<PAGE>
Investment Advisors
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
United States Trust Company of the
Pacific Northwest
4380 Southwest Macadam Avenue
Suite 450
Portland, OR 97201
Federated Management
Federated Investment Tower
1001 Liberty Avenue
Pittsburgh, PA 15222
Transfer Agent
Chase Global Funds Services Company
73 Tremont Street
Boston, MA 02108
(800) 909-1989
Distributor
Edgewood Services, Inc.
Clearing Operations
P.O. Box 897
Pittsburgh, PA 15230
SHARES OF THE FUNDS ARE NOT DEPOSITS
OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES
ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE
CORPORATION, BANK INSURANCE FUND,
FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENTAL AGENCY. AN INVESTMENT IN
A FUND IS SUBJECT TO RISK OF
PRINCIPAL.
US EXIT A96
LOGO
EQUITY FUND
INCOME FUND
TOTAL RETURN BOND FUND
BALANCED FUND
EQUITY GROWTH FUND
INTERNATIONAL EQUITY FUND
BOND INDEX FUND
ANNUAL REPORT
MAY 31, 1996
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholder:
I am pleased to present the Annual Report for Excelsior Institutional
Trust for the fiscal year ended May 31, 1996. There were several exciting
developments during the year.
On January 1, 1996 the Trust entered alliances with a new distributor,
Edgewood Services, and two fund companies; Excelsior Funds, Inc. and
Excelsior Tax-Exempt Funds, Inc. These strategic alliances have expanded our
fund family's product offerings to reach new markets and have enabled the
funds to consolidate service providers, thereby reducing certain operating
expenses of the funds.
The extended Excelsior Funds Family now consists of thirteen domestic
equity, five international, ten fixed-income, and five money market funds
totalling $4.75 billion in assets. These funds have been designed to provide
a comprehensive range of investment options and offer investors, both
institutional and individual, an oppportunity to allocate holdings in
accordance with their specific investment objectives.
Excelsior Fund shareholders are served by a dedicated team of
professionals. We recognize the importance of excellent customer service and
are committed to meeting investor needs in a responsible and efficient
manner. We appreciate your participation in the funds and look forward to
serving you in the years to come.
Alfred C. Tannachion
Chairman of the Board and
President
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
ADVISER'S MARKET REVIEW
The stock market momentum generated during early 1995 carried through the
remainder of the year and into 1996. Some of the factors contributing to this
surge included: strong merger and acquisition activity, continued corporate
restructuring efforts, much improved corporate earnings and heavy mutual fund
money flow. The stock market, as measured by the Standard & Poor's 500
Composite Stock Price Index ("S&P 500"), posted return of 28.44%(1) for the
twelve months ending May 31, 1996. The out performance by shares of large
companies relative to shares of smaller companies during 1995 began to
reverse in early 1996. From February through May 1996, various broad stock
market indices outperformed the S&P 500 which is dominated by large
companies. The Wilshire 4500 Equity Index increased 37.09%(2) while the
Russell 2000 Index increased 35.97%(3) during the twelve month period
ending May 31, 1996.
The yield on the 30 year treasury bond fell from 6.66% to 5.95% by the end of
the 1995 calendar year. The Lehman Brothers Aggregate Index rose 7.08%(4)
in that period. However, in the first five months of 1996, the yield on the
30 year treasury bond increased dramatically from 5.95% to 6.99%, primarily a
result of increasing inflationary concerns. As a result the Lehman Brothers
Aggregate Index decreased 2.53%(4) in the same time period. The one year
total rate of return for the Lehman Brothers Aggregate Index ending May 31,
1996 was 4.39%(4).
Even a sharp increase in long-term interest rates did not cool mutual fund
investors, who poured money into equity and fixed income funds at record
rates. One of the beneficiaries of this trend were international funds, whose
inflows contributed to the worldwide rise in markets in the first part of
1996. Currency markets were stable, and, as usual, international equities
benefited from that stability. Despite this, the international equities did
not fare as well as domestic equities, with the FT/S&P -- Actuaries World
Indices -- World Excluding U.S. Index increasing to 11.45%(5) for the year
ended May 31, 1996.
- ------
(1) Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
(2) Source: Wilshire Associates Incorporated -- The Wilshire 4500 Equity
Index is a widely accepted, unmanaged index of domestic stock market
performance and is composed of 4,500 stocks in the Wilshire 5000 Equity
Index (it excludes the 500 stocks in the S&P 500). The Wilshire 5000
Equity Index measures the performance of all U.S. headquartered equity
securities with readily available price data. Approximately 6,500
capitalization weighted security returns are used to adjust the Index.
The Index includes dividends reinvested.
(3) Source: The Russell Company -- Russell 2000 Index is an unmanaged index
and is composed of the 2,000 smallest companies in the Russell 3000
Index. The Russell 3000 Index is composed of 3,000 of the largest U.S.
companies by market capitalization. The Index includes dividends
reinvested.
(4) Source: Lehman Brothers -- Lehman Brothers Aggregate Index is an
unmanaged total return performance benchmark commonly used to measure
bond performance. The Index is made up of Lehman's Govt/Corp Bond
Index, Mortgage-Backed Securities Index and Asset-Based Securities
Index which are comprised of U.S. Government agencies and U.S. Treasury
securities, investment grade corporate debt, mortgage-backed and
asset-backed securities, selected as representative of the market.
(5) Source: Goldman Sachs -- The FT/S&P-Actuaries World Indices -- World
Excluding U.S. Index is a widely accepted, unmanaged index of global
stock market performance, including Canada, Mexico, Europe, Australia,
New Zealand, South Africa and the Far East. The Index includes
dividends reinvested.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
ADVISER'S INVESTMENT REVIEW
EQUITY FUND
For the twelve months ended May 31, 1996, the Fund realized a total return
of 17.04%*, versus 28.44%** for the Standard & Poor's 500 Composite Stock
Price Index. Much of the weak relative performance was due to the Fund's
emphasis for most of the fiscal year on mid-cap companies and the weakness in
the technology sector in the fiscal second quarter. In the fiscal second half
we moved to increase the average market capitalization of the Fund and added
some high quality growth stocks to the portfolio. The Fund remains well
diversified across U.S. Trust's investment strategies and themes with
continuing emphasis on the productivity, restructuring and global competitor
themes.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN EQUITY FUND
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX**
16,000|------------------------------------------------------------------|
| |
| * |
15,000|------------------------------------------------------------------|
| |
| * |
14,000|------------------------------------------------------------------|
| * |
D | |
O 13,000|-----------------------------------------------------------&------|
L | |
L | * & |
A 12,000|----------------------------------------&-------------------------|
R | * & |
S | & |
11,000|------------------------------------------------------------------|
| * |
| & |
10,000|----*&------------------------------------------------------------|
| |
| |
9,000|------------------------------------------------------------------|
| |
| |
0|----|--------|--------|--------|--------|--------|--------|-------|
1/16/95 2/28/95 5/31/95 8/31/95 11/30/95 2/29/96 5/31/96
*=S&P 500 &=Equity Fund
Past performance is not predictive of future performance. Investment returns
and principal values will vary and shares may be worth more or less at
redemption than their original cost.
The above illustration compares a $10,000 investment made in Equity Fund
on 1/16/95 (inception date) to a $10,000 investment made in the Standard &
Poor's 500 Composite Stock Price Index on that date. For comparative
purposes, the value of the Index on 12/31/94 is used as the beginning value
on 1/16/95. All dividends and capital gain distributions are reinvested. The
Fund's performance takes into account fees and expenses. The Standard &
Poor's 500 Composite Stock Price Index does not take into account charges,
fees and other expenses. Further information relating to Fund performance is
contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
- ------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
** Source: Standard & Poor's Corporation--Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Standard
& Poor's 500 Composite Stock Price Index is a widely accepted unmanaged
index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
ADVISER'S INVESTMENT REVIEW
INCOME FUND
The Fund posted a return of 3.18%* for the year ended May 31, 1996. With
the emphasis on current income as opposed to total return, this return still
compares favorably to the Lipper-Corporate Debt Funds BBB rated category**,
which showed a gain of 4.09% for the same time period. During the first eight
months of the fiscal year, the bond market enjoyed positive total returns
with only July showing negative price action, just barely offset by the
coupon return. For most of that period, signs of economic weakness continued
to emerge, which prompted the Federal Reserve to lower its federal funds
target three times from a 6.00% rate at the beginning of July, to a 5.25%
rate at the end of January. For the balance of the fiscal year, the market
gave back a portion of the gains of the first eight months. In order to
maximize current interest income, we remained fully invested for most of the
fiscal year. At May 31, 1996, the portfolio had an average coupon of 7.42%
while maintaining an average AA+ quality rating. The average maturity was
10.2 years with a 5.8 year duration. The mix of securities includes 50%
Treasury and government agency securities, 25% mortgaged backed securities,
and 25% corporate notes and bonds. With the market stabilized after the
four-month sell off, we will look for opportunities to add more coupon income
to the portfolio.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN INCOME FUND AND
THE LEHMAN BROTHERS INTERMEDIATE GOVT/CORP BOND INDEX**
12,000|------------------------------------------------------------------|
| |
| |
11,500|-------------------------------------------------*----------------|
| * & * |
D | & |
O 11,000|-------------------------------*&-------------------------&-------|
L | *& |
L | |
A 10,500|------------------------------------------------------------------|
R | * |
S | & |
10,000|----*&------------------------------------------------------------|
| |
| |
9,500|------------------------------------------------------------------|
| |
| |
0|----|--------|--------|--------|--------|--------|--------|-------|
1/16/95 2/28/95 5/31/95 8/31/95 11/30/95 2/29/96 5/31/96
*=Lehman &=Income Fund
Past performance is not predictive of future performance. Investment returns
and principal values will vary and shares may be worth more or less at
redemption than their original cost.
The above illustration compares a $10,000 investment made in Income Fund
on 1/16/95 (inception date) to a $10,000 investment made in the Lehman
Brothers Intermediate Govt/Corp Bond Index on that date. For comparative
purposes, the value of the Index on 12/31/94 is used as the beginning value
on 1/16/95. All dividends and capital gain distributions are reinvested.
The Fund's performance takes into account fees and expenses. The Lehman
Brothers Intermediate Govt/Corp Bond Index is an unmanaged total return
performance benchmark comprised of U.S. Government agencies and U.S. Treasury
securities and investment grade corporate debt, selected as representative of
the market with maturities of one to ten years. The Index does not take into
account charges, fees and other expenses. Further information relating to
Fund performance is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
- ------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
** Source: Lipper Analytical Services, Inc. -- Lipper is an independent
mutual fund performance monitor.
*** Source: Lehman Brothers.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
ADVISER'S INVESTMENT REVIEW
TOTAL RETURN BOND FUND
The Fund achieved a return of 4.20%* for the fiscal year ended May 31,
1996 compared to 4.10%** for the Lehman Brothers Govt/Corp Bond Index. During
the early portion of this period a soft economy prompted the Federal Reserve
to lower interest rates three times. The federal funds rate was dropped from
6.00% at the beginning of July to 5.25% at the end of January. When signs of
a stronger economy emerged early in the 1996 calendar year, fixed income
securities sold off sharply. Employment, housing, and auto sales were strong
and some investors feared that inflation and a shift to a tighter monetary
policy by the Fed was just a matter of time. Our investment strategy during
this difficult period was to stay invested as we believed that the economy
would soon slow to a more sustainable pace. On May 31, 1996, the Fund had an
average coupon of 6.625%, an average maturity of 10.45 years and an average
quality rating of AA+. By sector, we maintained 51% of the portfolio in
federal government/agency issues, 4% in the industrial area, 5% in finance,
2% in a Canadian provincial, 28% in mortgage backed securities, and 10% in
temporary investments. With the market stabilized after the four-month
sell-off, we will continue to look for attractive opportunities in the fixed
income markets.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN TOTAL RETURN
BOND FUND AND THE LEHMAN BROTHERS GOVT/CORP BOND INDEX**
12,000|------------------------------------------------------------------|
| * * |
| & * |
11,500|-------------------------------------------------&----------------|
| & |
D | * |
O 11,000|-----------------------*-------&----------------------------------|
L | & |
L | |
A 10,500|------------------------------------------------------------------|
R | * |
S | & |
10,000|----*&------------------------------------------------------------|
| |
| |
9,500|------------------------------------------------------------------|
| |
| |
0|----|--------|--------|--------|--------|--------|--------|-------|
1/18/95 2/28/95 5/31/95 8/31/95 11/30/95 2/29/96 5/31/96
*=Lehman &=Total Return Fund
Past performance is not predictive of future performance. Investment returns
and principal values will vary and shares may be worth more or less at
redemption than their original cost.
The above illustration compares a $10,000 investment made in Total Return
Bond Fund on 1/19/95 (inception date) to a $10,000 investment made in the
Lehman Brothers Govt/Corp Bond Index on that date. For comparative purposes,
the value of the Index on 12/31/94 is used as the beginning value on 1/19/95.
All dividends and capital gain distributions are reinvested.
The Fund's performance takes into account fees and expenses. The Lehman
Brothers Govt/Corp Bond Index is an unmanaged total return performance
benchmark comprised of U.S. Government agencies and U.S. Treasury securities
and investment grade corporate debt, selected as representative of the
market. The Index does not take into account charges, fees and other
expenses. Further information relating to Fund performance is contained in
the Financial Highlights section of the Prospectus and elsewhere in this
report.
- ------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
** Source: Lehman Brothers.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
ADVISER'S INVESTMENT REVIEW
BALANCED FUND
The Fund generated a total return of 15.07%* for the twelve months ended
May 31, 1996, compared to 28.44%** for the Standard & Poor's 500 Composite
Stock Price Index and 4.38%*** for the Lehman Aggregate Bond Index for the
same time period. For much of the period, equity markets were good, as
indicated by the performance figures. Bonds did well in the first half of the
fiscal year but weakened in the second half, with inflation concerns
translating into higher interest rates. One of the most important decisions
for any balanced fund is the allocation between stocks, bonds and cash. As of
the last fiscal year end, the Fund was invested almost equally between stocks
and bonds. Early in the fiscal year the allocation of fixed income was
reduced in favor of equities with the current allocation 40% fixed income and
60% equity. Within equities, the Fund's subadvisor continues to focus on
quality companies with low valuation multiples.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN BALANCED FUND,
THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX** AND
THE LEHMAN BROTHERS AGGREGATE INDEX***
16,000|------------------------------------------------------------------|
| & |
| |
15,000|----------------------------------------------------&-------------|
| |
| & |
14,000|------------------------------------------------------------------|
| |
D | |
O 13,000|---------------------------------------&--------------------------|
L | |
L | & |
A 12,000|------------------------------------------------------------------|
R | * * * |
S | & * * |
11,000|------------------------------------------------------------------|
| & & * |
| * * |
10,000|----*&------------------------------------------------------------|
| |
| |
9,000|------------------------------------------------------------------|
| |
| |
0|----|------|------|------|------|------|------|------|------|-----|
7/11 8/31 11/30 2/28 5/31 8/31 11/30 2/29 5/31
94 94 94 95 95 95 95 96 96
*=S&P 500 &=Equity Fund #=Balanced
Past performance is not predictive of future performance. Investment returns
and principal values will vary and shares may be worth more or less at
redemption than their original cost.
The above illustration compares a $10,000 investment made in Balanced Fund
on 7/11/94 (inception date) to a $10,000 investment made in the Standard &
Poor's 500 Composite Stock Price Index and the Lehman Brothers Aggregate
Index on that date. For comparative purposes, the value of the Indexes on
6/30/94 is used as the beginning value on 7/11/94. All dividends and capital
gain distributions are reinvested. The Fund's performance takes into account
fees and expenses. The Standard & Poor's 500 Composite Stock Price Index and
the Lehman Brothers Aggregate Index do not take into account charges, fees
and other expenses. Further information relating to Fund performance is
contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
- ------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
** Source: Standard & Poor's Corporation--Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
*** Source: Lehman Brothers--Lehman Brothers Aggregate Index is an unmanaged
total return performance benchmark commonly used to measure bond
performance. The Index is made up of Lehman's Govt/Corp bond Index,
Mortgage-Backed Securities Index and Asset-Backed Securities Index which
are comprised of U.s. Government agencies and U.S. Treasury securities,
investment grade cororate debt, mortgage-backed and asset-backed
securities, selected as representative of the market.
The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
ADVISER'S INVESTMENT REVIEW
EQUITY GROWTH FUND
The Fund generated a total return of 20.01%* for the twelve months ended
May 31, 1996, compared to 28.44%** for the Standard & Poor's 500 Composite
Stock Price Index (S&P 500). For much of the period, market conditions were
generally good, as indicated by the performance figures. However, good
absolute performance was not consistent, either by industry or by market
capitalization. The Fund has had less exposure to the two hottest sectors,
finance and technology. Being underweighted in the best performing sectors
means, unfortunately, the Fund was over weighted in some sectors that under
performed the index. As a result the performance of the Fund has lagged the
S&P 500. The Fund's subadvisor has continued to emphasize companies with
above average growth rates, high returns on equity, solid balance sheets and
has been able to buy such companies without having to "pay up" for them. The
companies, as a group, are also smaller than those in the S & P 500 as
measured by market capitalization. While both the investment advisor and
subadvisor firmly believe companies with such characteristics will outperform
the S & P 500 over time, there will be periods of under performance, such as
was just experienced.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN EQUITY GROWTH
FUND AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX**
17,000|------------------------------------------------------------------|
| |
| |
16,000|------------------------------------------------------------------|
| * |
| |
15,000|-----------------------------------------------------*------------|
| |
D | * |
O 14,000|------------------------------------------------------------------|
L | & |
L | & |
A 13,000|---------------------------------------*--------------------------|
R | & |
S | * |
12,000|---------------------------------------&--------------------------|
| |
| * & |
11,000|------------------------------------------------------------------|
| *& & |
| *& |
10,000|----*&------------------------------------------------------------|
| |
| |
9,000|----|------|------|------|------|------|------|------|------|-----|
7/11 8/31 11/30 2/28 5/31 8/31 11/30 2/29 5/31
94 94 94 95 95 95 95 96 96
*=S&P 500 &=Equity
Past performance is not predictive of future performance. Investment returns
and principal values will vary and shares may be worth more or less at
redemption than their original cost.
The above illustration compares a $10,000 investment made in Equity Growth
Fund on 7/11/94 (inception date) to a $10,000 investment made in the Standard
& Poor's 500 Composite Stock Price Index on that date. For comparative
purposes, the value of the Index on 6/30/94 is used as the beginning value on
7/11/94. All dividends and capital gain distributions are reinvested. The
Fund's performance takes into account fees and expenses. The Standard &
Poor's 500 Composite Stock Price Index does not take into account charges,
fees and other expenses. Further information relating to Fund performance is
contained in the Financial Highlights section of the Prospectus and elsewhere
in this report.
- ------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
** Source: Standard & Poor's Corporation--Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Standard
& Poor's 500 Composite Stock Price Index is a widely accepted unmanaged
index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
ADVISER'S INVESTMENT REVIEW
INTERNATIONAL EQUITY FUND
The Fund generated a total return of 16.58%* for the twelve months ended
May 31, 1996, compared to 11.45%** for the FT/S&P -- Actuaries World Indices
- -- World Excluding U.S. Index and 28.44%*** for the Standard & Poor's 500
Composite Stock Price Index for the same time period. For much of the period,
market conditions were generally good, as indicated by the performance
figures. Good performance is credited to good stock selection, particularly
in Japan during the first part of the fiscal year. The Fund is broadly
diversified in terms of geography and industry, owning shares in
approximately 40 companies in more than a dozen countries and in a wide
variety of businesses. In terms of region, approximately 50% of the Fund is
invested in Europe, 35% in the Pacific Rim, with much smaller amounts in
Latin America, Africa and short-term investments. The subadvisor continues to
focus on high-quality, well-managed companies that are leaders in their area
of expertise or in the geographical markets in which they operate. More
specifically, the subadvisor seeks companies that are growing, well financed,
high value added product or service and well managed.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN INTERNATIONAL EQUITY
FUND AND FT/S&P-ACTUARIES INDICES--WORLD EXCLUDING U.S. INDEX**
14,000|------------------------------------------------------------------|
| |
| & |
13,000|------------------------------------------------------------------|
| & |
D | |
O 12,000|------------------------------------------------------------------|
L | & |
L | & & * |
A 11,000|-------------------------------------------------*----------------|
R | * |
S | & * * |
10,000|----*&------------------------------------------------------------|
| |
| |
9,500|-------------*----------------------------------------------------|
| |
| |
0|----|--------|--------|--------|--------|--------|--------|-------|
1/24/95 2/28/95 5/31/95 8/31/95 11/30/95 2/29/96 5/31/96
*=S&P 500 &=Internatioal
Past performance is not predictive of future performance. Investment returns
and principal values will vary and shares may be worth more or less at
redemption than their original cost.
International investing is subject to special risks such as currency
fluctuations and differences in accounting and taxation standards.
The above illustration compares a $10,000 investment made in International
Equity Fund on 1/24/95 (inception date) to a $10,000 investment made in the
FT/S&P Actuaries World Indices--World Excluding U.S. Index on that date. For
comparative purposes, the value of the Index on 12/31/94 is used as the
beginning value on 1/24/95. All dividends and capital gain distributions are
reinvested. The Fund's performance takes into account fees and expenses. The
FT/S&P Actuaries World Indices--World Excluding U.S. Index does not take into
account charges, fees and other expenses. Further information relating to
Fund performance is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
- ------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
** Source: Goldman Sachs--The FT/S&P-Actuaries World Indices--World
Excluding U.S. Index is a widely accepted, unmanaged index of global
stock market performance, including Canada, Mexico, Europe, Australia,
New Zealand, Sotuh Africa and the Far East. The Index includes dividends
reinvested.
*** Source: Standard & Poor's Corporation--Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
ADVISER'S INVESTMENT REVIEW
BOND INDEX FUND
The Fund's fiscal year ended May 31, 1996 can be divided into two distinct
segments in terms of performance. The slow growth/low inflation drumbeat
powered the fixed income markets higher through year-end 1995. The impetus
for lower yields was aided by an accommodative Federal Reserve which lowered
the federal funds rate by 50 bp in the second half of 1995, and by
expectations for an agreement on balancing the federal budget in seven years.
By the end of 1995, interest rates were sharply lower and the benchmark
30-year bond broke below 6% for the first time since 1993 to end the year at
5.95%. Calendar 1996, on the other hand, has been marked by a dramatic
reversal in the bond market. Despite a third cut of 25 bp in the federal
funds rate in January 1996, the bond market reacted negatively to burgeoning
signs of increased economic activity. As a result of negative investor
sentiment, interest rates climbed sharply higher by the end of May 1996.
While higher yields during 1996 have hurt the performance of all the sectors
in the Fund, mortgage-backed securities were the best performing sector;
illustrating the benefit of diversification in a bond portfolio. At May 31,
1996 the Fund's option- adjusted duration was 4.8 years. For the year ended
May 31, 1996, the Fund achieved a total return of 4.12%* compared to 4.38%**
for the Lehman Brothers Aggregate Index.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN BOND INDEX FUND AND
THE LEHMAN BROTHERS AGGREGATE INDEX**
12,000|------------------------------------------------------------------|
| |
| |
11,500|------------------------------------------------------------------|
| |
D | |
O 11,000|------------------------------------------------------------------|
L | *& *& |
L | *& *& *& |
A 10,500|------------------------------------------------------------------|
R | *& |
S | *& |
10,000|----*&-----------*&-----------------------------------------------|
| |
| |
9,500|------------------------------------------------------------------|
| |
| |
0|----|------|------|------|------|------|------|------|------|-----|
7/11 8/31 11/30 2/28 5/31 8/31 11/30 2/29 5/31
94 94 94 95 95 95 95 96 96
*=S&P 500 &=Lehman
Past performance is not predictive of future performance. Investment returns
and principal values will vary and shares may be worth more or less at
redemption than their original cost.
The above illustration compares a $10,000 investment made in Bond Index
Fund on 7/11/94 (inception date) to a $10,000 investment made in the Lehman
Brothers Aggregate Index on that date. For comparative purposes, the value of
the Index on 6/30/94 is used as the beginning value on 7/11/94. All dividends
and capital gain distributions are reinvested. The Fund's performance takes
into account fees and expenses. The Lehman Brothers Aggregate Index does not
take into account charges, fees and other expenses. Further information
relating to Fund performance is contained in the Financial Highlights section
of the Prospectus and elsewhere in this report.
- ------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested.
** Source: Lehman Brothers -- Lehman Brothers Aggregate Index is an unmanaged
total return performance benchmark commonly used to measure bond
performance. The Index is made up of Lehman's Govt/Corp Bond Index,
Mortgage-Backed Securities Index and Asset-Backed Securities Index which
are comprised of U.S. Government agencies and U.S. treasury securities,
investment grade corporate debt, morgage-backed and asset-backed
securities, selected as representative of the market.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
<TABLE>
<CAPTION>
Equity Fund
Shares Value
------------ ------------
<S> <C> <C>
COMMON STOCKS -- 90.41%
CONSUMER STAPLES -- 23.71%
5,140 Columbia/HCA Healthcare Corp. ....... $276,918
7,925 CPC International, Inc. ............. 547,816
19,250 Dial Corp. .......................... 553,438
7,090 Eastman Kodak Co. ................... 527,319
10,780 Forest Laboratories, Class A ........ 444,675
6,195 Johnson & Johnson ................... 603,238
20,732 Mattel, Inc. ........................ 564,947
18,460 PepsiCo, Inc. ....................... 613,795
6,595 Procter & Gamble Co. ................ 579,536
9,455 Schering-Plough Corp. ............... 554,299
6,675 +Tupperware Corp. .................... 305,380
------------
5,571,361
------------
CAPITAL GOODS -- 17.45%
7,335 General Electric Co. ................ 606,971
10,570 Honeywell, Inc. ..................... 536,428
9,545 Illinois Tool Works, Inc. ........... 639,515
6,675 Premark International, Inc. ......... 107,634
7,050 Raychem Corp. ....................... 526,988
10,780 Thermo Electron Corp. ............... 687,225
22,845 Westinghouse Electric Corp. ......... 419,777
10,890 York International Corp. ............ 575,808
------------
4,100,346
------------
TECHNOLOGY -- 12.24%
14,140 Adobe Systems, Inc. ................. 523,180
11,530 Cisco Systems, Inc. ................. 629,826
5,435 Hewlett Packard Co. ................. 580,186
8,230 Intel Corp. ......................... 620,336
15,850 Oracle Corp. ........................ 523,050
------------
2,876,578
------------
FINANCIAL -- 11.90%
4,815 American International Group, Inc. .. 453,814
5,530 Barnett Banks of Florida, Inc. ...... 345,625
7,160 Household International, Inc. ....... 495,830
6,375 Mellon Bank Corp. ................... 364,172
9,965 Morgan Stanley Group, Inc. .......... 493,267
9,420 Norwest Corp. ....................... 328,523
7,985 Standard Federal Bancorporation ..... 314,409
------------
2,795,640
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Equity Fund
Shares Value
------------ ------------
<S> <C> <C>
COMMON STOCKS -- (continued)
UTILITIES -- 4.80%
8,890 American Telephone & Telegraph Co. . $554,514
11,780 WorldCom, Inc. ...................... 572,802
------------
1,127,316
------------
ENERGY -- 7.65%
3,160 British Petroleum Co., plc .......... 332,985
6,160 Louisiana Land & Exploration Co. .... 331,870
4,835 Mobil Corp. ......................... 545,751
3,915 Royal Dutch Petroleum Co. ........... 587,250
------------
1,797,856
------------
RAW/INTERMEDIATE
MATERIALS -- 6.06%
9,330 Nucor Corp. 513,150
6,515 Pioneer Hi-Bred International, Inc. 368,098
27,290 Worthington Industries, Inc. ........ 542,389
------------
1,423,637
------------
CONSUMER CYLICAL -- 6.60%
9,150 McDonald's Corp. 440,344
12,180 Stewart Enterprises, Inc., Class A .. 575,505
13,225 Time Warner, Inc. ................... 533,959
------------
1,549,808
------------
TOTAL COMMON STOCKS
(Cost $18,711,761) 21,242,542
------------
Principal
Amount
- --------------
DEMAND NOTES -- 9.47%
$1,016,000 Associates Corp. of North America 1,016,000
Master Notes .......................
1,208,000 General Electric Co. Promissory
Notes .............................. 1,208,000
------------
TOTAL DEMAND NOTES
(Cost $2,224,000) ................... 2,224,000
------------
TOTAL INVESTMENTS
(Cost $20,935,761) ............ 99.88% $23,466,542
OTHER ASSETS AND LIABILITIES
(NET) ......................... 0.12 28,714
--------- -------------
NET ASSETS ..................... 100.00% $23,495,256
========= =============
</TABLE>
- ------
+ Non-income producing security.
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
Income Fund
<TABLE>
<CAPTION>
Principal Coupon Maturity
Amount Rate Date Value
------------ -------- ---------- -------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 71.58%
$3,000,000 Federal National
Mortgage
Association .......... 8.59% 2/03/05 $3,013,200
1,400,000 Federal National
Mortgage
Association .......... 8.04 4/28/05 1,381,226
2,000,000 Federal National
Mortgage
Association .......... 6.40 9/27/05 1,899,860
Government
National Mortgage
Association
286,803 Pool #184076 .......... 6.50 7/15/23 264,576
713,029 Pool #403557 .......... 8.50 11/15/24 730,187
3,270,691 Pool #410047 .......... 7.00 7/15/25 3,111,245
998,291 Pool #408241 .......... 7.00 3/15/26 949,625
2,000,000 Student Loan
Marketing
Association .......... 7.62 4/18/00 2,017,960
50,000 Tennessee Valley
Authority ............ 6.88 1/15/02 49,330
2,784,000 U.S. Treasury Bonds ... 6.25 8/15/23 2,488,200
1,200,000 U.S. Treasury Notes ... 7.88 11/15/04 1,275,374
-------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $17,669,832) 17,180,783
-------------
CORPORATE BONDS -- 25.49%
1,000,000 Bank of New York ...... 8.50 12/15/04 1,066,517
3,000,000 BankAmerica Corp ...... 7.13 5/12/05 2,932,560
1,000,000 Citicorp .............. 8.80 2/01/00 1,018,245
50,000 Eli Lilly & Co., ...... 8.38 12/01/06 54,074
1,000,000 Ford Motor Credit
Corp. ................ 8.20 2/15/02 1,045,996
-------------
TOTAL CORPORATE BONDS
(Cost $6,072,278) 6,117,392
-------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
----------- --------------
<S> <C> <C> <C>
OTHER SHORT-TERM INVESTMENTS -- 2.23%
290,728 Fidelity U.S.
Treasury II Fund $290,728
244,100 Dreyfus
Government Cash
Management Fund .. 244,100
--------------
TOTAL OTHER
SHORT-TERM
INVESTMENTS
(Cost $534,828) 534,828
--------------
TOTAL INVESTMENTS
(Cost $24,276,938) ................. 99.30% $23,833,003
OTHER ASSETS AND
LIABILITIES (NET) .................. 0.70 168,296
--------- --------------
NET ASSETS 100.00% $24,001,299
========= ==============
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
Total Return Bond Fund
<TABLE>
<CAPTION>
Principal Coupon Maturity
Amount Rate Date Value
------------ -------- ---------- -------------
<S> <C> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 78.31%
$ 1,635,000 Federal Farm Credit
Bank .................. 5.18%+ 6/03/96 $1,634,529
200,000 Federal National
Mortgage Corp. ........ 8.50 2/01/05 207,704
Government
National
Mortgage
Association
137,939 Pool #203151 ........... 8.50 2/15/17 141,259
39,644 Pool #356873 ........... 6.50 5/15/23 36,572
21,587 Pool #184076 ........... 6.50 7/15/23 19,914
2,512,188 Pool #345538 ........... 8.00 2/15/24 2,516,899
5,207,341 Pool #780136 ........... 7.00 6/15/24 4,953,639
10,035,148 Pool #410853 ........... 7.50 12/15/25 9,803,086
100,000 Private Export
Funding Corp. ......... 9.10 10/30/98 105,574
2,900,000 U.S. Treasury Bonds .... 7.25 5/15/16 2,927,188
50,000 U.S. Treasury Bonds .... 8.13 8/15/21 55,453
8,000,000 U.S. Treasury Bonds .... 6.25 8/15/23 7,150,000
300,000 U.S. Treasury Notes .... 7.00 9/30/96 301,594
300,000 U.S. Treasury Notes .... 8.88 11/15/97 311,344
100,000 U.S. Treasury Notes .... 7.88 1/15/98 102,563
1,000,000 U.S. Treasury Notes .... 7.25 2/15/98 1,016,562
300,000 U.S. Treasury Notes .... 7.88 4/15/98 308,531
800,000 U.S. Treasury Notes .... 9.25 8/15/98 847,250
500,000 U.S. Treasury Notes .... 7.13 9/30/99 508,750
3,000,000 U.S. Treasury Notes .... 7.50 10/31/99 3,085,311
610,000 U.S. Treasury Notes .... 8.50 2/15/00 647,934
100,000 U.S. Treasury Notes .... 8.50 11/15/00 107,094
50,000 U.S. Treasury Notes .... 7.50 5/15/02 51,984
40,000 U.S. Treasury Notes .... 6.38 8/15/02 39,325
3,500,000 U.S. Treasury Notes .... 7.25 5/15/04 3,584,217
4,129,000 U.S. Treasury Notes .... 6.50 5/15/05 4,025,775
7,000,000 U.S. Treasury Notes .... 5.63 2/15/06 6,422,500
-------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $51,598,970) 50,912,551
-------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Principal Coupon Maturity
Amount Rate Date Value
------------ -------- ---------- -------------
<S> <C> <C> <C>
CORPORATE BONDS -- 8.22%
1,500,000 Emerson Electric
Co. ................... 6.30% 11/1/05 $1,406,727
500,000 McDonald's Corp. ....... 7.05 11/15/25 462,158
3,065,000 Mellon Bank Corp. ...... 7.00 3/15/06 2,954,571
500,000 Rockwell
International ......... 7.88 2/15/05 519,444
-------------
TOTAL CORPORATE BONDS
(Cost $5,531,914) 5,342,900
-------------
FOREIGN GOVERNMENT BONDS -- 2.09%
1,500,000 Province of Ontario
Global Bond
(Cost $1,463,467) ..... 6.00 2/21/06 1,360,560
-------------
REPURCHASE AGREEMENT -- 3.38%
2,200,000 Dillon Read 5.30%, dated 5/31/96, due 6/3/96, to
be repurchased at $2,200,972, collateralized by
$2,191,698 U.S. Treasury Notes, 6.75%, due 2/28/97
valued at $2,238,135 (Cost $2,200,000) 2,200,000
-------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
Total Return Bond Fund - (continued)
<TABLE>
<CAPTION>
<S> <C> <C>
Shares Value
----------- -------------
OTHER SHORT-TERM INVESTMENTS -- 7.63%
2,886,453 Fidelity U.S.
Treasury Fund ....... $2,886,452
2,073,100 Dreyfus
Government Cash
Management
Fund ................ 2,073,100
-------------
TOTAL OTHER SHORT-TERM
INVESTMENTS
(Cost $4,959,553) 4,959,552
-------------
TOTAL INVESTMENTS
(Cost $65,753,904) 99.63% $64,775,563
OTHER ASSETS AND LIABILITIES
(NET) 0.37 241,919
--------- -------------
NET ASSETS 100.00% $65,017,482
========= =============
</TABLE>
- ------
+ Discount Rate.
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
Balanced Fund
<TABLE>
<CAPTION>
Shares Value
------------ ------------
<S> <C> <C>
COMMON STOCKS -- 57.72%
CONSUMER CYLICAL -- 13.29%
11,000 +AMR Corp. ........................... $1,038,125
23,000 Dillard Department Stores, Class A .. 920,000
16,500 Eaton Corp. ......................... 954,937
32,000 Ford Motor Co. ...................... 1,168,000
24,000 +Fred Meyer, Inc. .................... 693,000
20,000 General Motors Corp. ................ 1,102,500
19,000 Goodyear Tire & Rubber Co. .......... 959,500
21,000 J.C. Penney Co. ..................... 1,089,375
22,000 +King World Productions, Inc. ........ 918,500
15,000 Pitney Bowes, Inc. .................. 744,375
30,000 Singer Co. N.V. ..................... 618,750
30,000 Standard Register Co. ............... 840,000
30,000 +Waban, Inc. ......................... 802,500
5,500 Xerox Credit Corp. .................. 865,562
------------
12,715,124
------------
FINANCIAL -- 10.64%
22,000 Allstate Corp. ...................... 929,500
14,500 Bankers Trust New York Corp. ........ 1,089,313
35,000 Cali Realty Corp. ................... 783,125
30,000 Comdisco, Inc. ...................... 825,000
12,000 Exel Ltd. ........................... 832,500
32,000 Federal National Mortage
Association ........................ 988,000
16,000 GATX Corp. .......................... 720,000
25,000 Hospitality Properties Trust ........ 650,000
31,000 +Olympic Financial Ltd. .............. 732,375
31,000 Spieker Properties, Inc. ............ 852,500
30,000 U.S. Bancorp ........................ 1,068,750
33,000 Winthrop Resources Corp. ............ 701,250
------------
10,172,313
------------
TECHNOLOGY -- 6.65%
29,200 Apple Computer, Inc. ................ 759,200
20,000 Fisher Scientific International ..... 817,500
18,000 Intel Corp. ......................... 1,356,750
7,500 International Business Machines
Corp. .............................. 800,625
21,000 +Marshall Industries 658,875
26,000 Philips Electronics N.V. 913,250
46,000 +Read-Rite Corp. 1,052,250
------------
6,358,450
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares Value
------------ ------------
<S> <C> <C>
COMMON STOCKS -- (continued)
RAW/INTERMEDIATE
MATERIALS -- 7.42%
19,000 Arco Chemical Co. ................... $985,625
35,000 British Steel ADR ................... 940,625
20,000 Cleveland-Cliffs, Inc. .............. 802,500
14,000 Eastman Chemical Co. ................ 938,000
20,450 Hanna (M.A.) Co. .................... 702,969
30,000 Quanex Corp. ........................ 697,500
23,000 Weyerhauser Co. ..................... 1,043,625
16,500 Willamette Industries Inc. .......... 985,875
------------
7,096,719
------------
CONSUMER STAPLES -- 7.03%
13,000 Anheuser Busch Co., Inc. ............ 926,250
52,000 Archer-Daniels-Midland Co. .......... 1,014,000
9,600 Bristol-Meyers Squibb Co. ........... 819,600
25,000 +Foundation Health Corp. ............. 993,750
36,000 IBP, Inc. ........................... 985,500
10,000 Philip Morris Companies, Inc. ....... 993,750
30,000 RJR Nabisco Holdings Corp. .......... 993,750
------------
6,726,600
------------
ENERGY -- 6.93%
12,000 Exxon Corp. ......................... 1,017,000
45,000 Occidental Petroleum Corp. .......... 1,164,375
26,400 Reposol S.A. ADR .................... 897,600
20,000 Tenneco, Inc. ....................... 1,075,000
6,000 Texaco, Inc. ........................ 502,500
34,000 Ultramar Corp. ...................... 1,092,250
40,000 YPF S.A. ADR ........................ 880,000
------------
6,628,725
------------
CAPITAL GOODS -- 3.60%
21,000 Cummins Engine Co., Inc. ............ 892,500
32,000 Giddings & Lewis, Inc. .............. 528,000
55,000 +Griffon Corp. ....................... 501,875
50,000 Hanson plc ADR ...................... 731,250
14,000 Tecumseh Products, Class A .......... 791,000
------------
3,444,625
------------
UTILITY -- 2.16%
30,000 El Paso Natural Gas Co. ............. 1,087,500
60,000 +National Semiconductor .............. 975,000
------------
2,062,500
------------
TOTAL COMMON STOCKS
(Cost $44,525,403) .................. 55,205,056
------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
Balanced Fund -- (continued)
<TABLE>
<CAPTION>
Shares Value
------------ ------------
<S> <C> <C>
Shares Value
------------ ------------
CONVERTIBLE PREFERED STOCKS -- 1.06%
CONSUMER CYLICAL -- 1.06%
16,000 Delta Airlines, Series C, $3.50
(Cost $820,677) ..................... $1,014,000
------------
Principal
Amount
------------
CORPORATE BONDS -- 15.33%
FINANCIAL -- 5.96%
$ 450,000 AT&T Corp. 8.20%, 2/15/05 ............ 462,465
1,950,000 Ford Motor Credit Co. 6.375%,
10/06/00 ............................ 1,899,082
500,000 Ford Motor Credit Co. 7.57%,
5/16/05 ............................. 483,190
1,000,000 Safeco Corp. 7.875%, 4/01/05 ......... 1,012,476
1,850,000 Xerox Credit Corp. 6.84%, 6/01/00 .... 1,838,197
------------
5,695,410
------------
CONSUMER STAPLES -- 2.54%
714,000 Anheuser Busch Co., Inc. 8.50%,
3/01/17 ............................. 744,802
1,625,000 Campbell Soup Co. 8.75%, 3/13/01 ..... 1,687,432
------------
2,432,234
------------
ENERGY -- 2.07%
500,000 Occidental Petroleum Corp.
9.75%, 6/15/01 ...................... 549,900
1,375,000 8.50%, 9/15/04 ...................... 1,431,691
------------
1,981,591
------------
RAW/INTERMEDIATE
MATERIALS -- 1.91%
1,800,000 SmithKline Beecham 7.50%, 5/01/02 ... 1,826,856
------------
UTILITIES -- 1.81%
275,000 General Telephone of Wisconsin
7.50%, 3/01/02 ...................... 272,927
1,500,000 Southwestern Bell 7.75%, 9/01/09 ..... 1,460,436
------------
1,733,363
------------
TECHNOLOGY -- 1.04%
1,000,000 Lockheed Martin Corp. 6.55%,
5/15/99 ............................. 993,782
------------
TOTAL CORPORATE BONDS
(Cost $14,887,472) .................. 14,663,236
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
------------ ------------
<S> <C> <C>
U.S. GOVERNMENT & AGENCY
OBLIGATIONS -- 24.18%
Federal Home Loan Motgage Corp.
$1,635,000 8.53%, 2/02/05 ...................... $1,690,871
------------
Federal National Mortgage
Association
1,400,000 7.24%, 9/02/99 ...................... 1,408,330
750,000 8.875%, 7/10/01 ..................... 750,327
1,025,000 8.625%, 11/10/04 .................... 1,053,288
975,000 8.50%, 2/01/05 ...................... 1,012,556
------------
4,224,501
------------
Financial Assistance Corp.
1,100,000 9.50%, 4/16/04 ...................... 1,172,580
1,000,000 9.20%, 9/27/05 ...................... 1,038,530
------------
2,211,110
------------
Student Loan Marketing
Association
400,000 7.76%, 4/17/00 ...................... 405,312
1,100,000 7.62%, 4/18/00 ...................... 1,109,878
------------
1,515,190
------------
U.S. Treasury Notes
500,000 6.50%, 5/15/97 ...................... 502,968
1,000,000 5.25%, 12/31/97 ..................... 987,187
1,550,000 9.25%, 8/15/98 ...................... 1,641,546
1,150,000 6.75%, 6/30/99 ...................... 1,158,985
1,250,000 7.125%, 9/30/99 ..................... 1,271,875
1,700,000 7.75%, 11/30/99 ..................... 1,762,688
1,500,000 6.25%, 8/31/00 ...................... 1,478,906
425,000 6.25%, 2/15/03 ...................... 413,445
350,000 7.25%, 8/15/04 ...................... 358,859
2,250,000 7.875%, 11/15/04 .................... 2,391,327
750,000 6.875%, 5/15/06 ..................... 750,703
675,000 9.125%, 5/15/09 ..................... 760,851
------------
13,479,340
------------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS
(Cost $23,467,837) ................. 23,121,012
------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
Balanced Fund -- (continued)
Principal
Amount Value
------------ ------------
DEMAND NOTES -- 0.62%
$314,000 Associates Corp. of North America
Master Notes ....................... $314,000
279,000 General Electric Co. Promissory
Notes .............................. 279,000
------------
TOTAL DEMAND NOTES
(Cost $593,000) .................... 593,000
------------
Value
-------------
TOTAL INVESTMENTS
(Cost $84,294,389) ............. 98.91% $94,596,304
OTHER ASSETS AND LIABILITIES
(NET) ........................... 1.09 1,041,744
--------- -------------
NET ASSETS ....................... 100.00% $95,638,048
========= =============
- ------
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
Equity Growth Fund
<TABLE>
<CAPTION>
Shares Value
-------- ------------
<S> <C> <C>
COMMON STOCKS -- 90.94%
DRUG & HEALTHCARE
SUPPLIES -- 10.00%
30,000 Bard (C.R.), Inc. ..................... $986,250
14,500 Baxter International, Inc. ............ 641,625
10,000 Pharmacia & Upjohn, Inc. .............. 408,750
9,000 Schering-Plough Corp. ................. 527,625
20,000 +Sybron International Corp. ............ 542,500
------------
3,106,750
------------
RETAILING -- 9.48%
23,000 Gap, Inc. ............................. 773,375
18,000 Home Depot, Inc. ...................... 920,250
13,500 Sherwin Williams Co. .................. 605,812
12,000 Tandy Corp. ........................... 648,000
------------
2,947,437
------------
HOUSEHOLD PRODUCTS &
TOILETRIES -- 6.93%
7,500 Colgate-Palmolive Co. ................. 590,625
6,700 Kimberly Clark Corp. .................. 488,263
12,000 Estee Lauder Co., Class A ............. 456,000
10,000 Premark International, Inc. ........... 161,250
10,000 Tupperware Corp. ...................... 457,500
------------
2,153,638
------------
ELECTRONICS -- 6.24%
15,000 AMP, Inc. ............................. 631,875
8,500 Intel Corp. ........................... 640,687
10,000 Motorola, Inc. ........................ 667,500
------------
1,940,062
------------
COMMERCIAL SERVICES -- 4.60%
4,000 Eastman Kodak Co. ..................... 297,500
15,000 Manpower, Inc. ........................ 577,500
18,000 Olsten Corp. .......................... 553,500
------------
1,428,500
------------
OIL -- SERVICES -- 4.37%
45,000 +Nabors Industries, Inc. ............... 691,875
8,000 Schlumberger Ltd. ..................... 667,000
------------
1,358,875
------------
INSURANCE -- 4.29%
6,200 American International Group, Inc. .... 584,350
8,000 Marsh & McLennan Co., Inc. ............ 749,000
------------
1,333,350
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares Value
-------- ------------
<S> <C> <C>
COMMON STOCKS -- (continued)
FOODS & BEVERAGES -- 4.28%
18,000 H.J. Heinz Co. ........................ $598,500
22,000 PepsiCo, Inc. ......................... 731,500
------------
1,330,000
------------
ELECTRICAL EQUIPMENT -- 4.08%
8,000 General Electric Co. .................. 662,000
33,000 Westinghouse Electric Corp. ........... 606,375
------------
1,268,375
------------
TELEPHONE SERVICES -- 3.67%
21,000 +AirTouch Communications, Inc. ......... 669,375
15,000 Alltel Corp. .......................... 472,500
------------
1,141,875
------------
CREDIT & FINANCE -- 3.18%
20,000 Associates First Capital Corp.,
Class A .............................. 740,000
8,000 Federal National Mortage
Association .......................... 247,000
------------
987,000
------------
OIL -- 3.13%
7,000 Amoco Corp. ........................... 507,500
5,500 Exxon Corp. ........................... 466,125
------------
973,625
------------
SHIPPING & FREIGHT -- 3.12%
55,000 +Kirby Corp. ........................... 969,375
------------
PUBLISHING & BROADCASTING -- 2.56%
8,000 Belo (A.H) Corp., Class A ............. 306,000
7,000 Gannett Co. ........................... 488,250
------------
794,250
------------
COMPUTER SYSTEMS & OFFICE
EQUIPMENT -- 2.24%
5,000 Hewlett Packard Co. ................... 533,750
3,000 +Cisco Systems, Inc. ................... 163,875
------------
697,625
------------
CHEMICALS & FERTILIZERS -- 2.18%
8,500 Du Pont (E.I.) de Nemours ............. 677,875
------------
EXPLORATION & PRODUCTION -- 2.18%
20,000 Noble Affiliates, Inc. ................ 677,500
------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
Equity Growth Fund - (continued)
<TABLE>
<CAPTION>
Shares Value
-------- ------------
<S> <C> <C>
COMMON STOCKS -- (continued)
AEROSPACE -- 2.12%
12,400 Raytheon Co. .......................... $660,300
------------
RAILROADS -- 2.08%
9,200 Union Pacific Corp. ................... 645,150
------------
DIVERSIFIED INDUSTRIALS -- 2.07%
24,000 +Jacobs Engineering Group, Inc. ........ 645,000
------------
BIO TECHNOLOGY -- 1.49%
8,000 +Genzyme Corp. ......................... 462,000
------------
INVESTMENT COMPANIES -- 1.33%
13,000 Donaldson Lufkin & Jenrette ........... 414,375
------------
BANKS -- 1.32%
8,000 Cullen/Frost Bankers, Inc. ............ 410,000
------------
PAPER & FOREST PRODUCTS -- 1.15%
6,000 Willamette Industries Inc. ............ 358,500
------------
ENVIRONMENTAL SERVICES -- 1.13%
10,000 WMX Technologies, Inc. ................ 352,500
------------
AUTOMOTIVE -- 1.02%
5,600 General Motors, Class E ............... 315,700
------------
MACHINERY & TOOLS -- 0.70%
10,000 Keystone International, Inc. .......... 218,750
------------
TOTAL COMMON STOCKS
(Cost $24,341,874) .................... 28,268,387
------------
PREFERRED STOCKS -- 1.76%
TELEPHONE SERVICES -- 1.76%
10,376 +Cellular Communications
(Cost $494,157) ....................... 547,334
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Principal
Amount Value
----------- -----------
<S> <C> <C>
DEMAND NOTES -- 3.90%
$526,000 Associates Corp. of North
America Master Notes ................ $526,000
687,000 General Electric Co. Promissory
Notes ............................... 687,000
-----------
TOTAL DEMAND NOTES
(Cost $1,213,000) .................... 1,213,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $26,049,031) ........ 96.60% $30,028,721
OTHER ASSETS AND
LIABILITIES (NET) .......... 3.40 1,055,834
--------- -------------
NET ASSETS .................. 100.00% $31,084,555
========= =============
</TABLE>
- ------
+ Non-income producing security.
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
International Equity Fund
<TABLE>
<CAPTION>
Shares Value
--------- ------------
<S> <C> <C>
COMMON STOCKS -- 92.72%
JAPAN -- 17.18%
50,000 Atlantis Japan Growth Fund Ltd. ........ $516,500
30,000 Canon, Inc. ............................ 589,817
19,000 Canon Sales Co., Inc. .................. 518,038
20,000 Honda Motor Co. ........................ 482,241
12,000 Ito Yokado Co., Ltd. ................... 682,185
90,000 Mitsubishi Heavy Industries Ltd. ....... 775,387
30,000 Nippon Denso Co. ....................... 648,243
------------
4,212,411
------------
SWITZERLAND -- 11.37%
3,000 ABB AG (Registered) .................... 713,942
15,000 Nestle S.A. ADR (Registered) ........... 844,495
2,000 SGS Holdings S.A. ...................... 849,359
1,500 Silka Finanz AG (Bearer) ............... 379,808
------------
2,787,604
------------
NETHERLANDS -- 10.15%
16,000 IHC Caland N.V. ........................ 739,125
4,000 Randstad Holdings N.V. ................. 291,007
6,000 Royal Dutch Petroleum Co. .............. 900,000
5,000 Wolters Kluwer N.V. .................... 559,562
------------
2,489,694
------------
GERMANY -- 9.27%
2,000 Bayer AG ............................... 671,610
15,000 Deutsche Bank AG ....................... 706,097
1,000 Hochtief AG ............................ 439,690
5,000 Hornbach Baumarkt AG ................... 188,673
150 Muenchener Rueckver AG
(Registered) .......................... 266,275
------------
2,272,345
------------
SINGAPORE -- 7.11%
100,000 Acer Computer International Ltd. ....... 184,000
156,000 Courts Singapore Ltd. .................. 254,884
50,000 Develpment Bank of Singapore ........... 593,166
85,000 Keppel Corp., Ltd. ..................... 712,510
------------
1,744,560
------------
HONG KONG -- 5.57%
400,000 Chen Hsong Holdings .................... 214,581
110,000 Hutchison Whampoa Ltd. ................. 706,696
200,000 Johnson Electric Holdings Ltd. ......... 444,674
------------
1,365,951
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares Value
--------- ------------
<S> <C> <C>
COMMON STOCKS -- (continued)
MALAYSIA -- 5.44%
50,000 Nestle Bhd. ............................ $388,700
120,000 Nylex Bhd. ............................. 476,057
175,000 Sime Darby Bhd. ........................ 469,846
------------
1,334,603
------------
UNITED KINGDOM -- 4.56%
100,000 Blenheim Group plc ..................... 482,672
100,000 Rentokil Group plc ..................... 636,320
------------
1,118,992
------------
NORWAY -- 3.53%
10,000 Norsk Hydro AS ADR ..................... 468,750
25,000 Unitor Ships ADR ....................... 398,047
------------
866,797
------------
FRANCE -- 3.48%
1,500 Financiere et Industrielle Gaz et Eaux 638,953
2,000 Primagaz Cie ........................... 213,566
------------
852,519
------------
SPAIN -- 2.94%
7,000 Banco Intercontinental Espana .......... 720,869
------------
SWEDEN -- 2.77%
15,000 Astra AB, Class B ...................... 678,566
------------
CANADA -- 2.48%
14,000 Imperial Oil Ltd. ...................... 609,000
------------
BERMUDA -- 1.83%
15,000 Partnerre Holdings Ltd. ................ 448,125
------------
SOUTH AFRICA -- 1.52%
120,000 LibLife Strategic Investments Ltd. ..... 372,414
------------
ARGENTINA -- 1.18%
25,000 Quilmes Industrial S.A. ................ 290,625
------------
INDONESIA -- 1.18%
100,000 P.T. Wickasana Overseas (Foreign) ...... 288,379
------------
PHILIPPINES -- 1.16%
22,000 Philippine Commercial
International Bank .................... 284,047
------------
TOTAL COMMON STOCKS
(Cost $19,709,103) .................... 22,737,501
------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
May 31, 1996
International Equity Fund - (continued)
<TABLE>
<CAPTION>
Shares Value
--------- ------------
<S> <C> <C>
PREFERRED STOCKS -- 0.63%
ARGENTINA -- 0.63%
12,500 Quilmes Industrial S.A.
(Cost $150,000) ....................... $153,125
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
-----------
<S> <C> <C>
CORPORATE OBLIGATIONS -- 3.10%
THAILAND -- 3.10%
$625,000 Bankok Bank Public Co.
(Convertible) 3.25%, 3/3/04
(Cost $579,397) ................. 759,375
---------
No. of
Warrants
-----------
WARRANTS -- 0.21%
JAPAN -- 0.21%
10,000 +Atlantis Japan Growth Fund,
expiring 4/30/01 (Cost $0) ....... 52,225
---------
Principal
Amount
-----------
DEMAND NOTES -- 2.93%
$446,000 Associates Corp. of North America
Master Notes .................... 446,000
273,000 General Electric Co. Promissory
Notes ........................... 273,000
---------
TOTAL DEMAND NOTES
(Cost $719,000) ................. 719,000
---------
TOTAL INVESTMENTS
(Cost $21,157,500) ............. 99.59% $24,421,226
OTHER ASSETS AND
LIABILITIES (NET) .............. 0.41 100,675
--------- -------------
NET ASSETS ....................... 100.00% $24,521,901
========= =============
</TABLE>
- ------
+ Non-income producing security.
ADR -- American Depositary Receipt.
<PAGE>
At May 31, 1996, sector diversification of the Fund's investment portfolio
was as follows:
% of
Net Market
Sector Diversification Assets Value
---------------------------------- --------- -------------
Consumer Cyclical ................ 20.78% $ 5,095,089
Financial ........................ 20.20 4,954,496
Consumer Staples ................. 12.94 3,172,741
Capital Goods .................... 11.66 2,859,178
Energy ........................... 8.21 2,013,191
Transportation ................... 7.83 1,920,385
Investment Companies ............. 6.45 1,580,092
Raw/Intermediate Materials ....... 4.68 1,147,667
Technology ....................... 3.91 959,387
Demand Notes ..................... 2.93 719,000
--------- -------------
Total Investments .............. 99.59% $24,421,226
Other Assets and Liabilities (Net) . 0.41 100,675
--------- -------------
Net Assets ..................... 100.00% $24,521,901
========= =============
See Notes to Financial Statemets.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 1996
<TABLE>
<CAPTION>
Total Return
Equity Income Bond
Fund Fund Fund
-------------- -------------- --------------
<S> <C> <C> <C>
Assets:
Investments, at cost - see accompanying
Schedule of Investments ........ $20,935,761 $24,276,938 $65,753,904
============== ============== ==============
Investments in securities, at value
(Note 1a) ...................... $23,466,542 $23,833,003 $64,775,563
Cash ............................. 980 -- 210
Dividends and interest receivable . 52,584 334,326 614,488
Receivable for investment securities
sold ........................... -- -- --
Receivable for fund shares sold .. -- -- --
Deferred organization expenses
(Note 1f) ...................... 4,061 4,922 4,844
-------------- -------------- --------------
Total assets ................ 23,524,167 24,172,251 65,395,105
Liabilities:
Dividends payable ................ -- 143,256 328,389
Payable for fund shares redeemed . -- -- --
Investment advisory fees payable
(Note 2a) ...................... 10,423 7,908 9,003
Administration fees payable (Note 2b) 3,010 3,189 8,115
Accrued expenses and other liabilities 15,478 16,599 32,116
-------------- -------------- --------------
Total liabilities ........... 28,911 170,952 377,623
-------------- -------------- --------------
Net Assets ............................ $23,495,256 $24,001,299 $65,017,482
============== ============== ==============
Net Assets Consist of:
Paid-in capital .................. $19,457,712 $23,920,676 $65,921,418
Undistributed net investment income 79,732 807 13,244
Accumulated net realized gain .... 1,427,031 523,751 61,161
Net unrealized appreciation
(depreciation) ................. 2,530,781 (443,935) (978,341)
-------------- -------------- --------------
Net Assets ............................ $23,495,256 $24,001,299 $65,017,482
============== ============== ==============
Shares outstanding (Unlimited number of
$0.00001 par value share authorized for
each Fund) .......................... 2,630,623 3,435,892 9,059,616
Net Asset Value Per Share (net assets / shares
outstanding) ........................ $ 8.93 $ 6.99 $ 7.18
============== ============== ==============
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Equity International
Balanced Growth Equity
Fund Fund Fund
-------------- -------------- ---------------
<S> <C> <C> <C>
Assets:
Investments, at cost - see accompanying
Schedule of Investments ........ $84,294,389 $26,049,031 $21,157,500
============== ============== ===============
Investments in securities, at value
(Note 1a) ...................... $94,596,304 $30,028,721 $24,421,226
Cash ............................. 8,669 888 194
Dividends and interest receivable . 755,606 46,198 134,421
Receivable for investment securities
sold ........................... 306,600 1,018,141 --
Receivable for fund shares sold .. 61,837 25,512 6,554
Deferred organization expenses
(Note 1f) ...................... 18,607 15,838 3,654
-------------- -------------- ---------------
Total assets ................ 95,747,623 31,135,298 24,566,049
Liabilities:
Dividends payable ................ -- -- --
Payable for fund shares redeemed . 528 2,970 2,094
Investment advisory fees payable
(Note 2a) ...................... 63,411 26,435 20,138
Administration fees payable (Note 2b) 11,598 4,057 2,960
Accrued expenses and other liabilities 34,038 17,281 18,956
-------------- -------------- ---------------
Total liabilities ........... 109,575 50,743 44,148
-------------- -------------- ---------------
Net Assets ............................ $95,638,048 $31,084,555 $24,521,901
============== ============== ===============
Net Assets Consist of:
Paid-in capital .................. $82,756,981 $22,035,337 $20,964,782
Undistributed net investment income 864,007 84,433 150,383
Accumulated net realized gain .... 1,715,145 4,985,095 143,446
Net unrealized appreciation
(depreciation) ................. 10,301,915 3,979,690 3,263,290
-------------- -------------- ---------------
Net Assets ............................ $95,638,048 $31,084,555 $24,521,901
============== ============== ===============
Shares outstanding (Unlimited number of
$0.00001 par value share authorized for
each Fund) .......................... 11,578,002 3,587,822 2,726,557
Net Asset Value Per Share (net assets / shares
outstanding) ........................ $ 8.26 $ 8.66 $ 8.99
============== ============== ===============
</TABLE>
See Notes to Financial Statements.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 1996
<TABLE>
<CAPTION>
Total Return
Equity Income Bond
Fund Fund Fund
------------ ------------- --------------
<S> <C> <C> <C>
Investment Income
Dividend income .......................... $ 290,975 -- --
Interest income .......................... 66,837 $ 2,277,717 $ 2,656,854
Less: Foreign Taxes withheld ............. -- -- --
------------ ------------- --------------
Total Income ........................ 357,812 2,277,717 2,656,854
Expenses (Note 1g):
Investment advisory fees (Note 2a) ....... 137,986 204,243 254,455
Shareholder servicing fees (Note 2d) ..... 53,071 78,555 97,868
Administrative fees (Note 2b) ............ 53,899 64,253 76,145
Custodian fees ........................... 16,188 10,069 14,226
Transfer agent fees (Note 2e) ............ 10,793 12,613 12,223
Auditing fees ............................ 13,377 14,239 14,764
Legal fees ............................... 8,627 12,840 13,905
Prospectus and shareholder reports ....... 4,537 5,303 5,818
Registration fees ........................ 2,071 800 11,360
Trustees' fees and expenses (Note 2f) .... 5,395 8,628 9,191
Amortization of organization expenses (Note
1f) .................................... 4,554 5,058 4,766
Insurance expense ........................ 5,806 6,076 5,957
Miscellaneous ............................ 920 1,359 995
------------ ------------- --------------
Total Expenses ...................... 317,224 424,036 521,673
Less: Waiver of fees (Note 2c, 2d, 2e) (171,960) (277,425) (329,883)
Reimbursement of expenses (Note 2c) (68,274) (64,906) (67,299)
------------ ------------- --------------
Net Expenses ........................ 76,990 81,705 124,491
------------ ------------- --------------
Net Investment Income ......................... 280,822 2,196,012 2,532,363
------------ ------------- --------------
Realized and Unrealized Gain (Loss) (Note 3):
Net realized gain on investments ......... 1,711,256 728,960 496,712
Net realized gain on foreign currency
transactions ........................... -- -- --
Change in unrealized appreciation
(depreciation) during the year (a) ..... 1,271,632 (1,694,757) (2,190,037)
------------ ------------- --------------
Net Realized and Unrealized Gain (Loss) ....... 2,982,888 (965,797) (1,693,325)
------------ ------------- --------------
Net Increase in Net Assets Resulting from
Operations .................................. $3,263,710 $ 1,230,215 $ 839,038
============ ============= ==============
- ------
(a) Includes net unrealized appreciation
(depreciation) of foreign currency ........ -- -- --
</TABLE>
<PAGE>
[RESTUBBED FROMN TABLE ABOVE]
<TABLE>
<CAPTION>
Equity International
Balanced Growth Equity
Fund Fund Fund
------------- ------------ ---------------
<S> <C> <C> <C>
Investment Income
Dividend income .......................... $ 1,202,308 $ 663,905 $ 379,087
Interest income .......................... 2,891,328 217,198 83,363
Less: Foreign Taxes withheld ............. -- -- (42,684)
------------- ------------ ---------------
Total Income ........................ 4,093,636 881,103 419,766
Expenses (Note 1g):
Investment advisory fees (Note 2a) ....... 563,354 299,363 182,001
Shareholder servicing fees (Note 2d) ..... 216,675 115,140 45,500
Administrative fees (Note 2b) ............ 120,046 70,875 62,343
Custodian fees ........................... 27,975 17,666 29,900
Transfer agent fees (Note 2e) ............ 12,121 10,668 10,636
Auditing fees ............................ 18,687 15,511 13,102
Legal fees ............................... 29,091 19,779 6,409
Prospectus and shareholder reports ....... 15,138 7,819 4,094
Registration fees ........................ 3,776 -- 3,259
Trustees' fees and expenses (Note 2f) .... 20,913 13,228 4,055
Amortization of organization expenses (Note
1f) .................................... 11,618 10,262 4,586
Insurance expense ........................ 6,554 6,295 5,762
Miscellaneous ............................ 1,480 1,468 1,716
------------- ------------ ---------------
Total Expenses ...................... 1,047,428 588,074 373,363
Less: Waiver of fees (Note 2c, 2d, 2e) (621,441) (378,970) (198,320)
Reimbursement of expenses (Note 2c) (97,439) (81,407) (66,499)
------------- ------------ ---------------
Net Expenses ........................ 328,548 127,697 108,544
------------- ------------ ---------------
Net Investment Income ......................... 3,765,088 753,406 311,222
------------- ------------ ---------------
Realized and Unrealized Gain (Loss) (Note 3):
Net realized gain on investments ......... 3,058,186 6,460,933 262,528
Net realized gain on foreign currency
transactions ........................... -- -- 8,314
Change in unrealized appreciation
(depreciation) during the year (a) ..... 5,262,714 971,832 2,447,750
------------- ------------ ---------------
Net Realized and Unrealized Gain (Loss) ....... 8,320,900 7,432,765 2,718,592
------------- ------------ ---------------
Net Increase in Net Assets Resulting from
Operations .................................. $12,085,988 $8,186,171 $3,029,814
============= ============ ===============
- ------
(a) Includes net unrealized appreciation
(depreciation) of foreign currency ........ -- -- $ (436)
</TABLE>
See Notes to Financial Statements.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Equity Fund Income Fund
------------------------------ -------------------------------
January 16, January 16,
Year Ended 1995(a) to Year Ended 1995(a) to
May 31, May 31, May 31, May 31,
1996 1995 1996 1995
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income ................... $ 280,822 $ 89,003 $ 2,196,012 $ 745,928
Net realized gain (loss) on investments . 1,711,256 (284,225) 728,960 95,032
Net realized gain (loss) on foreign currency
transactions .......................... -- -- -- --
Net change in unrealized appreciation
(depreciation) on investments during the
year .................................. 1,271,632 1,259,149 (1,694,757) 1,250,822
------------- ------------- -------------- -------------
Net increase in net assets resulting from
operation ........................ 3,263,710 1,063,927 1,230,215 2,091,782
Distributions to Shareholders:
From net investment income .............. (263,354) (26,739) (2,194,625) (745,928)
In excess of net investment income ...... -- -- -- (490)
From net realized gains ................. -- -- (300,331) --
------------- ------------- -------------- -------------
Total distributions to shareholders . (263,354) (26,739) (2,494,956) (746,418)
------------- ------------- -------------- -------------
Transactions in Shares of Beneficial Interest:
Net proceeds from shares sold ........... 10,449,094 14,609,717 4,886,857 31,900,620
Reinvestment of dividends ............... 18,659 -- -- --
Cost of shares redeemed ................. (5,381,530) (238,235) (12,850,432) (16,376)
------------- ------------- -------------- -------------
Net increase (decrease) in net assets
from beneficial interest transactions 5,086,223 14,371,482 (7,963,575) 31,884,244
------------- ------------- -------------- -------------
Total Increase (Decrease) in Net
Assets ...................... 8,086,579 15,408,670 (9,228,316) 33,229,608
Net Assets:
Beginning of Period ..................... 15,408,677 7 33,229,615 7
------------- ------------- -------------- -------------
End of Period (b) ....................... $23,495,256 $15,408,677 $ 24,001,299 $33,229,615
============= ============= ============== =============
Capital Share Transactions:
Shares sold ............................. 1,273,927 2,026,411 667,752 4,538,335
Shares issued for dividend reinvestment . 2,276 -- -- --
Shares redeemed ......................... (638,657) (33,335) (1,767,902) (2,294)
------------- ------------- -------------- -------------
Net Increase (Decrease) in Shares Outstanding: . 637,546 1,993,076 (1,100,150) 4,536,041
============= ============= ============== =============
- ------
(a) Commencement of operations
(b) Including undistributed net investment income $ 79,732 $ 62,264 $ 807 $ --
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Total Return Bond Fund
-------------------------------
January 19,
Year Ended 1995(a) to
May 31, May 31,
1996 1995
-------------- -------------
<S> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income ................... $ 2,532,363 $ 473,357
Net realized gain (loss) on investments . 496,712 127,441
Net realized gain (loss) on foreign currency
transactions .......................... -- --
Net change in unrealized appreciation
(depreciation) on investments during the
year .................................. (2,190,037) 1,211,696
-------------- -------------
Net increase in net assets resulting from
operation ........................ 839,038 1,812,494
Distributions to Shareholders:
From net investment income .............. (2,524,201) (473,357)
In excess of net investment income ...... -- (289)
From net realized gains ................. (557,621) --
-------------- -------------
Total distributions to shareholders . (3,081,822) (473,646)
-------------- -------------
Transactions in Shares of Beneficial Interest:
Net proceeds from shares sold ........... 44,811,645 23,574,319
Reinvestment of dividends ............... 91,507 8,583
Cost of shares redeemed ................. (2,556,385) (8,258)
-------------- -------------
Net increase (decrease) in net assets
from beneficial interest transactions 42,346,767 23,574,644
-------------- -------------
Total Increase (Decrease) in Net
Assets ...................... 40,103,983 24,913,492
Net Assets:
Beginning of Period ..................... 24,913,499 7
-------------- -------------
End of Period (b) ....................... $65,017,482 $24,913,499
============== =============
Capital Share Transactions:
Shares sold ............................. 6,054,335 3,333,799
Shares issued for dividend reinvestment . 12,229 1,176
Shares redeemed ......................... (340,750) (1,174)
-------------- -------------
Net Increase (Decrease) in Shares Outstanding: . 5,725,814 3,333,801
============== =============
- ------
(a) Commencement of operations
(b) Including undistributed net investment income $ 13,244 $ --
</TABLE>
See Notes to Financial Statements.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
Balanced Fund Equity Growth Fund
-------------------------------- --------------------------------
July 11, July 11,
Year Ended 1994(a) to Year Ended 1994(a) to
May 31, May 31, May 31, May 31,
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income ................... $ 3,765,088 $ 3,129,416 $ 753,406 $ 556,925
Net realized gain (loss) on investments . 3,058,186 1,047,160 6,460,933 2,653,866
Net realized gain (loss) on foreign currency
transactions .......................... -- -- -- --
Net change in unrealized appreciation
(depreciation) on investments during the
year .................................. 5,262,714 5,039,201 971,832 3,007,858
-------------- -------------- -------------- --------------
Net increase in net assets resulting from
operation ........................ 12,085,988 9,215,777 8,186,171 6,218,649
Distributions to Shareholders:
From net investment income .............. (3,769,789) (2,224,147) (816,257) (409,641)
In excess of net investment income ...... -- -- -- --
From net realized gains ................. (2,141,545) (250,952) (4,129,704) --
-------------- -------------- -------------- --------------
Total distributions to shareholders . (5,911,334) (2,475,099) (4,945,961) (409,641)
-------------- -------------- -------------- --------------
Transactions in Shares of Beneficial Interest:
Net proceeds from shares sold ........... 58,108,025 96,454,563 27,128,750 73,548,734
Reinvestment of dividends ............... 1,427 685 1,783 143
Cost of shares redeemed ................. (43,123,869) (28,734,782) (51,632,981) (27,027,759)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
from beneficial interest transactions 14,985,583 67,720,466 (24,502,448) 46,521,118
-------------- -------------- -------------- --------------
Total Increase (Decrease) in Net
Assets ...................... 21,160,237 74,461,144 (21,262,238) 52,330,126
Net Assets:
Beginning of Period ..................... 74,477,811 16,667 52,346,793 16,667
-------------- -------------- -------------- --------------
End of Period (b) ....................... $ 95,638,048 $ 74,477,811 $ 31,084,555 $ 52,346,793
============== ============== ============== ==============
Capital Share Transactions:
Shares sold ............................. 7,347,793 13,689,338 3,291,231 10,437,754
Shares issued for dividend reinvestment . 180 99 217 20
Shares redeemed ......................... (5,442,894) (4,018,895) (6,358,222) (3,785,559)
-------------- -------------- -------------- --------------
Net Increase (Decrease) in Shares Outstanding: . 1,905,079 9,670,542 (3,066,774) 6,652,215
============== ============== ============== ==============
- ------
(a) Commencement of operations
(b) Including undistributed net investment income $ 864,007 $ 905,269 $ 84,433 $ 147,284
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
International Equity Fund
------------------------------
January 24,
Year Ended 1995(a) to
May 31, May 31,
1996 1995
------------- -------------
<S> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income ................... $ 311,222 $ 91,366
Net realized gain (loss) on investments . 262,528 9,535
Net realized gain (loss) on foreign currency
transactions .......................... 8,314 (779)
Net change in unrealized appreciation
(depreciation) on investments during the
year .................................. 2,447,750 815,540
------------- -------------
Net increase in net assets resulting from
operation ........................ 3,029,814 915,662
Distributions to Shareholders:
From net investment income .............. (259,741) --
In excess of net investment income ...... -- --
From net realized gains ................. (128,616) --
------------- -------------
Total distributions to shareholders . (388,357) --
------------- -------------
Transactions in Shares of Beneficial Interest:
Net proceeds from shares sold ........... 15,986,577 8,407,110
Reinvestment of dividends ............... -- --
Cost of shares redeemed ................. (2,910,308) (518,604)
------------- -------------
Net increase (decrease) in net assets
from beneficial interest transactions 13,076,269 7,888,506
------------- -------------
Total Increase (Decrease) in Net
Assets ...................... 15,717,726 8,804,168
Net Assets:
Beginning of Period ..................... 8,804,175 7
------------- -------------
End of Period (b) ....................... $24,521,901 $8,804,175
============= =============
Capital Share Transactions:
Shares sold ............................. 1,953,107 1,189,132
Shares issued for dividend reinvestment . -- --
Shares redeemed ......................... (343,478) (72,205)
------------- -------------
Net Increase (Decrease) in Shares Outstanding: . 1,609,629 1,116,927
============= =============
- ------
(a) Commencement of operations
(b) Including undistributed net investment income $ 150,383 $ 90,558
</TABLE>
See Notes to Financial Statements.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
Equity Fund Income Fund Total Return Bond Fund
------------------------ ----------------------- ------------------------
January 16, January 16, January 19,
Year Ended 1995(a) to Year Ended 1995(a) to Year Ended 1995(a) to
May 31, May 31, May 31, May 31, May 31, May 31,
1996 1995 1996 1995 1996 1995
----------- ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ...... $ 7.73 $ 7.00 $ 7.33 $ 7.00 $ 7.47 $ 7.00
------- ------- ------- ------- ------- ----------
Investment Operations:
Net investment income ................ 0.11 0.05 0.51 0.19 0.48 0.18
Net realized and unrealized gain (loss) 1.20 0.70 (0.27) 0.33 (0.17) 0.47
------- ------- ------- ------- ------- ----------
Total From Investment Operations ... 1.31 0.75 0.24 0.52 0.31 0.65
------- ------- ------- ------- ------- ----------
Distributions:
From net investment income ........... (0.11) (0.02) (0.51) (0.19) (0.48) (0.18)
From net realized gains .............. -- -- (0.07) -- (0.12) --
------- ------- ------- ------- ------- ----------
Total Distributions ................ (0.11) (0.02) (0.58) (0.19) (0.60) (0.18)
------- ------- ------- ------- ------- ----------
Net Asset Value, End of Period ............ $ 8.93 $ 7.73 $ 6.99 $ 7.33 $ 7.18 $ 7.47
======= ======= ======= ======= ======= =======
Total Return .............................. 17.04% 10.80% 3.18% 7.51% 4.20% 9.40%
======= ======= ======= ======= ======= =======
Ratios and Supplemental Data:
Ratios to Average Net Assets
Expenses (c) ......................... 0.36% 0.12%(b) 0.26% 0.12%(b) 0.32% 0.12%(b)
Net Investment Income (c) ............ 1.32% 2.44 %(b) 6.99% 7.17%(b) 6.47% 7.09%(b)
Portfolio Turnover (d) ............... 113% 34% 67% 34% 127% 84%
Net Assets at end of Period (000's omitted) . $23,495 $15,409 $24,001 $33,230 $65,017 $24,913
- ------
(a) Commencement of Operations
(b) Annualized
(c) Reflects a voluntary expense waiver and reimbursement of expenses by the investment advisor. Without these waivers and
reimbursements, the ratios of expenses to average net assets and net investment income to average net assets would have been
as follows:
Expenses to Average Net Assets .. 1.49% 2.67%(b) 1.35% 1.65%(b) 1.33% 1.93%(b)
Net Investment Income to Average Net
Assets ........................ 0.19% (0.12)%(b) 5.90% 5.65%(b) 5.46% 5.28%(b)
(d) Portfolio Turnover calculation excludes in-kind transfers of securities (See Note 3a)
</TABLE>
See Notes to Financial Statements.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
Balanced Fund Equity Growth Fund International Equity Fund
--------------------------- -------------------------- --------------------------
July 11, July 11, January 24,
Year Ended 1994(a) to Year Ended 1994(a) to Year Ended 1995(a) to
May 31, May 31, May 31, May 31, May 31, May 31,
1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ...... $ 7.70 $ 7.00 $ 7.87 $ 7.00 $ 7.88 $ 7.00
------- ------- ------- ------- ------- ------
Investment Operations:
Net investment income ................ 0.34 0.35 0.13 0.08 0.09 0.08
Net realized and unrealized gain (loss) 0.78 0.64 1.39 0.85 1.20 0.80
------- ------- ------- ------- ------- ------
Total From Investment Operations ... 1.12 0.99 1.52 0.93 1.29 0.88
------- ------- ------- ------- ------- ------
Distributions:
From net investment income ........... (0.36) (0.26) (0.13) (0.06) (0.12) --
From net realized gains .............. (0.20) (0.03) (0.60) -- (0.06) --
------- ------- ------- ------- ------- ------
Total Distributions ................ (0.56) (0.29) (0.73) (0.06) (0.18) --
------- ------- ------- ------- ------- ------
Net Asset Value, End of Period ............ $ 8.26 $ 7.70 $ 8.66 $ 7.87 $ 8.99 $ 7.88
======= ======= ======= ======= ======= ======
Total Return .............................. 15.07% 14.59% 20.01% 13.38% 16.58% 12.57%
======= ======= ======= ======= ======= ======
Ratios and Supplemental Data:
Ratios to Average Net Assets
Expenses (c) ......................... 0.38% 0.12%(b) 0.28% 0.12%(b) 0.60% 0.25%(b)
Net Investment Income (c) ............ 4.34% 5.55 %(b) 1.64% 1.27%(b) 1.71% 3.47%(b)
Portfolio Turnover (d) ............... 56% 57% 103% 122% 19% 8%
Net Assets at end of Period (000's omitted) . $95,638 $74,478 $31,085 $52,347 $24,522 $8,804
- ------
(a) Commencement of Operations
(b) Annualized
(c) Reflects a voluntary expense waiver and reimbursement of expenses by the investment advisor. Without these waivers and
reimbursements, the ratios of expenses to average net assets and net investment income to average net assets would have been
as follows:
Expenses to Average Net Assets .. 1.21% 1.32%(b) 1.28% 1.36%(b) 2.05% 3.32%(b)
Net Investment Income to Average Net
Assets ........................ 3.51% 4.35%(b) 0.64% 0.03%(b) 0.26% 0.40%(b)
(d) Portfolio Turnover calculation excludes in-kind transfers of securities (See Note 3a)
</TABLE>
See Notes to Financial Statements.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES:
Excelsior Institutional Trust ("Trust") is registered under the Investment
Company Act of 1940 ("Act") and the Securities Act of 1933, as an open-end
diversified management investment company and is comprised of nine funds
(each a "Fund", collectively, the "Funds"), each having its own investment
objectives and policies.
These financial statements pertain to the following six Funds: Excelsior
Institutional Equity Fund ("Equity Fund"), Excelsior Institutional Income
Fund ("Income Fund"), Excelsior Institutional Total Return Bond Fund ("Total
Return Bond Fund"), Excelsior Institutional Balanced Fund ("Balanced Fund"),
Excelsior Institutional Equity Growth Fund ("Equity Growth Fund") and
Excelsior Institutional International Equity Fund ("International Equity
Fund"). The financial statements for Excelsior Institutional Bond Index Fund
are presented separately. Excelsior Institutional Value Equity Fund and
Excelsior Institutional Optimum Growth Fund commenced operations on June 1,
1996.
Prior to December 18, 1995, the Trust sought to achieve each Fund's
investment objective by investing all of the Fund's investable assets in a
corresponding portfolio or series (each a "Portfolio"; collectively, the
"Portfolios"), of St. James Portfolios, an open-end diversified management
investment company. Each Fund had the same investment objective and policies
as its corresponding Portfolio. The value of a Fund's investment reflected
its proportionate beneficial interest in the net assets of its corresponding
Portfolio. At meetings of the Board of Trustees of the Trust held on August
29, September 13 and October 6, 1995, the Trustees of the Trust approved a
restructuring of the Trust (the "Restructuring"), as more fully described
below. The Restructuring was ratified by the shareholders of the Trust at a
special meeting of shareholders held on November 15, 1995. Pursuant to the
Restructuring, (i) on December 15, 1995, the Trust withdrew the investment of
all of the assets of the Equity Fund, Income Fund, Total Return Bond Fund,
Balanced Fund, Equity Growth Fund and International Equity Fund from their
corresponding Portfolio of St. James Portfolios and thereafter began to
operate each such Fund in a one-tier mutual fund structure; (ii) on December
29, 1995, the Excelsior Institutional Value Equity Income Fund, Excelsior
Institutional Equity Index Fund and Excelsior Institutional Small
Capitalization Fund were liquidated; and (iii) effective December 18, 1995,
United States Trust Company of New York ("U.S. Trust"), Chase Global Funds
Services Company ("CGFSC"), a subsidiary of The Chase Manhattan Bank, N.A.,
and Federated Administrative Services ("FAS"), a wholly-owned subsidiary of
Federated Investors, replaced Signature Financial Services, Inc. ("SFSI") as
administrators of the Trust.
The following is a summary of the significant accounting policies of the
Funds. Such policies are in conformity with generally accepted accounting
principles for investment companies and are consistently followed by the
Funds in the preparation of the financial statements. Generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures on the financial statements.
Actual results could differ from these estimates.
a) Valuation of Investments--Investments in securities that are traded on
a domestic stock exchange are valued at the last sale price on the exchange
on which such securities are primarly traded or at the last sale price on a
national securities market. Securities traded over-the-counter are valued
each business day on the basis of closing over-the-counter bid prices.
Securities for which there were no transac-
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements - (Continued)
tions are valued at the average of the most recent bid and asked prices (as
calculated by an independent pricing service (the "Service") based upon its
evaluation of the market for such securities) when, in the judgment of the
Service, quoted bid and asked prices for securities are readily available and
are representative of the market. Bid price is used when no asked price is
available. Investments in securities that are primarily traded on foreign
securities exchanges are generally valued at the preceding closing values of
such securities on their respective exchanges, except that when an occurrence
subsequent to the time a value was so established is likely to have changed
such value, then a fair value of those securities will be determined by
consideration of other factors under the direction of the Funds' Trustees. A
security which is traded on more than one exchange is valued at the quotation
on the exchange determined to be the primary market on which the security is
traded.
All other foreign securities are valued at the last current bid quotation
if market quotations are available, or at fair value as determined in
accordance with policies established by the Board of Trustees. Investment
valuations, other assets, and liabilities initially expressed in foreign
currencies are converted each business day into U.S. dollars based upon
current exchange rates. Purchases and sales of foreign investments and income
and expenses are converted into U.S. dollars based upon currency exchange
rates prevailing upon the respective dates of such transactions. Gains and
losses attributable to foreign currency exchange rates are recorded for
financial statement purposes as realized gains and losses on investments.
Securities for which market quotations are not readily available are
valued at fair value pursuant to guidelines adopted by the Funds' Trustees.
Short-term debt instruments with remaining maturities of 60 days or less are
valued at amortized cost, which approximates market value.
b) Forward foreign currency exchange contracts--The International Equity
Fund's participation in forward currency exchange contracts will be limited
to hedging involving either specific transactions or portfolio positions.
Transaction hedging involves the purchase or sale of foreign currency with
respect to specific receivables or payables of a Fund generally arising in
connection with the purchase or sale of its portfolio securities. Risk may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and is generally limited
to the amount of unrealized gain on the contracts, if any, on the date of
default. Risk may also arise from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. Contracts are marked-to-market
daily and the change in market value recorded as unrealized appreciation or
depreciation. Realized gains and losses arising from such transactions are
included in net realized gains or losses from foreign currency transactions.
c) Security transactions and investment income--Security transactions are
recorded on a trade date basis. Realized gains and losses on investments sold
are recorded on the basis of identified cost. Interest income, including
where applicable, amortization of discounts and premiums on investments, is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date, except for certain dividends from foreign securities, which are
recorded as soon as the Fund is informed of the dividend.
d) Dividends to Shareholders--Dividends equal to all or substantially all
of each Fund's net investment income will be declared and paid as follows:
For the Equity Fund, Balanced Fund and the Equity Growth
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements - (Continued)
Fund, dividends will be declared and paid at least quarterly; for the Income
Fund and Total Return Bond Fund, dividends will be declared daily and paid at
least monthly; and for the International Equity Fund, dividends will be
declared and paid at least once a year. Distributions to shareholders of net
realized capital gains, if any, are normally declared and paid annually, but
the Funds may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code. To the extent that
net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Trust not to distribute such gain.
Dividends and distributions are determined in accordance with Federal
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, passive foreign investment companies, deferral
of losses on wash sales and post-October losses.
In order to avoid a Federal excise tax, each Fund is required to
distribute certain minimum amounts of net realized capital gain and net
investment income for the respective periods ending October 31 and December
31 in each calendar year.
e) Repurchase agreements--The Funds may purchase portfolio securities from
financial institutions deemed to be creditworthy by the investment advisor
subject to the seller's agreement to repurchase and the Funds' agreement to
resell such securities at mutually agreed upon prices. Securities purchased
subject to such repurchase agreements are deposited with the Funds' custodian
or are maintained in the Federal Reserve/Treasury book-entry system and must
have, at all times, an aggregate market value of not less than 102% of the
repurchase price (including accrued interest).
If the value of the underlying security, including accrued interest, falls
below 102% of the repurchase price plus accrued interest, the Funds will
require the seller to deposit additional collateral by the next business day.
Default or bankruptcy of the seller may, however, expose the applicable Fund
to the possible delay in connection with the disposition of the underlying
securities or loss to the extent that proceeds from a sale of the underlying
securities were less than the repurchase price under the agreement.
f) Deferred Organization Expense--Expenses incurred by each Fund in
connection with its organization are being amortized on a straight-line basis
over a five-year period.
g) Expense Allocation--Expenses incurred by the Trust with respect to any
two or more Funds in the Trust are allocated in proportion to the average net
assets of each Fund, except where allocations of direct expenses to each Fund
can otherwise be fairly made. Expenses directly attributable to a Fund are
charged to that Fund.
h) Federal Income Taxes--It is the policy of each Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interest to the shareholders, by complying with the requirements of the
Internal Revenue Code of 1986, as amended, applicable to regulated investment
companies, and by distributing substantially all of its taxable earnings to
its shareholders.
Net capital losses incurred after October 31 and within the taxable year
are deemed to arise on the first business day of a Fund's next taxable year.
International Equity Fund incurred, and elected to defer, net currency losses
of approximately $7,000 for the year ended May 31, 1996.
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements - (Continued)
At May 31, 1996, the aggregate cost and gross unrealized appreciation and
gross unrealized depreciation in the value of investments owned by the Funds,
as computed on a federal tax basis, were as follows:
<TABLE>
<CAPTION>
Total
Return Equity International
Equity Income Bond Balanced Growth Equity
Fund Fund Fund Fund Fund Fund
------------- ------------- -------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Aggregate cost . $20,950,984 $24,276,938 $65,845,628 $84,306,724 $26,056,176 $21,315,314
============= ============= ============== ============= ============= ===============
Gross unrealized
appreciation .. $ 2,914,985 $ 199,507 $ 334,647 $11,373,037 $ 4,093,924 $ 3,418,876
------------- ------------- -------------- ------------- ------------- ---------------
Gross unrealized
depreciation .. (399,427) (643,442) (1,404,712) (1,083,457) (121,379) (312,964)
------------- ------------- -------------- ------------- ------------- ---------------
Net unrealized
appreciation
(depreciation) . $ 2,515,558 $ (443,935) $(1,070,065) $10,289,580 $ 3,972,545 $ 3,105,912
============= ============= ============== ============= ============= ===============
</TABLE>
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY
TRANSACTIONS:
a) U.S. Trust serves as the investment advisor to the Equity Fund, Income
Fund and Total Return Bond Fund. For the services provided pursuant to the
Investment Advisory Agreements, U.S. Trust is entitled to receive a fee,
computed daily and paid monthly, at the annual rate of 0.65% of the average
daily net assets of each Fund.
United States Trust Company of The Pacific Northwest ("U.S. Trust
Pacific") serves as the investment advisor to the Balanced Fund, Equity
Growth Fund and International Equity Fund. U.S. Trust Pacific is a subsidiary
of U.S. Trust. U.S. Trust Pacific has delegated the daily management of the
security holdings of these Funds to the investment managers named below,
acting as subadvisors:
<TABLE>
<S> <C>
Balanced Fund ............... Becker Capital Management, Inc.
Equity Growth Fund .......... Luther King Capital Management
International Equity Fund ... Harding, Loevner Management, L.P.
</TABLE>
For the services provided pursuant to the Investment Advisory Agreements,
U.S. Trust Pacific is entitled to receive a fee, computed daily and paid
monthly, at the annual rate of 0.65% of the average daily net assets of each
of the Balanced Fund and Equity Growth Fund, and 1.00% of the average daily
net assets of the International Equity Fund. Pursuant to separate subadvisory
agreements between U.S. Trust Pacific and each subadvisor, subadvisory fees
are payable monthly by U.S. Trust Pacific, computed on the average daily
value of each Fund's net assets at the following annual rates: 0.425% for the
Balanced Fund, 0.40% for the Equity Growth Fund, and 0.50% for the
International Equity Fund. The subadvisors are compensated only by U.S. Trust
Pacific, and receive no fee directly from the Funds.
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements - (Continued)
b) Effective December 18, 1995, U.S. Trust, CGFSC and FAS (collectively, the
"Administrators") provide administrative services to the Trust. For the
services provided to the Funds, the Administrators are entitled jointly to
annual fees, computed daily and paid monthly, based on the combined aggregate
average daily net assets of the Funds (excluding the International Equity
Fund), Excelsior Funds, Inc. (excluding Excelsior Fund's international equity
portfolios), and Excelsior Tax-Exempt Funds, Inc., all of which are
affiliated investment companies, as follows: .200% of the first $200 million,
.175% of the next $200 million, and .150% over $400 million. Administration
fees payable by each Fund of the three investment companies are determined in
proportion to the relative average daily net assets of the respective Funds
for the period paid. The Administrators are entitled jointly to annual fees,
computed daily and paid monthly, based on the average daily net assets of the
International Equity Fund at an annual rate of .20%. For the year ended May
31, 1996, administration fees charged by U.S. Trust were as follows:
<TABLE>
<S> <C>
Equity Fund ..................................................... $ 948
Income Fund ..................................................... $1,228
Total Return Bond Fund .......................................... $2,184
Balanced Fund ................................................... $4,116
Equity Growth Fund .............................................. $1,385
International Equity Fund ....................................... $5,568
</TABLE>
Prior to December 18, 1995, SFSI served as servicing and fund accounting
agent to the Trust. For the services provided to the Trust, SFSI received a
servicing fee, computed daily and paid monthly, at the annual rate of 0.07%
of the average daily net assets of the funds and a fund accounting fee,
payable monthly, of $12,000 per year per Fund plus out of pocket expense.
c) From time to time, as they may deem appropriate in their sole
discretion, or pursuant to applicable state expense limitations, U.S. Trust,
U.S. Trust Pacific and the Administrators may undertake to waive a portion or
all of the fees payable to them and also may reimburse the Funds for a
portion of other operating expenses. Effective January 1, 1996 and until
further notice, U.S. Trust and U.S. Trust Pacific have agreed to voluntarily
waive fees and reimburse expenses to the extent necessary to maintain an
annual operating expense ratio of not more than 0.50% of average daily net
assets of the Income Fund and Total Return Bond Fund; 0.70% of average daily
net assets of the Equity Fund, Balanced Fund and Equity Growth Fund; and
0.90% of average daily net assets of the International Equity Fund. Prior to
Janauary 1, 1996, U.S. Trust, U.S. Trust Pacific and/or the Administrators
voluntarily waived and reimbursed fees to the extent necessary to maintain an
annual operating expense ratio of not more than 0.12% of average daily net
assets for each Fund, except for the International Equity Fund and of not
more than 0.25% of average daily net assets of the International Equity Fund.
For the year ended May 31, 1996, U.S. Trust voluntarily waived fees and
reimbursed expenses to the Funds in the following amounts:
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements - (Continued)
<TABLE>
<S> <C>
Equity Fund ..................................................... $178,163
Income Fund ..................................................... $254,776
Total Return Bond Fund .......................................... $290,314
Balanced Fund ................................................... $493,205
Equity Growth Fund .............................................. $336,237
International Equity Fund ....................................... $210,319
</TABLE>
d) The Trust, on behalf of the Funds, has also entered into shareholder
servicing agreements with various service organizations (which may include
affiliates of U.S. Trust) requiring them to provide administrative support
services to their customers owning shares of the Portfolios. As a
consideration for the administrative services provided by each service
organization to its customers, each Portfolio will pay the service
organizations an administrative service fee at the annual rate of up to .40%
of the average daily net asset value of its shares held by the service
organizations' customers. Such services may include assisting in processing
purchase, exchange and redemption requests; transmitting and receiving funds
in connection with customer orders to purchase, exchange or redeem shares;
and providing periodic statements.
For the year ended May 31, 1996, Shareholder Service Agents voluntarily
agreed to waive shareholder servicing fees in the following amounts:
<TABLE>
<S> <C>
Equity Fund ..................................................... $ 53,071
Income Fund ..................................................... $ 78,555
Total Return Bond Fund .......................................... $ 97,868
Balanced Fund ................................................... $216,675
Equity Growth Fund .............................................. $115,140
International Equity Fund ....................................... $ 45,500
</TABLE>
e) Effective September 1, 1995 CGFSC serves as the Trust's transfer agent.
For the year ended May 31, 1996, CGFSC voluntarily agreed to waive transfer
agency fees in the amount of $9,000 per Fund.
f) Independent Trustees receive an annual retainer of $4,000 and an
additionsl $250 for each meeting of the Board of Trustee attended. In
addition, the Trust reimburses independent Trustees for reasonable expenses
incurred when acting in their capacity as Trustees. Officers and Trustees of
the Trust, deemed to be affiliated or "interested parties" under the Act
receive no compensation from the Trust for their services.
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements - (Continued)
3. PURCHASES AND SALES OF INVESTMENT SECURITIES.
a) Investment transactions (excluding short-term investments) for the year
ended May 31, 1996 were as follows:
<TABLE>
<CAPTION>
Cost of Contribution Proceeds
Purchases In Kind from Sales
------------- -------------- -------------
<S> <C> <C> <C>
Equity Fund ............. $26,373,581 $ -- $22,836,043
Income Fund ............. $20,339,359 $ 585,797 $28,798,042
Total Return Bond Fund .. $78,705,593 $1,111,143 $45,864,739
Balanced Fund ........... $60,520,459 $ -- $45,320,706
Equity Growth Fund ...... $43,445,421 $ -- $71,295,786
International Equity Fund . $15,770,075 $ -- $ 3,145,124
</TABLE>
b) Investment transactions in U.S. Government and Agency Obligations
(excluding short-term investments) for the year ended May 31, 1996 were as
follows:
<TABLE>
<CAPTION>
Cost of Contribution Proceeds
Purchases In Kind from Sales
------------- -------------- -------------
<S> <C> <C> <C>
Equity Fund ............. $ -- $ -- $ --
Income Fund ............. $15,689,181 $466,205 $25,693,222
Total Return Bond Fund .. $51,458,203 $966,853 $37,831,984
Balanced Fund ........... $23,698,643 $ -- $14,526,492
Equity Growth Fund ...... $ -- $ -- $ --
International Equity Fund . $ -- $ -- $ --
</TABLE>
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements - (Continued)
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees
Excelsior Institutional Trust
We have audited the accompanying statements of assets and liabilities,
including the schedule of investments of the Excelsior Institutional Equity
Fund, Excelsior Institutional Income Fund, Excelsior Institutional Total
Return Bond Fund, Excelsior Institutional Balanced Fund, Excelsior
Institutional Equity Growth Fund and Excelsior Institutional International
Equity Fund, six of the Funds comprising Excelsior Institutional Trust, (the
"Trust"), as of May 31, 1996, the related statements of operations for the
year then ended, and the statements of changes in net assets and financial
highlights for each of the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights 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
financial highlights 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 May 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 financial highlights referred to
above present fairly, in all material respects, the financial position of
each of the respective Funds constituting the Excelsior Institutional Trust
at May 31, 1996, the results of their operations for the year then ended, and
the changes in their net assets and financial highlights for each of the
periods indicated therein, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP LOGO
Boston, Massachusetts
July 15, 1996
<PAGE>
FEDERAL TAX INFORMATION (UNAUDITED):
For the year ended May 31, 1996, the percentage of dividends paid that
qualify for the 70% dividends received deduction for corporate shareholders,
the designation of long-term capital gain and the amounts expected to be
passed through to shareholders as foreign tax credits are approximated as
follows:
Dividends
Received Long-Term Foreign Tax
Deduction Capital Gain Credit
------------- --------------- -------------
Equity Fund ................. 19% -- --
Income Fund ................. -- -- --
Total Return Bond Fund ...... -- -- --
Balanced Fund ............... 14% $1,067,000 --
Equity Growth Fund .......... 4% 96,000 --
International Equity Fund ... -- -- $43,000
<PAGE>
EXCELSIOR INSTITUTIONAL BOND INDEX FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1996
<TABLE>
<CAPTION>
Assets:
<S> <C> <C>
Investment in Bond Index Portfolio ("Portfolio"), at value (Note
2a) ........................................................ $15,122,373
Receivable for fund shares sold ............................... 1,190
Deferred organization expenses (Note 2d) ...................... 6,593
-------------
Total assets .......................................... 15,130,156
Liabilities:
Payable for fund shares redeemed .............................. $ 188
Dividends payable ............................................. 86,418
Accrued expenses .............................................. 38,197
--------
Total liabilities ..................................... 124,803
-------------
Net Assets ...................................................... $15,005,353
=============
Net Assets Consist of:
Paid-in capital ............................................... $14,946,517
Net unrealized depreciation from Portfolio .................... (22,644)
Accumulated net realized gain from Portfolio .................. 81,480
-------------
Net Assets ...................................................... $15,005,353
=============
Shares outstanding (Unlimited number of $0.00001 par value share
authorized) ................................................... 2,154,485
Net Asset Value Per Share (net assets / shares outstanding) ..... $ 6.96
=============
</TABLE>
See Notes to Financial Statements
<PAGE>
EXCELSIOR INSTITUTIONAL BOND INDEX FUND
STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1996
Investment Income from Portfolio (Note 2b):
Interest Income ............................... $1,100,499
Portfolio Expenses ............................ --
----------
1,100,499
Expenses (Note 2f):
Administrative fees (Note 3a) ................. $ 25,645
Shareholder servicing fees (Note 3b) .......... 37,519
Transfer agent fees (Note 3c) ................. 9,500
Auditing fees ................................. 8,751
Insurance expense ............................. 2,778
Prospectus and shareholder reports ............ 2,016
Legal fees .................................... 1,659
Trustees' fees and expenses (Note 3e) ......... 888
Registration fees ............................. 106
Amortization of organization expenses (Note 2d) . 1,998
Miscellaneous ................................. 208
----------
Total expenses ............................... 91,068
Less: Waiver of fees (Note 3d) ............... (47,019)
Reimbursement of expenses (Note 3d) .... (26,527)
----------
Net expenses ................................. 17,522
----------
Net investment income ........................... 1,082,977
----------
Realized and Unrealized Gain (Loss) from Portfolio:
Net realized gain ............................. 228,297
Net change in unrealized (depreciation) ....... (634,192)
----------
Net Realized and Unrealized Loss ................ (405,895)
----------
Net Increase in Net Assets Resulting from Operations $ 677,082
==========
See Notes to Financial Statements
<PAGE>
EXCELSIOR INSTITUTIONAL BOND INDEX FUND
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding each period are as follows:
<TABLE>
<CAPTION>
Year Ended May 31,
------------------------
1996 1995(a)
--------- -----------
<S> <C> <C>
Net Asset Value, Beginning of Period ................ $ 7.26 $ 7.00
-------
Investment Operations:
Net investment income ............................. 0.50 0.46
Net realized and unrealized gain (loss) from Portfolio (0.20) 0.28
------ -------
Total from investment operations .................. 0.30 0.74
------ -------
Distributions:
From net investment income ........................ (0.50) (0.46)
In excess of net investment income ................ -- 0.00(b)
From net realized gains ........................... (0.10) (0.02)
-------
Total distributions ............................... (0.60) (0.48)
------ -------
Net Asset Value, End of Period ...................... $ 6.96 $ 7.26
====== =======
Total return ........................................ 4.12% 11.03%(c)
Ratios to average net assets
Expenses(d) ....................................... 0.11% 0.12%*(e)
Net investment income ............................. 6.91% 7.33%*(e)
Supplemental data
Net assets, end of period (000 omitted) ........... $15,005 $15,565
(a) Reflects operations for the period from July 11, 1994 (commencement of
operations) to May 31, 1995.
(b) Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
distributions do not represent a return of capital for Federal income tax
purposes. The amount does not round to a penny per share.
(c) Not annualized.
(d) Reflects the Fund's proportionate share of the Portfolio's expenses as
well as voluntary fee waivers and reimbursements by agents of the
Portfolio and a voluntary fee waiver and an expense reimbursement by
agents of the Trust. If the voluntary waivers and expense reimbursements
had not been in place the ratios of expenses and net investment income to
average net assets would have been as follows:
Expenses .................................. 0.58% 1.23%(e)
Net Investment Income ..................... 6.44% 6.22%(e)
(e) Annualized.
</TABLE>
See Notes to Financial Statements
<PAGE>
EXCELSIOR INSTITUTIONAL BOND INDEX FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Period Ended
May 31, 1996 May 31, 1995*
--------------- ---------------
<S> <C> <C>
Operations:
Net investment income ............................. $ 1,082,977 $ 1,405,515
Net realized gain from Portfolio ($228,827 and $136,598
for federal Income Tax Purposes) ............... 228,297 136,598
Net change in unrealized appreciation (depreciation)
from Portfolio during the year ................. (634,192) 611,548
--------------- ---------------
Net increase in net assets resulting from operations 677,082 2,153,661
--------------- ---------------
Distributions to Shareholders:
From net investment income ........................ (1,082,479) (1,405,515)
In excess of net investment income ................ -- (498)
From net realized gains ........................... (222,525) (60,890)
--------------- ---------------
Total distributions to shareholders ............ (1,305,004) (1,466,903)
--------------- ---------------
Transactions in Shares of Beneficial Interest:
Net proceeds from share sales ..................... 10,905,117 33,020,207
Reinvestment of dividends ......................... 1,590 1,162
Cost of shares redeemed ........................... (10,837,971) (18,160,255)
--------------- ---------------
Net increase in net assets from beneficial interest
transactions ................................. 68,736 14,861,114
--------------- ---------------
Total Increase in Net Assets ................... (559,186) 15,547,872
Net Assets:
Beginning of period ............................... 15,564,539 16,667
--------------- ---------------
End of period ..................................... $ 15,005,353 $ 15,564,539
=============== ===============
Capital Share Transactions:
Shares sold ........................................ 1,513,852 4,741,011
Shares issued for dividend reinvestment ............ 195 167
Shares redeemed .................................... (1,504,886) (2,598,235)
--------------- ---------------
Net Increase in Shares Outstanding: ................. 9,161 2,142,943
=============== ===============
* For the period from July 11, 1994 (commencement of operations) to May 31, 1995
</TABLE>
See Notes to Financial Statements
<PAGE>
Excelsior Institutional Bond Index Fund
Notes to Financial Statements
1. ORGANIZATION
Excelsior Institutional Trust (the "Trust") is registered under the
Investment Company Act of 1940 ("Act") and the Securities Act of 1933, as an
open-end, management investment company and is comprised of nine funds each
having its own investment objectives and policies. The financial statements
included herein are only those of Excelsior Institutional Bond Index Fund
(the "Fund"). The financial statements of the remaining eight funds are
presented separately.
The Fund's investment objective is to provide investment results that
correspond to the investment performance of the Lehman Brothers Aggregate
Bond Index, a broad market-weighted index which encompasses U.S. Treasury and
agency securities, corporate investment grade bonds, and mortgage-backed
securities. The Fund seeks to achieve its investment objective by investing
all of the Fund's investable assets in the Bond Index Portfolio, a
corresponding portfolio (the "Portfolio") of Federated Investment Portfolios,
an open-end diversified management investment company. The Fund has the same
investment objective and policies as the Portfolio. The value of the Fund's
investment reflects its proportionate beneficial interest in the net assets
of the Portfolio. At May 31, 1996, the Fund's beneficial interest in the
Portfolio was 66.9%
Prior to January 1, 1996, the Fund sought to achieve its investment objective
by investing all of its investable assets in a corresponding portfolio of St.
James Portfolios, an open-end diversified management investment company. The
Fund had the same investment objective and policies as its corresponding
portfolio. The value of a Fund's investment reflected its proportionate
beneficial interest in the net assets of its corresponding portfolio. At
meetings of the Board of Trustees of the Trust held on August 29, September
13 and October 6, 1995, the Trustees of the Trust approved a restructuring of
the Trust (the "Restructuring"). The Restructuring was ratified by the
shareholders of the Trust at a special meeting of shareholders held on
November 15, 1995. Pursuant to the Restructuring, on December 29, 1995, the
Trust withdrew the investment of all of the assets of the Bond Index Fund
from its corresponding portfolio of St. James Portfolios and thereafter
invested all of the investable assets of the Bond Index Fund in the Bond
Index Portfolio. Effective January 1, 1996, United States Trust Company of
New York ("U.S. Trust"), Chase Global Funds Services Company ("CGFSC"), a
subsidiary of The Chase Manhattan Bank, N.A., and Federated Administrative
Services ("FAS"), a wholly-owned subsidiary of Federated Investors, replaced
Signature Financial Services, Inc. ("SFSI") as administrator of the Trust.
Federated Management, a wholly-owned subsidiary of Federated Investors, is
the investment advisor for the Portfolio. Federated Management has delegated
the daily management of the security holdings of the Portfolio to U.S. Trust,
acting as subadvisor. The advisory fee is charged to the Portfolio.
The performance of the Fund is directly affected by the performance of the
Portfolio. The financial statements of the Portfolio, including the schedule
of investments, are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements.
<PAGE>
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the
Fund. Such policies are in conformity with generally accepted accounting
principles for investment companies and are consistently followed by the Fund
in the preparation of the financial statements. Generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts and disclosures on the financial statements. Actual
results could differ from these estimates.
a) Valuation of Investments -- Valuation of securities by the Portfolio is
discussed in Note 2 of the Portfolio's Notes to Financial Statements which
are included elsewhere in this report.
b) Investment Income -- The Fund records its share of net investment
income realized and unrealized gain and loss and adjusts its investment in
the Portfolio each day. All the net investment income and realized and
unrealized gain and loss of the Portfolio is allocated to the Fund and other
investors in the Portfolio at the time of such determination.
c) Dividends to Shareholders -- Dividends equal to all or substantially
all of the Fund's net investment income will be declared daily and paid at
least once a month. Distributions to shareholders of net realized capital
gains, if any, are normally declared and paid annually.
d) Deferred Organization Expenses -- Expenses incurred by the Fund in
connection with its organization are being amortized on a straight-line basis
over a five-year period.
e) Federal Income Taxes -- It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interest of the shareholders, by complying with the requirements of the
Internal Revenue Code of 1986, as amended, applicable to regulated investment
companies, and by distributing substantially all of its taxable earnings to
its shareholders.
f) Expense Allocation -- Expenses incurred by the Trust with respect to
any two or more Funds in the Trust are allocated in proportion to the average
net assets of each Fund, except where allocations of direct expenses to each
Fund can otherwise be fairly made. Expenses directly attributable to a Fund
are charged to that Fund.
g) Other -- All the net income of the Portfolio is allocated pro rata to
the Fund and the other investors in the Portfolio at the time of such
determination.
3. TRANSACTIONS WITH AFFILIATES
a) Administrative Fee -- Effective January 1, 1996, U.S. Trust, CGFSC and
FAS (collectively, the "Administrators") provide administrative services to
the Trust. For the services provided to the Funds, the Administrators are
entitled jointly to annual fees, computed daily and paid monthly, based on
the combined aggregate average daily net assets of the Funds (excluding the
International Equity Fund), Excelsior Funds, Inc. (excluding Excelsior Fund's
international equity portfolios), and Excelsior Tax-Exempt Funds, Inc., all
of which are affiliated investment companies, as follows: .200% of the first
$200 million, .175% of the next $200 million, and .150% over $400 million.
Administration fees payable by each Fund of the three investment companies
are determined in proportion to the relative average daily net assets of the
respective Funds for the period paid. For the year ended May 31, 1996,
administration fees charged by FAS amounted to $9,951.
<PAGE>
Prior to January 1, 1996, SFSI served as servicing and fund accounting
agent to the Trust. For the services provided to the Trust, SFSI received a
servicing fee, computed daily and paid monthly, at the annual rate of 0.07%
of the average daily net assets of the Funds and a fund accounting fee,
payable monthly, of $12,000 per year per Fund plus out of pocket expenses.
b) Shareholder Servicing Fee -- The Trust, on behalf of the Fund has also
entered into shareholder servicing agreements with various service
organizations (which may include affiliates of U.S. Trust) requiring them to
provide administrative support services to their customers owning shares of
the Fund. As a consideration for the administrative services provided by each
service organization to its customers, the Fund will pay the service
organizations an administrative service fee at the annual rate of up to .40%
of the average daily net asset value of its shares held by the service
organizations' customers. Such services may include assisting in processing
purchase, exchange and redemption requests; transmitting and receiving funds
in connection with customer orders to purchase, exchange or redeem shares,
and providing periodic statements. For the year ended May 31, 1996,
Shareholder Servicing Agents voluntarily agreed to waive shareholder
servicing fees amounting to $37,519.
c) Transfer Agent -- CGFSC serves as the Fund's transfer agent. For the
year ended May 31, 1996, CGFSC voluntarily agreed to waive transfer agency
fees amounting to $9,500.
d) Fee waivers and Expense Reimbursement -- From time to time, as they may
deem appropriate in their sole discretion, or pursuant to applicable state
expense limitations, U.S. Trust, and Federated Management may undertake to
waive a portion or all of the fees payable to them and also may reimburse the
Fund for a portion of other operating expenses. Effective January 1, 1996 and
until further notice, U.S. Trust and Federated Management have agreed to
voluntarily waive fees and reimburse expenses at Fund and Portfolio levels,
respectively, to the extent necessary to maintain a combined annual operating
expense ratio of not more than 0.30% of average daily net assets. For the
year ended May 31, 1996, U.S. Trust voluntarily reimbursed expenses of
$26,527.
e) General -- Independent Trustees receive an annual retainer of $4,000
and an additional $250 for each meeting of the Board of Trustees attended. In
addition, the Trust reimburses independent Trustees for reasonable expenses
incurred when acting in their capacity as Trustees. Officers and Trustees of
the Trust or Portfolio, deemed to be affiliated or "interested parties" under
the Act receive no compensation from the Trust or Portfolio for their
services.
4. INVESTMENT TRANSACTIONS
Additions and reductions in the Fund's investment in the Portfolio for the
year ended May 31, 1996, aggregated $11,090,111 and $12,943,087,
respectively.
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees
Excelsior Institutional Bond Index Fund
We have audited the accompanying statements of assets and liabilities of
the Excelsior Institutional Bond Index Fund as of May 31, 1996, and the
related statements of operations for the year then ended, and the statements
of changes in net assets and the financial highlights for each of the periods
presented therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights 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
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. 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 financial highlights referred
to above present fairly, in all material respects, the financial position of
Excelsior Institutional Bond Index Fund at May 31, 1996, the results of its
operations for the year then ended, the changes in its net assets and
financial highlights for each of the periods presented therein, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP LOGO
Pittsburgh, Pennsylvania
July 18, 1996
- -----------------------------------------------------------------------------
FEDERAL TAX INFORMATION (UNAUDITED):
For the year ended May 31, 1996, the percentage of dividends paid that
qualify for the 70% dividends received deduction for corporate shareholders,
the designation of long-term capital gain and the amounts expected to be
passed through to shareholders as foreign tax credits are approximated as
follows:
Dividends
Received Long-Term Foreign Tax
Deduction Capital Gain Credit
----------- -------------- -------------
Bond Index Fund . -- 134,260 --
