 40,000 1,205,000 1.3
TELEPHONE - LONG DISTANCE
Portugal Telecom S.A. - ADR T PORT 43,000 1,112,625 1.2
TELEPHONE - REGIONAL/LOCAL
CPT Telefonica Del Peru, S.A. - ADR T PERU 40,900 843,563 0.9
TELEPHONE NETWORKS
Centennial Cellular Corp. "A" ! US 50,000 643,750 0.7
WIRELESS COMMUNICATIONS
Pakistan Telecommunications Co., Ltd.: PAK 0.6
TELEPHONE NETWORKS
GDR ! T 4,892 366,900
New Voucher ! 2,800 226,348
Korea Mobile Telecom KOR 290 298,535 0.3
WIRELESS COMMUNICATIONS
------------
25,139,244
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MATERIALS/BASIC INDUSTRY (17.3%)
La Cementos Nacional, C.A. 144A - GDR ) !T ECDR 15,060 3,027,060 3.3
CEMENT
Giant Cement Holding, Inc. ! US 179,800 2,697,000 2.9
CEMENT
RMI Titanium Co. ! US 106,600 2,571,725 2.8
METALS - NON-FERROUS
Northwest Pipe Co. ! US 127,500 2,199,375 2.4
METALS - STEEL
PT Bakrie and Brothers INDO 1,170,000 1,733,668 1.9
BUILDING MATERIALS &
COMPONENTS
Hylsamex, S.A. de C.V. 144A - ADR ) T MEX 75,000 1,612,500 1.8
METALS - STEEL
Cimpor-Cimentos de Portugal S.A. PORT 45,900 965,100 1.1
CEMENT
Siam Cement Co., Ltd. - Foreign THAI 28,000 957,866 1.0
CEMENT
HI Cement Corp. ! PHIL 439,000 135,514 0.1
CEMENT
------------
15,899,808
------------
CAPITAL GOODS (13.0%)
Tadiran Telecommunications Ltd. !T ISRL 130,000 2,990,000 3.3
TELECOM EQUIPMENT
ABB AB "B" SWDN 22,000 2,456,172 2.7
ELECTRICAL PLANT/EQUIPMENT
United Engineers Ltd. MAL 270,000 2,137,767 2.3
CONSTRUCTION
Caterpillar, Inc. US 30,000 2,058,750 2.2
MACHINERY & ENGINEERING
KCI Konecranes International ! FIN 42,660 1,148,596 1.3
MACHINERY & ENGINEERING
C & P Homes, Inc. PHIL 1,497,300 684,739 0.7
CONSTRUCTION
Cheung Kong Infrastructure HK 264,000 491,690 0.5
CONSTRUCTION
------------
11,967,714
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TECHNOLOGY (2.7%)
DSP Communications, Inc. ! US 65,900 2,504,200 2.7
TELECOM TECHNOLOGY
------------
MULTI-INDUSTRY/MISCELLANEOUS
(1.6%)
E.R.G. Ltd. AUSL 1,503,378 1,476,819 1.6
MULTI-INDUSTRY
------------
TOTAL EQUITY INVESTMENTS
---------------------
(cost $75,266,645) 85,393,804 92.8
---------------------
Value % of Net
Repurchase Agreement (Note 1) Assets
----------------------------------------------------------------------------------------------------
Dated October 31, 1996, with State Street Bank & 6,217,958 6.8
Trust Co., due November 1, 1996, for an effective yield of 5.55%
collateralized by $5,685,000 U.S. Treasury Bond, 7.875% due 11/15/07
(market value of collateral is $6,347,502, including accrued interest).
(cost $6,217,958)
----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $81,484,603) * 91,611,762 99.6
Other Assets and Liabilities 412,796 0.4
-------------------------------------------------------------------------------============---------
NET ASSETS $92,024,558 100.0
====================================================================================================
! Non-income producing security.
T U.S. currency denominated.
) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
* For Federal income tax purposes, cost is $81,484,603 and appreciation
(depreciation) is as follows:
Unrealized appreciation: $15,411,502
Unrealized depreciation: (5,284,343)
------------
Net unrealized appreciation: $10,127,159
============
Abbreviations:
ADR --American Depository Receipt
GDR --Global Depository Receipt
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Portfolio's Portfolio of Investments at October 31, 1996, was
concentrated in the following countries:
Percentage of Net Assets-D
--------------------------------------------------
Fixed Income,
Rights Short-term
&
COUNTRY (COUNTRY Equity Warrants & Other Total
CODE/CURRENCY
CODE)
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Argentina (ARG/ARS) 3.1 3.1
Australia (AUSL/AUD) 1.6 1.6
Austria (ASTRI/ATS) 2.5 2.5
Bolivia (BOL/BOL) 2.9 2.9
Brazil (BRZL/BRL) 2.8 2.8
Canada (CAN/CAD) 1.8 1.8
Czech Republic (CZCH/CSK) 2.2 2.2
Ecuador (ECDR/ECS) 3.3 3.3
Finland (FIN/FIM) 1.3 1.3
Germany (GER/DEM) 3.2 3.2
Greece (GREC/GRD) 2.1 2.1
Hong Kong (HK/HKD) 0.5 0.5
India (IND/INR) 2.1 2.1
Indonesia (INDO/IDR) 3.2 3.2
Israel (ISRL/ILS) 3.3 3.3
Italy (ITLY/ITL) 2.9 2.9
Japan (JPN/JPY) 2.4 2.4
Korea (KOR/KRW) 2.0 2.0
Malaysia (MAL/MYR) 2.3 2.3
Mexico (MEX/MXN) 1.8 1.8
New Zealand (NZ/NZD) 2.6 2.6
Norway (NOR/NOK) 0.7 0.7
Pakistan (PAK/PKR) 2.8 2.8
Peru (PERU/PES) 1.5 1.5
Philippines (PHIL/PHP) 2.8 2.8
Portugal (PORT/PTE) 2.3 2.3
Spain (SPN/ESP) 4.9 4.9
Sweden (SWDN/SEK) 2.7 2.7
Thailand (THAI/THB) 1.0 1.0
United States & Other (US/USD) 24.2 7.2 31.4
=========================================
Total 92.8 0.0 7.2 100.0
=========================================
D Percentages indicated are based on net assets of $92,024,558.
Forward Foreign Currency Contracts Outstanding
October 31, 1996
Market
Value Contract Delivery Unrealized
Contracts to Sell: (U.S. Dollars) Price Date Appreciation
- ------------------ -------------- ----- ---- ------------
Deutsche Marks.......................................................... 1,720,879 1.46900 11/29/96 $49,033
Japanese Yen .......................................................... 339,752 106.30000 11/12/96 23,748
Japanese Yen .......................................................... 291,769 110.00000 01/07/97 6,958
--------- -------
Total Contracts to Sell (Receivable amount $2,432,139)............. 2,352,400 79,739
--------- -------
THE VALUE OF CONTRACTS TO SELL AS PERCENTAGE OF NET ASSETS IS 2.55%
Total Open Forward Foreign Currency Contracts...................... $79,739
=======
_______________
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
GLOBAL NATURAL RESOURCES PORTFOLIO
Portfolio of Investments
October 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ENERGY EQUIPMENT & SERVICES (26.8%)
Veritas DGC, Inc. US 5.6
Common ! 158,200 $3,243,100
Common ! # 157,200 3,048,557
Rowan Cos., Inc. ! US 165,900 3,712,013 3.3
Energy Ventures, Inc. ! US 81,300 3,577,200 3.2
Western Atlas, Inc. ! US 49,900 3,461,813 3.1
Global Marine, Inc. ! US 179,900 3,305,663 3.0
Seacor Holdings, Inc. ! US 59,100 3,191,400 2.8
Input/Output, Inc. ! US 84,700 2,519,825 2.3
Tuboscope Vetco International Corp. ! US 119,100 1,816,275 1.6
Reading & Bates Corp. ! US 43,000 1,236,250 1.1
Weatherford Enterra, Inc. ! US 32,300 936,700 0.8
------------
30,048,796
------------
OIL (25.8%)
Ente Nazionale Idrocarburi (ENI) S.p.A. - ADR T ITLY 147,700 7,015,750 6.3
Benton Oil & Gas Co. ! US 149,800 3,670,100 3.3
Abacan Resource Corp. ! CAN 475,900 3,602,883 3.2
Cooper Cameron Corp. ! US 53,200 3,398,150 3.0
Rutherford-Moran Oil Corp. ! US 91,600 2,725,100 2.4
BJ Services Co. ! US 47,000 2,109,125 1.9
Petroleum Securities Australia Ltd. AUSL 1.5
Common ! 248,137 1,014,329
ADR !T 32,000 652,000
Basic Petroleum International Ltd. ! US 52,800 1,610,400 1.4
Canadian 88 Energy Corp. ! CAN 346,200 1,471,873 1.3
HarCor Energy, Inc. ! US 239,900 1,229,488 1.1
Petroleo Brasileiro S.A. (Petrobras) Preferred ! BRZL 3,750,000 485,496 0.4
------------
28,984,694
------------
GOLD (12.4%)
Bre-X Minerals Ltd. ! CAN 191,700 3,202,864 2.9
Greenstone Resources Ltd. ! CAN 219,400 2,781,980 2.5
Meridian Gold, Inc. ! CAN 564,000 2,439,919 2.2
Getchell Gold Corp. ! US 45,800 2,038,100 1.8
Oryx Gold Holdings Ltd. ! SAFR 824,300 1,300,879 1.2
Asquith Resources, Inc. ! CAN 487,400 908,854 0.8
HJ Joel Mining Co., Ltd. ! SAFR 549,900 603,964 0.5
Arian Resources Corp. !T CAN 200,000 290,000 0.3
Arizona Star Resource Corp. ! CAN 16,200 97,270 0.1
Bema Gold Corp. ! CAN 10,900 65,447 0.1
Bro-X Minerals Ltd. ! CAN 19,070 55,473 -
------------
13,784,750
------------
GAS PRODUCTION & DISTRIBUTION (11.8%)
Atwood Oceanics, Inc. ! US 63,000 3,496,500 3.1
Triton Energy Ltd. ! US 71,400 3,186,225 2.9
Chesapeake Energy Corp. ! US 54,600 3,180,450 2.8
Enterprise Oil PLC UK 247,700 2,242,842 2.0
Falcon Drilling Co., Inc. ! US 33,000 1,167,375 1.0
------------
13,273,392
------------
CHEMICALS (4.7%)
Monsanto Co. US 77,300 3,063,013 2.7
Cytec Industries, Inc. ! US 61,800 2,209,350 2.0
------------
5,272,363
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
METALS - STEEL (4.7%)
UCAR International, Inc. ! US 70,900 2,773,963 2.5
SGL Carbon AG GER 22,100 2,489,791 2.2
------------
5,263,754
------------
METALS - NON-FERROUS (2.5%)
PT Tambang Timah: INDO 1.6
144A GDR ) T 97,200 1,484,730
Reg. S GDR S T 20,000 305,500
International Curator Resources Ltd. ! CAN 100,000 950,996 0.9
------------
2,741,226
------------
ENERGY SOURCES (1.9%)
Transocean Offshore, Inc. ! US 33,300 2,106,225 1.9
Misc. Materials & Commodities (1.6%)
Aber Resources Ltd. ! CAN 88,200 1,374,938 1.2
Yamana Resources, Inc. ! US 162,400 442,127 0.4
------------
1,817,065
------------
TRANSPORTATION - SHIPPING (1.1%)
Trico Marine Services, Inc. ! US 36,200 1,276,050 1.1
MISCELLANEOUS (1.1%)
Orogen Minerals Ltd. - 144A ADR ) ! T AUSL 82,000 1,230,000 1.1
TOTAL EQUITY INVESTMENTS
---------------------
(cost $90,052,470) 105,798,315 94.4
---------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Value % of Net
Equity Investments Country Shares (Note 1) Assets
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
No. of Value % of Net
Warrants Country Warrants (Note 1) Assets
--------------------------------------------------------------------------------------------------------
Yamana Resources, Inc. Warrants, expire 12/31/98 ! US 81,200 85,393 0.1
Misc. Materials & Commodities
Arian Resources Corp. Warrants, expire 3/29/97 ! T CAN 100,000 - -
Gold
TOTAL WARRANTS
---------------------
(cost $65,108) 85,393 0.1
---------------------
% of Net
Repurchase Agreement Value Assets
--------------------------------------------------------------------------------------------------------
Dated October 31, 1996, with State Street Bank & Trust Co., due November 5,576,860 5.0
1, 1996, for an effective yield of 5.55%, collateralized by $5,390,000
U.S. Treasury Bonds, 7.125% due 2/15/23 (market value of collateral is
$5,692,896, including accrued interest). (cost $5,576,860)
--------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
(cost $95,694,438) * 111,460,568 99.5
Other Assets and Liabilities 588,090 0.5
-----------------------------------------------------------------------------------============----------
NET ASSETS $112,048,658 100.0
=========================================================================================================
# Security is denominated in Canadian Dollars.
! Non-income producing security.
T U.S. currency denominated.
) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
S Security issued under Regulation S. Rule 144A and additional restrictions
may apply in the resale of such securities.
* For Federal income tax purposes, cost is $96,324,663 and appreciation
(depreciation) is as follows:
Unrealized appreciation: $16,474,023
Unrealized depreciation: (1,338,118)
----------
Net unrealized appreciation: $15,135,905
==========
Abbreviations:
ADR --American Depository Receipt
GDR --Global Depository Receipt
</TABLE>
<PAGE>
The Portfolio's Portfolio of Investments at October 31, 1996, was
concentrated in the following countries:
<TABLE>
<CAPTION>
Percentage of Net Assets-D
------------------------------------------------
Fixed Income,
Rights & Short-term
Country (Country Code/Currency Code) Equity Warrants & Other Total
---------------------------------------
<S> <C> <C> <C> <C> <C>
Australia (AUSL/AUD) 2.6 2.6
Brazil (BRZL/BRL) 0.4 0.4
Canada (CAN/CAD) 15.5 15.4
Germany (GER/DEM) 2.2 2.2
Indonesia (INDO/IDR) 1.6 1.6
Italy (ITLY/ITL) 6.3 6.3
South Africa (SAFR/ZAR) 1.7 1.7
United Kingdom (UK/GBP) 2.0 2.0
United States & Other (US/USD) 62.1 0.1 5.5 67.8
=======================================
Total 94.4 0.1 5.5 100.0
=======================================
D Percentages indicated are based on net assets of $112,048,658.
Forward Foreign Currency Contracts Outstanding
October 31, 1996
Market
Value Contract Delivery Unrealized
Contracts to Sell: (U.S. Dollars) Price Date Appreciation
- ------------------ -------------- ----- ---- ------------
<S> <C> <C> <C> <C>
Deutsche Marks ................................................. 529,501 1.46900 11/29/96 $15,087
------- ------- -------- -------
Total Contracts to sell (Receivable amount $544,588) ........ 529,501 15,087
------- ------
THE VALUE OF CONTRACTS TO SELL AS PERCENTAGE OF NET ASSETS IS 0.47%.
Total Open Forward Foreign Currency Contracts............... 15,087
======
_____________________
See Note 1 to the financial statements.
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in securities, at value (cost $156,514,774) (Note 1) $165,777,735
Repurchase agreement, at value and cost (Note 1) 10,575,630
U.S. currency $ 589
Foreign currencies (cost $229) 244 833
Receivable for securities sold 160,000
Dividends and dividend withholding tax reclaims receivable 54,386
Receivable for forward foreign currency contracts - closed (Note 1) 1,301
Cash held as collateral for securities loaned (Note 1) 10,659,295
------------
Total assets 187,229,180
------------
Liabilities:
Payable for securities purchased 6,154,529
Payable for investment management and administration fees (Note 2) 102,601
Payable for professional fees 7,929
Payable for Trustees' fees and expenses (Note 2) 3,673
Payable for printing and postage expenses 3,200
Payable for custodian fees (Note 1) 2,063
Other accrued expenses 3,008
Collateral for securities loaned (Note 1) 10,659,295
------------
Total liabilities 16,936,298
------------
Net assets $170,292,882
============
Net assets consist of:
Paid in capital (Note 2) $151,926,976
Accumulated net investment income 234,342
Accumulated net realized gain on investments and foreign currency 8,868,716
transactions
Net unrealized depreciation on translation of assets and liabilities in (113)
foreign currencies
Net unrealized appreciation of investments 9,262,961
============
Total - representing net assets applicable to shares of beneficial interest $170,292,882
outstanding ============
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 1996
- ------------------------------------------------------------------------------------------------------------------------
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $6,469) $ 359,427
Interest income 286,745
------------
Total investment income 646,172
------------
Expenses:
Investment management and administration fees (Note 2) 422,640
Custodian fees (Note 1) 54,316
Legal fees 4,026
------------
Total expenses before reductions 480,982
------------
Expense reductions (Notes 1 & 4) (62,446)
------------
Total net expenses 418,536
Page 1
<PAGE>
Net investment income 227,636
------------
Net realized and unrealized gain on investments and foreign currencies: (Note 1)
Net realized gain on investments $ 8,408,399
Net realized gain on foreign currency transactions 64,343
-----------
Net realized gain during the year 8,472,742
Net change in unrealized depreciation on translation of
assets and liabilities in foreign currencies (7,034)
Net change in unrealized appreciation of investments 8,880,649
-----------
Net unrealized appreciation during the year 8,873,615
------------
Net realized and unrealized gain on investments and foreign currencies 17,346,357
------------
Net increase in net assets resulting from operations $17,573,993
============
The accompanying notes are an integral part of the financial statements
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
Year ended Year ended
October 31, 1996 October 31, 1995
---------------- ----------------
Increase in net assets
Operations:
Net investmnebnt income $227,636 $6,706
Net realized gain on investments and foreign currency transactons 8,472,742 395,974
Net change in unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies (7,034) 6,921
Net change in unrealized appreciation of investments 8,880,649 382,312
----------- ----------
Net increase in net assets resulting from operations 17,573,993 791,913
Beneficial interest transactions: (Note 2)
Contributions 176,533,504 6,002,349
Withdrawals (30,316,869) (392,108)
----------- ----------
Net increase from beneficial interest transactions 146,216,635 5,610,241
----------- ----------
Total increase in net assets 163,790,628 6,402,154
Net assets:
Beginning of year 6,502,254 100,100
----------- ---------
End of year $170,292,882 $6,502,254
============ ==========
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------------------------------------------------------
Page 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------- ---------------------------
GLOBAL FINANCIAL SERVICES PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in securities, at value (cost $14,381,272) (Note 1) $15,772,784
Repurchase agreement, at value and cost (Note 1) 523,081
U.S. currency $ 559
Foreign currencies (cost $367,172) 370,106 370,665
Receivable for securities sold 313,698
Dividends and dividend withholding tax reclaims receivable 18,230
Cash held as collateral for securities loaned (Note 805,810
1)
-----------
Total assets 17,804,268
-----------
Liabilities:
Payable for securities purchased 501,995
Payable for professional fees 8,814
Payable for printing and postage expenses 4,007
Payable for Trustees' fees and expenses (Note 2) 3,128
Payable for custodian fees (Note 1) 272
Other accrued expenses 6,965
Collateral for securities loaned (Note 1) 805,810
-----------
Total liabilities 1,330,991
-----------
===========
Net assets $16,473,277
===========
Net assets consist of:
Paid in capital (Note 2) $13,348,556
Accumulated net investment income 432,377
Accumulated net realized gain on investments and foreign currency 1,293,202
transactions
Net unrealized appreciation on translation of assets and 7,630
liabilities in foreign currencies
Net unrealized appreciation of investments 1,391,512
===========
Total - representing net assets applicable to shares of beneficial interest $16,473,277
outstanding
===========
The accompanying notes are an integral part of the financial statements.
- ----------------------------------------------------------------------------- ------------
- ----------------------------------------------------------------------------- ------------
GLOBAL FINANCIAL SERVICES PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 1996
- ----------------------------------------------------------------------------- ------------
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $14,755) $ 298,448
Interest income 82,401
-----------
Total investment income 380,849
-----------
Page 1
<PAGE>
Expenses:
Investment management and administration fees (Note 2) 99,991
Custodian fees (Note 1) 9,966
Audit fees 6,916
Legal fees 5,490
Trustees' fees and expenses (Note 2) 5,490
Other expenses 1,464
-----------
Total expenses before reductions 129,317
-----------
Expense reductions (Notes 1 & 4) (10,706)
-----------
Total net expenses 118,611
-----------
Net investment income 262,238
-----------
Net realized and unrealized gain on investments and foreign currencies: (Note 1)
Net realized gain on investments $ 1,705,569
Net realized gain on foreign currency transactions 58,811
-----------
Net realized gain during the year 1,764,380
Net change in unrealized appreciation on translation (6,352)
of assets and liabilities in foreign currencies
Net change in unrealized appreciation of investments 615,083
-----------
Net unrealized appreciation during the year 608,731
-----------
Net realized and unrealized gain on investments and foreign currencies 2,373,111
-----------
Net increase in net assets resulting from operations $2,635,349
===========
The accompanying notes are an integral part of the financial statements.
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
GLOBAL FINANCIAL SERVICES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------
Year ended Year ended
October 31, October
1996 31, 1995
-------------- -----------
Increase in net assets
Operations:
Net investment income $262,238 $183,834
Net realized gain (loss) on investments and foreign 1,764,380 (438,738)
currency transactions
Net change in unrealized appreciation (depreciation) (6,352) 13,973
on translation of assets and liabilities in foreign
currencies
Net change in unrealized appreciation of investments 615,083 743,739
----------- -----------
Net increase in net assets resulting from 2,635,349 502,808
operations
----------- -----------
Beneficial interest transactions: (Note 2)
Contributions 14,419,683 9,881,645
Withdrawals (10,375,099) (5,766,944)
----------- -----------
Net increase from beneficial interest 4,044,584 4,114,701
transactions
----------- -----------
Total increase in net assets 6,679,933 4,617,509
Net assets:
Beginning of year 9,793,344 5,175,835
=========== ===========
End of year $16,473,277 $9,793,344
=========== ===========
The accompanying notes are an integral part of the financial statements.
- -----------------------------------------------------------------------------------------
Page 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
GLOBAL INFRASTRUCTURE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in securities, at value (cost $75,266,645) (Note 1) $85,393,804
Repurchase agreement, at value and cost (Note 1) 6,217,958
U.S. currency $ 613
Foreign currencies (cost $87,210) 85,042 85,655
Receivable for securities sold 447,146
Receivable for open forward foreign currency contracts, net (Note 1) 79,739
Dividends and dividend withholding tax reclaims receivable 56,171
Cash held as collateral for securities loaned (Note 1) 7,455,555
----------------
Total assets 99,736,028
----------------
Liabilities:
Payable for securities purchased 164,460
Payable for investment management and administration fees (Note 2) 57,277
Payable for professional fees 11,751
Payable for custodian fees (Note 1) 9,020
Payable for Trustees' fees and expenses (Note 2) 4,272
Payable for printing and postage expenses 4,250
Other accrued expenses 4,885
Collateral for securities loaned (Note 1) 7,455,555
----------------
Total liabilities 7,711,470
----------------
================
Net assets $92,024,558
================
Net assets consist of:
Paid in capital (Note 2) $74,428,358
Accumulated net investment income 2,196,262
Accumulated net realized gain on investments and foreign currency transactions 5,200,554
Net unrealized appreciation on translation of assets and liabilities in foreign currencies 72,225
Net unrealized appreciation of investments 10,127,159
================
Total - representing net assets applicable to shares of beneficial interest outstanding $92,024,558
================
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
GLOBAL INFRASTRUCTURE PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $121,927) $ 1,455,213
Interest income 249,111
----------------
Total investment income 1,704,324
----------------
Expenses:
Investment management and administration fees (Note 2) 635,456
Custodian fees (Note 1) 90,835
Page 1
<PAGE>
Legal fees 5,490
Trustees' fees and expenses (Note 2) 5,490
Audit fees 4,453
Insurance expenses 234
Other expenses 1,464
----------------
Total expenses before reductions 743,422
----------------
Expense reductions (Notes 1 & 4) (98,566)
----------------
Total net expenses 644,856
----------------
Net investment income 1,059,468
----------------
Net realized and unrealized gain on investments and foreign currencies: (Note 1)
Net realized gain on investments $ 4,996,832
Net realized gain on foreign currency transactions 311,306
----------------
Net realized gain during the year 5,308,138
Net change in unrealized appreciation on translation of assets and (86,155)
liabilities in foreign currencies
Net change in unrealized appreciation of investments 9,582,726
----------------
Net unrealized appreciation during the year 9,496,571
----------------
Net realized and unrealized gain on investments and foreign currencies 14,804,709
----------------
Net increase in net assets resulting from operations $15,864,177
================
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
GLOBAL INFRASTRUCTURE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Year ended Year ended
October 31, October 31,
1996 1995
---------------- ----------------
Increase in net assets
Operations:
Net investment income $1,059,468 $1,012,280
Net realized gain (loss) on investments and foreign currency transactions 5,308,138 (58,363)
Net change in unrealized appreciation (depreciation) on translation of (86,155) 157,236
assets and liabilities in foreign currencies
Net change in unrealized appreciation (depreciation) of investments 9,582,726 (565,235)
---------------- ----------------
Net increase in net assets resulting from operations 15,864,177 545,918
---------------- ----------------
Beneficial interest transactions: (Note 2)
Contributions 23,459,855 62,352,320
Withdrawals (33,309,402) (27,995,100)
---------------- ----------------
Net increase (decrease) from beneficial interest transactions (9,849,547) 34,357,220
---------------- ----------------
Total increase in net assets 6,014,630 34,903,138
Net assets:
Beginning of year 86,009,928 51,106,790
================ ================
End of year $92,024,558 $86,009,928
================ ================
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------------------------------------------------------------------
Page 2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------- -- -----------------------
GLOBAL NATURAL RESOURCES PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments in securities, at value (cost $90,117,578) (Note 1) $105,883,708
Repurchase agreement, at value and cost (Note 1) 5,576,860
U.S. currency 610
Receivable for securities sold 4,361,795
Receivable for open forward foreign currency contracts, net (Note 1) 15,087
Dividends and dividend withholding tax reclaims receivable 2,230
Cash held as collateral for securities loaned (Note 1) 3,777,600
-------------
Total assets 119,617,890
-------------
Liabilities:
Payable for securities purchased 3,692,099
Payable for investment management and administration fees (Note 2) 62,817
Due to custodian 8,709
Payable for professional fees 8,004
Payable for custodian fees (Note 1) 5,312
Payable for printing and postage expenses 4,713
Payable for Trustees' fees and expenses (Note 2) 3,081
Other accrued expenses 6,897
Collateral for securities loaned (Note 1) 3,777,600
--------------
Total liabilities 7,569,232
--------------
Net assets $112,048,658
==============
Net assets consist of:
Paid in capital (Note 2) $90,821,556
Accumulated net investment income 649,078
Accumulated net realized gain on investments and foreign currency 4,795,019
transactions
Net unrealized appreciation on translation of assets and liabilities in 16,875
foreign currencies
Net unrealized appreciation of investments 15,766,130
==============
Total - representing net assets applicable to shares of beneficial interest outstanding $112,048,658
==============
The accompanying notes are an integral part of the financial statements.
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
GLOBAL NATURAL RESOURCES PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 1996
- -----------------------------------------------------------------------------------------------------------------
Investment income: (Note 1)
Dividend income (net of foreign withholding tax of $14,864) $ 279,542
Interest income 103,047
--------------
Total investment income 382,589
Page 1
<PAGE>
--------------
Expenses:
Investment management and administration fees (Note 2) 425,745
Custodian fees (Note 1) 42,780
Audit fees 7,686
Trustees' fees and expenses (Note 2) 5,490
Legal fees 5,070
Other expenses 1,374
--------------
Total expenses before reductions 488,145
--------------
Expense reductions (Notes 1 & 4) (61,692)
--------------
Total net expenses 426,453
--------------
Net investment loss (43,864)
--------------
Net realized and unrealized gain on investments and foreign currencies: (Note 1)
Net realized gain on investments $ 7,289,530
Net realized gain on foreign currency transactions 27,175
-------------
Net realized gain during the year 7,316,705
Net change in unrealized appreciation on translation of
assets and liabilities in foreign currencies 65,378
Net change in unrealized appreciation of investments 14,910,009
-------------
Net unrealized appreciation during the year 14,975,387
--------------
Net realized and unrealized gain on investments and foreign currencies 22,292,092
--------------
Net increase in net assets resulting from operations ` $22,248,228
==============
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
GLOBAL NATURAL RESOURCES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Year ended Year ended
October 31, 1996 October 31, 1995
---------------------------------------------
Increase (Decrease) in net assets
Operations:
Net investment income (loss) $ (43,864) $555,631
Net realized gain (loss) on investments and foreign currency 7,316,705 (2,391,427)
transactions
Net change in unrealized appreciation (depreciation) on 65,378 (43,764)
translation of assets and liabilities in foreign currencies
Net change in unrealized appreciation of investments 14,910,009 177,530
-------------- ---------------
Net increase (decrease) in net assets resulting from
operations 22,248,228 (1,702,030)
-------------- ---------------
Beneficial interest transactions: (Note 2)
Contributions 134,700,675 34,259,648
Withdrawals (71,660,229) (32,747,373)
-------------- ---------------
Net increase from beneficial interest transactions 63,040,446 1,512,275
-------------- ---------------
Total increase (decrease) in net assets 85,288,674 (189,755)
Net assets:
Beginning of year 26,759,984 26,949,739
============== ===============
End of year $112,048,658 $26,759,984
============== ===============
The accompanying notes are an integral part of the financial statements.
- -----------------------------------------------------------------------------------------------------------------
Page 2
</TABLE>
<PAGE>
GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
S U P P L E M E N T A R Y D A T A
_______________________________________________________________________________
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
December 30, 1994
Year ended (commencement of operations)
October 31, 1996 to October 31, 1995
---------------- ----------------------------
<S> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's).................................$170,293 $6,502
Ratio of net investment income to average net assets:................... 0.39% 0.30%(a)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & $)...............................0.72% 2.37%(a)
Without expense reductions..........................................0.83% 2.44%(a)
Portfolio turnover rate.................................................. 169% 240%(a)
___________________
(a) Annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
GLOBAL FINANCIAL SERVICES PORTFOLIO
S U P P L E M E N T A R Y D A T A
_______________________________________________________________________________
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
Year ended
October 31, May 31, 1994
------------------ (commencement of operations)
1996 1995 to October 31, 1994
---- ---- ---------------------
<S> <C> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's)................................. $16,473 $9,793 $5,176
Ratio of net investment income to average net assets.................... 1.90% 2.60% 1.19%(a)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & 4).............................. 0.86% 1.43% 4.43%(a)
Without expense reductions......................................... 0.94% 1.46% --%*
Portfolio turnover rate.................................................. 103% 170% 53%
</TABLE>
___________________
(a) Annualized.
*Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reductions, if any.
The accompanying notes are an integral part of the financial statements.
<PAGE>
GLOBAL INFRASTRUCTURE PORTFOLIO
S U P P L E M E N T A R Y D A T A
_______________________________________________________________________________
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
Year ended
October 31, May 31, 1994
------------------ (commencement of operations)
1996 1995 to October 31, 1994
---- ---- ---------------------
<S> <C> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's)................................. $92,025 $86,010 $51,107
Ratio of net investment income to average net assets:................... 1.21% 1.22% 1.44%(a)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & 4).............................. 0.74% 0.83% 1.17%(a)
Without expense reductions......................................... 0.85% 0.88% --%*
Portfolio turnover rate................................................... 41% 45% 18%
</TABLE>
___________________
(a) Annualized.
*Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reductions, if any.
The accompanying notes are an integral part of the financial statements.
<PAGE>
GLOBAL NATURAL RESOURCES PORTFOLIO
S U P P L E M E N T A R Y D A T A
_______________________________________________________________________________
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
Year ended
October 31, May 31, 1994
------------------ (commencement of operations)
1996 1995 to October 31, 1994
---- ---- ---------------------
<S> <C> <C> <C>
Ratios and supplemental data:
Net assets, end of period (in 000's)................................ $112,049 $26,760 $26,950
Ratio of net investment income (loss) to average net assets............ (0.07)% 1.88% 3.47%(a)
Ratio of expenses to average net assets:
With expense reductions (Notes 1 & 4).............................. 0.73% 0.93% 2.15%(a)
Without expense reductions......................................... 0.83% 0.96% --%*
Portfolio turnover rate................................................... 94% 87% 137%
</TABLE>
___________________
(a) Annualized.
*Calculation of "Ratio of expenses to average net assets" was made without
considering the effect of expense reductions, if any.
The accompanying notes are an integral part of the financial statements.
<PAGE>
GLOBAL INVESTMENT PORTFOLIOS
NOTES TO
FINANCIAL STATEMENTS
October 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Each of the Global Consumer Products and Services Portfolio, Global Financial
Services Portfolio, Global Infrastructure Portfolio, and Global Natural
Resources Portfolio ("Portfolios") is organized as a New York Trust and is
registered under the Investment Company Act of 1940, as amended ("1940 Act"), as
a diversified, open-end management investment company. The following is a
summary of significant accounting policies consistently followed by the
Portfolios in the preparation of the financial statements. The policies are in
conformity with generally accepted accounting principles, and therefore the
financial statements may include certain estimates made by management.
(A) PORTFOLIO VALUATION
The Portfolios calculate the net asset value of and complete orders to purchase
or repurchase Portfolio shares of beneficial interest on each business day, with
the exception of those days on which the New York Stock Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by Chancellor LGT Asset
Management, Inc. (the "Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Portfolios' Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Portfolios' Board of Trustees.
<PAGE>
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Portfolios are maintained in U.S. dollars. The
market values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Portfolios after
translation to U.S. dollars based on the exchange rates on that day. The cost of
each security is determined using historical exchange rates. Income and
withholding taxes are translated at prevailing exchange rates when earned or
incurred.
A Portfolio does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains or losses arise from
changes in the value of assets and liabilities other than investments in
securities at year end, resulting from changes in exchange rates.
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by a Portfolio, it is the
Portfolio's policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Portfolio
under each agreement at its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement
between two parties to buy and sell a currency at a set price on a future date.
The market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Portfolio as an unrealized gain or loss. When
the Forward Contract is closed, the Portfolio records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. Forward Contracts involve market risk in excess
of the amount shown in the Portfolio's "Statement of Assets and Liabilities." A
Portfolio could be exposed to risk if a counterparty is unable to meet the terms
of the contract or if the value of the currency changes unfavorably. A Portfolio
may enter into Forward Contracts in connection with planned purchases or sales
of securities, or to hedge against adverse fluctuations in exchange rates
between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When a Portfolio writes a call or put option, an amount equal to the premium
received is included in the Portfolio's "Statement of Assets and Liabilities" as
an asset and an equivalent liability. The amount of the liability is
<PAGE>
subsequently marked-to-market to reflect the current market value of the option.
The current market value of an option listed on a traded exchange is valued at
its last bid price, or, in the case of an over-the-counter option, is valued at
the average of the last bid prices obtained from brokers. If an option expires
on its stipulated expiration date or if the Portfolio enters into a closing
purchase transaction, a gain or loss is realized without regard to any
unrealized gain or loss on the underlying security, and the liability related to
such option is extinguished. If a written call option is exercised, a gain or
loss is realized from the sale of the underlying security and the proceeds of
the sale are increased by the premium originally received. If a written put
option is exercised, the cost of the underlying security purchased would be
decreased by the premium originally received. The Portfolio can write options
only on a covered basis, which, for a call, requires that the Portfolio holds
the underlying security and, for a put, requires the Portfolio to set aside
cash, U.S. government securities or other liquid, high-grade debt securities in
an amount not less than the exercise price or otherwise provide adequate cover
at all times while the put option is outstanding. The Portfolio may use options
to manage its exposure to the stock market and to fluctuations in currency
values or interest rates.
The premium paid by a Portfolio for the purchase of a call or put option is
included in the Portfolio's "Statement of Assets and Liabilities" as an
investment and subsequently "marked-to-market" to reflect the current market
value of the option. If an option which the Portfolio has purchased expires on
the stipulated expiration date, the Portfolio realizes a loss in the amount of
the cost of the option. If the Portfolio enters into a closing sale transaction,
the Portfolio realizes a gain or loss, depending on whether proceeds from the
closing sale transaction are greater or less than the cost of the option. If the
Portfolio exercises a call option, the cost of the securities acquired by
exercising the call is increased by the premium paid to buy the call. If the
Portfolio exercises a put option, it realizes a gain or loss from the sale of
the underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Portfolio may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Portfolio may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Portfolio may not be able to enter into a closing transaction because of an
illiquid secondary market.
<PAGE>
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract a
Portfolio is required to pledge to the broker an amount of cash or securities
equal to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Portfolio agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as "variation margin"
and are recorded by the Portfolio as unrealized gains or losses. When the
contract is closed, the Portfolio 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. The potential risk to the Portfolio is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. A Portfolio may use futures contracts to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. A Portfolio may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Portfolio to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
For international securities, cash collateral is received by a Portfolio against
loaned securities in an amount at least equal to 105% of the market value of the
loaned securities at the inception of each loan. This collateral must be
maintained at not less than 103% of the market value of the loaned securities
during the period of the loan. For domestic securities, cash collateral is
received by a Portfolio against loaned securities in the amount at least equal
to 102% of the market value of the loaned securities at the inception of each
loan. This collateral must be maintained at not less than 100% of the market
value of the loaned securities during the period of the loan. At October 31,
1996, stocks with an aggregate value listed below were on loan to brokers. The
loans were secured by cash collateral received by the Portfolios:
<PAGE>
<TABLE>
<CAPTION>
Year ended
October 31, 1996 October 31, 1996
Aggregate Value Cash ----------------
on Loan Collateral Fees Received
---------------- ---------- -------------
Portfolio
- ---------
<S> <C> <C> <C>
Global Consumer Products and Services Portfolio 10,331,341 $ 10,659,295 $ 44,553
Global Financial Services Portfolio 750,391 805,810 1,304
Global Infrastructure Portfolio 6,788,616 7,455,555 88,349
Global Natural Resources Portfolio 3,663,443 3,777,600 16,439
</TABLE>
Fees received from securities loaned were used to reduce the Portfolios'
custodian fees.
(I) TAXES
It is the policy of the Portfolio to meet the requirements of the Internal
Revenue Code of 1986, as amended ("Code"). Therefore, no provision has been made
for Federal taxes on income, capital gains, or unrealized appreciation of
securities held.
(J) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent with
investments of domestic origin. A Portfolio's investment in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
In addition, each Portfolio may focus its investments in certain related
consumer products and services, financial services, infrastructure, and natural
resources industries, subjecting the Portfolio to greater risk than a fund that
is more diversified.
(K) INDEXED SECURITIES
A Portfolio may invest in indexed securities whose value is linked either
directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
(L) RESTRICTED SECURITIES
A Portfolio is permitted to invest in privately placed restricted securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult.
<PAGE>
2. RELATED PARTIES
Chancellor LGT Asset Management Inc. is the Portfolios' investment manager and
administrator. On October 31, 1996, Chancellor Capital Management, Inc. merged
with LGT Asset Management, Inc., and the surviving entity was renamed Chancellor
LGT Asset Management, Inc. Each of the Portfolios pays investment management and
administration fees to the Manager at the annualized rate of 0.725% on the first
$500 million of average daily net assets of the Portfolio; 0.70% on the next
$500 million; 0.675% on the next $500 million; and 0.65% on amounts thereafter.
These fees are computed daily and paid monthly.
The Portfolios pay each of its Trustees who is not an employee, officer or
director of the Manager, G.T. Global Financial Services, Inc. or G.T. Global
Investor Services, Inc. $500 per year plus $150 for each meeting of the board or
any committee thereof attended by the Trustees.
At October 31, 1996, all of the shares of beneficial interest of each Portfolio
were owned either by its Fund (GT Global Consumer Products and Services Fund, GT
Global Financial Services Fund, GT Global Infrastructure Fund, and GT Global
Natural Resources Fund) or the Manager.
3. PURCHASES AND SALES OF SECURITIES
The following summarizes purchases and sales of investment securities, other
than short-term investments, by each Portfolio for the year ended October 31,
1996:
Purchase and Sales of Securities
Purchases
Portfolio U.S. GOVERNMENT OTHER ISSUES
- --------- --------------- ------------
Global Consumer Products and Services Portfolio $ - $239,257,063
Global Financial Services Portfolio - 17,579,805
Global Infrastructure Portfolio - 34,122,375
Global Natural Resources Portfolio - 161,696,208
Sales
Portfolio U.S. GOVERNMENT OTHER ISSUES
- --------- --------------- ------------
Global Consumer Products and Services Portfolio $ - $ 96,407,016
Global Financial Services Portfolio - 13,303,919
Global Infrastructure Portfolio - 45,967,339
Global Natural Resources Portfolio - 102,403,195
<PAGE>
4. EXPENSE REDUCTIONS
The Manager has directed certain portfolio trades to brokers who paid a portion
of a Portfolio's expenses. For the year ended October 31, 1996, the Portfolios'
expenses were reduced by the following amounts under these arrangements:
EXPENSE
REDUCTION
- -----------------------------------------------------------------------
Global Consumer Products and Services Portfolio $ 17,893
Global Financial Services Portfolio 9,402
Global Infrastructure Portfolio 10,217
Global Natural Resources Portfolio 45,253
<PAGE>
PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
The following audited financial statements and Reports of
Coopers & Lybrand L.L.P., independent auditors are included in
Part B: Audited financial statements of Global Financial
Services Portfolio, Global Infrastructure Portfolio, Global
Natural Resources Portfolio and Global Consumer Products and
Services Portfolio for the fiscal year ended October 31, 1996.
(b) Exhibits
1. Declaration of Trust of the Registrant - Filed herewith.
2. By-Laws of the Registrant. Incorporated by Reference to
Amendment No. 3 to Registrant's Registration Statement,
File No. 811-8454.
5. Investment Management and Administration Contract
between the Registrant and LGT Asset Management.
Incorporated by Reference to Amendment No. 3 to
Registrant's Registration Statement, File No. 811-8454.
8. Custodian Agreement between the Registrant and State
Street Bank and Trust Company - Filed herewith.
11. Consent of Coopers & Lybrand L.L.P., Independent
Accountants - Filed herewith.
13. Investment representation letters of initial investors.
Incorporated by Reference to Amendment No. 3 to
Registrant's Registration Statement, File No. 811-8454.
27. Financial Data Schedules - Filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
(1) (2)
Title of Class Number of Record Holders
Series of Beneficial (as of February 27, 1997)
Interests
Global Financial Services 2
Portfolio
Global Infrastructure 2
Portfolio
C-1
<PAGE>
Global Natural Resources 2
Portfolio
Global Consumer Products and 2
Services Portfolio
ITEM 27. INDEMNIFICATION.
Reference is hereby made to Article V of the Registrant's Declaration
of Trust, filed as Exhibit 1 to this Registration Statement.
The Registrant's Trustees and officers of the Registrant are insured
under an errors and omissions liability insurance policy and the Registrant is
insured under a fidelity bond required by Rule 17g-1 under the Investment
Company Act of 1940.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Information as to any other business, profession, vocation or
employment of a substantial nature in which each director or officer of
Chancellor LGT Asset Management, Inc. is, or at any time during the past two
years has been, engaged for his or her own account or in the capacity of
director, officer, employee, partner or trustee is incorporated herein by
reference from the section entitled "Management" in the Feeder's Part A and the
sections entitled "Directors and Executive Officers" and "Management" in the
Feeder's Part B.
Information as to the directors and officers of Chancellor LGT Asset
Management, Inc., Registrant's investment manager, is included in such manager's
Form ADV (File No. 801-10254), filed with the Securities and Exchange
Commission, which is incorporated herein by reference thereto.
ITEM 29. PRINCIPAL UNDERWRITERS.
Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
Accounts, books and other records required by Rules 31a-1 and 31a-2
under the Investment Company Act of 1940, as amended, are maintained and held in
the offices of the Registrant and its investment manager, Chancellor LGT Asset
Management, Inc., 50 California Street, 27th Floor, San Francisco, California
94111.
Records covering shareholder accounts and portfolio transactions are
also maintained and kept by the Registrant's Custodian, State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110.
ITEM 31. MANAGEMENT SERVICES.
Other than as set forth in Parts A and B of this Registration
Statement, the Registrant is not a party to any management-related service
contract.
ITEM 32. UNDERTAKINGS.
None.
C-2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940,
Registrant has duly caused this Registration Statement on Form N-1A to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of San
Francisco and State of California on the 26th day of February, 1997.
GLOBAL INVESTMENT PORTFOLIO
By /S/ DAVID J. THELANDER
David J. Thelander
Assistant Secretary
C-3
<PAGE>
INDEX OF EXHIBITS
Exhibit No. Description of Exhibit
1. Declaration of Trust of the Registrant - Filed herewith.
2. By-Laws of the Registrant Incorporated by Reference to
Amendment No. 3 to Registrant's Registration Statement, File
No. 811-8454.
5. Investment Management and Administration Contract between the
Registrant and Chancellor LGT Asset Management, Inc.
Incorporated by Reference to Amendment No. 3 to Registrant's
Registration Statement, File No. 811-8454.
8. Form of Custodian Agreement between the Registrant and State
Street Bank and Trust Company - Filed herewith.
11. Consent of Coopers & Lybrand, Independent Accountants - Filed
herewith.
13. Investment representation letters of initial investors
Incorporated by Reference to Amendment No. 3 to Registrant's
Registration Statement, File No. 811-8454.
27. Financial Data Schedules - Filed herewith.
C-4
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FUND'S
ANNUAL FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000921104
<NAME> GLOBAL INVESTMENT PORTFOLIO
<SERIES>
<NUMBER> 04
<NAME> GLOBAL CONSUMER PRODUCTS AND SERVICES PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 167090
<INVESTMENTS-AT-VALUE> 176353
<RECEIVABLES> 216
<ASSETS-OTHER> 10660
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 187229
<PAYABLE-FOR-SECURITIES> 6155
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10781
<TOTAL-LIABILITIES> 16936
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 151927
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 234
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 8869
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9263
<NET-ASSETS> 170293
<DIVIDEND-INCOME> 359
<INTEREST-INCOME> 287
<OTHER-INCOME> 0
<EXPENSES-NET> (418)
<NET-INVESTMENT-INCOME> 228
<REALIZED-GAINS-CURRENT> 8472
<APPREC-INCREASE-CURRENT> 8874
<NET-CHANGE-FROM-OPS> 17574
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 176534
<NUMBER-OF-SHARES-REDEEMED> (30317)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 163791
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 423
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 481
<AVERAGE-NET-ASSETS> 99658
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FUND'S
ANNUAL FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000921104
<NAME> GLOBAL INVESTMENT PORTFOLIO
<SERIES>
<NUMBER> 01
<NAME> GLOBAL FINANCIAL SERVICES PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 14904
<INVESTMENTS-AT-VALUE> 16296
<RECEIVABLES> 332
<ASSETS-OTHER> 1176
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17804
<PAYABLE-FOR-SECURITIES> 502
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 829
<TOTAL-LIABILITIES> 1331
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13349
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 432
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1293
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1399
<NET-ASSETS> 16473
<DIVIDEND-INCOME> 298
<INTEREST-INCOME> 82
<OTHER-INCOME> 0
<EXPENSES-NET> (118)
<NET-INVESTMENT-INCOME> 262
<REALIZED-GAINS-CURRENT> 1764
<APPREC-INCREASE-CURRENT> 609
<NET-CHANGE-FROM-OPS> 2635
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14420
<NUMBER-OF-SHARES-REDEEMED> (10375)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 6680
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 100
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 129
<AVERAGE-NET-ASSETS> 14403
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FUND'S ANNUAL FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000921104
<NAME> GLOBAL INVESTMENT PORTFOLIO
<SERIES>
<NUMBER> 02
<NAME> GLOBAL INFRASTRUCTURE PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 81485
<INVESTMENTS-AT-VALUE> 91612
<RECEIVABLES> 583
<ASSETS-OTHER> 7541
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 99736
<PAYABLE-FOR-SECURITIES> 164
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7547
<TOTAL-LIABILITIES> 7711
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 74428
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2196
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5201
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10199
<NET-ASSETS> 92025
<DIVIDEND-INCOME> 1455
<INTEREST-INCOME> 249
<OTHER-INCOME> 0
<EXPENSES-NET> (645)
<NET-INVESTMENT-INCOME> 1059
<REALIZED-GAINS-CURRENT> 5308
<APPREC-INCREASE-CURRENT> 9497
<NET-CHANGE-FROM-OPS> 15864
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 23460
<NUMBER-OF-SHARES-REDEEMED> (33309)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 6015
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 635
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 743
<AVERAGE-NET-ASSETS> 91103
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FUND'S
ANNUAL FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000921104
<NAME> GLOBAL INVESTMENT PORTFOLIO
<SERIES>
<NUMBER> 03
<NAME> GLOBAL NATURAL RESOURCES PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 95694
<INVESTMENTS-AT-VALUE> 111461
<RECEIVABLES> 4379
<ASSETS-OTHER> 3778
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 119618
<PAYABLE-FOR-SECURITIES> 3692
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3877
<TOTAL-LIABILITIES> 7569
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 90822
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 649
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4795
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15783
<NET-ASSETS> 112049
<DIVIDEND-INCOME> 280
<INTEREST-INCOME> 103
<OTHER-INCOME> 0
<EXPENSES-NET> (427)
<NET-INVESTMENT-INCOME> (44)
<REALIZED-GAINS-CURRENT> 7317
<APPREC-INCREASE-CURRENT> 14975
<NET-CHANGE-FROM-OPS> 22248
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 134701
<NUMBER-OF-SHARES-REDEEMED> (71660)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 85289
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 426
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 488
<AVERAGE-NET-ASSETS> 81612
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> .73
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
DECLARATION OF TRUST
OF
GLOBAL INVESTMENT PORTFOLIO
This DECLARATION OF TRUST of the Global Investment Portfolio hereby is
made as of the 11th day of January, 1994, by the parties signatory hereto, as
Trustees (as defined in Section 1.2 hereof).
WITNESSETH:
-----------
WHEREAS, the Trustees desire to form a master trust fund under the law
of the State of New York for the investment and reinvestment of its assets; and
WHEREAS, it is proposed that the trust assets be composed of money and
other property contributed to the subtrusts of the trust fund established
hereby, such assets to be held and managed in trust for the benefit of the
holders of beneficial interests in such subtrusts;
NOW, THEREFORE, the Trustees hereby declare that they will hold in
trust all money and property contributed to the master trust fund and will
manage and dispose of the same for the benefit of the holders of interests in
the Trust and subject to the provisions hereof, to wit:
ARTICLE I
THE TRUST
---------
1.1. NAME. The name of the master trust fund established hereby (the
"Trust") shall be the Global Investment Portfolio and so far as may be
practicable the Trustees shall conduct the Trust's activities, execute all
documents and sue or be sued under that name, which name (and the word "Trust"
wherever hereinafter used) shall refer to the Trustees as Trustees, and not
individually, and shall not refer to the officers, employees, agents or
independent contractors of the Trust or its holders of beneficial interests.
1.2. DEFINITIONS. As used in this Declaration, the following terms
shall have the following meanings:
"ADMINISTRATOR" shall mean any party furnishing services to the Trust
pursuant to any investment management or administration contract described in
Section 4.1 hereof.
"BOOK CAPITAL ACCOUNT" shall mean, for any Holder at any time, the Book
Capital Account of the Holder for such day, determined in accordance with
Section 8.1 hereof.
1
<PAGE>
"CODE" shall mean the United States Internal Revenue Code of 1986, as
amended from time to time, as well as any nonsuperseded provisions of the
Internal Revenue Code of 1954, as amended (or any corresponding provision or
provisions of succeeding law).
"COMMISSION" shall mean the United States Securities and Exchange
Commission.
"DECLARATION" shall mean this Declaration of Trust as amended from time
to time. References in this Declaration to "DECLARATION," "HEREOF," "HEREIN" and
"HEREUNDER" shall be deemed to refer to this Declaration rather than the article
or section in which any such word appears.
"FISCAL YEAR" shall mean an annual period determined by the Trustees
which ends on December 31 of each year or on such other day as is permitted or
required by the Code.
"HOLDER" shall mean as of any particular time all holders of record of
Interests in the Trust.
"INSTITUTIONAL LNVESTOR(S)" shall mean any regulated investment
company, segregated asset account, foreign investment company, common trust
fund, group trust or other investment arrangement, whether organized within or
without the United States of America, other than an individual, S corporation,
partnership or grantor trust beneficially owned by any individual, S corporation
or partnership.
"INTERESTED PERSON" shall have the meaning given it in the 1940 Act.
"INTEREST(S)" shall mean the beneficial interest of a Holder in the
Trust Property of any Series, including all rights, powers and privileges
accorded to Holders by this Declaration, which interest may be expressed as a
percentage, determined by calculating for a particular Series, at such times and
on such basis as the Trustees shall from time to time determine, the ratio of
each Holder's Book Capital Account balance to the total of all Holders' Book
Capital Account balances. Reference herein to a specified percentage of, or
fraction of, Interests, means Holders whose combined Book Capital Account
balances represent such specified percentage or fraction of the combined Book
Capital Account balances of all, or a specified group of, Holders.
"INVESTMENT ADVISER" shall mean any party furnishing services to one or
more Series of the Trust pursuant to any investment advisory contract described
in Section 4.1 hereof.
"MAJORITY INTERESTS VOTE" shall mean the vote, at a meeting of Holders
(or Holders of one or more Series as the context may require), of (A) 67% or
more of the Interests present or represented at such meeting, if Holders of more
than 50% of all Interests are present or represented by proxy, or (B) more than
50% of all Interests, whichever is less.
"PERSON" shall mean and include individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
2
<PAGE>
"REDEMPTION" shall mean the complete withdrawal of an Interest of a
Holder the result of which is to reduce the Book Capital Account balance of that
Holder to zero, and the term "REDEEM" shall mean to effect a Redemption.
"SERIES" shall mean the subtrusts of the trust fund established hereby
as the same are established pursuant to Article VI hereof, each of which shall
be a separate subtrust.
"TRUST" shall mean the master trust fund established hereby and shall
include each Series hereof.
"TRUST PROPERTY" shall mean as of any particular time any and all
assets or other property, real or personal, tangible or intangible, which at
such time is owned or held by or for the account of the Trust or the Trustees,
each component of which shall be allocated and belong to a specific Series to
the exclusion of all other Series.
"TRUSTEES" shall mean each signatory to this Declaration, so long as
such signatory shall continue in office in accordance with the terms hereof, and
all other individuals who at the time in question have been duly elected or
appointed and have qualified as Trustees in accordance with the provisions
hereof and are then in office, and reference in this Declaration to a Trustee or
Trustees shall refer to such individual or individuals in their capacity as
Trustees hereunder.
The "1940 ACT" shall mean the United States Investment Company Act of
1940, as amended, and the rules and regulations thereunder.
ARTICLE 11
TRUSTEES
--------
2.1. NUMBER AND QUALIFICATION. The number of Trustees shall be fixed
from time to time by action of the Trustees taken as provided in Section 2.5
hereof; provided, however, that the number of Trustees so fixed shall in no
event be less than two. Any vacancy created by an increase in the number of
Trustees may be filled by the appointment of an individual having the
qualifications described in this Section 2.1 made by action of the Trustees
taken as provided in Section 2.5 hereof. Any such appointment shall not become
effective, however, until the individual named in the written instrument of
appointment shall have accepted in writing such appointment and agreed in
writing to be bound by the terms of this Declaration. No reduction in the number
of Trustees shall have the effect of removing any Trustee from office. Whenever
a vacancy occurs, until such vacancy is filled as provided in Section 2.4
hereof, the Trustees continuing in office, regardless of their number, shall
have all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration. A Trustee shall be an individual
at least 21 years of age who is not under legal disability.
2.2. TERM AND ELECTION. Each Trustee named herein, or elected or
appointed prior to the first meeting of Holders, shall (except in the event of
3
<PAGE>
resignations, retirements, removals or vacancies pursuant to Section 2.3 or
Section 2.4 hereof) hold office until a successor to such Trustee has been
elected at such meeting and has qualified to serve as Trustee, as required under
the 1940 Act. Subject to the provisions of Section 16(a) of the 1940 Act and
except as provided in Section 2.3 hereof, each Trustee shall hold office during
the lifetime of the Trust and until its termination as hereinafter provided.
2.3. RESIGNATION, REMOVAL AND RETIREMENT. Any Trustee may resign his or
her trust (without need for prior or subsequent accounting) by an instrument in
writing executed by such Trustee and delivered or mailed to the Chairman, if
any, the President or the Secretary of the Trust and such resignation shall be
effective upon such delivery, or at a later date according to the terms of the
instrument. Any Trustee may be removed with or without cause by the affirmative
vote of Holders of two-thirds of the Interests or (provided the aggregate number
of Trustees, after such removal and after giving effect to any appointment made
to fill the vacancy created by such removal, shall not be less than the number
required by Section 2.1 hereof), by the action of two-thirds of the remaining
Trustees. Any Trustee who has attained a mandatory retirement age, if any,
established pursuant to any written policy adopted from time to time by at least
two-thirds of the Trustees shall, automatically and without action by such
Trustee or the remaining Trustees, be deemed to have retired in accordance with
the terms of such policy, effective as of the date determined in accordance with
such policy. Any Trustee who has become incapacitated by illness or injury as
determined by a majority of the other Trustees, may be retired by written
instrument executed by a majority of the other Trustees, specifying the date of
such Trustee's retirement. Upon the resignation, retirement or removal of a
Trustee, or a Trustee otherwise ceasing to be a Trustee, such resigning,
retired, removed or former Trustee shall execute and deliver such documents as
the remaining Trustees shall require for the purpose of conveying to the Trust
or the remaining Trustees any Trust Property held in the name of such resigning,
retired, removed or former Trustee. Upon the death of any Trustee or upon
removal, retirement or resignation due to any Trustee's incapacity to serve as
Trustee, the legal representative of such deceased, removed, retired or
resigning Trustee shall execute and deliver on behalf of such deceased, removed,
retired or resigning Trustee such documents as the remaining Trustees shall
require for the purpose set forth in the preceding sentence.
2.4. VACANCIES. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of the death, resignation, retirement,
adjudicated incompetence or other incapacity to perform the duties of the
office, or removal of a Trustee. No such vacancy shall operate to annul this
Declaration or to revoke any existing agency created pursuant to the terms of
this Declaration. In the case of a vacancy, Holders of at least a majority of
the Interests entitled to vote-, acting at any meeting of Holders held in
accordance with Section 9.2 hereof, or, to the extent permitted by the 1940 Act,
a majority vote of the Trustees continuing in office acting by written
instrument or instruments, may fill such vacancy, and any Trustee so elected by
the Trustees or the Holders shall hold office as provided in this Declaration.
The Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in the number of Trustees, provided that such
appointment shall become effective only when or after the expected vacancy
occurs. As soon as any Trustee has accepted his or her appointment in writing,
the Trust estate shall vest in the now Trustee,
4
<PAGE>
together with the continuing Trustees, without any further act or conveyance,
and he or she shall be deemed a Trustee hereunder. The power of appointment is
subject to Section 16(a) of the 1940 Act.
2.5. MEETINGS. Meetings of the Trustees shall be held from time to time
upon the call of the Chairman, if any, the President, the Secretary, an
Assistant Secretary or any two Trustees. Regular meetings of the Trustees may be
held without call or notice at a time and place fixed by the By-Laws or by
resolution of the Trustees. Notice of any other meeting shall be mailed or
otherwise given not less than 24 hours before the meeting but may be waived in
writing by any Trustee either before or after such meeting. The attendance of a
Trustee at a meeting shall constitute a waiver of notice of such meeting except
in the situation in which a Trustee attends a meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting was
not lawfully called or convened. The Trustees may act with or without a meeting.
A quorum for all meetings of the Trustees shall be a majority of the Trustees.
Unless otherwise provided in this Declaration, any action of the Trustees may be
taken at a meeting by vote of a majority of the Trustees present (a quorum being
present) or without a meeting by written consent of a majority of the Trustees.
Any committee of the Trustees may act with or without a meeting. A
quorum for all meetings of any such committee shall be a majority of the members
thereof. Unless otherwise provided in this Declaration, any action of any such
committee may be taken at a meeting by vote of a majority of the members present
(a quorum being present) or without a meeting by written consent of a majority
of the members.
Any notice, waiver or written consent hereunder may be provided and
delivered to the Trust or a Trustee by facsimile or other similar electronic
mechanism.
With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons of the Trust or otherwise
interested in any action to be taken may be counted for quorum purposes under
this Section 2.5 and shall be entitled to vote to the extent permitted by the
1940 Act.
All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all individuals participating in the
meeting can hear each other and participation in a meeting by means of such
communications equipment shall constitute presence in person at such meeting.
Any Trustee may, by power of attorney, delegate his or her powers as
Trustee for a period not exceeding six months at any one time to any other
Trustee or Trustees.
2.6. OFFICERS: CHAIRMAN OF THE BOARD. The Trustees shall, from time to
time, elect a President, a Secretary and a Treasurer. The Trustees may elect or
appoint, from time to time, a Chairman of the Board who shall preside at all
meetings of the Trustees and carry out such other duties as the Trustees may
designate. The Trustees may elect or appoint or authorize the President to
appoint such other officers, agents or independent contractors with such powers
5
<PAGE>
as the Trustees may deem to be advisable. The Chairman, if any, shall be and
each other officer may, but need not, be a Trustee.
2.7. BY-LAWS. The Trustees may adopt and, from time to time, amend or
repeal By- Laws for the conduct of the business of the Trust.
ARTICLE III
POWERS OF TRUSTEES
------------------
3.1. GENERAL. The Trustees shall have exclusive and absolute control
over the Trust Property and over the business of the Trust to the same extent as
if the Trustees were the sole owners of the Trust Property and such business in
their own right, but with such powers of delegation as may be permitted by this
Declaration. The Trustees may perform such acts as in their sole discretion they
deem proper for conducting the business of the Trust. The enumeration of or
failure to mention any specific power herein shall not be construed as limiting
such exclusive and absolute control. The powers of the Trustees may be exercised
without order of or resort to any court.
3.2. INVESTMENTS. The Trustees shall have power with respect to the
Trust and each Series thereof to
(a) conduct, operate and carry on the business of an investment
company; and
(b) subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, exchange, distribute or otherwise
deal in or dispose of United States and foreign currencies and related
instruments, including forward contracts, and securities, including common and
preferred stock warrants, bonds, debentures, time notes and all other evidences
of indebtedness, negotiable or non-negotiable instruments, obligations,
certificates of deposit or indebtedness, commercial paper, repurchase
agreements, reverse repurchase agreements, convertible securities, options,
futures contracts, and other securities, including, without limitation, those
issued, guaranteed or sponsored by any state, territory or possession of the
United States and the District of Columbia and their political subdivisions,
agencies and instrumentalities, or by the U.S. Government, any foreign
government, or any agency, instrumentality or political subdivision of the U.S.
Government or any foreign government, or any international instrumentality, or
by any bank, savings institution, corporation or other business entity organized
under the laws of the United States or under any foreign laws; and to exercise
any and all rights, powers and privileges of ownership or interest in respect of
any and all such investments of any kind and description, including, without
limitation, the right to consent and otherwise act with respect thereto, with
power to designate one or more Persons to exercise any of such rights, powers
and privileges with respect to any of such investments; and the Trustees shall
be deemed to have the foregoing powers with respect to any additional
instruments in which the Trustees may determine to invest.
6
<PAGE>
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.
3.3. TITLE. Legal title to all Trust Property shall be vested in the
Trustees as joint tenants except that the Trustees shall have the power to cause
legal title to any Trust Property to be held by or in the name of one or more of
the Trustees, or in the name of the Trust, or in the name or nominee name of any
other Person on behalf of the Trust, on such terms as the Trustees may
determine.
The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each individual who may hereafter become a Trustee
upon his due election and qualification. Upon the resignation, removal or death
of a Trustee, such resigning, removed or deceased Trustee shall automatically
cease to have any right, title or interest in any Trust Property, and the right,
title and interest of such resigning, removed or deceased Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
3.4. SALE AND INCREASES OF INTERESTS. The Trustees, in their discretion,
may, from time to time, without a vote of the Holders, permit any Institutional
Investor to purchase an Interest in a Series, or increase such Interest, for
such type of consideration, including cash or property, at such time or times
(including, without limitation, each business day), and on such terms as the
Trustees may deem best, and may in such manner acquire other assets (including
the acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses. Individuals, S corporations, partnerships and
grantor trusts that are beneficially owned by any individual, S corporation or
partnership may not purchase Interests. The Trustees, in their discretion, may
refuse to sell an interest in a Series to any person without any cause or
reasons therefor. A Holder which has redeemed its Interest in a Series may not
be permitted to purchase an Interest in such Series until the later of 60
calendar days after the date of such Redemption or the first day of the Fiscal
Year next succeeding the Fiscal Year during which such Redemption occurred.
3.5. DECREASES AND REDEMPTIONS OF INTEREST. Subject to Article VII
hereof, the Trustees, in their discretion, may, from time to time, without a
vote of the Holders, permit a Holder to redeem its Interest in a Series, or
decrease such Interest, for either cash or property, at such time or times
(including, without limitation, each business day), and on such terms as the
Trustees may deem best.
3.6. BORROW MONEY. The Trustees shall have power to borrow money or
otherwise obtain credit and to secure the same by mortgaging, pledging or
otherwise subjecting as security the assets of the Trust, including the lending
of portfolio securities, and to endorse, guarantee, or undertake the performance
of any obligation, contract or engagement of any other Person.
3.7. DELEGATION; COMMITTEES. The Trustees shall have power, consistent
with their continuing exclusive and absolute control over the Trust Property and
7
<PAGE>
over the business of the Trust or any Series, to delegate from time to time to
such of their number or to officers, employees, agents or independent
contractors of the Trust the doing of such things and the execution of such
instruments in either the name of the Trust or any Series or the names of the
Trustees or otherwise as the Trustees may deem expedient.
3.8. COLLECTION AND PAYMENT. The Trustees shall have power to collect
all property due to the Trust or any Series; and to pay all claims, including
taxes, against the Trust Property; to prosecute, defend, compromise or abandon
any claims relating to the Trust or any Series or the Trust Property; to
foreclose any security interest securing any obligation, by virtue of which any
property is owed to the Trust or any Series; and to enter into releases,
agreements and other instruments.
3.9. EXPENSES. The Trustees shall have power to incur and pay any
expenses from the Trust Property or the assets of belonging to a particular
Series, which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of this Declaration, and to pay reasonable
compensation from the Trust Property or the assets belonging to a particular
Series to themselves as Trustees. The Trustees may pay themselves such
compensation for special services, including legal and brokerage services, as
they, in good faith may deem reasonable, and reimbursement for expenses
reasonably incurred by themselves on behalf of the Trust or any Series. The
Trustees shall have a lien on the assets belonging to the appropriate Series, or
in the case of an expense allocable to more than one Series, on the assets of
each such Series, prior to any rights or interest of the holders thereto, for
the reimbursement to them of such expenses, disbursements, losses and
liabilities. The Trustees shall fix the compensation of all officers, employees
and Trustees.
3.10. MISCELLANEOUS POWERS. The Trustees shall have power to (a) employ
or contract with such Persons as the Trustees may deem appropriate for the
transaction of the business of the Trust or any Series and terminate such
employees or contractual relationships as they consider appropriate; (b) enter
into joint ventures, partnerships and any other combinations or associations;
(c) purchase, and pay for out of Trust Property, insurance policies insuring the
Investment Adviser, Administrator, placement agent, Holders, Trustees, officers,
employees, agents or independent contractors of the Trust or any Series against
all claims arising by reason of holding any such position or by reason of any
action taken or omitted by any such Person in such capacity, whether or not the
Trust would have the power to indemnify such Person against such liability; (d)
establish pension, profit-sharing and other retirement, incentive and benefit
plans for the Trustees, officers, employees or agents of the Trust or any
Series; (e) to the extent permitted by law, indemnify any Person with whom the
Trust or any Series has dealings, including the Investment Adviser,
Administrator, placement agent, Holders, Trustees, officers, employees, agents
or independent contractors of the Trust or any Series, to such extent as the
Trustees shall determine; (f) guarantee indebtedness or contractual obligations
of others; (g) determine and change the Fiscal Year of the Trust or any Series
and the method by which its accounts shall be kept; and (h) adopt a seal for the
Trust or any Series, but the absence of such a seal shall not impair the
validity of any instrument executed on behalf of the Trust or any Series.
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3.11 . FURTHER POWERS. The Trustees shall have power to conduct the
business of the Trust or any Series and carry on its operations in any and all
of its branches and maintain offices, whether within or without the State of New
York, in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper, appropriate or desirable in order to
promote the interests of the Trust or any Series although such things are not
herein specifically mentioned. Any determination as to what is in the interests
of the Trust or any Series which is made by the Trustees in good faith shall be
conclusive. In construing the provisions of this Declaration, the presumption
shall be in favor of a grant of power to the Trustees. The Trustees shall not be
required to obtain any court order in order to deal with Trust Property.
ARTICLE IV
INVESTMENT ADVISORY AND ADMINISTRATION
AND PLACEMENT AGENT ARRANGEMENTS
--------------------------------
4.1. INVESTMENT ADVISORY AND OTHER ARRANGEMENTS. The Trustees may in
their discretion, from time to time, enter into investment advisory,
administration, or placement agent contracts or agreements whereby the other
party to such contract or agreement shall undertake to furnish with respect to
one or more particular Series such investment advisory, administration,
placement agent and/or other services as the Trustees shall, from time to time,
consider appropriate or desirable and all upon such terms and conditions as the
Trustees may in their sole discretion determine, provided that any investment
advisory contract shall be subject to a Majority Interests Vote. Notwithstanding
any provision of this Declaration, the Trustees may authorize any Investment
Advisor (subject to such general or specific instructions as the Trustees may,
from time to time adopt) to effect purchases, sales, loans or exchanges of Trust
Property on behalf of any Series or may authorize any officer, employee or
Trustee to effect such purchases, sales, loans or exchanges pursuant to
recommendations of any such Investment Advisor (all without any further action
by the Trustees). Any such purchase, sale, loan or exchange shall be deemed to
have been authorized by the Trustees.
4.2. PARTIES TO CONTRACT. Any contract of the character described in
Section 4.1 or Section 4.3 hereof or in the By-Laws of the Trust may be entered
into with any corporation, firm, trust or association, although one or more of
the Trustees or officers of the Trust may-be an officer, director, Trustee,
shareholder or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any individual holding such relationship be liable
merely by reason of such relationship for any loss or expense to the Trust under
or by reason of any such contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when entered into
was reasonable and fair and not inconsistent with the provisions of this Article
IV or the By-Laws of the Trust. The same Person may be the other party to one or
more contracts entered into pursuant to Section 4.1 or Section 4.3 hereof or the
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By-Laws of the Trust, and any individual may be financially interested or
otherwise affiliated with Persons who are parties to any or all of the contracts
mentioned in this Section 4.2 or in the By-Laws of the Trust.
4.3 CUSTODIAN. The Trustees shall at all times place and maintain
securities and similar investments of the Trust and of each Series in custody
meeting the requirements of Section 17(f) of the 1940 Act and the rules
thereunder. The Trustees, on behalf of the Trust or any Series, may enter into
an agreement with a custodian on terms and conditions acceptable to the
Trustees, providing for the custodian, among other things, (a) to hold the
securities owned by the Trust or any Series and to deliver the same upon written
order or oral order confirmed in writing, (b) to receive a receipt for any
monies due the Trust or any Series and deposit the same in its own banking
department or elsewhere, (c) to disburse such funds upon orders or vouchers, and
(d) to employ one or more subcustodians.
4.4 1940 ACT GOVERNANCE. Any contract referred to in Section 4.1 hereof
shall be consistent with and subject to the applicable requirements of Section
15 of the 1940 Act with respect to its continuance in effect, its termination,
and the method of authorization. and approval of such contract and renewal. No
amendment to a contract referred to in Section 4.1 hereof shall be effective
unless assented to in a manner consistent with the requirements of Section 15 of
the 1940 Act.
ARTICLE V
LIABILITY OF HOLDERS; LIMITATIONS OF
LIABILITY OF TRUSTEES, OFFICERS, ETC.
-------------------------------------
5.1. LIABILITY OF HOLDERS, INDEMNIFICATION. Each Holder of an Interest
in a Series shall be jointly and severally liable (with rights of contribution
INTER SE in proportion to their respective Interests in the Series) for the
liabilities and obligations of the Series in the event that the Trust fails to
satisfy such liabilities and obligations from the assets of that Series;
provided, however, that, to the extent assets of that Series are available in
the Trust, the Trust shall indemnity and hold each Holder harmless from and
against any claim or liability to which such Holder may become subject by reason
of being or having been a Holder of an interest in that Series to the extent
that such claim or liability imposes on the Holder an obligation or liability
which, when compared to the obligations and liabilities imposed on other Holders
of interests in that Series, is greater than such Holder's Interest
(proportionate share), and shall reimburse such Holder for all legal and other
expenses reasonably incurred by such Holder in connection with any such claim or
liability. The rights accruing to a Holder under this Section 5.1 shall not
exclude any other right to which such Holder may be lawfully entitled, nor shall
anything contained herein restrict the right of the Trust to indemnify or
reimburse a Holder in any appropriate situation even though not specifically
provided herein. Notwithstanding the indemnification procedure described above,
it is intended that each Holder of an interest in the Series shall remain
jointly and severally liable to the Trust's creditors of that Series as a legal
matter. The liabilities of a particular Series and the right to indemnification
granted hereunder to Holders of Interest in such Series shall not be enforceable
against any other Series or Holders of Interest in any other Series.
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5.2. LIMITATIONS OF LIABILITY OF TRUSTEES. OFFICERS, EMPLOYEES,
AGENTS., INDEPENDENT CONTRACTORS TO THIRD PARTIES. No Trustee, officer,
employee, agent or independent contractor (except in the case of an agent or
independent contractor to the extent expressly provided by written contract) of
the Trust or any Series shall be subject to any personal liability whatsoever to
any Person, other than the Trust or the Holders, in connection with Trust
Property or the affairs of the Trust; and all such Persons shall look solely to
the Trust Property for satisfaction of claims of any nature against a Trustee,
officer, employee, agent or independent contractor (except in the case of an
agent or independent contractor to the extent expressly provided by written
contract) of the Trust arising in connection with the affairs of the Trust.
5.3. LIMITATIONS OF LIABILITY OF TRUSTEES, OFFICERS, AGENTS,
INDEPENDENT CONTRACTORS TO TRUST HOLDERS, ETC. No Trustee, officer, employee,
agent or independent contractor (except in the case of an agent or independent
contractor to the extent expressly provided by written contract) of the Trust or
any Series shall be liable to the Trust or the Holders for any action or failure
to act (including, without limitation, the failure to compel in any way any
former or acting Trustee to redress any breach of trust) except for such
Person's own bad faith, willful misfeasance, gross negligence or reckless
disregard of such Person's duties.
5.4. MANDATORY INDEMNIFICATION. The Trust shall indemnify, to the
fullest extent permitted by law (including the 1940 Act), each Trustee, officer,
employee, agent or independent contractor (except in the case of an agent or
independent contractor to the extent expressly provided by written contract) of
the Trust (including any Person who serves at the Trust's request as a director,
officer or trustee of another organization in which the Trust has any interest
as a shareholder, creditor or otherwise) against all liabilities and expenses
(including amounts paid in satisfaction of judgments, in compromise, as fines
and penalties, and as counsel fees) reasonably incurred by such Person in
connection with the defense or disposition of any action, suit or other
proceeding. whether civil or criminal, in which such Person may be involved or
with which such Person may be threatened, while in office or thereafter, by
reason of such Person being or having been such a Trustee, officer, employee,
agent or independent contractor, except with respect to any matter as to which
such Person shall have been adjudicated to have acted in bad faith, willful
misfeasance, gross negligence or reckless disregard of such Person's duties;
provided, however, that as to any matter disposed of by a compromise payment by
such Person, pursuant to a consent decree or otherwise, no indemnification
either for such payment or for any other expenses shall be provided unless there
has been a determination that such Person did not engage in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Person's office (i) by the court or other body approving the
settlement or other disposition; (ii) by a reasonable determination, based upon
a review of readily available facts (as opposed to a full trial-type inquiry),
that such Person did not engage in such conduct by written opinion from
independent legal counsel approved by the Trustees; or (iii) by a majority of
the Trustees who are neither Interested Persons of the Trust nor parties to the
matter based upon a review of readily available facts (as opposed to a full
trial-type inquiry). The rights accruing to any Person under these provisions
shall not exclude any other right to which such Person may be lawfully entitled;
provided that no Person may satisfy any right of indemnity or reimbursement
granted in this Section 5.4 or In Section 5.2 hereof or to which such Person may
be otherwise entitled except out of the Trust Property. The Trustees may make
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advance ayments in connection with indemnification under this Section 5.4,
provided that the indemnified Person shall have given a written undertaking to
reimburse the Trust in the event it is subsequently determined that such Person
is not entitled to such indemnification, and provided further that (i) such
Person shall have provided appropriate security for such undertaking, (ii) the
Trust is insured against losses arising out of any such advanced payments, or
(iii) either a majority of the Trustees who are neither Interested Persons of
the Trust nor parties to the matter, or independent legal counsel in a written
opinion, shall have determined, based upon a review of readily available facts
(as opposed to a trial-type inquiry or full investigation), that there is reason
to believe that such Person will not be disqualified from indemnification under
this Section 5.4.
5.5. NO BOND REQUIRED OF TRUSTEES No Trustee shall, as such, be
obligated to give any bond or surety or other security for the performance of
any of such Trustee's duties hereunder.
5.6. NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS., ETC., No
purchaser, lender or other Person dealing with any Trustee, officer, employee,
agent or independent contractor of the Trust or any Series shall be bound to
make any inquiry concerning the validity of any transaction purporting to be
made by such Trustee, officer, employee, agent or independent contractor or be
liable for the application of money or property paid, loaned or delivered to or
on the order of such Trustee, officer, employee, agent or independent
contractor. Every obligation, contract, instrument, certificate or other
interest or undertaking of the Trust or any Series, and every other act or thing
whatsoever executed in connection with the Trust or any Series shall be
conclusively taken to have been executed or done by the executors thereof only
in their capacity as Trustees, officers, employees, agents or independent
contractors of the Trust or any Series. Every written obligation, contract,
instrument, certificate or other interest or undertaking of the Trust or any
Series made or sold by any Trustee, officer, employee, agent or independent
contractor of the Trust or any Series, in such capacity, shall contain an
appropriate recital to the effect that the Trustee, officer, employee, agent or
independent contractor of the Trust or any Series shall not personally be bound
by or liable thereunder, nor shall resort be had to their private property for
the satisfaction of any obligation or claim thereunder, and appropriate
references shall be made therein to the Declaration, and may contain any further
recital which they may deem appropriate, but the omission of such recital shall
not operate to impose personal liability on any Trustee, officer, employee,
agent or independent contractor of the Trust or any Series. Subject to the
provisions of the 1940 Act, the Trust may maintain insurance for the protection
of the Trust Property, the Holders, and the Trustees, officers, employees,
agents and independent contractors of the Trust or any Series in such amount as
the Trustees shall deem adequate to cover possible tort liability, and such
other insurance as the Trustees in their sole judgment shall deem advisable.
5.7. RELIANCE ON EXPERTS. Each Trustee, officer, employee, agent or
independent contractor of 'the Trust or any Series shall, in the performance of
such Person's duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust or any Series (whether
or not the Trust or any Series would have the power to indemnify such Persons
against such liability), upon an opinion of counsel, or upon reports made to the
Trust or any Series by any of its officers or employees or by any Investment
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Advisor or Administrator, accountant, ppraiser or other experts or consultants
selected with reasonable care by the Trustees, officers or employees of the
Trust, regardless of whether such counsel or expert may also be a Trustee.
5.8 NO REPEAL OR MODIFICATION. Any repeal or modification of this
Article V by the Holders or adoption or modification of any other provision of
this Declaration or the By-Laws inconsistent with this Article V, shall be
prospective only, to the extent that such repeal or modification would, if
applied retrospectively, adversely affect any limitation on the liability of any
Person or indemnification available to any indemnified Person with respect to
any act or omission which occurred prior to such repeal, modification, or
adoption.
ARTICLE VI
INTERESTS
---------
6.1. INTERESTS. The beneficial interest in the Trust Property shall
consist of nontransferable Interests. Interests may be sold only to
Institutional Investors, as may be approved by the Trustees, for cash or other
consideration acceptable to the Trustees, subject to the requirements of the
1940 Act. The Interests shall be personal property giving only the rights in
this Declaration specifically set forth. The value of an Interest shall be equal
to the Book Capital Account balance of the Holder of the lnterest.
The Trustees shall have authority, from time to time, to establish
Series, each of which shall be a separate subtrust and the Interests in which
shall be separate and distinct from the Interests in any other Series. The
Series shall include, without limitation, those Series specifically established
and designated pursuant to Section 6.2 hereof, and such other Series as the
Trustees may deem necessary or desirable. The Trustees shall have exclusive
power without the requirement of Holder approval to establish and designate such
separate and distinct Series, and, subject to the provisions of this Declaration
and the 1940 Act, to fix and determine the rights of Holders of Interests in
such Series, including with respect to the price, terms and manner of purchase
and redemption, dividends and other distributions, rights on liquidation,
sinking or purchase fund provisions, conversion rights and conditions under
which the Holders of the several Series shall have separate voting rights or no
voting rights.
6.2. ESTABLISHMENT AND DESIGNATION OF SERIES. The establishment and
designation of any Series shall be effective upon the execution by the Secretary
or an Assistant Secretary of the Trust, pursuant to authorization by a majority
of the Trustees, of an instrument setting forth such establishment and
designation and the relative rights and preferences of the Interests in such
Series, or as otherwise provided in such instrument. At any time that there are
no Interests outstanding of any particular Series previously established and
designated, the Trustees may by resolution adopted by a majority of their
number, and evidenced by an instrument executed by the Secretary or an Assistant
Secretary of the Trust, abolish that Series and the establishment and
designation thereof. Each instrument referred to in this paragraph shall have
the status of an amendment to this Declaration of Trust.
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Without limiting the authority of the Trustees set forth above to
establish and designate further Series, the Trustees hereby establish and
designate the subtrusts or Series set forth on Schedule A hereto. The interests
in each of these Series and any Interests in any further Series that may from
time to time be established and designated by the Trustees shall (unless the
Trustees otherwise determine with respect to some further Series at the time of
establishing and designating the same) have the following relative rights and
preferences:
(a) ASSETS BELONGING TO SERIES. All consideration received by the
Trust for the issue or sale of Interests in a particular Series, together with
all assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
be held by the Trustees in a separate trust for the benefit of the Holders of
Interests in that Series and shall irrevocably belong to that Series for all
purposes, and shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as "assets
belonging to" that Series. No Series shall have any right to or interest in the
assets belonging to any other Series, and no Holder shall have any right or
interest with respect to the assets belonging to any Series in which it does not
hold an Interest.
(b) LIABILITIES BELONGING TO SERIES. The assets belonging to each
particular Series shall be charged with the liabilities in respect of that
Series and all expenses, costs, charges and reserves attributable to that
Series. The liabilities, expenses, costs, charges and reserves so charged to a
Series are herein referred to as "liabilities belonging to" that Series. No
Series shall be liable for or charged with the liabilities belonging to any
other Series, and no Holder shall be subject to any liabilities belonging to any
Series in which it does not hold an Interest.
(c) VOTING. On each matter submitted to a vote of the Holders,
each Holder of an Interest in each Series shall be entitled to a vote
proportionate to its Interest in such Series as recorded on the books of the
Trust and all Holders of Interests in each Series shall vote as a separate class
except as to voting for Trustees and as otherwise required by the 1940 Act. As
to any matter which does not affect the interest of a particular Series, only
the Holders of Interests in the one or more affected Series shall be entitled to
vote.
6.3. NONTRANSFERABILITY. A Holder may not transfer, sell or exchange
its Interest.
6.4. REGISTER OF INTERESTS. A register shall be kept at the Trust under
the direction of the Trustees which shall contain the name, address and Book
Capital Account balance of each Holder. Such register shall be conclusive as to
the identity of the Holders. No Holder shall be entitled to receive payment of
any distribution, nor to have notice given to it as herein provided, until it
has given its address to such officer or agent of the Trust as is keeping such
register for entry thereon.
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ARTICLE VII
INCREASES, DECREASES AND REDEMPTIONS OF INTERESTS
-------------------------------------------------
Subject to applicable law, to the provisions of this Declaration and to
such restrictions as may from time to time be adopted by the Trustees, each
Holder shall have the right to vary its investment in any Series at any time
without limitation by increasing (through a capital contribution) or decreasing
(through a capital withdrawal) or by a Redemption of its Interest. An increase
in the Investment of a Holder in a Series shall be reflected as an increase in
the Book Capital Account balance of that Holder and a decrease in the investment
of a Holder in the Series or the Redemption of the Interest of a Holder shall be
reflected as a decrease in the Book Capital Account balance of that Holder. The
Trust shall, upon appropriate and adequate notice from any Holder increase,
decrease or redeem such Holder's Interest for an amount determined by the
application of a formula adopted for such purpose by resolution of the Trustees;
provided that (a) the amount received by the Holder upon any such decrease or
Redemption shall not exceed the decrease in the Holder's Book Capital Account
balance effected by such decrease or Redemption of its Interest, and (b) if so
authorized by the Trustees, the Trust may, at any time and from time to time,
charge fees for effecting any such decrease or Redemption, at such rates as the
Trustees may establish, and may, at any time and from time to time, suspend such
right of decrease or Redemption. The procedures for effecting decreases or
Redemptions shall be as determined by the Trustees from time to time.
ARTICLE VIII
DETERMINATION OF BOOK CAPITAL ACCOUNT
BALANCES AND DISTRIBUTIONS
--------------------------
8.1. BOOK CAPITAL ACCOUNT BALANCES. The Book Capital Account balance of
each Holder with respect to a particular Series shall be determined on such days
and at such time or times as the Trustees may determine. The Trustees shall
adopt resolutions setting forth the method of determining the Book Capital
Account balance of each Holder. The power and duty to make calculations pursuant
to such resolutions may be delegated by the Trustees to the Investment Advisor
or Administrator, custodian, or such other Person as the Trustees may determine.
Upon the Redemption of an Interest, the Holder of that Interest shall be
entitled to receive the balance of its Book Capital Account. A Holder may not
transfer, sell or exchange its Book Capital Account balance.
8.2. ALLOCATIONS AND DISTRIBUTIONS TO HOLDERS. The Trustees shall, in
compliance with the Code, the 1940 Act and generally accepted accounting
principles, establish the procedures by which the Trust shall make with respect
to each Series (i) the allocation of unrealized gains and losses, taxable income
and tax loss, and profit and loss, or any item or items thereof, to each Holder,
(ii) the payment of distributions, if any, to Holders, and (iii) upon
liquidation, the final distribution of items of taxable income and expense. Such
procedures shall be set forth in writing and be furnished to the Trust's
accountants. The Trustees may amend the procedures adopted pursuant to this
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Section 8.2 from time to time. The Trustees may retain from the net profits of
each Series such amount as they may deem necessary to pay the liabilities and
expenses of the Trust to meet obligations of each Series, and as they may deem
necessary to pay the liabilities and expenses of that Series.
8.3. POWER TO MODIFY FOREGOING PROCEDURES. Notwithstanding any of the
foregoing provisions of this Article VIII, the Trustees may prescribe, in their
absolute discretion, such other bases and times for determining the net income
of the Trust and of each Series, the allocation of income of the Trust and of
each Series, the Book Capital Account balance of each Holder, or the payment of
distributions to the Holders as they may deem necessary or desirable to enable
the Trust or a Series to comply with any provision of the 1940 Act or any order
of exemption issued by the Commission or with the Code.
ARTICLE IX
HOLDERS
-------
9.1. RIGHTS OF HOLDERS. The ownership of the Trust Property and the
right to conduct any business described herein are vested exclusively in the
Trustees, and the Holders shall have no right or title therein other than the
beneficial interest conferred by their Interests and they shall have no power or
right to call for any partition or division of any Trust Property. In addition,
the Holders shall have power to vote only with respect to (a) the election of
Trustees as provided in Article II, Section 2.4; (b) the removal of Trustees as
provided in Article II, Section 2.3; (c) any investment advisory contract as
provided in Article IV, Section 4.1; (d) any dissolution of a Series as provided
in Article X, Section 10.2; (e) the amendment of this Declaration to the extent
and as provided in Article X, Section 10.4; (f) any merger, consolidation or
sale of assets as provided in Article X, Section 10.5; and (g) such additional
matters relating to the Trust as may be required or authorized by law, by this
Declaration or the By-Laws or any registration statement of the Trust filed with
the Commission, or as the Trustees may consider desirable.
9.2. MEETINGS OF HOLDERS. Meetings of Holders may be called at any time
by a majority of the Trustees and shall be called by any Trustee upon written
request of Holders holding, in the aggregate, not less than 10% of the Interests
in a Series (if the meeting relates solely to that Series), or not less than 10%
of the Interests in the Trust (if the meeting relates to the Trust and not
solely to a particular Series), such request specifying the purpose or purposes
for which such meeting is to be called. Any such meeting shall be held within or
without the State of New York and within or without the United States of America
on such day and at such time as the Trustees shall designate. Holders of at
least one-third of the Interests in the Series (if the meeting relates solely to
that Series) or Holders of at least one-third of the Interests in the Trust (if
the meeting relates to the Trust and not solely to a particular Series). present
in person or by proxy, shall constitute a quorum for the transaction of any
business, except as may otherwise be required by the 1940 Act, other applicable
law, this Declaration or the By-Laws. If a quorum is present at a meeting, an
affirmative vote of the Holders present, in person or by proxy, holding more
than 50% of the total Interests of the Holders present, either in person or by
proxy, at such meeting constitutes the action of the Holders, unless a greater
number of
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affirmative votes is required by the 1940 Act, other applicable law, this
Declaration or the ByLaws, and except that a plurality of the total Interests of
the Holders present shall elect a Trustee. All or any one of more Holders may
participate in a meeting of Holders by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting by means of such
communications equipment shall constitute presence in person at such meeting.
9.3. NOTICE OF MEETINGS. Notice of each meeting of Holders, stating the
time, place and purposes of the meeting, shall be given by the Trustees by mail
to each Holder of the Series or the Trust, as the case may be, at its registered
address, mailed at least 10 days and not more than 60 days before the meeting.
Notice of any meeting may be waived in writing by any Holder either before or
after such meeting. The attendance of a Holder at a meeting shall constitute a
waiver of notice of such meeting except in the situation in which a Holder
attends a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting was not lawfully called or convened. At
any meeting, any business properly before the meeting may be considered whether
or not stated in the notice of the meeting. Any adjourned meeting may be held as
adjourned without further notice.
9.4. RECORD DATE FOR MEETINGS, DISTRIBUTIONS, ETC. For the purpose of
determining the Holders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Holders or the payment of any distribution
or the taking of any other action, as the case may be, as a record date for the
determination of the Persons to be treated as Holders of the Series or the
Trust, as the case may be, for such purpose.
9.5. PROXIES. ETC. At any meeting of Holders, any Holder entitled to
vote thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Secretary, or with
such other officer or agent of the Trust as the Secretary may direct, for
verification prior to the time at which such vote is to be taken. A proxy may be
revoked by a Holder at any time before it has been exercised by placing on file
with the Secretary, or with such other officer or agent of the Trust as the
Secretary may direct, a later dated proxy or written revocation. Pursuant to a
resolution of a majority of the Trustees, proxies may be solicited in the name
of the Trust or of one or more Trustees or of one or more officers of the Trust.
Only Holders on the record date shall be entitled to vote. Each such Holder
shall be entitled to a vote proportionate to its Interest in the Series or the
Trust, as the case may be. When an Interest is held jointly by several Persons,
any one of 'them may vote at any meeting in person or by proxy with respect to
such Interest, but if more than one of them is present at such meeting in person
or by proxy, and such joint owners or their proxies so present disagree as to
any vote to be cast, such vote shall not be received with respect to such
Interest. A proxy purporting to be executed by or on behalf of a Holder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger.
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9.6. REPORTS. The Trustees shall cause to be prepared and furnished to
each Holder, at least annually as of the end of each Fiscal Year, a report of
operations containing a balance sheet and a statement of income of each Series
prepared in conformity with generally accepted accounting principles and an
opinion of an independent public accountant on such financial statements. The
Trustees shall, in addition, with respect to each Series furnish to each Holder
at least semi-annually interim reports of operations containing an unaudited
balance sheet as of the end of such period and an unaudited statement of income
for the period from the beginning of the then-current Fiscal Year to the end of
such period.
9.7. INSPECTION OF RECORDS. The records of the Trust shall be open to
inspection by Holders during normal business hours for any purpose not harmful
to the Trust.
9.8. HOLDER ACTION BY WRITTEN CONSENT. Any action which may be taken on
behalf of the Trust or any Series by Holders may be taken without a meeting if
Holders holding more than 50% of all Interests entitled to vote (or such larger
proportion thereof as shall be required by any express provision of this
Declaration or of applicable law) consent to the action in writing and the
written consents are filed with the records of the meetings of Holders. Such
consents shall be treated for all purposes as a vote taken at a meeting of
Holders. Each such written consent shall be executed by or on behalf of the
Holder delivering such consent and shall bear the date of such execution. No
such written consent shall be effective to take the action referred to therein
unless, within one year of the earliest dated consent, written consents executed
by a sufficient number of Holders to take such action are filed with the records
of the meetings of Holders.
9.9. NOTICES. Any and all communications, including any and all notices
to which any Holder may be entitled, shall be deemed duly served or given if
mailed, postage prepaid, addressed to a Holder at its last known address as
recorded an the register of the Trust or if delivered to a Holder by courier or
by facsimile or other similar electronic mechanism.
ARTICLE X
DURATION; TERMINATION; DISSOLUTION;
AMENDMENT; MERGERS; LNCORPORATION
---------------------------------
10.1. DURATION. Subject to possible dissolution or termination in
accordance with the provisions of Section 10.2 and Section 10.3 hereof,
respectively, the Trust created hereby shall continue until the expiration of 20
years after the death of the last survivor of the initial Trustees named herein
and the following named persons:
<TABLE>
<CAPTION>
Name Address Date of Birth
<S> <C> <C>
Nelson Stewart Ruble 65 Duck Pond Road 04/10/91
Glen Cove, NY 11542
Shelby Sara Wyetzner 8 Oak Brook Lane 10/18/90
Merrick, NY 11566
18
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name Address Date of Birth
<S> <C> <C>
Amanda Jehan Sher Coolidge 483 Pleasant Street, No. 9 08/16/89
Belmont, MA 02178
David Cornelius Johnson 752 West End Avenue, Apt. 10J 05/02/89
New York, NY 10025
Conner Leahy McCabe 100 Parkway Road, Apt. 3C 02/22/89
Bronxville, NY 10708
Andrea Hellegers 530 East 84th Street, Apt. 5H 12/22/88
New York, NY 10028
Emilie Blair Ruble 65 Duck Pond Road 02/24/89
Glen Cove, NY 11542
Brian Patrick Lyons 152-48 Jewel Avenue 01/20/89
Flushing, NY 11367
Carolina Bolger Cima 11 Beachwood Lane 12/23/88
Scarsdale, NY 10583
</TABLE>
or until such later date as may be permitted by the applicable law of the State
of New York.
10.2. DISSOLUTION. Any Series shall be dissolved (i) by the affirmative
vote of the Holders of not less than two-thirds of the Interests in the Series
at any meeting of the Holders or by an instrument in writing, without a meeting,
signed by a majority of the Trustees and consented to by the Holders of not less
than two-thirds of such Interests or (ii) by the Trustees by written notice of
dissolution to the Holders of the Interests in the Series. The Trust shall be
dissolved upon the dissolution of the last remaining Series.
10.3. TERMINATION.
------------
(a) Upon an event of dissolution of the Trust or a Series, the
Trust or Series shall be terminated in accordance with the following Provisions:
(i) the Trust or Series, as applicable, shall carry on no
business except for the purpose of winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of
the Trust or Series, as applicable, and all of the powers of the
Trustees under this Declaration shall continue until the affairs of
the Trust or Series have been wound up, including the power to fulfill
or discharge the contracts of the Trust or Series, collect the assets
of the Trust of Series, sell, convey, assign, exchange or otherwise
19
<PAGE>
dispose of all or any part of the Trust Property affected to one or
more Persons at public or private sale for consideration which may
consist in whole or in part of cash, securities or other property of
any kind, discharge or pay the liabilities of the Trust or Series, and
do all other acts appropriate to liquidate the business of the Trust
or Series; provided that any sale, conveyance, assignment, exchange or
other disposition of all or substantially all the Trust Property or
substantially all of the assets belonging to a particular Series,
other than for cash, shall require approval of the principal terms of
the transaction and the nature and amount of the consideration by the
vote of Holders holding more than 50% of the total Interests in the
Trust or Series, as applicable; and
(iii) after paying or adequately providing for the payment
of all liabilities of the Trust or of the Series being terminated, and
upon receipt of such releases, indemnities and refunding agreements as
they deem necessary for their protection, the Trustees shall
distribute the remaining Trust Property of the Trust or Series, as
applicable, in cash or in kind or partly each, among the Holders
according to their respective rights as set forth in the procedures
established pursuant to Section 8.2 hereof.
(b) Upon termination of the Trust or Series and distribution
to the Holders as herein provided, a majority of the Trustees shall execute and
file with the records of the Trust an instrument in writing setting forth the
fact of such termination and distribution. Upon termination of the Trust, the
Trustees shall thereupon be discharged from all further duties hereunder, and
the rights and interests of all Holders shall thereupon cease.
10.4. AMENDMENT PROCEDURE.
--------------------
(a) The Trustees may, without any vote of Holders, amend or
otherwise supplement this Declaration by an instrument in writing executed by a
majority of the Trustees, provided that Holders shall have the right to vote on
any amendment (a) which would affect the voting rights of Holders granted in
Article IX, Section 9.1, (b) to this Section 10.4, (c) required to be approved
by Holders by law or by the Trust's registration statement filed with the
Commission, or (d) submitted to them by the Trustees. Any amendment submitted to
Holders which the Trustees determine would affect the Holders of any Series
shall be authorized by vote of the Holders of such Series and no vote shall be
required of Holders of a Series not affected. Notwithstanding anything else
herein, any amendment to Article V which would have the effect of reducing the
indemnification and other rights provided thereby and any repeal or amendment of
this sentence shall each require the affirmative vote of the Holders of
two-thirds of the Interests entitled to vote thereon.
(b) No amendment may be made under Section 10.4 (a) hereof
which would change any rights with respect to any Interest by reducing the
amount payable thereon upon liquidation of the Trust or any Series or by
diminishing or eliminating any voting rights pertaining thereto, except with the
vote or consent of Holders of two-thirds of all Interests which would be so
affected by such amendment.
20
<PAGE>
(c) A certification in recordable form executed by a majority
of the Trustees setting forth an amendment and reciting that it was duly adopted
by the Holders or by the Trustees as aforesaid or a copy of the Declaration, as
amended, in recordable form, and executed by a majority of the Trustees, shall
be conclusive evidence of such amendment when filed with the records of the
Trust.
Notwithstanding any other provision hereof, until such time as Interests
are first sold, this Declaration may be terminated or amended in any respect by
the affirmative vote of a majority of the Trustees at any meeting of Trustees or
by an instrument executed by a majority of the Trustees.
10.5. MERGER, CONSOLIDATION AND SALE OF ASSETS. The Trust or any Series
may merge or consolidate with any other corporation, association, trust or other
organization or may sell, lease or exchange all or substantially all of the
Trust Property, or assets belonging to such Series, as applicable, including
good will, upon such terms and conditions and for such consideration when and as
authorized at any meeting of Holders called for such purpose by Majority
Interests Vote of Interests in the Series affected by such action, or by an
instrument in writing without a meeting, consented to by Holders of not less
than a majority of the Interests in the Series affected by such action, and any
such merger, consolidation, sale, lease or exchange shall be deemed for all
purposes to have been accomplished under and pursuant to the law of the State of
New York.
ARTICLE XI
MISCELLANEOUS
-------------
11.1. CERTIFICATE OF DESIGNATION; AGENT FOR SERVICE OF PROCESS. If
required by New York law, the Trust shall file, with the Department of State of
the State of New York, a certificate, in the name of the Trust and executed by
an officer of the Trust, designating the Secretary of State of the State of New
York as an agent upon whom process in any action or proceeding against the Trust
or any Series may be served.
11.2. GOVERNING LAW. This Declaration is executed by the Trustees and
delivered in the State of New York and with reference to the law thereof, and
the rights of all parties and the validity and construction of every provision
hereof shall be subject to and construed in accordance with the law of the State
of New York and reference shall be specifically made to the trust law of the
State of New York as to the construction of matters not specifically covered
herein or as to which an ambiguity exists.
11.3. COUNTERPARTS. This Declaration may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any one such original counterpart.
11.4. RELIANCE BY THIRD PARTIES. Any certificate executed by an
individual who, according to the records of the Trust or of any recording office
21
<PAGE>
in which this Declaration may be recorded, appears to be a Trustee hereunder,
certifying to (a) the number or identity of Trustees or Holders, (b) the due
authorization of the execution of any instrument or writing, (c) the form of any
vote passed at a meeting of Trustees or Holders, (d) the fact that the number of
Trustees or Holders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (e) the form of any By-Laws
adopted by or the identity of any officer elected by the Trustees, or (f) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust shall be conclusive evidence as to the matters so certified in favor of
any Person dealing with the Trustees.
11.5. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
-----------------------------------------------
(a) The provisions of this Declaration are severable, and if
the Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, or with other applicable law and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of this Declaration in any jurisdiction.
22
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Declaration of Trust of
Global Investment Portfolio Trust as of the day and year first above written.
/s/ David A, Minella
--------------------
David A. Minella
As Trustee and not individually
/s/ C. Derek Anderson
---------------------
C. Derek Anderson
As Trustee and not individually
/s/ Frank S. Bayley
-------------------
Frank S. Bayley
As Trustee and not individually
/s/ ARTHUR C. PATTESON
----------------------
Arthur C. Patterson
As Trustee and not individually
/s/ RUTH H. QUIGLEY
-------------------
Ruth H. Quigley
As Trustee and not individually
23
<PAGE>
SCHEDULE A
INITIAL SERIES
Global Financial Services Portfolio
Global Infrastructure Portfolio
Global Natural Resources Portfolio
CUSTODIAN CONTRACT
Between
GLOBAL INVESTMENT PORTFOLIO
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
PAGE
1. Employment of Custodian and Property to be Held By It 1
2. Duties of the Custodian with Respect to Property of the Fund Held
by the Custodian in the United States 2
2.1 Holding Securities 2
2.2 Delivery of Securities 3
2.3 Registration of Securities 7
2.4 Bank Accounts 7
2.5 Availability of Federal Funds 8
2.6 Collection of Income 8
2.7 Payment of Fund Monies 9
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased 11
2.9 Appointment of Agents 12
2.10 Deposit of Fund Assets in Securities System 12
2.11 Fund Assets Held in the Custodian's Direct Paper System 15
2.12 Segregated Account 16
2.13 Ownership Certificates for Tax Purposes 17
2.14 Proxies 17
2.15 Communications Relating to Portfolio Securities 17
3. Duties of Custodian With Respect to Property of the Fund Held
Outside of the United States 18
3.1 Appointment of Foreign Sub-Custodians 18
3.2 Assets to be Held 19
3.3 Foreign Securities Depositories 19
3.4 Agreements with Foreign Banking Institutions 19
3.5 Access of Independent Accountants of the Fund 20
3.6 Reports by Custodian 20
3.7 Transactions in Foreign Custody Account 20
3.8 Liability of Foreign Sub-Custodians 21
3.9 Liability of Custodian 22
3.10 Reimbursement for Advances 22
3.11 Monitoring Responsibilities 23
3.12 Branches of U.S. Banks 23
3.13 Tax Law 24
<PAGE>
Page
4. Payments for Sales or Repurchase or Redemptions of Shares
of the Fund 25
5. Proper Instructions 26
6. Actions Permitted Without Express Authority 26
7. Evidence of Authority 27
8. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income 27
9. Mitigation by Custodian 28
10. Notice of Litigation; Right to Proceed 28
11. Records 29
12. Opinion of Fund's Independent Accountants 30
13. Reports to Fund by Independent Public Accountants 30
14. Compensation by Custodian 31
15. Responsibility of Custodian 31
16. Effective Period, Termination and Amendment 33
17. Successor Custodian 34
18. Interpretive and Additional Provisions 35
19. Additional Funds 35
20. Massachusetts Law to Apply 36
21. Prior Contracts 36
22. Limitation of Shareholder Liability 36
<PAGE>
Page
23. Shareholder Communications Election 36
24. Assignment 37
25 Severability 37
<PAGE>
CUSTODIAN CONTRACT
------------------
This Contract between Global Investment Portfolio, a New York trust,
having its principal place of business at 50 California Street, 27th Floor, San
Francisco, California 94111- 4624 hereinafter called the "Fund", and State
Street Bank and Trust Company, a Massachusetts trust company, having its
principal place of business at 225 Franklin Street, Boston, Massachusetts,
02110, hereinafter called the "Custodian".
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate subtrusts,
with each such subtrusts representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends to initially offer shares in three subtrusts,
the G. T. Global Financial Services Portfolio, G. T. Global Natural Resources
Portfolio, and G.T. Global Infrastructure Portfolio (such subtrusts together
with all other subtrusts subsequently established by the Fund and made subject
to this Contract in accordance with Article 19, being herein referred to as the
"Portfolio(s)");
NOW THEREFOR, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Declaration of
1
<PAGE>
Trust. The Fund on behalf of the Portfolio(s) agrees to deliver to the Custodian
all securities and cash of the Portfolios, and all payments of income, payments
of principal or capital distributions received by it with respect to all
securities owned by the Portfolio(s) from time to time, and the cash
consideration received by it for such new or treasury shares of beneficial
interest of the Fund representing interests in the Portfolios, ("Shares") as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of a Portfolio held or received by the Portfolio and not delivered
to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article
5), the Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY THE
CUSTODIAN IN THE UNITED STATES
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held by
it in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities
2
<PAGE>
depository or in a book-entry system authorized by the U. S. Department
of the Treasury, collectively referred to herein as "Securities System"
and (b) commercial paper of an issuer for which State Street Bank and
Trust Company acts as issuing and paying agent ("Direct Paper") which
is deposited and/or maintained in the Direct Paper System of the
Custodian pursuant to Section 2.11.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only
upon receipt of Proper Instructions from the Fund on behalf of the
applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 thereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
3
<PAGE>
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.9 or into the name
or nominee name of any sub-custodian appointed pursuant to
Article 1; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate
face amount or number of units; PROVIDED that, in any such
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that in any such case, the Custodian shall
have no responsibility or liability for any loss arising from
the delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
4
<PAGE>
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Fund on behalf of the Portfolio, BUT ONLY against
receipt of adequate collateral as agreed upon from time to
time by the Custodian and the Fund on behalf of the Portfolio,
which may be in the form of cash or obligations issued by the
United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral
is to be credited to the Custodian's account in the book-entry
system authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, BUT ONLY
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
5
<PAGE>
exchange, or of any similar organization or organizations
regarding escrow or other arrangements in connection with
transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered under
the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or organizations,
regarding account deposits in connection with transactions by
the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent,
("Transfer Agent") for the Fund, for delivery to such Transfer
Agent or to the holders of shares in connection with
distributions in kind, as may be described from time to time
in the currently effective prospectus and statement of
additional information of the Fund, related to the Portfolio
("Prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other proper corporate purpose, BUT ONLY upon receipt
of, in addition to Proper Instructions from the Fund on behalf
of the applicable Portfolio, a certified copy of a resolution
of the Board of Trustees or of the Executive Committee signed
by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities of the
Portfolio to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a
6
<PAGE>
proper corporate purpose, and naming the person or persons to
whom delivery of such securities shall be made.
2.3 REGISTRATION OF SECURITIES. Domestic Securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, UNLESS the Fund has authorized in
writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as the
Portfolio, or in the name or nominee name of any agent appointed pursuant
to Section 2.9 or in the name or nominee name of any sub-custodian
appointed pursuant to Article 1. All securities accepted by the Custodian
on behalf of the Portfolio under the terms of this Contract shall be in
"street name" or other good delivery form. If, however, the Fund directs
the Custodian to maintain securities in "street name", the Custodian
shall utilize its best efforts only to timely collect income due the
Portfolio on such securities and to notify the Fund on a best efforts
basis only of relevant corporate actions including, without limitation,
pendency of calls, maturities, tender or exchange offers.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio of
the Fund which shall contain only property held by the Custodian as
Custodian for the Portfolios, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and shall hold
in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Portfolio, other than cash
maintained by the Portfolio in a bank account established and used in
7
<PAGE>
accordance with Rule 17f-3 under the Investment Company Act of 1940.
Funds held by the Custodian for a Portfolio may be deposited by it to its
credit as Custodian in the Banking Department of the Custodian or in such
other banks or trust companies as it may in its discretion deem necessary
or desirable; PROVIDED, however, that every such bank or trust company
shall be qualified to act as a custodian under the Investment Company Act
of 1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall on behalf of each
applicable Portfolio be approved by vote of a majority of the Board of
Trustees of the Fund. Such funds shall be deposited by the Custodian in
its capacity as Custodian and shall be withdrawable by the Custodian only
in that capacity.
2.5 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Fund on
behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf of
a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of such
Portfolio which are deposited into the Portfolio's account.
2.6 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer, such securities are held by the Custodian
or its agent thereof and shall credit such income, as collected, to such
Portfolio's custodian account. Without limiting the generality of the
8
<PAGE>
payment all coupons and other income items requiring presentation as and
when they become due and shall collect interest when due on securities
held hereunder. Income due each Portfolio on securities loaned pursuant
to the provisions of Section 2.2 (10) shall be the responsibility of the
Fund. The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data
as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Portfolio is
properly entitled.
2.7 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions from the Fund
on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of the
Portfolio but only (a) against the delivery of such securities or
evidence of title to such options, futures contracts or options on
futures contracts to the Custodian (or any bank, banking firm or
trust company doing business in the United States or abroad which
is qualified under the Investment Company Act of 1940, as amended,
to act as a custodian and has been designated by the Custodian as
its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian referred to
in Section 2.3 hereof or in proper form for transfer; (b) in the
case of a purchase effected through a Securities System, in
accordance with the conditions set forth in Section 2.10 hereof;
9
<PAGE>
(c) in the case of a purchase involving the Direct Paper System,
in accordance with the conditions set forth in Section 2.11; (d)
in the case of repurchase agreements entered into between the Fund
on behalf of the Portfolio and the Custodian, or another bank, or
a broker-dealer which is a member of NASD, (i) against delivery of
the securities either in certificate form or though an entry
crediting the Custodian's account at the Federal Reserve Bank with
such securities or (ii) against delivery of the receipt evidencing
purchase by the Portfolio of securities owned by the Custodian
along with written evidence of the agreement by the Custodian to
repurchase such securities from the Portfolio or (e) for transfer
to a time deposit account of the Fund in any bank, whether
domestic or foreign; such transfer may be effected prior to
receipt of a confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Fund as defined in
Article 5;
2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Portfolio
as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for
the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses
of the Fund whether or not such expenses are to be in whole or
part capitalized or treated as deferred expenses;
10
<PAGE>
5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the
Portfolio, a certified copy of a resolution of the Board of
Trustees or of the Executive Committee of the Fund signed by an
officer of the Fund and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment, setting forth
the purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or persons
to whom such payment is to be made.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written instructions
from the Fund on behalf of such Portfolio to so pay in advance, the
Custodian shall be absolutely liable to the Fund for such securities to
the same extent as if the securities had been received by the Custodian.
2.9 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
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of the provisions of this Article 2 as the Custodian may from time to
time direct; PROVIDED, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder. In the event of any loss, damage or expense suffered or
incurred by the Fund or a Portfolio caused by or resulting from the
negligence or willful misconduct of any agent appointed by the custodian
pursuant to this Section 2.9, the Custodian shall promptly reimburse the
Fund or the applicable Portfolio in the amount of such loss, damage or
expense.
2.10 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS. The Custodian may deposit
and/or maintain securities owned by a Portfolio in a clearing agency
registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U. S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with applicable
Federal Reserve Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a Securities
System provided that such securities are represented in an account
("Account") of the Custodian in the Securities System which shall
not include any assets of the Custodian other than assets held as
a fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a Securities System shall
identify by book-entry those securities belonging to the
Portfolio;
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3) The Custodian shall pay for securities purchased for the account
of the Portfolio upon (i) receipt of advice from the Securities
System that such securities have been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the
Portfolio. The Custodian shall transfer securities sold for the
account of the Portfolio upon (i) receipt of advice from the
Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and payment for
the account of the Portfolio. Copies of all advises from the
Securities System of transfers of securities for the account of
the Portfolio shall identify the Portfolio, be maintained for the
Portfolio by the Custodian and be provided to the Fund at its
request. The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the account of
the Portfolio in the form of a written advice or notice and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of the Portfolio on the next
business day;
4) The Custodian shall provide the Fund for the Portfolio with any
report obtained by the Custodian (or by any agent appointed by the
Custodian pursuant to Section 2.9 and furnished to the Custodian)
on the Securities System's accounting system, internal accounting
control and procedures for safeguarding securities deposited in
the Securities System;
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5) The Custodian shall have received from the Fund on behalf of the
Portfolio the initial or annual certificate, as the case may be,
required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss, damage or expense to the Portfolio
resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of
its agents or of any of its or their employees or from failure of
the Custodian or any such agent to enforce effectively such rights
as it may have against the Securities System; at the election of
the Fund, it shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the Securities
System or any other person which the Custodian may have as a
consequence of any such loss, damage or expense, if and to the
extent that the Portfolio has not been made whole for any such
loss, damage or expense. The Custodian agrees to cooperate with
the Fund on connection with the enforcements of the Fund's
subrogation rights.
2.11 FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM
The Custodian may deposit and/or maintain securities owned by a Portfolio
in the Direct Paper System of the Custodian subject to the following
provisions:
1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions from the
Fund on behalf of the Portfolio;
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2) The Custodian may keep securities of the Portfolio in the Direct
Paper System only if such securities are represented in an account
("Account") of the Custodian in the Direct Paper System which
shall not include any assets of the Custodian other than assets
held as a fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System shall
identify by book- entry those securities belonging to the
Portfolio;
4) The Custodian shall pay for securities purchased for the account
of the Portfolio upon the making of an entry on the records of the
Custodian to reflect such payment and transfer of securities to
the account of the Portfolio. The Custodian shall transfer
securities sold for the account of the Portfolio upon the making
of an entry on the records of the Custodian to reflect such
transfer and receipt of payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transaction in the
Securities System for the account of the Portfolio;
6) The Custodian and any agent appointed pursuant to Section 2.9
shall provide the Fund on behalf of the Portfolio with any report
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on its system of internal accounting control as the Fund may
reasonably request from time to time.
2.12 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on behalf
of each such Portfolio, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by
the Custodian pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund on behalf of the Portfolio,
the Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by
the Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contract or options thereon purchased or
sold by the Portfolio, (iii) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release
No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) as mutually agreed upon from
time to time in writing by the Custodian and the Fund.
2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
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tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
2.14 PROXIES. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.15 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund of behalf of the Portfolio and
the maturity of futures contracts purchased or sold by the Portfolio)
received by the Custodian from issuers of the securities being held for
the Portfolio. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Portfolio all written information received
by the Custodian from issuers of the securities whose tender or exchange
is sought and from the party (or his agents) making the tender or
exchange offer. If the Fund on behalf of the Portfolio desires to take
action with respect to any tender offer, exchange offer or any other
similar transaction, the Fund on behalf of the Portfolio shall notify the
Custodian at least three business days prior to the date on which the
Custodian is to take such action.
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3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD OUTSIDE
OF THE UNITED STATES
3.1 APPOINTMENT OF FOREIGN SUB-CUSTODIANS. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Portfolio's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians"). Upon receipt
of "Proper Instructions", as defined in Section 5 of this Contract,
together with a certified resolution of the Fund's Board of Trustees, the
Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign
securities depositories to act as sub-custodian. Upon receipt of Property
Instructions, the Fund may instruct the Custodian to cease the employment
of any one or more such sub-custodians for maintaining custody of the
Portfolio's assets.
3.2 ASSETS TO BE HELD. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5 under
the Investment Company Act of 1940, and (b) cash and cash equivalents in
such amounts as the Custodian or the Fund may determine to be reasonably
necessary to effect the Portfolio's foreign securities transactions. The
Custodian shall identify on its books as belonging to the Fund on behalf
of each Portfolio, the foreign securities of that Portfolio held by each
foreign sub-custodian.
3.3 FOREIGN SECURITIES DEPOSITORIES. Except as may otherwise be agreed upon
in writing by the Custodian and the Fund, assets of the Portfolios shall
be maintained in foreign securities depositories only through
arrangements implemented by the foreign banking institutions serving as
sub-custodians pursuant to the terms hereof. Where possible, such
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arrangements shall include entry into agreements containing the
provisions set forth in Section 3.5 hereof.
3.4 AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS. Each agreement with a
foreign banking shall be substantially in the form set forth in Exhibit 1
hereto and shall provide that: (a) the assets of each Portfolio will not
be subject to any right, charge, security interest, lien or claims of any
kind in favor of the foreign banking institution or is creditors or
agent, except a claim of payment for their safe custody or
administration; (b) beneficial ownership for the assets of each Portfolio
will be freely transferable without the payment of money or value other
than for custody or administration; (c) adequate records will be
maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking institution
relating to its actions under its agreement with the Custodian; and (e)
assets of the Portfolios held by the foreign sub-custodian will be
subject only to the instructions of the Custodian of its agents.
3.5 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon request of the Fund,
the Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records of
any foreign banking institution employed as a foreign sub-custodian
insofar as such books and records relate to the performance of such
foreign banking institution under its agreement with the Custodian.
3.6 REPORTS BY CUSTODIAN. The Custodian will supply to the Fund from time to
time, as mutually agreed upon, statements in respect of the securities
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and other assets of the Portfolio(s) held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Portfolio(s) securities and other assets and advises or
notifications of any transfers of securities to or from each custodial
account maintained by a foreign banking institution for the Custodian on
behalf of each applicable Portfolio indicating, as to securities acquired
for a Portfolio, the identity of the entity having physical possession of
such securities.
3.7 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
(a) Except as otherwise provided in paragraph (b) of this Section 3.7,
the provision of Sections 2.2 and 2.7 of this Contract shall apply,
MUTATIS MUTANDIS to the foreign securities of the Portfolios of the Fund
held outside the United States by foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be effected in accordance with
the customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities
to the purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian may
be maintained in the name of such entity's nominee to the same extent as
set forth in Section 2.3 of this Contract, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of
such securities.
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3.8 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which the
Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless, the
Custodian and each Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund on behalf of
the Portfolios, it shall be entitled to be subrogated to the rights of
the Custodian with respect to any claims against a foreign banking
institution as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund or any Portfolio
has not been made whole for any such loss, damage, cost, expense,
liability or claim.
3.9 LIABILITY OF CUSTODIAN. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a
U.S. bank as contemplated by paragraph 3.12 hereof, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim
resulting from nationalization, expropriation, currency restrictions, or
acts of war or terrorism or any loss where the sub-custodian has
otherwise exercised reasonable care. Notwithstanding the foregoing
provisions of this paragraph 3.9, in delegating custody duties to State
Street London Ltd., the Custodian shall not be relived of any
responsibility to the Fund for any loss due to such delegation, except
such loss as may result from (a) political risk (including, but not
limited to, exchange control restrictions, confiscation, expropriation,
nationalization, insurrection, civil strife or armed hostilities) or (b)
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other losses (excluding a bankruptcy or insolvency of State Street
London, Ltd. not caused by political risk) due to acts of God, nuclear
incident or other losses under circumstances where the Custodian and
State Street London Ltd. have exercised reasonable care.
3.10 REIMBURSEMENT FOR ADVANCES. If the Fund on behalf of the Portfolio
requires the Custodian to advance cash or securities for any purpose for
the benefit of a Portfolio including the purchase or sale of foreign
exchange or of contracts for foreign exchange, or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the
performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the
applicable Portfolio shall be security therefor and should the Fund fail
to repay the Custodian promptly, the Custodian shall be entitled to
utilize available cash and to dispose of such Portfolios assets to the
extent necessary to obtain reimbursement.
3.11 MONITORING RESPONSIBILITIES. The Custodian shall furnish annually to the
Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of a
material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or any
Portfolio or in the case of any foreign sub-custodian not the subject of
an exemptive order from the Securities and Exchange Commission is
notified by such foreign sub-custodian that there appears to be a
substantial likelihood that its shareholders' equity will decline below
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$200 million (U.S. dollars or the equivalent thereof) or that its
shareholders' equity has declined below $200 million (in each case
computed in accordance with generally accepted U.S. accounting
principles).
3.12 BRANCHES OF U.S. BANKS. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of the
Portfolio's assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of this Contract. (b) Cash
held for each Portfolio of the Fund in the United Kingdom shall be
maintained in an interest bearing account established for the Fund with
the Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd. or both.
3.13 TAX LAW. The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or
any state or political subdivision thereof. It shall be the
responsibility of the Custodian to use reasonable efforts and due care
(a) to perform such ministerial steps as are required to collect any tax
refund, (b) to ascertain the appropriate rate of tax withholding and (c)
to provide such documents as may be required to enable the Fund to
received appropriate tax treatment under applicable tax laws and any
applicable treaty provisions. Unless otherwise informed by the Fund, the
Custodian, in performance of its duties under this Section, shall be
entitled to apply categorical treatment of the Fund according to the
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nationality of the Fund, the particulars of its organization and other
relevant details that shall be supplied by the Fund. The Custodian shall
be entitled to rely on any information supplied by the Fund on behalf of
the Portfolio. The Custodian may engage reasonable professional advisors
disclosed to the Fund by the Custodian, which may include attorneys,
accountants or financial institutions in the regular business of
investment administration and may rely upon advise received therefrom. It
shall be the duty of the Fund to inform the Custodian of any change in
the organization, domicile or other relevant fact concerning tax
treatment of the Fund and further to inform the Custodian if the Fund is
or becomes the beneficiary of any special ruling or treatment not
applicable to the general nationality and category or entity of which the
Fund is a part under general laws and treaty provisions.
4. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND. The
Custodian shall receive from the distributor for the Shares or from the Transfer
Agent of the Fund and deposit into the account of the appropriate Portfolio such
payments as are received for Shares of that Portfolio issued or sold from time
to time by the Fund. The Custodian will provide timely notification to the Fund
on behalf of each such Portfolio and the Transfer Agent of any receipt by it of
payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Declaration of Trust and any applicable votes of the Board of
Trustees of the Fund pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of shares of a Portfolio, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders.
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In connection with the redemption or repurchase of Shares of a Portfolio of the
Fund, the Custodian shall honor checks drawn on the Custodian by a holder of
Shares, which checks have been furnished by the Fund on behalf of such Portfolio
to the holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time between
the Fund and the Custodian.
5. PROPER INSTRUCTIONS. "Proper Instructions" as used throughout this Contract
means a writing signed in the name of the Fund by any TWO of the President, any
Vice President, the Secretary, the Assistant Secretary, the Treasurer or the
Assistant Treasurer of the Fund or any other persons duly authorized to sign
such writing by the Board of Trustees of the Fund. Each such writing shall set
forth the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested, and may be
in the form of standing instructions. The Custodian may act and rely upon oral
instructions if the Custodian reasonable believes them to have been given by a
person authorized to give instructions with respect to the transactions
involved. Oral instructions shall be promptly confirmed in writing by Proper
Instructions. Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by the Board of Trustees, Proper Instructions
may include communications effected directly between electro-mechanical or
electronic devices provided that the Board of Trustees and the Custodian are
satisfied that such procedures afford adequate safeguards for the Portfolios'
assets. For purposes of this Section, Proper Instructions shall include
instructions received by the Custodian pursuant to any three-party agreement
which requires a segregated asset account in accordance with Section 2.12.
6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Fund on behalf of each applicable
Portfolio:
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1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
PROVIDED that all such payments shall be accounted for to the Fund on behalf of
the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other dealings with the
securities and property of the Portfolio except as otherwise directed by the
Board of Trustees of the Fund.
7. EVIDENCE OF AUTHORITY.
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Trustees of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Trustees pursuant to the Declaration of Trust as described in
such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
8. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION
OF NET ASSET VALUE AND NET INCOME.
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees of the Fund to keep
the books of account of each Portfolio and/or compute the net asset value per
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share of the outstanding shares of each Portfolio or, if directed in writing to
do so by the Fund on behalf of the Portfolio shall itself keep such books of
account and/or compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Portfolio as
described in the Fund's currently effective prospectus related to such Portfolio
and shall advise the Fund and the Transfer Agent daily of the total amounts of
such net income and, if instructed in writing by an officer of the Fund to do
so, shall advise the Transfer Agent periodically of the division of such net
income among its various components. The calculations of the net asset value per
share and the daily income of each Portfolio shall be made at the time or times
described from time to time in the Fund's currently effective prospectus related
to such Portfolio.
9. MITIGATION BY CUSTODIAN
Upon the occurrence of any event connected with the duties of the
Custodian under this Contract which causes or may cause any loss, damage or
expense to the fund or any Portfolio, (i) the Custodian shall, and (ii) shall
exercise reasonable efforts to cause any sub-custodian to, use reasonable
efforts and take all reasonable steps under the circumstances to mitigate the
effects of such event and to avoid continuing harm to the Fund and the
Portfolios.
10. NOTIFICATION OF LITIGATION; RIGHT TO PROCEED
The Fund shall not be liable for indemnification under this Contract to
the extent that the Fund's ability to defend against any litigation or
proceeding brought against the Custodian in respect of which indemnity may be
sough under this Contract is prejudiced by the Custodian's failure to give
prompt notice of the commencement of any such litigation or proceeding, With
respect to claims in such litigation or proceedings for which indemnity by the
Fund may be sough and subject to applicable law and the ruling of any court of
competent jurisdiction, the Fund shall be entitled to participate in any such
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litigation or proceeding and, after written notice from the Fund to the
Custodian, the Fund may assume the defense of such litigation or proceeding with
counsel of its choice at its own expense in respect of that portion of the
litigation for which the Fund may be subject to an indemnification obligation;
provided, however, that the Custodian shall be entitled to participate in the
defense of any such litigation or proceeding. If the Funds has acknowledged in
writing its obligation to indemnify the Custodian with respect to such
litigation or proceeding, the Custodian's participation shall be at its own
expense and the Fund shall control the defense of the litigation or proceeding.
If the Fund is not permitted to participate in or control such litigation or
proceeding under applicable law or by a ruling of a court of competent
jurisdiction, the Custodian shall reasonably prosecute such litigation or
proceeding. The Custodian shall not consent to the entry of any judgment or
enter into any settlement in any such litigation or proceeding without providing
the Fund with adequate notice of any such settlement or judgment, and without
the Fund's prior written consent. The Custodian shall submit written evidence to
the Fund with respect to any cost or expense for which it is seeking
indemnification in such form and detail as the Fund may reasonable request.
11. RECORDS
The Custodian shall with respect to each Portfolio create and maintain
and retain all records relating to its activities and obligations under this
Contract in such manner as will meet the obligations of the Fund under the
Investment Company Act of 1940 and the rules and regulations thereunder, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and in the event of
termination of this Contract shall be delivered to the Fund or a successor
custodian as instructed by the Fund. All such records shall at all times during
the regular business hours of the Custodian be open for inspection and audit by
duly authorized officers, employees or agents of, attorneys for and
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auditors employed by the Fund and employees and agents of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request, supply the Fund
with a tabulation of securities owned by each Portfolio of the Fund and held by
the Custodian and shall, when requested to do so by the Fund and for such
compensation as shall be agreed upon between the Fund and the Custodian, include
certificate numbers in such tabulations.
12. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio may from time to time request, to obtain from year
to year favorable opinions from the Fund's independent accountants with respect
to its activities hereunder in connection with the preparation of the Fund's
Form N-1A, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
13. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Fund, on behalf of each of the Portfolios
at such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this Contract;
such reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
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14. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.
15. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care and diligence in carrying out the provisions of this
Contract, but shall be kept indemnified by and shall be without liability to the
Fund for any action taken or omitted by it in good faith without negligence. It
shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for the Fund) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution appointed pursuant to the provisions of Article 3 to the
same extent as set forth in Article 1 hereof with respect to sub-custodians
located in the United States (except as specifically provided in Section 3.9)
and, regardless of whether assets are maintained in the custody of a foreign
banking institution, a foreign securities depository or a branch of a U.S. bank
as contemplated by Section 3.12 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability of claim resulting from, or caused
by, the direction of or authorization by the Fund to maintain custody or any
securities or cash of the Fund in a foreign country including, but
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not limited to, losses resulting from nationalization, expropriation, currency
restrictions, or acts of war or terrorism.
If the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund or the Portfolio being liable for the payment
of money or incurring liability of some other form, the Fund on behalf of the
Portfolio, as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement)
for the benefit of a Portfolio including the purchase or sale of foreign
exchange or of contracts for foreign exchange or in the event that the Custodian
or its nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Contract, except such as may arise from its or its nominee's own negligent
action, negligent failure to act or willful misconduct, any property at any time
held for the account of the applicable Portfolio shall be security therefor and
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of such Portfolio's assets to
the extent necessary to obtain reimbursement.
16. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
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than thirty (30) days after the date of such delivery or mailing; PROVIDED,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the Fund has
approved the initial use of a particular Securities System by such Portfolio, as
required by Rule 17f-4 under the Investment Company Act of 1940, as amended and
that the Custodian shall not with respect to a Portfolio act under Section 2.11
hereof in the absence of receipt of an initial certificate of the Secretary or
an Assistant Secretary that the Board of Trustees has approved the initial use
of the Direct Paper System by such Portfolio; PROVIDED FURTHER, however, that
the Fund shall not amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the Declaration of
Trust, and further provided, that the Fund on behalf of one or more of the
Portfolios may at any time by action of its Board of Trustees (i) substitute
another bank or trust company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate this Contract in the event
of the appointment of a conservator or receiver for the Custodian by the
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
17. SUCCESSOR CUSTODIAN
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
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Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank' as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to transfer
to an account of such successor custodian all the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust company
shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
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the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
18. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, PROVIDED that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of Trust of the Fund. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
19. ADDITIONAL FUNDS
In the event that the Fund establishes one or more subtrusts of Shares in
addition to G.T. Global Financial Services Portfolio, G.T. Global Natural
Resources Portfolio and G.T. Global Infrastructure Portfolio with respect to
which it desires to have the Custodian render services as custodian under the
terms hereof, it shall so notify the Custodian in writing, and if the Custodian
agrees in writing to provide such services, such series of Shares shall become a
Portfolio hereunder.
20. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
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21. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund on behalf of each of the Portfolios and the Custodian
relating to the custody of the Fund's assets.
22. LIMITATION OF SHAREHOLDER LIABILITY
It is expressly agreed that the obligations of the Fund hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Fund personally, but shall only bind the assets and
property of the applicable Portfolios, as provided in the Fund's Declaration of
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees of the fund, and this Agreement has been executed and delivered by an
authorized officer of the Fund acting as such; neither such authorization by
such Trustees nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the assets and property of the applicable
Portfolios, as provided in the Fund's Declaration of Trust.
23. SHAREHOLDER COMMUNICATIONS ELECTION
Securities and Exchange Commission Rule 14b-2 requires banks which hold
sec/urities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
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Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the
Fund's name, address, and share positions.
NO [ x ] The Custodian is not authorized to release the Fund's
name, address, and share positions.
24. ASSIGNMENT
Neither the Fund nor the Custodian shall have the right to assign any of
its rights or obligations under this Contract without the prior written consent
of the other party.
25. SEVERABILITY
If any provision of this Contract is held to be unenforceable as a matter
of law, the other terms and provisions hereof shall not be affected thereby and
shall remain in full force and effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 23RD day of MARCH, 1994.
ATTEST: GLOBAL INVESTMENT PORTFOLIO
/s/ Noel B. Daugherty By: /s/ Peter R. Guarino
________________________________________ _____________________________
Secretary
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ATTEST: STATE STREET BANK AND TRUST
COMPANY
/s/ Janine McDuffy By: /s/
_________________________________________ _______________________________
Executive Vice President
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SCHEDULE A
GLOBAL INVESTMENT PORTFOLIO:
G.T. GLOBAL FINANCIAL SERVICES PORTFOLIO
G.T. GLOBAL NATURAL RESOURCES PORTFOLIO
G.T. GLOBAL INFRASTRUCTURE PORTFOLIO
The following foreign banking institutions and foreign securities depositories
have been approved by the board of trustees of the above-mentioned trust for use
by the indicated series of the trust as sub-custodians for the securities and
other assets:
Citibank, N.A.-Argentina (Caja de Valores) (Argentina)
Westpac Banking Corp. (Austraclear) (Australia)
GiroCredit Bank Aktiengesellschaft der Sparkassen (OEKB) (Austria)
Standard Chartered Bank (Bangladesh)
Generale Bank (C.I.K.) (Belgium)
Citibank, N.A. (BOVESPA) (Brazil)
Canada, Trustco Mortgage Company (CDS) (Canada)
Citibank, N.A.-Chile (Chile)
The Hongkong and Shanghai Banking Corporation Limited (SSCCRC and Shenzhen
Securities Registrars Co., Ltd.) (China)
Cititrust Colombia S.A. Sociedad Fiduciaria (Colombia)
Barclays Bank PLC (Cyprus)
Den Danske Bank (VP-Centralen) (Denmark)
Kansallis-Osake-Pankki (Central Share Register) (Finland)
Banque Paribas (SICOVAM) (France)
Berliner Handels-und Frankfurter Bank (Kassenverein) (Germany)
National Bank of Greece S.A. (Apothetirio Titlon) (Greece)
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Standard Chartered Bank Hong Kong (CCASS) (Hong Kong)
Citibank Budapest Rt. (Hungary)
The Hongkong and Shanghai Banking Corporation Limited (India)
Standard Chartered Bank Jakarta (Indonesia)
Bank of Ireland (Ireland)
Bank Hapoalim B.M. (Clearing House of the Tel Aviv Stock
Exchange) (Israel)
Morgan Guaranty Trust Company (Monte Titoli S.p.A.) (Italy)
Sumitomo Trust & Banking Co. (Japan)
Standard Chartered Bank, Kuala Lumpur (Malaysia)
Citibank, N.A.-Mexico (INDEVAL) (Mexico)
MeesPierson N.V. (NECIGEF) (The Netherlands)
ANZ Banking Group (NZ) Ltd. (New Zealand)
Christiania Bank Og Kreditkasse (VPS) (Norway)
Deutsche Bank AG (Pakistan)
Citibank, N.A.-Peru (CAVAL) (Peru)
Standard Chartered Bank (the Philippines)
Banco Comercial Portugues (Central de Valores Mobiliarios)
(Portugal)
Development Bank of Singapore (CDP) (Singapore)
Bank of Seoul (South Korea)
Banco Santander, S.A. (SCLV) (Spain)
The Hongkong and Shanghai Banking Corporation Limited (CDS) (Sri
Lanka)
Skandinaviska Enskilda Banken (VPC) (Sweden)
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Union Bank of Switzerland (SEGA) (Switzerland)
Central Trust of China (TSCD) (Taiwan)
Standard Chartered Bank, Bangkok (SDC) (Thailand)
Citibank, N.A. (Turkey)
State Street Bank and Trust Company (United Kingdom)
Citibank, N.A.-Uruguay (Uruguay)
Citibank, N.A. -Venezuela (Venezuela)
Cedel
Euro-Clear
GLOBAL INVESTMENT PORTFOLIO
/s/ PETER R. GUARINO
- --------------------
Peter R. Guarino
Secretary
Dated as of March 23, 1994
<PAGE>
EXHIBIT I
SUBCUSTODIAN AGREEMENT
AGREEMENT made this _____ day of ______________ 19 __, between State
Street Bank and Trust Company, A Massachusetts Trust Company (hereinafter
referred to as the
"Custodian") , having its principal place of business at 225 Franklin Street,
Boston, MA, and _______________________________________(hereinafter referred
to as the "Subcustodian") , a ___________________________organized under the
laws of ______________________and having an office at
_____________________________________________________________________________
WHEREAS, Custodian has been appointed to act as Trustee, Custodian or
Subcustodian of securities and monies on behalf of certain of its customers
including, without limitation, collective investment undertakings, investment
companies subject to the U.S. Investment Company Act of 1940, as amended, and
employee benefit plans subject to the U.S. Employee Retirement Income Security
Act of 1974, as amended;
WHEREAS, Custodian wishes to establish Account (the "Account") with the
Subcustodian to hold and maintain certain property for which Custodian is
responsible as custodian; and
WHEREAS, Subcustodian agrees to establish the Account and to hold and
maintain all Property in the Account in accordance with the terms and conditions
herein set forth.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the Custodian and the Subcustodian agree as follows:
I. THE ACCOUNT
-----------
A. Establishment of the Account. Custodian hereby requests that
Subcustodian establish for each client of the Custodian an Account which shall
be composed of:
1. A Custody Account for any and all Securities (as hereinafter
defined) from time to time received by Subcustodian therefor, and
2. A Deposit Account for any and all Cash (as hereinafter defined)
from time to time received by Subcustodian therefor.
B. Use of the Account. The Account shall be used exclusively to hold,
acquire, transfer or otherwise care for, on behalf of Custodian as custodian and
the customers of Custodian and not for Custodian's own interest, Securities and
such Cash or cash equivalents as
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are transferred to Subcustodian or as are received in payment of any transfer
of, or as payment on, or interest on, or dividend from, any such Securities
(herein collectively called "Cash").
C. Transfer of Property in the Account. Beneficial ownership of the
Securities and Cash in the Account shall be freely transferable without payment
of money or value other than for safe custody and administration.
D. Ownership and Segregation of Property in the Account. The ownership
of the property in the Account, whether Securities, Cash or both, and whether
any such property is held by Subcustodian in an Eligible Depository, shall be
clearly recorded on Subcustodian's books as belonging to Custodian on behalf of
Custodian's customers, and not for Custodian's own interest and, to the extent
that Securities are physically held in the Account, such Securities shall also
be physically segregated from the general assets of Subcustodian, the assets of
Custodian in its individual capacity and the assets of Subcustodian's other
customers. In addition, Subcustodian shall maintain such other records as may be
necessary to identify the property hereunder as belonging to each Account.
E. Registration of Securities in the Account. Securities which are
eligible for deposit in a depository as provided for in Paragraph III may be
maintained with the depository in an account for Subcustodian's customers.
Securities which are not held in a depository and that are ordinarily held in
registered form will be registered in the name of Subcustodian or in the name of
Subcustodian's nominee, unless alternate Instructions are furnished by
Custodian.
II. Services to Be Provided By the Subcustodian
The services Subcustodian will provide to Custodian and the manner in
which such services will be performed will be as set forth below in this
Agreement.
A. Services Performed Pursuant to Instructions. All transactions
involving the Securities and Cash in the Account shall be executed solely in
accordance with Custodian's Instructions as that term is defined in Paragraph IV
hereof, except those described in paragraph B below.
B. Services to Be Performed Without Instructions. Subcustodian will,
unless it receives Instructions from Custodian to the contrary:
1. Collect Cash. Promptly collect and receive all dividends,
income, principal, proceeds from transfer and other payments with respect to
property held in the Account, and present for payment all Securities held in the
Account which are called, redeemed or retired or otherwise become payable and
all coupons and other income items which call for payment upon presentation, and
credit Cash receipts therefrom to the Deposit Account.
2. Exchange Securities. Promptly exchange Securities where the
exchange is purely ministerial including, without limitation, the exchange of
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temporary Securities for those in definitive form and the exchange of warrants,
or other documents of entitlement to Securities, for the Securities themselves.
3. Sale of Rights and Fractional Interests. Whenever notification
of a rights entitlement or a fractional interest resulting from a rights issue,
stock dividend or stock split is received for the Account and such rights
entitlement or fractional interest bears an expiration date, Subcustodian will
promptly endeavor to obtain Custodian's Instructions, but should these not be
received in time for Subcustodian to take timely action, Subcustodian is
authorized to sell such rights entitlement or fractional interest and to credit
the Account.
4. Execute Certificates. Execute in Custodian's name for the
Account, whenever Subcustodian deems it appropriate, such ownership and other
certificates as may be required to obtain the payment of income from the
Securities held in the account.
5. Pay Taxes and Receive Refunds. To pay or cause to be paid from
the Account any and all taxes and levies in the nature of taxes imposed on the
property in the Account by any governmental authority, and to take all steps
necessary to obtain all tax exemptions, privileges or other benefits, including
reclaiming and recovering any foreign withholding tax, relating to the Account
and to execute any declaration, affidavits, or certificates of ownership which
may be necessary in connection therewith.
6. Prevent Losses. Take such steps as may be reasonably
necessary to secure or otherwise prevent the loss of, entitlements attached to
or otherwise relating to property held in the Account.
C. Additional Services.
1. Transmission of Notices of Corporate Action. By such means
as will permit custodian to take timely action with respect thereto,
Subcustodian will promptly notify Custodian upon receiving notices or reports,
or otherwise becoming aware, of corporate action affecting Securities held in
the Account (including, but not limited to, calls for redemption, mergers,
consolidations, reorganizations, recapitalizations, tender offers, rights
offerings, exchanges, subscriptions and other offerings) and dividend, interest
and other income payments relating to such Securities.
2. Communications Regarding the Exercise of Entitlements. Upon
request by Custodian, Subcustodian will promptly deliver, or cause any Eligible
Depository authorized and acting hereunder to deliver, to Custodian all notices
proxies, proxy soliciting materials and other communications that call for
voting or the exercise of rights or other specific action (including material
relative to legal proceedings intended to be transmitted to security holders)
relating to Securities held in the Account to the extent received by
Subcustodian or said Eligible Depository, such proxies or any voting instruments
to be executed by the registered holder of the Securities, but without
indicating the manner in which such Securities are to be voted.
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3. Monitor Financial Service. In furtherance of its obligations
under this Agreement, Subcustodian will monitor a leading financial service with
respect to announcements and other information respecting property held in the
Account, including announcements and other information with respect to corporate
actions and dividend, interest and other income payments.
III. Use of Securities Depository
Subcustodian may, with the prior written approval of Custodian, maintain all or
any part of the Securities in the Account with a securities depository or
clearing agency which is incorporated or organized under the laws of a country
other than the United States of America and is supervised or regulated by a
government agency or regulatory authority in the foreign jurisdiction having
authority over such depositories or agencies, and which operates (a) the central
system for handling of designated securities, or equivalent book entries in
_______________________, or (b) a transnational system for the central handling
of securities or equivalent book entries (herein called "Eligible Depository") ,
provided however, that, while so maintained, such securities shall be subject
only to the directions of Subcustodian, and that Subcustodian duties,
obligations and responsibilities with regard to such Securities shall be the
same as if such Securities were held by Subcustodian on its premises.
IV. Claims Against Property in the Account
The property in the account shall not be subject to any right, charge, security
interest, lien or claim of any kind (collectively "Charges") in favor of
Subcustodian or any Eligible Depository or any creditor of Subcustodian or of
any Eligible Depository except a claim for payment for such property's safe
custody or administration in accordance with the terms of this Agreement.
Subcustodian will immediately notify Custodian of any attempt by any party to
assert any Charge against the property held in the Account and shall take all
lawful actions to protect such property from such Charges until Custodian has
had a reasonable time to respond to such notice.
V. Subcustodian's Warranty
Subcustodian represents and warrants that:
(A) It is a branch of a "qualified U.S. bank" or an "eligible foreign
custodian" as those terms are defined in Rule 17f-5 of the Investment Company
Act of 1940, a copy of which is attached hereto as Attachment A (the "Rule"),
and subcustodian shall immediately notify Custodian, in writing or. by other
authorized means, in the event that there appears to be a substantial likelihood
that Subcustodian will cease to qualify under the Rule as currently in effect or
as hereafter amended, or
(B) It is the subject of an exemptive order issued by the United States
Securities and Exchange Commission which order permits Custodian to employ
Subcustodian notwithstanding the fact that Subcustodian fails to qualify under
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the terms of the Rule, and Subcustodian shall immediately notify Custodian, in
writing or by other authorized means, if for any reason it is no longer covered
by such exemptive order.
Upon receipt of any such notification required under (A) or (B) of this section,
Custodian may terminate this Agreement immediately without prior notice to
Subcustodian.
VI. Definitions
A. Instructions. The term "Instructions" means:
1. instructions in writing signed by authorized individuals designated
as such by Custodian;
2. telex or tested telex instructions of Custodian;
3. other forms of instructions in computer readable form as shall
customarily be used for the transmission of like information, and
4. such other forms of communication as from time to time may be agreed
upon by Custodian and Subcustodian, which subcustodian believes in good faith to
have been given by Custodian or which are transmitted with proper testing or
authentication pursuant to terms and conditions which Custodian may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded. Subcustodian shall act in
accordance with Instructions and shall not be liable for any act or omission in
respect of any Instruction except in the case of willful default, negligence,
fraud, bad faith, willful misconduct, or reckless disregard of duties on the
part of Subcustodian. Subcustodian in executing all Instructions will take
relevant action in accordance with accepted industry practice and local
settlement practice.
B. Account. The term "Account" means collectively the Custody Account,
and the Deposit Account.
C. Securities. The term "Securities" includes, without limitation,
stocks, shares, bonds, debentures, debt securities (convertible or
non-convertible) , notes, or other obligations or securities and any
certificates, receipts, futures contracts, foreign exchange contracts, options,
warrants, scrip 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.
VII. Miscellaneous Provision
A. Statements Regarding the Account. Subcustodian will supply Custodian
with such statements regarding the Account as Custodian may request, including
the identity and location of any Eligible Depository authorized and acting
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hereunder. In addition, Subcustodian will supply Custodian an advice or
notification of any transfers of Securities to or from the Account indicating as
to Securities acquired for the Account, if applicable, the Eligible Depository
having physical possession Securities.
B. Examination of Books and Records. Subcustodian agrees that its books
and records relating to the Account and Subcustodian's actions under this
Agreement shall be open to the physical, on-premises inspection and audit at
reasonable times by officers of, auditors employed by or other representatives
of Custodian including (to the extent permitted under the law of ___________)
the independent public accountants for any customer of Custodian whose property
is being held hereunder and such books and records shall be retained for such
period as shall be agreed upon by Custodian and Subcustodian.
As Custodian may reasonably request from time to time, Subcustodian will furnish
its auditor's reports on its system of internal controls, and Subcustodian will
use its best efforts to obtain and furnish similar reports of any Eligible
Depository authorized and acting hereunder.
C. Standard of Care. In holding, maintaining, servicing and disposing of
Property under this Agreement, and in fulfilling any other obligations
hereunder, Subcustodian shall exercise the same standard of care that it
exercises over its own assets, PROVIDED that Subcustodian shall exercise at
least the degree of care and maintain adequate insurance as expected of a
prudent professional Subcustodian for hire and shall assume the burden of
proving that it has exercised such care in its maintenance of Property held by
Subcustodian in its Account. The maintenance of the Property in an Eligible
Depository shall not affect Subcustodian's standard of care, and Subcustodian
will remain as fully responsible for any loss or damage to such securities as if
it had itself retained physical possession of them. Subcustodian shall also
indemnify and hold harmless Custodian and each of Custodian's customers from and
against any loss, damage, cost, expense, liability or claim (including
reasonable attorney's fees) arising out of or in connection with the improper or
negligent performance or the nonperformance of the duties of Subcustodian.
Subcustodian shall be responsible for complying with all provisions of the law
of ______________ or any other law, applicable to Subcustodian in connection
with its duties hereunder, including (but not limited to) the payment of all
transfer taxes or other taxes and compliance with any currency restrictions and
securities laws in connection with its duties as Subcustodian.
D. Loss of Cash or Securities. Subcustodian agrees that, in the even of
any loss of Securities or Cash in the Account, Subcustodian will use its best
efforts to ascertain the circumstances relating to such loss and will promptly
report the same to Custodian and shall use every legal means available to it to
effect the quickest possible recovery.
E. Compensation of Subcustodian. Custodian agrees to pay to Subcustodian
from time to time such compensation for its services and such out-of-pocket or
incidental expenses of Subcustodian pursuant to this Agreement as may be
mutually agreed upon in writing from time to time.
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F. Operating Requirements. The Subcustodian agrees to follow such
Operating Requirements as the Custodian may establish from time to time. A copy
of the current Operating Requirements is attached as Attachment B to this
Agreement.
G. Termination. This Agreement may be terminated by subcustodian or
Custodian on 60 days' written notice to the other party, sent by registered
mail, provided that any such notice, whether given by Subcustodian or Custodian,
shall be followed within 60 days by Instructions specifying the names of the
persons to whom Subcustodian shall deliver the Securities in the Account and to
whom the Cash in the account shall be paid. If within 60 days following the
giving of such notice of termination, Subcustodian does not receive such
Instructions, Subcustodian shall continue to hold such Securities and Cash
subject to this Agreement until such Instructions are given. The obligations of
the parties under this Agreement shall survive the termination of this
Agreement.
G. Notices. Unless otherwise specified in this Agreement, all notices and
communications with respect to matters contemplated by this Agreement shall be
in writing, and delivered by mail, postage prepaid, telex, SWIFT, or other
mutually agreed telecommunication methods to the following addresses (or to such
other address as either party hereto may from time to time designate by notice
duly given in accordance with this paragraph):
To Subcustodian:
To Custodian State Street Bank and Trust Company
Securities Operations/
Network Administration
P.O. Box 1631
Boston, MA 02105
H. Confidentiality. Subcustodian and Custodian shall each use its best
efforts to maintain the confidentiality of the property in the Account and the
beneficial owners thereof, subject, however, to the provisions of any laws,
requiring disclosure. In addition, Subcustodian shall safeguard any test keys,
identification codes or other security devices which Custodian shall make
available to it. The Subcustodian further agrees it will not disclose the
existence of this Agreement or any current business relationship unless
compelled by applicable law or regulation or unless it has secured the
Custodian's written consent.
I. Assignment. This Agreement shall not be assignable by either party but
shall bind any successor in interest of Custodian and Subcustodian respectively.
J. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of _____________________. To the extent inconsistent
with this Agreement or Custodian's Operating Requirements as attached hereto,
Subcustodian's rules and conditions regarding accounts generally or custody
accounts specifically shall not apply.
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CUSTODIAN: STATE STREET BANK AND TRUST COMPANY
By: ________________________________
Date: _______________________________
AGREED TO BY SUBCUSTODIAN
____________________________________
By: ________________________________
Date: _______________________________
<PAGE>
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, MA 02171
Gentlemen:
This is to advise you that Global Investment Portfolio ("Master Trust") has
established a new sub-trust to be known as Global Consumer Products and Services
Portfolio. In accordance with the Additional Funds provision in Section 19 of
the Custodian Contract dated March 23, 1994 (the "Contract"), between the Master
Trust and State Street Bank and Trust Company, the Master Trust hereby requests
that you act as Custodian for the new sub-trust under the terms of the Contract.
Please indicate your acceptance of the foregoing by executing two copies of this
Letter Agreement, returning one to the Master Trust and retaining one copy for
your records.
GLOBAL INVESTMENT PORTFOLIO
By: /s/ Peter R. Guarino
______________________
Peter R. Guarino
Assistant Secretary
Agreed to this 30th day of December, 1994.
STATE STREET BANK AND TRUST COMPANY
By: /S/ GARY E. ENOS
________________
Name: Gary E. Enos
Title: Vice President
COOPERS
&LYBRAND Coopers & Lybrand L.L.P.
a professional services firm
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Global Investment Portfolios:
Global Consumer Products and Services Portfolio
Global Financial Services Portfolio
Global Infrastructure Portfolio
Global Natural Resources Portfolio
We consent to the inclusion in Post Effective Amendment No. 4 to the
Registration Statement of Global Investment Portfolios on Form N-1A (File No.
811-8454) of our report dated December 13, 1996 on our audit of the financial
statements and financial highlights of the above referenced funds which report
is included in the Annual Report to Shareholders for the year ended October 31,
1996 which is included in the Post Effective Amendment to the Registration
Statement.
We also consent to the reference to our Firm under the caption, "Financial
Statements."
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 24, 1997
Coopers & Lybrand L.L.P. is a member of Coopers & Lybrand International, a
limited liability association incorporated in Switzerland.
<PAGE>
