REPUBLIC FIXED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS -- OCTOBER 31, 1995
PRINCIPAL S&P/MOODY'S VALUE
AMOUNT SECURITY DESCRIPTION RATING (NOTE 1)
--------- -------------------- ----------- --------
CORPORATE OBLIGATIONS -- 19.1%
BANKING -- 2.2%
$ 100,000 FNBC 93A, 8.08%, due 1/15/18 ..... A+/A-1 $ 106,827
175,000 Marshall & Ilsley, 5.9375%, due
5/26/97 ........................ A+/Aa-3 175,335
200,000 Nomura, 7.10%, due 8/13/07 ....... --/-- 204,313
175,000 Wells Fargo & Company, 5.8125%,
due 8/16/96 .................... A-/A-2 175,246
-----------
661,721
-----------
BROADCASTING AND PUBLISHING -- 2.0%
115,000 Comcast Corporation, 9.375%, due
5/15/05 ........................ B+/B-1 118,450
175,000 News America Holdings, 10.125%,
due 10/15/12 ................... BBB/Baa-3 205,570
135,000 Paramount Communications, 8.25%,
due 8/1/22 ..................... BB+/Ba-2 134,394
125,000 Time Warner Inc., 9.15%, due
2/1/23 ......................... BBB-/Ba-1 136,230
-----------
594,644
-----------
ENERGY -- 0.4%
100,000 Mobil Energy, 8.665%, due 1/1/17 . BBB-/Baa-3 105,591
-----------
FINANCE -- 3.5%
125,000 Beverly Finance Corporation,
8.36%, due 7/15/04 ............. AA-/-- 134,305
100,000 Carousel Center Financial, 6.828%,
due 10/15/07 ................... AA/-- 100,063
175,000 Dean Witter Discover, 5.9425%,
3/6/97 ......................... A/A-3 174,956
90,000 Firemans Fund Mortgage Corporation,
8.875%, due 10/15/01 ........... A-/A-3 97,288
99,423 J.P. Morgan, 7.268%, due 7/25/10 . AAA/-- 102,002
53,325 Mid-State Trust IV, 8.33%, due
4/1/30 ......................... AAA/Aaa 56,641
250,000 Principal Mutual Insurance Company,
7.875%, due 3/1/24 ............. AA-/Aa-3 242,666
150,000 Prudential Insurance, 8.30%, due
7/1/25 ......................... --/A-2 152,645
-----------
1,060,566
-----------
HEALTHCARE -- 0.8%
175,000 Columbia/HCA Healthcare, 7.69%,
due 6/15/25 .................... BBB+/A-3 182,636
70,000 Tenet Healthcare Corporate Notes,
8.625%, due 12/1/03 ............ B+/Ba-2 71,575
-----------
254,211
-----------
INSURANCE -- 3.8%
150,000 Conseco Incorporated, 8.125%, due
2/15/03 ........................ BB+/Ba-2 143,756
250,000 Mass Mutual Surplus, 7.625%, due
11/15/23 (a) ................... AA-/Aa-3 250,713
250,000 Metropolitan Life, 7.45%, due
11/1/23(a) .................... AA/Aa-3 234,987
250,000 Mutual Life Insurance Company New
York, 11.25%, 08/15/24 ......... --/BA-1 200,788
250,000 New York Life, 7.50%, 12/15/23(a). AA/Aa-2 243,141
75,000 Reliance Group Holdings, 9.00%,
due 11/15/00 ................... BB+/Ba-3 75,563
-----------
1,148,948
-----------
INDUSTRIAL -- 3.1%
49,000 Blue Bell Funding, 11.85%, due
5/1/99 ......................... BB-/Ba-2 49,980
150,000 Caterpillar Finance 5.8875%, due
6/20/97 ........................ A/A-2 149,865
150,000 Excel Paralubes, 7.43%, due 11/1/15 A3/A- 150,440
115,000 Fleming Companies Inc., 10.625%,
due 12/15/01 ................... BB-/Ba-1 121,038
175,000 RJR Nabisco (New), 8.75%, due
4/15/04 ........................ BBB-/Baa-3 178,307
110,000 Rogers Cable Systems, 10.00%, due
3/15/05 ........................ BB+/Baa3 114,400
68,227 Scotia Pacific Holdings, 7.95%,
due 7/20/15 .................... BBB/Baa-2 68,301
100,000 Owens-Illinois, Incorporated,
11.00%, 12/1/03 ................ BB/Ba-3 110,875
-----------
943,206
-----------
MISCELLANEOUS -- 0.3%
75,000 PT Alatief Freeport, 9.75%, due
4/15/01 ........................ BBB-/Ba-2 82,125
-----------
REAL ESTATE -- 0.3%
100,000 Lakewood Mall, 7.00%, due 8/13/10 AA/-- 100,375
-----------
RETAIL -- 0.9%
150,000 Federated Department Stores,
8.125%, due 10/15/02 ........... BB-/Ba-1 147,375
135,000 Southland Corporation, 5.00%, due
12/15/03 ....................... BB+/B-1 110,869
-----------
258,244
-----------
TECHNOLOGY -- 0.5%
145,000 Digital Equipment, 8.625%, due
11/1/12 ........................ BB+/Ba-1 154,880
-----------
TELECOMMUNICATIONS -- 0.8%
50,000 AT&T Corporation, 8.35%, due 1/15/25 AA/Aa-3 55,107
50,000 Tele Communications Inc., 10.125%,
due 4/15/22 .................... BBB-/Baa-3 60,751
125,000 Tele Communications Inc., 9.25%,
due 1/15/23 .................... BBB-/Baa-3 132,974
-----------
248,832
-----------
TRANSPORTATION -- 0.3%
75,000 Delta Air Lines Inc., 10.06%, due
1/2/16 ......................... BB+/Baa-2 86,269
-----------
UTILITIES -- 0.2%
45,000 Long Island Lighting, 8.90%, due
7/15/19 ........................ BB+/Ba-1 44,910
-----------
TOTAL CORPORATE OBLIGATIONS ..................... 5,744,522
-----------
CORPORATE ASSET-BACKED OBLIGATIONS -- 6.1%
100,000 Aircraft Lease Portfolio
Securitizations, 1994-1 A4,
7.80%, due 9/15/04 ............. AA/Aa2 103,563
99,493 Aircraft Lease Portfolio
Securitizations, 1994-1 C,
9.35%, due 9/15/04 ............. BBB/Baa-2 103,472
150,000 American Southwest Financial,
7.40%, due 11/17/04 ............ --/-- 153,234
126,915 American Southwest Financial,
7.30%, due 1/18/09 ............. --/-- 128,779
174,608 Asset Securitization Corporation,
7.59%, due 7/1/20 .............. --/-- 183,011
146,962 Countrywide Mortgage Backed
Security, 6.50%, due 1/25/24 ... AAA/AA-1 137,915
146,789 First Boston Mortgage Security
Corporation, 7.30%, due 7/25/23 --/-- 141,513
24,962 Jet Equipment Trust, 10.91%, due
6/15/06 (a) .................... BB+/Baa-1 28,192
75,000 Jet Equipment Trust, 10.00%, due
6/15/12 ........................ A/A-2 86,753
100,000 Jet Equipment Trust, 9.71%, due
8/15/13 ........................ BBB/Baa-1 105,297
150,000 MCFI, 7.60%, due 5/25/27 ......... AAA/-- 156,539
100,000 Residential Funding Mortgage,
6.97%, due 8/28/23 ............. AAA/-- 94,531
147,000 Residential Funding Mortgage
Security, 6.50%, due 11/25/23 .. AAA/-- 138,031
124,839 Residential Funding Mortgage
Security, 7.50%, due 9/15/25 ... AAA/-- 125,775
175,000 Residential Funding Mortgage
Security, 7.50%, due 10/15/25 .. AAA/-- 176,367
-----------
TOTAL CORPORATE ASSET-BACKED OBLIGATIONS ........ 1,862,972
-----------
CORPORATE MORTGAGE-BACKED OBLIGATIONS -- 1.6%
124,554 CMSI, 7.50%, due 4/25/25 ......... --/-- 123,826
144,209 FBS Mortgage Corporation, 8.625%,
due 7/25/23 .................... AAA/-- 147,540
200,000 GECMS, 7.50%, due 11/25/25 ....... AAA/-- 201,625
-----------
TOTAL CORPORATE MORTGAGE-BACKED OBLIGATIONS ..... 472,991
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 40.9%
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 14.3%
138,416 10.50%, due 12/1/16 .............. AAA/Aaa 152,569
152,418 10.00%, due 5/1/22 ............... AAA/Aaa 167,240
2,500,000 7.00%, due 8/15/23 (b) ........... AAA/Aaa 2,478,125
500,000 7.00%, due 11/15/24 (b) .......... AAA/Aaa 495,625
975,000 7.50%, due 11/15/25 (b) .......... AAA/Aaa 985,055
-----------
4,278,614
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 6.5%
151,953 11.00%, due 9/1/16 ............... AAA/Aaa 167,813
123,507 10.50%, due 11/1/18 .............. AAA/Aaa 135,009
275,000 7.50%, due 8/15/24 ............... AAA/Aaa 278,094
1,350,000 7.50%, due 11/15/25 (b) .......... AAA/Aaa 1,365,188
-----------
1,946,104
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 20.1%
56,744 13.50%, due 9/15/14 .............. AAA/Aaa 66,514
28,578 13.50%, due 11/15/14 ............. AAA/Aaa 33,498
56,645 11.50%, due 2/15/16 .............. AAA/Aaa 64,380
74,222 6.50%, due 1/20/22 ............... AAA/Aaa 73,867
296,140 5.50%, due 12/20/23 .............. AAA/Aaa 297,413
752,834 6.00% Adjustable Rate, 4/20/24 ... AAA/Aaa 752,969
617,061 6.00% Adjustable Rate, due 5/20/24 AAA/Aaa 617,171
128,691 6.00%, due 6/20/24 ............... AAA/Aaa 128,158
93,110 6.50%, due 7/20/24 ............... AAA/Aaa 94,041
250,000 5.50%, due 8/15/24 ............... AAA/Aaa 248,125
400,000 7.50%, due 8/15/24 ............... AAA/Aaa 405,250
292,004 6.00%, due 10/20/24 .............. AAA/Aaa 292,056
193,133 6.50% Adjustable Rate, due 12/20/24 AAA/Aaa 195,065
2,500,000 7.00%, due 12/15/25 .............. AAA/Aaa 2,479,059
295,436 6.50% Adjustable Rate, due 1/20/29 AAA/Aaa 298,570
-----------
6,046,136
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS ........ 12,270,854
-----------
YANKEE BONDS -- 0.1%
35,000 Hydro Quebec, 9.40%, due 2/1/21 .. AA-/A-2 42,522
-----------
FOREIGN GOVERNMENT OBLIGATIONS -- 14.4%
CAD 925,000 Canadian Government Note, 8.50%,
due 4/1/02 ..................... AA+/Aa1 731,243
DKR 1,800,000 Denmark Kingdom, 9.00%, due 11/15/00 AAA/Aaa 356,576
FFR 1,650,000 French OAT, 8.50%, due 11/25/02 .. AAA/Aaa 366,565
FFR 2,400,000 French OAT, 8.50%, due 4/25/23 ... AAA/Aaa 523,560
FFR 1,600,000 French OAT, 9.50%, due 1/25/01 ... AAA/Aaa 368,129
USD 250,000 Mexican Par Bond Series A, 6.25%,
due 12/31/19 ................... BB/Ba3 146,563
USD 400,000 Republic of Argentina, 5.00%, due
3/31/23 ........................ BB/B2 190,500
DEM 1,750,000 Treuhandanstalt, 7.125%, due 1/29/03 AAA/Aaa 1,304,566
DEM 250,000 Treuhandanstalt, 7.75%, due 10/1/02 AAA/Aaa 193,002
GBP 95,000 United Kingdom, 9.125%, due 2/21/01 AAA/Aaa 133,701
-----------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS ............ 4,314,405
-----------
SHORT-TERM OBLIGATIONS -- 45.2%
U.S TREASURY BILLS -- 26.3%
$ 7,900,000 5.17%, due 11/16/95 ............................. 7,881,848
-----------
REPURCHASE AGREEMENTS -- 18.9%
5,677,108 Salomon Brothers, 5.35%, dated 10/31/95, due
11/01/95, proceeds $5,677,952 (collateralized
by U.S. Treasury Securities with rates from
6.50% to 7.50%, due from 4/18/96 to 11/19/97,
value $5,827,593) ............................ 5,677,108
-----------
13,558,956
-----------
TOTAL INVESTMENTS -- 127.4%
(Identified Cost $37,854,514) ................................ 38,267,222
OTHER ASSETS LESS LIABILITIES -- (27.4%) ....................... (8,244,695)
-----------
TOTAL NET ASSETS -- 100.0% ..................................... $30,022,527
===========
- ----------
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(b) Security purchased on a delayed delivery basis.
Note: CAD = Canadian Dollar DEM = German Mark DKR = Danish Krona
GBP = Great Britian Pound FFR = French Franc USD = United States
Dollar
<PAGE>
REPUBLIC FIXED INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES -- OCTOBER 31, 1995
ASSETS:
Investment at value (cost $32,177,406) .......................... $32,590,114
Repurchase agreements (cost $5,677,108) ......................... 5,677,108
Foreign currency contracts at value (cost $21,558) .............. 21,385
Cash ............................................................ 187,820
Interest receivable ............................................. 330,058
Receivable for investments sold ................................. 1,257,789
Receivable from affiliate (Note 2) .............................. 41,753
Prepaid insurance ............................................... 2,695
Unamortized organization expenses ............................... 56,965
-----------
Total assets .............................................. 40,165,687
-----------
LIABILITIES:
Payable for investments purchased ............................... 1,991,957
Payable for when-issued investments purchased ................... 8,062,152
Sub-advisory fee payable (Note 2) ............................... 8,396
Administration fee payable (Note 2) ............................. 1,119
Net unrealized depreciation on forward currency contracts ....... 58,728
Accrued expenses and other liabilities .......................... 20,808
-----------
Total liabilities ......................................... 10,143,160
-----------
NET ASSETS:
Applicable to investors' beneficial interest .................... $30,022,527
===========
See accompanying notes to financial statements
<PAGE>
REPUBLIC FIXED INCOME PORTFOLIO
STATEMENT OF OPERATIONS -- FOR THE PERIOD ENDED OCTOBER 31, 1995*
NET INVESTMENT INCOME (NOTE 1):
Interest income ................................................. $ 935,978
EXPENSES (NOTE 2):
Sub-advisery fees ................................. $ 53,963
Administration fees ............................... 7,195
Custody fees ...................................... 12,184
Fund accounting fees .............................. 32,438
Audit fees ........................................ 15,000
Legal fees ........................................ 1,234
Trustees' fees and expenses ....................... 6,648
Insurance expense ................................. 2,376
Amortization of organization expenses ............. 11,028
Reports to shareholders ........................... 1,092
Other expenses .................................... 348
---------
Total expenses .................................. 143,506
Less: waiver of expenses ........................ (10,115)
Less: reimbursement of expenses ................. (67,177)
---------
Net expenses ................................................ 66,214
----------
NET INVESTMENT INCOME ........................................... 869,764
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on:
Investments ................................................. 1,015,322
Foreign currency transactions ............................... 40,903
Net unrealized appreciation of investments ...................... 412,708
Net unrealized depreciation of foreign currency contracts and (63,634)
translations ...............................................
----------
Net realized and unrealized gain on investments and foreign
currency transactions ...................................... 1,405,299
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $2,275,063
==========
*For the period January 9, 1995 (commencement of operations) to October 31,
1995.
See accompanying notes to financial statements
<PAGE>
REPUBLIC FIXED INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD
JANUARY 9, 1995
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1995
-------------------
INCREASE IN NET ASSETS FROM:
OPERATIONS:
Net investment income ................................... $ 869,764
Net realized gain from investment and foreign currency
transactions ............................................ 1,056,225
Net unrealized appreciation of investments and foreign
currency translations ................................... 349,074
-----------
Net increase in net assets resulting from operations .... 2,275,063
-----------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Additions ............................................... 28,059,930
Reductions .............................................. (362,566)
-----------
Net increase in net assets from transactions in
investors' beneficial interest .......................... 27,697,364
-----------
NET INCREASE IN NET ASSETS .............................. 29,972,427
NET ASSETS:
Beginning of period ..................................... 50,100
-----------
End of period ........................................... $30,022,527
===========
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR THE PERIOD
JANUARY 9, 1995
(COMMENCEMENT
OF OPERATIONS) TO
OCTOBER 31, 1995
-------------------
RATIOS AND SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) .............. $30,023
Ratios:
Expenses to average net assets (a) ...................... 0.46%(b)
Net investment income to average net assets (a) ......... 6.04%(b)
Portfolio turnover ...................................... 100%(c)
(a) The Portfolio expenses reflect reimbursements and waivers by Republic and
Signature Financial Services, Inc. If this agreement to reimburse the
Portfolio had not been in place for the period ended October 31, 1995, the
annualized ratios of expenses and net investment income to average net
assets would have been 1.00% and 5.51%, respectively.
(b) Annualized.
(c) Not annualized.
See accompanying notes to financial statements
<PAGE>
REPUBLIC FIXED INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 1995
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. The Fixed Income
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 was
initially capitalized with an investment of $50,000 from Republic Fixed
Income Fund Ltd., a Cayman Islands exempted company, and $100 from
Republic Fixed Income Fund. 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.
The following is a summary of the significant accounting policies of
the Portfolio:
(A) Investment Security Valuations: The net asset value of the
Portfolio is determined on each day on which the New York Stock Exchange
is open for trading. Bonds and other fixed-income securities which are
traded over-the-counter and on a stock exchange will be valued according
to the broadest and most representative market, and it is expected that
for bonds and other fixed-income securities this ordinarily will be the
over-the-counter market. Bonds and other fixed income securities (other
than short-term obligations but including listed issues) in the Portfolio
may be valued on the basis of valuations furnished by a pricing service,
use of which has been approved by the Board of Trustees of the Portfolio.
In making such valuations, the pricing service utilizes both dealer-
supplied valuations and electronic data processing techniques which take
into account appropriate factors such as institutional-size trading in
similar groups of securities, yield, quality, coupon rate, maturity, type
of issue, trading characteristics and other market data, without exclusive
reliance upon quoted prices or exchange or over-the-counter prices, since
such valuations are believed to reflect more accurately the fair value of
such securities. Short-term debt obligations are valued at amortized cost,
which constitutes fair value as determined by the Board of Trustees of the
Portfolio. Futures contracts are normally valued at the settlement price
on the exchange on which they are traded. Portfolio securities (other than
short-term obligations) for which there are no such valuations are valued
at fair value as determined in good faith under the direction of the Board
of Trustees of the Portfolio.
Bonds and other fixed income securities listed on a foreign exchange
are valued at the last quoted sales price available before the time when
assets are valued.
(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, or 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.
<TABLE>
<CAPTION>
SUMMARY OF OPEN FORWARD FOREIGN CURRENCY CONTRACTS AT OCTOBER 31, 1995
-----------------------------------------------------------------------------------------------------
U.S. DOLLAR NET UNREALIZED
EXPIRATION VALUE AT APPRECIATION/
SALE CONTRACTS DATE PROCEEDS 10/31/95 (DEPRECIATION)
-------------- ---------- -------- -------- --------------
<S> <C> <C> <C> <C>
Canadian Dollar 12/14/95 $ 704,618 $ 715,459 ($10,841)
Danish Krone 01/11/96 188,440 190,347 (1,907)
European Currency Unit 01/11/96 142,043 143,058 (1,015)
French Franc 12/05/95 217,194 219,852 (2,658)
French Franc 12/12/95 1,031,645 1,072,577 (40,932)
French Franc 01/12/96 11,954 12,264 (310)
German Mark 11/06/95 667,252 667,305 (53)
German Mark 01/19/96 209,845 210,208 (363)
German Mark 01/24/96 868,905 869,554 (649)
---------
Net unrealized depreciation on forward foreign currency contracts ............. ($58,728)
========
</TABLE>
(D) When-Issued Security Transactions: The Portfolio may purchase or
sell securities on a when-issued or forward commitment basis. Payment and
delivery may take place a month or more after the date of the transaction.
The price of the underlying securities and the date when the securities
will be delivered and paid for are fixed at the time the transaction is
negotiated. The Portfolio may receive compensation for interest forgone in
a delayed delivery transaction. The custodian identifies these securities
as segregated assets in its records with a value at least equal to the
amount of the purchase commitment.
(E) Income: Securities transactions are recorded on a trade date
basis. Interest income is recorded on an accrual basis. Realized gains and
losses are determined on the basis of specific identification.
(F) 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.
(G) Taxes: There is, at present, no direct taxation in the Cayman
Islands, and therefore, interest and capital gains derived by the
Portfolio are not subject to taxes in that jurisdiction.
2. 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-Advisery: Miller Anderson & Sherrerd (the "Sub-Adviser")
continuously manages the investment portfolio of the Portfolio pursuant to
a Sub-Advisory 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 0.375% of net assets up to
$50 million, 0.25% of net assets over $50 million up to $95 million,
$300,000 when net assets are over $95 million and less than $150 million,
0.20% of net assets over $150 million up to $250 million, and 0.15% 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 period from January 9, 1995 to October 31, 1995, MAS's fees for
these services aggregated $53,963.
(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 period
from January 9, 1995 to October 31, 1995, Signature (Cayman)'s fee for
these services aggregated $7,195.
(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, Signature
receives fees payable monthly equal on an annual basis to $40,000. For the
period from January 9, 1995 to October 31, 1995, SFSI's fee for these
services aggregated $32,438, of which $10,115 was waived.
(E) 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 during the
period January 9, 1995 through October 31, 1995. At October 31, 1995,
expenses of the Portfolio were voluntarily limited to no more than 0.46%
of the average daily net assets on an annualized basis. For the period
ended October 31, 1995, the Manager and SFSI waived fees and reimbursed
expenses aggregating $77,292.
(F) Trustees' Fees: The fees and expenses of the Trustees amounted to
$6,648 for the period January 9, 1995 to October 31, 1995.
3. INVESTMENT TRANSACTIONS. Investment transactions (excluding short-term
investments) for the fiscal period from January 9, 1995 to October 31,
1995 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
--------- ----------
<S> <C> <C>
US Government and Agency Obligations ....................... $45,156,378 $33,793,553
Corporate and Collateralized Obligations ................... 13,707,475 1,385,634
----------- -----------
$58,863,853 $35,179,187
----------- -----------
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To Owners of Beneficial Interest of Republic Fixed Income Portfolio
and the Board of Trustees of Republic Portfolios:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Republic Fixed Income Portfolio
(the "Portfolio", one of the series comprising the Republic Portfolios,
the "Portfolio Trust"), as of October 31, 1995, and the related statement
of operations, the statement of changes in net assets and the financial
highlights for the period from January 9, 1995 (commencement of
operations) to October 31, 1995. These financial statements and financial
highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1995, by correspondence
with the custodian and brokers or other appropriate auditing procedures
where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Republic Fixed Income Portfolio, a Portfolio of Republic
Portfolios, at October 31, 1995, the results of its operations, the
changes in its net assets and its financial highlights for the period from
January 9, 1995 (commencement of operations) to October 31, 1995, in
conformity with accounting principles generally accepted in the United
States of America.
/s/ Ernst & Young
December 8, 1995
Grand Cayman, Cayman Islands
