<PAGE>
MARTIN CURRIE BUSINESS TRUST
OPPORTUNISTIC EAFE FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1999
(UNAUDITED)
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1999 (Unaudited)
OBJECTIVE Long term capital appreciation through active
management of a diversified portfolio of
international equities outside the USA and Canada.
LAUNCH DATE July 1, 1994
FUND SIZE $223.0m
PERFORMANCE Total return from May 1, 1999 through October 31,
SINCE LAUNCH 1999
<TABLE>
<S> <C> <C>
- MCBT - Opportunistic EAFE (excluding all transaction fees) 9.6%
- MCBT - Opportunistic EAFE (including all transaction fees) 9.2%
- The Morgan Stanley Capital International EAFE Index 6.9%
<CAPTION>
Annualized total return from July 1, 1994 through October 31, 1999
<S> <C> <C>
- MCBT - Opportunistic EAFE (excluding all transaction fees) 11.6%
- MCBT - Opportunistic EAFE (including all transaction fees) 10.8%
- The Morgan Stanley Capital International EAFE Index 9.6%
</TABLE>
PORTFOLIO Over the six months to the 31 October 1999, the
COMMENTS MSCI EAFE Index rose by 6.9%. Over the same period
our fund rose by 9.2%.
Concerned about the outlook for economic growth
and pressure on the euro, we reduced our exposure
to continental Europe. But we added a number of
cyclical stocks such as Lafarge (France), Preussag
(Germany) and technology holdings such as Cap
Gemini (France) and Ericsson (Sweden). Weaker bond
yields and a change in the interest rate cycle
restrict the potential for the region.
We took profits in the UK portfolio. Against
falling bond yields, valuations remain stretched.
We built up our resource weighting (RTZ) and added
to financials with Legal & General. Our sales were
driven by worries over pricing power, such as
Safeway (food retailing). Telecommunications
remains a growth sector and we added BT.
Japan rallied sharply, as did the yen. Encouraged
by an unprecedented change in the attitude of
Japanese corporate management, we added
substantially to the region. We switched emphasis
away from export stocks towards domestic plays.
New holdings included Sumitomo Bakelite and
Benesse. NTT Mobile, Secom (domestic security) and
Rohm have been some of the best performing shares
in the portfolio. We are currently unhedged.
In Asia, firmer currencies, falling interest rates
and evidence of considerable corporate
restructuring encouraged us to broaden our market
exposure. We added holdings in South Korea and
Thailand. New additions included North
(Australia), Swire Pacific (Hong Kong), Singapore
Telecom, Korea Telecom and Thai Petrochemical.
In line with a more optimistic view on world
growth, and rising commodity prices, we increased
our exposure to smaller markets. Alpha Credit Bank
(Greece), Magyar Olaj es Gaz (Hungary), Bank
Handlowy (Poland), Tele Norte (Brazil) Cifra
(Mexico) and Nedcor (South Africa) were all new
additions.
1
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1999 (Unaudited)
PORTFOLIO OUTLOOK
COMMENTS -------
(continued)
The market falls in August and September reflected
the adjustment to slowing activity in world
economies and significantly weaker corporate profits
in the year ahead. The ensuing cuts in global
interest rates have encouraged liquidity back into
major markets and added vital support to the Pacific
region. We continue to favour European equities and
are cautiously adding to the Pacific. Smaller
markets, particularly Latin America, will find it
difficult to attract capital flows. Uncertainty over
the extent of slower growth in 1999 will leave
markets volatile.
INVESTMENT James Fairweather, Chief Investment Officer for
MANAGER PROFILE Martin Currie Investment Management LTD, oversees
the management of the MCBT Opportunistic EAFE
Fund. All funds are managed on a team basis
with a named director heading each team.
James spent three years with Montague Loebl Stanley
& Co as an institutional sales and economics
assistant. He moved into Eurobond sales for 18
months with Kleinwort Benson before joining Martin
Currie in 1984. He had worked in their Far East,
North American and continental European investment
teams. Appointed director in 1987, he became head of
their continental European team in 1992. Chairman of
the international strategy group, James was
appointed deputy chief investment officer in 1994
with overall responsibility for their investments in
emerging markets. He was promoted to chief
investment officer in 1997.
The international strategy group sets limits for
regional allocation. The managers of the funds are
responsible for the selection of countries within
those regions, sectors, and stocks.
2
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1999 (Unaudited)
ASSET ALLOCATION
(% of net assets)
Europe 52%
Japan 31%
Pacific Basin 9%
Other Areas 4%
ST Investment 3%
Other Net Assets 1%
<TABLE>
<CAPTION>
LARGEST HOLDINGS
BY REGION/COUNTRY % OF NET ASSETS
<S> <C> <C>
EUROPE
Total SA (France) 2.4
Nokia Oyi (Finland) 1.9
Mannesmann (Germany) 1.7
Telefonaktiebolaget L.M.
Ericsson, Cl B (Sweden) 1.7
JAPAN
NTT Mobile Communications 3.3
Rohm 2.4
PACIFIC BASIN
Overseas Chinese Bank
Corporation, Foreign (Singapore) 0.8
OTHER AREAS
TB Finance (Cayman) Limited 0.7
Indian Opportunities Fund (Investment Company) 0.7
</TABLE>
3
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCK, PREFERRED STOCK AND
CONVERTIBLE NOTES - 96.7%
AFRICA - 0.2%
SOUTH AFRICA - 0.2%
ANGLO AMERICAN CORPORATION 4,323 $ 230,093
NEDCOR INVESTMENT BANK HOLDINGS * 14,500 8,496
NEDCOR LIMITED 14,500 285,105
-----------------
TOTAL SOUTH AFRICA - (COST $496,120) 523,694
-----------------
TOTAL AFRICA - (COST $496,120) 523,694
-----------------
EUROPE - 51.5%
FINLAND - 1.9%
NOKIA OYJ 36,173 4,140,065
-----------------
TOTAL FINLAND - (COST $1,578,645) 4,140,065
-----------------
FRANCE - 12.8%
ACCOR SA 7,095 1,597,055
AXA 25,098 3,540,150
CAP GEMINI SA 19,674 2,979,950
COMPAGNIE DE SAINT GOBAIN 13,975 2,425,434
FRANCE TELECOM SA 20,015 1,933,698
LAFARGE SA 11,014 1,060,034
PSA PEUGEOT CITROEN 8,234 1,580,620
SOCIETE GENERALE 12,104 2,635,439
SUEZ LYONNAISE DES EAUX SA 10,081 1,627,668
TOTAL SA 40,022 5,409,482
VIVENDI 48,642 3,686,372
-----------------
TOTAL FRANCE - (COST $24,418,190) 28,475,902
-----------------
GERMANY - 7.0%
BASF AG 50,004 2,248,509
BAYERISCHE VEREINSBANK 36,548 2,398,844
CELANESE AG * 7,032 110,949
HOECHST AG 70,320 3,095,480
MANNESMANN 23,850 3,750,450
METRO AG 35,757 1,921,922
SIEMENS AG 24,589 2,207,487
-----------------
TOTAL GERMANY - (COST $14,235,316) 15,733,641
-----------------
GREECE - 0.1%
HELLENIC TELECOMMUNICATION ORGANIZATION SA (OTE) 14,600 309,361
-----------------
TOTAL GREECE - (COST $313,726) 309,361
-----------------
IRELAND - 0.7%
BANK OF IRELAND 194,990 1,521,844
-----------------
TOTAL IRELAND - (COST $2,009,220) 1,521,844
-----------------
</TABLE>
See notes to financial statements.
4
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
EUROPE - CONTINUED
ITALY - 3.3%
INSTITUTO BANCARIO SAN PAOLO DI TORINO 203,938 $ 2,642,790
SEAT PAGINE GIALLE SPA 610,000 869,407
TELECOM ITALIA MOBILE 211,926 1,324,111
TELECOM ITALIA SPA 301,620 2,604,696
-----------------
TOTAL ITALY - (COST $8,160,941) 7,441,004
-----------------
NETHERLANDS - 3.5%
ING GROEP NV 51,809 3,056,096
KONINKLIJKE AHOLD NV 75,854 2,329,781
VERENIGD BEZIT VNU NV 71,663 2,423,426
-----------------
TOTAL NETHERLANDS - (COST $8,005,987) 7,809,303
-----------------
POLAND - 0.1%
TELEKOMUNIKACJA POLSKA SA 43,000 219,300
-----------------
TOTAL POLAND - (COST $214,205) 219,300
-----------------
SPAIN - 3.4%
ARGENTARIA SA 104,261 2,313,972
BANCO SANTANDER CENTRAL HISPANO SA 231,205 2,400,314
TELEFONICA SA * 171,375 2,819,279
-----------------
TOTAL SPAIN - (COST $7,151,466) 7,533,565
-----------------
SWEDEN - 2.6%
FORENINGSSPARBANKEN AB, SERIES A 129,000 2,054,839
TELEFONAKTIEBOLAGET L.M. ERICSSON, CL B 89,000 3,701,119
-----------------
TOTAL SWEDEN - (COST $4,866,978) 5,755,958
-----------------
SWITZERLAND - 2.1%
CLARIANT AG 2,746 1,201,589
HOLDERBANK FINANCIERE GLARUS AG 1,240 1,526,917
NOVARTIS 1,340 2,004,330
-----------------
TOTAL SWITZERLAND - (COST $4,838,743) 4,732,836
-----------------
UNITED KINGDOM - 14.0%
ALLIED ZURICH AG 75,000 911,975
ASTRAZENECA GROUP PLC 33,550 1,517,159
BP AMOCO PLC 170,000 1,650,922
BRITISH SKY BROADCASTING GROUP PLC 66,000 711,439
BRITISH TELECOMMUNICATIONS PLC 56,000 1,015,891
CABLE & WIRELESS 125,050 1,458,923
GENERAL ELECTRIC 93,050 1,012,960
GKN 94,600 1,521,823
GLAXO WELLCOME 56,080 1,655,025
HALIFAX GROUP PLC 50,000 638,383
HILTON GROUP PLC 403,140 1,232,137
LAND SECURITIES 118,580 1,476,967
LASMO 262,014 581,231
LEGAL & GENERAL GROUP PLC 205,000 569,286
LLOYDS TSB 120,400 1,665,823
</TABLE>
See notes to financial statements.
5
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
EUROPE - CONTINUED
UNITED KINGDOM - CONTINUED
MCKECHNIE 47,840 $ 302,651
NATIONAL WESTMINSTER BANCORP 59,370 1,340,429
RIO TINTO PLC 35,000 597,549
ROYAL BANK OF SCOTLAND GROUP 47,710 1,097,558
SCOTTISH & NEWCASTLE PLC 165,000 1,537,295
SCOTTISH POWER 94,910 878,032
SHELL TRANSPORT & TRADING 164,180 1,257,177
SMITHKLINE BEECHAM PLC 118,000 1,522,095
SMITHS INDUSTRIES 102,343 1,389,084
STAGECOACH HOLDINGS PLC 190,000 540,120
UNILEVER 139,523 1,295,342
VODAFONE GROUP PLC 385,000 1,793,511
-----------------
TOTAL UNITED KINGDOM - (COST $27,036,689) 31,170,787
-----------------
TOTAL EUROPE - (COST $102,830,106) 114,843,566
-----------------
JAPAN - 31.1%
ASAHI CHEMICAL INDUSTRY COMPANY LIMITED 210,000 1,268,821
BENESSE CORPORATION 7,400 1,582,622
BRIDGESTONE CORPORATION 85,000 2,339,599
CANON 90,000 2,546,274
FAMILYMART COMPANY 19,000 1,321,089
FUJI PHOTO FILM 38,000 1,220,869
FUJITSU LIMITED 112,000 3,372,782
HITACHI 256,000 2,766,970
HONDA MOTOR 41,000 1,730,124
ITO - YOKADO 30,000 2,399,540
KAO CORPORATION 121,000 3,690,227
KUBOTA CORPORATION 186,000 740,290
MABUCHI MOTOR 12,700 1,875,707
MARUI 118,000 2,229,404
MITSUI MARINE AND FIRE INSURANCE COMPANY LIMITED 160,000 1,060,324
NTT MOBILE COMMUNICATIONS 275 7,305,553
PROMISE 18,000 1,208,401
RISO KAGAKU 13,400 578,306
ROHM 24,000 5,386,017
SANWA INTERNATIONAL FINANCE, PREFERRED 132,000,000 1,645,727
SECOM COMPANY (NEW) LIMITED * 24,000 2,554,906
SECOM COMPANY LIMITED 18,000 1,929,989
SHIN - ETSU CHEMICAL 85,950 3,544,500
SONY 32,100 5,005,716
SUMITOMO BAKELITE COMPANY LIMITED 148,000 1,460,554
TAISHO PHARMACEUTICAL 50,000 2,081,136
TOPPAN PRINTING 241,000 2,956,162
YAMANOUCHI PHARMACEUTICAL 81,000 3,674,403
-----------------
TOTAL JAPAN - (COST $41,556,138) 69,476,012
-----------------
</TABLE>
See notes to financial statements.
6
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SHARES/PAR VALUE
---------- -----
<S> <C> <C>
LATIN AMERICA - 2.6%
BRAZIL - 0.8%
COMPANHIA VALE DO RIO DOCE, ADR 30,000 $ 589,050
PETROLEO BRASILIEIRO SA, ADR 37,000 585,641
TELESP PARTICIPACOES SA, ADR 37,000 598,937
-----------------
TOTAL BRAZIL - (COST $1,656,980) 1,773,628
-----------------
MEXICO - 1.8%
ALFA SA, SERIES A 160,000 614,232
CEMEX SA DE CV, ADR * 23,700 533,250
CIFRA SA DE CV * 348,000 547,416
DESC SA DE CV, ADR 23,000 365,125
GRUPO TELEVISA SA, GDR * 15,000 637,500
TELEFONOS DE MEXICO SA, ADR 14,600 1,248,300
-----------------
TOTAL MEXICO - (COST $3,870,457) 3,945,823
-----------------
TOTAL LATIN AMERICA - (COST $5,527,437) 5,719,451
-----------------
OTHER AREAS - 1.8%
OTHER AREAS - 0.7%
TB FINANCE (CAYMAN) LIMITED, 2.750%, 10/01/2004 (Y) 182,000,000 1,590,645
-----------------
TOTAL OTHER AREAS - (COST $1,210,889) 1,590,645
-----------------
INVESTMENT COMPANIES - 1.1%
INDIAN OPPORTUNITIES FUND (a) * 108,911 1,590,101
NEAR EAST OPPORTUNITIES FUND (b) * 52,000 808,600
-----------------
TOTAL INVESTMENT COMPANIES - (COST $1,960,842) 2,398,701
-----------------
TOTAL OTHER AREAS - (COST $3,171,731) 3,989,346
-----------------
PACIFIC BASIN - 9.5%
AUSTRALIA - 2.4%
BRAMBLES INDUSTRIES LIMITED 33,000 928,045
NEWS CORPORATION LIMITED 165,000 1,193,200
NORTH LIMITED 440,000 850,181
TABCORP HOLDINGS LIMITED 140,000 887,423
TELSTRA CORPORATION LIMITED 285,000 1,449,775
-----------------
TOTAL AUSTRALIA - (COST $5,628,096) 5,308,624
-----------------
HONG KONG - 3.2%
CHINA TELECOM (HONG KONG) LIMITED * 279,000 955,319
DAO HENG BANK GROUP LIMITED 206,000 936,062
HENDERSON LAND DEVELOPMENT COMPANY LIMITED 109,000 495,295
HONG KONG TELECOMMUNICATIONS LIMITED 688,089 1,572,193
HUTCHISON WHAMPOA 109,000 1,094,420
NEW WORLD DEVELOPMENT LIMITED 470,000 889,361
SWIRE PACIFIC LIMITED 240,000 1,189,419
-----------------
TOTAL HONG KONG - (COST $7,746,024) 7,132,069
-----------------
</TABLE>
See notes to financial statements.
7
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
SINGAPORE - 2.6%
CHARTERED SEMICONDUCTOR MANUFACTURING, ADR * 30,000 $ 995,625
NEPTUNE ORIENT LINES LIMITED * 1,100,000 1,593,820
OVERSEAS CHINESE BANK CORPORATION, FOREIGN 236,250 1,775,461
SINGAPORE AIRLINES LIMITED, FOREIGN 142,000 1,502,555
-----------------
TOTAL SINGAPORE - (COST $4,726,016) 5,867,461
-----------------
SOUTH KOREA - 0.9%
KOREA TELECOM CORPORATION, ADR * 38,850 1,369,463
SHINHAN BANK, GDR * 27,810 595,829
-----------------
TOTAL SOUTH KOREA - (COST $1,846,943) 1,965,292
-----------------
THAILAND - 0.4%
THAI PETROCHEMICAL INDUSTRY PUBLIC COMPANY LIMITED * 1,800,000 827,613
-----------------
TOTAL THAILAND - (COST $950,692) 827,613
-----------------
TOTAL PACIFIC BASIN - (COST $20,897,771) 21,101,059
-----------------
TOTAL COMMON STOCK, PREFERRED STOCK AND
CONVERTIBLE NOTES - (COST $174,479,303) + 215,653,128
-----------------
<CAPTION>
PRINCIPAL
AMOUNT
------
<S> <C> <C>
SHORT TERM INVESTMENT - 2.8%
STATE STREET BANK AND TRUST COMPANY REPURCHASE AGREEMENT,
4.600%, 11/01/1999 (c) $ 6,230,000 $ 6,230,000
-----------------
TOTAL SHORT TERM INVESTMENT - (COST $6,230,000) 6,230,000
-----------------
TOTAL INVESTMENTS - (COST $180,709,303) - 99.5% 221,883,128
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - 0.5% 1,156,464
-----------------
NET ASSETS - 100.0% $ 223,039,592
=================
</TABLE>
* Non-income producing security.
(a) The Indian Opportunities Fund is managed by Martin Currie Bermuda Ltd.,
an affiliate of Martin Currie Inc. Martin Currie Inc. does not receive
advisory fees on the portion of net assets represented by affiliated
investment companies.
(b) Martin Currie Investment Management Ltd., which is affiliated to Martin
Currie Inc., provides investment management services to the Near East
Opportunities Fund. Martin Currie Inc. does not receive advisory fees on
the portion of net assets represented by affiliated investment companies.
(c) The repurchase agreement, dated 10/29/99, $6,230,000 par due 11/1/99, is
collateralized by United States Treasury Notes, 8.125%, due 5/15/21 with
a market value of $6,359,788.
+ Percentages of long term investments are presented in the portfolio by
country. Percentages of long term investments by industry are as follows:
Aerospace 0.6%, Air Travel 0.7%, Automobiles 2.5%, Banks 10.7%, Brewery
0.7%, Broadcasting 0.6%, Building and Construction 1.6%, Cement 0.9%,
Chemicals 7.0%, Commercial Services 1.1%, Computer Services 1.3%,
Conglomerates 0.5%, Diversified 4.9%, Drugs & Health Care 5.6%,
Electric Utilities 0.4%, Electrical Equipment 4.0%, Electronics 6.9%,
Financial Services 2.0%, Food & Beverages 1.0%, Hotels & Restaurants
1.3%, Household Products 1.7%, Industrial Machinery 2.5%, Insurance
2.7%, Investment Companies 1.5%, Leisure Time 0.4%, Manufacturing 0.3%,
Mining 1.0%, Oil & Gas 4.3%, Petroleum Services 0.4%, Photography 1.7%,
Publishing 3.3%, Real Estate 1.3%, Retail 1.5%, Retail Trade 2.3%,
Semi-Conductor Manufacturing Equiptment 0.4%, Telecommunications 16.1%,
Transportation 1.0%.
ADR American Depositary Receipts.
GDR Global Depositary Receipts.
See notes to financial statements.
8
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999 (Unaudited)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $174,479,303) (Note B) $ 215,653,128
Investments in repurchase agreements, at value (Note B) 6,230,000
-----------------
Total Investments 221,883,128
Cash 349
Foreign currency, at value (cost $1,921,735) (Note B) 1,927,665
Receivable for investments sold 1,955,891
Receivable for currency sold 1,319,843
Dividend and interest receivable 213,472
Foreign tax reclaims receivable 183,348
-----------------
TOTAL ASSETS 227,483,696
-----------------
LIABILITIES
Payable for investments purchased 1,919,844
Payable for currency purchased 1,319,640
Payable for forward foreign currency contracts - net 770,239
Management fee payable (Note C) 369,181
Administration fee payable (Note C) 9,528
Trustees fees payable (Note C) 4,163
Accrued expenses and other liabilities 51,509
-----------------
TOTAL LIABILITIES 4,444,104
-----------------
TOTAL NET ASSETS $ 223,039,592
=================
COMPOSITION OF NET ASSETS:
Paid-in-capital $ 164,779,553
Undistributed net investment income 2,786,601
Accumulated net realized gain on investment and foreign currency transactions 15,060,328
Net unrealized appreciation on investment and foreign currency transactions 40,413,110
-----------------
TOTAL NET ASSETS $ 223,039,592
=================
NET ASSET VALUE PER SHARE $ 14.74
($223,039,592 / 15,128,396 shares of beneficial interest outstanding) =================
</TABLE>
See notes to financial statements.
9
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1999 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest income $ 214,446
Dividend income 2,699,931
Foreign taxes withheld (278,076)
-----------------
TOTAL INVESTMENT INCOME 2,636,301
-----------------
EXPENSES
Management fee (Note C) 729,115
Custodian fee 145,895
Administration fee (Note C) 75,657
Audit fee 12,602
Legal fees 7,058
Transfer agent fee 3,630
Trustees fees (Note C) 3,730
Amortization of deferred organization expenses (Note B) 439
Miscellaneous expenses 17,818
-----------------
TOTAL EXPENSES 995,944
-----------------
NET INVESTMENT INCOME 1,640,357
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on investments 8,123,325
Net realized loss on foreign currency transactions (89,828)
Net unrealized appreciation (depreciation) on:
Investments 9,578,622
Foreign currency transactions (764,273)
-----------------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 16,847,846
-----------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 18,488,203
=================
</TABLE>
See notes to financial statements.
10
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended Year
October 31, 1999 Ended
(Unaudited) April 31, 1999
----------- --------------
<S> <C> <C>
NET ASSETS at beginning of year $ 213,865,065 $ 159,362,284
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income 1,640,357 1,411,785
Net realized gain on investment transactions 8,123,325 11,196,185
Net realized gain (loss) on foreign currency transactions (89,828) 903,970
Net unrealized appreciation (depreciation) on:
Investments 9,578,622 1,056,622
Foreign currency transactions (764,273) 206,000
--------------- ---------------
Net increase in net assets from operations 18,488,203 14,774,562
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (1,261,524)
--------------- ---------------
Net realized gains -- (8,700,165)
--------------- ---------------
Total distributions -- (9,961,689)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 2,231,424 65,935,613
Reinvestment of dividends and distributions to shareholders -- 8,591,028
Cost of shares repurchased (11,649,334) (25,412,041)
Paid in capital from subscription and redemption fees 104,234 575,308
--------------- ---------------
Total increase (decrease) in net assets from capital share transactions (9,313,676) 49,689,908
--------------- ---------------
NET INCREASE IN NET ASSETS 9,174,527 54,502,781
--------------- ---------------
NET ASSETS at end of period (includes undistributed net investment
income of $2,786,601 and $1,146,244, respectively) $ 223,039,592 $ 213,865,065
=============== ===============
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares sold 157,032 5,165,192
Shares issued in reinvestment of distributions to shareholders -- 667,005
Less shares repurchased (881,112) (1,952,430)
--------------- ---------------
Net share transactions (724,080) 3,879,767
=============== ===============
</TABLE>
See notes to financial statements.
11
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
Six Months Year Year Year Year
Ended Ended Ended Ended Ended July 1, 1994 *
October 31, 1999 April 30, April 30, April 30, April 30, through
(Unaudited) 1999 1998 1997 1996 April 30, 1995
----------- ---------- ---------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of period $ 13.490 $ 13.310 $ 11.320 $ 11.250 $ 9.860 $ 10.000
---------- ---------- ----------- ----------- ----------- ----------
Net investment income 0.112 0.192 0.095 0.134 0.314 0.055
Net realized and unrealized gain(loss) on
investment and foreign currency
transactions 1.131 0.786 2.462 0.286 1.239 (0.323)
---------- ---------- ----------- ----------- ----------- ---------
Total from investment operations 1.243 0.978 2.557 0.420 1.553 (0.268)
---------- ---------- ----------- ----------- ----------- ---------
Less distributions:
Net investment income 0.000 (0.106) (0.153) (0.229) (0.167) 0.000
In excess of net investment income 0.000 0.000 0.000 (0.127) (0.023) 0.000
Net realized gains 0.000 (0.728) (0.422) 0.000 0.000 0.000
---------- ---------- ----------- ----------- ----------- ---------
Total distributions 0.000 (0.834) (0.575) (0.356) (0.190) 0.000
---------- ---------- ----------- ----------- ----------- ---------
Paid in capital from subscription and
redemption fees (Note B) 0.007 0.036 0.008 0.006 0.027 0.128
---------- ---------- ----------- ----------- ----------- ---------
Net asset value, end of period $ 14.740 $ 13.490 $ 13.310 $ 11.320 $ 11.250 $ 9.860
========== ========== =========== =========== =========== =========
TOTAL INVESTMENT RETURN (1) (2) 9.19% 7.92% 23.33% 3.85% 16.17% (1.40)%
- ----------------------- ========== ========== =========== =========== =========== =========
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $223,039,592 $213,865,065 $159,362,284 $120,649,807 $108,295,237 $72,660,677
Operating expenses, net, to average
net assets (Note C) 0.93%(3) 0.96% 0.96% 0.98% 1.00% 1.00%(3)
Operating expenses, gross, to average
net assets (Note C) 0.93%(3) 0.96% 0.96% 0.98% 1.05% 1.37%(3)
Net investment income to average net assets 1.55%(3) 0.85% 1.08% 0.90% 1.46% 1.32%(3)
Portfolio turnover rate 38% 82% 63% 49% 37% 39%
Per share amount of fees waived (Note C) $ 0.000 $ 0.000 $ 0.000 $ 0.000 $ 0.012 $ 0.015
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations.
(1) Total return at net asset value assuming all distributions reinvested and
no purchase premiums or redemption fees. Total return would have been lower
had certain expenses not been waived.
(2) Periods less than one year are not annualized.
(3) Annualized.
See notes to financial statements.
12
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Martin Currie Business Trust ("MCBT") (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business trust on May
20, 1994. The Trust offers five funds which have differing investment objectives
and policies: Opportunistic EAFE Fund, Global Emerging Markets Fund, Japan Small
Companies Fund, Asia Pacific ex Japan Fund (formerly "Emerging Asia Fund") and
EMEA Fund, (the "Funds"). The MCBT Opportunistic EAFE Fund (the "Fund")
commenced investment operations on July 1, 1994. The Fund's Declaration of Trust
permits the Board of Trustees to issue an unlimited number of full and
fractional shares of beneficial interest, without par value.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
VALUATION OF INVESTMENTS - The Fund's portfolio securities traded on a
securities exchange are valued at the last quoted sale price, or, if no sale
occurs, at the mean of the most recent quoted bid and asked prices. Unlisted
securities for which market quotations are readily available are valued at the
mean of the most recent quoted bid and asked prices. Prices for securities which
are primarily traded in foreign markets are furnished by quotation services
expressed in the local currency's value and are translated into U.S. dollars at
the current rate of exchange. Short-term securities and debt securities with a
remaining maturity of 60 days or less are valued at their amortized cost.
Options and futures contracts are valued at the last sale price on the market
where such options or futures contract is principally traded. Options traded
over-the-counter are valued based upon prices provided by market makers in such
securities or dealers in such currencies. Securities for which current market
quotations are unavailable or for which quotations are not deemed by the
investment adviser to be representative of market values are valued at fair
value as determined in good faith by the Trustees of the Fund, or by persons
acting pursuant to procedures established by the Trustees.
REPURCHASE AGREEMENTS - In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value or market price of which is at least equal to the
principal amount, including interest, of the repurchase transaction. To the
extent that any repurchase transaction exceeds one business day, the value of
the collateral is marked-to-market on a daily basis to ensure the adequacy of
the collateral. In the event of default of the obligation to repurchase, the
Fund has the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation. Under certain circumstances, in the event of
default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal proceedings that
could delay or increase the cost of such realization or retention.
INVESTMENT TRANSACTIONS - Investment security transactions are recorded on the
date of purchase or sale. Realized gains and losses from security transactions
are determined on the basis of identified cost.
INVESTMENT INCOME - Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
FOREIGN CURRENCY TRANSLATIONS - The records of the Fund are maintained in U.S.
dollars. Foreign currency amounts are translated into U.S. dollars at a current
rate of exchange of such currency to determine the value of investments, other
assets and liabilities on the date of any determination of net asset value of
the Fund. Purchases and sales of securities and income and expenses are
converted at the prevailing rate of exchange on the respective dates of such
transactions.
The Fund may realize currency gains or losses between the trade and settlement
dates on security transactions. To minimize such currency gains or losses, the
Fund may enter into forward foreign currency contracts.
13
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
FOREIGN CURRENCY TRANSLATIONS (CONTINUED) - The net U.S. dollar value of foreign
currency underlying all contractual commitments held by the Fund on each day and
the resulting net unrealized appreciation, depreciation and related net
receivable or payable amounts are determined by using forward currency exchange
rates supplied by a quotation service.
Reported net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses realized
between the trade and settlement dates on security transactions, and the
difference between the amount of net investment income accrued and the U.S.
dollar amount actually received. The effects of changes in foreign currency
exchange rates on investments in securities are not segregated in the Statement
of Operations from the effects of changes in market prices of those securities,
and are included with the net realized and unrealized gain or loss on investment
securities.
FORWARD FOREIGN CURRENCY CONTRACTS - A forward foreign currency contract
("Forward") is an agreement between two parties to buy and sell a currency at a
set price on a future date. The market value of the Forward fluctuates with
changes in currency exchange rates. The Forward is marked-to-market daily and
the change in the market value is recorded by the Fund as an unrealized gain or
loss. When the Forward is closed, the Fund records a realized gain or loss equal
to the difference between the value at the time it was opened and the value at
the time it was closed. The Fund may enter into Forwards in connection with
planned purchases and sales of securities, to hedge specific receivables or
payables against changes in future exchange rates or to hedge the U.S. dollar
value of portfolio securities denominated in a foreign currency.
Although forward currency contracts limit the risk of loss due to a decline in
the value of hedged currency, they also limit any potential gain that might
result should the value of the currency increase. In addition, the Funds could
be exposed to additional risks if the counterparties to the contracts are unable
to meet the terms of their contracts.
The Fund had the following open forward foreign currency contract at October 31,
1999:
<TABLE>
<CAPTION>
Unrealized
Appreciation
Delivery Date Local Currency Face Amount Value (Depreciation)
------------- -------------- ----------- ----- --------------
<S> <C> <C> <C> <C> <C>
Japanese Yen (buy) 11/22/1999 1,720,979,083 $ 16,348,239 $ 16,561,653 $ 213,414
Japanese Yen (sell) 11/22/1999 1,720,979,083 15,578,000 16,561,653 (983,653)
-------------
$ (770,239)
=============
</TABLE>
EXPENSES - Expenses directly attributable to the Fund are charged to the Fund.
Expenses not directly attributable to a particular Fund are either split evenly
among the affected Funds, allocated on the basis of relative average net assets,
or otherwise allocated among the Funds as the Board of Trustees may direct or
approve. Certain costs incurred in connection with the organization of the Trust
and each Fund have been deferred and are being amortized on a straight line
basis over a five year period starting on each Fund's commencement of
operations.
DISTRIBUTIONS TO SHAREHOLDERS - The Fund declares and distributes dividends from
net investment income, if any, and distributes its net realized capital gains,
if any, at least annually. All distributions will be reinvested in shares of the
Fund at the net asset value unless the shareholder elects in the subscription
agreement either to receive cash in respect of all distributions or to receive
cash with respect to distributions of income and to reinvest in shares of the
Fund with respect to distributions of realized capital gains. Income and capital
gain distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for passive foreign
investment companies (PFIC's), foreign currency transactions, losses deferred
due to wash sales, post October 31 losses and excise tax regulations. Permanent
book and tax differences relating to shareholder distributions will result in
reclassifications to paid-in-capital. Distributions are recorded on the
ex-dividend date.
14
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
PURCHASES AND REDEMPTIONS OF FUND SHARES - There is a purchase premium for cash
investments into the Fund of 0.75% of the amount invested and a redemption fee
on cash redemptions of 0.75% of the amount redeemed. All purchase premiums and
redemption fees are paid to and retained by the Fund and are recorded as
paid-in-capital by the Fund. These fees are intended to offset brokerage and
transaction costs arising in connection with the purchase and redemption. The
purchase and redemption fees may be waived by the Manager, however, if these
brokerage and transaction costs are minimal or in other circumstances at the
Manager's discretion. For the six months ended October 31, 1999, $16,864 was
collected in purchase premiums and $87,370 was collected in redemption fees.
INCOME TAXES - Each Fund of the Trust is treated as a separate entity for U.S.
federal income tax purposes. Each Fund intends to qualify each year as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended. By so qualifying, the Funds will not be subject to federal
income taxes to the extent that they distribute substantially all of their
taxable income, including realized capital gains, if any, for the fiscal year.
In addition, by distributing substantially all of their net investment income,
realized capital gains and certain other amounts, if any, during the calendar
year, the Funds will not be subject to a federal excise tax.
The Fund may be subject to taxes imposed by countries in which it invests. Such
taxes are generally based on income and/or capital gains earned or repatriated.
Taxes are accrued and applied to net investment income, net realized gains and
unrealized appreciation as such income and/or gains are earned.
ESTIMATES - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
income and expenses at the date of the financial statements. Actual results
could differ from these estimates.
NOTE C - AGREEMENTS AND FEES
The Fund has entered into a Management Contract with Martin Currie Inc. (the
"Investment Manager"), a wholly owned subsidiary of Martin Currie Ltd. Under the
Management Contract, the Fund pays the Investment Manager a quarterly management
fee at the annual rate of 0.70% of the Fund's average net assets.
The Investment Manager has voluntarily undertaken to reduce its fee until
further notice to the extent necessary to limit the Fund's annual expenses
(including the management fee but excluding brokerage commissions, transfer
taxes, and extraordinary expenses) to 1.00% of the Fund's average net assets on
an annualized basis. For the six months ended October 31, 1999, it was not
necessary for the Investment Manager to waive any of its fees.
State Street Bank and Trust Company (the "Administrator") serves as
administrator of the Fund. The Administrator performs certain administrative
services for the Fund. The Fund pays the Administrator a fee at the rate of
0.08% of the Fund's average net assets up to $125 million, 0.06% of the next
$125 million, and 0.04% of those assets in excess of $250 million, subject to
certain minimum requirements, plus certain out of pocket costs. State Street
Bank and Trust Company also receives fees and compensation of expenses for
certain custodian and transfer agent services.
Trustees of the Trust who are not interested persons receive aggregate annual
fees of $20,000 ($10,000 per Trustee).
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE D - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for the six months ended October 31, 1999 were $77,359,652
and $93,233,221, respectively.
The identified cost of investments in securities and repurchase agreements owned
for federal income tax purposes and their respective gross unrealized
appreciation and depreciation at October 31, 1999 were as follows:
<TABLE>
<CAPTION>
IDENTIFIED GROSS UNREALIZED NET UNREALIZED
COST APPRECIATION (DEPRECIATION) APPRECIATION
--------------- ------------ -------------- ---------------
<S> <C> <C> <C>
$ 180,709,303 $ 47,800,168 $ (6,626,343) $ 41,173,825
</TABLE>
NOTE E - PRINCIPAL SHAREHOLDERS
As of October 31, 1999 there was one shareholder who owned greater than 10% of
the Fund's outstanding shares, representing 21% of the Fund.
NOTE F - CONCENTRATION OF RISK
The Fund will invest extensively in foreign securities (i.e., those which are
not listed on a United States securities exchange). Investing in foreign
securities involves risks not typically found in investing in U.S. markets.
These include risks of adverse change in foreign economic, political, regulatory
and other conditions, and changes in currency exchange rates, exchange control
regulations (including currency blockage), expropriation of assets or
nationalization, imposition of withholding taxes on dividend or interest
payments and capital gains, and possible difficulty in obtaining and enforcing
judgments against foreign entities. Furthermore, issuers of foreign securities
are subject to different, and often less comprehensive, accounting, reporting
and disclosure requirements than domestic issuers. The securities of some
foreign companies and foreign securities markets are less liquid and at times
more volatile than securities of comparable U.S. companies and U.S. securities
markets.
- --------------------------------------------------------------------------------
16
<PAGE>
MARTIN CURRIE BUSINESS TRUST
--------------------
TRUSTEES AND OFFICERS
C. James P. Dawnay, TRUSTEE AND PRESIDENT *
Simon D. Eccles, TRUSTEE
Patrick R. Wilmerding, TRUSTEE
Colin Winchester, VICE PRESIDENT AND TREASURER
J. Grant Wilson, VICE PRESIDENT
Julian M.C. Livingston, CLERK
* INTERESTED TRUSTEE
--------------------
INVESTMENT MANAGER
Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh EH1 2ES
Scotland
011-44-131-229-5252
Regulated by IMRO
Registered Investment Adviser with the SEC
--------------------
- --------------------------------------------------------------------------------
The information contained in this report is intended for general
informational purposes only. This report is not authorized for
distribution to prospective investors unless preceded or accompanied by
a current Private Placement Memorandum which contains important
information concerning the Fund and its current offering of shares.
- --------------------------------------------------------------------------------
