REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS -- OCTOBER 31, 1995
VALUE
SECURITY DESCRIPTION SHARES (NOTE 1)
- -------------------- ------ --------
COMMON STOCKS -- 92.7%
ARGENTINA -- 0.8%
Telecom Argentina Stet ADS (Telecommunications) .... 6,000 $ 230,250
YPF Soc Anonima ADR D Sponsored (Energy Sources) ... 6,000 103,500
-----------
333,750
-----------
AUSTRALIA -- 4.0%
Brambles Industries Ltd. (Business & Public
Services) ........................................ 34,000 361,367
Coca Cola Amatil Ltd. (Beverages & Tobacco) ........ 59,625 461,218
Western Mining Corp. (Metals: Nonferrous) .......... 63,000 403,866
Westpac Banking Corp. (Banking) .................... 86,000 352,916
-----------
1,579,367
-----------
BRAZIL -- 0.6%
Electrobras ADR (Utilities: Electric & Gas) ........ 6,000 85,234
Telebras PN Sponsored ADR (Telecommunications) ..... 3,500 140,000
-----------
225,234
-----------
CANADA -- 4.6%
Alcan Aluminum Ltd. (Metals: Nonferrous) ........... 10,300 325,738
Bombardier Class B Sub Voting (Machinery &
Engineering) ..................................... 27,400 334,458
Cominco Ltd. (Metal: Nonferrous) ................... 6,000 116,250
Inco Ltd. (Metal: Nonferrous) ...................... 6,000 206,250
Petro-Canada (Energy Services) ..................... 16,800 181,588
Rogers Communication Class B (Broadcasting &
Publishing) ...................................... 27,000 264,163
Seagrams Company Ltd. (Beverages & Tobacco) ........ 11,000 396,000
-----------
1,824,447
-----------
DENMARK -- 1.0%
Tele Danmark B ADR (Telecommunications) ............ 15,000 391,875
-----------
FRANCE -- 3.8%
Canal Plus (Broadcasting & Publishing) ............. 717 123,986
Compagnie De Saint Goban (Miscellaneous Materials &
Commodities) ..................................... 2,000 238,614
Eurotunnel/Euro SA (Business & Public Services) .... 58,400 91,426
Euro Disneyland (Leisure & Tourism) ................ 105,000 353,470
Havas (Business & Public Services) ................. 2,200 152,623
Pechiney Cert Inv (Metals: Nonferrous) ............. 2,300 120,023
Renault (Automobiles) .............................. 5,300 165,945
Valeo (Industrial Components) ...................... 6,200 280,275
-----------
1,526,362
-----------
GERMANY -- 6.0%
Landis & Gyr AG (Electrical & Electronics) ......... 530 $ 319,446
Mannesman AG (Machinery & Engineering) ............. 3,050 1,002,849
Muchener Rueckversicherungs Nam (Insurance) ........ 175 362,904
Siemens AG (Electrical & Electronics) .............. 500 261,879
Volkswagen AG (Automobiles) ........................ 600 188,851
Wolters Kluwer (Broadcasting & Publishing) ......... 2,900 263,753
-----------
2,399,682
-----------
HONG KONG -- 4.2%
Citic Pacific (Multi-Industry) ..................... 90,000 281,130
Consolidated Electric Power Asia (Electric & Gas) .. 66,000 133,600
Hong Kong Electric (Utilities: Electric & Gas) ..... 105,000 357,184
Hong Kong Telecom (Telecommunications) ............. 142,000 247,953
Hutchison Whampoa (Multi-Industry) ................. 58,000 319,584
Swire Pacific Class A (Multi-Industry) ............. 47,000 352,593
-----------
1,692,044
-----------
ITALY -- 1.6%
Italcementi Fabbriche Riunite (Building Materials &
Components) ...................................... 22,200 137,475
Telecom Italia Mobile (Telecommunications) ......... 178,000 196,368
Telecom Italia Mobile ORD (Telecommunications) ..... 125,000 210,539
Telecom Italia Ord (Telecommunications) ............ 70,500 108,158
-----------
652,540
-----------
JAPAN -- 28.3%
Banyu Pharmaceutical (Health & Personal Care) ...... 31,000 327,433
Bridgestone Corp. (Industrial Components) .......... 35,000 486,064
Chudenko (Construction & Housing) .................. 7,150 260,826
Fuji Photo Film (Recreational & Other Consumer) .... 13,000 321,663
Hitachi Ltd. (Electrical & Electronics) ............ 46,000 472,372
Ito Yokado Co. Ltd. (Merchandising) ................ 5,000 273,350
Kao Corporation (Food & Household Products) ........ 23,000 278,924
Kawasaki Heavy Industries (Machinery & Engineering) 78,000 326,494
Kawasaki Kisen (Transportation: Shipping) .......... 122,000 326,924
Kokusai Electric (Electrical & Electronics) ........ 6,000 136,724
Kyocera Corp. (Electronic Components) .............. 8,000 655,648
Makita Corp. (Electrical & Electronics) ............ 17,000 264,352
Mitsubishi Heavy Industries, Inc. (Machinery &
Engineering) ..................................... 70,000 540,147
Mitsui Fudosan (Real Estate) ....................... 30,000 343,276
Murata Mfg. (Electronic Components) ................ 11,000 377,604
JAPAN continued
Nihon Dempa Kogyo (Electronic Components) .......... 4,000 $ 102,494
Nikon Corporation (Industrial Components) .......... 23,000 328,411
Nintendo (Recreation, Other Consumer Products) ..... 10,300 757,516
Nippon Telephone & Telegraph (Telecommunications) .. 69 568,305
Nomura Securities (Financial Services) ............. 24,000 438,924
Omron Corp. (Electrical & Electronics) ............. 13,000 305,134
Orix Corporation (Financial Services) .............. 7,000 246,455
Sankyo Co. (Health & Personal Care) ................ 25,500 561,125
Secom (Business & Public Services) ................. 4,000 260,538
Sekisui House (Construction & Housing) ............. 29,000 334,670
Sony Corp. (Appliances & Household Goods) .......... 7,600 341,907
Sumitomo Bank (Banking) ............................ 12,000 212,421
Sumitomo Reality & Development (Real Estate) ....... 30,000 197,164
Suzuki Motor (Automobiles) ......................... 21,000 211,540
Tokyo Broadcast Systems (Broadcasting Publishing) .. 17,000 249,389
Tostem Corp. (Building Materials & Components) ..... 6,000 184,254
Toyota Motor Corp. (Automobiles) ................... 16,000 297,311
Yasuda Fire & Marine (Insurance) ................... 52,000 315,306
-----------
11,304,665
-----------
MALAYSIA -- 1.5%
Renong Berhad (Multi-Industry) ..................... 136,000 207,748
Sime Darby BHD (Multi-Industry) .................... 156,000 390,000
-----------
597,748
-----------
MEXICO -- 1.4%
Grupo Financiero Banamex "L" (Finance) ............. 3,100 5,091
Grupo Financiero Banamex "B" (Finance) ............. 76,800 130,425
Telefonos de Mexico L ADR (Telecommunications) ..... 15,900 437,250
-----------
572,766
-----------
NETHERLANDS -- 2.7%
Aegon (Insurance) .................................. 9,500 360,409
ABN-AMRO Holding (Banking) ......................... 9,200 386,320
International Nederlanden Group (Insurance) ........ 5,500 327,792
-----------
1,074,521
-----------
NEW ZEALAND -- 1.8%
Brierly Investments (Multi-Industry) ............... 367,000 285,625
Lion Nathan (Beverages & Tobacco) .................. 94,000 213,272
Telecom New Zealand (Telecommunications) ........... 56,000 232,320
-----------
731,217
-----------
NORWAY -- 1.3%
Orkla AS A-Aksjer (Multi-Industry) ................. 7,000 $ 361,809
Norsk Hydro Ord (Energy Sources) ................... 4,200 167,196
-----------
529,005
-----------
PHILIPPINE -- 0.6%
Philippine Long Distance Telephone ADR
(Telecommunications) ............................. 4,000 224,500
-----------
SINGAPORE -- 2.1%
City Developments (Real Estate) .................... 35,000 216,814
Overseas Chinese Banking Corp. Foreign (Banking) ... 27,000 317,310
Singapore Press Holdings Ltd. (Broadcasting &
Publishing) ...................................... 19,400 303,533
-----------
837,657
-----------
SPAIN -- 2.2%
Banco De Santander (Banking) ....................... 5,400 235,138
Corporacion Mapfre Regular (Insurance) ............. 3,000 153,468
Repsol SA ADR (Energy Sources) ..................... 4,600 136,275
Repsol SA ADS (Energy Sources) ..................... 1,500 44,751
Telefonica de Espana (Telecommunications) .......... 25,900 326,466
-----------
896,098
-----------
SWEDEN -- 9.1%
AGA AB Free (Chemicals) ............................ 26,000 336,925
Akt Electrolux B Free (Appliances & Household
Durables) ........................................ 4,500 192,571
Asea A Free (Electrical & Electronics) ............. 6,500 651,322
Astra AB A Free (Health & Personal Care) ........... 24,500 900,776
Ericsson B Free (Electrical & Electronics) ......... 15,600 331,440
Hennes & Mauritz B Free (Merchandising) ............ 7,800 510,088
Sandvik A Free (Machinery & Engineering) ........... 9,500 178,219
Sandvik B Free (Machinery & Engineering) ........... 8,200 154,449
Svenska Handelsbken A Free (Banking) ............... 16,000 280,871
Svenska Handelsbken B Free (Banking) ............... 5,100 85,685
-----------
3,622,346
-----------
SWITZERLAND -- 5.3%
BBC Brown Boveri A Inhager (Electrical &
Electronics) ..................................... 125 144,853
Baloise Holding Namen (Insurance) .................. 163 334,175
CS Holding Inhaber (Banking) ....................... 3,275 334,272
Elektrowatt Inhaber (Electric & Gas) ............... 580 175,046
Holderbank Finan Glaris Class B (Building Materials
& Components) .................................... 470 377,158
SWITZERLAND continued
Nestle Registered Shares (Food & Household Products) 489 $ 512,019
Swissair (Transportation: Airlines) ................ 350 220,194
-----------
2,097,717
-----------
UNITED KINGDOM -- 9.8%
Allied Irish Banks PLC (Banking) ................... 55,000 278,323
BAT Industries (Multi-Industry) .................... 15,200 124,681
Bicc PLC (Industrial Components) ................... 39,000 161,649
British Petroleum PLC ADR (Energy Sources) ......... 2,400 211,800
British Sky Broadcasting PLC (Broadcasting &
Publishing) ...................................... 50,000 299,789
Cable & Wireless PLC (Telecommunications) ......... 38,207 249,329
Carlton Communications (Broadcasting & Publishing) . 11,000 166,814
English China Clays (Miscellaneous Materials &
Commodities) ..................................... 19,000 103,099
Mai PLC (Business & Public Services) ............... 46,000 237,964
Morgan Crucible Co. (Industrial Components) ........ 51,800 319,595
National Westminster Bank (Banking) ................ 8,600 85,848
News International PLC (Broadcasting & Publishing) . 40,000 180,347
Reckitt & Coleman PLC (Food & Household Products) .. 28,400 301,472
Rolls-Royce PLC (Aerospace & Military Technology) .. 55,407 134,987
Storehouse PLC (Merchandising) ..................... 50,000 238,882
Thorn EMI PLC (Recreation, Other Consumer Products) 17,000 395,342
Vodafone Group PLC (Telecommunications) ............ 50,000 204,869
Zeneca Group PLC (Health & Personal Care) .......... 11,000 205,490
-----------
3,900,280
-----------
TOTAL COMMON STOCK ................................. 37,013,821
-----------
WARRANTS -- 0.4%
ITALY -- 0.3%
Softe-Sip Risp Warrants (Telecommunications) (a) ... 110,000 143,534
SWEDEN -- 0.1%
Ericson B Free (Electrical & Electronics) .......... 1,560 33,144
-----------
176,678
-----------
PREFERRED STOCK -- 0.3%
GERMANY -- 0.3%
Volkswagon N/V VZG (Automobiles) ................... 600 $ 136,689
-----------
PRINCIPAL
AMOUNT
----------
LONG TERM CORPORATE DEBT -- 0.7%
JAPAN -- 0.7%
MBL International Fin (Banking), 3.00%, 11/30/02 ... $ 270,000 282,150
-----------
REPURCHASE AGREEMENTS -- 4.1%
UNITED STATES -- 4.1%
Salomon Brothers, 5.35%, dated 10/31/95, due 11/01/ 95, proceeds $1,655,619
(collateralized by various U.S. Treasury Securities with rates from 6.50% to
7.50%, due from 4/18/96 to 11/19/97, value
$1,699,252) ...................................... 1,655,373 1,655,373
-----------
TOTAL INVESTMENTS 98.3%
(Identified Cost $38,082,840) .................... 39,264,711
-----------
OTHER ASSETS LESS LIABILITIES 1.7% ................. 664,197
-----------
TOTAL NET ASSETS 100.0% ............................ $39,928,908
===========
- ------------------------------------------------------------------------------
<PAGE>
(a) Non-income producing security.
Note: ADR = American depository receipt.
ADS = American depository shares.
<TABLE>
<CAPTION>
INDUSTRY DIVERSIFICATION
PERCENT OF PERCENT OF
---------- ----------
PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
Electrical & Electronics ................... 10.8% Automobiles ............................ 2.7%
Telecommunications ......................... 10.4% Energy Sources ......................... 2.2%
Banking .................................... 7.6% Real Estate ............................ 2.1%
Machinery & Engineering .................... 6.7% Utilities: Electric & Gas .............. 2.0%
Multi-Industry ............................. 6.2% Building Materials & Components ........ 1.9%
Health & Personal Care ..................... 5.3% Financial Services ..................... 1.8%
Insurance .................................. 4.9% Construction & Housing ................. 1.6%
Broadcasting & Publishing .................. 4.9% Appliances & Household Goods ........... 1.4%
Industrial Components ...................... 4.2% Leisure & Tourism ...................... 0.9%
Recreation & Other Consumer ................ 3.9% Miscellaneous Materials & Commodities .. 0.9%
Metals: Nonferrous ......................... 3.1% Chemicals .............................. 0.9%
Business & Public Services ................. 2.9% Transportation: Shipping ............... 0.9%
Food & Household Products .................. 2.9% Transportation: Airlines ............... 0.6%
Beverages & Tobacco ........................ 2.8% Finance ................................ 0.4%
Merchandising .............................. 2.7% Aerospace & Military Technology ........ 0.4%
------
Total .......................... 100.0%
------
</TABLE>
See accompanying notes to financial statements
<PAGE>
REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES -- OCTOBER 31, 1995
ASSETS:
Investment at value (cost $38,082,840) .......................... $39,264,711
Cash ............................................................ 120,885
Foreign currency at value (cost $321,525) ....................... 324,162
Receivable for investments sold ................................. 135,150
Interest receivable ............................................. 754
Dividends receivable ............................................ 57,682
Prepaid insurance ............................................... 2,696
Net unrealized appreciation on forward currency contracts ....... 521,069
Deferred organization expenses .................................. 56,965
Receivable from affiliate (Note 2) .............................. 51,071
-----------
Total assets .............................................. 40,535,145
-----------
LIABILITIES:
Payable for investments purchased ............................... 553,714
Withholding tax payable ......................................... 150
Sub-advisery fees payable (Note 2) .............................. 22,164
Administration fee payable (Note 2) ............................. 1,583
Accrued expenses and other liabilities .......................... 28,626
-----------
Total liabilities ......................................... 606,237
-----------
NET ASSETS:
Applicable to investors' beneficial interest .................... $39,928,908
===========
See accompanying notes to financial statements
<PAGE>
REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS -- FOR THE PERIOD ENDED OCTOBER 31, 1995*
INVESTMENT INCOME (NOTE 1):
Dividends (net of foreign withholding tax $79,144) .............. $ 313,008
101,630
Interest (net of foreign withholding tax $150) .................. ----------
Investment Income ........................................... 414,638
EXPENSES (NOTE 2):
Sub-advisery fees ................................. $ 131,059
Administration fees ............................... 9,433
Custody fees ...................................... 41,964
Fund accounting fees .............................. 40,548
Audit fees ........................................ 15,000
Legal fees ........................................ 1,641
Trustees' fees and expenses ....................... 6,745
Insurance ......................................... 2,376
Printing .......................................... 3,342
Amortization of organization expenses ............. 11,028
Other expenses .................................... 836
---------
Total expenses .................................. 263,972
Less: reimbursement of expenses ................. (129,834)
Less: waiver of fees ............................ (12,835)
---------
Net expenses ................................................ 121,303
----------
NET INVESTMENT INCOME ........................................... 293,335
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments ................................................. 32,114
Foreign currency transactions ............................... (130,372)
Net unrealized appreciation of investments ...................... 1,181,871
Net unrealized appreciation of foreign currency contracts and 518,726
translations ....................................................
----------
Net realized and unrealized gain on investments and foreign 1,602,339
currency transactions ...........................................
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $1,895,674
==========
*For the period January 9, 1995 (commencement of operations) to October 31,
1995.
See accompanying notes to financial statements
<PAGE>
REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD
JANUARY 9, 1995
(COMMENCEMENT
OF OPERATIONS)
THROUGH
OCTOBER 31, 1995
-------------------
INCREASE IN NET ASSETS FROM:
OPERATIONS:
Net investment income ................................... $ 293,335
Net realized loss from investment and foreign currency
transactions ............................................ (98,258)
Net unrealized appreciation of investments and foreign
currency and translations ............................... 1,700,597
-----------
Net increase in net assets resulting from operations .... 1,895,674
-----------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Additions ............................................... 38,444,279
Reductions .............................................. (461,145)
-----------
Net increase in net assets from transactions in
investors' beneficial interest .......................... 37,983,134
-----------
NET INCREASE IN NET ASSETS .............................. 39,878,808
NET ASSETS:
Beginning of period ..................................... 50,100
-----------
End of period ........................................... $39,928,908
===========
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR THE PERIOD
JANUARY 9, 1995
(COMMENCEMENT
OF OPERATIONS)
THROUGH
OCTOBER 31, 1995
-------------------
RATIOS AND SUPPLEMENTAL DATA:
Net assets at end of period (in 000's) .................. $39,929
Ratios:
Expenses to average net assets (a) ...................... 0.64%(b)
Net investment income to average net assets (a) ......... 1.55%(b)
Portfolio turnover ...................................... 3%(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 January 9, 1995 (commencement
of operations) to October 31, 1995, the annualized ratios of expenses and
net investment income to average daily net assets would have been 1.39% and
0.80%, respectively.
(b) Annualized.
(c) Not annualized.
See accompanying notes to financial statements
<PAGE>
REPUBLIC INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 1995
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. 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 was initially
capitalized with an investment of $50,000 from Republic International Equity
Fund Ltd., a Cayman Island exempted company, and $100 from Republic
International Equity 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 ("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.
<PAGE>
SUMMARY OF OPEN FORWARD FOREIGN CURRENCY CONTRACTS
AT OCTOBER 31, 1995
- ------------------------------------------------------------------------------
U.S. DOLLAR NET UNREALIZED
EXPIRATION COST/ VALUE AT APPRECIATION/
SALE CONTRACTS DATE PROCEEDS 10/31/95 (DEPRECIATION)
-------------- ---------- -------- ----------- --------------
British Pound $ (7)
Sterling ........... 11/03/95 $ 29,889 $ 29,896
Canadian Dollar .... 11/27/95 182,000 185,917 (3,917)
Canadian Dollar .... 1/24/96 253,000 258,852 (5,852)
French Franc ....... 05/13/96 100,433 99,487 946
Hong Kong Dollars .. 8/14/96 165,000 165,486 (486)
Japanese Yen ....... 11/01/95 79,066 78,785 281
Japanese Yen ....... 12/12/95 353,162 315,846 37,316
Japanese Yen ....... 02/16/96 751,793 626,039 125,754
Japanese Yen ....... 04/10/96 1,414,181 1,323,013 91,168
Japanese Yen ....... 04/11/96 622,004 547,316 74,688
Japanese Yen ....... 06/28/96 1,007,300 860,265 147,035
Japanese Yen ....... 07/19/96 128,812 115,224 13,588
Japanese Yen ....... 08/06/96 260,000 229,579 30,421
Japanese Yen ....... 10/15/96 682,000 669,076 12,924
Japanese Yen ....... 10/30/96 410,000 408,984 1,016
Swiss Franc ........ 11/03/95 2,375 2,377 (2)
Swiss Franc ........ 12/13/95 257,000 259,859 (2,859)
PURCHASE CONTRACTS
------------------
Deutsche Mark ...... 05/16/96 100,433 96,815 (3,618)
Italian Lira ....... 11/30/95 191,378 194,051 2,673
--------
NET UNREALIZED APPRECIATION ON FORWARD FOREIGN
CURRENCY CONTRACTS .................................. $521,069
========
(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 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-Advisory: Capital Guardian Trust Company (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 0.70% 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 period from
January 9, 1995 to October 31, 1995, the sub-advisory fee was $131,059.
(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 $9,433.
(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 period from January 9,
1995 to October 31, 1995, fees for these services aggregated $40,548, of
which $12,835 was waived.
(E) Trustees Fees: The fees and expenses of the Trustees amounted to
$6,745 for the period January 9, 1995 to October 31, 1995.
(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 during the period
January 9, 1995 to October 31, 1995. For the period ended October 31, 1995,
expenses of the Portfolio were voluntarily limited to no more than 0.64% 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 $142,669.
3. INVESTMENT TRANSACTIONS. Purchase and sales of investments, other than
U.S. Government securities and short-term obligations, aggregated
$38,559,967, and $2,181,655, respectively for the period.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To Owners of Beneficial Interest of Republic International Equity 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 International Equity
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 Portfolio 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 the Republic International Equity 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.
Ernst & Young LLP
December 8, 1995
Grand Cayman, Cayman Islands
