<PAGE>
Investment Advisers
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
U.S. Trust Company of Connecticut
225 High Ridge Road
Stamford, CT 06905
United States Trust Company of the
Pacific Northwest
4380 Southwest Macadam Avenue
Suite 450
Portland, OR 97201
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 A98
[LOGO OF EXCELSIOR INSTITUTIONAL
TRUST APPEARS HERE]
EQUITY FUND
INCOME FUND
TOTAL RETURN BOND FUND
BALANCED FUND
INTERNATIONAL EQUITY FUND
OPTIMUM GROWTH FUND
VALUE EQUITY FUND
Annual Report
March 31, 1998
<PAGE>
LETTER TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the annual report for Excelsior Institutional
Trust. Fiscal 1998 was an exciting year in the financial markets as a whole and
for the fund family. Highlights included exceptional performance by many of the
funds, the reconfiguration of some of our existing equity funds, and the
commencement of several new fund offerings.
During the year, we introduced the Large Cap Growth Fund, Real Estate Fund
and Emerging Markets Fund. These funds provide access to important asset
classes and subclasses not previously offered by Excelsior. As always, we will
continue to evaluate the current Excelsior funds and will consider expanding
our offerings to help you meet your financial goals.
Buoyed by low interest rates and the lack of inflationary pressures,
corporate profits continued to grow. These factors combined to produce another
year of extraordinary returns on domestic equity investments. They also
combined to constrain returns on fixed-income investments to modest levels.
International markets were mixed, with strong returns in Europe, moderate Latin
American returns and down markets in Asia, brought on by a weakened economic
environment and currency devaluations in several countries.
The financial markets will present many challenges and opportunities
during the coming year. Fiscal policy has continued to be effective in keeping
inflation under control. We remain cautiously optimistic regarding the domestic
equity markets. International markets, as a whole, remain attractive. A close
watch will be required in Asia, as efforts are made to right their recent
economic woes. I am confident that the Excelsior fund family will continue to
provide you with the appropriate investment vehicles to respond to a changing
economic environment and to meet your long-term investment objectives.
Sincerely,
/s/ Frederick S. Wonham
-----------------------------------
Frederick S. Wonham
Chairman of the Board and President
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
ADVISER'S MARKET REVIEW
- --------------------------------------------------------------------------------
The U.S. stock market staged one of its strongest gains in history for the
one year period ending March 31, 1998. For that period, the Standard & Poor's
500 Composite Stock Price Index rose 48.00%(1) and the Dow Jones Industrial
Average rose 36.00%.(2) Some of the factors that resulted in this return
included rising corporate earnings, a falling rate of inflation, falling
interest rates, and very heavy mutual fund inflows.
Equities of smaller companies also rose strongly. The Russell 2000 Index,
a widely accepted measure of small cap performance, rose 42.01%(3) over the
same period.
The bond market benefited from a continuing decline in the rate of
inflation. The Lehman Brothers Aggregate Bond Index rose 12.00%.(4)
International markets benefited from a continuing decline in the rate of
inflation. The FT/S&P-Actuaries World Indices -- World Excluding U.S. Index
rose 17.21%.(5) This figure disguised much higher performance in Europe, where
economic fundamentals are sound, and much lower performance in the Far East,
where deflationary trends caused stock markets to fall.
- ------------
(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: Lipper Analytical Services, Inc. -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Dow Jones Industrial Average is a widely accepted unmanaged index of U.S.
stock market performance.
(3) Source: The Russell Company -- The 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 -- The Lehman Brothers Aggregate Bond 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 March 31, 1998, the Fund realized a total
return of 51.58%,* versus 48.00%** for the Standard & Poor's 500 Composite
Stock Price Index. In the first fiscal quarter, much of the domestic stock
market's strong performance was concentrated in the very largest stocks by
market capitalization, and this was evidenced by the solid performance of many
of the Fund's large companies. The financial sector of the market continued to
perform well, as did the drug group. In the second and third fiscal quarters,
the Fund continued to benefit from its holdings in the financial and technology
sectors. Moving to the final fiscal quarter, the Fund continued to make solid
gains with strong performers in the technology and drug sectors. Our strategy
remained consistent throughout the year; that is, we emphasized a long-term
investment horizon (as opposed to attempts at timing the market), broad
portfolio diversification across strategies and investment themes, and solid
good business values--that is, companies who have demonstrated and continue to
demonstrate solid growth in a volatile environment. As the year progressed, we
also added selectively to our smaller- and medium-capitalization holdings as
they appeared to represent better relative value than many of their
larger-capitalization peers.
Equity Fund+
- ---------------------------------
Average Annual Total Return
Ended on 3/31/98*
- ---------------------------------
1 year Since Inception (1/16/95)
- ---------------------------------
51.58% 27.28%
- ---------------------------------
Standard & Poor's 500
Composite Stock Price Index** Equity Fund
----------------------------- -----------
01/16/95 $10,000 $10,000
03/31/95 $10,970 $10,507
09/30/95 $12,970 $11,946
03/31/96 $14,490 $12,388
09/30/96 $15,610 $13,403
03/31/97 $17,360 $14,294
09/30/97 $21,920 $18,234
03/31/98 $25,690 $21,667
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
and a broad-based index since 1/16/95 (inception 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 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 seeks to achieve its investment objective of providing as high a
level of current interest income as is consistent with moderate risk of capital
and maintenance of liquidity, the Fund invests principally in a broad range of
investment-grade fixed income securities. Through much of the 1998 fiscal year,
we overweighted the portfolio in longer maturities while maintaining an
emphasis on high credit quality investments. The strategy proved effective,
particularly in the third fiscal quarter, as long maturities outperformed
intermediates and corporate spreads widened substantially due to the crisis in
Asia. In the fourth fiscal quarter, we sold into the rally of early January and
then settled back for the balance of the quarter, slightly shorter than the
Fund's Lehman benchmark, before beginning to lengthen again toward the end of
the quarter. We also added to our mortgage-backed securities due to reduced
bond market volatility. For the fiscal year ended March 31, 1998, the Fund
achieved a total return of 11.78%.*
Income Fund+
- ---------------------------------
Average Annual Total Return
Ended on 3/31/98*
- ---------------------------------
1 year Since Inception (1/16/95)
- ---------------------------------
11.78% 8.71%
- ---------------------------------
Lehman Brothers
Int Govt/Corp
Bond Index** Income Fund
------------- -----------
01/16/95 $10,000 $10,000
03/31/95 $10,440 $10,301
09/30/95 $11,140 $11,016
03/31/96 $11,440 $11,232
09/30/96 $11,710 $11,406
03/31/97 $11,990 $11,691
09/30/97 $12,670 $12,502
03/31/98 $13,140 $13,068
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
and a broad-based index since 1/16/95 (inception 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 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 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 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's investment objective is to maximize total return consistent
with moderate risk of capital and maintenance of liquidity. To pursue this
objective we invest in a broad range of investment grade fixed income
securities. In selecting investment opportunities, the Fund will seek to
balance yield, average maturity and risk to provide maximum preservation of
purchase power. Through much of Fiscal 1998, we overweighted the portfolio in
longer maturities while maintaining an emphasis on high credit quality
investments. The strategy proved effective, particularly in the third fiscal
quarter, as long maturities outperformed intermediates and corporate spreads
widened substantially due to the crisis in Asia. In the fourth fiscal quarter,
we sold into the rally of early January and then settled back for the balance
of the quarter, slightly shorter than the Lehman benchmark, before beginning to
lengthen again toward the end of the quarter. Our overall strategy worked well
and for the fiscal year ended March 31, 1998, the Fund achieved a total return
of 12.21%,* ranking 27 out of 139 funds, based on total return, in the Lipper
Corporate Debt A-Rated category,*** for the same period.
Total Return Bond Fund+
- ---------------------------------
Average Annual Total Return
Ended on 3/31/98*
- ---------------------------------
1 year Since Inception (1/19/95)
- ---------------------------------
12.21% 9.76%
- ---------------------------------
Lehman Brothers
Govt/Corp Total Return
Bond Index** Bond Fund
---------------- -----------
01/19/95 $10,000 $10,000
03/31/95 $10,500 $10,320
09/30/95 $11,390 $11,224
03/31/96 $11,650 $11,515
09/30/96 $11,910 $11,769
03/31/97 $12,160 $12,002
09/30/97 $13,050 $12,851
03/31/98 $13,670 $13,467
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 and a broad-based index since 1/19/95 (inception 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 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 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.
*** Source: Lipper Analytical Services, Inc. -- Lipper is an independent mutual
fund performance monitor.
+ 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 25.12%* for the year ending March 31,
1998, compared to 48.00%** for the Standard & Poor's 500 Composite Stock Price
Index and 12.00%*** for the Lehman Brothers Aggregate Bond Index for the same
time period. The Fund has emphasized equities in its asset allocation and has
benefited from the strong rise in the stock market. The bond portion of the
portfolio benefited, though to a lesser extent than the equity portion, from
the decline in the rate of inflation. The sub-adviser's style is to seek value
in both the equity selection and the bond sector selection.
Balanced Fund+
- ------------------------------------------------
1 year Since Inception
- ------------------------------------------------
Average Annual Total Return Ended on 3/31/98*
- ------------------------------------------------
Institutional Shares
7/11/94 inception 25.12% 16.83%
- ------------------------------------------------
Total Return Ended on 3/31/98*
- ------------------------------------------------
Trust Shares
8/25/97 inception N/A 9.42%
- ------------------------------------------------
Lehman Brothers
Aggregate Index*** S&P 500 Balanced Fund
--------------- -------- ------------
07/11/94 $10,000 $10,000 $10,000
09/30/94 $10,060 $10,490 $10,200
03/31/95 $10,610 $11,500 $10,819
09/30/95 $11,480 $13,600 $12,101
03/31/96 $11,750 $15,200 $12,930
09/30/96 $12,040 $16,360 $13,377
03/31/97 $12,330 $18,200 $14,267
09/30/97 $13,210 $22,980 $16,975
03/31/98 $13,810 $26,930 $17,851
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
and two broad-based indices since 7/11/94 (inception date). For comparative
purposes, the value of the indices 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 indices 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.
The graph represents the performance of the Balanced Fund's Institutional
Shares which have been in existence since the Fund's inception. The performance
of the Balanced Fund's Trust Shares will differ based upon the different
inception date and higher fees assessed to that class.
- --------
* 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 Bond 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, 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.
<PAGE>
EXCELSIOR INSTITUTIONAL TRUST
ADVISER'S INVESTMENT REVIEW
INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
The Fund generated a total return of 9.90%* for the year ending March 31,
1998 compared to a return of 17.21%** for the FT/S&P-Actuaries World Indices --
World Excluding U.S. Index and a return of 48.00%*** for the Standard & Poor's
500 Composite Stock Index for the same time period. The Fund's overweighting in
Southeast Asia (ex Japan), the worst performing international region at the
beginning of the time period had a negative impact on performance. The
underperformance was particularly acute during the quarter ending December 31,
1997, when Southeast Asia (ex Japan) markets were especially hard hit. The
Fund's asset value has rebounded in the first calendar quarter of 1998. At the
end of the year, the Fund's geographical diversification was 64.2% Europe,
13.7% Southeast Asia (ex Japan), 11.05% Japan, and approximately 11% other
regions.
International Equity Fund+
- ---------------------------------
Average Annual Total Return
Ended on 3/31/98*
- ---------------------------------
1 year Since Inception (1/24/95)
- ---------------------------------
9.90% 13.02%
- ---------------------------------
FT-Actuaries International
World Indices** Equity Fund
------------- -----------
01/24/95 $10,000 $10,000
03/31/95 $10,090 $10,386
09/30/95 $10,600 $11,471
03/31/96 $11,370 $12,787
09/30/96 $11,600 $13,254
03/31/97 $11,570 $13,440
09/30/97 $12,980 $14,511
03/31/98 $13,560 $14,771
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 and a broad-based index since 1/24/95 (inception 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
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,
South 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
OPTIMUM GROWTH FUND
- --------------------------------------------------------------------------------
The Fund achieved a total return of 60.85%* for the twelve months ended
March 31, 1998, versus 48.00%** for the Standard & Poor's 500 Composite Stock
Price Index, for the same period. During the fiscal year, Fund performance was
driven by a rebound in the Fund's networking/connectivity companies, continued
strength of computer hardware and software stocks, and a strong showing from
the Fund's financial services companies. Among the Fund's outstanding
performers, we would highlight America Online, Dell Computer, General Electric,
Merrill Lynch, Microsoft, and Pfizer. Throughout the year, the overlay
performed as expected by dampening the Fund's volatility without materially
inhibiting the upside return. The Fund's structure and strategy remained
consistent; that is, we devoted approximately 70% of the portfolio to high-
quality, mid- to large-capitalization companies which we believe have superior
growth potential and complemented those investments with investments in a
structured overlay to increase diversification and reduce market volatility
without materially inhibiting return. Looking forward, we anticipate no major
changes; we continue to believe that the outlook for non-inflationary global
growth remains strong and therefore feel that superior long-term returns may be
generated by being fully invested in high-quality growth companies. This
strategy worked well, ranking the Fund twenty-seventh, based on total return,
among the 858 funds in the Lipper Growth Fund category*** for the twelve months
ended March 31, 1998.
Optimum Growth Fund+
- -------------------------------------------------------------
Average Annual Total Return Ended on 3/31/98*
- -------------------------------------------------------------
1 year Since Inception
- -------------------------------------------------------------
Institutional Shares
6/1/96 Inception 60.85% 31.12%
- -------------------------------------------------------------
Trust Shares
7/3/96 Inception 60.41% 33.57%
- -------------------------------------------------------------
Standard Optimum
& Poor's 500** Growth Fund
---------------- -----------
06/01/96 $10,000 $10,000
06/30/96 $10,350 $9,860
07/31/96 $9,590 $9,180
08/31/96 $9,800 $9,220
09/30/96 $10,350 $10,004
10/31/96 $10,630 $10,014
11/30/96 $11,440 $10,685
12/31/96 $11,210 $10,424
01/31/97 $11,910 $11,116
02/28/97 $12,000 $10,906
03/31/97 $11,510 $10,223
06/30/97 $13,520 $12,340
09/30/97 $14,530 $13,450
12/31/97 $14,950 $13,917
03/31/98 $17,030 $16,444
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 Optimum
Growth Fund and a broad-based index since 6/1/96 (inception date). All
dividends and capital gain distributions are reinvested. The Fund's performance
takes into account fees and expenses. 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.
The graph presents the performance of the Optimum Growth Fund's
Institutional Shares which have been in existence since the Fund's inception.
The performance of the Optimum Growth Fund's Trust Shares will differ based
upon the different inception date and higher fees assessed to that class.
- --------
* 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: Lipper Analytical Services, Inc.--Lipper is an independent mutual
fund performance monitor.
+ 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
VALUE EQUITY FUND
- --------------------------------------------------------------------------------
The Fund posted a total return of 51.67%* for the twelve months ended
March 31, 1998, versus 48.00%** for the Standard & Poor's 500 Composite Stock
Price Index, for the same period. The goal of the Fund is long-term capital
appreciation with a focus on value. During the first half of the fiscal year,
Fund strength was broadbased, though performance was aided in particular by an
overweighting of large-capitalization concerns as well as the aerospace,
energy, financial services, and technology sectors. Momentum slowed in the
fiscal third quarter, however, in response to Asian economic difficulties and
subsequent stock market corrections and volatility. We added to several of our
financial services holdings and other globally oriented companies on stock
price weakness during this period. Positive momentum resumed in the fiscal
fourth quarter. During this final quarter, we began to add several
smaller-capitalization names to the Fund, as we felt that the group's extended
period of underperformance versus larger-capitalization companies had created a
number of compelling values. Strength in the final quarter was broadbased, and
our overweighted areas (technology and financials) performed particularly well.
In keeping with the Fund's goal, the price/earnings and price/book ratios were
kept low in relative terms, and portfolio turnover has been low as well. Most
important, we maintained broad portfolio diversification. For the twelve months
ended March 31, 1998, the Fund ranked twenty-one, based on total return, among
the 646 funds in the Lipper Growth & Income category.*** Over time, we believe
that a disciplined search for fundamental value will achieve better results
than attempting to take advantage of short-term price movements.
Value Equity Fund+
- -------------------------------------------------------------
Average Annual Total Return Ended on 3/31/98*
- -------------------------------------------------------------
1 year Since Inception
- -------------------------------------------------------------
Institutional Shares
6/1/96 Inception 51.67% 39.70%
- -------------------------------------------------------------
Trust Shares
1/15/97 Inception 51.09% 34.42%
- -------------------------------------------------------------
Standard Value
& Poor's 500** Equity Fund
-------------- -----------
06/01/96 $10,000 $10,000
06/30/96 $10,040 $9,830
07/31/96 $9,590 $9,470
08/31/96 $9,800 $9,840
09/30/96 $10,350 $10,292
10/31/96 $10,630 $10,452
11/30/96 $11,440 $11,494
12/31/96 $11,210 $11,572
01/31/97 $11,910 $12,125
02/28/97 $12,000 $11,823
03/31/97 $11,510 $11,391
06/30/97 $13,520 $13,727
09/30/97 $14,530 $15,443
12/31/97 $14,950 $14,768
03/31/98 $17,030 $17,276
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 Value Equity
Fund and a broad-based index since 6/1/96 (inception date). All dividends and
capital gain distributions are reinvested. The Fund's performance takes into
account fees and expenses. 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.
The graph presents the performance of the Value Equity Fund's
Institutional Shares which have been in existence since the Fund's inception.
The performance of the Value Equity Fund's Trust Shares will differ based upon
the different inception date and higher fees assessed to that class.
- --------
* 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: Lipper Analytical Services, Inc.--Lipper is an independent mutual
fund performance monitor.
+ 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
March 31, 1998
Equity Fund
<TABLE>
<CAPTION>
Shares Value
- ------------------ -------------
<S> <C> <C>
COMMON STOCKS -- 97.83%
CONSUMER STAPLES -- 25.27%
30,641 Bestfoods ................................ $ 3,581,167
52,110 Coca-Cola Co. ............................ 4,035,268
7,656 +Corn Products International, Inc. . 274,659
38,740 Gillette Co. ............................. 4,597,954
62,164 Johnson & Johnson. ....................... 4,557,398
80,776 Mattel, Inc. ............................. 3,200,749
47,660 +Oxford Health Plans, Inc. ................ 708,943
58,971 Pfizer, Inc. ............................. 5,878,672
49,739 Procter & Gamble Co. ..................... 4,196,728
48,002 Schering-Plough Corp. .................... 3,921,163
-----------
34,952,701
-----------
FINANCIAL -- 17.50%
26,730 American International Group,
Inc. .................................... 3,366,309
21,782 Aon Corp. ................................ 1,410,384
30,940 BankBoston Corp. ......................... 3,411,135
19,095 Citicorp ................................. 2,711,490
22,308 Household International, Inc. ............ 3,072,927
47,529 Mellon Bank Corp. ........................ 3,018,092
51,406 Morgan Stanley Dean Witter
Discover & Co. .......................... 3,746,212
83,548 Norwest Corp ............................. 3,472,464
-----------
24,209,013
-----------
TECHNOLOGY -- 14.48%
38,310 +Analog Devices, Inc. ..................... 1,273,807
66,743 +Cisco Systems, Inc. ...................... 4,563,553
47,380 Ericsson LM ADR .......................... 2,250,550
42,198 Hewlett Packard Co. ...................... 2,674,298
47,178 Intel Corp. .............................. 3,679,884
62,555 +Microsoft Corp. .......................... 5,594,763
-----------
20,036,855
-----------
CAPITAL GOODS -- 12.46%
55,892 General Electric Co. ..................... 4,817,192
44,821 Honeywell, Inc. .......................... 3,706,136
51,710 Illinois Tool Works, Inc. ................ 3,348,223
65,287 Raychem Corp. ............................ 2,713,491
65,656 +Thermo Electron Corp. .................... 2,650,861
-----------
17,235,903
-----------
CONSUMER CYCLICAL -- 10.08%
93,146 CBS Corp. ................................ 3,161,142
36,475 +Lear Corp. ............................... 2,056,278
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares Value
- ------------------ ------------
<S> <C> <C>
COMMON STOCKS -- (continued)
CONSUMER CYCLICAL -- (continued)
36,268 McDonald's Corp. ......................... $ 2,176,080
50,940 Stewart Enterprises, Inc., Class A........ 2,827,170
51,613 Time Warner, Inc. ........................ 3,716,136
-----------
13,936,806
-----------
ENERGY -- 7.94%
24,954 British Petroleum Co. ADR ................ 2,147,604
34,592 Burlington Resources, Inc. ............... 1,658,254
37,817 Mobil Corp. .............................. 2,897,728
19,550 Ocean Energy, Inc. ....................... 460,636
6,490 +Petroleum Geo-Services ADR ............... 385,344
60,472 Royal Dutch Petroleum Co. ................ 3,435,565
-----------
10,985,131
-----------
UTILITY -- 5.90%
65,820 +AES Corp. ................................ 3,451,436
109,492 +WorldCom, Inc. ........................... 4,708,156
-----------
8,159,592
-----------
RAW/INTERMEDIATE
MATERIALS -- 4.20%
21,130 Monsanto Co. ............................. 1,098,760
16,257 Nucor Corp. .............................. 884,990
24,867 Pioneer Hi-Bred International, Inc. ...... 2,426,087
65,850 +Steel Dynamics, Inc. ..................... 1,395,197
-----------
5,805,034
-----------
TOTAL COMMON STOCKS
(Cost $86,756,742)........................ 135,321,035
-----------
Principal
Amount
DEMAND NOTES -- 0.62%
$418,000 Associates Corp. of North America
Master Notes ............................ 418,000
446,000 General Electric Co.
Promissory Notes ........................ 446,000
-----------
TOTAL DEMAND NOTES
(Cost $864,000).......................... 864,000
-----------
TOTAL INVESTMENTS
(Cost $87,620,742) ............................... 98.45% $136,185,035
OTHER ASSETS AND
LIABILITIES (NET) ............................... 1.55 2,143,062
------ ------------
NET ASSETS ........................................ 100.00% $138,328,097
====== ============
</TABLE>
- -------------------------
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
March 31, 1998
Income Fund
<TABLE>
<CAPTION>
Principal Coupon Maturity
Amount Rate Date Value
- ------------- --------------- ---------- -------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT & AGENCY
OBLIGATIONS -- 57.18%
Federal Home Loan Bank
$7,200,000 Discount Note ......... 5.45%++ 4/01/98 $7,200,000
Federal Home Loan
Mortgage Corporation
7,671 Pool #220001 .......... 10.75 7/01/00 8,150
Federal National
Mortgage Association
959,000 Discount Note ......... 5.46++ 4/01/98 959,000
1,258,947 Pool #190748 .......... 5.50 4/01/01 1,225,899
2,975,811 Pool #303859 .......... 7.50 3/01/11 3,058,577
4,785,952 Pool #251502 .......... 6.50 2/01/13 4,799,415
1,456,970 Pool #316972 .......... 7.50 7/01/25 1,492,939
5,582,450 April TBA ............. 6.00 4/15/28 5,402,768
Government National
Mortgage Association
1,000,000 Pool #471660 .......... 7.50 3/15/28 1,025,313
1,250,000 Tennessee Valley
Authority, Put
Bond ................. 5.88 4/01/36 1,282,779
7,593,000 U.S. Treasury
Bonds ................ 7.25 5/15/16 8,639,414
----------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS
(Cost $34,573,734)............................... 35,094,254
----------
CORPORATE BONDS -- 26.39%
2,625,000 Associates Corp. of
North America,
Series F ............. 6.31 6/16/00 2,639,089
750,000 Caterpillar, Inc....... 9.38 7/15/01 822,407
1,500,000 Coca Cola Enterprises,
Inc. ................. 7.00 10/01/26 1,610,031
2,340,000 First Union Corp. 8.00 11/15/02 2,508,459
3,000,000 General Motors
Acceptance
Corp. ................ 7.50 7/24/00 3,087,906
2,000,000 +Goldman Sachs
Group ................ 6.60 7/15/02 2,018,244
1,565,000 Kimberly-Clark
Corp. ................ 6.38 1/01/28 1,500,868
2,000,000 Morgan Stanley Dean
Witter & Co. ......... 6.38 8/01/02 2,007,256
----------
TOTAL CORPORATE BONDS
(Cost $16,110,363)............................... 16,194,260
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Principal Coupon Maturity
Amount Rate Date Value
- ------------ ---------- ------------ ---------------
<S> <C> <C> <C> <C>
ASSET BACKED SECURITIES -- 17.57%
$ 840,000 AT&T Universal
Card Master
Trust, Series 95-2,
Class A ................. 5.95% 10/17/02 $ 841,184
1,000,000 California
Infrastructure,
San Diego Gas &
Electric Co., Series
97-1, Class A5 .......... 6.19 9/25/05 1,006,190
1,540,000 California
Infrastructure,
Pacific Gas &
Electric Co., Series
97-1, Class A7 .......... 6.42 9/25/08 1,557,772
2,078,000 Chase Manhattan
Credit Card
Master Trust,
Series 96-3, Class A 7.04 2/15/05 2,142,150
1,260,000 Citibank Credit
Card Master Trust
I, Series 97-7,
Class A ................. 6.35 8/15/02 1,277,073
1,920,000 ContiMortgage
Home Equity
Loan Trust, Series
97-5, Class A4 .......... 6.58 6/15/19 1,930,272
2,000,000 Nomura Asset
Securities Corp.,
Series 98-D6, Class
A1B ..................... 6.59 3/17/28 2,031,875
-----------
TOTAL ASSET BACKED SECURITIES
(Cost $10,725,003) ............................ 10,786,516
-----------
Shares
- ----------
SHORT-TERM INVESTMENTS -- 6.92%
2,111,576 Dreyfus Government Cash
Management Fund ............................... 2,111,576
2,134,085 Fidelity U.S. Treasury II Fund .................. 2,134,085
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $4,245,661).............................. 4,245,661
-----------
TOTAL INVESTMENTS
(Cost $65,654,761)............................... 108.06% $66,320,691
-----------
OTHER ASSETS AND
LIABILITIES (NET) ............................... (8.06) (4,946,542)
-------- -----------
NET ASSETS ....................................... 100.00% $61,374,149
======== ===========
</TABLE>
- -------------------------
+ 144A Security -- certain conditions for public sale may exist.
++ Discount Rate
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
March 31, 1998
Total Return Bond Fund
<TABLE>
<CAPTION>
Principal Coupon Maturity
Amount Rate Date Value
- ------------- -------------- ---------------- -------------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT & AGENCY
OBLIGATIONS -- 48.34%
Federal Home Loan
Bank
$7,000,000 Discount Note ............ 5.47%++ 4/06/98 $6,994,701
Federal National
Mortgage Association
8,000,000 Discount Note ............ 5.47++ 4/13/98 7,985,464
915,000 Medium Term Note 6.21 10/28/02 927,024
5,310,000 April TBA ................ 6.00 4/15/28 5,139,087
Government National
Mortgage Association
34,177 Pool #356873 ............. 6.50 5/15/23 33,814
28,889,000 U.S. Treasury
Bonds ................... 7.25 5/15/16 32,870,280
8,000,000 U.S. Treasury Notes 5.25 1/31/01 7,917,504
19,155,000 U.S. Treasury Notes
(Inflation Indexed) 5.75 10/31/02 19,202,887
----------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS
(Cost $79,127,751)....................................... 81,070,761
----------
CORPORATE BONDS -- 29.16%
2,570,000 Amgen, Inc. ............. 8.13 4/01/97 2,972,133
3,955,000 Associates Corp. of
North America,
Series 1 ................ 7.11 7/16/01 4,069,153
5,205,000 CIT Group
Holdings ................ 6.80 4/17/00 5,280,275
3,470,000 Coca Cola
Enterprises, Inc. ....... 7.00 10/01/26 3,724,538
5,360,000 First Union Corp......... 8.00 11/15/02 5,745,872
5,575,000 Ford Motor Credit
Co. ..................... 6.25 11/08/00 5,607,971
5,250,000 +Goldman Sachs
Group ................... 6.60 7/15/02 5,297,890
3,145,000 Kimberly-Clark
Corp. ................... 6.38 1/01/28 3,016,121
1,517,000 Merrill Lynch &
Co., Inc. ............... 6.00 2/12/03 1,504,609
3,630,000 Morgan Stanley
Dean Witter & Co.. 6.38 8/01/02 3,643,170
3,290,000 Motorola, Inc. .......... 5.22 10/01/97 2,538,653
5,140,000 Nationsbank Corp.. 8.13 6/15/02 5,500,031
----------
TOTAL CORPORATE BONDS
(Cost $48,175,812)....................................... 48,900,416
----------
ASSET BACKED SECURITIES -- 22.02%
6,580,000 +AESOP Funding II,
Series 97-1,
Class A2 ................ 6.40 10/20/03 6,664,290
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Principal Coupon Maturity
Amount Rate Date Value
- ------------- -------------- ---------------- -------------------
<S> <C> <C> <C> <C>
$2,335,000 AT&T Universal
Series 95-2, Class A...... 5.95% 10/17/02 $2,338,292
1,655,000 California
Infrastructure, Pacific
Gas & Electric Co.,
Series 97-1,
Class A7 ................. 6.42 9/25/08 1,674,099
7,120,000 Chase Manhattan
Credit Card Master
Trust, Series 96-3,
Class A .................. 7.04 2/15/05 7,339,802
3,510,000 Citibank Credit Card
Master Trust I,
Series 97-7, Class A...... 6.35 8/15/02 3,557,561
3,290,000 ContiMortgage Home
Equity Loan Trust,
Series 97-3,
Class A4 ................. 6.82 5/15/12 3,332,342
4,805,000 ContiMortgage Home
Equity Loan Trust,
Series 97-5,
Class A4 ................. 6.58 6/15/19 4,830,707
4,860,000 Nomura Asset
Securities Corp., Series
98-D6, Class A1B ......... 6.59 3/17/28 4,937,456
2,255,000 The Money Store
Home Equity Trust,
Series 97-C,
Class AF5 ................ 6.54 6/15/21 2,266,703
----------
TOTAL ASSET BACKED SECURITIES
(Cost $36,589,066).................................... 36,941,252
Shares
- -------------------------------
SHORT-TERM INVESTMENTS -- 4.41%
3,676,104 Dreyfus Government Cash
Management Fund ...................................... 3,676,104
3,720,860 Fidelity U.S. Treasury II
Fund ................................................. 3,720,860
------------
TOTAL SHORT-TERM
INVESTMENTS
(Cost $7,396,964) .................................... 7,396,964
------------
TOTAL INVESTMENTS
(Cost $171,289,593)................................... 103.93% $174,309,393
OTHER ASSETS AND
LIABILITIES (NET) .................................... (3.93) (6,598,138)
------ ------------
NET ASSETS .............................................. 100.00% $167,711,255
====== ============
</TABLE>
- -------------------------
+ 144A Security - certain conditions for public sale may exist.
++ Discount Rate
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
March 31, 1998
Balanced Fund
Shares Value
- ---------- -------------
COMMON STOCKS -- 59.02%
CONSUMER CYCLICAL -- 11.26%
30,000 Callaway Golf Co. ..................... $ 870,000
51,000 Clayton Homes, Inc. ................... 1,032,750
25,000 Dillard's, Inc., Class A .............. 923,438
9,500 Eaton Corp. ........................... 904,281
28,000 Elcor Corp. ........................... 752,500
16,000 Ford Motor Co. ........................ 1,037,000
13,000 General Motors Corp. .................. 876,687
13,000 Goodyear Tire & Rubber Co. ............ 984,750
13,000 J.C. Penney Co. ....................... 983,938
23,000 Standard Register Co. ................. 780,562
32,600 +Toys "R" Us, Inc. ..................... 980,038
-----------
10,125,944
-----------
RAW/INTERMEDIATE
MATERIALS -- 9.60%
18,000 Arco Chemical Co. ..................... 852,750
35,000 British Steel ADR ..................... 848,750
21,000 Caraustar Industries, Inc. ............ 687,750
35,000 +Gradall Industries, Inc. .............. 616,875
30,675 Hanna (M.A.) Co. ...................... 749,620
37,000 Millenium Chemicals Inc. .............. 1,239,500
28,000 Quanex Corp. .......................... 841,750
15,000 Union Camp Corp. ...................... 896,250
17,000 Weyerhaeuser Co. ...................... 960,500
25,000 Willamette Industries, Inc. ........... 939,063
-----------
8,632,808
-----------
FINANCIAL -- 8.30%
10,000 Allstate Corp. ........................ 919,375
8,000 Bankers Trust New York Corp. .......... 962,500
22,000 Comdisco, Inc. ........................ 959,750
14,000 Exel Ltd. ............................. 1,085,000
15,000 Fannie Mae ............................ 948,750
15,000 PNC Bank Corp. ........................ 899,062
17,000 Safeco Corp. .......................... 928,625
27,500 Washington Federal, Inc. .............. 756,250
-----------
7,459,312
-----------
CONSUMER STAPLES -- 6.44%
26,500 Allergan, Inc. ........................ 1,007,000
20,000 American Greetings Corp., Class A 920,000
37,000 Archer-Daniels-Midland Co. ............ 811,688
28,000 C.R. Bard, Inc. ....................... 1,029,000
24,000 Mallinckrodt, Inc. .................... 948,000
30,000 +The SABRE Group Holdings, Inc. 1,076,250
-----------
$ 5,791,938
-----------
<PAGE>
Shares Value
- -------- -----------
COMMON STOCKS -- (continued)
CAPITAL GOODS -- 5.19%
29,000 AGCO Corp. ............................ $ 860,938
17,000 Caterpillar Inc. ...................... 936,062
16,000 Deere & Co. ........................... 991,000
50,000 +Griffon Corp. ......................... 793,750
25,000 +Gulfstream Aerospace Corp. ............ 1,084,375
-----------
4,666,125
-----------
ENERGY -- 5.16%
10,700 Atlantic Richfield Co. ................ 841,287
30,000 Occidental Petroleum Corp. ............ 879,375
20,000 Repsol S.A. ADR ....................... 1,017,500
25,000 Ultramar Diamond Shamrock
Corp. ................................ 881,250
30,000 YPF S.A. ADR .......................... 1,020,000
-----------
4,639,412
-----------
TECHNOLOGY -- 4.71%
13,500 +Genentech, Inc. ....................... 950,906
15,000 Intel Corp. ........................... 1,170,000
25,000 +Marshall Industries ................... 834,375
12,000 Xerox Corp. ........................... 1,277,250
-----------
4,232,531
-----------
TRANSPORTATION -- 4.09%
7,000 +AMR Corp. ............................. 1,002,313
7,500 Delta Air Lines, Inc. ................. 886,875
12,000 GATX Corp. ............................ 936,000
30,000 Knightsbridge Tankers Ltd. ............ 847,500
-----------
3,672,688
-----------
REAL ESTATE INVESTMENT
TRUST -- 2.32%
20,000 Mack-Cali Realty Corp. ................ 781,250
50,000 Prime Retail, Inc. .................... 746,875
35,000 Wilshire Real Estate Investment
Trust Inc. ........................... 560,000
-----------
2,088,125
-----------
UTILITIES -- 1.95%
21,000 Enron Corp. ........................... 973,875
35,000 PECO Energy Co. ....................... 774,375
-----------
1,748,250
-----------
TOTAL COMMON STOCKS
(Cost $36,342,438) .................... 53,057,133
-----------
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
March 31, 1997
Balanced Fund -- (continued)
Principal
Amount Value
- -------------------------- ---------
CORPORATE BONDS -- 20.61%
FINANCIAL -- 6.09%
$1,000,000 American General Corp. 7.75%,
4/01/05 ........................... $1,072,769
463,000 Chevron Capital USA, Inc. 7.45%,
8/15/04 ........................... 482,301
750,000 General Motors Acceptance Corp.
6.75%, 6/10/02 .................... 762,786
1,310,000 Safeco Corp. 7.875%, 4/01/05 ....... 1,383,467
750,000 Sunamerica, Inc. 6.75%, 10/01/07 754,424
1,000,000 Transamerica Corp. 6.75%,
11/15/06 .......................... 1,019,807
----------
5,475,554
----------
CONSUMER STAPLES -- 5.93%
750,000 Albertson's, Inc. 6.375%, 6/01/00 756,875
1,575,000 Anheuser Busch Co., Inc. 7.10%,
6/15/07 ........................... 1,638,343
650,000 Columbia/HCA Healthcare Corp.
6.87%, 9/15/03 .................... 613,677
500,000 McDonald's Corp. 7.375%,
7/15/02 ........................... 512,570
750,000 SmithKline Beecham 7.50%,
5/01/02 ........................... 750,974
1,000,000 Tenneco, Inc. 7.50%, 4/15/07 ....... 1,059,132
----------
5,331,571
----------
RAW/INTERMEDIATE
MATERIALS -- 5.08%
1,000,000 English China Clays plc 7.375%,
10/01/02 .......................... 1,044,127
1,250,000 Phelps Dodge Corp. 7.75%,
1/01/02 ........................... 1,316,720
500,000 Reynolds Metals 9.40%, 2/15/05...... 583,576
750,000 Reynolds Metals 8.90%, 9/20/06...... 869,335
750,000 Willamette Industries, Inc. 7.00%,
2/01/18 ........................... 756,233
----------
4,569,991
----------
<PAGE>
Principal
Amount Value
- ------------------------------ -------------
CORPORATE BONDS -- (continued)
UTILITIES -- 2.65%
$ 575,000 Alabama Power Co. 7.00%,
1/01/03 ........................... $ 581,100
775,000 AT&T Corp. 8.20%, 2/15/05 .......... 806,165
1,000,000 SBC Communications, Inc. 6.25%,
3/01/05 ........................... 999,104
-----------
2,386,369
-----------
ENERGY -- 0.86%
750,000 Occidental Petroleum 8.50%,
9/15/04 ........................... 770,403
-----------
TOTAL CORPORATE BONDS
(Cost $18,288,924).................. 18,533,888
-----------
U.S. GOVERNMENT & AGENCY
OBLIGATIONS -- 17.96%
Federal National Mortgage
Association
550,000 6.45%, 12/16/02 .................... 551,942
750,000 7.65%, 3/10/05 ..................... 823,192
1,000,000 7.50%, 4/16/07 ..................... 1,050,126
-----------
2,425,260
-----------
Financial Assistance Corp.
1,000,000 9.20%, 9/27/05 ..................... 1,130,886
-----------
U.S. Treasury Bonds
750,000 9.125%, 5/15/09 .................... 875,625
1,000,000 7.50%, 11/15/16 .................... 1,165,938
-----------
2,041,563
-----------
U.S. Treasury Notes
250,000 6.875%, 8/31/99 .................... 254,219
1,250,000 7.50%, 10/31/99 .................... 1,284,766
1,000,000 7.75%, 11/30/99 .................... 1,033,438
750,000 6.375%, 5/15/00 .................... 761,485
500,000 5.50%, 12/31/00 .................... 498,125
500,000 6.25%, 4/30/01 ..................... 508,282
600,000 6.50%, 5/31/01 ..................... 614,250
700,000 6.25%, 10/31/01 .................... 712,687
775,000 6.125%, 12/31/01 ................... 786,141
750,000 6.625%, 3/31/02 .................... 774,610
875,000 6.25%, 8/31/02 ..................... 893,868
250,000 7.875%, 11/15/04 ................... 279,297
750,000 7.50%, 2/15/05 ..................... 824,531
500,000 6.875%, 5/15/06 .................... 535,781
750,000 6.50%, 10/15/06 .................... 786,562
-----------
10,548,042
-----------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS
(Cost $16,001,915)................. 16,145,751
-----------
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
March 31, 1997
Balanced Fund -- (continued)
Principal
Amount Value
- ------------- ------------
DEMAND NOTES -- 0.47%
$ 274,000 Associates Corp. of North America
Master Notes .................... $ 274,000
148,000 General Electric Co. Promissory
Notes ........................... 148,000
----------
TOTAL DEMAND NOTES
(Cost $422,000).................. 422,000
----------
TOTAL INVESTMENTS
(Cost $71,055,277) ................. 98.06% $88,158,772
OTHER ASSETS AND
LIABILITIES (NET) ................. 1.94 1,743,747
------ -----------
NET ASSETS .......................... 100.00% $89,902,519
====== ===========
- -------------------------
+ Non-income producing security.
ADR--American Depositary Receipt.
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
March 31, 1998
International Equity Fund
Shares Value
- ------------ ----------
COMMON STOCK -- 95.97%
SWITZERLAND -- 13.97%
5,100 +ABB AG (Registered) .................... $1,519,790
19,700 Nestle S.A. ADR (Registered) ........... 1,882,150
680 Novartis AG (Registered) ............... 1,204,227
3,000 SGS Holdings S.A. ...................... 1,041,680
----------
5,647,847
----------
UNITED KINGDOM -- 12.66%
18,100 Glaxo Wellcome plc ADR ................. 979,663
40,000 Pearson plc ............................ 650,090
63,500 Railtrack Group plc..................... 1,042,658
227,800 Rentokil Initial plc ................... 1,390,258
78,700 Rio Tinto plc (Registered) ............. 1,057,526
----------
5,120,195
----------
JAPAN -- 10.97%
73,000 +Atlantis Japan Growth Fund Ltd.......... 310,250
45,000 Canon, Inc. ............................ 1,016,129
45,000 Denso Co. .............................. 843,961
14,200 Hirose Electric ........................ 707,337
43,000 Kurita Water Industries, Ltd. .......... 451,613
90,000 Mitsubishi Corp. ....................... 735,934
33,000 Tokio Marine & Fire
Insurance Co. ......................... 368,867
----------
4,434,091
----------
NETHERLANDS -- 10.86%
13,400 IHC Caland N.V. ........................ 739,909
19,500 ING Groep N.V. ......................... 1,106,668
29,200 Royal Dutch Petroleum Co. .............. 1,658,925
6,200 Wolters Kluwer N.V. .................... 886,352
----------
4,391,854
----------
GERMANY -- 10.66%
800 Allianz AG (Registered) ................ 240,346
23 +Allianz AG (New) ....................... 6,898
30,600 Bayer AG ............................... 1,392,639
11,900 Daimler-Benz AG ........................ 1,095,392
21,000 Deutsche Bank AG ....................... 1,574,716
----------
4,309,991
----------
HONG KONG -- 7.29%
200,000 Hutchison Whampoa Ltd. ................. 1,406,815
177,500 Johnson Electric Holdings Ltd. ......... 758,292
254,000 Li & Fung, Ltd. ........................ 403,227
72,000 Swire Pacific Ltd. ..................... 381,001
----------
2,949,335
----------
<PAGE>
Shares Value
- ---------- ---------
COMMON STOCKS -- (continued)
FRANCE -- 6.70%
10,200 Dassault Systemes S.A. ................. $ 410,938
1,900 Financiere et Industrielle
Gaz et Eaux ........................... 1,006,314
21,600 Michelin, Class B ...................... 1,290,161
----------
2,707,413
----------
SWEDEN -- 4.17%
31,400 Investor AB, Class B ................... 1,686,143
----------
SPAIN -- 3.94%
22,500 Banco Intercontinental Espana
(Registered) ........................... 1,591,981
----------
SINGAPORE -- 2.28%
99,000 Acer Computer International Ltd. 67,815
234,000 Courts Singapore Ltd. .................. 93,513
100,100 Development Bank of Singapore
Ltd. .................................. 731,834
2,000 +Singapore Sesdaq Fund Ltd. ............. 28,000
----------
921,162
----------
CANADA -- 2.25%
16,100 Imperial Oil Ltd. ...................... 910,656
----------
MEXICO -- 2.14%
167,800 Kimberly-Clark de Mexico,
SA de CV .............................. 866,980
----------
SOUTH AFRICA -- 2.12%
203,218 LibLife Strategic Investments Ltd....... 857,843
----------
BERMUDA -- 1.52%
12,500 Partner Re Ltd. ........................ 614,063
----------
ITALY -- 1.44%
6,200 Luxottica Group S.p.A. ADR ............. 580,863
----------
MALAYSIA -- 1.13%
24,000 Nestle (Malaysia) Berhad ............... 133,187
289,000 Sime Darby Bhd. ........................ 323,934
----------
457,121
----------
ARGENTINA -- 0.96%
41,300 Quilmes Industrial S.A.
(Registered) ........................... 388,220
----------
THAILAND -- 0.91%
26,600 The Siam Cement Co., Ltd. .............. 369,143
----------
TOTAL COMMON STOCKS
(Cost $32,516,133)..................... 38,804,901
----------
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
March 31, 1998
International Equity Fund -- (continued)
Principal
Amount Value
- ------------- --------
CORPORATE OBLIGATIONS -- 1.94%
THAILAND -- 1.15%
$ 970,000 Bangkok Bank Public Co.
(Convertible) 3.25%, 3/03/04 .......... $463,175
--------
SINGAPORE -- 0.79%
380,000 Far East Levingston Shipping
1.50%, 5/02/01 ....................... 319,675
--------
TOTAL CORPORATE
OBLIGATIONS
(Cost $1,302,557) .................... 782,850
--------
No. of
Warrants
- ----------
WARRANTS -- 0.02%
JAPAN -- 0.01%
13,000 +Atlantis Japan Growth Fund Ltd.,
$10.00 exercise price,
expiring 4/30/01 ...................... 5,590
--------
SINGAPORE -- 0.01%
20,000 +Acer Computer International Ltd.,
$1.56 exercise price,
expiring 7/31/01 ...................... 3,000
--------
TOTAL WARRANTS
(Cost $17,787) ........................ 8,590
--------
No. of
Rights
- ----------
RIGHTS -- 0.09%
SINGAPORE -- 0.09%
18,200 +Development Bank of Singapore
Ltd., SGD 8.50 subscription
price (Cost $0) ...................... 37,212
--------
Principal
Amount
- ----------
DEMAND NOTES -- 1.49%
$ 297,000 Associates Corp. of North America
Master Notes ......................... 297,000
307,000 General Electric Co. Promissory
Notes ................................ 307,000
--------
TOTAL DEMAND NOTES
(Cost $604,000) ...................... 604,000
--------
<PAGE>
Value
-----------
TOTAL INVESTMENTS
(Cost $34,440,477)......... 99.51% $40,237,553
OTHER ASSETS AND
LIABILITIES (NET) ......... 0.49 198,801
------- -----------
NET ASSETS .................. 100.00% $40,436,354
======= ===========
- -------------------------
+ Non-income producing security.
ADR -- American Depositary Receipt.
SGD -- Singapore Dollar
- --------------------------------------------------------------------------------
At March 31, 1998, sector diversification of the Fund's investment
portfolio was as follows:
% of
Net Market
Sector Diversification Assets Value
- ------------------------------------ ------- ------------
Financial .......................... 33.48% $13,536,599
Consumer Staples ................... 15.37 6,213,236
Consumer Cyclical .................. 15.34 6,204,061
Capital Goods ...................... 9.98 4,035,169
Energy ............................. 7.32 2,957,801
Raw/Intermediate Materials ......... 6.97 2,819,309
Technology ......................... 4.03 1,631,340
Transportation ..................... 3.56 1,440,585
Demand Notes ....................... 1.49 604,000
Utilities .......................... 1.12 451,613
Investment Companies ............... 0.85 343,840
------ -----------
Total Investments ................ 99.51% $40,237,553
Other Assets and Liabilities (Net) 0.49 198,801
------ -----------
Net Assets ....................... 100.00% $40,436,354
====== ===========
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
March 31, 1998
Optimum Growth Fund
Shares Value
- ------------ -----------
COMMON STOCKS -- 98.44%
TECHNOLOGY -- 28.64%
36,000 +America Online, Inc. ................. $2,459,250
10,000 +BMC Software, Inc. ................... 838,125
36,000 +Cisco Systems, Inc. .................. 2,461,500
40,000 +Dell Computer Corp. .................. 2,707,500
51,000 +EMC Corp. ............................ 1,928,438
27,000 Intel Corp. .......................... 2,106,000
27,000 Medtronic, Inc. ...................... 1,400,625
27,000 +Microsoft Corp. ...................... 2,414,812
4,000 Western Atlas, Inc. .................. 309,500
----------
16,625,750
----------
CONSUMER STAPLES -- 27.69%
6,000 Abbott Laboratories .................. 451,875
5,000 American Home Products Corp. ......... 476,875
5,000 Bestfoods ............................ 584,375
4,000 Bristol-Meyers Squibb Co. ............ 417,250
24,000 Coca-Cola Co. ........................ 1,858,500
6,000 ConAgra, Inc. ........................ 192,750
6,000 Eli Lilly & Co. ...................... 357,750
6,500 General Mills, Inc. .................. 494,000
16,000 Gillette Co. ......................... 1,899,000
5,000 H.J. Heinz Co. ....................... 291,875
10,000 Johnson & Johnson .................... 733,125
6,600 Kellogg Co. .......................... 284,625
10,000 Merck & Co., Inc. .................... 1,283,750
12,400 PepsiCo, Inc. ........................ 529,325
23,000 Pfizer, Inc. ......................... 2,292,813
21,300 Philip Morris Companies, Inc. ........ 887,944
7,800 Procter & Gamble Co. ................. 658,125
4,000 Ralston-Ralston Purina Group ......... 424,000
6,000 Sara Lee Corp. ....................... 369,750
5,200 Schering-Plough Corp. ................ 424,775
750 Sodexho Marriott Services, Inc. ...... 19,922
4,120 Tootsie Roll Industries, Inc. ........ 295,352
4,500 UST, Inc. ............................ 145,125
8,000 Winn-Dixie Stores, Inc. .............. 371,000
4,000 Wrigley (WM.) Jr. Co. ................ 327,000
----------
16,070,881
----------
<PAGE>
Shares Value
- ---------- -----------
COMMON STOCKS -- (continued)
CONSUMER CYCLICAL -- 15.16%
50,000 +Cendant Corp. ........................ $1,981,250
7,000 Hannaford Brothers Co. ............... 311,063
25,000 Home Depot, Inc. ..................... 1,685,937
3,000 Marriott International, Inc. ......... 111,562
3,000 Marriott International, Inc.,
Class A .............................. 107,438
5,000 McDonald's Corp. ..................... 300,000
22,000 +Quintiles Transnational Corp. ........ 1,058,750
4,000 Sears, Roebuck and Co. ............... 229,750
18,000 +Sylvan Learning Systems, Inc. ........ 846,000
4,500 Time Warner, Inc. .................... 324,000
10,000 Wal-Mart Stores, Inc. ................ 508,125
9,000 Walt Disney Co. ...................... 960,750
700 Washington Post Co., Class B ......... 372,269
----------
8,796,894
----------
FINANCIAL -- 13.95%
12,000 American International
Group, Inc. ......................... 1,511,250
40,000 Charles Schwab Corp. ................. 1,520,000
12,000 Citicorp ............................. 1,704,000
23,000 Fannie Mae ........................... 1,454,750
23,000 Merrill Lynch & Co., Inc. ............ 1,909,000
----------
8,099,000
----------
TELECOMMUNICATIONS -- 5.15%
4,500 +AirTouch Communications, Inc. ........ 220,219
10,000 Ameritech Corp. ...................... 494,375
3,662 Lucent Technologies, Inc. ............ 468,278
25,000 +Tellabs, Inc. ........................ 1,678,125
3,000 +WorldCom, Inc. ....................... 129,000
----------
2,989,997
----------
CAPITAL GOODS -- 2.97%
20,000 General Electric Co. ................. 1,723,750
----------
TRANSPORTATION -- 1.82%
32,000 Harley-Davidson, Inc. ................ 1,056,000
----------
ENERGY -- 1.53%
3,500 Anadarko Petroleum Corp. ............. 241,500
8,000 Burlington Resources Inc. ............ 383,500
6,000 Vastar Resources, Inc. ............... 260,625
----------
885,625
----------
RAW/INTERMEDIATE
MATERIALS -- 0.79%
8,000 Sonoco Products Co. .................. 320,500
3,500 Witco Corp. .......................... 137,812
----------
458,312
----------
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
March 31, 1998
Optimum Growth Fund -- (continued)
Shares Value
- ------------ -----------
COMMON STOCKS -- (continued)
UTILITIES -- 0.74%
11,000 Texas Utilities Co. ............ $ 432,437
-----------
TOTAL COMMON STOCKS
(Cost $34,295,535) ............. 57,138,646
Principal
Amount
- -------------
DEMAND NOTES -- 1.58%
$295,000 Associates Corp. of North America
Master Notes ................... 295,000
623,000 General Electric Co. Promissory
Notes .......................... 623,000
-----------
TOTAL DEMAND NOTES
(Cost $918,000) ................ 918,000
-----------
TOTAL INVESTMENTS
(Cost $35,213,535) ......... 100.02% $58,056,646
OTHER ASSETS AND
LIABILITIES (NET) .......... (0.02) (14,118)
------ -----------
NET ASSETS .................... 100.00% $58,042,528
====== ===========
- --------------------
+ Non-income producing security.
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Schedule of Investments
March 31, 1998
Value Equity Fund
Shares Value
- ------------ -----------
COMMON STOCKS -- 100.11%
CONSUMER STAPLES -- 26.28%
10,500 Avon Products, Inc. ...................... $ 819,000
10,000 Bestfoods ................................ 1,168,750
13,000 Bristol-Meyers Squibb Co. ................ 1,356,062
10,000 Eastman Kodak Co. ........................ 648,750
20,625 Fort James Corp. ......................... 944,883
20,000 Philip Morris Companies, Inc. ............ 833,750
85,000 +Styling Technology Corp. ................. 2,018,750
31,000 Sunbeam Corp., Inc. ...................... 1,365,938
----------
9,155,883
----------
FINANCIAL -- 25.67%
41,000 +Amerin Corp. ............................. 1,230,000
10,000 Chase Manhattan Corp. .................... 1,348,750
12,000 Fannie Mae ............................... 759,000
7,000 J.P. Morgan & Co., Inc. .................. 940,187
12,000 Long Island Bancorp, Inc. ................ 754,500
16,000 Mid Ocean Ltd. ........................... 1,240,000
15,000 NAC Re Corp. ............................. 786,563
12,000 People's Bank Bridgeport ................. 454,500
8,500 Ritchie Bros. Auctioneers, Inc. .......... 204,531
13,000 SLM Holding Corp. ........................ 567,125
15,000 Travelers Property Casualty Corp.,
Class A .................................. 660,000
----------
8,945,156
----------
TECHNOLOGY -- 21.59%
22,000 +Bell & Howell Co. ........................ 603,625
12,000 International Business Machines
Corp. ................................... 1,246,500
17,000 +National Semiconductor Corp. ............. 355,938
15,500 Nokia Corp., Class A ADR ................. 1,673,031
11,000 +QUALCOMM, Inc. ........................... 588,500
12,000 Raychem Corp. ............................ 498,750
57,500 +Splash Technology Holdings, Inc. . 959,531
15,000 Xerox Corp. .............................. 1,596,563
----------
7,522,438
----------
CAPITAL GOODS -- 6.43%
25,000 +American Standard Companies,
Inc. .................................... 1,146,875
21,000 Boeing Co. ............................... 1,094,625
----------
2,241,500
----------
<PAGE>
Shares Value
- ------------ ----------
COMMON STOCKS -- (continued)
CONSUMER CYCLICAL -- 6.28%
15,000 CBS Corp. ................................ $ 509,063
13,300 CDnow, Inc. .............................. 319,200
21,000 Ford Motor Co. ........................... 1,361,062
----------
2,189,325
----------
ENERGY -- 4.64%
10,000 Mobil Corp. .............................. 766,250
25,000 YPF S.A. ADR ............................. 850,000
----------
1,616,250
----------
UTILITY -- 3.74%
40,000 Frontier Corp. ........................... 1,302,500
----------
TELECOMMUNICATIONS -- 2.22%
44,000 +Tele-Communications TCI
Ventures Group .......................... 772,750
----------
RAW/INTERMEDIATE
MATERIALS -- 2.16%
16,000 Olin Corp. ............................... 751,000
----------
TRANSPORTATION -- 1.10%
22,000 +Hvide Marine, Inc., Class A .............. 385,000
----------
TOTAL COMMON STOCKS
(Cost $22,357,176)........................ 34,881,802
----------
TOTAL INVESTMENTS
(Cost $22,357,176) ...................... 100.11% $34,881,802
OTHER ASSETS AND
LIABILITIES (NET) ....................... ( 0.11) (38,328)
------ -----------
NET ASSETS ................................ 100.00% $34,843,474
====== ===========
- -------------------------
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Statements of Assets and Liabilities
March 31, 1998
<TABLE>
<CAPTION>
Total Return
Equity Income Bond
Fund Fund Fund
------------- ---------------- -------------
<S> <C> <C> <C>
Assets:
Investments, at cost -- see accompanying
Schedule of Investments ................................................... $ 87,620,742 $ 65,654,761 $171,289,593
============ ============ ============
Investments in securities, at value (Note 1a) .............................. $136,185,035 $ 66,320,691 $174,309,393
Cash ....................................................................... -- 49 --
Dividends and interest receivable .......................................... 119,082 769,779 2,746,579
Receivable for investment securities sold .................................. 2,113,470 2,430,020 --
Receivable for fund shares sold ............................................ -- -- --
Deferred organization expenses (Note 1f) ................................... 1,800 1,738 2,195
Other assets ............................................................... 5,620 2,538 7,449
------------ ------------ ------------
Total assets ............................................................. 138,425,007 69,524,815 177,065,616
Liabilities:
Payable for investments purchased ......................................... -- 7,805,626 5,133,111
Dividends payable ......................................................... -- 303,125 791,821
Payable for fund shares redeemed .......................................... -- -- --
Investment advisory fees payable (Note 2a) ................................ 42,044 16,367 35,520
Administration fees payable (Note 2b) ..................................... 16,192 7,958 20,883
Trustees fees and expenses payable (Note 2f) .............................. 2,729 1,066 3,109
Due to custodian bank ..................................................... 7,622 -- 3,332,571
Accrued expenses and other liabilities .................................... 28,323 16,524 37,346
------------ ------------ ------------
Total liabilities ........................................................ 96,910 8,150,666 9,354,361
------------ ------------ ------------
Net Assets ................................................................. $138,328,097 $ 61,374,149 $167,711,255
============ ============ ============
Net Assets Consist of:
Paid-in capital ........................................................... $ 86,913,275 $ 59,728,551 $163,063,205
Undistributed (distributions in excess of) net investment income .......... 114,531 (3,529) 35,252
Accumulated net realized gain on investments .............................. 2,735,998 983,197 1,592,998
Net unrealized appreciation of investments ................................ 48,564,293 665,930 3,019,800
------------ ------------ ------------
Net Assets ................................................................. $138,328,097 $ 61,374,149 $ 167,711,255
============ ============= =============
Institutional Shares outstanding (Unlimited number of $0.00001 par value
shares authorized for each Fund) .......................................... 10,896,706 8,491,581 22,345,546
Net Asset Value Per Share (net assets/shares outstanding) ................ $ 12.69 $ 7.23 $ 7.51
============ ============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Statements of Assets and Liabilities -- (continued)
March 31, 1998
<TABLE>
<CAPTION>
International Optimum Value
Balanced Equity Growth Equity
Fund Fund Fund Fund
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Assets:
Investments, at cost -- see accompanying
Schedule of Investments ............................. $ 71,055,277 $ 34,440,477 $ 35,213,535 $ 22,357,176
============ ============ ============ =============
Investments in securities, at value (Note 1a) $ 88,158,772 $ 40,237,553 $ 58,056,646 $ 34,881,802
Cash ................................................. 5,080 155,352 -- --
Dividends and interest receivable .................... 771,162 91,236 41,036 64,448
Receivable for investment securities sold ............ 1,747,457 -- -- --
Receivable for fund shares sold ...................... -- -- 925 --
Foreign withholding tax receivable ................... -- 25,809 -- --
Deferred organization expenses (Note 1f) ............. 8,191 1,446 769 769
Other assets ......................................... 4,542 1,811 1,970 1,348
------------ ------------ ------------ -------------
Total assets ........................................ 90,695,204 40,513,207 58,101,346 34,948,367
Liabilities:
Payable for investments purchased .................... 671,566 19,568 -- --
Payable for fund shares redeemed ..................... -- -- 1,000 1,000
Investment advisory fees payable (Note 2a) ........... 44,364 34,290 15,619 14,971
Administration fees payable (Note 2b) ................ 11,601 6,767 7,156 4,329
Trustees fees and expenses payable (Note 2f) ......... 2,109 954 913 654
Due to custodian bank ................................ -- -- 262 70,794
Accrued expenses and other liabilities ............... 63,045 15,274 33,868 13,145
------------ ------------ ------------ -------------
Total liabilities ................................... 792,685 76,853 58,818 104,893
------------ ------------ ------------ -------------
Net Assets ............................................ $ 89,902,519 $ 40,436,354 $ 58,042,528 $ 34,843,474
============ ============ ============ =============
Net Assets Consist of:
Paid-in capital ...................................... $ 67,937,311 $ 34,738,393 $ 37,698,437 $ 21,652,872
Undistributed (distributions in excess of)
net investment income ............................... 726,375 (110,649) 6,771 63,875
Accumulated net realized gain (loss) on investments 4,135,338 13,600 (2,505,791) 602,101
Net unrealized appreciation of investments ........... 17,103,495 5,795,010 22,843,111 12,524,626
------------ ------------ ------------ -------------
Net Assets ............................................ $ 89,902,519 $ 40,436,354 $ 58,042,528 $ 34,843,474
============ ============ ============ =============
Net Assets:
Institutional Shares ................................. $ 69,667,280 $ 40,436,354 $ 51,440,603 $ 34,765,562
Trust Shares ......................................... 20,235,239 -- 6,601,925 77,912
Shares outstanding (Unlimited number of $0.00001
par value shares authorized for each Fund):
Institutional Shares ................................. 7,676,395 4,181,608 3,149,996 2,157,021
Trust Shares ......................................... 2,230,982 -- 404,733 4,836
Net Asset Value Per Share (net assets/shares
outstanding):
Institutional Shares ................................. $ 9.08 $ 9.67 $ 16.33 $ 16.12
============ ============ ============ =============
Trust Shares ......................................... $ 9.07 -- $ 16.31 $ 16.11
============ ============ ============ =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Statements of Operations
Year Ended March 31, 1998
<TABLE>
<CAPTION>
Total Return
Equity Income Bond
Fund Fund Fund
-------------- -------------- ----------------
<S> <C> <C> <C>
Investment Income
Dividend income ........................ $ 1,373,719 $ --- $ ---
Interest income ........................ 91,892 3,571,789 9,692,743
Less: Foreign taxes withheld ........... -- -- --
----------- ---------- ------------
Total Income ........................ 1,465,611 3,571,789 9,692,743
Expenses (Note 1g):
Investment advisory fees
(Note 2a) ............................. 824,219 349,390 976,175
Administrative fees (Note 2b) .......... 194,009 82,241 229,777
Custodian fees ......................... 40,226 21,991 48,349
Legal fees ............................. 26,066 10,789 32,903
Prospectus and shareholder
reports ............................... 16,550 6,159 20,000
Trustees' fees and expenses
(Note 2f) ............................. 10,620 4,339 12,690
Auditing fees .......................... 8,932 402 10,270
Transfer agent fees .................... 4,035 4,765 5,041
Insurance expense ...................... 3,751 1,433 3,976
Registration fees ...................... 1,376 785 680
Amortization of organization
expenses (Note 1f) .................... 1,234 1,737 1,445
Distribution fees -- Trust Shares
(Note 2e) ............................. -- -- --
Miscellaneous .......................... 7,573 4,182 11,645
----------- ---------- ------------
Total Expenses ...................... 1,138,591 488,213 1,352,951
Less: Waiver of fees
(Note 2c) .......................... (250,968) (219,452) (600,960)
----------- ---------- ------------
Net Expenses ........................ 887,623 268,761 751,991
----------- ---------- ------------
Net Investment Income .................... 577,988 3,303,028 8,940,752
----------- ---------- ------------
Realized and Unrealized Gain (Loss)
(Note 1):
Net realized gain (loss) on
investments ............................ 13,078,300 990,393 2,353,952
Net realized loss on foreign
currency transactions .................. -- -- --
Net change in unrealized
appreciation/
depreciation of investments
during the year (a) .................... 39,624,075 1,583,858 5,697,218
----------- ---------- ------------
Net Realized and Unrealized Gain ......... 52,702,375 2,574,251 8,051,170
----------- ---------- ------------
Net Increase in Net Assets Resulting
from Operations ......................... $53,280,363 $5,877,279 $ 16,991,922
=========== ========== ============
------------
(a) Includes net unrealized
appreciation/depreciation of
foreign currency ....................... -- -- --
(b) Excelsior Institutional Trust
began offering Trust Shares on
August 25, 1997 for the Balanced Fund.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
International Optimum Value
Balanced Equity Growth Equity
Fund(b) Fund Fund Fund
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Investment Income
Dividend income ........................ $ 1,295,811 $ 725,718 $ 369,195 $ 450,998
Interest income ........................ 2,786,426 190,065 34,130 3,569
Less: Foreign taxes withheld ........... -- (64,098) -- --
------------ ----------- ------------ -----------
Total Income ........................ 4,082,237 851,685 403,325 454,567
Expenses (Note 1g):
Investment advisory fees
(Note 2a) ............................. 624,842 436,436 281,437 195,973
Administrative fees (Note 2b) .......... 147,078 87,287 66,246 46,129
Custodian fees ......................... 30,087 66,272 15,955 13,762
Legal fees ............................. 19,811 9,963 8,856 6,307
Prospectus and shareholder
reports ............................... 22,589 9,922 18,104 14,996
Trustees' fees and expenses
(Note 2f) ............................. 8,274 3,777 3,464 2,514
Auditing fees .......................... 4,967 -- -- --
Transfer agent fees .................... 5,425 5,295 8,924 6,431
Insurance expense ...................... 2,659 1,053 927 703
Registration fees ...................... 3,382 1,430 14,527 14,472
Amortization of organization
expenses (Note 1f) .................... 5,683 1,205 245 245
Distribution fees -- Trust Shares
(Note 2e) ............................. 40,718 -- 18,431 292
Miscellaneous .......................... 9,047 3,721 3,469 1,207
------------ ----------- ------------ -----------
Total Expenses ...................... 924,562 626,361 440,585 303,031
Less: Waiver of fees
(Note 2c) .......................... (210,804) (233,567) (119,069) (91,692)
------------ ----------- ------------ -----------
Net Expenses ........................ 713,758 392,794 321,516 211,339
------------ ----------- ------------ -----------
Net Investment Income .................... 3,368,479 458,891 81,809 243,228
------------ ----------- ------------ -----------
Realized and Unrealized Gain (Loss)
(Note 1):
Net realized gain (loss) on
investments ............................ 12,929,382 487,012 (2,090,039) 2,142,877
Net realized loss on foreign
currency transactions .................. -- (37,743) -- --
Net change in unrealized
appreciation/depreciation of
investments during the year (a) ........ 5,190,357 2,474,310 22,166,451 9,909,167
------------ ----------- ------------ -----------
Net Realized and Unrealized Gain ......... 18,119,739 2,923,579 20,076,412 12,052,044
------------ ----------- ------------ -----------
Net Increase in Net Assets Resulting
from Operations ......................... $ 21,488,218 $ 3,382,470 $ 20,158,221 $12,295,272
============ =========== ============ ===========
------------
(a) Includes net unrealized
appreciation/depreciation of
foreign currency ..................... -- $ (2,066) -- --
(b) Excelsior Institutional Trust
began offering Trust Shares on
August 25, 1997 for the Balanced Fund.
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Equity Fund Income Fund Total Return Bond Fund
------------------------------- ----------------------- ----------------------------
Ten Months Ten Months Ten Months
Year Ended Ended Year Ended Ended Year Ended Ended
March 31, March 31, March 31, March 31, March 31, March 31,
1998 1997 (b) 1998 1997 (b) 1998 1997 (b)
------------- ------------ ---------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from:
Operations:
Net investment income ................. $ 577,988 $ 709,198 $ 3,303,028 $ 2,452,838 $ 8,940,752 $ 6,642,608
Net realized gain on
investments .......................... 13,078,300 5,378,047 990,393 221,976 2,353,952 892,647
Net change in unrealized
appreciation/depreciation of
investments during the period 39,624,075 6,409,437 1,583,858 (473,993) 5,697,218 (1,699,077)
------------- ------------- ------------ ------------ ------------- -------------
Net increase in net assets
resulting from operations ............ 53,280,363 12,496,682 5,877,279 2,200,821 16,991,922 5,836,178
Distributions to Shareholders:
From net investment income ............. (644,350) (608,037) (3,299,499) (2,453,645) (8,941,053) (6,627,379)
In excess of net investment
income ................................ -- -- (3,529) (10,723) -- --
From net realized gains ................ (15,372,442) (1,774,938) (183,152) (562,577) (1,220,129) (487,553)
------------- ------------- ------------ ------------ ------------- -------------
Total distributions to
shareholders ......................... (16,016,792) (2,382,975) (3,486,180) (3,026,945) (10,161,182) (7,114,932)
------------- ------------- ------------ ------------ ------------- -------------
Transactions in Shares of Beneficial
Interest:
Net proceeds from shares sold .......... 33,699,430 28,801,841 12,191,434 35,338,940 49,920,677 39,912,748
Contribution in-kind ................... -- 100,714,496 -- -- -- 77,792,503
Reinvestment of dividends .............. 405,457 46,531 -- -- 134,539 96,057
Cost of shares redeemed ................ (51,602,372) (44,609,820) (4,290,648) (7,431,851) (27,577,046) (43,137,691)
------------- ------------- ------------ ------------ ------------- -------------
Net increase (decrease) in net
assets from beneficial interest
transactions ......................... (17,497,485) 84,953,048 7,900,786 27,907,089 22,478,170 74,663,617
------------- ------------- ------------ ------------ ------------- -------------
Total Increase in Net Assets ......... 19,766,086 95,066,755 10,291,885 27,080,965 29,308,910 73,384,863
Net Assets:
Beginning of Period .................... 118,562,011 23,495,256 51,082,264 24,001,299 138,402,345 65,017,482
------------- ------------- ------------ ------------ ------------- -------------
End of Period (a) ...................... $ 138,328,097 $ 118,562,011 $ 61,374,149 $ 51,082,264 $ 167,711,255 $ 138,402,345
============= ============= ============ ============ ============= =============
Capital Share Transactions:
Institutional Shares sold .............. 3,017,785 3,042,701 1,695,891 5,026,877 6,736,023 5,461,630
Contribution in-kind ................... -- 11,211,157 -- -- -- 10,749,843
Institutional Shares issued for
dividend reinvestment ................. 37,320 4,908 -- -- 18,167 13,188
Institutional Shares redeemed .......... (4,449,056) (4,598,732) (610,049) (1,057,030) (3,735,567) (5,957,354)
------------- ------------- ------------ ------------ ------------- -------------
Net Increase (Decrease) in Shares
Outstanding ............................ (1,393,951) 9,660,034 1,085,842 3,969,847 3,018,623 10,267,307
============= ============= ============ ============ ============= =============
------------
(a) Including undistributed
(distributions in excess of) net
investment income .................... $ 114,531 $ 180,893 $ (3,529) $ (10,723) $ 35,252 $ 28,473
(b) The Fund changed its fiscal year
end to March 31, 1997.
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Statements of Changes in Net Assets -- (continued)
<TABLE>
<CAPTION>
Balanced Fund International Equity Fund
---------------------------------- ---------------------------------
Ten Months Ten Months
Year Ended Ended Year Ended Ended
March 31, March 31, March 31, March 31,
1998 1997 (b) 1998 1997 (b)
---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income ................................... $ 3,368,479 $ 3,029,273 $ 458,891 $ 131,111
Net realized gain on investments ........................ 12,929,382 2,735,694 487,012 451,182
Net realized loss on foreign currency
transactions ........................................... -- -- (37,743) (57,101)
Net change in unrealized appreciation/depreciation
of investments during the period ....................... 5,190,357 1,611,223 2,474,310 57,410
------------- ------------- ------------- ------------
Net increase in net assets resulting from
operations ............................................ 21,488,218 7,376,190 3,382,470 582,602
Distributions to Shareholders:
From net investment income
Institutional Shares .................................... (3,042,093) (3,169,226) (318,203) (226,392)
Trust Shares ............................................ (319,761) -- -- --
In excess of net investment income
Institutional Shares .................................... -- -- (110,649) (129,768)
From net realized gains
Institutional Shares .................................... (7,725,226) (3,666,341) (661,743) (377,475)
Trust Shares ............................................ (1,876,320) -- -- --
------------- ------------- ------------- ------------
Total distributions to shareholders .................... (12,963,400) (6,835,567) (1,090,595) (733,635)
------------- ------------- ------------- ------------
Transactions in Shares of Beneficial Interest:
Net proceeds from shares sold
Institutional Shares .................................... 21,742,743 18,753,237 23,093,069 11,788,947
Trust Shares ............................................ 20,319,193 -- -- --
Contribution in-kind
Institutional Shares .................................... -- -- -- 8,235,903
Reinvestment of dividends
Institutional Shares .................................... 3,590 1,657 8,515 --
Trust Shares ............................................ 2,196,081 -- -- --
Cost of shares redeemed
Institutional Shares .................................... (57,967,499) (17,971,066) (23,426,766) (5,926,057)
Trust Shares ............................................ (1,878,906) -- -- --
------------- ------------- ------------- ------------
Net increase (decrease) in net assets from
beneficial interest transactions ...................... (15,584,798) 783,828 (325,182) 14,098,793
------------- ------------- ------------- ------------
Total Increase (Decrease) in Net Assets ............... (7,059,980) 1,324,451 1,966,693 13,947,760
Net Assets:
Beginning of Period ...................................... 96,962,499 95,638,048 38,469,661 24,521,901
------------- ------------- ------------- ------------
End of Period (a) ........................................ $ 89,902,519 $ 96,962,499 $ 40,436,354 $ 38,469,661
============= ============= ============= ============
Capital Share Transactions:
Shares sold:
Institutional Shares .................................... 2,483,939 2,281,968 2,482,442 1,294,468
Trust Shares (c) ........................................ 2,179,728 -- -- --
Contribution in-kind:
Institutional Shares .................................... -- -- -- 894,234
Shares issued for dividend reinvestment:
Institutional Shares .................................... 418 201 877 --
Trust Shares (c) ........................................ 256,143 -- -- --
Shares redeemed:
Institutional Shares .................................... (6,477,987) (2,190,146) (2,564,182) (652,788)
Trust Shares (c) ........................................ (204,889) -- -- --
------------- ------------- ------------- ------------
Net Increase (Decrease) in Shares Outstanding ............. (1,762,648) 92,023 (80,863) 1,535,914
============= ============= ============= ============
------------
(a) Including undistributed (distributions in excess of)
net investment income ................................. $ 726,375 $ 719,750 $ (110,649) $ (129,768)
(b) The Fund changed its fiscal year end to March 31,
1997.
(c) Initial offering of Trust Shares commenced operations
on August 25, 1997 for Balanced Fund.
</TABLE>
See Notes to Financial Statements.
<PAGE>
Excelsior Institutional Trust
Statements of Changes in Net Assets -- (continued)
<TABLE>
<CAPTION>
Optimum Growth Fund Value Equity Fund
---------------------------------- ---------------------------------
Year Ended Period Ended Year Ended Period Ended
March 31, March 31, March 31, March 31,
1998 1997 (b) 1998 1997 (b)
---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income .................................. $ 81,809 $ 129,278 $ 243,228 $ 171,115
Net realized gain (loss) on investments ................ (2,090,039) (804,467) 2,142,877 (34,750)
Net change in unrealized appreciation/depreciation
of investments during the period ...................... 22,166,451 676,660 9,909,167 2,615,459
------------ ------------ ------------ ------------
Net increase in net assets resulting from
operations ........................................... 20,158,221 1,471 12,295,272 2,751,824
Distributions to Shareholders:
From net investment income
Institutional Shares ................................... (123,146) (75,546) (230,995) (119,110)
Trust Shares ........................................... (4,167) (1,457) (363) --
From net realized gains
Institutional Shares ................................... -- -- (1,695,764) --
Trust Shares ........................................... -- -- (5,580) --
------------ ------------ ------------ ------------
Total distributions to shareholders ................... (127,313) (77,003) (1,932,702) (119,110)
------------ ------------ ------------ ------------
Transactions in Shares of Beneficial Interest:
Net proceeds from shares sold
Institutional Shares ................................... 8,293,581 6,828,215 1,679,381 1,035,782
Trust Shares ........................................... 2,776,946 3,547,991 31,723 59,997
Contribution in-kind
Institutional Shares ................................... -- 20,819,867 -- 20,345,814
Reinvestment of dividends
Institutional Shares ................................... 4,030 390 -- --
Trust Shares ........................................... 875 1,458 1,672 --
Cost of shares redeemed
Institutional Shares ................................... (1,722,710) (576,929) (937,737) (331,027)
Trust Shares ........................................... (1,880,728) (5,834) (37,415) --
------------ ------------ ------------ ------------
Net increase in net assets from beneficial interest
transactions ......................................... 7,471,994 30,615,158 737,624 21,110,566
------------ ------------ ------------ ------------
Total Increase in Net Assets ......................... 27,502,902 30,539,626 11,100,194 23,743,280
Net Assets:
Beginning of Period .................................... 30,539,626 -- 23,743,280 --
------------ ------------ ------------ ------------
End of Period (a) ...................................... $ 58,042,528 $ 30,539,626 $ 34,843,474 $ 23,743,280
============ ============ ============ ============
Capital Share Transactions:
Shares Sold:
Institutional Shares (c) ............................... 614,403 640,078 131,715 86,905
Trust Shares (d) ....................................... 210,824 330,238 2,111 4,975
Contribution in-kind:
Institutional Shares (c) ............................... -- 2,081,986 -- 2,034,581
Shares issued for dividend reinvestment:
Institutional Shares (c) ............................... 332 37 -- --
Trust Shares (d) ....................................... 83 142 123 --
Shares redeemed:
Institutional Shares (c) ............................... (132,059) (54,781) (65,278) (30,902)
Trust Shares (d) ....................................... (135,970) (584) (2,373) --
------------ ------------ ------------ ------------
Net Increase in Shares Outstanding ....................... 557,613 2,997,116 66,298 2,095,559
============ ============ ============ ============
------------
(a) Including undistributed net investment income ........ $ 6,771 $ 52,275 $ 63,875 $ 52,005
(b) For the period June 1, 1996 (commencement of
operations) to March 31, 1997.
(c) Initial offering of Institutional Shares commenced
operations on June 1, 1996 for Optimum Growth
Fund and Value Equity Fund.
(d) Initial offering of Trust Shares commenced
operations on July 3, 1996 for Optimum Growth Fund and
January 15, 1997 for Value Equity Fund.
</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
----------------------------------------------------------------------
Ten Months January 16,
Year Ended Ended Year Ended 1995(b) to
March 31, March 31, May 31, May 31,
1998 1997 (a) 1996 1995
-------------- -------------------- ------------ ------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ........... $ 9.65 $ 8.93 $ 7.73 $ 7.00
---------- --------- ------ ----------
Investment Operations:
Net investment income ......................... 0.05 0.05 0.11 0.05
Net realized and unrealized gain (loss)
on investments ............................... 4.67 0.86 1.20 0.70
---------- --------- ------ ----------
Total From Investment Operations ............. 4.72 0.91 1.31 0.75
---------- --------- ------ ----------
Distributions:
From net investment income .................... ( 0.06) (0.07) (0.11) (0.02)
In excess of net investment income ............ -- -- -- --
From net realized gains ....................... ( 1.62) (0.12) -- --
---------- --------- ------ ----------
Total Distributions .......................... ( 1.68) (0.19) (0.11) (0.02)
---------- --------- ------ ----------
Net Asset Value, End of Period ................. $ 12.69 $ 9.65 $ 8.93 $ 7.73
========== ========= ====== ==========
Total Return ................................... 51.58% 10.22%(c) 17.04% 10.80%(c)
========== ========= ====== ==========
Ratios and Supplemental Data:
Ratios to Average Net Assets
Expenses (d) .................................. 0.70% 0.70%(f) 0.36% 0.12%(f)
Net Investment Income (d) ..................... 0.46% 0.70%(f) 1.32% 2.44%(f)
Portfolio Turnover ............................. 26% 32%(f) 113% 34%(f)
Average Commission Rate (e) .................... $ 0.0721 $ 0.0800 N/A N/A
Net Assets at end of Period (000's omitted) $ 138,328 $ 118,562 $23,495 $ 15,409
----------
(a) The Fund changed its fiscal year end to March 31, 1997.
(b) Commencement of Operations
(c) Not annualized
(d) Reflects voluntary fee waiver and reimbursement of expenses, if any, by the adviser and administrators. Without
these waivers, 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 ............. 0.90% 0.92%(f) 1.49% 2.67%(f)
Net Investment Income to Average
Net Assets ................................. 0.26% 0.48%(f) 0.19% (0.12)%(f)
(e) For fiscal years beginning on or after September 1, 1995, a portfolio is required to disclose the average
commission rate per share it paid for portfolio trades on which commissions were charged.
(f) Annualized
(g) Amount represents less than $0.01 per share.
</TABLE>
<PAGE>
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
Income Fund
-------------------------------------------------------------
Ten Months January 16,
Year Ended Ended Year Ended 1995(b) to
March 31, March 31, May 31, May 31,
1998 1997 (a) 1996 1995
------------ ---------------- ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ........... $ 6.90 $ 6.99 $ 7.33 $ 7.00
------- --------- ------- ---------
Investment Operations:
Net investment income ......................... 0.44 0.38 0.51 0.19
Net realized and unrealized gain (loss)
on investments ............................... 0.35 (0.01) (0.27) 0.33
------- --------- ------- ---------
Total From Investment Operations ............. 0.79 0.37 0.24 0.52
------- --------- ------- ---------
Distributions:
From net investment income .................... (0.44) (0.38) (0.51) (0.19)
In excess of net investment income ............ --(g) --(g) -- --
From net realized gains ....................... (0.02) (0.08) (0.07) --
------- --------- ------- ---------
Total Distributions .......................... (0.46) (0.46) (0.58) (0.19)
------- --------- ------- ---------
Net Asset Value, End of Period ................. $ 7.23 $ 6.90 $ 6.99 $ 7.33
======= ========= ======= =========
Total Return ................................... 11.78% 5.39%(c) 3.18% 7.51%(c)
======= ========= ======= =========
Ratios and Supplemental Data:
Ratios to Average Net Assets
Expenses (d) .................................. 0.50% 0.50%(f) 0.26% 0.12% (f)
Net Investment Income (d) ..................... 6.14% 6.50%(f) 6.99% 7.17%(f)
Portfolio Turnover ............................. 190% 107%(f) 67% 34%(f)
Average Commission Rate (e) .................... N/A N/A N/A N/A
Net Assets at end of Period (000's omitted) $61,374 $ 51,082 $24,001 $ 33,230
----------
(a) The Fund changed its fiscal year end to March 31, 1997.
(b) Commencement of Operations
(c) Not annualized
(d) Reflects voluntary fee waiver and reimbursement of expenses, if any, by the adviser and administrators. Without
these waivers, 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 ............. 0.91% 0.96%(f) 1.35% 1.65%(f)
Net Investment Income to Average
Net Assets ................................. 5.73% 6.04%(f) 5.90% 5.65%(f)
(e) For fiscal years beginning on or after September 1, 1995, a portfolio is required to disclose the average
commission rate per share it paid for portfolio trades on which commissions were charged.
(f) Annualized
(g) Amount represents less than $0.01 per share.
</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>
Total Return Bond Fund
-------------------------------------------------------------------------
Ten Months January 19,
Year Ended Ended Year Ended 1995(b) to
March 31, March 31, May 31, May 31,
1998 1997 (a) 1996 1995
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 7.16 $ 7.18 $ 7.47 $ 7.00
----------- ----------- ---------- ----------
Investment Operations:
Net investment income ............. 0.44 0.37 0.48 0.18
Net realized and unrealized gain
(loss) on investments ............ 0.41 0.01 (g) (0.17) 0.47
----------- ----------- ---------- ----------
Total From Investment
Operations ...................... 0.85 0.38 0.31 0.65
----------- ----------- ---------- ----------
Distributions:
From net investment income ........ (0.44) (0.37) (0.48) (0.18)
In excess of net investment income -- -- -- --
From net realized gains ........... (0.06) (0.03) (0.12) --
----------- ----------- ---------- ----------
Total Distributions .............. (0.50) (0.40) (0.60) (0.18)
----------- ----------- ---------- ----------
Net Asset Value, End of Period ..... $ 7.51 $ 7.16 $ 7.18 $ 7.47
=========== =========== ========== ==========
Total Return ....................... 12.21% 5.29%(c) 4.20% 9.40%(c)
=========== =========== ========== ==========
Ratios and Supplemental Data:
Ratios to Average Net Assets
Expenses (d) ...................... 0.50% 0.50%(f) 0.32% 0.12%(f)
Net Investment Income (d) ......... 5.95% 6.08%(f) 6.47% 7.09%(f)
Portfolio Turnover ................. 196% 200%(f) 127% 84%(f)
Average Commission Rate (e) ........ N/A N/A N/A N/A
Net Assets at end of Period (000's
omitted) .......................... $ 167,711 $ 138,402 $ 65,017 $ 24,913
(a) The Fund changed its fiscal year end to March 31, 1997.
(b) Commencement of Operations
(c) Not annualized
(d) Reflects voluntary fee waiver and reimbursement of expenses, if any, by the adviser and administrators. Without
these waivers, 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 .............................. 0.90% 0.92%(f) 1.33% 1.93%(f)
Net Investment Income
to Average Net Assets ............... 5.55% 5.66%(f) 5.46% 5.28%(f)
(e) For fiscal years beginning on or after September 1, 1995, a portfolio is required to disclose the average commission
rate per share it paid for portfolio trades on which commissions were charged.
(f) Annualized
(g) The amount shown for the ten months ended March 31, 1997 for a share outstanding throughout that period does not
accord with the aggregate net losses on investments for that period because of the timing of sales and repurchases
of the portfolio shares in relation to fluctuating market value of the investments in the Fund.
</TABLE>
<PAGE>
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
Balanced Fund
-------------------------------------------------------------------------------------
Institutional Shares Trust Shares
----------------------------------------------------------------- ---------------
Ten Months July 11, August 25,
Year Ended Ended Year Ended 1994(b) to 1997(b), to
March 31, March 31, May 31, May 31, March 31,
1998 1997 (a) 1996 1995 1998
-------------- ---------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 8.31 $ 8.26 $ 7.70 $ 7.00 $ 9.33
---------- ------------ -------- ------------ ----------
Investment Operations:
Net investment income ............. 0.33 0.26 0.34 0.35 0.16
Net realized and unrealized gain
(loss) on investments ............ 1.66 0.40 0.78 0.64 0.65
---------- ------------ -------- ------------ ----------
Total From Investment
Operations ...................... 1.99 0.66 1.12 0.99 0.81
---------- ------------ -------- ------------ ----------
Distributions:
From net investment income ........ (0.30) (0.28) (0.36) (0.26) (0.15)
In excess of net investment income. -- -- -- -- --
From net realized gains ........... (0.92) (0.33) (0.20) (0.03) (0.92)
---------- ------------ -------- ------------ ----------
Total Distributions .............. (1.22) (0.61) (0.56) (0.29) (1.07)
---------- ------------ -------- ------------ ----------
Net Asset Value, End of Period ..... $ 9.08 $ 8.31 $ 8.26 $ 7.70 $ 9.07
========== ============ ======== ============ ==========
Total Return ....................... 25.12% 8.20%(c) 15.07% 14.59%(c) 9.42%(c)
========== ============ ======== ============ ==========
Ratios and Supplemental Data:
Ratios to Average Net Assets
Expenses (d) ...................... 0.70% 0.70%(f) 0.38% 0.12%(f) 1.05%(f)
Net Investment Income (d) ......... 3.57% 3.84%(f) 4.34% 5.55%(f) 3.03%(f)
Portfolio Turnover ................. 75% 53%(f) 56% 57%(f) 75%(f)
Average Commission Rate (e) ........ $ 0.0544 $ 0.0591 N/A N/A $ 0.0544
Net Assets at end of Period (000's
omitted) .......................... $ 69,667 $ 96,962 $95,638 $ 74,478 $ 20,235
---------
(a) The Fund changed its fiscal year end to March 31, 1997.
(b) Commencement of Operations
(c) Not annualized
(d) Reflects voluntary fee waiver and reimbursement of expenses, if any, by the adviser and administrators. Without these
waivers, 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 .............................. 0.92% 0.93%(f) 1.21% 1.32%(f) 1.27%(f)
Net Investment Income
to Average Net Assets ............... 3.35% 3.61%(f) 3.51% 4.35%(f) 2.81%(f)
(e) For fiscal years beginning on or after September 1, 1995, a portfolio is required to disclose the average commission rate
per share it paid for portfolio trades on which commissions were charged.
(f) Annualized
(g) The amount shown for the ten months ended March 31, 1997 for a share outstanding throughout that period does not accord with
the aggregate net losses on investments for that period because of the timing of sales and repurchases of the portfolio
shares in relation to fluctuating market value of the investments in the Fund.
</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>
International Equity Fund
----------------------------------------------------------------------
Ten Months January 24,
Year Ended Ended Year Ended 1995(b) to
March 31, March 31, May 31, May 31,
1998 1997 (a) 1996 1995
-------------- ---------------------- ------------ ----------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ............ $ 9.03 $ 8.99 $ 7.88 $ 7.00
---------- ---------- -------- ---------
Investment Operations:
Net investment income .......................... 0.09 0.01 0.09 0.08
Net realized and unrealized gain on
investments ................................... 0.79 0.21 1.20 0.80
---------- ---------- -------- ---------
Total From Investment Operations .............. 0.88 0.22 1.29 0.88
---------- ---------- -------- ---------
Distributions:
From net investment income ..................... (0.07) (0.06) (0.12) --
In excess of net investment income ............. (0.02) (0.03) -- --
From net realized gains ........................ (0.15) (0.09) (0.06) --
---------- ----------- -------- ---------
Total Distributions ........................... (0.24) (0.18) (0.18) --
---------- ----------- -------- ---------
Net Asset Value, End of Period .................. $ 9.67 $ 9.03 $ 8.99 $ 7.88
========== =========== ======== =========
Total Return .................................... 9.90% 2.41%(c) 16.58% 12.57%(c)
========== =========== ======== =========
Ratios and Supplemental Data:
Ratios to Average Net Assets
Expenses (d) ................................... 0.90% 0.90%(f) 0.60% 0.25%(f)
Net Investment Income (d) ...................... 1.05% 0.45%(f) 1.71% 3.47%(f)
Portfolio Turnover .............................. 52% 45%(f) 19% 8%(f)
Average Commission Rate (e) ..................... $ 0.0260 $ 0.0293 N/A N/A
Net Assets at end of Period (000's omitted) ..... $ 40,436 $ 38,470 $ 24,522 $ 8,804
----------
(a) The Fund changed its fiscal year end to March 31, 1997.
(b) Commencement of Operations
(c) Not annualized
(d) Reflects a voluntary fee waiver and reimbursement of expenses, if any, by the adviser and administrators. Without these
waivers, 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 ............. 1.43% 1.49%(f) 2.05% 3.32%(f)
Net Investment Income to Average
Net Assets ................................. 0.52% (0.14)%(f) 0.26% 0.40%(f)
(e) For fiscal years beginning on or after September 1, 1995, a fund is required to disclose the average commission rate
per share it paid for portfolio trades on which commissions were charged.
(f) Annualized
(g) The amount shown for the ten months ended March 31, 1997 for a share outstanding throughout that period does not accord
with the aggregate net losses on investments for that period because of the timing of sales and repurchases of the
portfolio shares in relation to fluctuating market value of the investments in the Fund.
</TABLE>
See Notes to Financial Statements.
<PAGE>
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
Optimum Growth Fund
--------------------------------------------------------------------------
Institutional Shares Trust Shares Trust Shares
-------------------------------------- ---------------- -----------------
June 1, July 3,
Year Ended 1996(b) to Year Ended 1996(b) to
March 31, March 31, March 31, March 31,
1998 1997 1998 1997
-------------- ---------------- -------------- --------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ............ $ 10.19 $ 10.00 $ 10.18 $ 9.87
--------- ----------- --------- ---------
Investment Operations:
Net investment income .......................... 0.03 0.05 ( 0.01) 0.02
Net realized and unrealized gain on
investments ................................... 6.15 0.17(g) 6.15 0.31(g)
--------- ----------- --------- ---------
Total From Investment Operations .............. 6.18 0.22 6.14 0.33
--------- ----------- --------- ---------
Distributions:
From net investment income ..................... (0.04) (0.03) (0.01) (0.02)
In excess of net investment income ............. -- -- -- --
From net realized gains ........................ -- -- -- --
--------- ------------ --------- ---------
Total Distributions ........................... (0.04) (0.03) (0.01) (0.02)
--------- ------------ --------- ---------
Net Asset Value, End of Period .................. $ 16.33 $ 10.19 $ 16.31 $ 10.18
========= ============ ========= =========
Total Return .................................... 60.85% 2.23%(c) 60.41% 3.31%(c)
========= ============ ========= =========
Ratios and Supplemental Data:
Ratios to Average Net Assets
Expenses (d) ................................... 0.70% 0.70%(f) 1.05% 1.05%(f)
Net Investment Income (d) ...................... 0.23% 0.66%(f) ( 0.12)% 0.33%(f)
Portfolio Turnover .............................. 19% 20%(f) 19% 20%(f)
Average Commission Rate (e) ..................... $ 0.0314 $ 0.0280 $ 0.0314 $ 0.0280
Net Assets at end of Period (000's omitted) ..... $ 51,441 $ 27,183 $ 6,602 $ 3,357
----------
(a) The Fund changed its fiscal year end to March 31, 1997.
(b) Commencement of Operations
(c) Not annualized
(d) Reflects a voluntary fee waiver and reimbursement of expenses, if any, by the adviser and administrators. Without these
waivers, 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 ............. 0.97% 1.11%(f) 1.32% 1.47%(f)
Net Investment Income to Average
Net Assets ................................. (0.04)% 0.25%(f) (0.39)% (0.09)%(f)
(e) For fiscal years beginning on or after September 1, 1995, a fund is required to disclose the average commission rate
per share it paid for portfolio trades on which commissions were charged.
(f) Annualized
(g) The amount shown for the ten months ended March 31, 1997 for a share outstanding throughout that period does not accord
with the aggregate net losses on investments for that period because of the timing of sales and repurchases of the
portfolio shares in relation to fluctuating market value of the investments in the Fund.
</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>
Value Equity Fund
---------------------------------------------------------
Institutional Shares Trust Shares
----------------------------- -------------------------
June 1, January 15,
Year Ended 1996(a) to Year Ended 1997(a) to
March 31, March 31, March 31, March 31,
1998 1997 1998 1997
---------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................................. $ 11.33 $ 10.00 $ 11.33 $ 12.08
------- ---------- ------- --------
Investment Operations:
Net investment income .............................................. 0.11 0.08 0.07 0.01
Net realized and unrealized gain (loss) on investments ............. 5.59 1.31 5.57 (0.76)
------- ---------- ------- --------
Total From Investment Operations ................................. 5.70 1.39 5.64 (0.75)
------- ---------- ------- --------
Distributions:
From net investment income ......................................... (0.11) (0.06) (0.06) --
From net realized gains ............................................ (0.80) -- (0.80) --
------- ------------ ------- --------
Total Distributions .............................................. (0.91) (0.06) (0.86) --
------- ------------ ------- --------
Net Asset Value, End of Period ....................................... $ 16.12 $ 11.33 $ 16.11 $ 11.33
======= ============ ======= ========
Total Return ......................................................... 51.67% 13.91%(b) 51.09% (6.21)%(b)
======= ============ ======= ========
Ratios and Supplemental Data:
Ratios to Average Net Assets
Expenses (c) ....................................................... 0.70% 0.70%(d) 1.05% 1.05%(d)
Net Investment Income (c) .......................................... 0.81% 0.94%(d) 0.47% 0.54%(d)
Portfolio Turnover ................................................... 51% 64%(d) 51% 64%(d)
Average Commission Rate .............................................. $0.0630 $ 0.0783 $ 0.0630 $ 0.0783
Net Assets at end of Period (000's omitted) .......................... $34,766 $ 23,687 $ 78 $ 56
----------
(a) Commencement of Operations
(b) Not annualized
(c) Reflects voluntary fee waiver and reimbursement of expenses, if any, by the adviser and administrators. Without these
waivers, 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 ................................. 1.00% 1.12%(d) 1.35% 1.43%(d)
Net Investment Income to Average Net Assets .................... 0.51% 0.52%(d) 0.17% 0.16%(d)
(d) Annualized
</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. The Trust currently offers shares in
the following seven funds (each a "Fund", collectively, the "Funds"), each
having its own investment objectives and policies: 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 International Equity Fund ("International Equity Fund"),
Excelsior Institutional Optimum Growth Fund ("Optimum Growth Fund") and
Excelsior Institutional Value Equity Fund ("Value Equity Fund"). With regard to
Balanced Fund, International Equity Fund, Optimum Growth Fund and Value Equity
Fund, the Trust offers two classes of shares: Institutional Shares and Trust
Shares. Balanced Fund began offering Trust Shares on August 25, 1997. At March
31, 1998, International Equity Fund has not issued Trust Shares.
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 require 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 primarily 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 transactions 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 is 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 net realized gains and losses on investments. That
portion of both realized and unrealized gains and losses on investments that
results from fluctuations in foreign currency exchange rates is not separately
disclosed.
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements -- (Continued)
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 the 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 is 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, Optimum Growth Fund, and Value Equity Fund,
dividends will be declared and paid at least quarterly; for the Income Fund and
Total Return Bond Fund, dividends are declared daily and paid 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 net capital losses incurred after October 31 and
within the taxable year ("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
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements -- (Continued)
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 not
less than the repurchase price.
If the value of the underlying security falls below the value of the
repurchase price, 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 the connection
with the disposition of the underlying securities or loss to the extent that
proceeds from the 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 and expenses directly attributable to a particular class
of shares in a Fund are charged to such class.
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 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.
At March 31, 1998, the following Fund had approximate capital loss
carryforwards for federal tax purposes available to offset future net capital
gains through the indicated expiration dates:
Expiration Date March 31,
---------------------------
2005 2006
----------- -------------
Optimum Growth Fund ........................... $404,322 $1,089,198
During the year ended March 31, 1998, the Value Equity Fund utilized
capital loss carryforwards for federal tax purposes totaling $49,313.
Post-October losses are deemed to arise on the first business day of a
Portfolio's next taxable year. Optimum Growth Fund incurred, and elected to
defer, net capital losses of approximately $1,012,000 for the year ended March
31, 1998.
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements -- (Continued)
At March 31, 1998, 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 International Optimum Value
Equity Income Bond Balanced Equity Growth Equity
Fund Fund Fund Fund Fund Fund Fund
----------- ----------- ------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Aggregate Cost ........ $87,699,660 $65,654,761 $171,290,240 $71,058,064 $ 35,466,880 $35,213,535 $22,369,845
=========== =========== ============ =========== ============ =========== ===========
Gross unrealized
appreciation ......... $49,017,492 $ 757,489 $ 3,531,699 $17,293,137 $ 8,244,600 $22,869,314 $12,652,487
----------- ----------- ------------ ----------- ------------ ----------- -----------
Gross unrealized
depreciation ......... (532,117) (91,559) (512,546) (192,429) (3,473,927) (26,203) (140,530)
----------- ----------- ------------ ----------- ------------ ----------- -----------
Net unrealized
appreciation
(depreciation) ....... $48,485,375 $ 665,930 $ 3,019,153 $17,100,708 $ 4,770,673 $22,843,111 $12,511,957
=========== =========== ============ =========== ============ =========== ===========
</TABLE>
2. Investment Advisory Fee, Administration Fee, Distribution Expenses and
Related Party Transactions:
a) United States Trust Company of New York ("U.S. Trust NY") and U.S.
Trust Company of Connecticut ("U.S. Trust CT" and, collectively with U.S. Trust
NY, "U.S. Trust") serve as the investment advisers to the Equity Fund, Income
Fund, Total Return Bond Fund, Optimum Growth Fund and Value Equity 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. Prior to May
16, 1997, U.S. Trust NY served as the Funds' investment adviser pursuant to
investment advisory agreements substantially similar to those currently in
effect for the Funds.
United States Trust Company of The Pacific Northwest ("U.S. Trust
Pacific") serves as the investment adviser to the Balanced Fund and
International Equity Fund. U.S. Trust Pacific has delegated the daily
management of the security holdings of these Funds to the investment managers
named below, acting as sub-advisers:
Balanced Fund ..................... Becker Capital Management, Inc.
International Equity Fund ......... Harding, Loevner Management, L.P.
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 for the
Balanced Fund, and 1.00% of the average daily net assets of the International
Equity Fund. Pursuant to separate sub-advisory agreements between U.S. Trust
Pacific and each sub-adviser, sub-advisory 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, and 0.50% for the
International Equity Fund. The sub-advisers are compensated only by U.S. Trust
Pacific, and receive no fee directly from the Funds.
U.S. Trust NY, U.S. Trust CT and U.S. Trust Pacific are wholly-owned
subsidiaries of U.S. Trust Corporation, a registered bank holding company.
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements -- (Continued)
b) U.S. Trust CT, Chase Global Funds Services Company ("CGFSC"), a
corporate affiliate of The Chase Manhattan Bank, and Federated Administrative
Services ("FAS"), a wholly-owned subsidiary of Federated Investors,
(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 International Equity
Fund), Excelsior Funds, Inc. (excluding its international equity portfolios),
and Excelsior Tax-Exempt Funds, Inc., all of which are affiliated investment
companies, as follows: 0.200% of the first $200 million, 0.175% of the next
$200 million, and 0.150% 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 0.20%. Prior to May 16, 1997, U.S. Trust NY, CGFSC and FAS
served as the Funds' administrators pursuant to administration agreements
substantially similar to those currently in effect for the Funds. For the year
ended March 31, 1998, administration fees charged by U.S. Trust were as
follows:
Equity Fund ............................................... $ 35,840
Income Fund ............................................... $ 15,245
Total Return Bond Fund .................................... $ 42,534
Balanced Fund ............................................. $ 20,555
International Equity Fund ................................. $ 28,015
Optimum Growth Fund ....................................... $ 12,415
Value Equity Fund ......................................... $ 8,577
c) From time to time, as they may deem appropriate in their sole
discretion, 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. 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 and the Institutional Shares of the Balanced Fund, Optimum Growth
Fund and Value Equity Fund; 0.90% of average daily net assets of the
Institutional Shares of the International Equity Fund; and 1.05% of average
daily net assets of the Trust Shares of the Balanced Fund, Optimum Growth Fund
and Value Equity Fund. For the year ended March 31, 1998, U.S. Trust
voluntarily waived fees in the following amounts:
Equity Fund ............................................... $250,968
Income Fund ............................................... $219,452
Total Return Bond Fund .................................... $600,960
Balanced Fund ............................................. $210,804
International Equity Fund ................................. $233,567
Optimum Growth Fund ....................................... $119,069
Value Equity Fund ......................................... $ 91,692
<PAGE>
Excelsior Institutional Trust
Notes to Financial Statements -- (Continued)
d) The Trust, on behalf of the Funds, may enter into administrative
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 Funds. As a consideration for
the administrative services provided by each service organization to its
customers, each Fund will pay the service organizations an administrative
service fee at the annual rate of up to 0.40% of the average daily net asset
value of its shares held by the service organization's customers. Such services
may include assisting in processing purchase, exchange or redemption requests;
transmitting and receiving funds in connection with customer orders to
purchase, exchange or redeem shares; and providing periodic statements. U.S.
Trust, U.S. Trust Pacific and the Administrators intend to voluntarily waive
investment advisory and administration fees payable by each Fund in an amount
equal to the administrative service fees payable by such Fund. For the year
ended March 31, 1998, no administrative service fees have been charged to the
Funds.
e) Pursuant to a Distribution Agreement, Edgewood Services, Inc. (the
"Distributor") serves as the Trust's distributor. Under the Funds' Distribution
Plan, adopted pursuant to Rule 12b-1 under the Act, the Trust Shares of the
Balanced Fund, International Equity Fund, Optimum Growth Fund and Value Equity
Fund may compensate the Distributor monthly for its services which are intended
to result in the sale of Trust Shares, in an amount not to exceed the annual
rate of 0.75% of the average daily net asset value of each Fund's outstanding
Trust Shares. Trust Shares currently bear the expense of such distribution fees
at the annual rate of 0.35% of the average daily net asset value of the Fund's
outstanding Trust Shares.
f) 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, deemed to be affiliated or "interested persons" under the Act
receive no compensation from the Trust for their services.
g) For the year ended March 31, 1998, brokerage commissions on investment
transactions were paid to UST Securities Corp. in the amount of $9,474 for the
Equity Fund and $1,377 for the Value Equity Fund. UST Securities Corp. is a
wholly-owned subsidiary of U.S. Trust Company of New Jersey which is a
wholly-owned subsidiary of U.S. Trust Corporation.
<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 March 31, 1998 were as follows:
Cost of Proceeds
Purchases From Sales
-------------- --------------
Equity Fund ....................... $ 32,663,780 $ 67,967,471
Income Fund ....................... $102,663,682 $ 98,369,527
Total Return Bond Fund ............ $296,047,901 $267,577,945
Balanced Fund ..................... $ 68,693,838 $ 92,529,169
International Equity Fund ......... $ 22,353,002 $ 20,923,457
Optimum Growth Fund ............... $ 15,087,462 $ 8,079,659
Value Equity Fund ................. $ 15,415,186 $ 16,333,402
b) Investment transactions in U.S. Government and Agency Obligations
(excluding short-term investments) for the year ended March 31, 1998 were as
follows:
Cost of Proceeds
Purchases From Sales
------------- ------------
Equity Fund ....................... -- --
Income Fund ....................... $ 48,056,204 $ 67,681,861
Total Return Bond Fund ............ $181,215,116 $216,081,358
Balanced Fund ..................... $ 18,248,786 $ 24,282,976
International Equity Fund ......... -- --
Optimum Growth Fund ............... -- --
Value Equity Fund ................. -- --
4. Line of Credit:
The Portfolios and other affiliated funds participate in a $250 million
unsecured line of credit provided by a syndication of banks under a line of
credit agreement. Borrowings may be made to temporarily finance the repurchase
of Portfolio shares. Interest is charged to each Portfolio, based on its
borrowings, at a rate equal to the Federal Funds Rate plus 2% per year. In
addition, a commitment fee, based on the average daily unused portion of the
line of credit, is allocated among the participating Portfolios at the end of
each quarter. For the year ended March 31, 1998, the Portfolios had no
borrowings under the agreement.
<PAGE>
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 schedules of investments, of Excelsior Institutional Trust (the
"Trust") (comprising, respectively, the Excelsior Institutional Equity Fund,
Excelsior Institutional Income Fund, Excelsior Institutional Total Return Bond
Fund, Excelsior Institutional Balanced Fund, Excelsior Institutional
International Equity Fund, Excelsior Institutional Optimum Growth Fund and
Excelsior Institutional Value Equity Fund) as of March 31, 1998, and the
related statements of operations, the statements of changes in net assets and
the 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
March 31, 1998 by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received.
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
March 31, 1998, the results of their operations, the changes in their net
assets and the financial highlights for each of the periods indicated therein,
in conformity with generally accepted accounting principles.
Boston, Massachusetts
May 8, 1998
<PAGE>
Federal Tax Information (Unaudited):
For the year ended March 31, 1998, the percentage of dividends paid that
qualify for the 70% dividends received deduction for corporate shareholders,
the designation of long-term capital gains, the amounts expected to be passed
through to shareholders as foreign tax credits and the percentage of income
earned from direct Treasury obligations are approximated as follows:
<TABLE>
<CAPTION>
Dividends 20% 28%
Received Long-Term Long-Term Foreign Tax Treasury
Deduction Capital Gain Capital Gain Credit Income
----------- -------------- -------------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Equity Fund ....................... 34% $1,302,274 $9,401,818 -- --
Income Fund ....................... -- -- 166,627 -- 39%
Total Return Bond Fund ............ -- 149,872 511,016 -- 51%
Balanced Fund ..................... 24% 6,486,351 2,279,004 -- 43%
International Equity Fund ......... -- 317,099 215,154 $64,098 --
Optimum Growth Fund ............... 100% -- -- -- --
Value Equity Fund ................. 87% 427,565 1,273,779 -- --
</TABLE>
In addition, for the year ended March 31, 1998, gross income derived from
sources within foreign countries for the International Equity Fund
approximately amounted to $764,550.
