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SIGNATURE JOHN R. ELDER
TITLE TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<CIK>
<NAMEBALANCED PORTFOLIO
<S> <C>
<PERIOD-TYPE> 1 Year
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 222,624,686
<INVESTMENTS-AT-VALUE> 252,717,571
<RECEIVABLES> 1,343,766
<ASSETS-OTHER> 1,012
<OTHER-ITEMS-ASSETS> 54
<TOTAL-ASSETS> 254,062,403
<PAYABLE-FOR-SECURITIES> 2,742,347
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 2,742,347
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 251,194,336
<SHARES-COMMON-STOCK> 0
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
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<NET-ASSETS> 251,194,336
<DIVIDEND-INCOME> 1,548,998
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<NET-INVESTMENT-INCOME> 7,239,807
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</TABLE>
February 2, 1998
To the Investors and Board of Trustees of The
Premium Portfolios, with respect to its series
Balanced Portfolio, Government Income Portfolio,
International Equity Portfolio and Emerging
Asian Markets Equity Portfolio.
In planning and performing our audits of the
financial statements of Balanced Portfolio,
Government Income Portfolio, International
Equity Portfolio and Emerging Asian Markets
Equity Portfolio (four of the portfolios
constituting The Premium Portfolios, hereafter
referred to as the "Portfolios") for the year
ended December 31, 1997, we considered their
internal control, including control activities
for safeguarding securities, in order to
determine our auditing procedures for the
purpose of expressing our opinion on the
financial statements and to comply with the
requirements of Form N-SAR, not to provide
assurance on internal control.
The management of the Portfolios is responsible
for establishing and maintaining internal
control. In fulfilling this responsibility,
estimates and judgments by management are
required to assess the expected benefits and
related costs of control activities. Generally,
control activities that are relevant to an audit
pertain to the entity's objective of preparing
financial statements for external purposes that
are fairly presented in conformity with
generally accepted accounting principles. Those
control activities include the safeguarding of
assets against unauthorized acquisition, use of
disposition.
Because of inherent limitations in internal
control, errors or irregularities may occur and
not be detected. Also, projection of any
evaluation of internal control to future periods
is subject to the risk that it may become
inadequate because of changes in conditions or
that the effectiveness of the design and
operation may deteriorate.
Our consideration of internal control would not
necessarily disclose all matters in internal
control that might be material weaknesses under
standards established by the American Institute
of Certified Public Accountants. A material
weakness is a condition in which the design or
operation of a specific internal control
components does not reduce to a relatively low
level risk that errors or irregularities in
amounts that would be material in relation to
the financial statements being audited may occur
and not be detected within a timely period by
employees in the normal course of performing
their assigned functions. However, we noted no
matters involving internal control, including
control for safeguarding securities, that we
consider to be material weaknesses as defined
above as of December 31, 1997.
This report is intended solely for the
information and use of management and the Board
of Trustees of the Portfolios and the Securities
and Exchange Commission.
Chartered Accountants
001homr-ltr
