<PAGE>
THE ASIA GROWTH PORTFOLIO
FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
- - - ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (92.4%)
CHINA (1.8%)
Huaneng Power International Inc (Spon. ADR, Series N) (Utilities - Electric) 35,000 $ 643,125
Shanghai Tyre and Rubber Co. Ltd. (Tyre & Rubber) 1,435,800 430,740
Shanghai Yaohua Pilkington Glass Co. Ltd. (Series B) (Building Materials) 510,000 510,000
----------
1,583,865
----------
HONG KONG (34.3 %)
Pacific Basin Bulk Ship (Transportation - Marine) 25,000 365,625
Cathay Pacific Airways (Transportation - Air) 125,000 182,545
Cheung Kong Holdings Ltd. (Multi-Industry) 690,000 3,415,312
China Light & Power Co. Ltd. (Utilities - Electric) 350,000 1,800,253
Citic Pacific Ltd. (Multi-Industry) 833,000 2,093,857
Dao Heng Bank Group Ltd. (Banking & Finance) 79,000 240,947
Dong Fang Electrical Machinery Co. (Electrical Equipment) 684,000 256,352
Hang Seng Bank (Banking & Finance) 112,000 853,990
Hong Kong Electric Holdings Ltd. (Utilities - Electric) 700,000 2,379,229
Hong Kong Telecommunications Ltd. (Utilities - Telecom) 1,818,800 3,596,325
HSBC Holdings Public Ltd. Co. (Banking & Finance) 169,303 2,171,589
Hung Hing Printing Group (Forest Products & Paper) 1,028,000 224,524
Hutchison Whampoa Ltd. (Multi-Industry) 557,000 2,692,212
Johnson Electrical Holdings Ltd. (Electrical Equipment) 71,000 143,141
Luoyang Glass Co. Ltd. (Building Materials) 770,000 390,583
New World Development Co. Ltd. (Real Estate) 514,000 1,710,499
Regal Hotels International (Hotels & Restaurants) 1,000,000 197,731
Shanghai Haixin Co. Ltd. (Textiles) 2,280,000 465,559
Shangri-La Asia Ltd. (Real Estate) 280,000 332,911
Sing Tao Holdings (Publishing & Newspapers) 672,000 369,097
Siu Fung Ceramics Holdings, Ltd. (Miscellaneous Manufacturing) 1,482,000 212,595
Sun Hung Kai Properties, Ltd. (Real Estate) 389,000 2,878,111
Swire Pacific Ltd. (Financial Services) 123,500 941,676
Television Broadcasts Ltd. (Media & Leisure) 186,000 653,829
Vincent Intertrans Ltd. (Marine Transportation) 2,710,000 203,133
Wharf (Holdings) Ltd. (Real Estate) 390,000 1,272,649
World Houseware Holdings Ltd. (Household Products) 352,800 80,702
Yizheng Chemical Fibre Co. Ltd. (Textiles) 1,987,000 693,337
----------
30,818,313
----------
INDONESIA (6.7%)
Astra International (Multi-Industry) 215,500 382,229
Bank Rama (Banking & Finance) 168,000 107,499
Bank Tiara Asia (Banking & Finance) 85,000 93,511
Central Proteina Prima (Food & Beverages) 125,500 147,929
Chareon Pokphand (Banking & Finance) 150,500 327,762
Fajar Surya Wisea (Forest Products & Paper) 180,000 165,694
Indocement Tunggas Perkasa (Building Materials) 60,000 235,743
</TABLE>
The Accompanying Notes are an Integral Part of these Financial Statements.
1
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
- - - ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INDONESIA (CONTINUED)
Indosat ( ADS represents 10 Series B shares) (Utilities - Telecom) 26,000 $ 994,500
International Nickel Indonesia (Mining) 210,000 424,338
Japfa Comfeed Indonesia (Food & Beverages) 351,500 244,645
Kalbe Farma (Pharmaceuticals) 86,000 393,893
Pabris Kertas Tjiwi Kimia (Forest Products & Paper) 67,000 134,632
Pan Indonesia Bank (Banking & Finance) 169,000 201,100
Bank Niaga (Banking & Finance) 60,000 181,522
Hanjaya Mandala Sampoerna (Tobacco) 77,000 605,074
Putra Surya Perkasa (Real Estate) 468,000 330,983
Sekar Bumi (Agriculture) 170,000 240,458
Semen Gresik (Building Materials) 38,000 255,097
Tigaraksa Satria (Distribution & Wholesale) 75,000 262,685
United Tractors (Machine Construction & Mining) 140,000 298,608
----------
6,027,903
----------
MALAYSIA (18.9%)
Aokam Perdana Berhad (Forest Products & Paper) 81,000 201,005
Arab Malaysian Finance Berhad (Financial Services) 86,000 347,457
Carlsberg Brewery Malaysia Berhad (Brewery) 55,000 259,434
CI Holdings Berhad (Building Materials) 57,000 236,136
Edaran Otomobil Nasional Berhad (Retail Automobiles) 57,000 556,440
Ekovest Berhad (Engineering & Construction) 80,000 265,792
Hong Leong Industries Berhad (Building Materials) 30,000 187,039
IJM Corporation Berhad (Engineering & Construction) 94,000 373,995
Island & Peninsular Berhad (Real Estate) 213,000 594,094
Land & General Berhad (Forest Products & Paper) 500 1,671
Leader Universal Holdings Berhad (Electrical Equipment) 125,000 446,062
Malayan Banking Berhad (Banking & Finance) 100,000 791,632
Malaysian International Shipping Corp. Berhad (Transportation - Marine) 140,000 410,582
Malaysian Oxygen Berhad (Chemicals) 241,500 931,132
Maruichi Malaysian Steel Tube Berhad (Metal Fabrication) 118,000 438,023
Matsushita Electric Co. (Utilities - Electric) 25,000 195,857
Negara Properties (Malaysia) Berhad (Agriculture) 48,000 198,852
Nestle (Malaysia) Berhad (Food & Beverages) 108,000 828,384
New Straits Times Press (Publishing & Newspapers) 205,000 634,844
Perusahaan Otomobil Nasional Berhad (Automobiles & Trucks) 107,000 386,218
Public Bank Berhad (Banking & Finance) 563,000 1,258,552
Rashid Hussain Berhad (Financial Services) 186,000 595,078
Resorts World Berhad (Entertainment) 116,000 680,394
Rothmans of Pall Mall (Malaysia) Berhad (Tobacco) 72,000 561,116
Shell Refinery (Malaysia) Berhad (International Oil & Gas) 75,000 249,180
Sime Darby Berhad (Multi-Industry) 753,600 2,101,920
</TABLE>
The Accompanying Notes are an Integral Part of these Financial Statements.
2
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
- - - ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MALAYSIA (CONTINUED)
Sime U.E.P. Properties Berhad (Real Estate) 431,000 $ 892,760
Tanjong Public Ltd. Co. (Entertainment) 280,000 964,725
Technology Resources Industries Berhad (Multi-Industry) 174,000 499,590
Tenaga Nasional Berhad (Utilities - Electric) 153,000 624,426
Tractors Malaysia Holdings Berhad (Electronics) 178,000 267,219
----------
16,979,608
----------
PHILIPPINES (2.5%)
Aboitiz Equity Ventures Inca (GDS represents 100 ordinary shares) (Banking & Finance) 1,590 28,223
SM Prime Holdings (GDS represents 50 ordinary shares) (Real Estate) 21,320 266,500
House of Investments, Inc. (Multi-Industry) 164,000 202,271
Aboitiz Equity Ventures Inca (Banking & Finance) 1,292,000 263,054
Manila Electric Company (Utilities - Electric) 27,000 216,719
Petron Corp. (Domestic Oil & Gas) 881,250 577,954
Philippine National Bank (Banking & Finance) 21,628 251,931
Picop Resources (Metals, Materials & Paper) 400,000 160,533
Steniel Manufacturing Corp. (Metals, Materials & Paper) 1,510,000 236,492
----------
2,203,676
----------
SINGAPORE (7.5%)
Acma Ltd. (Distribution & Wholesale) 98,000 311,356
Comfort Group Ltd. (Multi-Industry) 409,000 321,932
Creative Technology Ltd. (Computer Software) 14,200 133,109
Cycle & Carriage Ltd. (Retail Automobiles) 29,000 259,392
DBS Land Ltd. (Real Estate) 95,000 297,746
Development Bank Singapore (Banking & Finance) 69,000 785,045
Fraser & Neave Ltd. (Food & Beverages) 25,000 288,014
Jardine Matheson (Multi-Industry) 32,400 238,140
Jurong Shipyard Ltd. (Transportation - Marine) 32,000 228,980
NatSteel Ltd. (Iron & Steel) 102,500 214,168
Overseas Chinese Bank (Banking & Finance) 34,000 377,102
Pentex Schweizer Circuits Ltd. (Electrical Equipment) 167,000 238,998
Sembawang Corp. Ltd. (Transportation - Marine) 74,000 450,089
Sembawang Maritime Ltd. (Transportation - Marine) 58,000 240,716
Singapore Airlines Ltd. (Transportsation - Air) 136,000 1,255,385
Singapore Press Holdings (Publishing & Newspapaers) 18,000 269,195
United Overseas Bank Ltd. (Banking & Finance) 88,310 834,127
----------
6,743,494
----------
SOUTH KOREA (4.2%)
Hansol Paper Co ( GDS represents 1/2 share) (Paper) 14,937 287,537
Hyundai Motor Co. Ltd. (GDR represents 1/2 non-voting shares) (Automobiles & Trucks) 15,100 305,775
Korea Electric Power Corp. (Spon. ADR represents 1/2 non-voting shares) (Utilities - Electric) 38,000 859,750
LG Electronics (GDS represents 1/2 non-voting shares) (Electronics) 45,000 528,750
</TABLE>
The Accompanying Notes are an Integral Part of these Financial Statements.
3
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
- - - ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SOUTH KOREA (CONTINUED)
Pohang Iron & Steel Ltd. (ADS represents 1/4 ordinary shares) (Iron & Steel) 19,900 $ 587,050
President Enterprise (GDS represents 10 common shares) (Food & Beverages) 17,298 272,444
Samsung Electronics (GDS represents 1/2 voting common shares) (Electronics) 595 32,130
Samsung Electronics (GDS represents 1/2 non-voting common shares) (Electronics) 17,374 938,196
----------
3,811,632
----------
TAIWAN (3.9%)
Asia Cement Corp. (GDS represents common shares) (Building Materials) 38,835 815,535
China Steel Corp. ( GDS represents 20 shares) (Iron & Steel) 37,000 758,500
Hocheng Group Corp. (GDS represents 5 ordinary shares) (Containers & Glass) 17,000 204,000
Microelectronics Technology Inc. (GDS represents 5 ordinary shares) (Telecom Equipment) 46,000 322,000
Tuntex Distinct (represents 1 GDS and 10 shares) (Textiles) 70,000 665,000
Yageo Corp. ( GDR represents 5 ordinary shares) (Electronics) 56,576 820,352
----------
3,585,387
----------
THAILAND (12.6%)
Advanced Info Service Public Co. (Electronics) 29,700 440,356
Advanced Info Service Public Co. (Utilities - Telecom) 51,200 750,837
Bangkok Bank Co. ltd. (Banking & Finance) 150,200 1,655,029
Bangkok Expressway Public Co. (Transport & Trade Services) 100,000 166,093
Banpu Public Co. Ltd. (Mining) 10,700 253,142
Charoong Thai Wireless & Cable Co. Ltd. (Telecom Equipment) 76,000 170,873
Finance One Co. Ltd. (Financial Services) 59,500 438,687
Inoue Rubber (Thailand) Co. (Tire And Rubber) 2,200 14,705
International Cosmetics Public Co.Ltd. (Cosmetics & Toiletries) 5,800 86,935
Jasmine Intl Public Co. (Telecom Services) 137,000 926,838
KCE Electronics Co. Ltd. (Electronics) 22,100 77,889
Krung Thai Bank (Banking & Finance) 92,000 372,696
Land & House Co. Ltd. (Real Estate) 18,000 379,178
MDX Co. Ltd. (Real Estate) 55,700 129,745
Modernform Group Public Co. Ltd. (Household Products) 75,000 131,406
Phatra Thanakit Co. Ltd. (Financial Services) 36,000 300,425
Pizza Public Co (Thailand) Ltd. (Restaurants) 87,700 191,849
Saha-Union Corp. Ltd. (Textiles) 200,000 322,058
Siam Cement Public Co. Ltd. (Building Materials) 13,000 829,978
Siam Commercial Bank Co. Ltd. (Banking & Finance) 40,000 382,418
Swedish Motors Public Co. Ltd. (Automobiles & Auto Parts) 90,000 360,948
TelecomAsia Corp. (Utilities - Telecom) 438,000 1,623,537
Thai Farmers Bank Ltd. (Banking & Finance) 79,600 761,013
Thai Petrochemical Industry Public Co. Ltd. (Chemicals) 20,000 36,459
Tipco Asphalt Co. Ltd. (Building Materials) 58,900 264,853
United Communication Industry (Utilities - Telecom) 20,200 294,592
----------
11,362,540
----------
Total Common Stocks (cost $77,798,969) 83,116,417
----------
</TABLE>
The Accompanying Notes are an Integral Part of these Financial Statements.
4
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
- - - ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCKS (0.7%)
PHILIPPINES (0.7%)
Philippine Long Distance Telephone Co. (GDS represents 1 Series 2 Cnv Pfd ) (Utilities - Telecom) 15,900 $ 647,925
----------
Total Preferred Stocks (cost $532,650) 647,925
----------
<CAPTION>
CONVERTIBLE BONDS (2.2%) PRINCIPAL
AMOUNT
----------
MALAYSIA (0.9%)
Land & General Berhad (4.5% Cnv Bds, due 7/26/04) (Multi-Industry) $ 200,000 270,000
Telekom Malaysia Berhad ( 4% Cnv Bds, due 10/3/04) (Utilities -Telecom) 575,000 557,750
----------
827,750
----------
PHILIPPINES (0.3%)
JG Summit (Cayman) Ltd. (3.5% Cnv Bds, due 12/23/03) (Multi-Industry) 356,000 253,650
----------
SOUTH KOREA (0.4%)
Ssangyong Oil Refinery (3.75% Cnv Bds, due 12/31/08) (Domestic Oil & Gas) 305,000 328,638
----------
TAIWAN (0.6%)
Acer Inc. (4% Cnv Bds, due 6/10/01) (Technology) 90,000 265,275
U-Ming Marine Transport Corp. (1 1/2% Cnv Bds, due 2/7/01) (Transportation - Marine) 240,000 247,050
----------
512,325
----------
Total Convertible Bonds (cost $1,843,693) 1,922,363
----------
<CAPTION>
RIGHTS & WARRANTS * (0.6 %) WARRANTS
---------
CHINA (0.0 %)
Guangdong Development Fund (Warrants) (Banking & Finance) 60,000 10,200
----------
HONG KONG (0.0%)
Pacific Basin Bulk Ship (Warrants) (Transportation - Marine) 25,000 17,969
----------
INDONESIA (0.0%)
Indorama Synthetic (Rights shares) (Textiles) 5,750 3,486
Pan Indonesia Bank (Rights shares) (Banking & Finance) 39,125 0
----------
3,486
----------
SINGAPORE (0.6%)
United Overseas Land Ltd. (Warrants Expire 6/9/97) (Real Estate) 520,000 480,000
----------
Total Rights & Warrants (cost $395,955) 511,654
----------
UNIT TRUSTS (1.4%)
CHINA (0.2%)
Guangdong Development Fund 300,000 180,000
----------
SOUTH KOREA (1.2%)
Korea Asia Fund Ltd. (ADR represents 500 shares) 98 980,000
Korea Europe Fund Ltd. 17,500 129,063
</TABLE>
The Accompanying Notes are an Integral Part of these Financial Statements.
5
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
- - - ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- - - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$1,109,063
----------
Total Unit Trusts (cost $1,249,563) 1,289,063
----------
SHORT TERM INVESTMENTS (3.4%) PRINCIPAL
AMOUNT
----------
Time Deposit (3.4%)
State Street Cayman Islands 5.125% dated 6/30/95 due 7/3/95, proceeds at matu$ $ 3,080,000 $ 3,080,000
----------
Total Short Term Investments (cost $3,080,000) 3,080,000
----------
Total Investments (cost $ 84,900,830) (100.7%) 90,567,422
Other assets net of liabilities (.7%) (657,304)
----------
Total Net Assets (100.0%) $ 89,910,118
----------
----------
</TABLE>
* - Non-income producing securities.
ADR - American Depositary Receipt.
ADS - American Depositary Shares.
Spon. ADR - Sponsored ADR.
GDR - Global Depositary Receipt.
GDS - Global Depositary Shares.
144A - Securities restricted for resale to Qualified Institutional Buyers.
The Accompanying Notes are an Integral Part of these Financial Statements.
6
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1995
- - - ------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at Value (Cost $ 81,820,830) $87,487,422
Foreign Currency, at Value (Cost $ 252,401) 252,229
Short Term Investments (Cost $3,080,000) 3,080,000
Cash 250,328
Unrealized Appreciation on Open Foreign Currency Contracts 21
Receivable for Investments Sold 1,573,850
Dividends and Interest Receivable 232,158
Deferred Organization Expense 31,428
-----------
Total Assets 92,907,436
-----------
LIABILITIES:
Payable for Investments Purchased 2,882,347
Unrealized Depreciation on Open Foreign Currency Contracts 663
Advisory Fee Payable 53,329
Financial and Fund Accounting Services Fee Payable 11,201
Custody Fee Payable 1,046
Fund Services Fee Payable 533
Administration Fee Payable 451
Tax Withholding Liability 25,051
Accrued Expenses 16,946
Organization Expense Payable 5,750
-----------
Total Liabilities 2,997,318
-----------
NET ASSETS:
Applicable to Investors' Beneficial Interests $89,910,118
-----------
-----------
</TABLE>
The Accompanying Notes are an Integral Part of these Financial Statements.
7
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD APRIL 5, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1995
- - - ------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME (NOTE 1C):
Dividends (Net of $60,075 Foreign
Withholding Taxes) $ 725,764
Interest 69,396
--------
Investment Income $ 795,160
EXPENSES:
Advisory Fee 166,013
Custodian Fees and Expenses 64,330
Financial and Fund Accounting Services Fees 11,201
Professional Fees 15,791
Fund Services Fee 1,340
Administration Fee 1,312
Trustees' Fees and Expenses 928
Insurance Expense 110
Amortization of Organization Expense 1,572
Miscellaneous 1,785
--------
Total Expenses 264,382
--------
NET INVESTMENT INCOME 530,777
NET REALIZED GAIN (LOSS) ON:
Investment Transactions 1,168,937
Foreign Currency Transactions (7,183)
----------
Net Realized Gain 1,161,754
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF:
Investments 5,666,592
Foreign Currency Contracts and Translations (1,218)
----------
Change in Unrealized Appreciation 5,665,374
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $7,357,906
----------
----------
</TABLE>
The Accompanying Notes are an Integral Part of these Financial Statements.
8
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE PERIOD APRIL 5, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1995
- - - ------------------------------------------------------------------------------
<TABLE>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net Investment Income $ 530,777
Net Realized Gain (Loss) on Investments and Foreign Currency
Transactions 1,161,754
Net Change in Unrealized Appreciation (Depreciation) of
Investments and Foreign Currency Translations 5,665,374
----------
Net Increase (Decrease) in Net Assets Resulting from Operations 7,357,906
----------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions 89,583,416
Withdrawals (7,031,403)
----------
Net Increase from Investors' Transactions 82,552,013
----------
Total Increase in Net Assets 89,909,918
NET ASSETS:
Beginning of Period 200
End of Period $89,910,118
----------
</TABLE>
- - - ------------------------------------------------------------------------------
SUPPLEMENTARY DATA: (UNAUDITED)
FOR THE PERIOD APRIL 5, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1995
- - - ------------------------------------------------------------------------------
<TABLE>
<S> <C>
RATIO TO AVERAGE NET ASSETS (ANNUALIZED):
Expenses 1.32%
Net Investment Income 2.66%
Portfolio Turnover (Not Annualized) 29.74%
</TABLE>
The Accompanying Notes are an Integral Part of these Financial Statements.
9
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Asia Growth Portfolio (the "Portfolio") is a series of The Series
Portfolio (the "Series Portfolio"), a trust organized under the laws
of the State of New York on June 24, 1994 and is registered under the
Investment Company Act of 1940, as amended, (the "Act") as a no-load,
non-diversified, open-end management investment company. The
Portfolio commenced operations on April 5, 1995 and received a
contribution of certain assets and liabilities, including securities,
with a cost and value of $81,444,712 on that date from the JPM Asia
Growth, Ltd. in exchange for a beneficial interest in the Portfolio.
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) The value of each security for which readily available
market quotations exists is based on a decision as to the
broadest and most representative market for such security. The
value of such security will be based either on the last sale
price on a national securities exchange, or, in the absence of
recorded sales, at the readily available closing bid price on
such exchanges. Securities listed on a foreign exchange are
valued at the last quoted sale price available before the time
when net assets are valued. Unlisted securities are valued at
the average of the quoted bid and asked prices in the over-the-
counter market. Securities or other assets for which market
quotations are not readily available are valued at fair value in
accordance with procedures established by the Portfolio's
Trustees. Such procedures may include the use of independent
pricing services, which use prices based upon yields or prices of
securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; operating data and general
market conditions. All portfolio securities with a remaining
maturity of less than 60 days are valued by the amortized cost
method.
Trading in securities on most foreign exchanges and
over-the-counter markets is normally completed before the close
of the domestic market and may also take place on days on which
the domestic market is closed. If events materially affecting
the value of foreign securities occur between the time when the
exchange on which they are traded closes and the time when the
Portfolio's net assets are calculated, such securities will be
valued at fair value in accordance with procedures established by
and under the general supervision of the Portfolio's Trustees.
b) The books and records of the Portfolio are maintained
in U.S. dollars. The market values of investment securities,
other assets and liabilities and foreign currency contracts are
translated at the prevailing exchange rates at the end of the
period. Purchases, sales, income and expense are translated at
the exchange rate prevailing on the respective dates of such
transactions. Translation gains and losses resulting from
changes in exchange rates during the reporting period and gains
and losses realized upon settlement of foreign currency
transactions are reported in the Statement of Operations.
Since the net assets of the Portfolio are presented at
the exchange rates and market values prevailing at the end of the
period, the Portfolio does not isolate the portion of the results
of operations arising as a result of changes in foreign exchange
rates from the fluctuations arising from changes in the market
prices of securities during the period.
c) Securities transactions are recorded on a trade date
basis. Dividend income is recorded on the ex-dividend date or at
the time that the relevant ex-dividend date and amount becomes
known. Interest income, which includes the amortization of
premiums and discounts, if any, is recorded on an accrual basis.
For financial and tax reporting purposes, realized gains and
losses are determined on the basis of specific lot
identification.
d) The Portfolio may enter into forward and spot foreign
currency contracts to protect securities and related receivables
against fluctuations in future foreign currency rates. A forward
contract is an agreement to buy or sell currencies of different
countries on a specified future date at a specified rate. Risks
associated with such contracts include the movement in the value
of the foreign currency relative to the U.S. Dollar and the
ability of the counterparty to perform.
-10-
<PAGE>
The market value of the contract will fluctuate with
changes in currency exchange rates. Contracts are valued daily
based on procedures established by and under the general
supervision of the Portfolio's Trustees and the
change in the market value is recorded by the Portfolio
as unrealized appreciation or depreciation of foreign forward and
spot currency contract translations.
Summary of Open Contracts
<TABLE>
<CAPTION>
U.S. DOLLAR NET UNREALIZED
VALUE AT APPRECIATION
FOREIGN CURRENCY SALE CONTRACTS PROCEEDS 6/30/95 (DEPRECIATION)
-------- ----------- --------------
<S> <C> <C> <C>
Indonesian Rupiah, 33,422,625, expiring 7/3/95 $ 14,984 $ 15,008 $ (24)
<CAPTION>
FOREIGN CURRENCY PURCHASE CONTRACTS COST
--------
Indonesian Rupiah, 34,013,625, expiring 7/3/95 15,266 $ 15,287 $ 21
Malaysian Ringgit, 297,562, expiring 7/3/95 122,067 $122,052 $ (15)
Malaysian Ringgit, 341,510, expiring 7/3/95 140,078 $140,078 0
Malaysian Ringgit, 2,057,773 expiring 7/7/95 844,635 $844,012 $(624)
------
$(642)
------
</TABLE>
e) The Portfolio intends to be treated as a partnership
for federal income tax purposes. As such, each investor in the
Portfolio will be taxable on its share of the Portfolio's
ordinary income and capital gains. It is intended that the
Portfolio's assets will be managed in such a way that an investor
in the Portfolio will be able to satisfy the requirements of
Subchapter M of the Internal Revenue Code.
f) The Portfolio incurred organization expenses in the
amount of $33,000. These costs were deferred and are being
amortized on a straight-line basis over a five year period from
the commencement of operations.
g) The Portfolio's custodian takes possession of the collateral
pledged for investments in repurchase agreements on behalf of the
Portfolio. It is the policy of the Portfolio to value the
underlying collateral daily on a market-to-market basis to
determine that the value, including accrued interest, is at least
equal to the repurchase price plus accrued interest. In the
event of default of the obligation to repurchase, the Portfolio
has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. Under certain circumstances,
in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral or
proceeds may be subject to legal proceedings.
2. a) The Portfolio has an investment advisory agreement with
Morgan Guaranty Trust Company of New York ("Morgan"). Under the
terms of the investment advisory agreement, the Portfolio pays
Morgan at an annual rate of 0.800% of the Portfolio's average
daily net assets. For the period ended June 30, 1995 such fees
amounted to $166,013.
b) The Portfolio has retained Signature Broker - Dealer
Services, Inc. ("Signature") to serve as Administrator and
exclusive placement agent. Signature provides administrative
services necessary for the operations of the Portfolio, furnishes
office space and facilities required for conducting the business
of the Portfolio and pays the compensation of the Portfolio's
officers affiliated with Signature. The agreement provides for
a fee to be paid to Signature at an annual fee rate determined by
the following schedule: 0.01% of the first $1 billion of the
aggregate average daily net assets of the Portfolio and the other
portfolios subject to the Administrative Services Agreement
0.008% of the next $2 billion of such net assets, 0.006% of the
next $2 billion of such net assets, and 0.004% of such net
assets in excess of $5 billion. The daily equivalent of the fee
rate is applied to the daily net assets of the Portfolio. For
the period ended June 30, 1995, such expenses amounted to $1,312.
c) The Portfolio has entered into a Financial and Fund
Accounting Services Agreement ("Services Agreement") with Morgan
under which Morgan receives a fee, based on the percentages
described below, for assisting in certain
aspects of the administration and operation of the
Portfolio. The services agreement is also designed to provide an
expense limit for certain expenses of the Portfolio. If total
expenses of the Portfolio, excluding the advisory fee,
-11-
<PAGE>
custody expenses, fund services fee, brokerage costs,
and the amortization of organization expenses exceed the expense
limit of 0.15% of the Portfolio's average daily net assets up to
$200 million, 0.10% of the next $200
million of average daily net assets, 0.05% of the next
$200 million of average daily net assets and 0.03% of average
daily net assets thereafter, Morgan will reimburse the Portfolio
for the excess expense amount and receive no fee. Should such
expenses be less than the expense limit, Morgan's fee would be
limited to the difference between such expenses and the fee
calculated under the Services Agreements. For the period ended
June 30, 1995, this fee amounted to $11,210. Effective
September 1, 1995 the Services Agreement will be terminated. The
oversight services that were provided under the Services
Agreement will continue to be provided by Morgan without any fee
to the Fund until such time as a new agreement is put into place.
d) The Portfolio has a Fund Services Agreement with Pierpont
Group, Inc. ("Group") to assist the Trustees in exercising their
overall supervisory responsibilities for the Portfolio's affairs.
The Trustees of the Portfolio represent all the existing
shareholders of Group. The Portfolio's allocated portion of
Group's fee for its reasonable costs in performing its services
amounted to $1,340 for the period ended June 30, 1995.
e) An aggregate annual fee of $65,000 is paid to each
Trustee for serving as a Trustee of the Series Portfolio as well
as the funds and their corresponding portfolios of two other
affiliated series. The Trustees' Fees and Expenses shown in the
financial statements represents the Portfolio's allocated portion
of the total fees and expenses. The Trustee who serves as
Chairman and Chief Executive Officer of these Funds and
Portfolios also serves as Chairman of Group and received
compensation and employee benefits from Group in his role as
Group's Chairman. The allocated portion of such compensation and
benefits included in the Fund Services Fee shown in the financial
statements was $157.
3. INVESTMENT TRANSACTIONS:
Investment transactions (excluding short-term investments) for the
period ended June 30, 1995 were as follows:
<TABLE>
<CAPTION>
Cost Proceeds
of Purchases from Sales
------------- -----------
<S> <C>
$28,231,715 $24,839,368
------------- -----------
</TABLE>
-12-
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
Financial Statements
June 30, 1995
(unaudited)
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
- - - -------------------------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE
- - - -------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (93.4%)
AUSTRIA (1.3%)
Bohler Uddeholm (Iron/Steel) 5,000 $ 345,996
Creditanstalt Bankverein (Banks) 13,800 813,265
Oestereichische El Wirtsch, Class A (Electric Utilities) 9,300 681,745
OMV AG (Energy Sources) 8,126 936,910
Va Technologie AG (Industrial Machinery) 7,700 963,686
Wienerberger Baustoff (Construction Materials) 1,137 436,589
--------------
4,178,191
--------------
BELGIUM (3.6%)
Arbed SA (Steel) 4,090 596,692
Banque Bruxelles Lambert NPV (Banks) 14,660 2,445,395
Electrabel NPV (Electric Utilities) 4,300 908,493
Fortis AG (Insurance) 7,564 813,676
GIB Holdings LTD. (Retail Trade) 16,250 771,198
Glaverbel (Building Materials) 6,500 855,744
Groupe Bruxelles Lambert NPV (Multi-Industry) 4,270 584,675
Petrofina SA (Energy Sources) 2,590 782,117
Solvay SA (Chemicals) 2,060 1,129,719
Tractebel Capital NPV (Multi-Industry) 5,970 2,166,922
--------------
11,054,631
--------------
DENMARK (2.5%)
Carlsberg, Series B (Food & Beverages) 7,600 354,634
Danisco AS (Food & Beverages) 22,000 941,024
Danske Luftfartselskab (Transportation) 9,600 725,266
Den Danske Bank (Banks) 18,200 1,142,450
International Service System, Series B (Multi-Industry) 31,450 821,118
Novo Nordisk AS, Series B (Health Care & Personal Care) 10,000 1,066,568
Sophus Berendsen, Class B (Multi-Industry) 10,890 1,026,388
Teledanmark AS, Series B (Telecommunications) 28,600 1,591,390
--------------
7,668,838
--------------
FRANCE (16.2%)
Air Liquide (Chemicals) 11,845 1,892,251
Alcatel Alsthom (Electrical Equipment) 29,199 2,629,011
Alcatel Cable (Industrial Machinery) 4,300 261,476
Axa (Multi-Industry) 26,478 1,429,975
Banque Nationale de Paris (Banks) 17,560 846,998
BIC (Manufacturing) 4,000 659,617
Bouygues (Engineering & Construction) 8,525 1,020,969
Carrefour Supermarkets (Retail) 4,385 2,246,145
Christian Dior SA (Apparel & Textiles) 15,975 1,406,741
Compagnie Financiere de Cic Union Europ Certe De Invest (Banks) 13,070 840,566
Compagnie Financiere de Paribas, Class A (Banks) 48,331 2,905,060
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements
1
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
- - - -------------------------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE
- - - -------------------------------------------------------------------------------------------------
<S> <C> <C>
FRANCE (CONTINUED)
Compagnie Financiere de St. Gobain (Glass & Packaging) 8,910 $ 1,076,260
Compagnie Generale de Eaux (Utilities) 23,648 2,632,268
Credit Local De France (Banks) 10,600 983,242
Eridania Beghin-Say (Household Products) 5,690 877,315
Groupe Danone (Food & Beverages) 19,426 3,267,499
Groupe De La Cite (Broadcasting) 1,810 320,862
Imetal (Non-Ferrous Metals) 4,874 572,667
Lagardere Groupe (Publishing) 41,850 866,969
Legrand (Electrical Equipment) 6,200 984,066
LVMH Moet Hennessy (Beverages) 3,554 639,549
Lyonnaise des Eaux SA (Multi-Industry) 6,200 586,350
Peugeot SA (Automobiles) 8,830 1,224,948
Pinault Printemps Redoute SA (Retail) 3,450 739,596
Promodes (Retail) 7,400 1,685,528
Renault SA (Automobiles) 21,400 670,501
Rhone Poulenc SA, Class A (Chemicals) 53,020 1,194,543
Roussel Uclaf (Health & Personal Care) 7,785 1,214,776
Sanofi (Health & Personal Care) 28,000 1,549,688
SEITA (Tobacco) 28,500 856,533
SGS - Thomson Microelectronics NV (Electronics) 23,600 948,612
Societe Generale (Banks) 17,265 2,017,862
Societe Nationale Elf Aquitaine (Energy Sources) 24,604 1,818,179
Sommer-Allibert (Construction Materials) 1,665 612,624
Synthelabo (Health & Personal Care) 24,710 1,402,235
Television Francaise (Broadcasting) 9,830 967,540
Total, Class B (Energy Sources) 59,865 3,603,277
Ugine SA (Iron/Steel) 8,000 562,324
--------------
50,014,622
--------------
GERMANY (12.5%)
Allianz AG Holding (Insurance) 1,826 3,258,781
Allianz AG Holding (Insurance) 1,826 136,003
Ava Allgemeine Handels-Der Verbr (Merchandising) 2,476 966,838
Bankgesellschaft Berlin AG (Banks) 2,150 569,022
Bayer AG (Chemicals) 8,544 2,125,342
Bayerische Vereinsbank (Banks) 2,525 765,954
Bilfinger & Berger Bau AG (Construction & Housing) 670 309,346
CKAG Colonia Konzern AG (Insurance) 705 635,718
Continental AG (Industrial Machinery) 4,400 638,889
Daimler-Benz AG (Automobiles) 3,070 1,409,683
Deutsche Bank AG (Banks) 67,450 3,277,634
Deutsche Pfandbrief & Hypotheken Bank (Banks) 2,200 1,118,374
Deutsche Pfandbrief & Hypotheken Bank (Banks) 440 220,811
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements
2
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
- - - -------------------------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE
- - - -------------------------------------------------------------------------------------------------
<S> <C> <C>
GERMANY (CONTINUED)
Heidelberg Zement (Construction Materials) 1,250 $ 1,066,599
Hoechst AG (Chemicals) 5,000 1,080,338
Karstadt AG (Merchandising) 1,000 438,933
Lufthansa AG (Transportation) 3,200 462,796
Man AG (Industrial Machinery) 4,600 1,185,841
Mannesmann AG (Industrial Machinery) 3,280 1,002,097
Munchener Ruckversicherungs (Insurance) 1,540 3,374,214
Preussag AG (Multi-Industry) 2,100 627,160
Rheinisch Westfalisches Elektrizitaetswerk AG (Electric Utilities) 1,600 555,933
SAP AG (Business Services) 1,250 1,658,652
Schering AG (Health & Personal Care) 12,470 871,069
Siemens AG (Electrical Equipment) 7,182 3,565,293
SKW Trostberg AG (Chemicals) 21,000 440,379
Thyssen AG (Steel) 5,500 1,024,116
Veba AG (Electric Utilities) 9,845 3,869,230
Volkswagen AG (Automobiles) 7,076 2,044,155
--------------
38,699,200
--------------
IRELAND (0.3%)
Allied Irish Banks (Banks) 122,300 578,473
Cement Roadstone Holdings (Construction Materials) 46,300 309,930
Cement Roadstone Holdings (Construction Materials) 24,500 165,814
--------------
1,054,217
--------------
ITALY (1.7%)
Arnoldo Mondadori Editore SPA (Media & Leisure) 75,000 479,450
Assicurazioni Generali SPA (Insurance) 48,000 1,127,945
Banco Ambrosiano Veneto Di Risp (Banks) 189,800 257,513
Fiat SPA (Automobiles) 225,000 793,430
Istituto Mobiliare Italiano (Banks) 43,000 263,059
Istituto Nazionale Delle Assicurazioni (Insurance) 206,000 276,975
Montedison SPA (Multi-Industry) 621,000 444,425
Sirti SPA (Construction & Housing) 55,000 406,723
Telecom Italia SPA (Telecommunications) 276,000 748,089
Telecom Italia SPA (Telecommunications) 195,000 412,345
--------------
5,209,954
--------------
NETHERLANDS (6.2%)
ABN Amro Holdings NV (Banks) 15,573 601,010
Ahold NV (Retail) 18,500 662,633
Akzo Nobel NV (Chemicals) 3,400 406,376
Dutch States Mines NV (Mining) 9,000 775,411
Elsevier NV (Publishing) 88,920 1,050,168
Heineken NV (Beverages) 3,791 573,727
Internationale Nederlanden Groep (Insurance) 32,400 1,791,985
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements
3
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
- - - -------------------------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE
- - - -------------------------------------------------------------------------------------------------
<S> <C> <C>
NETHERLANDS (CONTINUED)
Koninklijke KNP NV (Paper) 23,000 $ 691,707
Koninklijke PTT Nederland (Telecommunications) 49,000 1,761,407
Moeara Enim Petroleum (Energy Sources) 1,000 1,077,767
Philips Electronics (Household Products) 39,570 1,675,245
Royal Dutch Petroleum (Energy Sources) 45,000 5,494,676
Unilever NV (Household Products) 18,699 2,432,861
--------------
18,994,973
--------------
NORWAY (3.3%)
Aker AS, Series B (Multi-Industry) 50,000 628,905
Hafslund Nycomed, Series B (Health & Personal Care) 50,000 1,156,374
Kvaerner AS, Series B (Engineering & Construction) 30,000 1,314,615
Norsk Hydro AS (Energy Sources) 115,000 4,824,718
Norske Skogsindustrier, Series B (Paper) 25,000 831,778
Orkla AS, A Free (Multi-Industry) 3,400 152,301
Orkla AS, B Free (Food & Beverages) 30,000 1,270,794
--------------
10,179,485
--------------
PORTUGAL (1.1%)
Banco Commercial Portugues (Banks) 40,300 533,293
Banco Espirito Santo e Com de Lisboa (Banks) 36,300 606,406
Cimpor Cimentos de Portugal (Construction Materials) 29,100 473,397
Cimpor Cimentos de Portugal (Construction Materials) 5,820 89,906
Empresa Fabril de Maquinas Electricas (Capital Goods) 21,400 254,518
Modelo Continente SGPS (Retail) 4,900 452,153
Portucel Industrial SA (Containers & Glass) 40,000 285,714
Portugal Telecom SA (Telecommunication Services) 40,000 760,000
--------------
3,455,387
--------------
SPAIN (2.1%)
Acerinox SA (Iron/Steel) 3,685 452,392
Banco Bilbao Vizcaya (Banks) 13,200 380,879
Banco Intercontinental Espanol (Banks) 5,000 449,948
Banco Pastor (Banks) 7,500 362,229
Banco Popular Espanol (Banks) 4,736 703,802
Empresa Nacional de Electric (Electric Utilities) 12,400 612,194
Fomento de Construcciones y Contra (Construction & Housing) 4,520 384,363
Fuerzas Electric de Cataluna SA, Series A (Electric Utilities) 56,400 327,807
Hidroelectrica del Cantabrico SA (Electric Utilities) 8,990 274,617
Iberdrola SA (Electric Utilities) 128,000 963,765
Repsol SA (Energy Sources) 28,670 901,818
Telefonica de Espana (Telecommunications) 56,475 727,356
--------------
6,541,170
--------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements
4
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
- - - -------------------------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE
- - - -------------------------------------------------------------------------------------------------
<S> <C> <C>
SWITZERLAND (11.0%)
Baer Holdings AG (Banks) 600 $ 703,430
BBC AG Brown Boveri & Cie (Electrical Equipment) 830 859,192
Bil GT Gruppe AG (Banks) 1,800 1,011,376
Ciba Geigy AG (Chemicals) 6,277 4,600,771
Compagnie Financiere Richemont AG, Series A (Insurance) 960 1,183,847
CS Holding (Banks) 24,275 2,224,066
Fischer (Georg) AG (Industrial Machinery) 910 1,224,924
Holderbank Financiere Glarus (Financial Services) 1,227 1,006,960
Nestle SA (Food & Beverages) 4,240 4,414,902
Roche Holdings Genusscheine AG (Health & Personal Care) 627 4,040,243
Sandoz AG (Health Personal Care) 7,170 4,943,969
Schweiz Ruckversicherungs Gesell (Insurance) 2,290 1,763,986
Schweizerischer Bankgesellschaft (Banks) 1,300 1,346,852
Schweizerischer Bankverein (Banks) 6,450 2,285,367
SMH AG Neuenburg (Manufacturing) 675 433,782
SOC Gen de Surveillance Holdings (Business Services) 170 295,267
Swissair-Schweiz Luftverkehr (Transportation) 750 519,106
Zurich Versicherungs (Insurance) 870 1,093,261
--------------
33,951,301
--------------
UNITED KINGDOM (31.6%)
Abbey National PLC (Insurance) 210,000 1,563,226
Allied Colloids Group PLC (Chemicals) 582,000 1,143,264
Argos (Retail) 129,000 886,401
Argyll Group PLC (Retail) 300,000 1,600,923
Bass PLC (Food & Beverages) 161,000 1,540,345
BAT Industries PLC (Tobacco) 392,000 3,005,313
BET PLC (Multi-Industry) 407,000 796,262
BICC (Electrical Equipment) 141,000 666,089
BOC Group PLC (Chemicals) 71,800 917,057
BPB Industries PLC (Construction Materials) 129,000 637,100
British Gas PLC (Utilities) 387,120 1,782,587
British Petroleum PLC (Energy Sources) 352,723 2,527,465
British Telecommunications PLC (Telecommunications) 831,135 5,182,200
British Tyre & Rubber PLC (Multi-Industry) 406,264 2,064,599
Cable & Wireless PLC (Telecommunication Services) 203,000 1,388,421
Caradon PLC (Containers & Glass) 237,000 889,645
Carlton Communications PLC (Broadcasting) 47,000 712,065
Chubb Security (Business Services) 173,600 867,034
Coats Viyella PLC (Apparel & Textiles) 188,000 556,195
Dalgety PLC (Food & Beverages) 156,000 1,091,777
Forte (Leisure Time) 278,000 1,005,965
General Electric Co. PLC (Electrical Equipment) 206,000 1,005,917
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements
5
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
- - - -------------------------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE
- - - -------------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM (CONTINUED)
Glaxo Wellcome PLC (Health & Personal Care) 405,900 $ 4,980,942
Glynwed International PLC (Industrial Machinery) 177,700 920,015
Granada Group PLC (Leisure Time) 115,000 1,115,795
Grand Metropolitan PLC (Multi-Industry) 253,301 1,553,166
Guardian Royal Exchange PLC (Insurance) 597,000 1,960,880
Guinness PLC (Food & Beverages) 233,000 1,752,966
Hanson Trust PLC (Multi-Industry) 453,000 1,581,573
Hillsdown Holdings PLC (Food & Beverages) 442,000 1,272,499
HSBC Holdings (Banks) 169,000 2,181,382
Inchcape PLC (Business Services) 173,000 814,506
Kingfisher (Retail) 232,300 1,568,496
Land Securities PLC (Real Estate) 90,000 870,367
Lloyds Bank PLC (Banks) 297,000 2,945,435
Marks & Spencer PLC (Retail) 163,200 1,048,716
MEPC (Real Estate) 108,000 657,070
MFI Furniture Group (Household Products) 390,000 725,783
Nationall Westminster Bank (Banks) 98,000 851,869
NFC PLC (Trucking & Freight Forwarding) 196,000 500,366
Norweb (Electric Utilities) 81,000 872,228
Peninsular & Orient Steam Navigation Company (Transportation) 89,000 818,936
Pearson PLC (Broadcasting) 117,382 1,110,900
Powergen PLC (Electric Utilities) 106,170 814,809
Racal Electronics (Electronics) 219,000 893,487
Reckitt & Colman (Food & Beverages) 182,150 1,926,670
Redland PLC (Construction Materials) 169,000 1,106,148
Reuters Holdings (Publishing) 225,000 1,873,509
Rexam PLC(Paper) 133,000 1,020,717
Rolls Royce (Automobiles) 402,000 1,115,779
Royal Bank of Scotland PLC (Banks) 240,000 1,631,939
Rtz Corp (Non-Ferrous Metals) 121,865 1,588,490
Scottish Hydro Electric PLC (Electric Utilities) 137,000 695,133
Sears Holdings (Retail) 791,350 1,252,415
Shell Transport & Trading Co. (Energy Sources) 260,300 3,111,428
Smithkline Beecham, Series A (Health & Personal Care) 226,000 2,045,395
Smiths Industries PLC (Industrial Machinery) 85,000 701,010
Standard Chartered Bank (Banks) 256,000 1,360,013
Storehouse PLC (Retail) 99,000 423,588
Sun Alliance Group PLC (Insurance) 259,000 1,384,190
Tarmac PLC (Construction Materials) 473,000 846,389
Tesco PLC (Merchandising) 306,200 1,412,407
Thorn Emi PLC (Household Products) 38,000 786,957
Tomkins (Multi-Industry) 300,000 1,071,258
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements
6
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
- - - -------------------------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE
- - - -------------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM (CONTINUED)
Unilever PLC (Household Products) 49,665 $ 1,005,228
United Biscuits PLC (Food & Beverages) 211,000 1,075,640
Vickers PLC (Industrial Machinery) 238,000 781,724
Vodafone Group PLC (Telecommunications) 135,000 501,392
Welsh Water (Business Services) 138,860 1,467,671
Willis Corroon Group PLC (Insurance) 360,000 858,915
Yorkshire Electricity Group (Electrical Equipment) 81,600 895,562
Yorkshire Water (Business Services) 127,000 1,163,544
Zeneca Group (Health & Personal Care) 44,000 742,898
--------------
97,488,045
--------------
UNITED STATES (0.0%)*
U S Industries Inc. (Multi-Industry) 4,530 61,721
--------------
Total Common Stocks (cost $270,519,753) 288,551,735
--------------
PREFERRED STOCKS (1.1%)
AUSTRIA (0.4%)
Creditanstalt Bank (Banks) 14,700 846,684
Bau Holdings AG (Construction & Housing) 6,190 298,696
--------------
1,145,380
--------------
GERMANY (0.6%)
Fresenius AG (Chemicals) 690 465,522
Rheinisch Westfalisches Elektrizitaetswerk AG (Electric Utilities) 3,240 891,240
GEA AG (Industrial Machinery) 1,600 513,703
--------------
1,870,465
--------------
ITALY (0.1%)
Fiat SPA (Automobiles) 200,000 435,141
--------------
Total Preferred Stocks (cost $3,514,845) 3,450,986
--------------
CONVERTIBLE BONDS (0.1%)
FRANCE (0.1%)
Sanofi 4.00% due 01/01/00 (Pharmaceuticals) 350,000 229,207
--------------
GERMANY (0.0%)*
Commerzbank AG 8.00% due 01/06/07 (Banks) 3,000 2,533
--------------
Total Convertible Bonds (cost $225,398) 231,740
--------------
WARRANTS (0.0%)*
SWITZERLAND (0.0%)*
Holderbank Financiere Glaris, Expiring 12/20/95 (Financial Services) 6,135 8,258
--------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements
7
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
- - - -------------------------------------------------------------------------------------------------
SECURITY DESCRIPTION SHARES VALUE
- - - -------------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM (0.0%)*
British Tyre & Rubber, Expiring 97 (Multi-Industry) 4,707 $ 4,792
British Tyre & Rubber, Expiring 98 (Multi-Industy) 1,899 816
--------------
5,608
--------------
Total Warrants (cost $7,029) 13,866
--------------
<CAPTION>
PRINCIPAL
AMOUNT
TIME DEPOSIT (4.8%) (IN US
UNITED STATES (4.8%) DOLLARS)
-----------
<S> <C> <C>
State Street Cayman Islands 5.75% due 07/03/95 (Financial Services)
(cost $14,850,000) 14,850,000 14,850,000
--------------
TOTAL INVESTMENTS (cost $289,117,025) (99.5%) 307,098,327
OTHER ASSETS NET OF LIABILITIES (0.5%) 1,694,248
--------------
NET ASSETS (100.0%) $308,792,575
--------------
--------------
</TABLE>
Note:
The cost of investments for Federal Income Tax purposes at June 30, 1995, was
$289,117,025, the aggregate gross unrealized appreciation and depreciation of
investments was $19,831,295 , and $1,849,993, respectively, resulting in net
unrealized appreciation of $17,981,302.
*Less than 0.1%
The Accompanying Notes are an Integral Part of the Financial Statements
8
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1995
- - - --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Value (Cost $289,117,025) $307,098,327
Foreign Currency, at Value (Cost $4,870,524) 4,890,191
Cash 383
Receivable for Investments Sold 1,486,998
Dividends and Interest Receivable 1,198,780
Deferred Organizational Expenses 31,283
------------
Total Assets 314,705,962
------------
LIABILITIES
Payable for Investments Purchased 5,602,462
Unrealized Depreciation on Open Spot Foreign Currency Contracts 501
Advisory Fee Payable 175,626
Financial and Fund Accounting Services Fee Payable 60,938
Custody Fee Payable 33,145
Organizational Expense Payable 5,228
Fund Services Fee Payable 1,645
Administration Fee Payable 1,460
Accrued Expenses 32,382
------------
Total Liabilities 5,913,387
------------
NET ASSETS
Applicable to Investors' Beneficial Interests $308,792,575
------------
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements
9
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD MARCH 28, 1995 (COMMENCEMENT OF OPERATIONS) THROUGH JUNE 30, 1995
- - - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends (Net of Foreign Withholding
Tax of $1,099,045) $3,256,173
Interest (Net of Foreign Withholding Tax of $11) 61,141
----------
Investment Income $3,317,314
EXPENSES
Advisory Fee 478,048
Custodian Fees and Expenses 183,865
Financial and Fund Accounting Services Fees 60,938
Professional Fees 26,880
Fund Services Fee 6,523
Administration Fee 4,467
Trustees' Fees and Expenses 3,832
Amortization of Organizational Expenses 1,717
----------
Miscellaneous 3,456
Total Expenses 769,726
-----------
NET INVESTMENT INCOME 2,547,588
NET REALIZED GAIN ON
Investment Transactions 1,764,260
Foreign Currency Contracts and Foreign Exchange
Transactions 28,173
----------
Net Realized Gain 1,792,433
NET CHANGE IN UNREALIZED APPRECIATION OF
Investments 17,981,302
Foreign Currency Contracts and Foreign Exchange
Translations 69,967
----------
Net Change in Unrealized Appreciation 18,051,269
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $22,391,290
-----------
-----------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements
10
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
- - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
MARCH 28, 1995
(COMMENCEMENT OF
OPERATIONS) THROUGH
JUNE 30, 1995
-------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 2,547,588
Net Realized Gain on Investments and Foreign Currency
Transactions 1,792,433
Net Change in Unrealized Appreciation of Investments and
Foreign Currency Translations 18,051,269
------------
Net Increase in Net Assets Resulting from Operations 22,391,290
------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions 314,269,480
Withdrawals (27,868,395)
------------
Net Increase from Investors' Transactions 286,401,085
------------
Total Increase in Net Assets 308,792,375
NET ASSETS
Beginning of Period 200
------------
End of Period $308,792,575
------------
------------
<CAPTION>
- - - --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- - - --------------------------------------------------------------------------------
FOR THE PERIOD
MARCH 28, 1995
(COMMENCEMENT OF
OPERATIONS) THROUGH
JUNE 30, 1995
(UNAUDITED)
-------------------
<S> <C>
RATIOS TO AVERAGE NET ASSETS
Expenses 1.05%*
Net Investment Income 3.46%*
Portfolio Turnover 15%
- - - ------------------------------------------------------------
* Annualized.
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements
11
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1995
- - - --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The European Equity Portfolio (the "Portfolio") is a series of The Series
Portfolio (the "Series Portfolio"), a Trust organized under the laws of the
State of New York on June 24, 1994, and is registered under the Investment
Company Act of 1940, as amended, (the "Act") as a no-load, diversified,
open-end management investment company. The Portfolio commenced operations
on March 28, 1995 and received a contribution of certain assets and
liabilities, including securities, with a cost and value of $269,794,577 on
that date from the JPM Europe Fund, Ltd., in exchange for a beneficial
interest in the Portfolio. 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) The value of each security for which readily available market
quotations exists is based on a decision as to the broadest and most
representative market for such security. The value of such security
will be based either on the last sale price on a national securities
exchange, or, in the absence of recorded sales, at the readily
available closing bid price on such exchanges. Securities listed on a
foreign exchange are valued at the last quoted sale price available
before the time when net assets are valued. Unlisted securities are
valued at the average of the quoted bid and asked prices in the
over-the-counter market. Securities or other assets for which market
quotations are not readily available are valued at fair value in
accordance with procedures established by the Portfolio's Trustees.
Such procedures include the use of independent pricing services, which
use prices based upon yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values from
dealers; and general market conditions. All portfolio securities with a
remaining maturity of less than 60 days are valued by the amortized
cost method.
Trading in securities on most foreign exchanges and over-the-counter
markets is normally completed before the close of the domestic market
and may also take place on days on which the domestic market is closed.
If events materially affecting the value of foreign securities occur
between the time when the exchange on which they are traded closes and
the time when the Portfolio's net asset value is calculated, such
securities will be valued at fair value in accordance with procedures
established by and under the general supervision of the Portfolio's
Trustees.
b) The books and records of the Portfolio are maintained in U.S. dollars.
The market value of investment securities, other assets and liabilities
and forward contracts stated in foreign currencies are translated at
the prevailing exchange rates at the end of the period. Purchases,
sales, income and expense are translated at the exchange rate
prevailing on the respective dates of such transactions. Translation
gains and losses resulting from changes in the exchange rate during the
reporting period and gains and losses realized upon settlement of
foreign currency transactions are reported in the Statement of
Operations.
Since the net assets of the Portfolio are presented at the exchange
rates and market values prevailing at the end of the period, the
Portfolio does not isolate the portion of the results of operations
arising as a result of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of securities
during the period.
c) The Portfolio may enter into forward and spot foreign currency contracts
to protect securities and related receivables and payables against
fluctuations in future foreign currency rates. A forward contract is an
agreement to buy or sell currencies of different countries on a
specified future date at a specified rate. Risks associated with such
contracts include the movement in the value of the foreign currency
relative to the U.S. dollar and the ability of the counterparty to
perform.
12
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1995
- - - --------------------------------------------------------------------------------
The market value of the contract will fluctuate with changes in
currency exchange rates. Contracts are valued daily based on procedures
established by and under the general supervision of the Portfolio's
Trustees and the change in the market value is recorded by the
Portfolio as unrealized appreciation or depreciation of foreign
currency translations. At June 30, 1995 the Portfolio had open foreign
forward and spot currency contracts as follows:
<TABLE>
<CAPTION>
SUMMARY OF OPEN CONTRACTS U.S. DOLLAR NET UNREALIZED
VALUE AT APPRECIATION
PROCEEDS 06/30/95 (DEPRECIATION)
-------- ----------- ---------------
<S> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
---------------------------------
Belgian Franc, 21,510,066, expiring 07/05/95 $756,588 $757,226 $(638)
<CAPTION>
COST
--------
<S> <C>
FOREIGN CURRENCY BUY CONTRACTS
--------------------------------
Danish Krone, 1,600,000, expiring 07/05/95 296,132 296,269 137
------
Net Unrealized Depreciation on Foreign Forward and Spot Currency Contracts $(501)
------
</TABLE>
d) Securities transactions are recorded on a trade date basis. Dividend
income is recorded on the ex-dividend date or at the time that the
relevant ex-dividend date and amount becomes known. Interest income,
which includes the amortization of premiums and discount, if any, is
recorded on an accrual basis. For financial and tax reporting purposes,
realized gains and losses are determined on the basis of specific lot
identification.
e) The Portfolio will be treated as a partnership for federal income tax
purposes. As such, each investor in the Portfolio will be taxable on
its share of the Portfolio's ordinary income and capital gains. It is
intended that the Portfolio's assets will be managed in such a way that
an investor in the Portfolio will be able to satisfy the requirements
of Subchapter M of the Internal Revenue Code. The Portfolio earns
foreign income which may be subject to foreign withholding taxes at
various rates.
f) The Portfolio incurred organization expenses in the amount of $33,000.
These costs were deferred and are being amortized by the Portfolio on a
straight-line basis over a five-year period from the commencement of
operations.
2. TRANSACTIONS WITH AFFILIATES
a) The Portfolio has an investment advisory agreement with Morgan Guaranty
Trust Company of New York ("Morgan"). Under the terms of the investment
advisory agreement, the Portfolio pays Morgan at an annual rate of
0.65% of the Portfolio's average daily net assets. For the period ended
June 30, 1995 such fees amounted to $478,048.
b) The Portfolio retains Signature Broker-Dealer Services, Inc.
("Signature") to serve as Administrator and exclusive placement agent.
Signature provides administrative services necessary for the operations
of the Portfolio, furnishes office space and facilities required for
conducting the business of the Portfolio and pays the compensation of
the Portfolio's officers affiliated with Signature. The agreement
provides for a fee to be paid to Signature at an annual rate determined
by the following schedule: 0.01% of the first $1 billion of the
aggregate average daily net assets of the Portfolio and the other
portfolios subject to the Administrative Services Agreement, 0.008% of
the next $2 billion of such net assets, 0.006% of the next $2 billion of
such net assets, and 0.004% of such net assets in excess of $5 billion.
The daily equivalent of the fee rate is applied to the daily net assets
of the Portfolio. For the period ended June 30, 1995 such expenses
amounted to $4,467.
13
<PAGE>
THE EUROPEAN EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1995
- - - --------------------------------------------------------------------------------
c) The Portfolio has a Financial and Fund Accounting Services Agreement
("Services Agreement") with Morgan under which Morgan receives a fee,
based on the percentages described below, for overseeing certain
aspects of the administration and operation of the Portfolio. The
Services Agreement is also designed to provide an expense limit for
certain expenses of the Portfolio. If total expenses of the Portfolio,
excluding the advisory fee, custody expenses, fund services fee, and
brokerage costs, exceed the expense limit of 0.15% of the Portfolio's
average daily net assets up to $200 million, 0.10% on the next $200
million of average daily net assets, 0.05% of the next $200 million of
average daily assets and 0.03% of net assets thereafter, Morgan will
reimburse the Portfolio for the excess expense amount and receive no
fee. Should such expenses be less than the expense limit, Morgan's fee
would be limited to the difference between such expenses and the fee
calculated under the Services Agreements. For the period ended
June 30, 1995, Morgan's fee amounted to $60,938. Effective September 1,
1995 the Services Agreement will be terminated. The oversight services
that were provided under the Services Agreement will continue to be
provided by Morgan without any fee to the Fund until such time as a new
agreement is put into place.
d) The Portfolio has a Fund Services Agreement with Pierpont Group, Inc.
("Group") to assist the Trustees in exercising their overall
supervisory responsibilities for the Portfolio's affairs. The Trustees
of the Portfolio represent all the existing shareholders of Group. The
Portfolio's allocated portion of Group's costs in performing its
services amounted to $6,523 for the period ended June 30, 1995.
e) An aggregate annual fee of $65,000 is paid to each Trustee for serving
as a Trustee of the Series Portfolio as well as the funds and their
corresponding Portfolios of two other affiliated series. The Trustees'
Fees and Expenses shown in the financial statements represents the
Portfolio's allocated portion of the total fees and expenses. The
Trustee who serves as Chairman and Chief Executive Officer of these
Funds and Portfolios also serves as Chairman of Group and received
compensation and employee benefits from Group in his role as Group's
Chairman. The allocated portion of such compensation and benefits
included in the Fund Services Fee shown in the financial statements
was $800.
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) for the period
were as follows:
<TABLE>
<CAPTION>
COST OF PURCHASES PROCEEDS FROM SALES
----------------- -------------------
<S> <C>
$46,439,338 $42,534,751
</TABLE>
14
<PAGE>
THE JAPAN EQUITY PORTFOLIO
Financial Statements
June 30, 1995
(unaudited)
<PAGE>
THE JAPAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY NAME SHARES VALUE
- - - -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (90.3%)
BASIC INDUSTRIES (10.0%)
ALUMINUM (0.2%)
Showa Aluminium Co. 180,000 $ 734,824
------------
CHEMICALS (3.9%)
Daido Hoxan Inc. 210,000 1,305,764
Daiso Co. 262,000 1,060,303
Kumiai Chemical Industrial Co. 250,000 1,460,091
Mitsui Toatsu Chemicals Inc. 1,000,000 3,681,199
Nichiban Co. Ltd. 29,000 156,711
Nippon Steel Corp. 354,000 1,315,675
Toyo Ink Manufacturing Co. 167,000 926,081
UBE Industries 950,000 3,317,798
------------
13,223,621
------------
CONTAINERS & GLASS (0.6%)
Central Glass Co. Ltd. 400,000 1,359,212
Ishizuka Glass Co. Ltd. 150,000 775,176
------------
2,134,387
------------
NON-FERROUS METALS (1.0%)
Fuji Denki Reiki 129,000 1,401,793
Mitsubishi Materials Corp. 450,000 2,017,580
------------
3,419,373
------------
PAPER (1.4%)
Mitsubishi Pencil Co. Ltd. 10,000 82,827
Nippon Paper Industries 400,000 2,595,717
Takasaki Paper Mfg. Co. Ltd. 569,000 1,550,811
Tomoegawa Paper Co. 150,000 573,418
------------
4,802,773
------------
STEEL (2.9%)
Daido Steel Co. Ltd. 400,000 1,887,794
Nippon Kinzoku Co. 200,000 861,306
Sumitomo Metal Industries 2,706,000 7,055,938
Toyo Shutter Co. Ltd. 36,000 242,110
------------
10,047,148
------------
Total Basic Industries 34,362,126
------------
CAPITAL GOODS (13.6%)
BUILDING CONSTRUCTION (0.8%)
Matsui Construction Co. Ltd. 11,000 96,561
S.X.L. Corporation 170,000 1,827,267
Sanyo Industries 117,000 760,628
------------
2,684,455
------------
CONSTRUCTION & MINING EQUIPMENT (0.6%)
Daito Trust Construction Co. Ltd. 210,000 1,982,184
------------
ELECTRICAL EQUIPMENT (5.9%)
Hitachi 566,000 5,642,971
Mitsubishi Cable Industries 100,000 576,957
Mitsubishi Elec Corp. Ltd. 550,000 3,867,618
NEC Corp. 605,000 6,631,408
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
1
<PAGE>
THE JAPAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY NAME SHARES VALUE
- - - -------------------------------------------------------------------------------
<S> <C> <C>
ELECTRICAL EQUIPMENT (CONTINUED)
Nippon Columbia Co. Ltd. 290,000 $ 1,666,332
Ryosan Co. Ltd. 45,000 1,061,884
Sanden Corp. 5,000 24,305
Toshiba Engineering & Construction Co. 90,000 738,010
------------
20,209,486
------------
INDUSTRIAL MACHINERY (6.4%)
Daikin Industries 400,000 3,218,689
Eagle Industry Co. 48,000 294,496
Ishikawajima-Harima Heavy Industries 1,506,000 5,917,031
Kitz Corp. 250,000 1,091,381
Minebea Co. 330,000 2,118,105
Mory Industries 44,000 275,146
Nikkiso Co. 200,000 1,366,291
NSK 300,000 1,730,871
Okamura Corp 300,000 2,145,006
Tochigi-Fuji Sangyo Co. Ltd. 123,000 943,307
Tokyo Seimitsu Co. 80,000 934,458
Toshiba Corp. 300,000 1,900,773
-----------
21,935,555
------------
Total Capital Goods 46,811,681
------------
CONSUMER BASICS (5.5%)
DRUGS & HEALTH CARE (1.9%)
Chugai Pharmaceutical Co. 160,000 1,619,727
Daiichi Pharmaceutical Co. 181,000 2,648,103
Fujirebio Inc. 100,000 772,816
Kaken Pharmaceutical Co. 4,000 37,992
Lion Corporation 250,000 1,445,342
------------
6,523,981
------------
FOOD & BEVERAGES (3.2%)
Hokkaido Can Co. Ltd. 213,000 1,676,255
Itoham Foods Inc. 270,000 2,070,674
Japan Tobacco Inc. 200 1,788,685
Morinaga Milk Industry Co. Ltd. 308,000 1,435,432
Morozoff 71,000 286,496
Nippon Suisan Kaisha 500,000 2,365,642
Snow Brand Milk Products Co. Ltd. 202,000 1,584,921
------------
11,208,106
------------
HOUSEHOLD PRODUCTS (0.2%)
Uni-Charm Corp. 30,000 587,576
------------
RETAIL GROCERY (0.2%)
Kasumi Co. 76,000 654,593
------------
Total Consumer Basics 18,974,255
------------
CONSUMER DURABLE GOODS (7.0%)
AUTO PARTS (0.6%)
Fuji Heavy Industries 30,000 111,498
Nissan Diesel Motor Co. 221,000 998,679
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
2
<PAGE>
THE JAPAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY NAME SHARES VALUE
- - - -------------------------------------------------------------------------------
<S> <C> <C>
AUTO PARTS (CONTINUED)
Toyota Auto Body Co. Ltd. 100,000 $ 825,910
-------------
1,936,086
-------------
AUTOMOBILES (3.2%)
Honda Motor Co. 442,000 6,779,541
Mitsubishi Motors Corp. 382,000 3,150,469
Shinmaywa Industries Ltd. 76,000 637,555
Tokyu Car Corp. 125,000 578,137
-------------
11,145,702
-------------
HOUSEHOLD APPLIANCES FURNISHINGS (3.2%)
Matsushita Electric Industries Co. Ltd. 430,000 6,696,950
Pioneer Electronic Corp. 24,000 407,764
Sony Corp. 80,000 3,841,661
-------------
10,946,375
-------------
Total Consumer Durable Goods 24,028,164
-------------
CONSUMER NON-DURABLE GOODS (6.6%)
APPAREL & TEXTILES (1.1%)
Kurabo Industries 450,000 1,624,683
Marutomi Group Co. 70,000 664,858
Tomiya Apparel Co. 229,000 1,472,538
-------------
3,762,079
-------------
LIQUOR (0.2%)
Chuo Spring Co. 150,000 768,096
-------------
PHOTOGRAPHY (1.2%)
Konica Corporation 230,000 1,408,412
Minolta Co. 704,000 2,574,951
-------------
3,983,364
-------------
RETAIL TRADE (3.5%)
Daiei Inc. 200,000 2,430,535
Izumiya Co. Ltd. 147,000 2,376,143
Mitsukoshi Ltd. 250,000 1,787,505
Nagasakiya Co. 302,000 1,357,584
Nichii Co. Ltd. 152,000 1,651,726
Parco Co. 110,000 1,162,881
Takashimaya Co. Ltd. 100,000 1,345,053
-------------
12,111,427
-------------
TOY AMUSEMENTS SPORTING GOODS (0.6%)
Mizuno Corp. 14,000 127,190
Yamaha Corp. 183,000 1,997,227
-------------
2,124,417
-------------
Total Non-Consumer Durable Goods 22,749,384
-------------
CONSUMER SERVICES (0.7%)
AIR TRAVEL (0.1%)
Shin Nippon Air Technologies Co. 10,000 130,966
-------------
LEISURE TIME (0.6%)
Japan Airport Terminals 80,000 943,897
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
3
<PAGE>
THE JAPAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY NAME SHARES VALUE
- - - -------------------------------------------------------------------------------
<S> <C> <C>
LEISURE TIME (CONTINUED)
Kinki Nippon Tourist Co. Ltd. 192,000 $ 1,420,376
------------
2,364,274
------------
Total Consumer Services 2,495,239
------------
ENERGY (1.8%)
INTERNATIONAL OIL (1.5%)
Cosmo Oil Company Ltd. 900,000 5,086,426
------------
PETROLEUM SERVICES (0.3%)
Hokuriku Gas Co. 204,000 924,264
------------
Total Energy 6,010,690
------------
FINANCE (22.4%)
BANKS (15.4%)
Bank Of Ryukyus 40,000 1,722,612
Daiichi Kangyo Bank Ltd. 300,000 5,415,610
Daiwa Bank 654,000 5,903,015
Fukui Bank 600,000 3,221,049
Hokkaido Takushoku Bank 790,000 2,162,468
Hyakugo Bank 400,000 2,808,094
Industrial Bank of Japan Ltd. 230,000 5,997,286
Juroku Bank 170,000 1,099,168
Kita-Nippon Bank 15,000 973,394
Kyushu Bank 96,000 446,275
Miyazaki Bank 153,000 1,079,512
Nanto Bank Ltd. 201,000 1,735,968
Nippon Credit Bank 447,000 2,215,091
Sakura Bank Ltd. 426,000 4,448,233
Shiga Bank Ltd. 150,000 1,044,186
Sumitomo Bank Ltd. 390,000 6,764,203
Suruga Bank Ltd. 103,000 771,695
Tokai Bank Ltd. 87,000 964,899
Yasuda Trust & Banking Co. Ltd. 658,000 4,308,772
------------
53,081,529
------------
FINANCIAL SERVICES (0.7%)
Daiwa Securities Co. Ltd. 75,000 791,104
Diamond Lease Co. 100,000 1,486,638
------------
2,277,742
------------
INSURANCE (2.5%)
Chiyoda Fire & Marine Insurance Co. Ltd. 202,000 1,136,853
Chuo Trust & Banking Co. 275,000 3,114,860
Koa Fire & Marine Insurance Co. Ltd. 150,000 920,300
Tokio Marine & Fire Insurance Co. Ltd. 304,000 3,486,378
------------
8,658,392
------------
INVESTMENT COMPANIES (3.8%)
Marubeni Corp. 550,000 2,796,885
Nomura Securities Co. Ltd. 588,000 10,267,713
------------
13,064,598
------------
Total Finance 77,082,261
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
4
<PAGE>
THE JAPAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY NAME SHARES VALUE
- - - -------------------------------------------------------------------------------
<S> <C> <C>
GENERAL BUSINESS (1.0%)
BROADCASTING (0.5%)
Gakken Co. Ltd. 303,000 $ 1,862,580
------------
BUSINESS SERVICES (0.5%)
Intec Inc. 50,000 601,734
Itochu Warehouse Co. 47,000 221,816
Nippon Koshuha Steel Co. 320,000 819,303
------------
1,642,853
------------
Total General Business 3,505,433
------------
MISCELLANEOUS (4.8%)
CONGLOMERATES (2.6%)
Aichi Corp. 150,000 1,265,412
Asatsu Inc. 30,000 959,235
Kanematsu Corp. 1,206,000 4,553,360
Tokai Rika Denki Co. 100,000 998,171
Topy Industries Co. Ltd. 230,000 1,006,784
------------
8,782,963
------------
MISCELLANEOUS (1.1%)
Fuji Distribution Co. 100,000 526,223
Itoki Crebio Corp. 120,000 891,983
Kansai Supermarket 70,000 635,951
Matsumoto Yushi Seiyaku Co. 19,000 462,923
Shin Nippon Machinery 50,000 352,782
Shinobu Foods Products Co. 85,000 807,327
------------
3,677,187
------------
PETROLEUM SERVICES (0.1%)
Toyoda Machine Works Ltd. 57,000 404,189
------------
REAL ESTATE (1.0%)
Mitsui Fudosan Co. Ltd. 245,000 2,806,855
Tokyu Land Corp. 155,000 658,368
------------
3,465,223
------------
Total Miscellaneous 16,329,562
------------
SHELTER (5.7%)
CONSTRUCTION MATERIALS (2.4%)
Achilles Corp. 639,000 2,344,747
Nichiei Co. 150,000 601,734
Nichiei Construction Co. 184,000 1,515,332
Toyo Construction Co. 700,000 3,658,781
------------
8,120,595
------------
FOREST PRODUCTS (1.0%)
Sumitomo Forestry Co. 200,000 3,327,237
------------
HOMEBUILDERS (2.3%)
Daiwa Danchi Co. 150,000 755,708
Katsumura Construction Co. 150,000 796,413
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
5
<PAGE>
THE JAPAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY NAME SHARES VALUE
- - - -------------------------------------------------------------------------------
<S> <C> <C>
HOMEBUILDERS (CONTINUED)
Mitsui Home Co. Ltd. 70,000 $ 999,351
Okumura Corp. 400,000 3,799,186
Yokogawa Bridge Corp. 120,000 1,628,223
------------
7,978,880
------------
Total Shelter 19,426,712
------------
TECHNOLOGY (1.7%)
COMPUTERS & BUSINESS EQUIPMENT (1.3%)
Ricoh Corp. Ltd. 410,000 3,521,680
Tec Corporation 174,000 687,747
Uchida Yoko Co. 70,000 335,319
------------
4,544,747
------------
ELECTRONICS (0.3%)
Alps Electric Co. Ltd. 50,000 523,863
Clarion Co. 125,000 479,323
------------
1,003,186
------------
SOFTWARE (0.1%)
Hitachi Software Engineering Co. 16,000 334,140
------------
Total Technology 5,882,072
------------
TRANSPORTATION (4.5%)
RAILROADS & EQUIPMENT (3.4%)
East Japan Railway Co. 1,100 5,645,685
Nagoya Railroad Co. Ltd. 71,000 375,293
Nishi Nippon Railroad 454,000 2,078,367
Sagami Railway Co. 209,000 976,509
Tobu Railway Co. 148,000 923,745
Zexel Corporation 250,000 1,687,216
------------
11,686,815
------------
TRUCKING & FREIGHT FORWARDING (1.1%)
Kawasaki Kisen Kaisha Ltd. 550,000 1,427,644
Nippon Express Co. Ltd. 150,000 1,380,450
Nippon Road Co. Ltd. 20,000 198,218
Senko Co. Ltd. 136,000 826,382
------------
3,832,694
------------
Total Transportation 15,519,509
------------
UTILITIES (5.0%)
ELECTRIC UTILITIES (3.5%)
Kanagawa Chuo Kotsu 60,000 387,234
Shikoku Electric Power Inc. 180,000 5,012,094
Tohoku Electric Power Co. Inc. 240,000 6,654,475
------------
12,053,802
------------
GAS & PIPELINES (0.5%)
Osaka Gas Co. Ltd. 488,000 1,802,183
------------
TELEPHONE (1.0%)
Kokusai Denshin Denwa 40,000 3,280,042
------------
Total Utilities 17,136,027
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
6
<PAGE>
THE JAPAN EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY NAME SHARES VALUE
- - - -------------------------------------------------------------------------------
<S> <C> <C>
TOTAL COMMON STOCKS (COST $ 324,281,177) $310,313,114
------------
PRINCIPAL AMOUNT
----------------
<C>
CONVERTIBLE BONDS (5.7%)
Bank of Tokyo Cayman Finance 4.25%
Due March 31, 2003 $650,000,000 8,608,637
Daiwa International Finance 5.65%
Due August 30, 1996 1,300,000 1,794,813
Hitachi Ltd. 2.70%
Due March 31, 1997 72,000,000 940,405
Toyota Motor Corp 1.70%
Due May 31, 1996 220,000,000 3,075,925
Yamanouchi Pharmaceuticals 1.25%
Due March 31, 2014 450,000,000 5,316,058
------------
TOTAL CONVERTIBLE BONDS (COST $ 17,861,566) 19,735,837
------------
SHORT TERM INVESTMENTS (6.4%)
EURO-DOLLAR TIME DEPOSITS (6.4%)
PRINCIPAL AMOUNT
----------------
<C>
State Street Cayman Island Time Deposit,
5.750% due 07/03/95 5,059,000 5,059,000
State Street Cayman Island Time Deposit,
5.875% due 07/03/95 6,000,000 6,000,000
State Street Cayman Island Time Deposit,
5.875% due 07/05/95 6,000,000 6,000,000
State Street Cayman Island Time Deposit,
6.000% due 07/07/95 5,000,000 5,000,000
------------
TOTAL SHORT TERM INVESTMENTS (COST $ 22,059,000) 22,059,000
------------
CURRENCY (0.9%)
LOCAL VALUE
-----------
<C>
Japanese Yen 235,605,053 2,779,837
Swiss Franc 196,217 170,401
------------
TOTAL CURRENCY (COST $ 2,958,088) 2,950,238
------------
TOTAL INVESTMENTS (103.3%)
(COST $367,159,831) 355,058,189
OTHER ASSETS NET OF LIABILITIES (-3.3%) (11,171,776)
------------
NET ASSETS $343,886,413
------------
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
7
<PAGE>
THE JAPAN EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Value (Cost $342,142,743) $330,048,951
Short Term Investments (Cost $22,059,000) 22,059,000
Foreign Currency, at Value (Cost $2,958,088) 2,950,238
Cash 619
Unrealized Appreciation on Open Forward Foreign Currency Contracts 20,294
Receivable for Investments Sold 6,718,415
Dividends and Interest Receivable 1,257,186
Deferred Amortization Expense 31,283
Prepaid Expense 511
------------
Total Assets 363,086,497
------------
LIABILITIES
Payable for Investments Purchased 18,848,547
Advisory Fee Payable 207,680
Financial and Fund Accounting Services Fee Payable 88,957
Custody Fee Payable 26,105
Organization Fee Payable 3,488
Fund Services Fee Payable 2,026
Accrued Expenses 23,281
------------
Total Liabilities 19,200,084
------------
NET ASSETS
Applicable to Investor's Beneficial Interests $343,886,413
------------
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
8
<PAGE>
THE JAPAN EQUITY PORTFOLIO
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD MARCH 28,1995 (COMMENCEMENT OF OPERATIONS) TO JUNE 30,1995
- - - -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends (Net of Foreign Withholding Tax $278,532) $ 1,114,126
Interest (Net of Foreign Withholding Tax of $4,009) 379,987
------------
Investment Income $ 1,494,112
EXPENSES
Advisory Fee 596,224
Custodian Fees and Expenses 146,763
Financial and Fund Accounting Services Fees 88,957
Professional Fees 18,340
Fund Services Fee 8,314
Administration Fee 5,573
Trustees' Fees and Expenses 2,709
Amortization of Organization Expense 1,717
Miscellaneous 2,175
------------
Total Expenses 870,772
------------
NET INVESTMENT INCOME 623,340
NET REALIZED GAIN (LOSS) ON
Investment Transactions 3,416,971
Foreign Currency Contracts and Foreign
Exchange Transactions (70,986.00)
-----------
Net Realized Loss 3,345,985
NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF
Investments (12,093,793)
Foreign Currency Contracts and Foreign
Exchange Translations 26,288
-----------
Net Change in Unrealized Appreciation (Depreciation) (12,067,505)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(8,098,180)
------------
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
9
<PAGE>
THE JAPAN EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
- - - -------------------------------------------------------------------------------
<TABLE>
FOR THE PERIOD
MARCH 28,1995
(COMMENCEMENT OF
OPERATIONS) TO
JUNE 30, 1995
(UNAUDITED)
---------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 623,340
Net Realized Gain (Loss) on Investments and Foreign Currency
Transactions 3,345,985
Net Change in Unrealized Appreciation (Depreciation) of
Investments and Foreign Currency Translations (12,067,505)
--------------
Net Decrease in Net Assets Resulting from Operations (8,098,180)
--------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST
Contributions 375,592,803
Withdrawals (23,608,410)
--------------
Net Increase from Investors' Transactions 351,984,393
--------------
Total Increase in Net Assets 343,886,213
NET ASSETS
Beginning of Period 200
---------------
End of Period $343,886,413
---------------
---------------
- - - -------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- - - -------------------------------------------------------------------------------
FOR THE PERIOD
MARCH 28, 1995
(COMMENCEMENT OF
OPERATIONS) TO
JUNE 30, 1995
(UNAUDITED)
--------------
Ratios to Average Net Assets
Expenses 0.95%
Net Investment Income 0.68%
Portfolio Turnover 27%
<FN>
- - - --------------
* Annualized.
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
10
<PAGE>
THE JAPAN EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Japan Equity Portfolio (the "Portfolio") is a series of The
Series Portfolio (the "Series Portfolio"), a trust under the laws of
the State of New York on June 24, 1994 and is registered under the
Investment Company Act of 1940, as amended, (the "Act") as a no-load,
non-diversified, open-end management investment company. The
Portfolio commenced operations on March 28,1995 and received a
contribution of certain assets and liabilities, including securities,
with a cost and value of $310,796,782.18 on that date from the Japan
Equity Fund. 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) The value of each security for which readily available market
quotations exists is based on a decision as to the broadest and most
representative market for such security. The value of such security
will be based either on the last sale price on a national securities
exchange, or, in the absence of recorded sales, at the readily
available closing bid price on such exchanges. Securities listed on a
foreign exchange are valued at the last quoted sale price available
before the time when net assets are valued. Unlisted securities are
valued at the average of the quoted bid and asked prices in the
over-the-counter market. Securities or other assets for which market
quotations are not readily available are valued at fair value in
accordance with procedures established by the Portfolio's Trustees.
Such procedures include the use of independent pricing services, which
use prices based upon yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values from
dealers; and general market conditions. All portfolio securities with
a remaining maturity of less than 60 days are valued by the amortized
cost method.
Trading in securities on most foreign exchanges and over-the-counter
markets is normally completed before the close of the domestic market
and may also take place on days on which the domestic market is
closed. If events materially affecting the value of foreign securities
occur between the time when the exchange on which they are traded
closes and the time when the Portfolio's net asset value is
calculated, such securities will be valued at fair value in accordance
with procedures established by and under the general supervision of
the Portfolio's Trustees.
b) The books and records of the Portfolio are maintained in U.S.
dollars. The market value of investment securities, other assets and
liabilities and forward contracts stated in foreign currencies are
translated at the prevailing exchange rates at the end of the period.
Purchases, sales, income and expense are translated at the exchange
rate prevailing on the respective dates of such transactions.
Translation gains and losses resulting from changes in the exchange
rate during the reporting period and gains and losses realized upon
settlement of foreign currency transactions are reported in the
Statement of Operations.
Since the net assets of the Portfolio are presented at the exchange
rates and market values prevailing at the end of the period, the
Portfolio does not isolate the portion of the results of operations
arising as a result of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of securities
during the period.
c) The Portfolio may enter into forward and spot foreign currency
contracts to protect securities and related receivables and payables
against fluctuations in future foreign currency rates. A forward
contract is an agreement to buy or sell currencies of different
countries on a specified future date at a specified rate. Risks
associated with such contracts include the movement in the value of
the foreign currency relative to the U.S. dollar and the ability of
the counterparty to perform.
11
<PAGE>
THE JAPAN EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
The market value of the contract will fluctuate with changes in
currency exchange rates. Contracts are valued daily based on
procedures established by and under the general supervision of the
Portfolio's Trustees and the change in the market value is recorded
by the Portfolio as unrealized appreciation or depreciation of
foreign currency translations. At June 30, 1995 the Portfolio had
open foreign currency contracts as follows:
<TABLE>
<CAPTION>
SUMMARY OF OPEN CONTRACTS U.S. DOLLAR NET UNREALIZED
VALUE AT APPRECIATION
COST 06/30/95 (DEPRECIATION)
---- ----------- ---------------
<S> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
- - - ------------------------------
Japanese Yen, 679,730,000 expiring 07/03/95 $8,000,000 $8,020,294 $20,294
-------
Net Unrealized Appreciation on Foreign Currency Contracts $20,294
-------
</TABLE>
d) Securities transactions are recorded on a trade date basis. Dividend
income is recorded on the ex-dividend date or at the time that the
relevant ex-dividend date and amount becomes known. Interest income,
which includes the amortization of premiums and discount, if any, is
recorded on an accrual basis. For financial and tax reporting
purposes, realized gains and losses are determined on the basis of
specific lot identification.
e) The Portfolio will be treated as a partnership for federal income tax
purposes. As such, each investor in the Portfolio will be taxable on
its share of the Portfolio's ordinary income and capital gains. It
is intended that the Portfolio's assets will be managed in such a way
that an investor in the Portfolio will be able to satisfy the
requirements of Subchapter M of the Internal Revenue Code. The
Portfolio earns foreign income which may be subject to foreign
withholding taxes at various rates.
g) The Portfolio invests primarily in foreign securities. Investment in
securities of foreign issuers involves somewhat different investment
risks from those affecting securities of U.S. domestic issuers. There
may be limited publicly available information with respect to foreign
issuers and foreign issuers are not generally subject to uniform
accounting, auditing and financial standards and requirements
comparable to those applicable to domestic companies. Interest paid
by foreign issuers may be subject to withholding and other foreign
taxes which may decrease the net return on foreign investments as
compared to interest paid to the Portfolio by domestic companies.
h) The Portfolio invests in warrants, which entitle the holder to buy
common stock from the issuer at a specific price (the strike price)
for a specific period of time. The strike price of warrants
sometimes is much lower than the current market price of the
underlying securities, yet warrants are subject to similar price
fluctuations. As a result, warrants may be more volatile investments
than the underlying securities.
2. TRANSACTIONS WITH AFFILIATES
a) The Portfolio has an investment advisory agreement with Morgan
Guaranty Trust Company of New York ("Morgan"). Under the terms of
the investment advisory agreement, the Portfolio pays Morgan at an
annual rate of 0.65% f the Portfolio's average daily net assets. For
the period ended June 30, 1995 such fees amounted to $596,224.
12
<PAGE>
THE JAPAN EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1995
- - - -------------------------------------------------------------------------------
b) The Portfolio retains Signature Broker-Dealer Services, Inc.
("Signature") to serve as Administrator and exclusive placement
agent. Signature provides administrative services necessary for the
operations of the Portfolio, furnishes office space and facilities
required for conducting the business of the Portfolio and pays the
compensation of the Portfolio's officers affiliated with Signature.
The agreement provides for a fee to be paid to Signature at an annual
rate determined by the following schedule: 0.01% of the first $1
billion of the aggregate average daily net assets of the Portfolio
and the other portfolios subject to the Administrative Services
Agreement, 0.006 of the next $2 billion of such net assets, 0.006% of
the next $2 billion of such net assets, and 0.004% of such net assets
in excess of $5 billion. The daily equivalent of the fee rate is
applied to the daily net assets of the Portfolio. For the period
ended June 30, 1995 such expenses amounted to $5,573.
c) The Portfolio has a Financial and Fund Accounting Services Agreement
("Services Agreement") with Morgan under which Morgan receives a fee,
based on the percentages described below, for overseeing certain
aspects of the administration and operation of the Portfolio. The
Services Agreement is also designed to provide an expense limit for
certain expenses of the Portfolio. If total expenses of the
Portfolio, excluding the advisory fee, custody expenses, fund
services fee, and brokerage costs, exceed the expense limit of 0.15%
of the Portfolio's average daily net assets up to $200 million, 0.10%
on the next $200 million of average daily net assets, 0.05% of the
next $200 million of average daily assets and 0.03% of net assets
thereafter, Morgan will reimburse the Portfolio for the excess
expense amount and receive no fee. Should such expenses be less than
the expense limit, Morgan's fee would be limited to the difference
between such expenses and the fee calculated under the Services
Agreements. For the period ended June 30,1995, Morgan's fee amounted
to $88,957. Effective September 1, 1995 the Services Agreement will
be terminated. The oversight services that were provided under the
Services Agreement will continue to be provided by Morgan without any
fee to the Fund until such time as a agreement is put into place.
d) The Portfolio has a Fund Services Agreement with Pierpont Group, Inc.
("Group") to assist the Trustees in exercising their overall
supervisory responsibilities for the Portfolio's affairs. The
Trustees of the Portfolio represent all the existing shareholders of
Group. The Portfolio's allocated portion of Group's costs in
performing its services amounted to $8,314 for the period ended
June 30, 1995.
e) An aggregate annual fee of $65,000 is paid to each Trustee for
serving as a Trustee of the Series Portfolio as well as the funds and
their corresponding portfolios of two other affiliated series. The
Trustees' Fees and Expenses shown in the financial statements
represents the Portfolio's allocated portion of the total fees and
expenses. The Trustee who serves as Chairman and Chief Executive
Officer of these Funds and Portfolios also serves as Chairman of
Group and received compensation and employee benefits from Group in
his role as Group's Chairman. The allocated portion of such
compensation and benefits included in the Fund Services Fee shown in
the financial statements was $1,000.
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) for the period
were as follows:
<TABLE>
<CAPTION>
COST OF PURCHASES PROCEEDS FROM SALES
----------------- -------------------
<S> <C>
$119,566,684 $89,250,236
</TABLE>
13
