<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
COMMON STOCK (89.7%)
CHINA (5.1%)
Guangdong Electric Power (Series B) (Electric)... 316,000 $ 279,436
Guangdong Province Expressway Development Ltd.
(Series B) (Construction & Housing)+........... 585,000 567,227
Guangshen Railway Co. Ltd. (Series H)
(Railroads)+................................... 2,112,000 914,700
Huaneng Power International Inc. (ADR)
(Telecommunication Services)+.................. 40,000 900,000
Luoyang Glass Co. Ltd. (Series H) (Building
Materials)..................................... 1,576,000 483,905
Qingling Motors Co. Ltd. (Series H)
(Automotive)................................... 400,000 221,073
Shandong Huaneng Power Ltd. (ADR) (Electric)..... 80,000 780,000
Shanghai Dajiang Group Co. Ltd. (Series B) (Multi
- Industry).................................... 1,487,100 724,218
Shanghai Tyre and Rubber Co. Ltd. (Series B)
(Metals & Mining)+............................. 1,135,800 481,579
Yizheng Chemical Fibre Co. Ltd. (Series H)
(Chemicals).................................... 1,340,000 325,689
Zhenhai Refining & Chemical Co. Ltd. (Series H)
(Chemicals).................................... 1,632,000 601,319
-------------
6,279,146
-------------
HONG KONG (30.6%)
Bank of East Asia Ltd. (Banking)................. 325,800 1,448,937
Cathay Pacific Airways Ltd. (Airlines)........... 150,000 236,587
CDL Hotels International Ltd. (Restaurants &
Hotels)........................................ 940,000 537,751
Cheung Kong Holdings Ltd. (Real Estate).......... 606,000 5,386,234
China Resources Enterprises Ltd. (Real Estate
Investment Trusts)............................. 140,000 314,932
Dickson Concepts International Ltd. (Wholesale &
International Trade)........................... 180,000 674,855
First Pacific Company Ltd. (Multi - Industry).... 323,000 419,670
Hang Seng Bank Ltd. (Banking).................... 257,000 3,123,207
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
HONG KONG (CONTINUED)
Henderson Land Development Company Ltd. (Real
Estate)........................................ 187,000 $ 1,885,715
Hong Kong & China Gas Co. Ltd. (Natural Gas)..... 927,000 1,791,681
Hong Kong Electric Holdings Ltd. (Electric)...... 451,000 1,498,475
Hong Kong Telecommunications Ltd.
(Telecommunications)........................... 999,200 1,608,280
HSBC Holdings PLC (Banking)...................... 34,103 729,677
Hutchison Whampoa Ltd. (Multi - Industry)........ 815,000 6,400,940
JCG Holdings Ltd. (Financial Services)........... 276,000 269,399
New World Infrastructure Ltd. (Construction &
Housing)+...................................... 94,000 274,648
Sun Hung Kai Properties Ltd. (Real Estate)....... 545,000 6,675,988
Swire Pacific Ltd. (Multi - Industry)............ 321,000 3,060,602
Television Broadcast Ltd. (Entertainment, Leisure
& Media)....................................... 128,000 511,338
Yue Yuen Industrial (Holdings) Ltd. (Metals &
Mining)........................................ 1,330,000 507,240
-------------
37,356,156
-------------
INDIA (0.5%)
EIH Limited (GDR) (Entertainment, Leisure &
Media)......................................... 8,900 210,263
Reliance Industrial Infrastructure Ltd. (GDR)
(Chemicals).................................... 14,700 176,400
State Bank of India (GDR) (Banking)+............. 10,400 180,648
-------------
567,311
-------------
INDONESIA (5.5%)
P.T. Bimantara Citra (Multi - Industry).......... 240,500 320,667
P.T. Fajar Surya Wisea (Metals & Mining)......... 1,150,000 498,942
P.T. Gudang Garam (Food, Beverages & Tobacco).... 287,000 1,239,111
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
16
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
INDONESIA (CONTINUED)
P.T. Kabelmetal Indonesia (Telecommunications-
Equipment)..................................... 765,000 $ 340,000
P.T. Kawasan Industri Jababeka (Real Estate)..... 258,000 300,317
P.T. Matahari Putra Prima (Retail)............... 411,000 478,413
P.T. Pabris Kertas Tjiwi Kimia (Metals &
Mining)........................................ 561,868 558,895
P.T. Pan Indonesia Bank (Banking)................ 442,125 505,286
P.T. Semen Cibinong (Building Materials)......... 152,000 427,852
P.T. Telekomunikasi Indonesia
(Telecommunications)........................... 1,198,000 2,066,391
-------------
6,735,874
-------------
MALAYSIA (18.6%)
Arab Malaysian Finance Berhad (Financial
Services)...................................... 189,000 1,055,194
Berjaya Capital Berhad (Financial Services)...... 629,000 697,365
Commerce Asset-Holding Berhad (Banking).......... 269,211 2,025,339
Gamuda Berhad (Construction & Housing)........... 287,000 1,215,954
Golden Hope Plantations Berhard (Metals &
Mining)........................................ 19,000 32,350
Guinness Anchor Berhad (Food, Beverages &
Tobacco)....................................... 489,000 1,200,472
IJM Corporation Berhad (Building Materials)...... 472,000 1,112,014
Industrial Concrete Products (Building
Materials)+.................................... 175,000 436,546
Industrial Oxygen Incorporated Berhad
(Agriculture).................................. 804,000 1,235,205
Lingkaran Trans Kota Holdings Berhad
(Construction & Housing)+...................... 112,000 230,607
Lingui Developments Berhad (Forest Products &
Paper)......................................... 311,000 531,980
Malayan Banking Berhad (Banking)................. 181,800 2,015,595
Malayan Cement Berhad (Building Materials)....... 233,000 535,100
Malaysian Oxygen Berhad (Chemicals).............. 500 2,574
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
MALAYSIA (CONTINUED)
Malaywata Steel Berhad (Metals & Mining)......... 443,000 $ 834,953
New Straits Times Press Berhad (Entertainment,
Leisure & Media)............................... 221,000 1,277,605
Pacific & Orient Berhad (Insurance).............. 104,000 251,197
Pelangi Berhad (Real Estate)..................... 376,000 396,768
Perusahaan Otomobil Nasional Berhad
(Automotive)................................... 170,000 1,077,011
Petronas Dagangan Berhad (Oil-Services).......... 112,000 288,259
Resorts World Berhad (Entertainment, Leisure &
Media)......................................... 219,000 997,226
Sime Darby Berhad (Multi - Industry)............. 596,000 2,348,123
Sime U.E.P. Properties Berhad (Real Estate)...... 266,000 684,615
Tenaga Nasional Berhad (Telecommunications)...... 476,000 2,280,572
-------------
22,762,624
-------------
PHILIPPINES (5.2%)
Aboitiz Equity Ventures Inc. (Banking)+.......... 4,490,040 452,418
Alaska Milk Corp. (Food, Beverages & Tobacco)+... 2,386,500 308,521
Ayala Corp. (Class B) (Multi - Industry)......... 304,000 329,430
Bankard Inc. (Banking)+.......................... 790,000 282,357
Engineering & Equipment Corp. (Industrial)....... 5,500,000 363,878
Fil-Estate Land Inc. (Real Estate)............... 296,100 258,947
Filinvest Land Inc. (Building Materials)+........ 1,610,000 501,977
First Philippine Holdings Corp. (Class B) (Multi
- Industry).................................... 50,100 114,297
Ionics Circuit Inc (Electronics)+................ 564,000 402,091
JG Summit Holdings Inc. (Class B) (Multi -
Industry)...................................... 852,000 239,726
Manila Electric Company (Class B) (Electric)..... 124,000 1,013,688
Petron Corp. (Oil-Services)...................... 1,212,813 410,420
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
17
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
PHILIPPINES (CONTINUED)
Philippine National Bank (Banking)+.............. 30,628 $ 363,926
Pryce Properties Corp. (Real Estate)+............ 5,405,400 390,504
San Miguel Corp. (Class B) (Food, Beverages &
Tobacco)....................................... 63,300 279,194
Steniel Manufacturing Corp. (Metals & Mining).... 950,000 67,909
Uniwide Holdings Inc. (Wholesale & International
Trade)+........................................ 2,719,000 537,597
-------------
6,316,880
-------------
SINGAPORE (6.7%)
Cerebos Pacific Ltd. (Food, Beverages &
Tobacco)....................................... 68,000 505,569
City Developments Ltd. (Real Estate)............. 30,000 270,228
DBS Land Ltd. (Real Estate)...................... 102,000 375,531
Development Bank Singapore (Banking)............. 73,000 986,331
Hotel Properties Limited (Restaurants &
Hotels)........................................ 297,000 479,847
Keppel Corporation Ltd. (Multi - Industry)....... 92,000 716,890
Osprey Maritime Ltd. (Transport & Services)...... 317,500 483,461
Overseas Chinese Bank (Banking).................. 24,600 306,001
Pacific Century Regional Development (Multi -
Industry)+..................................... 340,000 405,914
Singapore Airlines Ltd. (Airlines)............... 100,000 907,908
Singapore Land Ltd. (Real Estate)................ 60,000 332,423
Singapore Press Holdings (Entertainment, Leisure
& Media)....................................... 43,000 848,429
Singapore Telecommunications Ltd.
(Telecommunications)........................... 300,000 707,739
United Overseas Bank Ltd. (Banking).............. 80,310 895,638
-------------
8,221,909
-------------
SOUTH KOREA (5.4%)
Cho Hung Bank (Banking).......................... 61,000 495,215
Chung Ho Computer Co. (Computer Peripherals)..... 8,000 324,542
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
SOUTH KOREA (CONTINUED)
Dong Ah Construction Industrial Co. Ltd.
(Construction & Housing)....................... 7,300 $ 148,504
Dong Ah Construction Industrial Co. Ltd. (2nd
New) (Construction & Housing)+................. 643 13,689
Dongbu Insurance (Insurance)+.................... 16,210 525,315
Hana Bank (Banking).............................. 17,596 253,899
Hana Bank (1st New) (Banking)+................... 26,000 393,250
Hana Bank (New) (Banking)+....................... 3,046 42,150
Hansol Paper Co. Ltd. (GDS) (Forest Products &
Paper)+........................................ 14,937 190,447
Hansol Paper Co. Ltd. (GDS) (144A) (Forest
Products & Paper)+............................. 2,195 27,986
Hansol Paper Co. Ltd (Forest Products & Paper)
(144A)......................................... 2,329 29,695
Housing & Commercial Bank, Korea (New)
(Banking)+..................................... 540 7,536
Hyundai Engineering & Construction Co.
(Construction & Housing)+...................... 4,000 92,726
Korea Electric Power Corp. (Electric)............ 28,000 814,666
Korea First Bank (Banking)+...................... 83,000 420,154
Korea Long Term Credit Bank (Banking)............ 10,050 172,354
Korea Mobile Telecommunications
(Telecommunications)........................... 453 464,198
Korea Zinc Co. Ltd. (Metals & Mining)+........... 14,100 266,824
Korean Air Co. Ltd. (Aerospace).................. 15,360 236,168
LG Information & Communication (New)
(Telecommunications-Equipment)+................ 2,700 191,283
Oriental Fire & Marine Insurance Co. Ltd.
(Insurance).................................... 4,200 86,434
Pohang Iron & Steel Co. Ltd. (Metals & Mining)... 5,100 292,820
Samsung Electronics Co. Ltd. (GDS represents 1/2
non-voting common share) (144A)
(Electronics).................................. 11,374 209,850
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
18
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
SOUTH KOREA (CONTINUED)
Samsung Electronics Co. Ltd. (GDS represents 1/2
non-voting preferred share, 144A)
(Electronics)+................................. 5,236 $ 83,776
Samsung Electronics Co. Ltd. (GDS represents 1/2
voting common share, 144A) (Electronics)....... 266 9,576
Samsung Electronics Co. Ltd. (GDS represents 1/2
voting common share, 144A) (Electronics)+...... 884 36,576
Seoul City Gas Co. Ltd. (Natural Gas)+........... 4,500 282,082
Sungmi Telecom Electronics Co. Ltd.
(Telecommunications)........................... 270 42,248
Tong Yang Cement Co. (Building Materials)........ 13,000 235,245
Tong Yang Confectionery Co. Ltd. (Food, Beverages
& Tobacco)..................................... 11,800 259,586
-------------
6,648,794
-------------
TAIWAN (2.8%)
Asia Cement Corp. (GDS) (Building Materials)
(144A)......................................... 84,739 1,554,961
China Steel Corp. (GDS) (Metals & Mining)........ 50,000 1,003,125
Siliconware Precision Industries Co. (GDR)
(Semiconductors)+.............................. 32,000 355,200
Yageo Corp. (GDR) (Electronics)+................. 50,800 495,300
-------------
3,408,586
-------------
THAILAND (9.3%)
Bangkok Bank Public Co. Ltd. (Banking)........... 128,000 1,238,064
Bangkok Expressway Public Co. Ltd. (Transport &
Services)+..................................... 100,000 112,129
Banpu Public Co. Ltd. (Metals & Mining).......... 10,700 198,642
Central Pattana Public Co. Ltd. (Real Estate).... 194,500 675,135
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
THAILAND (CONTINUED)
Charoen Pokphand Feedmill Public Co. Ltd.
(Agriculture).................................. 58,000 $ 210,374
Dhana Siam Finance and Securities Public Co. Ltd.
(Financial Services)........................... 100,000 237,909
Finance One Public Co. Ltd. (Financial
Services)...................................... 83,000 168,330
KR Precision Public Co. Ltd. (Computer
Peripherals)................................... 76,900 524,863
Krung Thai Bank Public Co. Ltd. (Banking)........ 399,500 779,055
Land & House Public Co. Ltd. (Real Estate)....... 44,000 320,904
Modern Form Group Public Co. Ltd.
(Manufacturing)................................ 174,700 102,203
PTT Exploration & Production Public Co. Ltd.
(Oil-Production)............................... 26,000 375,194
Regional Container Line Public Co. Ltd.
(Packaging & Containers)....................... 58,300 563,899
Robinson Department Store Public Co. Ltd.
(Retail)....................................... 281,000 257,546
Shinawatra Computer Public Co. Ltd. (Computer
Systems)....................................... 69,900 845,123
Siam Cement Public Co. Ltd. (Building
Materials)..................................... 20,000 630,264
Siam Commercial Bank Public Co. Ltd. (Banking)... 105,000 761,699
Swedish Motors Public Co. Ltd. (Capital Goods)... 110,000 164,099
TelecomAsia Corporation Public Co. Ltd.
(Telecommunications)+.......................... 551,000 1,149,706
Thai Farmers Bank Public Co. Ltd. (Banking)...... 54,700 341,341
Thai Military Bank Public Co. Ltd. (Financial
Services)...................................... 169,000 332,858
Thai Petrochemical Industry Public Co. Ltd.
(Chemicals).................................... 352,000 356,942
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
19
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
THAILAND (CONTINUED)
Tipco Asphalt Public Co. Ltd. (Construction &
Housing)....................................... 46,000 $ 279,875
Total Access Communication Public Co. Ltd.
(Telecommunication Services)................... 102,000 703,800
-------------
11,329,954
-------------
TOTAL COMMON STOCK (COST $102,400,021)......... 109,627,234
-------------
CONVERTIBLE PREFERRED STOCKS (0.4%)
PHILIPPINES (0.4%)
Philippine Long Distance Telephone Co. (GDS
represents 1 Series 2 Cnv Pfd)
(Telecommunications) (cost $532,650)........... 15,900 500,850
-------------
PREFERRED STOCK (0.2%)
SOUTH KOREA (0.2%)
Hyundai Engineering & Construction Co. (New)
(Construction & Housing)+...................... 232 5,104
Mando Machinery Corp. (Automotive Supplies)...... 11,000 162,626
Shin Won Corp. (Apparels & Textiles)............. 13,530 118,097
-------------
285,827
-------------
TOTAL PREFERRED STOCK (COST $598,557).......... 285,827
-------------
RIGHTS (0.0%)
INDONESIA (0.0%)
P.T. Kabelmetal Indonesia
(Expires 2/12/97) (Telecommunications-
Equipment)..................................... 200,000 4,233
P.T. Kawasan Industri Jababeka (Expires 1/24/97)
(Real Estate).................................. 50,000 9,524
-------------
13,757
-------------
SECURITY DESCRIPTION SHARES VALUE
- ------------------------------------------------- ----------- -------------
MALAYSIA (0.0%)
Gamuda Berhad
(Expires 2/12/97) (Construction & Housing)..... 20,500 $ 42,209
Gamuda Berhad
(Expires 2/12/97) (Rights to Warrants)
(Construction & Housing)....................... 41,000 --
-------------
42,209
-------------
TOTAL RIGHTS................................... 55,966
-------------
WARRANTS (0.5%)
MALAYSIA (0.5%)
Petronas Dagangan Berhad (Expires 2/24/99)
(Retail)....................................... 412,000 587,288
SINGAPORE (0.0%)
United Overseas Land Ltd. (Expires 06/09/97)
(Real Estate).................................. 90 41
-------------
TOTAL WARRANTS (COST $601,196)................. 587,329
-------------
PRINCIPAL
AMOUNT
-----------
CONVERTIBLE BONDS (2.9%)
HONG KONG (0.7%)
Regal Hotels International, 5.25% due 12/13/08
(Restaurants & Hotels)......................... $ 705,000 839,831
TAIWAN (2.2%)
Far Eastern Department Stores Ltd., 3.00% due
07/06/01 (Retail).............................. 788,000 831,340
Nan Ya Plastics Corp., 1.75% due 07/19/01
(Chemicals).................................... 580,000 661,200
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
20
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- ------------------------------------------------- ----------- -------------
<S> <C> <C>
TAIWAN (CONTINUED)
U-Ming Marine Transport Corp., 1.50% due 02/07/01
(Transport & Services)......................... $ 690,000 $ 607,200
Yang Ming Marine Transport Corp., 2.00% due
10/06/01 (Transport & Services)................ 545,000 621,300
-------------
2,721,040
-------------
TOTAL CONVERTIBLE BONDS (COST $3,301,423)...... 3,560,871
-------------
SHORT-TERM INVESTMENTS (2.8%)
TIME DEPOSITS--FOREIGN (2.8%)
State Street Bank Cayman Islands, 4.88% due
01/02/97 (cost $3,430,000)..................... $ 3,430,000 3,430,000
-------------
TOTAL INVESTMENTS (COST $110,863,847) (96.5%).................
118,048,077
OTHER ASSETS IN EXCESS OF LIABILITIES (3.5%)..................
4,224,477
-------------
NET ASSETS (100.0%)........................................... $ 122,272,554
-------------
-------------
</TABLE>
- ------------------------------
Note: The cost of securities for Federal Income Tax purposes at December 31,
1996, was $111,490,917; the aggregate gross unrealized appreciation and
depreciation was $17,391,909 and $10,834,749, respectively, resulting in net
unrealized appreciation of $6,557,160.
+ - Non-income producing security.
ADS - American Depository Shares.
ADR - American Depository Receipts.
GDR - Global Depository Receipts.
GDS - Global Depository Shares.
144A - Securities restricted for resale to Qualified Institutional Buyers.
The Accompanying Notes are an Integral Part of the Financial Statements.
21
<PAGE>
THE ASIA GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY DIVERSIFICATION
PERCENT OF
TOTAL
INVESTMENTS
------------
<S> <C>
Banking............................................................................................. 15.43%
Real Estate......................................................................................... 15.22%
Multi-Industry...................................................................................... 12.77%
Telecommunications.................................................................................. 7.47%
Building Materials.................................................................................. 5.01%
Metals & Mining..................................................................................... 4.02%
Electric............................................................................................ 3.71%
Entertainment, Leisure & Media...................................................................... 3.26%
Food, Beverages & Tobacco........................................................................... 3.21%
Short-term Investments.............................................................................. 2.91%
Construction & Housing.............................................................................. 2.43%
Financial Services.................................................................................. 2.34%
Retail.............................................................................................. 1.83%
Chemicals........................................................................................... 1.80%
Natural Gas......................................................................................... 1.76%
Restaurants & Hotels................................................................................ 1.57%
Transportation...................................................................................... 1.55%
Telecommunication Services.......................................................................... 1.36%
Automotive.......................................................................................... 1.24%
Agriculture......................................................................................... 1.22%
Electronics......................................................................................... 1.05%
Wholesale & International Trade..................................................................... 1.03%
Airlines............................................................................................ 0.97%
Railroads........................................................................................... 0.77%
Insurance........................................................................................... 0.73%
Computer Peripherals................................................................................ 0.72%
Computer Systems.................................................................................... 0.71%
Forest Products & Paper............................................................................. 0.66%
Oil-Services........................................................................................ 0.59%
Packaging & Containers.............................................................................. 0.48%
Telecommunications-Equipment........................................................................ 0.45%
Oil-Production...................................................................................... 0.32%
Industrial.......................................................................................... 0.31%
Semiconductors...................................................................................... 0.30%
Real Estate Investment Trusts....................................................................... 0.27%
Aerospace........................................................................................... 0.20%
Capital Goods....................................................................................... 0.14%
Apparels & Textiles................................................................................. 0.10%
Manufacturing....................................................................................... 0.09%
------------
100.00%
------------
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
22
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at Value (Cost $110,863,847 ) $118,048,077
Foreign Currency at Value (Cost $1,362,172) 1,360,947
Cash 372
Receivable for Investments Sold 5,332,245
Dividends Receivable 76,945
Interest Receivable 28,377
Deferred Organization Expenses 21,733
Prepaid Trustees' Fees 409
Prepaid Expenses and Other Assets 430
------------
Total Assets 124,869,535
------------
LIABILITIES
Payable for Investments Purchased 2,369,447
Unrealized Depreciation of Open Spot Foreign
Currency Contracts 3,171
Custody Fee Payable 88,471
Advisory Fee Payable 83,677
Organization Expenses Payable 5,750
Administrative Services Fee Payable 3,317
Administration Fee Payable 348
Accrued Expenses 42,800
------------
Total Liabilities 2,596,981
------------
NET ASSETS
Applicable to Investors' Beneficial Interests $122,272,554
------------
------------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
23
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividend Income (Net of Foreign Withholding Tax
of $229,982 ) $2,099,917
Interest Income 301,692
----------
Investment Income 2,401,609
EXPENSES
Advisory Fee $ 899,241
Custodian Fees and Expenses 333,386
Professional Fees and Expenses 54,431
Administrative Services Fee 31,613
Administration Fee 9,063
Printing Expenses 6,655
Amortization of Organization Expense 6,644
Fund Services Fee 4,975
Trustees' Fees and Expenses 2,040
Insurance Expense 634
Miscellaneous 1,057
----------
Total Expenses 1,349,739
Less: Reimbursement of Expenses (7,302)
----------
NET EXPENSES 1,342,437
----------
NET INVESTMENT INCOME 1,059,172
NET REALIZED GAIN (LOSS) ON INVESTMENTS
Investment Transactions 4,120,737
Foreign Currency Transactions (36,577)
----------
Net Realized Gain 4,084,160
NET CHANGE IN UNREALIZED APPRECIATION OF
Investments 4,768,292
Foreign Currency Contracts and Translations 499
----------
Net Change in Unrealized Appreciation 4,768,791
----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $9,912,123
----------
----------
</TABLE>
The Accompanying Notes are an Integral Part of the Financial Statements.
24
<PAGE>
THE ASIA GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
APRIL 5, 1995
(COMMENCEMENT OF
FOR THE FISCAL OPERATIONS) TO
YEAR ENDED DECEMBER 31,
DECEMBER 31, 1996 1995
----------------- ----------------
<S> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS
Net Investment Income $ 1,059,172 $ 783,140
Net Realized Gain on Investments and Foreign
Currency Transactions 4,084,160 2,768,176
Net Change in Unrealized Appreciation of
Investments and Foreign Currency Contracts and
Translations 4,768,791 2,414,409
----------------- ----------------
Net Increase in Net Assets Resulting from
Operations 9,912,123 5,965,725
----------------- ----------------
----------------- ----------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS
Contributions 85,257,294 104,554,882
Withdrawals (59,878,251) (23,539,419)
----------------- ----------------
Net Increase from Investors' Transactions 25,379,043 81,015,463
----------------- ----------------
Total Increase in Net Assets 35,291,166 86,981,188
NET ASSETS
Beginning of Period 86,981,388 200
----------------- ----------------
End of Period $ 122,272,554 $ 86,981,388
----------------- ----------------
----------------- ----------------
</TABLE>
- --------------------------------------------------------------------------------
SUPPLEMENTARY DATA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
APRIL 5, 1995
FOR THE (COMMENCEMENT OF
FISCAL YEAR OPERATIONS) TO
ENDED DECEMBER 31,
DECEMBER 31, 1996 1995
----------------- ----------------
<S> <C> <C>
RATIOS TO AVERAGE NET ASSETS
Expenses 1.19% 1.40%(a)
Net Investment Income 0.94% 1.18%(a)
Decrease Reflected in Expense Ratio due to
Expense Reimbursement 0.01% --
Portfolio Turnover 93% 70%(b)
Average Brokerage Commissions $ 0.0069 --
</TABLE>
- ------------------------
(a) Annualized.
(b) Not annualized.
The Accompanying Notes are an Integral Part of the Financial Statements.
25
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Asia Growth Portfolio (the "Portfolio"), is one of five subtrusts
(portfolios) comprising The Series Portfolio (the "Series Portfolio"). The
Series Portfolio is registered under the Investment Company Act of 1940, as
amended (the "Act"), as a no load open-end management investment company which
was organized as a trust under the laws of the State of New York on June 24,
1994. The Portfolio's investment objective is to achieve a high total return
from a portfolio of equity securities of companies in Asian emerging market
countries. The Portfolio commenced operations on April 5, 1995. The Series
Portfolio's Declaration of Trust permits the Trustees to issue an unlimited
number of beneficial interests in the Portfolio.
Investments in Asian emerging markets may involve certain considerations and
risks not typically associated with investments in the United States. Future
economic and political developments in Asian emerging market countries could
adversely affect the liquidity or value, or both, of such securities in which
the Portfolio is invested. The ability of the issuers of debt securities held by
the Portfolio to meet their obligations may be affected by economic and
political developments in a specific industry or region.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual amounts could differ from
those estimates. 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 exchange, or at the quoted bid price in the over-the-counter market.
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;
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 value 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
26
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
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.
Although 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 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.
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 forward and spot foreign currency contract
translations. At December 31, 1996, the Portfolio had no open forward
foreign currency contracts.
e)The Portfolio intends to be treated as a partnership for federal income
tax purposes. As such, each investor in the Portfolio will be taxed 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 has incurred $33,000 in organization expenses. Morgan
Guaranty Trust Company of New York ("Morgan") has agreed to pay the
organization expenses of the Portfolio. The Portfolio has agreed to
reimburse Morgan for these costs which are being deferred and will be
amortized on a straight-line basis over a period not to exceed five years
beginning with the commencement of operations of the Portfolio.
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
mark-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
27
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
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.
(h)Expenses incurred by the Series Portfolio with respect to any two or more
portfolios in the Series Portfolio are allocated in proportion to the net
assets of each portfolio in the Series Portfolio, except where
allocations of direct expenses to each portfolio can otherwise be made
fairly. Expenses directly attributable to a portfolio are charged to that
portfolio.
2. TRANSACTIONS WITH AFFILIATES
a)The Portfolio has an Investment Advisory Agreement with Morgan. Under the
terms of the agreement, the Portfolio pays Morgan at an annual rate of
0.80% of the Portfolio's average daily net assets. For the fiscal year
ended December 31, 1996 such fees amounted to $899,241.
b)The Portfolio had retained Signature Broker-Dealer Services, Inc.
("Signature") to serve as administrator and exclusive placement agent.
Under an Administration Agreement, Signature provided administrative
services necessary for the operations of the Portfolio, furnished office
space and facilities required for conducting the business of the Portfolio
and paid the compensation of the Portfolio's officers affiliated with
Signature. The agreement provided for a fee to be paid to Signature equal
to the Portfolio's proportionate share of a complex-wide fee based on the
following annual schedule: 0.03% on the first $7 billion of the aggregate
average daily net assets of the Portfolio and the other portfolios (the
"Master Portfolios") in which The JPM Pierpont Funds, The JPM
Institutional Funds or The JPM Advisor Funds invest and 0.01% on the
aggregate average daily net assets of the Master Portfolios in excess of
$7 billion. The portion of this charge paid by the Portfolio was
determined by the proportionate share its net assets bore to the total net
assets of The JPM Pierpont Funds, The JPM Institutional Funds, The JPM
Advisor Funds and the Master Portfolios. For the period from January 1,
1996 to July 31, 1996, such fees amounted to $7,712. The Administration
Agreement with Signature was terminated July 31, 1996.
Effective August 1, 1996, certain administrative functions formerly
provided by Signature are provided by Funds Distributor, Inc. ("FDI"), a
registered broker-dealer, and by Morgan. FDI also serves as the
Portfolio's exclusive placement agent. Under a Co-Administration Agreement
between FDI and the Portfolio, the Portfolio has agreed to pay FDI fees
equal to its allocable share of an annual complex-wide charge of $425,000
plus FDI's out-of-pocket expenses. The amount allocable to the Portfolio
is based on the ratio of the Portfolio's net assets to the aggregate net
assets of the The JPM Pierpont Funds, The JPM Institutional Funds, The JPM
Advisor Funds, the Master Portfolios and JPM Series Trust. For the period
from August 1, 1996 to December 31, 1996, the fee for these services
amounted to $1,351.
On November 15, 1996, The JPM Advisor Funds terminated operations and were
liquidated. Subsequent to that date, the net assets of The JPM Advisor
Funds are no longer included in the calculation of the allocation of FDI's
fees.
c)The Portfolio has an Administrative Services Agreement (the "Services
Agreement") with Morgan under which Morgan was responsible for overseeing
certain aspects of the administration and operation
28
<PAGE>
THE ASIA GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
of the Portfolio. Under the Services Agreement, the Portfolio had agreed
to pay Morgan a fee equal to its proportionate share of an annual
complex-wide charge. Until July 31, 1996, this charge was calculated daily
based on the aggregate net assets of the Master Portfolios in accordance
with the following annual schedule: 0.06% on the first $7 billion of the
Master Portfolios' aggregate average daily net assets and 0.03% of the
Master Portfolios' aggregate average daily net assets in excess of $7
billion. The portion of this charge paid by the Portfolio was determined
by the proportionate share that the Portfolio's net assets bore to the net
assets of the Master Portfolios and investors in the Master Portfolios for
which Morgan provided similar services. For the period from January 1,
1996 to July 31, 1996, the fee for these services amounted to $15,260.
After July 31, 1996, the Services Agreement was amended such that the
annual complex-wide charge is calculated daily based on the aggregate
average daily net assets of the Master Portfolios and JPM Series Trust in
accordance with the following annual schedule: 0.09% on the first $7
billion of their aggregate average daily net assets and 0.04% of aggregate
average daily net assets in excess of $7 billion less the complex-wide
fees payable to FDI. The portion of this charge paid by the Portfolio is
determined by the proportionate share that its net assets bear to the net
assets of the Master Portfolios, investors in the Master Portfolios for
which Morgan provides similar services, and JPM Series Trust. For the
period from August 1, 1996 to December 31, 1996, the fee for these
services amounted to $16,353.
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 $4,975 for the fiscal year ended December 31, 1996.
e)An aggregate annual fee of $65,000 is paid to each Trustee for serving as
a Trustee of The JPM Pierpont Funds, The JPM Institutional Funds, the
Master Portfolios and JPM Series Trust. The Trustees' Fees and Expenses
shown in the financial statements represent the Portfolio's allocated
portion of the total fees and expenses. The Portfolio's Chairman and Chief
Executive Officer 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 $600.
3. INVESTMENT TRANSACTIONS
Investment transactions (excluding short-term investments) for the fiscal year
ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS FROM
PURCHASES SALES
- --------------- ---------------
<S> <C>
$123,302,624 $ 100,980,201
</TABLE>
29
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
The Asia Growth Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the supplementary data present fairly, in all material
respects, the financial position of The Asia Growth Portfolio (one of the
portfolios comprising part of the Series Portfolio, hereafter referred to as the
"Portfolio") at December 31, 1996, the results of its operations for the year
then ended, and the changes in its net assets and the supplementary data for the
year then ended and for the period April 5, 1995 (commencement of operations) to
December 31, 1995, in conformity with generally accepted accounting principles.
These financial statements and supplementary data (hereafter referred to as
"financial statements") are the responsibility of the Portfolio's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at December 31, 1996 by correspondence with the custodian and
brokers and the application of alternative auditing procedures where
confirmations from brokers were not received, provide a reasonable basis for the
opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
February 21, 1997
30
