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Prime Money Market Portfolio
Semi-Annual Report
September 30, 1997
<PAGE>
THE BEAR STEARNS FUNDS
Prime Money Market Portfolio
LETTER TO SHAREHOLDERS
November 13, 1997
Dear Shareholder:
We are pleased to present you with the first semi-annual report of the Prime
Money Market Portfolio (the "Portfolio"). As you know, the Portfolio was
launched on July 14, 1997, as a high-quality, diversified, taxable money market
fund specifically designed for institutional investors and high net-worth
individuals. To date, it has enjoyed steady asset growth and achieved
competitive investment results. We appreciate your confidence during the early
stages of the Portfolio's growth. As we go forward, we hope to expand our
investment relationship with you through our dedication to service and adherence
to the stated investment objectives which are: preservation of principal,
liquidity and a competitive yield.
Although newly launched money market funds typically grow slowly at first, we
are very pleased to report that the Portfolio's assets had grown to $90,000,000
as of November 13, 1997. At the same time, while investing in high-quality
commercial paper, certificates of deposit, floating-rate notes and repurchase
agreements, the Portfolio has produced a competitive net yield every week since
inception. As compiled by IBC's Money Fund Report(TM), the Portfolio's net yield
ranked among the Top 10 in the First Tier - Institutional Only category for each
week beginning with the week ended July 22, 1997 and extending through the week
ended November 11, 1997.1 On a monthly basis, the Portfolio's net yield exceeded
IBC's Money Fund Report Averages(TM) - First Tier - Institutional Only average
net yield by 26 basis points in each of August, September, and October.1 For the
period July 14 through September 30, the effective yield was 5.72%. As of
September 30, the 7-day yield was 5.60%.
During the third quarter of 1997, the Portfolio operated in an interest rate
environment that was fairly volatile but generally trending lower for issues
with a maturity of three months and longer. The less steeply-sloped yield curve
reflected the market's outlook for moderate economic growth with little
inflationary impact. Although the U.S. economy showed signs of faster economic
growth in early October, the global equity market sell-off later in the month is
expected to weaken many foreign economies and ultimately reduce growth in the
U.S. to a more moderate pace with low inflation by the end of the fourth
quarter. This suggests that the Federal Reserve Board will not need to tighten
monetary policy for several months and, as a result, interest rates should
remain fairly stable with a relatively flat yield curve. The appropriate
investment strategy based upon this outlook is to extend maturities when
possible subject to daily liquidity requirements and fluctuations in interest
rates.
Again, we appreciate your support and welcome your ideas and inquiries.
Sincerely,
(/S/ROBERT S. REITZES) (/S/JOHN M. WINTERS)
Robert S. Reitzes John M. Winters
President Senior Portfolio Manager
The Bear Stearns Funds Bear Stearns Funds Management
- ----------
1 The Net Yield represents past performance which is not a guarantee of
future results. Yields are net of management fees and expenses. As of
October 31, 1997, there were 163 funds in the taxable First Tier -
Institutional Only category, and throughout all periods, some or all of the
funds, including Bear Stearns', reported fee waivers from time to time.
Without such waivers, the reported yields would have been lower.
1
<PAGE>
THE BEAR STEARNS FUNDS
Prime Money Market Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT INTEREST MATURITY MARKET
(000'S) RATE DATE VALUE
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT -- 28.17%
BANK - DOMESTIC - 3.13%
$2,000 Bankers Trust Co. (P-1, A-1)* ............ 5.650% 10/01/97 $ 1,999,237
-----------
BANK - FOREIGN - 3.13%
2,000 Westpac Banking Corp. (P-1, A-1+) ........ 5.970 03/23/98 2,000,531
-----------
YANKEE DOLLAR CERTIFICATES OF DEPOSIT - 21.91%
2,000 Canadian Imperial Bank of Commerce,
N.Y. (P-1, A-1+) ...................... 5.950 06/29/98 2,000,448
2,000 Dai-Itchi Kangyo Bank, Ltd., N.Y.
(P-1, A-1) ............................ 5.670 11/04/97 2,000,050
3,000 Norinchukin Bank, Ltd., N.Y.
(P-1, A-1+) ........................... 5.730 11/12/97 3,000,138
1,000 Royal Bank of Canada, N.Y. (P-1, A-1+) ... 6.200 04/06/98 1,001,379
2,000 Societe General, N.Y. (P-1+, A-1) ........ 5.730 01/07/98 2,000,067
2,000 Sumitomo Bank, Ltd., N.Y. (P-1, A-1) ..... 5.650 10/10/97 2,000,002
2,000 Swiss Bank Corp., N.Y. (P-1, A-1+) ....... 5.900 08/28/98 1,999,259
-----------
14,001,343
-----------
Total Certificates of Deposit
(cost - $18,001,111) 18,001,111
-----------
COMMERCIAL PAPER -- 23.18%
COMMERCIAL FINANCE - 3.02%
2,000 General Electric Capital Corp.
(P-1, A-1+) ........................... 5.560 05/08/98 1,932,353
-----------
DIVERSIFIED RECEIVABLES CONDUIT - 7.82%
2,500 Sheffield Receivables Corp. (P-1, A-1+) .. 5.530 10/06/97 2,498,080
2,500 Twin Towers Inc. (P-1, A-1+) ............. 5.530 10/08/97 2,497,312
-----------
4,995,392
-----------
SECURITIES DEALERS - 6.98%
2,000 Goldman Sachs Group L.P. (P-1, A-1+) ..... 6.350 10/01/97 2,000,000
2,500 Merrill Lynch & Co. (P-1+, A-1) .......... 5.550 01/14/98 2,459,531
-----------
4,459,531
-----------
YANKEE DOLLAR COMMERCIAL PAPER - 5.36%
2,500 Nordbanken N.A. (P-1, A-1) ............... 5.550 01/08/98 2,461,844
1,000 Royal Bank of Canada (P-1, A-1+) ......... 5.600 05/08/98 965,933
-----------
3,427,777
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Total Commercial Paper
(cost - $14,815,053) .................. 14,815,053
-----------
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
THE BEAR STEARNS FUNDS
Prime Money Market Portfolio
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT INTEREST MATURITY MARKET
(000'S) RATE DATE VALUE
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS -- 24.19%
BANKS - DOMESTIC - 13.95%
$2,000 Bank of America N.A.
(P-1, A-1+)* .................. 5.710% 10/01/97 $ 1,998,940
3,000 J.P. Morgan & Co., Inc.
(P-1, A-1+) ................... 0.000(DAGGER) 04/01/98 2,915,716
2,000 Key Bank N.A. (P-1, A-1)* ....... 5.490 10/01/97 1,998,767
2,000 PNC Bank, N.A. (P-1, A-1)*....... 5.730 10/01/97 1,998,690
-----------
8,912,113
-----------
BANK - FOREIGN - 3.13%
2,000 ANZ Banking Group, Ltd.
(P-1, A-1+)* .................. 5.605 10/01/97 1,999,282
-----------
COMMERCIAL FINANCE - 3.20%
2,000 Norwest Financial Inc.
(P-1, A-1+) ................... 8.500 08/15/98 2,042,433
-----------
INVESTMENT STRUCTURE - 3.91%
2,500 Sigma Finance Corp.
(P-1, A-1+)* .................. 5.675 10/27/97 2,500,000
-----------
Total Corporate Obligations
(cost - $15,453,828) ... 15,453,828
-----------
REPURCHASE AGREEMENTS -- 24.37%
SECURITIES DEALERS - 24.37%
5,575 Goldman Sachs & Co.** ........... 6.200 10/01/97 5,575,000
10,000 Morgan Stanley & Co.,
Inc.** ........................ 6.250 10/01/97 10,000,000
-----------
Total Repurchase Agreements
(amortized cost -
$15,575,000) ................. 15,575,000
-----------
Total Investments -- 99.91%
(amortized cost -
$63,844,992***) .............. 63,844,992
Other assets in excess of
liabilities -- 0.09% .......... 58,761
-----------
Net Assets -- 100.00% ........... $63,903,753
===========
- ------------
(DAGGER) Zero Coupon Bond.
* Variable Rate Obligations -- The rate shown is the rate as of September 30,
1997 and the maturity date shown is the date the principal amount can be
recovered upon demand or put.
** See notes to financial statements for description of underlying collateral.
*** The cost of investments for federal income tax purposes is substantially
the same as for financial reporting purposes.
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
THE BEAR STEARNS FUNDS
Prime Money Market Portfolio
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
(UNAUDITED)
ASSETS
Investments, at amortized cost which approximates market value
(identified and tax cost - $63,844,992) ................. $63,844,992
Cash ...................................................... 1,760
Receivable from investment adviser ........................ 35,332
Interest receivable ....................................... 341,909
Deferred organization expenses and other assets ........... 80,912
-----------
Total assets ....................................... 64,304,905
-----------
LIABILITIES
Dividends payable ......................................... 291,931
Administration fee payable ................................ 2,647
Custodian fee payable ..................................... 493
Organization expenses payable ............................. 34,846
Accrued expenses .......................................... 71,235
-----------
Total liabilities .................................. 401,152
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NET ASSETS
Capital stock, $0.001 par value (unlimited shares
of beneficial interest authorized) ..................... 63,904
Paid-in capital ........................................... 63,839,849
-----------
Net assets ......................................... $63,903,753
===========
CLASS Y
Net assets ................................................ $63,903,753
-----------
Shares of beneficial interest outstanding ................. 63,903,753
-----------
Net asset value, offering and redemption
price per share ....................................... $1.00
=====
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
THE BEAR STEARNS FUNDS
Prime Money Market Portfolio
STATEMENT OF OPERATIONS
FOR THE PERIOD JULY 14, 1997* THROUGH SEPTEMBER 30, 1997
(UNAUDITED)
INVESTMENT INCOME
Interest ......................................................... $711,124
--------
EXPENSES
Advisory fees .................................................... 24,914
Legal and auditing fees .......................................... 13,825
Federal and state registration fees .............................. 12,154
Reports and notices to shareholders .............................. 9,115
Administration fees .............................................. 6,207
Transfer agent fees and expenses ................................. 5,194
Insurance expenses ............................................... 5,165
Accounting fees .................................................. 3,938
Amortization of organization expenses ............................ 2,415
Custodian fees and expenses ...................................... 1,890
Trustees' fees and expenses ...................................... 1,215
Other ............................................................ 1,930
--------
Total expenses before waivers and reimbursements ............... 87,962
Less: waivers and reimbursements ............................... (70,560)
--------
Total expenses after waivers and reimbursements ................ 17,402
--------
Net investment income ............................................... 693,722
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................ $693,722
========
- ----------
* Commencement of investment operations.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
THE BEAR STEARNS FUNDS
Prime Money Market Portfolio
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD
JULY 14, 1997* THROUGH
SEPTEMBER 30, 1997
(UNAUDITED)
----------------------
INCREASE IN NET ASSETS FROM
OPERATIONS
Net investment income ............................... $ 693,722
-----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income ................................. (693,722)
-----------
SHARES OF BENEFICIAL INTEREST**
Net proceeds from the sale of shares .................. 72,902,623
Cost of shares repurchased ............................ (9,400,663)
Shares issued in reinvestment of dividends ............ 401,792
-----------
Net increase in net assets derived from shares of
beneficial interest transactions .................... 63,903,752
-----------
Total increase in net assets .......................... 63,903,752
NET ASSETS
Beginning of period ................................... 1
-----------
End of period ......................................... $63,903,753
===========
- ---------
* Commencement of investment operations.
** Share transactions at net asset value of $1.00 per share.
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
THE BEAR STEARNS FUNDS
Prime Money Market Portfolio
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for each share
outstanding, total investment return, ratios to average net assets and other
supplemental data for the period. This information has been derived from
information provided in the financial statements.
- --------------------------------------------------------------------------------
FOR THE PERIOD
JULY 14, 1997* THROUGH
SEPTEMBER 30, 1997
(UNAUDITED)
----------------------
CLASS Y
----------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ..................... $ 1.00
------
Net investment income(1) ................................. 0.0121
------
Net increase in net assets resulting from operations ..... 0.0121
------
Dividends to shareholders from
Net investment income .................................. (0.0121)
------
Net asset value, end of period ........................... $ 1.00
======
Total investment return(2)(3) ............................ 5.72%
======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted). ............... $63,904
Ratio of expenses to average net assets(1)(3)(4) ......... 0.14%
Ratio of net investment income to average
net assets(1)(3) ...................................... 5.57%
Decrease reflected in above expense ratios and
net investment income due to waivers and
reimbursements(3). .................................... 0.57%
- -------------
* Commencement of investment operations.
(1) Reflects waivers and reimbursements.
(2) Total investment return is calculated assuming a purchase of shares on the
first day and a sale of shares on the last day of each period reported and
includes reinvestment of dividends and distributions.
(3) Annualized.
(4) Without the waiver of advisory fee and reimbursement of certain operating
expenses, the ratio of expenses to average net assets for Prime Money
Market Portfolio would have been 0.71% annualized for the period July 14,
1997 through September 30, 1997.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
THE BEAR STEARNS FUNDS
Prime Money Market Portfolio
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Bear Stearns Funds (the "Fund") was organized as a Massachusetts business
trust on September 29, 1994 and is registered with the Securities and Exchange
Commission (the "Commission") under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), as an open-end management investment
company. The Fund consists of seven separate portfolios: four diversified
portfolios, Large Cap Value Portfolio, Small Cap Value Portfolio, Total Return
Bond Portfolio, and Prime Money Market Portfolio (the "Portfolio"), and three
non-diversified portfolios, The Insiders Select Fund, S&P STARS Portfolio and
Focus List Portfolio. Each portfolio is treated as a separate entity for certain
matters under the Investment Company Act, and for other purposes, and a
shareholder of one portfolio is not deemed to be a shareholder of any other
portfolio. As of the date hereof, each portfolio (except the Prime Money Market
Portfolio which only offers shares designated as class Y and Focus List
Portfolio which has not yet commenced the public offering of its shares) offers
three classes of shares, which have been designated as class A, C, and Y shares.
ORGANIZATIONAL MATTERS -- Prior to commencing investment operations on July 14,
1997, the Portfolio did not have any transactions other than those relating to
organizational matters and the sale of one class Y share to Bear, Stearns & Co.
Inc., ("Bear Stearns" or the "Distributor"). Costs of $56,500 which were
incurred by the Portfolio in connection with the organization, registration with
the Commission and initial public offering of its shares, have been deferred and
are being amortized using the straight-line method over the period of benefit
not exceeding sixty months, beginning with the commencement of investment
operations of the Portfolio. In the event that the Distributor or any transferee
of the Distributor redeems any of its original shares in the Portfolio prior to
the end of the sixty month period, the proceeds of the redemption payable in
respect of such shares shall be reduced by the pro rata share (based on the
proportionate share of the original shares redeemed to the total number of
original shares outstanding at the time of the redemption) of the unamortized
deferred organization expenses as of the date of such redemption. In the event
that the portfolio is liquidated prior to the end of the sixty month period, the
Distributor or the transferee of the Distributor shall bear the unamortized
deferred organization expenses.
PORTFOLIO VALUATION -- Portfolio securities are valued under the amortized cost
method, which approximates current market value. Under this method, securities
are valued at cost when purchased and thereafter a constant proportionate
amortization of any discount or premium is recorded until maturity of the
security. Regular review and monitoring of the valuations are performed in an
attempt to avoid dilution or other unfair results to shareholders. The Portfolio
seeks to maintain a net asset value of $1.00 per share, although there is no
assurance that it will be able to do so on a continuing basis.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME -- Investment transactions are
recorded on the trade date (the date on which the order to buy or sell is
executed). Realized gains and losses are calculated on the identified cost basis
for both financial reporting and income tax purposes. Interest income and
expenses are recorded on the accrual basis.
U.S. FEDERAL TAX STATUS -- The Portfolio intends to distribute substantially all
of its taxable income and to comply with the other requirements of the Internal
Revenue Code of 1986, as amended, applicable to regulated investment companies.
Accordingly, no provision for U.S. federal income taxes is required. In
addition, by distributing during each calendar year substantially all of its
ordinary income and capital gains, if any, the Portfolio intends not to be
subject to a U.S. federal excise tax.
8
<PAGE>
DIVIDENDS AND DISTRIBUTIONS -- Dividends from net investment income are declared
daily and paid monthly. Any net realized capital gains are distributed at least
annually. Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
REPURCHASE AGREEMENTS -- The Portfolio may purchase securities from financial
institutions subject to the seller's agreement to repurchase and the Portfolio's
agreement to resell the securities at par. The investment adviser only enters
into repurchase agreements with financial institutions that are primary dealers
and deemed to be creditworthy by the investment adviser in accordance with
procedures adopted by the Board of Trustees. Securities purchased subject to
repurchase agreements are maintained with a custodian of the Portfolio and must
have, at all times, an aggregate market value greater than or equal to the
repurchase price plus accrued interest. If the value of the underlying
securities falls below 102% of the value of the repurchase price plus accrued
interest, the Portfolio will require the seller to deposit additional collateral
by the next Portfolio business day. In the event that the seller under the
agreement defaults on its repurchase obligation or fails to deposit sufficient
collateral, the Portfolio has the contractual right, subject to the requirements
of applicable bankruptcy and insolvency laws, to sell the underlying securities
and may claim any resulting loss from the seller.
MANAGEMENT ESTIMATES -- The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
certain estimates and assumptions that may affect the reported amounts and
disclosures in the financial statements. Actual results could differ from those
estimates.
TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
During the period ended September 30, 1997, Bear Stearns Funds Management Inc.
("BSFM" or the "Adviser"), a wholly-owned subsidiary of The Bear Stearns
Companies Inc., serves as the investment adviser pursuant to an Investment
Advisory Agreement with the Portfolio. The Adviser is entitled to receive from
the Portfolio a monthly fee equal to an annual rate of 0.20% of the Portfolio's
average daily net assets.
During the period ended September 30, 1997, BSFM (or the "Administrator") served
as administrator to the Portfolio pursuant to an Administration Agreement. The
Administrator is entitled to receive from the Portfolio a monthly fee equal to
0.05% of the Portfolio's average daily net assets. Under the terms of an
Administrative Services Agreement with the Portfolio, PFPC Inc. provides certain
administrative services to the Portfolio. For providing these services, PFPC
Inc. is entitled to receive from the Portfolio a monthly fee equal to an annual
rate of 0.075% of the Portfolio's average daily net assets up to $150 million,
0.04% of the next $150 million, 0.02% of the next $300 million and 0.0125% of
net assets above $600 million, subject to a minimum monthly fee of $6,250 for
the Portfolio. During the period ended September 30, 1997, PFPC Inc. has
voluntarily waived a portion of its fee.
During the period ended September 30, 1997, the adviser has voluntarily
undertaken to limit the Portfolio's operating expenses (exclusive of brokerage
commissions, taxes, interest, and extraordinary items) to a maximum annual level
of no more than 0.20% of its average daily net assets. The effective net
operating expense ratio for the period was 0.14% of the Portfolio's average
daily net assets (annualized). As necessary, this limitation is effected by
waivers by the Adviser of its advisory fees and reimbursements of expenses
exceeding the advisory fee. For the period ended September 30, 1997, the Adviser
waived advisory fees of $24,914. In addition, the Adviser reimbursed $45,646, in
order to maintain the voluntary expense limitation.
Custodial Trust Company, a wholly-owned subsidiary of The Bear Stearns Companies
Inc. and an affiliate of the Adviser and the Administrator, serves as custodian
to the Portfolio.
9
<PAGE>
SHARES OF BENEFICIAL INTEREST
The Portfolio currently offers class Y shares. There is no sales charge or CDSC
on class Y shares, which are offered primarily to institutional investors.
At September 30, 1997 there was an unlimited amount of $0.001 par value shares
of beneficial interest authorized for the Portfolio, of which Bear Stearns owned
50,374,856 of class Y shares (including 374,855 shares acquired through
dividends reinvested).
COLLATERAL FOR REPURCHASE AGREEMENTS
Listed below is the collateral associated with the repurchase agreement with
Goldman, Sachs & Co. outstanding at September 30, 1997.
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MARKET ACCRUED TOTAL
ISSUER AMOUNT (000'S) MATURITY RATE VALUE INTEREST VALUE
- ------ -------------- -------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Notes .... $6,500 08/31/99 5.875% $6,508,125 $29,537 $6,537,662
</TABLE>
Listed below is the collateral associated with the repurchase agreement with
Morgan Stanley & Co., Inc. outstanding at September 30, 1997.
<TABLE>
<CAPTION>
EFFECTIVE
PRINCIPAL YIELD MARKET ACCRUED TOTAL
ISSUER AMOUNT (000'S) MATURITY RATE VALUE INTEREST VALUE
- ------ -------------- -------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Federal National Mortgage
Association I/O ..... $27,160 02/01/31 6.114% $10,246,306 $50,846 $10,297,151
<FN>
- -------------
* Commencement of investment operations.
I/O Interest-Only, Zero Coupon.
</FN>
</TABLE>
CREDIT AGREEMENT
The Fund (on behalf of Prime Money Market Portfolio) has entered into a credit
agreement with The First National Bank of Boston. Small Cap Value Portfolio,
Large Cap Value Portfolio, The Insiders Select Fund, S&P STARS Portfolio, Total
Return Bond Portfolio, Focus List Portfolio and Bear Stearns Investment Trust
(the "Trust"), which consists of the Emerging Markets Debt Portfolio are also
parties to the credit agreement. The agreement provides that each party to the
credit agreement is permitted to borrow in an amount equal to the lesser of $25
million or 25% of the net assets of a Portfolio. At no time shall the aggregate
outstanding principal amount of all loans to any of the Portfolios exceed $25
million. Each Portfolio as a fundamental policy is permitted to borrow in an
amount up to 331/3% of the value of such Portfolio's assets. However, each
Portfolio currently intends to borrow money only for temporary or emergency (not
leveraging) purposes in an amount up to 15% (10% for the Emerging Markets Debt
Portfolio) of its net assets. The line of credit will bear interest at the
greater of: (i) the annual rate of interest announced from time to time from the
bank at its head office as its Base Rate, or (ii) the Federal Funds Effective
Rate plus 0.50%, or at the borrower's option, the rate quoted by The First
National Bank of Boston.
Each loan is payable on demand or upon termination of this credit agreement or,
for money market loans, on the last day of the interest period and, in any
event, not later than 14 days from the date the loan was advanced. The Portfolio
had no amounts outstanding under the line of credit agreement during the period
ended September 30, 1997.
10
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<PAGE>
BEAR
STEARNS
[LOGO OMITTED]
The
Bear Stearns
Funds
245 PARK AVENUE
NEW YORK, NY 10167
1.800.766.4111
Michael Minikes Chairman of the Board
Robert S. Reitzes President
Peter B. Fox Executive Vice President
William J. Montgoris Executive Vice President
Peter M. Bren Trustee
Alan J. Dixon Trustee
John R. McKernan, Jr. Trustee
M.B. Oglesby, Jr. Trustee
Stephen A. Bornstein Vice President
Donalda L. Fordyce Vice President
Frank J. Maresca Vice President and Treasurer
Ellen T. Arthur Secretary
Vincent L. Pereira Assistant Treasurer
Christina P. La Mastro Assistant Secretary
INVESTMENT ADVISER DISTRIBUTOR
AND ADMINISTRATOR Bear, Stearns & Co. Inc.
Bear Stearns Funds 245 Park Avenue
Management Inc. New York, NY 10167
245 Park Avenue
New York, NY 10167 TRANSFER AND DIVIDEND
DISBURSEMENT AGENT
CUSTODIAN PFPC Inc
Custodial Trust Company Bellevue Corporate Center
101 Carnegie Center 400 Bellevue Parkway
Princeton, NJ 08540 Wilmington, DE 19808
COUNSEL INDEPENDENT AUDITORS
Kramer, Levin, Deloitte & Touche LLP
Naftalis & Frankel Two World Financial Center
919 Third Avenue New York, NY 10281
New York, NY 10022
.
The financial information included herein is taken from the records of the
Portfolio without examination by independent auditors who do not express an
opinion thereon.
This report is submitted for the general information of the shareholders of the
Portfolio. It is not authorized for distribution to prospective investors in the
Portfolio unless it is preceded or accompanied by a current prospectus which
includes details regarding the Portfolio's objectives, policies, and other
information. Total investment return is based on historical results and is not
intended to indicate future performance. The investment return and principal
value of an investment in the Portfolio will fluctuate, so that an investor's
shares, when redeemed, may be worth more or less than original cost.
Prime Money Market Portfolio is neither insured nor guaranteed by the U.S.
Government, and there can be no assurance that the Prime Money Market Portfolio
will be able to maintain a stable net asset value of $1.00 per share.
BSF-R-017-01
