<PAGE>
REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
APRIL 30, 1996
SECURITY DESCRIPTION SHARES VALUE
- -------------------- ------ -----
COMMON STOCKS -- 94.0%
ARGENTINA -- 0.4%
Telecom Argentina Stet ADS (Telecommunications) ... 6,000 $ 271,500
YPF Sociedad Anonima ADR (Energy Sources) ......... 6,000 131,250
------------
402,750
------------
AUSTRALIA -- 5.1%
Brambles Industries Ltd. (Business & Public
Services) ....................................... 59,000 810,204
Coca Cola Amatil Ltd. (Beverages & Tobacco) ....... 87,625 923,327
Lend Lease Corp. (Multi-Industry) ................. 35,000 534,339
News Corp. ADR (Broadcasting & Publishing) ........ 43,000 1,010,500
Western Mining Corp. (Metals & Mining) ............ 167,400 1,222,505
Westpac Banking Corp. (Banking) ................... 210,000 1,021,304
------------
5,522,179
------------
BRAZIL -- 0.9%
Electrobras PNB ADR (Utilities)(a) ................ 20,000 250,000
Telecomunicacoes Brasileiras ADR
(Telecommunications) ............................ 13,500 730,688
------------
980,688
------------
CANADA -- 6.1%
Alcan Aluminum Ltd. (Metals & Mining) ............. 12,800 408,000
Bombardier Class B Sub Voting (Machinery &
Engineering) .................................... 47,400 666,576
CAE Industries (Aerospace) ........................ 92,000 803,965
Cominco Ltd. (Metal & Mining) ..................... 6,000 142,500
Diamonds Fields Resources (Metal & Mining)(a) ..... 29,000 892,308
Inco Ltd. (Metal & Mining) ........................ 23,000 776,250
Northern Telecom (Electrical & Electronics) ....... 14,000 721,000
Rogers Communication Class (Broadcasting &
Publishing) ..................................... 53,000 529,319
Royal Bank of Canada (Banking) .................... 33,500 793,373
Seagrams Company Ltd. (Beverages & Tobacco) ....... 25,300 857,037
------------
6,590,328
------------
DENMARK -- 0.5%
Tele Danmark ADR (Telecommunications) ............. 21,300 537,825
------------
FINLAND -- 0.7%
Nokia K (Electrical & Electronics) ................ 3,000 105,920
Nokia A (Electrical & Electronics) ................ 20,000 713,976
------------
819,896
------------
FRANCE -- 4.6%
Euro Disneyland (Leisure & Tourism)(a) ............ 105,000 312,464
Pechiney Cert Inv (Metals & Mining) ............... 21,030 989,528
Renault (Automobiles) ............................. 29,300 887,210
Societe National ELF-Aquitaine (Energy Sources)(a) 14,000 1,039,652
Synthelabo (Health & Personal Care)(a) ............ 5,850 455,678
TV Francaise (Services)(a) ........................ 4,800 519,420
Valeo (Industrial Components) ..................... 11,200 620,707
------------
4,824,659
------------
GERMANY -- 4.7%
Mannesman AG (Machinery & Engineering) ............ 5,350 1,826,344
Muchener Rueckversicherungs Nam (Insurance) ....... 190 344,767
Muenchener Rueckerver (Insurance)(a) .............. 200 327,666
Siemens AG (Electrical & Electronics) ............. 1,000 547,175
Volkswagen AG (Automobiles) ....................... 3,000 1,034,888
Wolters Kluwer (Broadcasting & Publishing)(a) ..... 8,800 961,913
------------
5,042,753
------------
HONG KONG -- 3.9%
Citic Pacific (Multi-Industry) .................... 90,000 353,685
Consolidated Electric Power Asia (Utilities) ...... 206,600 341,854
Hong Kong Electric (Utilities) .................... 304,000 966,739
Hong Kong Telecom (Telecommunications) ............ 392,000 747,444
Hutchison Whampoa (Multi-Industry) ................ 132,000 819,060
Swire Pacific Class A (Multi-Industry) ............ 113,000 964,100
------------
4,192,882
------------
INDONESIA -- 0.4%
PT Indonesia Satellite ADR (Telecommunications)(a). 12,000 418,500
------------
IRELAND -- 0.8%
Allied Irish Banks PLC (Banking) .................. 155,000 810,809
------------
ITALY -- 3.0%
Alleanza Assicurazioni SPA (Insurance) ............ 43,000 404,949
Alleanza Assicuraz (Insurance) .................... 72,300 501,101
Italcementi Fabbriche Riunite (Building Materials &
Components) ..................................... 22,200 161,199
Stet Risp (Telecommunications) .................... 250,000 654,449
Telecom Italia Mobile RSP (Telecommunications) .... 788,000 1,109,859
Telecom Italia Mobile ORD (Telecommunications) .... 125,000 274,168
Telicom Italia SPA (Telecommunications) ........... 70,500 143,347
------------
3,249,072
------------
JAPAN -- 28.6%
Acom Co. (Financial Services) ..................... 23,000 864,209
Advantest Corp. (Electronic Instruments) .......... 18,000 888,656
Banyu Pharmaceutical (Health & Personal Care) ..... 47,000 675,101
Bridgestone Corp. (Industrial Components) ......... 82,000 1,513,246
Chudenko (Construction & Housing) ................. 7,150 250,973
Dai-Ni-Denden (Telecomunications)(a) .............. 108 923,586
Fuji Photo Film (Recreational & Other Consumer) ... 36,000 1,116,385
Higashi Nihon House (Construction & Housing)(a) ... 33,000 533,650
Hitachi Ltd. (Electrical & Electronics) ........... 63,000 677,194
Japan Airlines (Transportation: Airlines)(a) ...... 109,000 867,853
Jusco Co. (Merchandising)(a) ...................... 29,000 893,793
Kao Corporation (Food & Household Products) ....... 35,000 466,112
Kawasaki Heavy Industries (Machinery & Engineering) 78,000 401,408
Kawasaki Kisen (Transportation: Shipping) ......... 122,000 447,962
Kurita Water Industries (Machinery & Engineering) . 30,800 770,549
Kyocera Corp. (Electronic Components) ............. 7,000 524,709
Kyocera Corp. ADR (Electronic Components) ......... 3,000 452,625
Makita Corp. (Electrical & Electronics) ........... 17,000 273,294
Mitsubishi Heavy Industries, Inc. (Machinery &
Engineering) .................................... 155,000 1,377,122
Mitsui Fudosan (Real Estate) ...................... 91,000 1,194,578
Murata Mfg. (Electronic Components) ............... 24,000 933,746
NKK Corp. (Metals & Mining) ....................... 273,000 851,786
Nihon Dempa Kogyo (Electronic Components) ......... 4,000 93,603
Nintendo (Recreation & Other Consumer Products) ... 16,300 1,240,428
Nikon Corporation (Industrial Components) ......... 82,000 1,099,834
Nippon Telephone & Telegraph (Telecommunications) . 154 1,190,058
Nomura Securities (Financial Services) ............ 42,000 910,916
Orix Corporation (Financial Services) ............. 7,000 288,323
Rohm Co. (Electrical & Electronics)(a) ............ 15,000 948,870
Sankyo Co. (Health & Personal Care) ............... 61,500 1,485,945
Sanyo Electric Co. Ltd. (Appliances & Household
Goods) .......................................... 140,000 889,608
Secom (Business & Public Services) ................ 4,000 281,570
Sekisui House (Construction & Housing) ............ 72,000 890,369
Sony Corp. (Appliances & Household Goods) ......... 9,200 595,101
Sumitomo Realty & Development (Real Estate) ....... 90,000 720,856
Suzuki Motor (Automobiles) ........................ 51,000 645,232
Tokyo Broadcast Systems (Broadcasting &
Publishing) ..................................... 17,000 282,996
Tostem Corp. (Building Materials & Components) .... 3,000 92,747
Toyota Motor Corp. (Automobiles) .................. 41,000 932,128
Yasuda Fire & Marine (Insurance) .................. 129,000 1,012,366
------------
30,499,487
------------
MALAYSIA -- 2.0%
Genting Berhad (Leisure & Tourism)(a) ............. 42,000 377,301
New Straits Times Press Berhad (Broadcasting &
Publishing)(a) .................................. 127,000 682,494
Renong Berhad (Multi-Industry) .................... 256,000 445,574
Sime Darby BHD (Multi-Industry) ................... 238,000 658,593
------------
2,163,962
------------
MEXICO -- 1.8%
Cemex SA Cl B ADR (Building Materials &
Components)(a) .................................. 48,000 402,000
Grupo Financiero Banamex "L" (Financial
Services)(a) .................................... 47,483 97,753
Grupo Financiero Banamex "B" (Financial
Services)(a) .................................... 269,654 622,796
Telefonos De Mexico ADR (Telecommunications) ...... 22,900 778,600
------------
1,901,149
------------
NETHERLANDS -- 3.3%
Aegon (Insurance) ................................. 16,500 785,760
ABN-AMRO Holding (Banking) ........................ 9,200 476,242
Asm Lithography Holding NV (Electronic
Components)(a) .................................. 17,000 757,981
Philips Electronics NV (Appliances & Household
Goods) .......................................... 23,100 815,611
Philips Electronics NV ADR (Appliances & Household
Goods) .......................................... 18,000 645,750
------------
3,481,344
------------
NEW ZEALAND -- 0.9%
Lion Nathan (Beverages & Tobacco) ................. 94,000 234,196
Telecom New Zealand (Telecommunications) .......... 184,000 780,463
------------
1,014,659
------------
NORWAY -- 0.8%
Orkla AS A-Aksjer (Multi-Industry)(a) ............. 17,000 829,911
------------
PHILIPPINES -- 0.2%
Philippine Long Distance ADR (Telecommunications) . 4,000 201,000
------------
PORTUGAL -- 0.4%
Portugal Telecom ADR (Telecommunications) ......... 22,000 475,750
------------
SINGAPORE -- 1.1%
City Developments (Real Estate) ................... 35,000 306,297
Singapore Press Holdings Ltd. (Broadcasting &
Publishing)(a) .................................. 47,400 897,075
------------
1,203,372
------------
SPAIN -- 2.3%
Banco de Santander (Banking) ...................... 20,400 947,160
Corporacion Mapfre Regular (Insurance) ............ 9,000 452,510
Telefonica de Espana (Telecommunications) ......... 60,900 1,083,656
------------
2,483,326
------------
SWEDEN -- 8.2%
AGA AB Free (Chemicals)(a) ........................ 46,000 737,201
Asea A Free (Electrical & Electronics) ............ 11,700 1,193,842
Astra AB A Free (Health & Personal Care) .......... 47,900 2,123,364
Atlas Copco AB-Ser B (Machinery & Engineering) .... 40,000 758,667
Autoliv AB (Industrial Components) ................ 17,000 924,810
Ericsson B Free (Electrical & Electronics) ........ 43,660 882,649
Hennes & Mauritz B Free (Merchandising) ........... 8,500 584,880
Incentive (Multi-Industry)(a) ..................... 12,000 635,163
Volvo Aktiebolag B Free (Automobiles) ............. 38,500 880,224
------------
8,720,800
------------
SWITZERLAND -- 5.3%
BBC Brown Boveri A Inhaber (Electrical &
Electronics) .................................... 125 150,261
Baloise Holdings (Insurance) ...................... 343 734,508
CS Holding Inhaber (Banking) ...................... 12,005 1,087,637
Ciba-Geigy (Chemicals) ............................ 835 966,842
Holderbank Finan Glaris Class B (Building Materials
& Components) ................................... 1,330 1,003,511
Nestle Registered Shares (Food & Household
Products) ....................................... 1,289 1,430,381
Swissair (Transportation: Airlines)(a) ............ 350 345,078
------------
5,718,218
------------
THAILAND -- 0.6%
Bangkok Bank (Banking) ............................ 45,000 652,148
------------
UNITED KINGDOM -- 7.4%
BAT Industries (Multi-Industry) ................... 15,200 115,143
Bicc PLC (Industrial Components) .................. 39,000 204,010
British Petroleum PLC ADR (Energy Sources) ........ 4,700 513,475
British Petroleum PLC (Energy Sources) ............ 46,000 415,723
British Sky Broadcasting PLC (Broadcasting &
Publishing) ..................................... 147,500 1,062,863
English China Clays (Miscellaneous Materials &
Commodities) .................................... 119,000 522,929
HSBC Holdings PLC (Financial Services) ............ 49,300 730,935
Morgan Crucible Co. (Industrial Components) ....... 51,800 337,342
Reckitt & Coleman PLC (Food & Household Products) . 77,400 850,499
Shell Transport & Trading (Energy Sources) ........ 13,000 171,772
Shell Transport & Trading (NY registered) (Energy
Sources) ........................................ 6,400 512,000
Storehouse PLC (Merchandising) .................... 50,000 259,290
Thorn EMI PLC (Recreation & Other Consumer
Products) ....................................... 84 2,333
United News & Media PLC (Broadcasting &
Publishing) ..................................... 45,440 475,053
Vodafone Group PLC (Telecommunications) ........... 170,434 682,147
Zeneca Group PLC (Health & Personal Care) ......... 46,000 965,630
------------
7,821,144
------------
TOTAL COMMON STOCK ................................ 100,558,611
------------
RIGHTS -- 0.0% (b)
MALAYSIA
Renong Berhad Warrant Rights (Multi-Industry)(a) .. 32,000 193
Renong Berhad Rights (Multi-Industry)(a) .......... 51,200 14,373
------------
14,566
------------
WARRANTS -- 0.2%
ITALY
Softe-Sip Risp (expires 3/24/97)
(Telecommunications)(a) ......................... 110,000 225,352
------------
PREFERRED STOCK -- 0.1%
GERMANY
Volkswagon N/V VZG (Automobiles) .................. 600 152,345
------------
PRINCIPAL
AMOUNT
---------
LONG TERM CORPORATE DEBT -- 2.3%
JAPAN -- 0.3%
MBL International, 3.00%, 11/30/02 (Banking) ...... $ 270,000 307,800
------------
SPAIN -- 0.0% (b)
Corporacion Mapfre, 8.50%, 2/27/99 (Insurance) .... 1,760,000 13,827
------------
SWITZERLAND -- 0.6%
BBC Brown Boveri, 4.00%, 7/10/98 (Electrical &
Electronics) .................................... 637,500 632,634
------------
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- -------------------- --------- -----
UNITED KINGDOM 1.3%
British Air Capitol, 9.75%, 6/15/05
(Transportation: Airlines) ...................... $ 197,000 $ 662,260
Royal Insurance, 7.25%, 12/12/07 (Insurance) ...... 390,000 740,785
------------
1,403,045
------------
TOTAL LONG TERM CORPORATE DEBT .................... 2,357,306
------------
REPURCHASE AGREEMENTS -- 2.7%
Salomon Brothers, 4.81%, dated 4/30/96, due 5/01/
96, proceeds $2,859,470 (collateralized by
$621,598 U.S. Treasury Note 11.25%, due 2/15/15,
valued at $616,215 and $2,143,316 U.S. Treasury
Note, 7.875%, due 11/15/04, valued at $2,384,075)
(cost $2,859,088) ............................... 2,859,088
------------
TOTAL INVESTMENTS 99.3%
(Identified Cost $97,948,127) ................... 106,167,268
OTHER ASSETS LESS LIABILITIES 0.7% ................ 792,571
------------
TOTAL NET ASSETS 100.0% ........................... $106,959,839
============
- ------------------------------------------------------------------------------
(a) Non-income producing security
(b) Less than 0.1%
ADR = American depository receipt
ADS = American depository share
<TABLE>
INDUSTRY DIVERSIFICATION
<CAPTION>
PERCENT OF PERCENT OF
PORTFOLIO PORTFOLIO
---------- ----------
<S> <C> <C> <C>
Telecommunications ......................... 10.4% Recreational & Other Consumers ......... 2.2%
Electrical & Electronics ................... 6.4% Real Estate ............................ 2.1%
Banking .................................... 5.7% Beverages & Tobacco .................... 1.9%
Broadcasting & Publishing .................. 5.5% Airlines ............................... 1.8%
Machinery & Engineering .................... 5.4% Merchandise ............................ 1.6%
Health & Personal Care ..................... 5.3% Chemicals .............................. 1.6%
Multi-Industry ............................. 5.0% Construction & Housing ................. 1.6%
Insurance .................................. 5.0% Building Materials & Components ........ 1.6%
Metals: Nonferrous ......................... 4.9% Utilities .............................. 1.5%
Industrial Components ...................... 4.4% Business & Public Services ............. 1.0%
Automobiles ................................ 4.2% Electronic Instruments ................. 0.8%
Financial Services ......................... 3.3% Aerospace & Military Technology ........ 0.8%
Appliances & Household Goods ............... 2.8% Leisure & Tourism ...................... 0.6%
Energy Sources ............................. 2.6% Services ............................... 0.5%
Electrical Components ...................... 2.6% Miscellaneous Materials & Commodities .. 0.5%
Food & Household Products .................. 2.6% Shipping ............................... 0.4%
------
96.6%
Short Term & Other Assets Less
Liabilities .......................... 3.4%
------
100.0%
======
</TABLE>
See accompanying notes to financial statements
<PAGE>
REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1996
ASSETS:
Investment at value (cost $97,948,127) ......................... $106,167,268
Foreign currency at value (cost $45,757) ....................... 41,778
Receivable for investments sold ................................ 1,174,825
Interest receivable ............................................ 45,435
Dividends receivable ........................................... 335,956
Net unrealized appreciation on forward currency contracts
(Note 2) ..................................................... 262,673
Deferred organization expenses (Note 1) ........................ 50,219
Receivable from affiliate (Note 2) ............................. 26,886
------------
Total Assets ............................................. 108,105,040
------------
LIABILITIES:
Payable for investments purchased .............................. 1,020,579
Sub-advisery fees payable (Note 2) ............................. 44,124
Administration fee payable (Note 2) ............................ 4,227
Accrued expenses and other liabilities ......................... 76,271
------------
Total Liabilities ........................................ 1,145,201
------------
NET ASSETS:
Applicable to investors' beneficial interest ................... $106,959,839
============
See accompanying notes to financial statements
<PAGE>
REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1996
INVESTMENT INCOME (NOTE 1):
Dividends (net of foreign withholding tax $97,234) .............. $ 582,160
174,583
Interest ........................................................ ----------
Investment Income ........................................... 756,743
EXPENSES (NOTE 2):
Sub-advisory fees ................................. $ 203,677
Custody fees ...................................... 56,893
Fund accounting fees .............................. 25,000
Administration fees ............................... 18,548
Audit fees ........................................ 11,119
Amortization of organization expenses (Note 2) .... 6,865
Trustees' fees and expenses ....................... 3,745
Insurance ......................................... 2,266
Printing .......................................... 1,200
Legal fees ........................................ 850
Other expenses .................................... 1,350
---------
Total expenses .................................. 331,513
Less: reimbursement of expenses ................. (26,052)
Less: waiver of fees ............................ (6,250)
---------
Net expenses ................................................ 299,211
----------
NET INVESTMENT INCOME ........................................... $ 457,532
==========
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments ................................................. 775,747
Foreign currency transactions ............................... 304,039
Net unrealized appreciation of investments ...................... 7,037,270
Net unrealized depreciation of foreign currency contracts and (256,611)
translations .................................................. ----------
Net realized and unrealized gain on investments and foreign
currency transactions ......................................... 7,860,445
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $8,317,977
==========
See accompanying notes to financial statements
<PAGE>
REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD
FOR THE JANUARY 9, 1995
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS)
APRIL 30, 1996 TO
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income .................... $ 457,532 $ 293,335
Net realized gain (loss) from investment
and foreign currency transactions ....... 1,079,786 (98,258)
Net unrealized appreciation of investments
and foreign currency and translations ... 6,780,659 1,700,597
------------ -----------
Net increase in net assets resulting from
operations .............................. 8,317,977 1,895,674
------------ -----------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Additions ................................ 60,467,253 38,444,279
Reductions ............................... (1,754,299) (461,145)
------------ -----------
Net increase in net assets from
transactions in investors' beneficial
interest ................................ 58,712,954 37,983,134
------------ -----------
NET INCREASE IN NET ASSETS ............... 67,030,931 39,878,808
NET ASSETS:
Beginning of period ...................... 39,928,908 50,100
----------- ----------
End of period ............................ $106,959,839 $39,928,908
============ ===========
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR THE PERIOD
FOR THE JANUARY 9, 1995
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS)
APRIL 30, 1996 TO
(UNAUDITED) OCTOBER 31, 1995
--------------- ----------------
RATIOS AND SUPPLEMENTAL DATA:
Net assets at end of period (in 000's) .... $106,960 $39,929
Ratios:
Expenses to average net assets (a) ........ 0.81%(b) 0.64%(b)
Net investment income to average net
assets (a) .............................. 1.23%(b) 1.55%(b)
Portfolio turnover ........................ 13%(c) 3%(c)
Average commission rate paid per share (d) $0.0355 --
(a) Reflects a voluntary expense limitation and waiver of fees by affiliated
parties of the Portfolio. If this limitation had not been in effect, the
annualized ratios of expenses and net investment income to average net
assets for the six months ended April 30, 1996 and the period January 9,
1995 (commencement of operations) to October 31, 1995 would have been:
Expenses to average net assets ...... 0.89%(b) 4.63%(b)
Net investment income to average net
assets ............................ 1.15%(b) (2.69%)(b)
(b) Annualized.
(c) Not annualized.
(d) Most foreign securities markets do not charge commissions based on a rate
per share but as a percentage of the principal value of the transaction.
As a result, the above rate is not indicative of the commission
arrangements currently in effect.
See accompanying notes to financial statements
<PAGE>
REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
APRIL 30, 1996
1. ORGANIZATION. The Republic International Equity Portfolio (the
"Portfolio") is a diversified separate series of Republic Portfolios,
which is registered under the Investment Company Act of 1940, as amended
(the "Act"), as a no-load, open-end management investment company. The
Portfolio is a series of the Republic Portfolios (the "Portfolio Trust")
which was organized as a master trust fund under the laws of the State of
New York on November 21, 1994. The Portfolio commenced operations on
January 9, 1995. The Declaration of Trust permits the Trustees to issue an
unlimited number of beneficial interests in the Portfolio.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements
in conformity with generally accepted accounting principals requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
the Portfolio's significant accounting policies.
(A) Investment Security Valuations: The net asset value of the
Portfolio is determined on each day on which the New York Stock Exchange
("NYSE") is open for trading. The Sub-Advisor typically completes its
trading on behalf of the Portfolio in various markets before 4:00 p.m.,
and the value of portfolio securities is determined when the primary
market for those securities closes for the day. Foreign currency exchange
rates are also determined prior to 4:00 p.m., however, if extraordinary
events occur that are expected to affect the value of a portfolio security
after the close of the primary exchange on which it is traded, the
security will be valued at fair value as determined in good faith under
the direction of the Board of Trustees of the Portfolio Trust.
(B) Foreign Currency Translation: The accounting records of the
Portfolio are maintained in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars at the current rate of exchange to determine
the value of investments, assets and liabilities. Purchases and sales of
securities, and income and expenses are translated at the prevailing rate
of exchange on the respective dates of such transactions. The Portfolio
does not isolate that portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or
loss from investments.
(C) Forward Foreign Currency Exchange Contracts: The Portfolio may
enter into forward foreign currency exchange contracts in connection with
planned purchases or sales of securities, to hedge the U.S. dollar value
of portfolio securities denominated in a particular currency. The
Portfolio could be exposed to risks if the counter-parties to the
contracts are unable to meet the terms of their contracts and from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. The forward foreign currency exchange contracts are adjusted
by the daily exchange rate of the underlying currency and any gains or
losses are recorded for financial statement purposes as unrealized gains
or losses until the contract settlement date. At April 30, 1996, the
Portfolio had open forward currency contracts as follows:
<PAGE>
<TABLE>
SUMMARY OF OPEN FORWARD FOREIGN CURRENCY CONTRACTS
AT APRIL 30, 1996
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL
VALUE U.S. DOLLAR NET UNREALIZED
LOCAL EXPIRATION VALUE AT APPRECIATION/
CONTRACTS TO BUY CURRENCY DATE PROCEEDS 4/30/96 (DEPRECIATION)
---------------- ---------- ---------- ---------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Deutche Mark ................... 135,163 5/13/96 $ 100,433 $ 88,291 $(12,142)
Japanese Yen ................... 88,363,480 5/16/96 846,163 842,516 (3,647)
Japanese Yes ................... 48,167,340 9/12/96 463,629 461,815 (1,814)
Japanese Yen ................... 68,077,600 6/28/96 696,860 652,889 (43,971)
Japanese Yen ................... 59,669,085 7/05/96 566,067 572,775 6,708
Japanese Yen ................... 5,662,791 7/19/96 57,754 54,460 (3,294)
Japanese Yen ................... 22,506,120 8/06/96 229,444 216,970 (12,474)
Japanese Yen ................... 47,614,000 10/08/96 461,086 462,911 1,825
Japanese Yen ................... 64,922,350 10/15/96 635,373 631,780 (3,593)
Japanese Yen ................... 39,626,500 10/30/96 408,984 386,389 (22,595)
--------
(94,997)
--------
CONTRACTS TO SELL
-----------------
Canadian Dollar ................ 1,148,250 7/23/96 843,000 844,407 (1,407)
Canadian Dollar ................ 959,717 7/29/96 705,000 705,830 (830)
Canadian Dollar ................ 417,487 1/29/97 301,000 307,534 (6,534)
Deutche Mark ................... 400,982 6/01/96 272,000 262,384 9,616
Deutche Mark ................... 589,991 7/01/96 401,000 386,551 14,449
French Franc ................... 487,600 5/13/96 100,433 94,278 6,155
Hong Kong Dollar ............... 1,282,050 8/14/96 165,000 165,767 (767)
Japanese Yen ................... 4,572,065 5/01/96 42,870 43,498 (628)
Japanese Yen ................... 6,557,640 5/02/96 62,023 62,398 (375)
Japanese Yen ................... 105,100,749 5/14/96 997,000 1,001,808 (4,808)
Japanese Yen ................... 150,396,960 5/16/96 1,428,000 1,433,984 (5,984)
Japanese Yen ................... 48,167,340 6/26/96 481,000 461,814 19,186
Japanese Yen ................... 68,078,600 6/28/96 831,000 652,888 178,112
Japanese Yen ................... 157,950,690 7/05/96 1,556,000 1,516,197 39,803
Japanese Yen ................... 7,550,582 7/19/96 89,000 72,616 16,384
Japanese Yen ................... 22,506,120 8/06/96 260,000 216,970 43,030
Japanese Yen ................... 33,064,350 9/12/96 319,000 320,337 (1,337)
Japanese Yen ................... 8,496,835 10/08/96 829,000 826,076 2,924
Japanese Yen ................... 94,914,900 10/11/96 900,000 923,150 (23,150)
Japanese Yen ................... 64,922,350 10/15/96 682,000 631,780 50,220
Japanese Yen ................... 39,626,500 10/30,96 410,000 386,389 23,611
--------
357,670
--------
NET UNREALIZED APPRECIATION ON FORWARD FOREIGN CURRENCY CONTRACTS ............................ $262,673
========
</TABLE>
(D) Accounting for Investments: Securities transactions are recorded
on a trade date basis. For financial and tax reporting purposes, realized
gains and losses are determined on the basis of specific identification.
Dividend income and other distributions from the portfolio securities are
recorded on the ex-dividend date, except, if the ex-dividend date has
passed, certain dividends from foreign securities are recorded as the
Portfolio is informed of the ex-dividend date. Dividend income is recorded
net of foreign taxes withheld where recovery of such taxes is not assured.
Interest income is accrued daily.
(E) Expenses: Expenses incurred by the Portfolio Trust with respect
to any two or more portfolios in the Trust are allocated in proportion to
the net assets of each portfolio, except when allocations of direct
expenses to each portfolio can otherwise be made fairly. Expenses directly
attributable to a portfolio are charged to that portfolio.
(F) Taxes: There is, at present, no direct taxation in the Cayman
Islands, and therefore, interest, dividends and capital gains derived by
the Portfolio are not subject to taxes in that jurisdiction.
3. TRANSACTIONS WITH AFFILIATES.
(A) Investment Management: Republic National Bank of New York
("Republic" or the "Manager") is the Investment Manager to the Portfolio
pursuant to an investment management agreement with the Portfolio Trust.
For its services, the Investment Manager receives no compensation from the
Portfolio.
(B) Sub-Adviser: Capital Guardian Trust Company (the "Sub-Adviser")
continuously manages the investment portfolio of the Portfolio pursuant to
a Sub-Advisery Agreement with the Manager. For its services, the Sub-
Adviser is paid a fee by the Portfolio, computed daily and based on the
Portfolio's average daily net assets, equal to 0.70% of net assets up to
$25 million, 0.55% of net assets over $25 million up to $50 million,
0.425% of net assets over $50 million up to $250 million, and 0.375% of
net assets over $250 million. It is the responsibility of the Sub-Adviser
not only to make investment decisions for the Portfolio, but also to place
purchase and sale orders for the portfolio transactions of the Portfolio.
For the six months ended April 30, 1996, the sub-advisory fee was
$203,677.
(C) Administration: Pursuant to an Administrative Services Agreement,
Signature Financial Group (Cayman) Ltd. ("Signature (Cayman)") provides
the Portfolio with general office facilities, and supervises the overall
administration of the Portfolio including, among other responsibilities,
the preparation and filing of all documents required for compliance by the
Portfolio with applicable laws and regulations and arranging for the
maintenance of books and records of the Portfolio. For its services to the
Portfolio, Signature (Cayman) receives from the Portfolio fees payable
monthly equal on an annual basis (for the Portfolio's then-current fiscal
year) to 0.05% of the Portfolio's average daily net assets. For the six
months ended April 30, 1996, Signature (Cayman)'s fee for these services
aggregated $18,548.
(D) Fund Accounting: Pursuant to a fund accounting agreement,
Signature Financial Services, Inc. ("SFSI") serves as fund accounting
agent to the Portfolio. For its services to the Portfolio, SFSI receives
fees payable monthly equal on an annual basis to $50,000. For the six
months ended April 30, 1996, fees for these services aggregated $25,000,
of which $6,250 was waived.
(E) Trustees Fees and expenses: The fees and expenses of the Trustees
amounted to $3,745 for the six months ended April 30, 1996.
(F) Reimbursement and Waiver of Expenses: The Manager and SFSI have
voluntarily agreed to waive a portion of their fees, and to the extent
necessary, reimburse the Portfolio for additional expenses. For the six
months ended April 30, 1996, expenses of the Portfolio were voluntarily
limited to no more than 0.81% of the average daily net assets on an
annualized basis. For the six months ended April 30, 1996, the Manager and
SFSI waived fees and reimbursed expenses aggregating $32,302.
4. INVESTMENT TRANSACTIONS. Purchase and sales of investments, other than
short-term obligations, aggregated $66,843,684, and $8,957,858,
respectively for the period.
