<PAGE>
- --------------------------------------------------------------------------------
BRINSON RELATIONSHIP FUNDS
BRINSON GLOBAL SECURITIES FUND
BRINSON GLOBAL EQUITY FUND
BRINSON U.S. EQUITY FUND
BRINSON POST-VENTURE FUND
BRINSON EMERGING MARKETS EQUITY FUND
BRINSON SHORT-TERM FUND
BRINSON HIGH YIELD FUND
BRINSON EMERGING MARKETS DEBT FUND
ANNUAL REPORT
DECEMBER 31, 1997
LOGO
GLOBAL INSTITUTIONAL ASSET MANAGEMENT
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
BRINSON GLOBAL SECURITIES FUND............................................ 1
Schedule of Investments................................................ 5
Statement of Assets and Liabilities.................................... 24
Statement of Operations................................................ 25
Statements of Changes in Net Assets.................................... 26
Financial Highlights................................................... 27
BRINSON GLOBAL EQUITY FUND................................................ 28
Schedule of Investments................................................ 32
Statement of Assets and Liabilities.................................... 44
Statement of Operations................................................ 45
Statements of Changes in Net Assets.................................... 46
Financial Highlights................................................... 47
BRINSON U.S. EQUITY FUND.................................................. 48
Schedule of Investments................................................ 51
Statement of Assets and Liabilities.................................... 55
Statement of Operations................................................ 56
Statements of Changes in Net Assets.................................... 57
Financial Highlights................................................... 58
BRINSON POST-VENTURE FUND................................................. 59
Schedule of Investments................................................ 62
Statement of Assets and Liabilities.................................... 67
Statement of Operations................................................ 68
Statements of Changes in Net Assets.................................... 69
Financial Highlights................................................... 70
BRINSON EMERGING MARKETS EQUITY FUND...................................... 71
Schedule of Investments................................................ 74
Statement of Assets and Liabilities.................................... 89
Statement of Operations................................................ 90
Statements of Changes in Net Assets.................................... 91
Financial Highlights................................................... 92
BRINSON SHORT-TERM FUND................................................... 93
Schedule of Investments................................................ 94
Statement of Assets and Liabilities.................................... 95
Statement of Operations................................................ 96
Statements of Changes in Net Assets.................................... 97
Financial Highlights................................................... 98
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
BRINSON HIGH YIELD FUND................................................... 99
Schedule of Investments................................................ 102
Statement of Assets and Liabilities.................................... 105
Statement of Operations................................................ 106
Statements of Changes in Net Assets.................................... 107
Financial Highlights................................................... 108
BRINSON EMERGING MARKETS DEBT FUND........................................ 109
Schedule of Investments................................................ 112
Statement of Assets and Liabilities.................................... 115
Statement of Operations................................................ 116
Statements of Changes in Net Assets.................................... 117
Financial Highlights................................................... 118
The Brinson Relationship Funds - Notes to Financial Statements............ 119
The Brinson Relationship Funds - Report of Independent Auditors........... 124
</TABLE>
<PAGE>
BRINSON GLOBAL SECURITIES FUND
- --------------------------------------------------------------------------------
The Brinson Global Securities Fund is diversified across the equity and fixed
income markets of the U.S. and a broad range of other countries. This Fund is
actively managed within an asset allocation framework, involving value-based
market, currency and individual security selection. Our senior asset
allocation, equity and fixed income professionals form the investment team for
this Fund, supported by a globally integrated market analysis system. Security
selection within each market is based on the fundamental research of our
analytical teams in our offices worldwide.
The Brinson Global Securities Fund has produced an annualized return of 16.54%,
since its performance inception on April 30, 1995, compared to the 15.66%
return of its benchmark, the Global Securities Markets Index (GSMI). For the
year ended December 31, 1997, the Fund returned 11.70%, underperforming the
benchmark return of 14.30%. Contributing positively to performance was security
selection in the Japanese equity market and the emerging debt and equity
markets. Currency risk hedge was a substantial contributor to added value in
1997. The primary negative contributor was the underweight in most equity
markets and the overweight in bonds.
Bond returns were the highest in Australia, Italy and the U.K. The U.S. bond
market return of 9.62% was in the middle of the pack. The peripheral European
bond markets performed well, as spreads over German yields declined
substantially due to the market's anticipation of a single currency.
The U.S. equity market return of about 30% was outdone by many of the European
markets which were driven by a combination of lower interest rates and the
anticipation of a profits recovery. Southeast Asian equity markets stood in
stark contrast with local currency losses ranging from 10% to 60% for the year.
The emerging debt and equity markets failed to produce the spectacular gains of
prior years. Emerging debt posted a total return of 13.02% while emerging
equity declined by 14.84%. Returns in the high yield bond market, at about
12.63%, not surprisingly fell between equity and bond returns.
Currency risk hedges were beneficial during the year, as the overpriced
Japanese yen depreciated against the U.S. dollar. The risk hedges also
benefited from interest rates in the U.S. exceeding rates in the overpriced
currencies.
Asset allocation strategy continues to underweight equity markets, as prices
remain in excess of fundamental values. Bond markets, apart from Japan, remain
overweight as they provide the most attractive relative value. Emerging market
debt is also overweight, with a small overweight in emerging market equity and
a small underweight in high yield bonds. Exchange rate changes during the year
have reduced the magnitude of overpricing and led to reductions in many of the
risk hedges.
1
<PAGE>
BRINSON GLOBAL SECURITIES FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
6 months 1 year Annualized
Ended Ended 04/30/95*
12/31/97 12/31/97 to 12/31/97
- -----------------------------------------------------------------
<S> <C> <C> <C>
Brinson Global Securities Fund 2.21% 11.70% 16.54%
- -----------------------------------------------------------------
Global Securities Markets Index ** 3.26% 14.30% 15.66%
- -----------------------------------------------------------------
</TABLE>
* Performance inception date of the Brinson Global Securities Fund
** An un-managed index compiled by the Advisor, constructed as follows: 40%
Wilshire 5000 Index; 22% MSCI Non-U.S. Equity (Free) Index; 19% Salomon BIG
Bond Index; 2% International Dollar Bond Index; 9% Salomon Non-U.S.
Government Bond Index (unhedged); 2% JP Morgan EMBI+; 3% IFC Investable
Index; and 3% High Yield Bond Index.
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $100,000
This chart shows the growth in the value of an investment in the Brinson Global
Securities Fund and the Global Securities Markets Index if you had invested
$100,000 on April 30, 1995. Past performance is no guarantee of future results.
Share price and return will vary with market conditions; investors may realize
a gain or loss upon redemption.
BRINSON GLOBAL SECURITIES FUND
VS. GLOBAL SECURITIES MARKETS INDEX
12783A-Global_Sec-dg
<TABLE>
<CAPTION>
Brinson Global Securities Global Securities Market Index
------------------------- ------------------------------
<S> <C> <C>
4/30/95 100,000 100,000
103,327 102,509
6/30/95 104,439 104,074
106,942 107,316
108,458 106,941
9/30/95 110,483 109,803
111,333 109,114
114,689 112,380
12/31/95 117,169 114,455
119,499 116,106
119,014 116,849
3/31/96 120,123 117,787
121,860 119,680
122,513 120,984
6/30/96 123,345 120,969
121,479 117,459
123,345 119,490
9/30/96 127,331 123,636
129,524 124,871
134,752 130,122
12/31/96 134,788 128,963
136,535 130,851
137,807 131,466
3/31/97 135,713 128,577
137,315 131,180
143,170 137,812
6/30/97 147,309 142,745
152,244 148,427
148,346 142,987
9/30/97 153,248 149,182
148,553 144,371
148,774 145,655
12/31/97 150,558 147,404
----------------------------------------------------------------
</TABLE>
LOGO
Fund returns are net of all fees and costs, while the Index returns are based
solely on market returns without deduction for fees or transaction costs for
rebalancing.
2
<PAGE>
BRINSON GLOBAL SECURITIES FUND
- --------------------------------------------------------------------------------
TOP TEN U.S. EQUITY HOLDINGS
As of December 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- -----------------------------------------
<S> <C>
1. Lockheed Martin Corp. 1.32%
2. Xerox Corp. 1.27
3. Philip Morris Companies,
Inc. 1.21
4. CIGNA Corp. 1.07
5. Aon Corp. 1.06
6. Schering Plough Corp. 0.94
7. Burlington Northern Santa
Fe Corp. 0.92
8. Federal Express Corp. 0.90
9. Goodyear Tire & Rubber
Co. 0.86
10. Corning, Inc. 0.76
- -----------------------------------------
</TABLE>
TOP TEN NON-U.S. EQUITY HOLDINGS
As of December 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- ---------------------------------------------------------------------------
<S> <C>
1. Telecom Corp. of New Zealand Ltd. 0.31%
2. Glaxo Wellcome PLC 0.27
3. Royal Dutch Petroleum Co. 0.25
4. Novartis AG (Reg.) 0.24
5. Lloyds TSB Group PLC 0.22
6. B.A.T. Industries PLC 0.20
7. Allianz AG 0.19
8. British Petroleum Co. PLC 0.17
9. Roche Holding AG (Gen.) 0.16
10. British Telecommunications PLC 0.16
- -------------------------------------------------------------------------
</TABLE>
TOP TEN U.S. BOND HOLDINGS
As of December 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- -----------------------------------------
<S> <C>
1. U.S. Treasury Notes
6.000%, due 06/03/99 1.75%
2. U.S. Treasury Notes
6.000%, due 02/15/26 0.73
3. Skandinaviaka Enskilda
Banken 144A 6.625%, due
03/29/49 0.63
4. Enron Corp.
6.250%, due 08/01/09 0.59
5. U.S. Treasury Notes
6.250%, due 08/31/02 0.52
6. Government National
Mortgage Association
7.000%, due 08/15/24 0.47
7. Federal National Mortgage
Association Strip 0.000%,
due 07/01/27 principal
only 0.44
8. Prudential Home Mortgage
Securities
6.500%, due 02/25/24 0.44
9. Federal National Mortgage
Association
8.500%, due 06/25/06 0.43
10. Federal National Mortgage
Association
7.875%, due 02/24/05 0.42
- -----------------------------------------
</TABLE>
TOP TEN NON-U.S. BOND HOLDINGS
As of December 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- ---------------------------------------------------------------------------
<S> <C>
1. Kingdom of Denmark
8.000%, due 05/15/03 0.91%
2. UK Treasury
8.000%, due 06/10/03 0.90
3. Government of Canada
4.250%, due 12/01/21 0.88
4. Treuhandanstalt
6.250%, due 03/04/04 0.83
5. Bundesrepublik Deutschland 8.500%, due 08/21/00 0.71
6. UK Treasury
9.000%, due 10/13/08 0.69
7. Kingdom of Denmark,
7.000%, due 12/15/04 0.61
8. Bundesrepublik Deutschland 7.750%, due 02/21/00 0.55
9. Government of Australia
7.000%, due 04/15/00 0.41
10. Government of Netherlands 7.250%, due 10/01/04 0.40
- ---------------------------------------------------------------------------
</TABLE>
3
<PAGE>
BRINSON GLOBAL SECURITIES FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of December 31, 1997
<TABLE>
<S> <C>
U.S. EQUITIES
Basic Industries
Chemicals...................... 0.66%
Housing/Paper.................. 1.60
Metals......................... 0.28
------
2.54
Capital Investments
Capital Goods.................. 2.22
Technology..................... 2.70
------
4.92
Consumer
Autos/Durables................. 1.23
Discretionary.................. 1.15
Health: Drugs.................. 2.54
Health: Non-Drugs.............. 1.34
Non-Durables................... 3.04
Retail/Apparel................. 1.60
------
10.9
Energy.......................... 1.27
Financial
Banks.......................... 2.47
Non-Banks...................... 2.19
------
4.66
Services/Misc................... 2.96
Transportation.................. 1.93
Utilities
Electric....................... 1.93
Telephone...................... 0.34
------
2.27
Post Venture.................... 2.17
------
Total U.S. Equities........... 33.62*
------
NON-U.S. EQUITIES
Aerospace & Military............ 0.03
Airlines........................ 0.06
Appliances & Household
Durables....................... 0.33
Automobiles..................... 0.53
Banking......................... 2.04
Beverages & Tobacco............. 0.44
Broadcasting & Publishing....... 0.35
Building Materials.............. 0.22
Business & Public Service....... 0.62
Chemicals....................... 0.49
Construction.................... 0.15
Data Processing................. 0.15
Electric Components............. 0.26
Electronics..................... 0.59
Energy.......................... 1.35
Financial Services.............. 0.35
Food & House Products........... 0.61
Forest Products................. 0.23
Gold Mining..................... 0.01
Health: Drugs................... 0.29
Health: Non-Drugs............... 0.91
Industrial Components........... 0.26
Insurance....................... 1.08
Leisure & Tourism............... 0.13
Machinery & Engineering......... 0.05
Merchandising................... 0.82
Metals-Steel.................... 0.25
Miscellaneous Materials......... 0.06%
Miscellaneous Services.......... 0.02
Multi-Industry.................. 0.88
Non-Ferrous Metals.............. 0.32
Real Estate..................... 0.15
Recreation...................... 0.08
Retail/Apparel.................. 0.09
Shipping........................ 0.01
Telecommunications.............. 1.44
Textiles & Apparel.............. 0.03
Transportation.................. 0.18
Utilities....................... 0.85
Wholesale & International
Trade.......................... 0.09
------
Total Non-U.S. Equities....... 16.80
------
EMERGING MARKETS EQUITIES....... 4.07
------
U.S. BONDS
Corporate Bonds
Asset-Backed................... 1.42
CMO............................ 1.23
Consumer....................... 0.50
Financial...................... 4.20
Transportation................. 0.65
------
Total U.S. Corporate Bonds.... 8.00
------
International Dollar Bonds
Foreign Energy................. 0.42
Foreign Financial.............. 2.57
Foreign Government............. 0.42
Foreign Industrial............. 0.06
Foreign Telecommunications..... 0.13
Foreign Utilities.............. 0.31
------
Total International Dollar
Bonds........................ 3.91
------
U.S. Government Agencies........ 4.16
U.S. Government Obligations..... 3.00
------
Total U.S. Bonds.............. 19.07*
------
HIGH YIELD BONDS................ 2.44
------
NON-U.S. BONDS
Foreign Financial Bonds......... 0.83
Foreign Government Bonds........ 12.33
------
Total Non-U.S. Bonds.......... 13.16*
------
EMERGING MARKETS DEBT........... 5.06
------
SHORT-TERM INVESTMENTS.......... 33.25*
------
TOTAL INVESTMENTS............. 127.47
LIABILITIES, LESS CASH
AND OTHER ASSETS................ (27.47)
------
NET ASSETS.................... 100.00%
======
</TABLE>
* The Fund held a short position in stock index futures which reduced the U.S.
Equity exposure from 33.62% to 23.38%. The Fund also held a long position in
U.S. Treasury futures which increased the U.S. Bond exposure from 19.07% to
28.82%. The Fund also held a long position in Non-U.S. Treasury futures which
increased the Non-U.S. Bond exposure from 13.16% to 16.51%. These adjustments
result in a net decrease in the Funds exposure to Short-Term Investments from
33.25% to 30.39%.
4
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
EQUITIES - 54.49%
U.S. EQUITIES - 33.62%
Allergan, Inc. .............................. 126,300 $ 4,238,944
Alza Corp. (b)............................... 123,200 3,919,300
American Home Products Corp. ................ 112,200 8,583,300
Aon Corp. ................................... 236,000 13,835,500
Automatic Data Processing, Inc. ............. 161,500 9,912,063
Baxter International, Inc. .................. 159,400 8,039,738
Beckman Instruments, Inc. ................... 53,400 2,136,000
Biogen, Inc. (b)............................. 48,200 1,753,275
Birmingham Steel Corp. ...................... 49,500 779,625
Boston Technology, Inc. (b).................. 49,200 1,236,150
Briggs & Stratton Corp. ..................... 8,900 432,206
Brinson Post-Venture Fund (b)................ 1,414,293 28,375,394
Burlington Northern Santa Fe Corp. .......... 129,400 12,026,112
Champion Enterprises, Inc. (b)............... 79,400 1,632,663
Champion International Corp. ................ 7,700 348,906
Chase Manhattan Corp. ....................... 66,000 7,227,000
CIGNA Corp. ................................. 80,600 13,948,837
Circuit City Stores--Circuit City Group...... 182,000 6,472,375
Citicorp..................................... 59,900 7,573,606
CMS Energy Corp. ............................ 159,100 7,010,344
Comerica, Inc. .............................. 33,900 3,059,475
Commscope, Inc. (b).......................... 93,699 1,259,080
Comverse Technology, Inc. (b)................ 24,300 947,700
Corning, Inc. ............................... 267,000 9,912,375
Covance, Inc. (b)............................ 62,150 1,235,231
CPC International, Inc. ..................... 53,900 5,821,200
Crown Cork & Seal Co., Inc. ................. 58,600 2,937,325
CVS Corp. ................................... 78,200 5,009,687
Dial Corp. .................................. 63,700 1,325,756
Eastman Chemical Co. ........................ 67,900 4,044,294
Echlin, Inc. ................................ 34,600 1,252,088
EMC Corp. (b)................................ 352,200 9,663,487
Enron Corp. ................................. 165,200 6,866,125
Entergy Corp. ............................... 321,700 9,630,894
Federal Express Corp. (b).................... 192,500 11,754,531
First American Corp. of Tennessee............ 32,300 1,606,925
First Data Corp. ............................ 297,970 8,715,623
First Security Corp. ........................ 40,700 1,704,313
FirstEnergy Corp. ........................... 96,270 2,791,830
Fleetwood Enterprises, Inc. ................. 35,300 1,498,044
Food Lion Inc., Class A...................... 289,100 2,439,281
Forest Laboratories, Inc. (b)................ 56,700 2,796,019
Fort James Corp. ............................ 143,900 5,504,175
Gannett Co., Inc. ........................... 122,400 7,565,850
General Semiconductor, Inc. (b).............. 63,675 736,242
</TABLE>
5
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
U.S. EQUITIES - (CONTINUED)
Genzyme Corp. ............................... 49,700 $ 1,379,175
Geon Co. .................................... 33,900 792,413
Goodyear Tire & Rubber Co. .................. 177,000 11,261,625
Harnischfeger Industries, Inc. .............. 93,500 3,301,719
Health Care and Retirement Corp. (b)......... 61,400 2,471,350
Hibernia Corp. .............................. 68,500 1,288,656
Informix Corp. (b)........................... 65,600 311,600
Interpublic Group of Companies, Inc. ........ 80,250 3,997,453
Kimberly Clark Corp. ........................ 148,800 7,337,700
Lear Corp. (b)............................... 53,000 2,517,500
Lockheed Martin Corp. ....................... 174,940 17,231,590
Lyondell Petrochemical Co. .................. 134,600 3,566,900
Manor Care, Inc. ............................ 91,300 3,195,500
Martin Marietta Materials, Inc. ............. 36,063 1,318,553
Masco Corp. ................................. 143,600 7,305,650
Nabisco Holdings Corp. ...................... 125,600 6,083,750
National Service Industries, Inc. ........... 24,000 1,189,500
Nextel Communications, Inc. (b).............. 168,500 4,381,000
NextLevel Systems, Inc. (b).................. 281,000 5,022,875
Old Republic International Corp. ............ 25,750 957,578
Peco Energy Co. ............................. 367,600 8,914,300
Pentair, Inc. ............................... 65,200 2,343,125
Pharmacia & UpJohn, Inc. .................... 114,800 4,204,550
Philip Morris Companies, Inc. ............... 347,700 15,755,156
Raytheon Co., Class B........................ 145,900 7,367,950
Regions Financial Corp. ..................... 31,600 1,333,125
Reynolds & Reynolds Co. ..................... 120,000 2,212,500
Schering Plough Corp. ....................... 196,600 12,213,775
Seagate Technology, Inc. (b)................. 110,000 2,117,500
Sears, Roebuck and Co. ...................... 15,700 710,425
Timken Co. .................................. 38,400 1,320,000
Tyson Foods, Inc., Class A................... 250,800 5,141,400
Ultramar Diamond Shamrock Corp. ............. 140,290 4,471,744
US Bancorp................................... 82,384 9,221,859
Vencor, Inc. (b)............................. 130,500 3,189,094
Viad Corp. .................................. 120,800 2,332,950
Westvaco Corp. .............................. 29,400 924,263
Witco Corp. ................................. 20,000 816,250
Xerox Corp. ................................. 224,200 16,548,762
York International Corp. .................... 76,700 3,034,444
---------------
TOTAL U.S. EQUITIES.......................... 438,644,147
---------------
</TABLE>
6
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
NON-U.S. EQUITIES - 16.80%
AUSTRALIA - 0.88%
Amcor Ltd. .................................. 54,330 $ 238,960
Boral Ltd. .................................. 137,760 348,287
Brambles Industries Ltd. .................... 26,410 524,008
Broken Hill Proprietary Co., Ltd. ........... 173,929 1,614,987
Coca-Cola Amatil Ltd. ....................... 31,230 233,328
CSR Ltd. .................................... 99,070 335,682
David Jones Ltd. ............................ 345,090 389,010
Lend Lease Corp., Ltd. ...................... 23,440 458,206
Mayne Nickless Ltd. ......................... 45,000 237,802
M.I.M. Holdings Ltd. ........................ 196,788 120,534
National Australia Bank Ltd. ................ 120,900 1,688,226
News Corp. Ltd. ............................. 253,583 1,399,541
News Corp. Ltd., Preferred................... 65,956 326,368
Pacific Dunlop Ltd. ......................... 165,535 350,554
Qantas Airways Ltd. ......................... 162,181 287,020
Rio Tinto Ltd. .............................. 63,509 740,872
Santos Ltd. ................................. 36,760 151,382
Telstra Corp., Ltd. (b)...................... 65,000 137,227
Westpac Banking Corp., Ltd. ................. 200,780 1,284,213
WMC Ltd. .................................... 109,675 382,335
Woolworth's Ltd. ............................ 69,210 231,349
---------------
11,479,891
---------------
BELGIUM - 0.63%
Delhaize-Le Lion S.A. ....................... 15,330 777,858
Electrabel S.A. ............................. 6,310 1,459,521
Fortis AG.................................... 711 96
Fortis AG Strip (b).......................... 5,531 1,153,940
Generale de Banque S.A. ..................... 1,430 622,352
Groupe Bruxelles Lambert S.A. ............... 3,330 481,736
Kredietbank NV............................... 1,645 690,393
Petrofina S.A. .............................. 2,820 1,040,822
Societe Generale de Belgique................. 4,400 402,580
Solvay S.A., Class A......................... 9,410 591,760
Tractebel.................................... 7,325 638,573
Tractebel Warrants "99" (b).................. 1,815 4,654
Union Miniere Group S.A. (b)................. 4,139 287,097
---------------
8,151,382
---------------
CANADA - 0.57%
Agrium, Inc. ................................ 18,100 220,069
Alcan Aluminum Ltd. ......................... 13,700 377,178
Bank of Montreal............................. 10,465 463,250
Barrick Gold Corp. .......................... 8,395 156,332
Canadian National Railway Co. ............... 9,550 449,106
Canadian Pacific Ltd. ....................... 31,558 848,985
</TABLE>
7
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
CANADA - (CONTINUED)
Hudson's Bay Co. ............................ 13,000 $ 289,323
Imasco, Ltd. ................................ 6,100 215,254
Imperial Oil Ltd. ........................... 11,355 729,970
Magna International, Inc., Class A........... 3,400 212,871
Moore Corp., Ltd. ........................... 12,900 193,802
Newbridge Networks Corp. (b)................. 4,300 150,384
Noranda, Inc. ............................... 14,125 242,803
Northern Telecom Ltd. ....................... 2,540 225,673
NOVA Corp. .................................. 38,540 366,253
Potash Corp. of Saskatchewan, Inc. .......... 4,200 349,389
Royal Bank of Canada......................... 12,295 649,502
Seagram Co., Ltd. ........................... 8,075 260,966
TELUS Corp. ................................. 18,900 418,650
TransCanada Pipelines Ltd. .................. 18,735 417,613
Westcoast Energy, Inc. ...................... 9,400 216,756
---------------
7,454,129
---------------
FINLAND - 0.18%
Cultor Oyj................................... 3,300 179,371
Merita Ltd., Class A......................... 51,050 279,356
Metsa-Serla Oyj, Series B.................... 13,100 102,237
Nokia Oyj, Class A Preferred................. 14,850 1,055,319
Outokumpu Oyj, Class A....................... 13,020 158,993
Pohjola Insurance Group, Class B............. 750 27,820
Sampo Insurance Co., Ltd., Series A.......... 4,480 145,612
The Rauma Group.............................. 648 10,115
UPM-Kymmene Corp............................. 19,830 396,913
---------------
2,355,736
---------------
FRANCE - 1.02%
Accor S.A. .................................. 2,326 432,645
Alcatel Alsthom.............................. 4,272 543,231
AXA-UAP...................................... 8,964 693,905
AXA-UAP Rights (b)........................... 14,094 13,822
Banque Nationale de Paris.................... 9,190 488,677
Cie Bancaire S.A. ........................... 866 140,351
Cie de Saint Gobain.......................... 5,162 733,629
Cie Financiere de Paribas.................... 4,900 425,981
Cie Generale Des Eaux........................ 5,340 745,612
Cie Generale Des Eaux Warrants "01" (b)...... 12,360 8,403
Dexia France................................. 4,141 479,767
Elf Aquitaine S.A. .......................... 7,158 832,879
France Telecom S.A. (b)...................... 18,000 653,158
Groupe Danone................................ 1,900 339,511
Lafarge S.A. ................................ 4,220 277,008
Lagardere S.C.A. ............................ 13,200 436,636
Lyonnaise des Eaux S.A. ..................... 6,088 673,971
</TABLE>
8
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BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
FRANCE - (CONTINUED)
Michelin, Class B............................ 9,818 $ 494,490
Pechiney S.A., Class A....................... 10,870 429,307
Peugeot S.A. ................................ 5,500 693,900
Pinault-Printemps-Redoute S.A. .............. 1,000 533,743
Rhone-Poulenc, Class A....................... 15,448 692,284
SEITA........................................ 15,290 548,976
Societe Generale............................. 5,259 716,818
Thomson CSF.................................. 13,800 435,150
Total S.A., Class B.......................... 6,491 706,716
Usinor Sacilor............................... 10,020 144,737
---------------
13,315,307
---------------
GERMANY - 1.82%
Allianz AG Holding........................... 9,640 2,487,604
BASF AG...................................... 14,450 515,928
Bayer AG..................................... 34,970 1,298,174
Bayerische Motoren Werke AG.................. 1,156 864,702
Commerzbank AG............................... 28,860 1,123,519
Continental AG............................... 26,950 607,016
Daimler-Benz AG.............................. 13,380 945,031
Deutsche Bank AG............................. 28,060 1,963,154
Deutsche Telekom AG.......................... 96,520 1,787,507
Henkel KGaA-Vorzug AG, Preferred............. 10,410 651,313
Hochtief AG.................................. 8,200 337,467
Hoechst AG................................... 11,080 383,896
M.A.N. AG.................................... 1,750 505,603
Mannesmann AG................................ 1,995 1,001,883
Metro AG..................................... 19,498 691,826
Muenchener Rueckver AG....................... 4,870 1,852,555
Muenchener Rueckver AG Warrants "98" (b)..... 8 4,850
Preussag AG.................................. 2,666 819,920
RWE AG....................................... 19,780 1,061,548
Schering AG.................................. 11,100 1,071,047
Siemens AG................................... 21,500 1,297,342
VEBA AG...................................... 23,120 1,575,107
Volkswagen AG................................ 1,690 944,580
---------------
23,791,572
---------------
HONG KONG - 0.25%
Cheung Kong Holdings, Ltd. .................. 80,000 523,972
China Light & Power Co., Ltd. ............... 48,500 269,149
Citic Pacific Ltd. .......................... 45,000 178,873
Hang Seng Bank Ltd. ......................... 32,500 313,529
Hong Kong and China Gas Co., Ltd. ........... 206,000 398,787
Hong Kong Telecommunications Ltd. ........... 235,400 484,562
Hutchison Whampoa Ltd. ...................... 87,000 545,680
Sun Hung Kai Properties Ltd. ................ 40,000 278,764
</TABLE>
9
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BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
HONG KONG - (CONTINUED)
Swire Pacific Ltd., Class A.................. 24,000 $ 131,638
---------------
3,124,954
---------------
ITALY - 0.80%
Aeroporti di Roma Spa (b).................... 11,000 114,165
Assicurazioni Generali....................... 41,230 1,013,231
Banca Commerciale Italiana................... 114,900 399,669
Credito Italiano Spa......................... 203,900 629,097
Danieli & Co. Savings (Risp)................. 83,800 301,444
Edison Spa................................... 47,500 287,464
ENI ADR (c).................................. 18,700 1,067,069
ENI Spa...................................... 88,000 499,217
Fiat Spa-Priv Preferred...................... 359,880 549,575
INA-Istituto Nazionale delle Assicurazioni... 184,400 373,900
Instituto Mobiliare Italiano Spa............. 54,100 642,572
Italgas Spa.................................. 75,300 310,902
La Rinascente Spa............................ 60,320 450,340
La Rinascente Spa RNC........................ 53,800 200,831
La Rinascente Spa Warrants "99" (b).......... 2,880 3,486
Mediobanca Spa............................... 19,450 152,801
Montedison Spa............................... 639,856 575,058
SAI - Savings (Risp)......................... 51,100 225,435
Telecom Italia Mobile Spa.................... 124,100 573,104
Telecom Italia Mobile Spa RNC................ 292,500 832,145
Telecom Italia Spa........................... 53,833 344,059
Telecom Italia Spa RNC....................... 212,051 935,493
---------------
10,481,057
---------------
JAPAN - 2.62%
Amada Co., Ltd. ............................. 88,000 328,245
Bank of Tokyo-Mitsubushi Ltd. ............... 58,000 802,923
Canon, Inc. ................................. 54,000 1,262,527
Canon Sales Co., Inc. ....................... 28,000 320,861
Citizen Watch Co., Ltd. ..................... 79,000 531,629
Dai Nippon Printing Co., Ltd. ............... 61,000 1,149,394
Daiichi Pharmaceutical Co., Ltd. ............ 55,000 621,804
Daikin Industries Ltd. ...................... 86,000 325,414
Daiwa House Industry Co., Ltd. .............. 43,000 228,187
Fanuc........................................ 26,500 1,006,806
Fujitsu...................................... 52,000 559,892
Hitachi Ltd. ................................ 130,000 929,821
Honda Motor Co. ............................. 25,000 920,977
Hoya Corp. .................................. 11,000 346,856
Inax......................................... 62,000 180,719
Ito Yokado Co., Ltd. ........................ 25,000 1,278,600
Kaneka Corp. ................................ 66,000 298,973
Keio Teito Electric Railway.................. 92,000 353,071
</TABLE>
10
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
JAPAN - (CONTINUED)
Kinki Nippon Railway........................ 99,000 $ 530,690
Kirin Brewery Co., Ltd. .................... 94,000 686,791
Kokuyo...................................... 27,000 467,218
Kuraray Co., Ltd. .......................... 80,000 664,488
Kyocera Corp. .............................. 10,100 459,850
Marui Co., Ltd. ............................ 45,000 702,557
Matsushita Electric Industrial Co. ......... 99,000 1,454,259
Mitsubishi Paper Mills...................... 78,000 109,779
NGK Insulators.............................. 108,000 963,507
Nintendo Co., Ltd. ......................... 7,400 728,475
Nippon Denso Co., Ltd. ..................... 41,000 741,011
Nippon Meat Packers, Inc. .................. 42,000 574,966
Nippon Steel Co. ........................... 68,000 100,934
Okumura..................................... 87,000 207,422
Osaka Gas Co. .............................. 162,000 371,283
Sankyo Co., Ltd. ........................... 48,000 1,089,021
Secom Co., Ltd. ............................ 16,000 1,026,264
Seino Transportation........................ 58,000 290,390
Sekisui House Ltd. ......................... 102,000 658,166
Shinmaywa Industries Ltd. .................. 22,000 54,143
Sony Corp. ................................. 15,400 1,373,890
Sumitomo Bank............................... 70,000 802,153
Sumitomo Chemical Co. ...................... 99,000 228,418
Sumitomo Electric Industries................ 71,000 971,967
Takeda Chemical Industries.................. 41,000 1,173,005
TDK Corp. .................................. 15,000 1,135,166
Tokio Marine & Fire Insurance Co. .......... 78,000 887,829
Tokyo Electric Power........................ 22,300 408,183
Tonen Corp. ................................ 48,000 259,889
Toray Industries, Inc. ..................... 236,000 1,061,796
Toshiba Corp. .............................. 155,000 647,299
Toyo Suisan Kaisha.......................... 47,000 326,768
Toyota Motor Corp. ......................... 40,000 1,150,548
Yamazaki Baking Co., Ltd. .................. 41,000 400,461
---------------
34,155,285
---------------
MALAYSIA - 0.32%
Hume Industries (Malaysia) Bhd.............. 106,000 111,106
Kuala Lumpur Kepong Bhd..................... 216,500 464,425
Land & General Holdings Bhd................. 202,000 37,364
Malayan Banking Bhd......................... 113,400 329,202
Malaysian International Shipping Bhd
(Frgn.).................................... 98,000 143,507
Nestle (Malaysia) Bhd....................... 53,000 245,087
New Strait Times Press Bhd.................. 99,000 122,590
Perusahaan Otomobil Nasional Bhd............ 66,000 64,432
Petronas Gas Bhd............................ 80,000 181,888
</TABLE>
11
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
MALAYSIA - (CONTINUED)
Public Bank Bhd.............................. 85,200 $ 26,485
Public Bank Bhd (Frgn.)...................... 169,600 58,385
Public Bank Bhd Rights (b)................... 14,200 766
Public Bank Bhd Rights (Frgn.) (b)........... 28,266 1,452
Resorts World Bhd............................ 104,000 175,003
Rothmans of Pall Mall Bhd.................... 56,000 435,196
Sime Darby Bhd............................... 306,000 294,012
Telekom Malaysia Bhd......................... 220,500 651,445
Tenaga Nasional Bhd.......................... 263,000 560,796
UMW Holdings Bhd............................. 44,000 33,346
United Engineers Bhd. ....................... 79,000 65,757
YTL Corp. Bhd................................ 123,000 165,896
YTL Power International Bhd (b).............. 4,600 3,534
---------------
4,171,674
---------------
NETHERLANDS - 0.80%
ABN AMRO Holdings NV......................... 43,986 857,025
Akzo Nobel NV................................ 1,540 265,567
Elsevier NV.................................. 51,620 835,168
Heineken NV.................................. 3,700 644,256
Hoogovens NV................................. 4,733 194,008
ING Groep NV................................. 25,465 1,072,713
KLM Royal Dutch Air Lines NV................. 6,816 252,158
Philips Electronics NV....................... 13,565 813,646
Royal Dutch Petroleum Co. ................... 59,680 3,276,468
Royal PTT Nederland NV....................... 25,730 1,073,723
Unilever NV.................................. 19,260 1,187,540
---------------
10,472,272
---------------
NEW ZEALAND - 0.73%
Brierley Investments Ltd. ................... 1,950,570 1,393,216
Carter Holt Harvey Ltd. ..................... 673,190 1,039,851
Fletcher Challenge Building.................. 222,825 455,468
Fletcher Challenge Energy.................... 246,195 862,081
Fletcher Challenge Forests Ltd. ............. 479,150 397,887
Fletcher Challenge Paper..................... 443,560 579,544
Lion Nathan Ltd. ............................ 177,000 396,746
Telecom Corp. of New Zealand Ltd. ........... 831,070 4,029,729
Telecom Corp. of New Zealand Ltd. ADS (c).... 10,840 420,050
---------------
9,574,572
---------------
SINGAPORE - 0.39%
City Developments Ltd. ...................... 62,000 287,003
DBS Land Ltd. ............................... 118,000 180,677
Development Bank of Singapore Ltd. .......... 64,000 546,944
Elec & Eltek International Co., Ltd. ........ 16,500 75,570
Fraser & Neave Ltd. ......................... 24,000 103,976
</TABLE>
12
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
SINGAPORE - (CONTINUED)
Hotel Properties Ltd. ...................... 211,000 $ 137,745
Keppel Corp., Ltd. ......................... 68,500 196,760
Keppel Land Ltd. ........................... 74,000 101,887
NatSteel Ltd. .............................. 46,000 62,243
Oversea-Chinese Banking Corp., Ltd. ........ 105,600 614,172
Singapore Airlines Ltd. (Frgn.)............. 106,000 691,988
Singapore Press Holdings Ltd. (Frgn.)....... 33,000 413,234
Singapore Telecommunications, Ltd. ......... 498,000 928,024
United Overseas Bank Ltd. (Frgn.)........... 112,000 621,484
Venture Manufacturing (Singapore) Ltd. ..... 7,000 19,525
Wing Tai Holdings Ltd. ..................... 86,000 100,546
---------------
5,081,778
---------------
SPAIN - 0.47%
Acerinox S.A. .............................. 623 92,252
Banco Bilbao-Vizcaya S.A. .................. 21,665 700,751
Banco Central Hispanoamericano.............. 17,540 426,935
Banco Popular Espanol S.A. ................. 6,240 436,006
Banco Santander S.A. ....................... 17,290 577,392
Empresa Nacional de Electricidad S.A. ...... 41,160 730,467
Fomento de Construcciones y Contratas
S.A. ...................................... 8,000 304,422
Gas Natural SDG S.A. ....................... 7,360 381,472
Iberdrola S.A. ............................. 40,580 533,807
Mapfre Corp. ............................... 9,140 242,262
Repsol S.A. ................................ 4,290 182,948
Repsol S.A. ADR (c)......................... 6,780 288,574
Tabacalera S.A. ............................ 1,300 105,334
Telefonica de Espana........................ 25,920 739,745
Vallehermoso S.A. .......................... 5,930 181,689
Viscofan Envolturas Celulosicas S.A. ....... 6,130 153,833
---------------
6,077,889
---------------
SWEDEN - 0.36%
ABB AB, A Shares............................ 22,100 261,815
AssiDoman AB................................ 1,500 37,998
Astra AB, A Shares.......................... 51,000 883,788
Electrolux AB, B Shares..................... 3,500 243,049
Hennes & Mauritz AB, B Shares............... 12,100 533,738
Nordbanken Holding AB ...................... 91,900 520,040
Securitas AB, B Shares...................... 7,100 214,756
Skanska AB, B Shares........................ 5,200 213,319
Svenska Handelsbanken, A Shares............. 10,500 363,251
Swedish Match AB............................ 74,400 248,481
Telefonaktiebolaget LM Ericsson, B Shares... 17,800 669,637
Volvo AB, B Shares.......................... 18,800 504,676
---------------
4,694,548
---------------
</TABLE>
13
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
SWITZERLAND - 0.91%
ABB AG (Bearer)............................. 220 $ 276,772
CS Holdings AG (Reg.)....................... 7,635 1,182,991
Holderbank Financiere Glarus AG, B Shares... 395 322,803
Nestle S.A. (Reg.).......................... 896 1,344,676
Novartis AG (Reg.).......................... 1,912 3,106,705
Roche Holding AG (Gen.)..................... 215 2,138,060
Sairgroup (b)............................... 241 330,454
Schweizerische Lebensversicherungs-und
Rentenanstalt.............................. 522 410,485
Sulzer AG................................... 413 262,195
Swiss Reinsurance Co. (Reg.)................ 543 1,017,055
UBS (Bearer)................................ 558 807,964
Zurich Versicherungs (Reg.)................. 1,497 714,323
---------------
11,914,483
---------------
UNITED KINGDOM - 4.05%
Abbey National PLC.......................... 59,380 1,065,958
Barclays PLC................................ 32,000 851,929
Bass PLC.................................... 35,930 558,386
B.A.T. Industries PLC....................... 284,700 2,595,209
BG PLC...................................... 301,428 1,358,968
Billiton PLC (b)............................ 222,000 569,840
Booker PLC.................................. 130,180 685,440
British Energy PLC.......................... 143,370 997,869
British Petroleum Co. PLC................... 170,674 2,246,634
British Sky Broadcasting Group PLC.......... 76,000 570,234
British Steel PLC........................... 170,530 366,173
British Telecommunications PLC.............. 260,570 2,051,547
BTR PLC..................................... 113,580 343,870
Cable & Wireless PLC........................ 56,000 492,966
Cadbury Schweppes PLC....................... 102,000 1,029,650
Centrica PLC (b)............................ 244,770 360,459
Charter PLC................................. 55,091 678,950
Coats Viyella PLC........................... 243,240 364,210
Diageo PLC.................................. 135,750 1,249,726
FKI PLC..................................... 288,887 907,897
General Electric Co. PLC.................... 254,650 1,652,973
Glaxo Wellcome PLC.......................... 151,100 3,580,156
Greenalls Group PLC......................... 73,000 526,104
Hanson PLC.................................. 97,122 434,073
Hillsdown Holdings PLC...................... 298,380 726,619
House of Fraser PLC......................... 318,300 1,052,708
HSBC Holdings PLC........................... 65,450 1,680,000
Inchcape PLC................................ 158,530 425,181
Legal & General Group PLC................... 145,100 1,270,147
Lloyds TSB Group PLC........................ 217,370 2,814,812
</TABLE>
14
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------- ---------------
<S> <C> <C>
UNITED KINGDOM - (CONTINUED)
Marks & Spencer PLC......................... 173,760 $ 1,712,583
Mirror Group PLC............................ 302,450 970,428
National Westminster Bank PLC............... 60,420 1,006,089
Northern Foods PLC.......................... 172,960 751,319
Peninsular & Oriental Steam Navigation
Co. ....................................... 110,460 1,258,635
Reckitt & Colman PLC........................ 32,095 504,331
Reuters Holdings PLC........................ 65,470 716,373
Rio Tinto PLC............................... 65,920 812,408
RJB Mining PLC.............................. 166,130 347,158
Royal & Sun Alliance Insurance Group PLC.... 81,539 822,434
Scottish Hydro-Electric PLC................. 70,820 584,971
Sears PLC................................... 408,820 356,519
Sedgwick Group PLC.......................... 266,640 623,001
SmithKline Beecham PLC...................... 157,020 1,609,600
Smurfit (Jefferson) Group PLC............... 241,304 671,006
Tate & Lyle PLC............................. 74,000 610,021
Tesco PLC................................... 115,860 943,656
Thames Water PLC............................ 78,690 1,173,714
The Great Universal Stores PLC.............. 93,000 1,173,690
Unilever PLC................................ 68,960 591,167
Vodafone Group PLC.......................... 154,310 1,114,637
Williams PLC................................ 180,990 1,006,575
---------------
52,869,003
---------------
TOTAL NON-U.S. EQUITIES..................... 219,165,532
---------------
EMERGING MARKETS EQUITIES - 4.07%
Brinson Emerging Markets Equity Fund (b).... 5,787,049 53,026,733
---------------
TOTAL EQUITIES (COST $630,600,959).......... 710,836,412
---------------
<CAPTION>
FACE
AMOUNT
---------------
<S> <C> <C>
BONDS - 39.73%
U.S. BONDS - 19.07%
U.S. CORPORATE BONDS - 8.00%
Aid-Israel, Series 10-Z 0.000%, due
02/15/03.................................... $ 5,670,000 4,209,918
Aid-Israel PO, 0.000%, due 08/15/19......... 1,105,000 290,261
Associates Corp. N.A. 6.450%, due 10/15/01.. 1,230,000 1,238,754
Bank of America FRN, 6.110%, due 09/24/98... 4,000,000 3,998,306
Capital One Bank 6.830%, due 05/17/99....... 1,000,000 1,006,932
Chase Manhattan Auto Owner Trust 96C-A4
6.150%, due 03/15/02....................... 265,000 265,416
Chase Manhattan Credit Card Trust 96-4A
6.730%, due 02/15/03....................... 4,340,000 4,381,577
Chemical Master Credit Card Trust 95-2A
6.230%, due 06/15/03....................... 3,915,000 3,939,234
</TABLE>
15
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- -------------
<S> <C> <C>
U.S. CORPORATE BONDS - (CONTINUED)
Citicorp Mortgage Securities, Inc. 94-9 Class
A8,
5.750%, due 06/25/09......................... $ 4,310,211 $ 3,898,672
Coca-Cola Enterprises 6.375%, due 08/01/01.... 1,450,000 1,460,376
Continental Airlines, Inc. 97-4A, 6.900%, due
01/02/18..................................... 5,450,000 5,449,183
Countrywide Funding Corp. FRN, 6.360%, due
12/01/03..................................... 3,000,000 2,977,500
Dayton Hudson Credit Card Master Trust 95-1A,
6.100%, due 02/25/02......................... 650,000 650,566
Donaldson, Lufkin & Jenrette FRN,
6.700%, due 06/30/00......................... 4,650,000 4,707,032
Enron Corp. 6.750%, due 08/01/09.............. 7,600,000 7,663,156
First National Bank of Chicago Series E,
7.000%, due 05/08/00......................... 2,500,000 2,537,500
GE Capital Mtg. Services, Inc. 94-7 Class A12,
6.000%, due 02/25/09......................... 5,062,551 4,927,634
General Motors Acceptance Corp. MTN
5.875%, due 01/12/99......................... 1,000,000 998,951
Green Tree Financial 94-6 Class A5,
8.250%, due 01/15/20......................... 460,000 488,923
Kern River Funding Corp. 144A Series B
6.720%, due 09/30/01......................... 275,000 280,490
Lehman Brothers Holdings, 7.250%, due
04/15/03..................................... 250,000 258,094
Nationsbanc Asset Securities, Inc. Series
1997-1,
6.375%, due 09/20/27......................... 4,210,000 4,210,000
News America Holdings 7.750%, due 12/01/45.... 680,000 707,953
Premier Auto Trust 96-4A, Class A4,
6.400%, due 10/06/01......................... 5,475,000 5,505,332
Prudential Home Mortgage Securities
93-43A9, 6.750%, due 10/25/23................ 3,185,467 3,141,093
94-3A10, 6.500%, due 02/25/24................ 5,970,000 5,735,379
Residential Asset Securitization Trust 97-A 11
P4,
7.000%, due 12/25/27......................... 2,520,000 2,527,875
Salomon, Inc.
6.500%, due 03/01/00......................... 2,780,000 2,794,798
6.750%, due 02/15/03......................... 3,800,000 3,853,949
The Money Store 97-B, A-8, 6.900%, due
07/15/38..................................... 3,000,000 3,048,630
Time Warner Inc.
9.125%, due 01/15/13......................... 1,735,000 2,072,003
7.570%, due 02/01/24......................... 1,490,000 1,561,815
Time Warner Entertainment Inc. 8.375%, due
03/15/23..................................... 1,250,000 1,426,006
UCFC Home Equity Loan 97-C, Class A8, FRN,
6.325%, due 09/15/27......................... 4,057,067 4,053,700
Union Pacific, 6.250%, due 03/15/99........... 3,000,000 3,008,429
World Omni Automobile Lease Securitization
Trust
6.850%, due 06/25/03......................... 5,060,000 5,097,242
-------------
104,372,679
-------------
</TABLE>
16
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- ---------------
<S> <C> <C>
INTERNATIONAL DOLLAR BONDS - 3.91%
Abbey National PLC
7.350%, Resettable Perpetual Preferred..... $ 645,000 $ 670,649
ABN AMRO Bank NV (Chicago) 6.625%, due
10/31/01................................... 1,000,000 1,014,901
African Development Bank 7.375%, due
04/06/23................................... 600,000 654,218
AT&T Corp. 8.250%, due 01/11/00............. 30,000 31,199
Banca Commercial Italian 8.250%, due
07/15/07................................... 30,000 32,924
Banque Paribas, Sub. Notes, 6.875%, due
03/01/09................................... 640,000 637,217
Bayerische Landesbank 6.850%, due 07/19/01.. 3,820,000 3,921,398
Credit Suisse-London 144A
7.900%, Resettable Perpetual Preferred..... 3,610,000 3,808,918
Den Danske Bank 144A 7.400%, due 06/15/10... 3,735,000 3,896,965
DR Investments 144A 7.450%, due 05/15/07.... 30,000 31,708
Empresa Nacional Electric
7.875%, due 02/01/2027..................... 4,320,000 4,487,400
8.125%, due 02/01/2097..................... 875,000 926,475
Government of Ireland, 9.500%, due
04/03/00................................... 700,000 749,148
Government of Poland, FRN, 6.688%, due
10/27/24................................... 2,600,000 2,505,750
International Bank for Reconstruction &
Development
9.250%, due 11/17/98....................... 700,000 720,085
International Telecom Satellite 8.125%, due
02/28/05................................... 890,000 979,016
Japanese Development Bank 8.375%, due
02/15/01................................... 30,000 31,800
Korea Development Bank 7.125%, due
09/17/01................................... 1,200,000 1,021,439
LKB-Baden Wuerttemberg Finance NV
8.125%, due 01/27/00....................... 1,030,000 1,070,243
National Australia Bank, FRN, 6.400%, due
12/10/07................................... 630,000 632,331
National Westminster Bank
7.750%, Resettable Perpetual Preferred..... 1,000,000 1,080,245
Pan Pacific Industry PLC 144A 0.000%, due
04/28/07................................... 250,000 123,381
Petroliam Nasional 7.125%, due 08/15/05..... 730,000 688,885
Province of Quebec
7.500%, due 07/15/02....................... 600,000 627,858
7.500%, due 07/15/23....................... 375,000 404,340
Ras Laffan Liquefied Natural Gas Co., Ltd.,
144A
8.294%, due 03/15/14....................... 4,340,000 4,083,966
Republic of Austria, 8.625%, due 01/14/00... 600,000 628,343
Republic of Italy, 0.000%, due 03/01/99..... 600,000 558,646
Royal Bank of Scotland
7.375%, Resettable Perpetual Preferred..... 1,185,000 1,230,274
Skandinaviaka Enskilda Banken 144A
6.625%, Resettable Perpetual Preferred..... 8,195,000 8,227,780
Southern Investments UK 6.800%, due
12/01/06................................... 2,740,000 2,761,561
State Bank of New South Wales 10.375%, due
04/26/99................................... 700,000 736,313
Swedbank 144A FRN
7.664%, Resettable Perpetual Preferred..... 780,000 791,700
Swedish Export Credit, 9.875%, due
03/15/38................................... 525,000 554,108
Telstra Corp. Ltd. 6.500%, due 11/28/05..... 650,000 652,278
---------------
50,973,462
---------------
</TABLE>
17
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- ---------------
<S> <C> <C>
U.S. GOVERNMENT AGENCIES - 4.16%
Federal Home Loan Mortgage Corp.
7.000%, due 10/15/13....................... $ 409,292 $ 417,994
7.500%, due 01/15/23....................... 2,895,757 3,040,776
7.238%, due 05/01/26....................... 1,326,073 1,373,308
Federal Home Loan Mortgage Corp. Gold
9.500%, due 04/01/25....................... 2,092,789 2,235,360
Federal National Mortgage Association
7.875%, due 02/24/05....................... 5,000,000 5,534,305
6.220%, due 03/13/06....................... 1,000,000 1,009,743
8.500%, due 06/25/06....................... 5,400,074 5,604,375
6.500%, due 05/25/08....................... 2,730,594 2,725,379
5.807%, due 01/25/19....................... 2,525,000 2,493,629
6.175%, due 10/01/27....................... 5,336,081 5,329,144
Federal National Mortgage Association Strip
0.000%, due 07/01/27 principal only........ 7,694,258 5,753,897
Government National Mortgage Association
8.000%, due 12/15/22....................... 2,026,375 2,113,145
7.500%, due 12/15/22....................... 3,230,262 3,322,098
7.500%, due 12/15/23....................... 2,055,079 2,112,210
7.000%, due 08/15/24....................... 6,029,348 6,092,717
7.500%, due 11/15/24....................... 9 9
Tennessee Valley Authority 6.375%, due
06/15/05.................................... 5,000,000 5,101,975
---------------
54,260,064
---------------
U.S. GOVERNMENT OBLIGATIONS - 3.00%
U.S. Treasury Notes and Bonds
6.000%, due 06/03/99....................... 22,660,000 22,773,300
6.250%, due 08/31/02....................... 6,680,000 6,817,775
6.000%, due 02/15/26....................... 9,600,000 9,588,000
---------------
39,179,075
---------------
TOTAL U.S. BONDS............................ 248,785,280
---------------
<CAPTION>
SHARES
---------------
<S> <C> <C>
HIGH YIELD BONDS - 2.44%
Brinson High Yield Fund (b)................. 2,283,216 31,883,974
---------------
<CAPTION>
FACE
AMOUNT
---------------
<S> <C> <C>
NON-U.S. BONDS - 13.16%
AUSTRALIA - 1.02%
Government of Australia
7.000%, due 04/15/00....................... AUD 8,000,000 5,394,636
10.000%, due 10/15/07...................... 4,400,000 3,715,263
Queensland Treasury Global Notes,
8.000%, due 05/14/03....................... 5,900,000 4,221,686
---------------
13,331,585
---------------
</TABLE>
18
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
------------------ ----------------
<S> <C> <C>
CANADA - 1.55%
Government of Canada
7.250%, due 06/01/03.................... CAD 2,295,000 $ 1,736,060
6.500%, due 06/01/04.................... 5,000,000 3,676,577
8.750%, due 12/01/05.................... 1,350,000 1,131,911
4.250%, due 12/01/21 (d)................ 14,800,000 11,476,955
4.250%, due 12/01/26 (d)................ 3,000,000 2,200,192
----------------
20,221,695
----------------
DENMARK - 1.52%
Kingdom of Denmark
8.000%, due 05/15/03.................... DKK 71,600,000 11,806,461
7.000%, due 12/15/04.................... 50,400,000 8,022,899
----------------
19,829,360
----------------
FRANCE - 0.51%
Government of France (BTAN)
5.750%, due 03/12/01.................... FRF 6,500,000 1,118,916
Government of France (OAT)
9.500%, due 06/25/98.................... 6,800,000 1,159,255
6.750%, due 10/25/04.................... 9,400,000 1,714,063
7.500%, due 04/25/05.................... 5,900,000 1,121,451
8.500%, due 12/26/12.................... 7,500,000 1,614,445
----------------
6,728,130
----------------
GERMANY - 3.16%
Bundesrepublik Deutschland
7.000%, due 09/20/99.................... DEM 5,900,000 3,432,835
8.500%, due 08/21/00.................... 15,050,000 9,206,104
7.750%, due 02/21/00.................... 12,000,000 7,137,534
6.500%, due 07/15/03.................... 3,900,000 2,330,543
6.000%, due 09/15/03.................... 7,400,000 4,336,867
6.000%, due 07/04/07.................... 2,300,000 1,338,991
6.000%, due 06/20/16.................... 3,500,000 2,020,271
6.250%, due 01/04/24.................... 1,160,000 677,833
Treuhandanstalt
6.250%, due 03/04/04.................... 18,200,000 10,771,614
----------------
41,252,592
----------------
ITALY - 0.74%
Republic of Italy (BTP)
9.500%, due 02/01/01.................... ITL 2,000,000,000 1,273,154
11.500%, due 03/01/03................... 6,000,000,000 4,322,050
9.000%, due 10/01/03.................... 6,000,000,000 4,002,715
----------------
9,597,919
----------------
</TABLE>
19
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
------------------ ---------------
<S> <C> <C>
NETHERLANDS - 1.24%
Government of Netherlands
7.500%, due 06/15/99.................... NLG 1,400,000 $ 722,133
9.000%, due 05/15/00.................... 8,300,000 4,505,574
8.250%, due 06/15/02.................... 5,500,000 3,073,793
5.750%, due 01/15/04.................... 2,600,000 1,326,740
7.250%, due 10/01/04.................... 9,500,000 5,234,302
7.500%, due 01/15/23.................... 2,300,000 1,375,031
---------------
16,237,573
---------------
SPAIN - 0.94%
Government of Spain
6.750%, due 04/15/00.................... ESP 600,000,000 4,115,822
7.900%, due 02/28/02.................... 100,000,000 727,590
5.250%, due 01/31/03.................... 400,000,000 2,640,336
8.000%, due 05/30/04.................... 300,000,000 2,250,689
10.000%, due 02/28/05................... 300,000,000 2,496,172
---------------
12,230,609
---------------
SWEDEN - 0.35%
Government of Sweden
13.000%, due 06/15/01................... SEK 12,000,000 1,857,530
6.000%, due 02/09/05.................... 21,000,000 2,665,745
---------------
4,523,275
---------------
UNITED KINGDOM - 2.13%
UK Treasury
7.000%, due 11/06/01.................... GBP 2,370,000 3,946,546
8.000%, due 06/10/03.................... 6,685,000 11,715,189
9.000%, due 10/13/08.................... 4,535,000 8,990,030
8.000%, due 09/27/13.................... 1,620,000 3,100,156
---------------
27,751,921
---------------
TOTAL NON-U.S. BONDS..................... 171,704,659
---------------
<CAPTION>
SHARES
------------------
<S> <C> <C>
EMERGING MARKETS BONDS - 5.06%
Brinson Emerging Markets Debt Fund (b)... 3,260,317 65,948,065
---------------
TOTAL BONDS (COST $505,561,309).......... 518,321,978
---------------
<CAPTION>
FACE
AMOUNT
------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 33.25%
U.S. GOVERNMENT OBLIGATIONS - 0.53%
U.S. Treasury Bill
4.890%, due 05/28/98.................... $ 7,100,000 6,949,118
---------------
CERTIFICATES OF DEPOSIT - 0.92%
Canadian Imperial Bank, 5.940%, due
10/23/98................................ 7,000,000 6,996,756
Societe Generale, 6.000%, due 10/20/98... 5,000,000 4,996,177
---------------
11,992,933
---------------
</TABLE>
20
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- ---------------
<S> <C> <C>
COMMERCIAL PAPER - 31.80%
Bausch & Lomb Inc.
8.000%, due 01/02/98...................... $ 59,306,000 $ 59,292,822
6.750%, due 01/05/98...................... 10,000,000 9,992,500
Case Credit Corp.
6.000%, due 01/23/98...................... 1,500,000 1,494,500
6.030%, due 03/10/98...................... 2,000,000 1,978,299
6.020%, due 03/12/98...................... 1,500,000 1,483,239
ConAgra Inc.
6.850%, due 01/02/98...................... 20,000,000 19,996,194
6.520%, due 01/02/98...................... 19,515,000 19,511,466
5.900%, due 01/23/98...................... 15,000,000 14,945,916
CSX Corp. 5.790%, due 01/12/98............. 5,000,000 4,991,155
Enron Corp. 5.780%, due 01/05/98........... 3,200,000 3,197,945
FMC Corp. 7.000%, due 01/02/98............. 47,040,000 47,030,851
GTE Corp. 6.200%, due 01/02/98............. 10,000,000 9,998,278
ITT Industries Inc. 7.500%, due 01/02/98... 50,000,000 49,989,585
Marriot Corp.
5.820%, due 01/05/98...................... 5,000,000 4,996,766
5.800%, due 01/08/98...................... 5,000,000 4,994,362
5.970%, due 01/28/98...................... 5,000,000 4,977,613
6.050%, due 02/09/98...................... 1,500,000 1,490,169
Nabisco, Inc., 6.100%, due 01/07/98........ 10,000,000 9,989,833
Occidental Petroleum Corp., 6.900%, due
01/12/98................................... 15,000,000 14,968,375
Praxair, Inc., 5.750%, due 01/05/98........ 10,000,000 9,993,611
Rite Aid Corp., 5.850%, due 01/20/98....... 10,000,000 9,969,125
Safeway, Inc.
6.070%, due 01/08/98...................... 10,000,000 9,988,197
5.920%, due 01/22/98...................... 5,000,000 4,982,734
Solutia, Inc., 7.000%, due 01/02/98........ 12,085,000 12,082,650
Sonat, Inc. 6.500%, due 01/02/98........... 25,000,000 24,995,485
Tenneco, Inc. 6.250%, due 01/22/98......... 2,505,000 2,495,867
The Limited, Inc. 6.200%, due 01/02/98..... 25,000,000 24,995,695
Ultramar Diamond Shamrock Corp.
6.020%, due 01/05/98...................... 10,000,000 9,993,311
6.000%, due 01/06/98...................... 10,000,000 9,991,667
U.S. West Capital Funding Corp. 6.100%, due
01/23/98................................... 1,000,000 996,272
Whirlpool Corp. 6.750%, due 01/05/98....... 9,000,000 8,993,250
---------------
414,797,732
---------------
TOTAL SHORT-TERM INVESTMENTS (COST
$433,739,480).............................. 433,739,783
---------------
TOTAL INVESTMENTS (COST $1,569,901,748) -
127.47%................................... 1,662,898,173
---------------
LIABILITIES, LESS CASH AND OTHER ASSETS -
(27.47%).................................. (358,365,864)
---------------
NET ASSETS - 100%.......................... $ 1,304,532,309
===============
</TABLE>
See accompanying notes to schedule of investments.
21
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $1,569,901,748; and
net unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation............ $150,827,839
Gross unrealized depreciation............ (57,831,414)
-------------
Net unrealized appreciation........... $ 92,996,425
=============
</TABLE>
(b) Non-income producing security
(c) Denominated in U.S. dollars.
(d) Linked to Canada's retail price index. Reset semi-annually
FRN: Floating rate note--The rate disclosed is that in effect at December 31,
1997.
MTN: Medium term note
PO: Principal Only--Security does not pay interest.
144A: Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December
31, 1997, the value of these securities amounted to $21,244,908 or
1.63% of net assets.
Resettable Perpetual Preferred: A bond with either no maturity date or a
maturity date that is so far in the future that the bond will pay
interest indefinitely. The issuer generally retains the right to call
such a bond.
FORWARD FOREIGN CURRENCY CONTRACTS (NOTE 5)
The Brinson Global Securities Fund had the following open forward currency
contracts as of December 31, 1997:
<TABLE>
<CAPTION>
SETTLEMENT LOCAL CURRENT UNREALIZED
DATE CURRENCY VALUE GAIN (LOSS)
---------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
FORWARD FOREIGN CURRENCY
BUY CONTRACTS:
Australian Dollar....... 02/05/98 27,900,000 $ 18,193,912 $ (1,800,398)
Belgian Franc........... 02/05/98 550,000,000 14,874,755 (554,906)
British Pound........... 02/05/98 26,800,000 44,021,025 (504,430)
Canadian Dollar ........ 02/05/98 39,900,000 27,912,248 (192,642)
Danish Krone............ 02/05/98 111,200,000 16,269,536 (345,695)
French Franc............ 02/05/98 102,900,000 17,140,030 152,254
German Mark............. 02/05/98 56,200,000 31,319,836 (471,919)
Hong Kong Dollar........ 02/05/98 14,500,000 1,866,452 10,497
Italian Lira............ 02/05/98 26,000,000,000 14,702,223 (42,857)
Japanese Yen............ 02/05/98 13,090,000,000 101,200,646 (14,108,831)
Netherlands Guilder..... 02/05/98 41,500,000 20,515,508 (358,767)
Spanish Peseta.......... 02/05/98 970,000,000 6,370,012 (92,346)
Swiss Franc............. 02/05/98 26,300,000 18,105,840 179,074
FORWARD FOREIGN CURRENCY
SALE CONTRACTS:
Australian Dollar....... 02/05/98 58,100,000 37,887,680 3,737,604
Belgian Franc........... 02/05/98 550,000,000 14,874,755 (162,185)
British Pound........... 02/05/98 66,100,000 108,409,987 666,372
Canadian Dollar......... 02/05/98 58,900,000 41,203,794 1,433,103
Danish Krone............ 02/05/98 248,600,000 36,372,362 (259,638)
French Franc............ 02/05/98 34,400,000 5,730,000 18,375
German Mark............. 02/05/98 121,000,000 67,432,386 (337,237)
Hong Kong Dollar........ 02/05/98 37,500,000 4,827,031 (26,724)
Italian Lira............ 02/05/98 26,000,000,000 14,702,223 (172,619)
Japanese Yen............ 02/05/98 9,900,000,000 76,538,304 7,453,959
Netherlands Guilder..... 02/05/98 65,400,000 32,330,463 83,443
Spanish Peseta.......... 02/05/98 2,453,400,000 16,111,534 519,161
Swiss Franc............. 02/05/98 10,000,000 6,884,350 47,098
-------------
Total................... $ (5,130,254)
=============
</TABLE>
22
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
December 31, 1997
NOTES TO SCHEDULE OF INVESTMENTS
FUTURES CONTRACTS (NOTE 6)
The Brinson Global Securities Fund had the following open futures contracts
as of December 31, 1997:
<TABLE>
<CAPTION>
SETTLEMENT COST/ CURRENT UNREALIZED
DATE PROCEEDS VALUE GAIN (LOSS)
---------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
U.S. INTEREST RATE FUTURES
BUY CONTRACTS
5 year U.S. Treasury Notes,
964 contracts............. March 1998 $104,328,621 $104,714,500 $ 385,879
10 year U.S. Treasury
Notes,
49 contracts.............. March 1998 5,459,274 5,495,656 36,382
30 year U.S. Treasury
Bonds,
141 contracts............. March 1998 16,877,776 16,986,094 108,318
NON-U.S. INTEREST RATE
FUTURES
BUY CONTRACTS
10 year Canadian Bond, 60
contracts................. March 1998 5,170,786 5,181,305 10,519
10 year French Bond, 22
contracts................. March 1998 1,884,983 1,869,538 (15,445)
10 year German Bond, 153
contracts................. March 1998 22,670,572 22,475,332 (195,240)
10 year Italian Bond, 22
contracts................. March 1998 2,949,947 2,926,601 (23,346)
10 year Spanish Bond, 44
contracts................. March 1998 3,125,768 3,098,683 (27,085)
15 year United Kingdom
Gilt, 78 contracts........ March 1998 7,948,281 7,893,607 (54,674)
U.S. INDEX FUTURES SALES
CONTRACTS
S&P 500 Index, 546 con-
tracts.................... March 1998 133,169,903 133,647,150 (477,247)
----------
Total.................... $(251,939)
==========
</TABLE>
The segregated cash and market value of investments pledged to cover margin
requirements for the open futures positions at December 31, 1997 were
$3,000,000 and $6,949,118, respectively.
See accompanying notes to financial statements.
23
<PAGE>
BRINSON GLOBAL SECURITIES FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Note 1):
Unaffiliated issuers (Cost $1,400,862,203)...................... $1,483,664,007
Affiliated issuers (Cost $169,039,545).......................... 179,234,166
Foreign currency, at value (Cost $11,920,469).................... 11,940,805
Cash............................................................. 5,233,760
Receivables:
Investment securities sold...................................... 44,930,869
Dividends....................................................... 1,465,189
Interest........................................................ 9,078,924
Fund shares sold................................................ 1,216,855
Variation margin (Note 6)....................................... 255,594
Other assets..................................................... 104,212
---------------
TOTAL ASSETS.................................................. 1,737,124,381
---------------
LIABILITIES:
Payables:
Investment securities purchased................................. 21,721,969
Securities loaned (Note 7)...................................... 155,096,060
Fund shares redeemed............................................ 250,573,690
Net unrealized depreciation on forward foreign currency con-
tracts.......................................................... 5,130,254
Other liabilities................................................ 70,099
---------------
TOTAL LIABILITIES............................................. 432,592,072
---------------
NET ASSETS:
Applicable to 86,647,824 shares; no par value, unlimited shares
authorized...................................................... $1,304,532,309
===============
Net asset value, offering price and redemption price per share
($1,304,532,309 / 86,647,824 shares)............................ $ 15.0556
===============
NET ASSETS CONSIST OF:
Paid in capital.................................................. $ 777,735,632
Accumulated net investment income................................ 151,083,373
Accumulated net realized gain.................................... 288,280,829
Net unrealized appreciation...................................... 87,432,475
---------------
NET ASSETS.................................................... $1,304,532,309
===============
</TABLE>
See accompanying notes to financial statements.
24
<PAGE>
BRINSON GLOBAL SECURITIES FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (net of $88,598 for foreign taxes withheld, including
securities lending income of $217,424)........................ $ 49,725,484
Dividends (net of $1,092,360 for foreign taxes withheld)....... 15,952,439
-------------
TOTAL INCOME................................................ 65,677,923
-------------
EXPENSES:
Custodian...................................................... 404,345
Administration................................................. 203,678
Professional................................................... 113,247
Accounting..................................................... 94,420
Other.......................................................... 54,945
-------------
TOTAL EXPENSES.............................................. 870,635
-------------
NET INVESTMENT INCOME....................................... 64,807,288
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................... 155,868,380
Futures contracts............................................. (16,857,667)
Foreign currency transactions................................. 28,597,551
-------------
Net realized gain............................................ 167,608,264
-------------
Change in net unrealized appreciation or depreciation on:
Investments and foreign currency.............................. (24,383,542)
Futures contracts............................................. (253,411)
Forward contracts............................................. (12,584,283)
Translation of other assets and liabilities denominated in
foreign currency............................................. (147,197)
-------------
Change in net unrealized appreciation or depreciation........ (37,368,433)
-------------
Net realized and unrealized gain............................... 130,239,831
-------------
Net increase in net assets resulting from operations........... $195,047,119
=============
</TABLE>
See accompanying notes to financial statements.
25
<PAGE>
BRINSON GLOBAL SECURITIES FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income................... $ 64,807,288 $ 55,158,091
Net realized gain....................... 167,608,264 77,363,628
Change in net unrealized appreciation or
depreciation........................... (37,368,433) 53,605,928
--------------- ---------------
Net increase in net assets resulting
from operations........................ 195,047,119 186,127,647
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................. 350,379,894 866,421,331
Shares redeemed......................... (999,404,170) (261,593,988)
--------------- ---------------
Net increase (decrease) in net assets
resulting from capital share
transactions (a)....................... (649,024,276) 604,827,343
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.............................. (453,977,157) 790,954,990
NET ASSETS:
Beginning of year....................... 1,758,509,466 967,554,476
--------------- ---------------
End of year (including accumulated net
investment income of $151,083,373 and
$86,276,085, respectively)............. $1,304,532,309 $1,758,509,466
=============== ===============
(a) A summary of capital share transactions follows:
<CAPTION>
SHARES SHARES
--------------- ---------------
<S> <C> <C>
Shares sold............................ 24,152,140 69,041,410
Shares redeemed........................ (67,968,919) (21,146,225)
--------------- ---------------
Net increase (decrease) in shares
outstanding.......................... (43,816,779) 47,895,185
=============== ===============
</TABLE>
See accompanying notes to the financial statements.
26
<PAGE>
BRINSON GLOBAL SECURITIES FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------- PERIOD ENDED
1997 1996 DECEMBER 31, 1995*
----------- ----------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of
period...................... $13.4788 $11.7181 $10.0000
----------- ----------- ----------
Income from investment opera-
tions:
Net investment income....... 0.5456*** 0.2844 0.3769
Net realized and unrealized
gain....................... 1.0312 1.4763 1.3412
----------- ----------- ----------
Total income from invest-
ment operations........... 1.5768 1.7607 1.7181
----------- ----------- ----------
Net asset value, end of peri-
od.......................... $15.0556 $13.4788 $11.7181
=========== =========== ==========
Total return (non-
annualized)................. 11.70% 15.03% 17.18%
Ratios/Supplemental data
Net assets, end of period
(in 000s).................. $ 1,304,532 $ 1,758,509 $967,554
Ratio of expenses to average
net assets:
Before expense reimburse-
ment...................... 0.05% 0.05% 0.14%**
After expense reimburse-
ment...................... N/A N/A 0.05%**
Ratio of net investment in-
come to average net assets:
Before expense reimburse-
ment...................... 3.72% 4.36% 4.95%**
After expense reimburse-
ment...................... N/A N/A 5.04%**
Portfolio turnover rate..... 138% 155% 158%
Average commission rate paid
per share.................. $0.0341 $0.0298 $0.0307
</TABLE>
* The Fund commenced operations April 28, 1995.
** Annualized
*** The net investment income per share data was determined by using average
shares outstanding during the period.
See accompanying notes to financial statements.
27
<PAGE>
BRINSON GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
The Brinson Global Equity Fund is actively managed, providing a fully
integrated approach to the primary equity markets across the world. Market
selection and currency strategies are managed within a global asset allocation
framework. Industry strategies and individual security selections are based on
the fundamental research of our analytical teams in our offices worldwide.
The Brinson Global Equity Fund has provided a return of 0.55% since its
performance inception on August 31, 1997, compared to the 2.89% return for the
benchmark MSCI World Equity (Free) Index.
For 1997, currency allocation made an important positive contribution to Fund
performance. Market allocation strategies, notable for a U.S. equity market
underweight, detracted from performance. Security selection also reduced
performance; with outstanding stock selection in Japan more than offset by less
successful results in the U.S.
Global equity markets in aggregate were strong in 1997. Returns varied
considerably, with double-digit rises in Europe and North America contrasting
sharply with very weak markets in the Pacific region. The MSCI U.S. component
returned 34.1% and was one of the better performers, but not the best during
1997. Still, the underweight of the U.S. market held down returns. Nine markets
in the global equity index outperformed the U.S. market, led by Switzerland and
Denmark, gaining U.S. dollar-hedged returns of 63.5% and 59.5%, respectively.
The performance of the MSCI World Equity (Free) Index was muted by the weakness
of Japan, Southeast Asia, New Zealand and Australia. The worst performing
market in 1997 was Malaysia, which declined 52.1% in U.S. dollar-hedged terms.
Currency strategies contributed to the performance of the Fund relative to the
MSCI World Equity (Free) benchmark. In October, a small underweight of the yen
was instated, while increasing the size of the U.S. dollar overweight.
Japan stock selection made a positive contribution, benefiting from overweights
of blue chip multinationals and other defensive securities, while avoiding all
but the highest quality banks and financials. The U.S. equity portion of the
Fund was hurt by its underexposure to large capitalization and consumer
products issues, as companies with well-known brand names and stable cash flows
outperformed.
28
<PAGE>
BRINSON GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
8/31/97*
TO
12/31/97
- ----------------------------------------
<S> <C>
Brinson Global Equity Fund 0.55%
- ----------------------------------------
MSCI World Equity (Free) Index 2.89%
- ----------------------------------------
</TABLE>
* Performance inception date of the Brinson Global Equity Fund
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $100,000
This chart shows the growth in the value of an investment in the Brinson Global
Equity Fund and the MSCI World Equity (Free) Index if you had invested $100,000
on August 31, 1997. Past performance is no guarantee of future results. Share
price and return will vary with market conditions; investors may realize a gain
or loss upon redemption.
BRINSON GLOBAL EQUITY FUNDVS. MSCI WORLD EQUITY (FREE) INDEX
12783B-Global_Eq-dg
<TABLE>
<CAPTION>
MSC1 World Equity
Brinson Global Equity (Free) Index
--------------------- ----------------
<S> <C> <C>
8/29/97 100,000 100,000
9/30/97 105,100 105,437
10/31/97 98,566 99,902
11/30/97 98,689 101,649
12/31/97 100,545 102,892
</TABLE>
LOGO
Fund returns are net of all fees and costs, while the Index returns are based
solely on market returns without deduction for fees or transaction costs for
rebalancing.
29
<PAGE>
BRINSON GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
TOP TEN U.S. EQUITY HOLDINGS
As of December 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- -----------------------------------------
<S> <C>
1. Lockheed Martin Corp. 1.72%
2. Xerox Corp. 1.67
3. Philip Morris Companies,
Inc. 1.57
4. CIGNA Corp. 1.40
5. Aon Corp. 1.38
6. Schering Plough Corp. 1.22
7. Burlington Northern Santa
Fe Corp. 1.19
8. Federal Express Corp. 1.17
9. Goodyear Tire & Rubber
Co. 1.14
10. Automatic Data Process-
ing, Inc. 1.00
- -----------------------------------------
</TABLE>
TOP TEN NON-U.S. EQUITY HOLDINGS
As of December 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- ---------------------------------------------------------------------------
<S> <C>
1. Glaxo Wellcome PLC 1.10%
2. Lloyds TSB Group PLC 0.91
3. Novartis AG (Reg.) 0.86
4. Royal Dutch Petroleum Co. 0.85
5. Telecom Corp. of New Zealand Ltd. 0.81
6. B.A.T. Industries PLC 0.79
7. Allianz AG 0.68
8. British Petroleum Co. PLC 0.68
9. British Telecommunications PLC 0.54
10. Muenchener Rueckver AG (Reg.) 0.54
- ---------------------------------------------------------------------------
</TABLE>
30
<PAGE>
BRINSON GLOBAL EQUITY FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of December 31, 1997
<TABLE>
<S> <C>
U.S. EQUITIES
Basic Industries
Chemicals...................... 0.84%
Housing/Paper.................. 2.04
Metals......................... 0.35
------
3.23
Capital Investments
Capital Goods.................. 2.83
Technology..................... 3.46
------
6.29
Consumer
Autos/Durables................. 1.57
Discretionary.................. 1.47
Health: Drugs.................. 3.25
Health: Non-Drugs.............. 1.72
Non-Durables................... 3.89
Retail/Apparel................. 2.05
------
13.95
Energy.......................... 1.62
Financial
Banks.......................... 3.15
Non-Banks...................... 2.80
------
5.95
Services/Misc................... 3.80
Transportation.................. 2.46
Utilities
Electric....................... 2.47
Telephone...................... 0.43
------
2.90
------
Total U.S. Equities........... 40.20*
------
NON-U.S. EQUITIES
Aerospace & Military............ 0.12
Airlines........................ 0.22
Appliances & Household.......... 0.96
Autos/Durables.................. 1.82
Banking......................... 6.83
Beverages & Tobacco............. 1.46
Broadcasting & Publishing....... 1.02
Building Materials.............. 0.81
Business & Public Service....... 1.88
Chemicals....................... 1.59
</TABLE>
<TABLE>
<S> <C>
Construction.................... 0.46%
Data Processing................. 0.40
Electric Components............. 0.59
Electronics..................... 2.06
Energy.......................... 4.89
Financial Services.............. 1.29
Food & House Products........... 2.03
Forest Products................. 0.73
Gold Mining..................... 0.04
Health: Drugs................... 0.92
Health: Non-Drugs............... 3.21
Industrial Components........... 0.74
Insurance....................... 3.74
Leisure & Tourism............... 0.32
Machinery & Engineering......... 0.10
Merchandising................... 2.60
Metals-Steel.................... 0.89
Miscellaneous Materials......... 0.22
Miscellaneous Services.......... 0.06
Multi-Industry.................. 3.04
Non-Ferrous Metals.............. 1.07
Real Estate..................... 0.63
Recreation...................... 0.22
Retail & Apparel................ 0.36
Shipping........................ 0.03
Telecommunications.............. 5.04
Textiles & Apparel.............. 0.10
Transportation.................. 0.54
Utilities....................... 2.57
Wholesale & International
Trade.......................... 0.31
------
Total Non-U.S. Equities....... 55.91
------
SHORT-TERM INVESTMENTS.......... 3.83
------
TOTAL INVESTMENTS............. 99.94*
CASH AND OTHER ASSETS,
LESS LIABILITIES................ 0.06
------
NET ASSETS...................... 100.00%
======
</TABLE>
* The Fund held a long position in stock index futures on December 31, 1997
which increased U.S. Equity exposure from 40.20% to 42.29%. This adjustment
results in a decrease in the Fund's exposure to Short- Term Investments from
3.83% to 1.74%.
31
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
EQUITIES - 96.11%
U.S. EQUITIES - 40.20%
Allergan, Inc. .................................... 2,900 $ 97,331
Alza Corp. (b)..................................... 2,900 92,256
American Home Products Corp. ...................... 2,300 175,950
Aon Corp. ......................................... 5,500 322,437
Automatic Data Processing, Inc. ................... 3,800 233,225
Baxter International, Inc. ........................ 3,700 186,619
Beckman Instruments, Inc. ......................... 1,000 40,000
Biogen, Inc. (b)................................... 1,100 40,013
Birmingham Steel Corp. ............................ 1,200 18,900
Boston Technology, Inc. (b)........................ 1,100 27,638
Briggs & Stratton Corp. ........................... 300 14,569
Burlington Northern Santa Fe Corp. ................ 3,000 278,813
Champion Enterprises, Inc. (b)..................... 1,800 37,013
Chase Manhattan Corp. ............................. 1,500 164,250
CIGNA Corp. ....................................... 1,900 328,819
Circuit City Stores - Circuit City Group........... 4,200 149,363
Citicorp........................................... 1,400 177,013
CMS Energy Corp. .................................. 3,700 163,031
Comerica, Inc. .................................... 800 72,200
Commscope, Inc. (b)................................ 2,200 29,563
Comverse Technology, Inc. (b)...................... 600 23,400
Corning, Inc. ..................................... 6,100 226,463
Covance, Inc. (b).................................. 1,400 27,825
CPC International, Inc. ........................... 1,300 140,400
Crown Cork & Seal Co., Inc. ....................... 1,400 70,175
CVS Corp. ......................................... 1,800 115,313
Dial Corp. ........................................ 1,500 31,219
Eastman Chemical Co. .............................. 1,600 95,300
Echlin, Inc. ...................................... 800 28,950
EMC Corp. (b)...................................... 8,200 224,988
Enron Corp. ....................................... 3,900 162,094
Entergy Corp. ..................................... 7,500 224,531
Federal Express Corp. (b).......................... 4,500 274,781
First American Corp. of Tennessee.................. 700 34,825
First Data Corp. .................................. 7,000 204,750
First Security Corp. .............................. 900 37,688
FirstEnergy Corp. ................................. 2,205 63,945
Fleetwood Enterprises, Inc. ....................... 900 38,194
Food Lion Inc., Class A............................ 5,200 43,875
Forest Laboratories, Inc. (b)...................... 1,300 64,106
Fort James Corp. .................................. 3,400 130,050
Gannett Co., Inc. ................................. 2,800 173,075
General Semiconductor, Inc. (b).................... 1,500 17,344
Genzyme Corp. ..................................... 1,200 33,300
Geon Co. .......................................... 800 18,700
</TABLE>
32
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
U.S. EQUITIES - (CONTINUED)
Goodyear Tire & Rubber Co. ........................ 4,200 $ 267,225
Harnischfeger Industries, Inc. .................... 2,200 77,688
Health Care and Retirement Corp. (b)............... 1,300 52,325
Hibernia Corp. .................................... 1,600 30,100
Informix Corp. (b)................................. 1,500 7,125
Interpublic Group of Companies, Inc. .............. 1,900 94,644
Kimberly Clark Corp. .............................. 3,200 157,800
Lear Corp. (b)..................................... 1,200 57,000
Lockheed Martin Corp. ............................. 4,100 403,850
Lyondell Petrochemical Co. ........................ 3,100 82,150
Manor Care, Inc. .................................. 2,200 77,000
Martin Marietta Materials, Inc. ................... 800 29,250
Masco Corp. ....................................... 3,300 167,888
Nabisco Holdings Corp. ............................ 2,900 140,469
National Service Industries, Inc. ................. 600 29,738
NextLevel Systems, Inc. (b)........................ 6,500 116,188
Nextel Communications, Inc. (b).................... 4,000 104,000
Old Republic International Corp. .................. 700 26,031
Peco Energy Co. ................................... 8,500 206,125
Pentair, Inc. ..................................... 1,500 53,906
Pharmacia & UpJohn, Inc. .......................... 1,500 54,938
Philip Morris Companies, Inc. ..................... 8,100 367,031
Raytheon Co., Class B.............................. 3,400 171,700
Regions Financial Corp. ........................... 700 29,531
Reynolds & Reynolds Co. ........................... 2,800 51,625
Schering Plough Corp. ............................. 4,600 285,775
Seagate Technology, Inc. (b)....................... 2,600 50,050
Timken Co. ........................................ 1,000 34,375
Tyson Foods, Inc., Class A......................... 5,800 118,900
Ultramar Diamond Shamrock Corp. ................... 3,300 105,188
US Bancorp......................................... 1,700 190,294
Vencor, Inc. (b)................................... 2,600 63,538
Viad Corp. ........................................ 2,800 54,075
Westvaco Corp. .................................... 700 22,006
Witco Corp. ....................................... 500 20,406
Xerox Corp. ....................................... 5,300 391,206
York International Corp. .......................... 1,800 71,213
------------
TOTAL U.S. EQUITIES................................ 9,416,647
------------
NON-U.S. EQUITIES - 55.91%
AUSTRALIA - 2.98%
Amcor Ltd. ........................................ 2,800 12,315
Boral Ltd. ........................................ 7,200 18,203
Brambles Industries Ltd. .......................... 2,000 39,682
Broken Hill Proprietary Co., Ltd. ................. 11,400 105,853
Coca-Cola Amatil Ltd. ............................. 1,800 13,448
</TABLE>
33
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
AUSTRALIA - (CONTINUED)
CSR Ltd. .......................................... 5,000 $ 16,942
David Jones Ltd. .................................. 17,800 20,065
Lend Lease Corp., Ltd. ............................ 1,500 29,322
M.I.M. Holdings Ltd. .............................. 10,794 6,611
Mayne Nickless Ltd. ............................... 2,500 13,211
National Australia Bank Ltd. ...................... 7,400 103,332
News Corp. Ltd. ................................... 15,600 86,097
News Corp. Ltd., Preferred......................... 3,300 16,329
Pacific Dunlop Ltd. ............................... 8,400 17,789
Qantas Airways Ltd. ............................... 8,900 15,751
Rio Tinto Ltd. .................................... 3,900 45,496
Santos Ltd. ....................................... 2,000 8,236
Telstra Corp., Ltd. (b)............................ 4,000 8,445
Westpac Banking Corp., Ltd. ....................... 13,000 83,150
WMC Ltd. .......................................... 6,900 24,054
Woolworth's Ltd. .................................. 4,000 13,371
------------
697,702
------------
BELGIUM - 2.18%
Delhaize-Le Lion S.A. ............................. 950 48,204
Electrabel S.A. ................................... 410 94,834
Fortis AG Strip (b)................................ 350 73,021
Generale de Banque S.A. ........................... 80 34,817
Groupe Bruxelles Lambert S.A. ..................... 180 26,040
Kredietbank NV..................................... 90 37,772
Petrofina S.A. .................................... 180 66,435
Societe Generale de Belgique....................... 290 26,534
Solvay S.A., Class A............................... 610 38,361
Tractebel.......................................... 500 43,589
Union Miniere Group S.A. .......................... 300 20,809
------------
510,416
------------
CANADA - 2.14%
Agrium, Inc. ...................................... 1,200 14,590
Alcan Aluminum Ltd. ............................... 1,000 27,531
Bank of Montreal................................... 700 30,987
Barrick Gold Corp. ................................ 700 13,035
Canadian National Railway Co. ..................... 700 32,919
Canadian Pacific Ltd. ............................. 1,900 51,114
Hudson's Bay Co. .................................. 800 17,804
Imasco Ltd. ....................................... 200 7,058
Imperial Oil Ltd. ................................. 800 51,429
Magna International, Inc., Class A................. 200 12,522
Moore Corp., Ltd. ................................. 900 13,521
Newbridge Networks Corp. (b)....................... 300 10,492
Noranda, Inc. ..................................... 1,100 18,908
Northern Telecom Ltd. ............................. 200 17,770
</TABLE>
34
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
CANADA - (CONTINUED)
NOVA Corp. ........................................ 2,500 $ 23,758
Potash Corp. of Saskatchewan, Inc. ................ 300 24,956
Royal Bank of Canada............................... 800 42,261
Seagram Co., Ltd. ................................. 500 16,159
TELUS Corp. ....................................... 1,200 26,581
TransCanada Pipelines Ltd. ........................ 1,500 33,436
Westcoast Energy, Inc. ............................ 600 13,836
------------
500,667
------------
FINLAND - 0.49%
Cultor Oyj......................................... 200 10,871
Merita Ltd., Class A............................... 2,400 13,133
Metsa-Serla Oyj, Class B........................... 600 4,683
Nokia Oyj, Class A Preferred....................... 700 49,746
Outokumpu Oyj, Class A............................. 500 6,106
Sampo Insurance Co., Ltd., Class A................. 400 13,001
UPM-Kymmene Corp. ................................. 800 16,013
------------
113,553
------------
FRANCE - 3.61%
Accor S.A. ........................................ 169 31,481
Alcatel Alsthom.................................... 265 33,729
AXA-UAP............................................ 481 37,196
AXA-UAP Rights (b)................................. 431 422
Banque Nationale de Paris.......................... 470 24,992
Cie Bancaire S.A. ................................. 12 1,945
Cie de Saint Gobain................................ 372 52,869
Cie Financiere de Paribas.......................... 300 26,080
Cie Generale Des Eaux.............................. 393 54,839
Dexia France....................................... 226 26,155
Elf Aquitaine S.A. ................................ 488 56,724
France Telecom S.A. (b)............................ 1,000 36,287
Groupe Danone...................................... 150 26,803
Lafarge S.A. ...................................... 225 14,769
Lagardere S.C.A. .................................. 750 24,809
Lyonnaise des Eaux S.A. ........................... 350 38,747
Michelin, Class B.................................. 667 33,594
Pechiney S.A., Class A............................. 592 23,371
Peugeot S.A. ...................................... 398 50,150
Pinault-Printemps-Redoute S.A. .................... 100 53,374
Rhone-Poulenc, Class A............................. 821 36,781
SEITA.............................................. 850 30,519
Societe Generale................................... 368 50,125
Thomson CSF........................................ 775 24,438
Total S.A., Class B................................ 440 47,878
Usinor Sacilor..................................... 500 7,222
------------
845,299
------------
</TABLE>
35
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
GERMANY - 6.36%
Allianz AG Holding................................. 620 $ 159,991
BASF AG............................................ 800 28,563
Bayer AG........................................... 2,110 78,328
Bayerische Motoren Werke AG........................ 70 52,361
Commerzbank AG..................................... 1,700 66,181
Continental AG..................................... 1,550 34,912
Daimler-Benz AG.................................... 800 56,504
Deutsche Bank AG................................... 1,650 115,438
Deutsche Telekom AG................................ 6,240 115,562
Henkel KGaA-Vorzug AG, Preferred................... 640 40,042
Hochtief AG........................................ 440 18,108
Hoechst AG......................................... 650 22,521
M.A.N. AG.......................................... 110 31,781
Mannesmann AG...................................... 120 60,264
Metro AG........................................... 1,270 45,062
Muenchener Rueckver AG............................. 330 125,532
Preussag AG........................................ 170 52,283
RWE AG............................................. 1,180 63,328
Schering AG........................................ 790 76,228
Siemens AG......................................... 1,430 86,288
VEBA AG............................................ 1,540 104,916
Volkswagen AG...................................... 100 55,892
------------
1,490,085
------------
HONG KONG - 0.68%
Cheung Kong Holdings, Ltd. ........................ 4,000 26,199
China Light & Power Co., Ltd. ..................... 2,500 13,874
Citic Pacific Ltd. ................................ 2,000 7,950
Hang Seng Bank Ltd. ............................... 2,000 19,294
Hong Kong and China Gas Co., Ltd. ................. 12,000 23,230
Hong Kong Telecommunications Ltd. ................. 7,784 16,023
Hutchison Whampoa Ltd. ............................ 5,000 31,361
Sun Hung Kai Properties Ltd. ...................... 2,000 13,938
Swire Pacific Ltd., Class A........................ 1,500 8,227
------------
160,096
------------
ITALY - 2.80%
Aeroporti di Roma Spa (b).......................... 1,000 10,379
Assicurazioni Generali............................. 2,700 66,353
Banca Commerciale Italiana......................... 7,000 24,349
Credito Italiano Spa............................... 12,000 37,024
Danieli & Co. Savings (Risp)....................... 5,000 17,986
Edison Spa......................................... 2,000 12,104
ENI ADR (c)........................................ 600 34,237
ENI Spa............................................ 12,000 68,075
Fiat Spa-Priv Preferred............................ 21,000 32,069
INA-Istituto Nazionale delle Assicurazioni......... 12,000 24,332
</TABLE>
36
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
ITALY - (CONTINUED)
Instituto Mobiliare Italiano Spa................... 3,000 $ 35,632
Italgas Spa........................................ 4,000 16,515
La Rinascente Spa.................................. 4,000 29,863
La Rinascente Spa RNC.............................. 4,000 14,932
Mediobanca Spa..................................... 1,000 7,856
Montedison Spa..................................... 40,000 35,949
SAI - Savings (Risp)............................... 3,000 13,235
Telecom Italia Mobile Spa.......................... 8,000 36,945
Telecom Italia Mobile Spa RNC...................... 19,000 54,054
Telecom Italia Spa................................. 4,000 25,565
Telecom Italia Spa RNC............................. 13,000 57,351
------------
654,805
------------
JAPAN - 7.72%
Amada Co., Ltd. ................................... 4,000 14,920
Bank of Tokyo-Mitsubushi Ltd. ..................... 3,000 41,530
Canon, Inc. ....................................... 3,000 70,140
Canon Sales Co., Inc. ............................. 1,000 11,459
Citizen Watch Co., Ltd. ........................... 3,000 20,188
Dai Nippon Printing Co., Ltd. ..................... 3,000 56,528
Daiichi Pharmaceutical Co., Ltd. .................. 3,000 33,916
Daikin Industries Ltd. ............................ 4,000 15,135
Daiwa House Industry Co., Ltd. .................... 2,000 10,613
Fanuc.............................................. 1,500 56,989
Fujitsu............................................ 2,000 21,534
Hitachi Ltd. ...................................... 7,000 50,067
Honda Motor Co. ................................... 1,000 36,839
Inax............................................... 3,000 8,744
Ito Yokado Co., Ltd. .............................. 1,000 51,144
Kaneka Corp. ...................................... 4,000 18,120
Keio Teito Electric Railway........................ 4,000 15,351
Kinki Nippon Railway............................... 4,000 21,442
Kirin Brewery Co., Ltd. ........................... 4,000 29,225
Kokuyo............................................. 1,000 17,304
Kuraray Co., Ltd. ................................. 4,000 33,224
Kyocera Corp. ..................................... 800 36,424
Marui Co., Ltd. ................................... 2,000 31,225
Matsushita Electric Industrial Co. ................ 6,000 88,137
Mitsubishi Paper Mills............................. 8,000 11,259
NGK Insulators..................................... 6,000 53,528
Nintendo Co., Ltd. ................................ 600 59,066
Nippon Denso Co., Ltd. ............................ 2,000 36,147
Nippon Meat Packers, Inc. ......................... 2,000 27,379
Nippon Steel Co. .................................. 3,000 4,453
Okumura............................................ 4,000 9,537
Osaka Gas Co. ..................................... 7,000 16,043
</TABLE>
37
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
JAPAN - (CONTINUED)
Sankyo Co., Ltd. .................................. 3,000 $ 68,064
Secom Co., Ltd. ................................... 1,000 64,141
Seino Transportation............................... 3,000 15,020
Sekisui House Ltd. ................................ 6,000 38,716
Sony Corp. ........................................ 1,300 115,978
Sumitomo Bank...................................... 4,000 45,837
Sumitomo Chemical Co. ............................. 4,000 9,229
Sumitomo Electric Industries....................... 3,000 41,069
Takeda Chemical Industries......................... 2,000 57,220
TDK Corp. ......................................... 1,000 75,678
Tokio Marine & Fire Insurance Co. ................. 3,000 34,147
Tokyo Electric Power............................... 1,000 18,304
Tonen Corp. ....................................... 3,000 16,243
Toray Industries, Inc. ............................ 13,000 58,489
Toshiba Corp. ..................................... 9,000 37,585
Toyo Suisan Kaisha................................. 4,000 27,810
Toyota Motor Corp. ................................ 2,000 57,527
Yamazaki Baking Co., Ltd. ......................... 2,000 19,535
------------
1,808,202
------------
MALAYSIA - 0.73%
Hume Industries (Malaysia) Bhd..................... 4,000 4,193
Kuala Lumpur Kepong Bhd............................ 9,000 19,306
Land & General Holdings Bhd........................ 6,000 1,110
Malayan Banking Bhd................................ 5,000 14,515
Malaysian International Shipping Bhd (Frgn.)....... 4,000 5,857
Nestle (Malaysia) Bhd.............................. 2,000 9,249
New Strait Times Press Bhd......................... 4,000 4,953
Perusahaan Otomobil Nasional Bhd................... 3,000 2,929
Petronas Gas Bhd................................... 5,000 11,368
Public Bank Bhd.................................... 1,200 373
Public Bank Bhd (Frgn.)............................ 8,400 2,892
Public Bank Bhd Rights (b)......................... 200 11
Public Bank Bhd Rights (Frgn.) (b)................. 1,400 72
Resorts World Bhd.................................. 4,000 6,731
Rothmans of Pall Mall Bhd.......................... 2,000 15,543
Sime Darby Bhd..................................... 13,000 12,491
Telekom Malaysia Bhd............................... 9,000 26,590
Tenaga Nasional Bhd................................ 11,000 23,455
UMW Holdings Bhd................................... 2,000 1,516
United Engineers Ltd. ............................. 3,000 2,497
YTL Corp. Bhd...................................... 4,500 6,069
------------
171,720
------------
NETHERLANDS - 2.69%
ABN AMRO Holdings NV............................... 2,704 52,685
Akzo Nobel NV...................................... 100 17,245
</TABLE>
38
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
NETHERLANDS - (CONTINUED)
Elsevier NV........................................ 3,000 $ 48,537
Heineken NV........................................ 225 39,178
Hoogovens NV....................................... 262 10,739
ING Groep NV....................................... 1,553 65,399
KLM Royal Dutch Air Lines NV....................... 406 15,020
Philips Electronics NV............................. 813 48,735
Royal Dutch Petroleum Co........................... 3,625 199,015
Royal PTT Nederland NV............................. 1,572 65,611
Unilever NV........................................ 1,100 67,824
------------
629,988
------------
NEW ZEALAND - 1.91%
Brierley Investments Ltd. ......................... 92,300 65,926
Carter Holt Harvey Ltd. ........................... 31,900 49,275
Fletcher Challenge Building........................ 10,400 21,258
Fletcher Challenge Energy.......................... 11,600 40,619
Fletcher Challenge Forests Ltd. ................... 22,700 18,850
Fletcher Challenge Paper........................... 20,900 27,307
Lion Nathan Ltd. .................................. 5,000 11,207
Telecom Corp. of New Zealand Ltd. ................. 39,300 190,560
Telecom Corp. of New Zealand Ltd. ADS (c).......... 600 23,250
------------
448,252
------------
SINGAPORE - 0.88%
City Developments Ltd. ............................ 3,000 13,887
DBS Land Ltd. ..................................... 5,000 7,656
Development Bank of Singapore Ltd. ................ 3,000 25,638
Elec & Eltek International Co., Ltd. .............. 1,100 5,038
Fraser & Neave Ltd. ............................... 1,000 4,332
Hotel Properties Ltd. ............................. 8,000 5,223
Keppel Corp., Ltd. ................................ 3,000 8,617
Keppel Land Ltd. .................................. 3,000 4,131
Oversea-Chinese Banking Corp., Ltd. ............... 4,000 23,264
Singapore Airlines Ltd. (Frgn.).................... 4,000 26,113
Singapore Press Holdings Ltd. (Frgn.).............. 1,000 12,522
Singapore Telecommunications Ltd. ................. 21,000 39,134
United Overseas Bank Ltd. (Frgn.).................. 5,000 27,745
Wing Tai Holdings Ltd. ............................ 3,000 3,507
------------
206,807
------------
SPAIN - 1.46%
Acerinox S.A. ..................................... 75 11,106
Banco Bilbao-Vizcaya S.A. ......................... 1,125 36,388
Banco Central Hispanoamericano..................... 850 20,690
Banco Popular Espanol S.A. ........................ 400 27,949
Banco Santander S.A. .............................. 900 30,055
Empresa National de Electridad S.A. ............... 2,350 41,705
</TABLE>
39
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
SPAIN - (CONTINUED)
Fomento de Construcciones y Contratas S.A. ....... 500 $ 19,026
Gas Natural SDG S.A. ............................. 500 25,915
Iberdrola S.A. ................................... 2,525 33,215
Mapfre Corp. ..................................... 400 10,602
Repsol S.A. ...................................... 575 24,521
Telefonica de Espana.............................. 1,350 38,528
Vallehermoso S.A. ................................ 300 9,192
Viscofan Envolturas Celulosicas S.A. ............. 500 12,548
------------
341,440
------------
SWEDEN - 1.07%
ABB AB, A Shares.................................. 1,100 13,031
Astra AB, A Shares................................ 2,600 45,056
Electrolux AB, B Shares........................... 200 13,889
Hennes & Mauritz AB, B Shares..................... 600 26,466
Nordbanken Holding AB ............................ 5,900 33,387
Securitas AB, B Shares............................ 500 15,124
Skanska AB, B Shares.............................. 300 12,307
Svenska Handelsbanken, A Shares................... 500 17,298
Swedish Match AB.................................. 4,000 13,359
Telefonaktiebolaget LM Ericsson, B Shares......... 900 33,858
Volvo AB, B Shares................................ 1,000 26,844
------------
250,619
------------
SWITZERLAND - 3.08%
ABB AG, Bearer.................................... 14 17,298
CS Holdings AG (Reg.)............................. 435 67,323
Holderbank Financiere Glarus AG, B Shares......... 22 17,979
Nestle S.A. (Reg.)................................ 61 91,546
Novartis AG (Reg.)................................ 124 200,668
Roche Holding AG (Gen.)........................... 13 124,306
Sairgroup (b)..................................... 14 19,196
Schweizerische Lebensversicherungs-und
Rentenanstalt.................................... 30 23,591
Sulzer AG......................................... 24 15,237
Swiss Reinsurance Co. (Reg.)...................... 31 58,064
UBS (Bearer)...................................... 32 45,611
Zurich Versicherungs (Reg.)....................... 85 40,679
------------
721,498
------------
UNITED KINGDOM - 15.13%
Abbey National PLC................................ 5,250 94,245
Barclays PLC...................................... 2,000 53,246
Bass PLC.......................................... 2,200 34,190
B.A.T. Industries PLC............................. 20,250 184,590
BG PLC............................................ 18,203 82,066
Billiton PLC (b).................................. 14,000 35,935
Booker PLC........................................ 8,630 45,440
</TABLE>
40
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
UNITED KINGDOM - (CONTINUED)
British Energy PLC................................. 9,750 $ 67,861
British Petroleum Co. PLC.......................... 12,120 159,539
British Sky Broadcasting Group PLC................. 5,000 37,515
British Steel PLC.................................. 16,250 34,893
British Telecommunications PLC..................... 16,180 127,390
BTR PLC............................................ 6,000 18,165
Cable & Wireless PLC............................... 4,000 35,212
Cadbury Schweppes PLC.............................. 7,000 70,662
Centrica PLC (b)................................... 14,880 21,913
Charter PLC........................................ 3,480 42,888
Coats Viyella PLC.................................. 13,750 20,588
Diageo PLC......................................... 7,580 69,782
FKI PLC............................................ 17,470 54,904
General Electric Co. PLC........................... 15,780 102,430
Glaxo Wellcome PLC................................. 10,880 257,790
Greenalls Group PLC................................ 5,000 36,035
Hanson PLC......................................... 6,250 27,933
Hillsdown Holdings PLC............................. 18,000 43,834
House of Fraser PLC................................ 19,750 65,319
HSBC Holdings PLC.................................. 4,000 102,674
Inchcape PLC....................................... 10,000 26,820
Legal & General Group PLC.......................... 8,750 76,594
Lloyds TSB Group PLC............................... 16,410 212,500
Marks & Spencer PLC................................ 12,380 122,018
Mirror Group PLC................................... 20,000 64,171
National Westminster Bank PLC...................... 3,450 57,448
Northern Foods PLC................................. 9,500 41,267
Peninsular & Oriental Steam Navigation Co.......... 7,000 79,761
Reckitt & Colman PLC............................... 2,040 32,056
Reuters Holdings PLC............................... 4,000 43,768
Rio Tinto PLC...................................... 5,680 70,001
RJB Mining PLC..................................... 10,500 21,942
Royal & Sun Alliance Insurance Group PLC........... 5,545 55,929
Scottish Hydro-Electric PLC........................ 4,550 37,583
Sears PLC.......................................... 22,750 19,840
Sedgwick Group PLC................................. 15,000 35,047
SmithKline Beecham PLC............................. 11,450 117,373
Smurfit (Jefferson) Group PLC...................... 13,730 38,180
Tate & Lyle PLC.................................... 5,000 41,218
Tesco PLC.......................................... 8,750 71,267
Thames Water PLC................................... 6,500 96,952
The Great Universal Stores PLC..................... 6,250 78,877
Unilever PLC....................................... 5,000 42,863
Vodafone Group PLC................................. 9,900 71,511
Williams PLC....................................... 11,250 62,567
------------
3,544,592
------------
TOTAL NON-U.S. EQUITIES............................ 13,095,741
------------
TOTAL EQUITIES (COST $22,421,294).................. 22,512,388
------------
</TABLE>
41
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
------------ ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 3.83%
COMMERCIAL PAPER - 3.83%
Bausch and Lomb Inc.
8.000%, due 01/02/98 (COST $897,800)............. $ 898,000 $ 897,800
------------
TOTAL INVESTMENTS (COST $23,319,094) - 99.94%
(A).............................................. 23,410,188
------------
CASH AND OTHER ASSETS, LESS LIABILITIES - 0.06%... 13,702
------------
NET ASSETS - 100%................................. $23,423,890
============
</TABLE>
See accompanying notes to schedule of investments.
42
<PAGE>
BRINSON GLOBAL EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $23,319,094; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation............ $ 1,562,234
Gross unrealized depreciation............ (1,471,140)
------------
Net unrealized appreciation.......... $ 91,094
============
</TABLE>
(b) Non-income producing security
(c) Denominated in U.S. dollars.
(d) Linked to Canada's retail price index. Reset semi-annually
FORWARD FOREIGN CURRENCY CONTRACTS (NOTE 5)
The Brinson Global Equity Fund had the following open forward currency
contracts as of December 31, 1997:
<TABLE>
<CAPTION>
SETTLEMENT COST/ CURRENT UNREALIZED
DATE PROCEEDS VALUE GAIN (LOSS)
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
FORWARD FOREIGN CURRENCY
BUY CONTRACTS:
Canadian Dollar................. 06/03/98 175,000 $ 122,749 $ (987)
Danish Krone.................... 06/03/98 800,000 117,700 (1,730)
French Franc.................... 06/03/98 700,000 117,359 (1,741)
Japanese Yen.................... 06/03/98 148,000,000 1,164,878 (2,337)
Swedish Krona................... 06/03/98 2,300,000 290,921 (5,006)
Swiss Franc..................... 06/03/98 240,000 167,448 (3,614)
FORWARD FOREIGN CURRENCY
SALE CONTRACTS:
Australian Dollar............... 06/03/98 550,000 359,696 13,974
Belgian Franc................... 06/03/98 11,600,000 315,780 4,158
British Pound................... 06/03/98 1,175,000 1,919,151 36,689
French Franc.................... 06/03/98 700,000 117,359 869
German Mark..................... 06/03/98 700,000 392,694 5,389
Hong Kong Dollar................ 02/05/98 1,200,000 154,465 124
Italian Lira.................... 06/03/98 230,000,000 130,188 2,225
Japanese Yen.................... 06/03/98 119,000,000 936,625 13,854
Singapore Dollar................ 06/03/98 200,000 117,354 6,409
Swedish Krona................... 06/03/98 2,300,000 290,921 958
--------
Total......................... $69,234
========
</TABLE>
FUTURES CONTRACTS (NOTE 6)
The Brinson Global Equity Fund had the following open futures contracts as
of December 31, 1997:
<TABLE>
<CAPTION>
SETTLEMENT CURRENT UNREALIZED
DATE COST VALUE LOSS
---------- -------- -------- ----------
<S> <C> <C> <C> <C>
INDEX FUTURES BUY CONTRACTS
Standard & Poor's 500, 2 contracts... March 1998 $492,514 $489,550 $2,964
=======
</TABLE>
The segregated cash pledged to cover margin requirements for the open
futures positions at December 31, 1997 was $25,000.
See accompanying notes to the financial statements.
43
<PAGE>
BRINSON GLOBAL EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $23,319,094) (Note 1):.............. $23,410,188
Foreign currency, at value (Cost $137,962)...................... 136,374
Cash............................................................ 30,721
Receivables:
Investment securities sold..................................... 117,847
Dividends...................................................... 28,815
Net unrealized appreciation on forward foreign currency con-
tracts........................................................ 69,234
Due from Advisor (Note 2)...................................... 6,435
Other assets.................................................... 10,100
------------
TOTAL ASSETS................................................. 23,809,714
------------
LIABILITIES:
Payables:
Investment securities purchased................................ 383,213
Variation margin (Note 6)...................................... 100
Other liabilities............................................... 2,511
------------
TOTAL LIABILITIES............................................ 385,824
------------
NET ASSETS:
Applicable to 2,329,539 shares; no par value, unlimited shares
authorized..................................................... $23,423,890
============
Net asset value, offering price and redemption price per share
($23,423,890 / 2,329,539 shares)............................... $ 10.0552
============
NET ASSETS CONSIST OF:
Paid in capital................................................. $23,295,395
Accumulated net investment income............................... 138,842
Accumulated net realized loss................................... (174,866)
Net unrealized appreciation..................................... 164,519
------------
NET ASSETS................................................... $23,423,890
============
</TABLE>
See accompanying notes to financial statements.
44
<PAGE>
BRINSON GLOBAL EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1997*
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $11,770 for foreign taxes withheld)............. $ 134,349
Interest.......................................................... 8,358
----------
TOTAL INCOME................................................... 142,707
----------
EXPENSES:
Professional...................................................... 6,466
Custodian......................................................... 1,366
Registration...................................................... 848
Directors......................................................... 636
Other............................................................. 984
----------
TOTAL EXPENSES................................................. 10,300
----------
Expenses reimbursed by Advisor (Note 2)........................ (6,435)
----------
NET EXPENSES................................................... 3,865
----------
NET INVESTMENT INCOME.......................................... 138,842
----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments...................................................... (187,169)
Futures contracts................................................ 4,108
Foreign currency transactions.................................... 8,195
----------
Net realized loss............................................... (174,866)
----------
Change in net unrealized appreciation or depreciation on:
Investments and foreign currency................................. 89,506
Futures contracts................................................ (2,964)
Forward contracts................................................ 69,234
Translation of other assets and liabilities denominated in for-
eign currency................................................... 8,743
----------
Change in net unrealized appreciation or depreciation........... 164,519
----------
Net realized and unrealized loss.................................. (10,347)
----------
Net increase in net assets resulting from operations.............. $ 128,495
==========
</TABLE>
*The Fund commenced operations on August 29, 1997.
See accompanying notes to financial statements.
45
<PAGE>
BRINSON GLOBAL EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1997*
------------------
<S> <C>
OPERATIONS:
Net investment income...................................... $ 138,842
Net realized loss.......................................... (174,866)
Change in net unrealized appreciation or depreciation...... 164,519
------------
Net increase in net assets resulting from operations....... 128,495
------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................ 23,295,385
------------
Net increase in net assets resulting from capital share
transactions (a).......................................... 23,295,385
------------
TOTAL INCREASE IN NET ASSETS............................ 23,423,880
------------
NET ASSETS:
Beginning of period........................................ 10
------------
End of period (including accumulated net investment income
of $138,842).............................................. $23,423,890
============
(a) A summary of capital share transactions follows:
<CAPTION>
SHARES
------------
<S> <C>
Shares sold............................................ 2,329,538
------------
Net increase in shares outstanding.................... 2,329,538
============
</TABLE>
*The Fund commenced operations on August 29, 1997.
See accompanying notes to the financial statements.
46
<PAGE>
BRINSON GLOBAL EQUITY FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout period presented.
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1997*
------------------
<S> <C>
Net asset value, beginning of period......................... $10.0000
---------
Income from investment operations:
Net investment income....................................... 0.0596
Net realized and unrealized loss............................ (0.0044)
---------
Total income from investment operations.................... 0.0552
---------
Net asset value, end of period............................... $10.0552
=========
Total return (non-annualized)................................ 0.55%
Ratios/Supplemental data
Net assets, end of period (in 000s)......................... $23,424
Ratio of expenses to average net assets:
Before expense reimbursement............................... 0.13%**
After expense reimbursement................................ 0.05%**
Ratio of net investment income to average net assets:
Before expense reimbursement............................... 1.71%**
After expense reimbursement................................ 1.79%**
Portfolio turnover rate..................................... 15%
Average commission rate paid per share...................... $0.0321
</TABLE>
* The Fund commenced operations on August 29, 1997.
** Annualized
See accompanying notes to financial statements.
47
<PAGE>
BRINSON U.S. EQUITY FUND
- --------------------------------------------------------------------------------
The Brinson U.S. Equity Fund is an actively managed portfolio invested in
common stocks of U.S. corporations. The Fund is diversified by issue and
industry; it is typically 70% invested in large capitalization stocks, with the
remaining 30% in intermediate and small capitalization stocks. Investment
strategies emphasize stock selection with attention to the management of factor
and industry exposures.
Since its performance inception on August 31, 1997, the Brinson U.S. Equity
Fund has provided a total return of 3.07% compared to 7.68% for the benchmark
Wilshire 5000 Index.
The Brinson U.S. Equity Fund underperformed its benchmark in 1997. Almost all
of the underperformance occurred in the fourth quarter against the backdrop of
a stock market environment heavily influenced by a "flight to quality"
mentality on the part of investors. Such an environment was precipitated by
difficulties in the Southeast Asian economies. There were indications of
trouble in the region earlier in 1997, but the problems came to the fore in the
final quarter as the magnitude of credit excesses became more apparent, future
economic growth rates were revised sharply lower and currency values in country
after country plummeted. U.S. financial markets and the dollar were viewed as a
safe haven. Not surprisingly, the strongest relative performance within the
stock market was posted by the highest quality, largest capitalization issues.
The Brinson U.S. Equity Fund was not positioned well for these fourth quarter
developments. The problem was not an unusually heavy weight in low quality,
small capitalization issues. Rather, the problem was that the Fund was
minimally weighted in those few very large, very high quality issues which have
come to dominate the market in recent years and which performed strongly in the
fourth quarter. The 20 largest U.S. stocks now account for over 30% of the
total market value of the S&P 500, and most of them are concentrated in the
relatively defensive consumer nondurable, international oil and telephone
utility industries. Our researchers recognize the strong products, capable
managements and worldwide market positions which characterize most of these
companies, and they have taken these factors into account in formulating their
future estimates of profitability and growth. However, based upon their work,
we found these stocks to be relatively overvalued throughout 1997, a mispricing
that by the end of the year was as high as we have observed since the inception
of our present organization in 1981.
As we enter 1998, our price/value discipline leads us to maintain an
underweight in such issues. More specifically, the Fund is positioned with
factor overweightings in the traditional value measures of book-price,
earnings-price and yield, and underweights in growth, size and foreign
earnings. From an industry standpoint, meaningful deviations from the benchmark
include overweightings in healthcare, defense and electric utilities. Important
underweights include energy, telephone utilities, miscellaneous finance and
semiconductor/personal computer issues.
48
<PAGE>
BRINSON U.S. EQUITY FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
8/31/97*
TO
12/31/97
- ----------------------------------
<S> <C>
Brinson U.S. Equity Fund
3.07%
- ----------------------------------
Wilshire 5000 Index 7.68%
- ----------------------------------
</TABLE>
* Performance inception date of the Brinson U.S. Equity Fund
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $100,000
This chart shows the growth in the value of an investment in the Brinson U.S.
Equity Fund and the Wilshire 5000 Index if you had invested $100,000 on August
31, 1997. Past performance is no guarantee of future results. Share price and
return will vary with market conditions; investors may realize a gain or loss
upon redemption.
BRINSON U.S. EQUITY FUND
VS. WILSHIRE 5000 INDEX
12783C-US_Eq_dg
<TABLE>
<CAPTION>
Brinson U.S. Equity Fund Wilshire 5000 Index
------------------------ -------------------
<S> <C> <C>
8/29/97 100,000 100,000
9/30/97 104,257 105,901
10/31/97 98,531 102,373
11/30/97 100,718 105,725
12/31/97 103,067 107,679
</TABLE>
LOGO
Fund returns are net of all fees and costs, while the Index returns are based
solely on market returns without deduction for fees or transaction costs for
rebalancing.
49
<PAGE>
BRINSON U.S. EQUITY FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of December 31, 1997
<TABLE>
<S> <C>
U.S. EQUITIES
Basic Industries
Chemicals..................... 1.85%
Housing/Paper................. 4.49
Metals........................ 0.78
------
7.12
Capital Investments
Capital Goods................. 6.23
Technology.................... 7.59
------
13.82
Consumer
Autos/Durables................ 3.45
Descretionary................. 3.22
Health: Drugs................. 7.13
Health: Non-Drugs............. 3.77
Non-Durables.................. 8.55
Retail/Apparel................ 4.49
------
30.61
Energy.......................... 3.57
Financial
Banks......................... 6.92
Non-Banks..................... 6.15
------
13.07
Services/Misc................... 8.33
Transportation.................. 5.42
Utilities
Electric...................... 5.42
Telephone..................... 0.94
------
6.36
------
Total U.S. Equities........... 88.30*
------
SHORT-TERM INVESTMENTS.......... 2.65*
------
TOTAL INVESTMENTS............. 90.95
CASH AND OTHER ASSETS,
LESS LIABILITIES................ 9.05
------
NET ASSETS.................... 100.00%
======
</TABLE>
- --------------------------------------------------------------------------------
* The Fund held a long position in stock index futures on December 31, 1997
which increased U.S. Equity exposure from 88.30% to 99.60%. This adjustment
results in a decrease in the Fund's exposure to Short-Term investments from
2.65% to -8.65%.
TOP TEN U.S. EQUITY HOLDINGS
As of December 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- -----------------------------------------------
<S> <C>
1. Lockheed Martin Corp. 3.76%
2. Xerox Corp. 3.61
3. Philip Morris Companies, Inc. 3.43
4. CIGNA Corp. 3.03
5. Aon Corp. 2.93
6. Schering Plough Corp. 2.66
7. Burlington Northern
Santa Fe Corp. 2.63
8. Federal Express Corp. 2.55
9. Goodyear Tire & Rubber Co. 2.45
10. Automatic Data
Processing, Inc. 2.16
</TABLE>
- --------------------------------------------------------------------------------
50
<PAGE>
BRINSON U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C>
U.S. EQUITIES - 88.30%
Allergan, Inc...................................... 20,300 $ 681,319
Alza Corp. (b)..................................... 19,800 629,887
American Home Products Corp........................ 15,500 1,185,750
Aon Corp........................................... 36,750 2,154,469
Automatic Data Processing, Inc..................... 25,900 1,589,612
Baxter International, Inc.......................... 25,600 1,291,200
Beckman Instruments, Inc. ......................... 7,500 300,000
Biogen, Inc. (b)................................... 7,700 280,087
Birmingham Steel Corp.............................. 7,900 124,425
Boston Technology, Inc. (b)........................ 7,900 198,487
Briggs & Stratton Corp............................. 1,500 72,844
Burlington Northern Santa Fe Corp.................. 20,800 1,933,100
Champion Enterprises, Inc. (b)..................... 12,400 254,975
Champion International Corp........................ 600 27,187
Chase Manhattan Corp............................... 10,600 1,160,700
CIGNA Corp......................................... 12,900 2,232,506
Circuit City Stores, Inc. - Circuit City Group..... 29,200 1,038,425
Citicorp........................................... 9,600 1,213,800
CMS Energy Corp.................................... 25,500 1,123,594
Comerica, Inc...................................... 5,400 487,350
Commscope, Inc. (b)................................ 15,066 202,449
Comverse Technology, Inc. (b)...................... 3,900 152,100
Corning, Inc....................................... 42,700 1,585,238
Covance, Inc. (b).................................. 10,000 198,750
CPC International, Inc............................. 8,600 928,800
Crown Cork & Seal Co., Inc. ....................... 9,400 471,175
CVS Corp........................................... 12,500 800,781
Dial Corp. ........................................ 10,200 212,287
Eastman Chemical Co. .............................. 10,900 649,231
Echlin, Inc........................................ 5,500 199,031
EMC Corp. (b)...................................... 56,500 1,550,219
Enron Corp......................................... 26,500 1,101,406
Entergy Corp....................................... 51,600 1,544,775
Federal Express Corp. (b).......................... 30,700 1,874,619
First American Corp. of Tennessee.................. 5,200 258,700
First Data Corp.................................... 47,800 1,398,150
First Security Corp. .............................. 6,500 272,187
FirstEnergy Corp................................... 15,395 446,455
Fleetwood Enterprises, Inc......................... 6,000 254,625
Food Lion Inc., Class A............................ 36,100 304,594
Forest Laboratories, Inc. (b)...................... 9,100 448,744
Fort James Corp. .................................. 23,100 883,575
Gannett Co., Inc................................... 19,600 1,211,525
General Semiconductor, Inc. (b).................... 10,200 117,937
Genzyme Corp....................................... 8,000 222,000
Geon Co............................................ 5,400 126,225
</TABLE>
51
<PAGE>
BRINSON U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C>
U.S. EQUITIES - (CONTINUED)
Goodyear Tire & Rubber Co.......................... 28,400 $ 1,806,950
Harnischfeger Industries, Inc...................... 15,000 529,687
Health Care and Retirement Corp. (b)............... 9,100 366,275
Hibernia Corp...................................... 11,000 206,938
Informix Corp. (b)................................. 8,800 41,800
Interpublic Group of Companies, Inc................ 12,850 640,091
Kimberly Clark Corp................................ 23,600 1,163,775
Lear Corp. (b)..................................... 8,500 403,750
Lockheed Martin Corp............................... 28,100 2,767,850
Lyondell Petrochemical Co. ........................ 21,600 572,400
Manor Care, Inc. .................................. 15,200 532,000
Martin Marietta Materials, Inc. ................... 5,800 212,062
Masco Corp......................................... 23,000 1,170,125
Nabisco Holdings Corp.............................. 20,100 973,594
National Service Industries, Inc. ................. 3,900 193,294
NextLevel Systems, Inc. (b)........................ 45,100 806,163
Nextel Communications, Inc. (b).................... 26,200 681,200
Old Republic International Corp.................... 4,300 159,906
Peco Energy Co..................................... 58,900 1,428,325
Pentair, Inc....................................... 10,500 377,344
Pharmacia & UpJohn, Inc............................ 10,600 388,225
Philip Morris Companies, Inc....................... 55,800 2,528,438
Raytheon Co., Class B.............................. 23,400 1,181,700
Regions Financial Corp............................. 5,100 215,156
Reynolds & Reynolds Co............................. 19,300 355,844
Schering Plough Corp............................... 31,500 1,956,938
Seagate Technology, Inc. (b)....................... 17,600 338,800
Sears, Roebuck and Co.............................. 2,100 95,025
Timken Co.......................................... 5,600 192,500
Tyson Foods, Inc., Class A......................... 40,200 824,100
Ultramar Diamond Shamrock Corp..................... 22,500 717,188
US Bancorp......................................... 13,599 1,522,238
Vencor, Inc. (b)................................... 19,500 476,531
Viad Corp. ........................................ 19,400 374,663
Westvaco Corp...................................... 4,700 147,756
Witco Corp......................................... 3,200 130,600
Xerox Corp......................................... 36,000 2,657,250
York International Corp............................ 12,300 486,619
-------------
TOTAL EQUITIES (COST $64,772,517).................. 65,018,395
-------------
</TABLE>
52
<PAGE>
BRINSON U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
VALUE VALUE
----------- -------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 2.65%
COMMERCIAL PAPER - 2.65%
Bausch and Lomb, Inc.
8.000%, due 01/02/98 (COST $1,949,567)....... $ 1,950,000 $ 1,949,567
-------------
TOTAL INVESTMENTS (COST $66,722,084) - 90.95%
(A).......................................... 66,967,962
-------------
CASH AND OTHER ASSETS, LESS LIABILITIES -
9.05%....................................... 6,662,826
-------------
NET ASSETS - 100%............................. $73,630,788
=============
</TABLE>
See accompanying notes to schedule of investments.
53
<PAGE>
BRINSON U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $66,722,084; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation............ $ 3,228,773
Gross unrealized depreciation............ (2,982,895)
------------
Net unrealized appreciation........... $ 245,878
============
</TABLE>
(b) Non-income producing security
FUTURES CONTRACTS (NOTE 6)
The Brinson U.S. Equity Fund had the following open futures contracts as of
December 31, 1997:
<TABLE>
<CAPTION>
SETTLEMENT CURRENT UNREALIZED
DATE COST VALUE GAIN
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INDEX FUTURES BUY CONTRACTS
Standard & Poor's 500, 34 con-
tracts......................... March 1998 $8,319,588 $8,322,350 $2,762
=======
</TABLE>
The segregated cash pledged to cover margin requirements for the open
futures positions at December 31, 1997 was $75,000.
See accompanying notes to financial statements.
54
<PAGE>
BRINSON U.S. EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $66,722,084) (Note 1)................ $66,967,962
Cash............................................................. 98,444
Receivables:
Investment securities sold...................................... 371,744
Fund shares sold................................................ 6,500,000
Dividends....................................................... 90,845
Variation margin (Note 6)....................................... 8,236
Due from Advisor (Note 2)....................................... 7,316
Other assets..................................................... 6,365
------------
TOTAL ASSETS.................................................. 74,050,912
------------
LIABILITIES:
Payables:
Investment securities purchased................................. 416,988
Accrued expenses................................................ 3,136
------------
TOTAL LIABILITIES............................................. 420,124
------------
NET ASSETS:
Applicable to 7,143,967 shares; no par value, unlimited shares
authorized...................................................... $73,630,788
============
Net asset value, offering price and redemption price per share
($73,630,788 / 7,143,967 shares)................................ $ 10.3067
============
NET ASSETS CONSIST OF:
Paid in capital.................................................. $72,956,740
Accumulated net investment income................................ 356,005
Accumulated net realized gain.................................... 69,403
Net unrealized appreciation...................................... 248,640
------------
NET ASSETS.................................................... $73,630,788
============
</TABLE>
See accompanying notes to financial statements.
55
<PAGE>
BRINSON U.S. EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1997*
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends.......................................................... $ 320,832
Interest........................................................... 36,846
----------
TOTAL INCOME.................................................... 357,678
----------
EXPENSES:
Professional....................................................... 6,465
Registration....................................................... 848
Other.............................................................. 1,676
----------
TOTAL EXPENSES.................................................. 8,989
----------
Expenses reimbursed by Advisor (Note 2)......................... (7,316)
----------
NET EXPENSES.................................................... 1,673
----------
NET INVESTMENT INCOME........................................... 356,005
----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments....................................................... 294,742
Futures contracts................................................. (225,339)
----------
Net realized gain................................................ 69,403
----------
Change in net unrealized appreciation or depreciation on:
Investments....................................................... 245,878
Futures contracts................................................. 2,762
----------
Change in net unrealized appreciation or depreciation............ 248,640
----------
Net realized and unrealized gain................................... 318,043
----------
Net increase in net assets resulting from operations............... $ 674,048
==========
</TABLE>
* The Fund commenced operations August 29, 1997.
See accompanying notes to financial statements.
56
<PAGE>
BRINSON U.S. EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1997*
------------------
<S> <C>
OPERATIONS:
Net investment income...................................... $ 356,005
Net realized gain.......................................... 69,403
Change in net unrealized appreciation or depreciation...... 248,640
------------
Net increase in net assets resulting from operations....... 674,048
------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................................ 72,956,730
------------
Net increase in net assets resulting from capital share
transactions (a).......................................... 72,956,730
------------
TOTAL INCREASE IN NET ASSETS............................ 73,630,778
NET ASSETS:
Beginning of period........................................ 10
------------
End of period (including accumulated net investment
income of $356,005)....................................... $73,630,788
============
(a) A summary of capital share transactions follows:
<CAPTION>
SHARES
------------
<S> <C>
Shares sold............................................ 7,143,966
------------
Net increase in shares outstanding.................... 7,143,966
============
</TABLE>
* The Fund commenced operations August 29, 1997.
See accompanying notes to the financial statements.
57
<PAGE>
BRINSON U.S. EQUITY FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout period presented.
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1997*
------------------
<S> <C>
Net asset value, beginning of period......................... $10.0000
---------
Income from investment operations:
Net investment income....................................... 0.0498
Net realized and unrealized gain............................ 0.2569
---------
Total income from investment operations.................... 0.3067
---------
Net asset value, end of period............................... $10.3067
=========
Total return (non-annualized)................................ 3.07%
Ratios/Supplemental data
Net assets, end of period (in 000s)......................... $73,631
Ratio of expenses to average net assets:
Before expense reimbursement............................... 0.05%**
After expense reimbursement................................ 0.01%**
Ratio of net investment income to average net assets:
Before expense reimbursement............................... 2.01%**
After expense reimbursement................................ 2.05%**
Portfolio turnover rate..................................... 9%
Average commission rate paid per share...................... $0.0309
</TABLE>
* The Fund commenced operations August 29, 1997.
** Annualized
See accompanying notes to financial statements.
58
<PAGE>
BRINSON POST-VENTURE FUND
- --------------------------------------------------------------------------------
The Brinson Post-Venture Fund invests in common stocks of companies with market
capitalizations between $50 and $620 million, which represents the lower 7.5%
of value of the Wilshire 5000 Equity Index. We define this equity sector as the
"mini-cap" sector. The Fund's emphasis is on companies that developed with the
assistance of professional venture capitalists since, we believe, venture-
backed companies have stronger management and are better positioned for growth
in the future.
The Brinson Post-Venture Fund has provided a 29.75% annualized return since its
performance inception on April 30, 1995, versus a 23.22% return for its
benchmark, the Wilshire Small Stock Index. The Wilshire Small Stock Index is a
market capitalization weighted index of roughly 3,300 mini-cap companies. For
the year ended December 31, 1997, the Post-Venture Fund had a 31.56% return,
compared to a 22.82% return of the Wilshire Small Stock Index.
The Brinson Post-Venture Fund's 1997 performance benefited from good stock
selection in consumer nondurables, materials and services, and capital goods.
Specific stocks that enhanced performance included: Silicon Valley Banc-shares,
a California-based regional bank which serves emerging growth and middle-market
companies; Pool Energy Services, which provides well servicing, workover, and
drilling services; Applied Power, a maker of hydraulic tools and enclosures for
electronic equipment; North Fork Bancorp., a regional bank holding company with
operations in the New York City metropolitan area and Connecticut; and
Integrated Circuit Systems, a leading supplier of high performance mixed signal
integrated circuits. The Fund also benefited from its underweight in drugs and
medicine and overweight in apparel.
The strategy of the Brinson Post-Venture Fund is to invest in companies with
strong management teams, significant competitive strengths in growing markets,
and strong financial positions. This entails identifying target companies that
exhibit, among other attributes, innovative management, low ratios of market
capitalization to sales, and previous venture capital backing. Each company
selected for inclusion in the Fund is scrutinized through on-site visits,
discussions with investment banking firms and venture capitalists, and
intensive valuation techniques. Investments in 35 new companies were made in
1997 using this process, while 33 companies were removed. Consistent with its
focus to add value through detailed screening of the operating potential of
smaller companies, the Fund emphasizes stock selection and does not make use of
market hedging strategies.
Entering 1998, we are particularly encouraged by the relative total return
potential of our larger Fund holdings. These holdings include: DT Industries, a
maker of automated production systems used to package industrial and consumer
products; Methode Electronics, a provider of electronic connectors for
manufacturers of automobiles and data processing equipment; and Coachmen
Industries, a leading maker of recreational vehicles and modular homes.
59
<PAGE>
BRINSON POST-VENTURE FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR ANNUALIZED
ENDED ENDED 04/30/95*
12/31/97 12/31/97 TO 12/31/97
- ---------------------------------------------------------
<S> <C> <C> <C>
Brinson Post-Venture Fund 17.29% 31.56% 29.75%
- ---------------------------------------------------------
Wilshire Small Stock Index 11.48% 22.82% 23.22%
- ---------------------------------------------------------
</TABLE>
* Performance inception date of the Brinson Post-Venure Fund
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $100,000
This chart shows the growth in the value of an investment in the Brinson Post-
Venture Fund and the Wilshire Small Stock Index if you had invested $100,000 on
April 30, 1995. Past performance is no guarantee of future results. Share price
and return will vary with market conditions; investors may realize a gain or
loss upon redemption.
BRINSON POST-VENTURE FUND
VS. WILSHIRE SMALL STOCK INDEX
12783D-Post_Venture-dg
<TABLE>
<CAPTION>
Brinson Post-Venture Fund Wilshire Small Stock Index
------------------------- --------------------------
<S> <C> <C>
4/30/95 100,000 100,000
100,802 102,030
6/30/95 105,306 107,958
109,310 114,392
113,508 117,835
9/30/95 113,864 120,475
112,673 114,391
117,557 117,308
12/31/95 119,936 119,959
118,542 120,835
121,360 124,279
3/31/96 125,800 127,895
134,578 137,283
141,097 146,233
6/30/96 135,051 139,755
126,673 126,283
135,902 132,155
9/30/96 140,758 136,477
142,806 134,334
148,199 138,203
12/31/96 152,509 142,100
154,820 146,931
153,430 143,038
3/31/97 149,872 135,628
147,152 132,536
161,939 147,685
6/30/97 171,055 156,561
183,111 164,561
191,387 170,222
9/30/97 205,843 184,606
199,239 177,074
198,700 173,745
12/31/97 200,633 174,527
--------------------------------------------------------------
</TABLE>
LOGO
Fund returns are net of all fees and costs, while the Index returns are based
solely on market returns without deduction for fees or transaction costs for
rebalancing.
60
<PAGE>
BRINSON POST-VENTURE FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of December 31, 1997
<TABLE>
<S> <C>
U.S. EQUITIES
Capital Goods................ 6.77%
Consumer
Durables..................... 6.20
Non-Durables................. 16.69
------
22.89
Energy........................ 1.24
Finance....................... 23.74
Materials & Services......... 19.26
Technology................... 14.69
Transportation................ 3.53
Utilities..................... 3.24
------
Total U.S. Equities......... 95.36*
------
SHORT-TERM INVESTMENTS........ 4.96*
------
TOTAL INVESTMENTS........... 100.32
LIABILITIES, LESS CASH AND
OTHER ASSETS.................. (0.32)
------
NET ASSETS.................. 100.00%
======
---------------------------------------
</TABLE>
* The Fund held a long position in stock index futures on December 31, 1997
which increased U.S. Equity exposure from 95.36% to 98.98%. This adjustment
results in a decrease in the Fund's exposure to Short-Term investments from
4.96% to 1.34%.
TOP TEN U.S. EQUITY HOLDINGS
As of December 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- ------------------------------------------------------------
<S> <C>
1. Financial Security Assurance Holdings Ltd. 2.73%
2. LTC Properties, Inc. 2.40
3. Applied Power, Inc., Class A 2.22
4. Shorewood Packaging Corp. 1.93
5. RFS Hotel Investors, Inc. 1.90
6. North Fork Bancorporation, Inc. 1.72
7. INMC Mortgage Holdings, Inc. 1.67
8. BancTec, Inc. 1.66
9. Connecticut Energy Corp. 1.65
10. DT Industries, Inc. 1.51
- ------------------------------------------------------------
</TABLE>
61
<PAGE>
BRINSON POST-VENTURE FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
EQUITIES - 95.36%
U.S. EQUITIES - 95.36%
AFC Cable Systems, Inc. (b)...................... 159,763 $ 4,752,934
Align-Rite International, Inc. (b)............... 130,000 1,657,500
Allied Capital Corp. II.......................... 99,100 2,861,512
Allied Life Financial Corp. ..................... 120,825 2,643,047
Alpharma, Inc., Class A.......................... 51,800 1,126,650
Altron Inc. (b).................................. 152,200 2,016,650
Ambassador Apartments, Inc. ..................... 186,700 3,839,019
American Business Products, Inc. ................ 233,070 5,040,139
Amerus Life Holdings, Inc., Class A.............. 42,500 1,567,187
Applied Power, Inc., Class A..................... 130,400 8,997,600
Atmos Energy Corp. .............................. 150,250 4,545,062
Bacou USA, Inc. (b).............................. 236,400 4,137,000
BancTec, Inc. (b)................................ 251,500 6,743,344
BEI Medical Systems Co., Inc. ................... 195,200 805,200
BEI Technologies, Inc. .......................... 195,200 2,391,200
Bell Microproducts, Inc. (b)..................... 230,500 1,815,187
Benchmark Electronics, Inc. (b).................. 147,100 3,282,169
Bon-Ton Stores, Inc. (b)......................... 229,619 3,444,285
Cadmus Communications Corp. ..................... 198,600 4,071,300
Carmike Cinemas, Inc., Class A (b)............... 106,100 3,043,744
Celadon Group, Inc. (b).......................... 148,100 1,999,350
CenterPoint Properties Corp. .................... 162,100 5,693,762
CFI ProServices, Inc. (b)........................ 100,800 1,234,800
Chandler Insurance Co., Ltd. (b)................. 203,800 1,171,850
Chico's FAS, Inc. (b)............................ 187,000 1,262,250
Clean Harbors, Inc. (b).......................... 274,800 429,375
Coachmen Industries, Inc. ....................... 271,799 5,860,666
Commonwealth Industries, Inc. ................... 267,000 3,871,500
Communications Central, Inc. (b)................. 148,300 1,492,269
Connecticut Energy Corp. ........................ 222,100 6,690,762
Continental Natural Gas, Inc. (b)................ 96,600 1,038,450
Coventry Corp. (b)............................... 181,395 2,766,274
Crown Crafts, Inc. .............................. 164,500 2,570,312
Davco Restaurants, Inc. (b)...................... 158,800 3,096,600
Dayton Superior Corp. (b)........................ 155,900 2,572,350
Delta Financial Corp. (b)........................ 197,600 2,642,900
Department 56, Inc. (b).......................... 103,400 2,972,750
Dress Barn, Inc. (b)............................. 113,050 3,207,794
Drug Emporium, Inc. (b).......................... 126,100 496,519
DSI Toys, Inc. (b)............................... 94,900 177,937
DT Industries, Inc. ............................. 180,500 6,137,000
Electromagnetic Sciences, Inc. (b)............... 172,000 3,483,000
Emulex Corp. (b)................................. 100,500 1,381,875
Eskimo Pie Corp. ................................ 72,600 834,900
Evans & Sutherland Computer Corp. (b)............ 147,500 4,277,500
</TABLE>
62
<PAGE>
BRINSON POST-VENTURE FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
U.S. EQUITIES - (CONTINUED)
Exabyte Corp. (b)................................ 367,800 $ 2,367,713
FBL Financial Group, Inc., Class A............... 119,800 4,806,975
Fidelity National Corp. (b)...................... 118,200 1,093,350
Financial Security Assurance Holdings Ltd. ...... 229,173 11,057,597
Golf Trust of America, Inc. ..................... 111,200 3,224,800
Gradall Industries, Inc. (b)..................... 143,200 2,362,800
Granite Broadcasting Corp. (b)................... 209,100 1,894,969
Granite Broadcasting Corp., Preferred............ 31,100 1,508,350
Haggar Corp. .................................... 172,400 2,715,300
Harborside Healthcare Corp. (b).................. 136,400 2,693,900
Hardinge, Inc. .................................. 81,400 3,032,150
Hartmarx Corp. (b)............................... 354,300 2,701,537
Helen of Troy Ltd. (b)........................... 267,800 4,318,275
Huffy Corp. ..................................... 215,350 2,907,225
Hycor Biomedical, Inc. (b)....................... 200,700 313,594
INMC Mortgage Holdings, Inc. .................... 288,300 6,757,031
Innkeepers USA Trust............................. 359,300 5,569,150
Insilco Corp. (b)................................ 57,400 1,894,200
InterTan, Inc. (b)............................... 256,900 1,380,837
InTEST Corp. (b)................................. 156,800 1,097,600
Jason, Inc. (b).................................. 345,100 2,760,800
JLM Industries, Inc. (b)......................... 160,400 1,644,100
Kellwood Co. .................................... 128,975 3,869,250
Kevco, Inc. (b).................................. 107,100 1,767,150
KLLM Transport Services, Inc. (b)................ 128,065 1,568,796
Landstar System, Inc. (b)........................ 195,200 5,148,400
LTC Properties, Inc. ............................ 468,200 9,715,150
Mac-Gray Corp. (b)............................... 72,400 1,131,250
MacNeal-Schwendler Corp. (b)..................... 161,120 1,550,780
M/A/R/C, Inc. ................................... 137,270 2,470,860
Marquette Medical Systems (b).................... 185,600 4,941,600
Maxim Group, Inc. (b)............................ 228,000 3,548,250
Methode Electronics, Inc., Class A............... 228,280 3,709,550
Michael Anthony Jewelers, Inc. (b)............... 244,635 596,298
Microsemi Corp. (b).............................. 263,800 4,632,987
Midway Airlines, Corp. (b)....................... 94,400 1,427,800
M.S. Carriers, Inc. (b).......................... 108,400 2,696,450
National Computer Systems, Inc. ................. 154,920 5,460,930
National Insurance Group......................... 112,450 983,937
National Patent Development Corp. (b)............ 57,580 798,923
NCI Building Systems, Inc. (b)................... 129,100 4,583,050
Newport Corp. ................................... 150,580 2,117,531
Nichols Research Corp. (b)....................... 203,654 5,091,350
North Fork Bancorporation, Inc. ................. 207,400 6,960,862
Norton McNaughton, Inc. (b)...................... 167,700 880,425
OPTEK Technology, Inc. (b)....................... 94,200 1,878,113
</TABLE>
63
<PAGE>
BRINSON POST-VENTURE FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
U.S. EQUITIES - (CONTINUED)
OSI Systems, Inc. (b)............................ 148,900 $ 1,824,025
Piccadilly Cafeterias, Inc. ..................... 196,700 2,581,688
Pluma, Inc. (b).................................. 151,100 1,293,794
Pool Energy Services Co. (b)..................... 201,600 4,485,600
Premier Financial Bancorp, Inc. ................. 114,100 2,852,500
ProCyte Corp. (b)................................ 384,000 360,000
Quixote Corp. ................................... 210,000 1,680,000
Rainbow Technologies, Inc. (b)................... 178,100 5,164,900
Ramsay Health Care, Inc. (b)..................... 146,900 440,700
Rare Hospitality International, Inc. (b)......... 158,661 1,427,949
Regal Beloit Corp. .............................. 178,620 5,280,454
RFS Hotel Investors, Inc......................... 386,700 7,709,831
Safeguard Health Enterprises, Inc. (b)........... 128,100 1,729,350
Sanfilippo (John B.) & Son, Inc. (b)............. 237,700 1,871,888
Scotsman Industries, Inc. ....................... 235,500 5,755,031
Shaw Group, Inc. (b)............................. 72,900 1,676,700
Shelby Williams Industries, Inc. ................ 185,000 3,052,500
Sholodge, Inc. (b)............................... 251,200 3,956,400
Shorewood Packaging Corp. (b).................... 291,800 7,805,650
Silicon Valley Bancshares (b).................... 105,590 5,939,438
SkyWest, Inc. ................................... 39,800 1,179,075
SOS Staffing Services, Inc. (b).................. 164,300 3,101,163
Southern Pacific Funding Corp. (b)............... 215,350 2,826,469
Special Metals Corp. (b)......................... 112,600 2,026,800
Stanley Furniture Co., Inc. (b).................. 100,360 2,797,535
Storage USA, Inc................................. 120,700 4,820,456
Stratasys, Inc. (b).............................. 42,200 485,300
Sun Healthcare Group, Inc. (b)................... 87,580 1,696,863
TBC Corp. (b).................................... 227,900 2,179,294
Team, Inc. (b)................................... 153,380 536,830
Teltrend, Inc. (b)............................... 25,500 436,688
Ticketmaster Group, Inc. (b)..................... 115,500 2,656,500
Tractor Supply Co. (b)........................... 61,900 913,025
Trans Financial, Inc............................. 105,300 4,093,538
Vans, Inc. (b)................................... 139,000 2,102,375
Varlen Corp...................................... 54,200 1,328,747
Xircom Inc. (b).................................. 122,300 1,230,644
York Group, Inc.................................. 142,600 3,475,875
-------------
TOTAL EQUITIES (COST $303,412,479)............... 386,550,994
-------------
</TABLE>
64
<PAGE>
BRINSON POST-VENTURE FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
------------- -------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 4.96%
U.S. GOVERNMENT OBLIGATION - 0.16%
U.S. Treasury Bill,
5.180%, due 05/28/98.......................... $ 670,000 $ 655,762
-------------
COMMERCIAL PAPER - 4.80%
Bausch & Lomb Inc.
8.000%, due 01/02/98.......................... 2,502,000 2,501,444
6.750%, due 01/05/98.......................... 7,000,000 6,994,750
Case Credit Corp.
6.020%, due 03/12/98.......................... 1,500,000 1,483,350
6.000%, due 01/23/98.......................... 1,000,000 996,334
GTE Corp., 6.050%, due 02/23/98................ 1,000,000 991,093
Marriott Corp., 6.050%, due 02/09/98........... 1,500,000 1,490,169
Nabisco Inc., 6.120%, due 01/16/98............. 1,000,000 997,450
Occidental Petroleum Corp., 6.000%, due
01/16/98...................................... 1,000,000 997,500
Tenneco, Inc., 6.250%, due 01/22/98............ 1,000,000 996,354
U.S. West Capital Funding Corp., 6.100%, due
01/23/98...................................... 1,000,000 996,272
Whirlpool Corp., 6.750%, due 01/05/98.......... 1,000,000 999,250
-------------
19,443,966
-------------
TOTAL SHORT-TERM INVESTMENTS (COST
$20,098,968).................................. 20,099,728
-------------
TOTAL INVESTMENTS (COST $323,511,447) - 100.32%
(A)........................................... 406,650,722
-------------
LIABILITIES, LESS CASH AND OTHER ASSETS -
(0.32%)...................................... (1,298,675)
-------------
NET ASSETS - 100%.............................. $405,352,047
=============
</TABLE>
See accompanying notes to schedule of investments.
65
<PAGE>
BRINSON POST-VENTURE FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $323,511,447; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation........... $ 98,003,701
Gross unrealized depreciation........... (14,864,426)
-------------
Net unrealized appreciation.......... $ 83,139,275
=============
</TABLE>
(b) Non-income producing security
FUTURES CONTRACTS (NOTE 6)
The Brinson Post-Venture Fund had the following open futures contracts as of
December 31, 1997:
<TABLE>
<CAPTION>
SETTLEMENT CURRENT UNREALIZED
DATE COST VALUE LOSS
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
INDEX FUTURES BUY CONTRACTS
Standard & Poor's 500, 60 con-
tracts....................... March 1998 $14,693,745 $14,686,500 $7,245
=======
</TABLE>
The segregated cash and market value of investments pledged to cover margin
requirements for the open futures positions at December 31, 1997 were
$80,000 and $655,762, respectively.
See accompanying notes to financial statements.
66
<PAGE>
BRINSON POST-VENTURE FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $323,511,447) (Note 1)................ $406,650,722
Cash.............................................................. 86,910
Receivables:
Investment securities sold....................................... 2,229,266
Dividends........................................................ 188,506
Due from Advisor (Note 2)........................................ 18,501
-------------
TOTAL ASSETS................................................... 409,173,905
-------------
LIABILITIES:
Payables:
Investment securities purchased.................................. 3,800,357
Variation margin (Note 6)........................................ 3,000
Accrued expenses................................................. 18,501
-------------
TOTAL LIABILITIES.............................................. 3,821,858
-------------
NET ASSETS:
Applicable to 20,203,483 shares; no par value, unlimited shares
authorized....................................................... $405,352,047
=============
Net asset value, offering and redemption price per share
($405,352,047 / 20,203,483 shares)............................... $ 20.0635
=============
NET ASSETS CONSIST OF:
Paid in capital................................................... $201,183,173
Accumulated net investment income................................. 14,577,807
Accumulated net realized gain..................................... 106,459,037
Net unrealized appreciation....................................... 83,132,030
-------------
NET ASSETS..................................................... $405,352,047
=============
</TABLE>
See accompanying notes to financial statements.
67
<PAGE>
BRINSON POST-VENTURE FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends........................................................ $ 4,863,543
Interest......................................................... 1,329,455
------------
TOTAL INCOME.................................................. 6,192,998
------------
EXPENSES:
Accounting....................................................... 38,502
Professional..................................................... 38,314
Administration................................................... 11,878
Custodian........................................................ 10,420
Other............................................................ 7,304
------------
TOTAL EXPENSES................................................ 106,418
------------
Expenses reimbursed by Advisor (Note 2)....................... (106,418)
------------
NET EXPENSES.................................................. 0
------------
NET INVESTMENT INCOME......................................... 6,192,998
------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain on:
Investments..................................................... 47,945,430
Futures contracts............................................... 2,625,776
------------
Net realized gain.............................................. 50,571,206
------------
Change in net unrealized appreciation or depreciation on:
Investments..................................................... 38,155,879
Futures contracts............................................... 204,305
------------
Change in net unrealized appreciation or depreciation.......... 38,360,184
------------
Net realized and unrealized gain................................. 88,931,390
------------
Net increase in net assets resulting from operations............. $95,124,388
============
</TABLE>
See accompanying notes to financial statements.
68
<PAGE>
BRINSON POST-VENTURE FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income..................... $ 6,192,998 $ 4,830,476
Net realized gain......................... 50,571,206 37,696,001
Change in net unrealized appreciation or
depreciation............................. 38,360,184 19,063,701
------------- -------------
Net increase in net assets resulting from
operations............................... 95,124,388 61,590,178
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................... 44,110,536 247,887,694
Shares redeemed........................... (32,861,125) (267,309,948)
------------- -------------
Net increase (decrease) in net assets
resulting from capital share transactions
(a)...................................... 11,249,411 (19,422,254)
------------- -------------
TOTAL INCREASE IN NET ASSETS........... 106,373,799 42,167,924
NET ASSETS:
Beginning of year......................... 298,978,248 256,810,324
------------- -------------
End of year (including accumulated net
investment income of $14,577,807 and
$8,384,809, respectively)................ $405,352,047 $298,978,248
============= =============
(a) A summary of capital share transactions follows:
<CAPTION>
SHARES SHARES
------------- -------------
<S> <C> <C>
Shares sold........................... 2,434,473 16,920,464
Shares redeemed....................... (1,835,022) (18,728,639)
------------- -------------
Net increase (decrease) in shares
outstanding......................... 599,451 (1,808,175)
============= =============
</TABLE>
See accompanying notes to financial statements.
69
<PAGE>
BRINSON POST-VENTURE FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------- PERIOD ENDED
1997 1996 DECEMBER 31, 1995*
----------- ----------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of
period............................. $15.2509 $11.9936 $10.0000
----------- ----------- ---------
Income from investment operations:
Net investment income.............. 0.2938 0.2617 0.1660
Net realized and unrealized gain... 4.5188 2.9956 1.8276
----------- ----------- ---------
Total income from investment
operations....................... 4.8126 3.2573 1.9936
----------- ----------- ---------
Net asset value, end of period...... $20.0635 $15.2509 $11.9936
=========== =========== =========
Total return (non-annualized)....... 31.56% 27.16% 19.94%
Ratios/Supplemental data
Net assets, end of period (in
000s)............................. $405,352 $298,978 $256,810
Ratio of expenses to average net
assets:
Before expense reimbursement...... 0.03% 0.09% 0.17%**
After expense reimbursement....... 0.00% 0.00% 0.00%**
Ratio of net investment income to
average net assets:
Before expense reimbursement...... 1.76% 1.78% 1.85%**
After expense reimbursement....... 1.79% 1.87% 2.02%**
Portfolio turnover rate............ 45% 39% 25%
Average commission rate paid per
share............................. $0.0598 $0.0359 $0.0255
</TABLE>
* The Fund commenced operations April 28, 1995.
** Annualized
See accompanying notes to financial statements.
70
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND
- --------------------------------------------------------------------------------
The Brinson Emerging Markets Equity Fund invests in the common stocks of less
developed countries and also considers those not covered in our developed
markets portfolios. We continually examine newly emerging markets in
anticipation of gaining broad diversification benefits and identifying
discrepancies between prices and fundamental values across markets.
Since July 31, 1995, the first month-end after the Fund became fully invested,
the Brinson Emerging Markets Equity Fund has generated an annualized rate of
return of -3.33% compared to -5.72% for the Brinson Emerging Markets Normal
benchmark. The International Finance Corporation Investable Index (IFCI), a
recognized emerging market benchmark, produced an annualized -4.65% for the
same period. Annualized volatility of the Brinson Emerging Markets Equity Fund
was 17.59%, lower than that of both the Normal Index benchmark at 18.27% or the
IFCI at 18.93%. The Fund returned -10.04% for 1997, compared to -15.30% for the
Brinson Emerging Markets Normal Index benchmark and -14.74% for the IFCI.
Emerging markets produced a wide regional dispersion of returns. Latin America
was up 29.27% in dollar terms, reflecting domestic demand growth in Mexico and
Argentina and privatization in Brazil.
In contrast, Asia lost a staggering 56.65%. Thailand, Korea, Indonesia and the
Philippines buckled under a mountain of foreign corporate debt after the mid-
summer Thai baht devaluation triggered a regional domino effect. Even countries
without debt problems, such as Taiwan and India, experienced a contagion of
negative sentiment.
The Europe, Middle East and Africa region returned a modest 12.45%. Eastern
European markets rose strongly at the beginning of the year, led by Hungary and
Russia, before falling back in the wake of the Asian crisis. The region
continued to display its customary volatility, with Turkey ending the year up
to 117.08%, while South Africa slipped back 11.45%.
Market and currency selection, which is combined for emerging market equity
performance attribution, made a strong contribution. Underweights in Malaysia
and Korea added to performance, as did overweights in Mexico, Argentina, Poland
and Greece. Partially offsetting these were a premature move into Thailand
(later reversed) and an early-year underweight in Turkey.
Stock selection was also positive, with significant contributions in Argentina,
Brazil, Peru, China, the Philippines, Thailand, Greece, Portugal, Russia and
South Africa. Much of this came from top-down sectorial bets, such as the
banking and real estate underweight in Thailand and the overweight in those
sectors likely to be privatized in Brazil.
The Fund is currently fully invested with overweights in EMEA and Latin America
offset by a significant underweight in the Asia region.
71
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR ANNUALIZED
ENDED ENDED 06/30/95*
12/31/97 12/31/97 TO 12/31/97
- -------------------------------------------------------------------------
<S> <C> <C> <C>
BRINSON EMERGING MARKETS EQUITY FUND/1/ -25.29% -10.04% -3.42%
- -------------------------------------------------------------------------
BRINSON EMERGING MARKETS EQUITY FUND/2/ -27.51 -12.72 -4.01
- -------------------------------------------------------------------------
Brinson Emerging Markets Normal Index -28.51 -15.30 -4.47
- -------------------------------------------------------------------------
IFCI Index -26.56 -14.74 -3.25
- -------------------------------------------------------------------------
</TABLE>
* Inception date of the Brinson Emerging Markets Equity Fund.
/1/Total return based on NAV--Does not include the payment of a 1.50%
transaction charge on Fund share purchases and redemptions.
/2/Standardized total return--Includes the payment of a 1.50% transaction
charge on Fund share purchases and redemptions in each period presented
where applicable.
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $100,000
This chart shows the growth in the value of an investment in the Brinson
Emerging Markets Equity Fund, the Brinson Emerging Markets Normal Index and the
IFCI Index if you had invested $100,000 on June 30, 1995. Past performance is
no guarantee of future results. Share price and return will vary with market
conditions; investors may realize a gain or loss upon redemption.
BRINSON EMERGING MARKETS EQUITY FUND
VS. BRINSON EMERGING MARKETS NORMAL INDEX
AND IFCI INDEX
12783E-Em_Mkt_Eq-dg
<TABLE>
<CAPTION>
Brinson Emerging Markets Equity Fund/1/ Brinson Emerging Markets Normal Index/2/ IFCI Investable Index
--------------------------------------- ---------------------------------------- ---------------------
<S> <C> <C> <C>
6/30/95 100,000 100,000 100,000
99,469 102,846 103,182
94,941 98,380 100,416
95,041 97,952 99,655
92,298 94,968 95,895
90,060 92,628 95,416
12/31/95 93,164 95,466 98,736
99,521 103,741 107,008
98,213 103,127 104,632
98,505 103,399 106,160
103,176 108,202 110,442
102,136 107,412 109,471
6/30/96 104,115 109,536 110,772
97,377 102,864 103,494
99,312 105,105 106,703
100,193 106,494 108,276
97,118 102,987 105,951
99,276 104,879 107,518
12/31/96 100,334 105,399 107,988
109,793 115,791 115,616
113,173 118,997 121,279
111,467 116,647 118,241
111,942 115,739 116,234
116,716 121,101 120,186
6/30/97 120,807 124,766 125,375
122,407 125,801 126,585
108,731 112,952 110,424
113,911 116,437 114,016
97,571 98,930 95,311
91,421 91,900 90,873
12/31/97 90,260 89,192 92,075
-------------------------------------------------------------------------------------------------------------------
</TABLE>
LOGO
Fund returns are net of all fees and costs, while the index returns are based
solely on market returns without deduction for fees or transaction costs for
rebalancing.
72
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND
- --------------------------------------------------------------------------------
MARKET ALLOCATION
As of December 31, 1997
<TABLE>
<CAPTION>
BENCHMARK NORMAL STRATEGY
CLASS EXPOSURE* EXPOSURE** EXPOSURE
------------------------------------------------------------
<S> <C> <C> <C> <C>
LATIN AMERICA 41.4% 24.1% 27.3%
Argentina....... 1 4.9 5.6 6.3
Brazil.......... 1 12.4 5.6 5.6
Chile........... 1 6.1 5.6 5.1
Mexico.......... 1 14.4 5.6 7.6
Peru............ 3 1.3 1.9 1.9
Bolivia......... 4 0.0 0.0 0.0
Colombia........ 4 1.3 0.0 0.0
Venezuela....... 4 1.2 0.0 1.0
ASIA 23.9 44.4 33.9
India........... 1 2.0 5.6 5.6
Indonesia....... 1 1.8 5.6 3.6
Korea........... 1 1.9 5.6 3.6
Malaysia........ 1 6.0 5.6 4.1
Philippines..... 1 1.5 5.6 4.1
Taiwan.......... 1 8.4 5.6 5.1
Thailand........ 1 0.7 5.6 3.6
China........... 2 0.7 3.7 3.2
Pakistan........ 3 0.7 1.9 1.4
Sri Lanka....... 4 0.1 0.0 0.0
Vietnam......... 4 0.0 0.0 0.0
EUROPE/MIDEAST/
AFRICA 34.6 31.5 35.8
South Africa.... 1 12.5 5.6 5.6
Turkey.......... 1 4.7 5.6 5.0
Greece.......... 2 2.3 3.7 3.0
Israel.......... 2 2.6 3.7 4.0
Poland.......... 2 0.9 3.7 5.7
Portugal........ 2 3.1 3.7 3.5
Czech Republic.. 3 0.3 1.9 1.3
Hungary......... 3 1.5 1.9 1.9
Russia.......... 3 4.7 1.9 2.9
Bulgaria........ 4 0.0 0.0 0.3
Egypt........... 4 0.9 0.0 0.9
Jordan.......... 4 0.2 0.0 0.0
Kazakhstan...... 4 0.0 0.0 1.3
Mauritius....... 4 0.0 0.0 0.0
Morocco......... 4 0.9 0.0 0.0
Romania......... 4 0.0 0.0 0.4
Slovakia........ 4 0.2 0.0 0.0
Slovenia........ 4 0.0 0.0 0.0
Tunisia......... 4 0.0 0.0 0.0
Ukraine......... 4 0.0 0.0 0.3
Zimbabwe........ 4 0.1 0.0 0.0
Cash............ 0.0 0.0 3.0
----- ----- -----
TOTALS 100.0% 100.0% 100.0%
===== ===== =====
------------------------------------------------------------
</TABLE>
* International Finance Corporation Investable Index as of December 31, 1997
** Current Strategy will fall in this range with 95% frequency
Note: Totals may not add due to rounding
TOP TEN NON-U.S. EQUITY HOLDINGS
As of December 31, 1997
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- --------------------------------------------------------------
<S> <C>
1. Chile Fund, Inc. 1.77%
2. Telecomunicacoes Brasileiras S.A., Preferred 1.74
3. Telefonos de Mexico S.A., Series L 1.37
4. Phillippine Long Distance Telephone Co. 1.19
5. YPF Sociedad Anonima S.A., Class D 1.09
6. Perez Companc S.A., B Shares 1.08
7. Telefonica de Argentina S.A., Class B 1.02
8. Regent Central Asia Investments 0.96
9. Telekomunikasi Indonesia 0.90
10. YPF Sociedad Anonima S.A. Class D ADR 0.86
-------------------------------------------------------------
</TABLE>
73
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
EQUITIES - 78.50%
ARGENTINA - 6.32%
Banco de Galicia y Buenos Aires S.A............. 150,317 $ 962,221
Banco Frances del Rio de la Plata S.A........... 122,597 1,137,928
CEI Citicorp Holdings S.A. (b).................. 111,308 445,321
Central Puerto S.A., Class B.................... 301,000 842,969
Disco S.A. ADR (b,c)............................ 3,500 155,750
Perez Companc S.A., B Shares.................... 684,126 4,885,637
Quilmes Industrial S.A. ADR (c) ................ 43,200 591,300
Siderca S.A., Class A........................... 871,629 2,423,613
Telecom Argentina S.A., Class B................. 394,000 2,837,367
Telefonica de Argentina S.A., Class B........... 1,234,000 4,628,426
Transportadora de Gas del Sur S.A., Class B..... 378,000 858,232
YPF Sociedad Anonima S.A., Class D.............. 146,000 4,921,184
YPF Sociedad Anonima S.A. Class D ADR (c)....... 113,000 3,863,187
-------------
28,553,135
-------------
ASIA - 1.51%
Central Asia Regional Growth Fund (b)........... 97,150 971,500
IS Himalayan Fund (b,c)......................... 139,218 1,479,191
Regent Central Asia Investments (b,c)........... 415,000 4,353,350
-------------
6,804,041
-------------
BALKAN REPUBLIC - 0.13%
Regent Balkan Fund (c).......................... 90,000 585,000
-------------
BRAZIL - 5.53%
Aracruz Celulose S.A. Preferred B............... 266,000 367,028
Brazil Fund, Inc. (c)........................... 20,266 425,586
Centrais Electricas Brasileiras S.A. ........... 33,500,000 1,665,845
Centrais Electricas Brasileiras S.A., Preferred
B.............................................. 18,000,000 919,272
Cia de Electricidade do Estado do Rio de Janeiro
(b)............................................ 1,078,500,000 695,744
Cia Energetica de Minas Gerais, ADR (c)......... 12,600 547,457
Cia Energetica de Minas Gerais, Preferred....... 11,400,000 495,284
Cia Paranaense de Energia....................... 45,420,000 508,691
Cia Paranaense de Energia-Copel, Preferred B.... 67,000,000 909,461
Cia Vale Do Rio Doce, Preferred................. 87,246 1,754,926
Electricas de Santa Catarina S.A., Preferred B.. 892,000 1,110,904
Light Participacoes S.A. ....................... 1,504,000 451,429
Petroleo Brasileiro S.A., Preferred............. 10,700,000 2,502,195
Telebras ADR (c)................................ 19,200 2,235,600
Telecomunicacoes Brasileiras S.A., Preferred.... 69,030,000 7,873,415
Telecomunicacoes de Sao Paulo S.A. (b).......... 3,330,000 757,806
Telecomunicacoes de Sao Paulo S.A., Preferred... 6,667,724 1,774,256
-------------
24,994,899
-------------
CHILE - 4.80%
Chile Fund, Inc. (c)............................ 449,700 8,010,281
Chilectra S.A. ADR (c).......................... 30,100 768,826
</TABLE>
74
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
CHILE - (CONTINUED)
Chilgener S.A. ADR (c).......................... 49,326 $ 1,208,487
Cia Cervecerias Unidas S.A. ADR (c)............. 18,900 555,187
Cia de Telecomunicaciones de Chile S.A. ADR
(c)............................................ 113,250 3,383,344
Distribucion y Servicio D&S S.A. ADR (b,c)...... 28,900 536,456
Embotelladora Andina S.A., Class B ADR (c)...... 31,200 606,450
Empresa Nacional de Electricidad S.A. ADR (c)... 124,100 2,195,019
Enersis S.A. ADR (c)............................ 50,400 1,461,600
Laboratorio Chile ADR (c)....................... 35,400 787,650
Madeco S.A. ADR (c)............................. 49,000 747,250
Maderas y Sinteticos Sociedad Anonima S.A. ADR
(c)............................................ 74,500 707,750
Quimica y Minera Chile S.A. ADR (c)............. 8,800 387,200
Vina Concha y Toro S.A. ADR (c)................. 14,000 353,500
-------------
21,709,000
-------------
CHINA - 0.12%
Huaneng Power International, Inc. ADR (b,c)..... 22,500 521,719
-------------
CZECH REPUBLIC - 1.24%
Czeske Energeticke Zavody 2 A.S. (b)............ 5,000 112,910
Czeske Energeticke Zavody A.S. (b).............. 33,000 1,080,220
CKD Praha Holding A.S. (b)...................... 18,958 628,771
Ceska Sporitelna A.S............................ 26,000 171,716
Cokoladovny A.S................................. 3,000 415,130
Inzenyrske a Prumyslove Stavby A.S.............. 93,014 519,962
Komercni Banka A.S.............................. 11,700 440,351
Leciva Praha (b)................................ 1,838 111,318
SPT Telecom A.S. (b)............................ 11,600 1,237,833
Skoda Plzen A.S. (b)............................ 11,700 206,509
Tabak A.S....................................... 1,900 432,895
Unipetrol A.S. (b).............................. 90,000 258,215
-------------
5,615,830
-------------
EGYPT - 0.50%
Egypt Investment Co. (b,c)...................... 61,000 915,000
The Egypt Fund (b,c)............................ 76,300 1,279,551
The Egypt Trust (c)............................. 5,000 70,625
-------------
2,265,176
-------------
GREECE - 3.06%
A.G. Petzetakis S.A. (b)........................ 118,250 637,702
Aktor S.A....................................... 15,925 135,838
Alpha Credit Bank............................... 43,294 2,529,336
Aluminium of Greece S.A......................... 9,250 512,204
Athens Medical Center S.A....................... 63,290 748,433
Atti-Kat........................................ 33,000 172,148
Attica Enterprises S.A.......................... 32,270 360,565
Delta Dairy S.A................................. 27,520 312,342
Delta Dairy S.A., Preferred..................... 25,000 224,701
</TABLE>
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<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
GREECE - (CONTINUED)
Ergo Bank S.A. ................................. 33,122 $ 1,713,831
Hellenic Bottling Co. S.A....................... 46,840 1,087,997
Hellenic Telecommunications Organization S.A. .. 37,421 767,651
Heracles General Cement Co. S.A. ............... 19,820 411,825
Intracom S.A. .................................. 10,400 480,209
Loulis Flour Mills S.A. ........................ 98,680 408,688
Michaniki S.A. ................................. 134,612 690,354
Michaniki S.A., Preferred New Shares............ 3,552 14,022
National Bank of Greece S.A. (b)................ 2,752 242,453
Omega Fund (b,c)................................ 14,530 1,200,000
Titan Cement Co. S.A. .......................... 12,630 576,499
Titan Cement Co. S.A., Preferred................ 14,320 580,452
-------------
13,807,250
-------------
HONG KONG - 3.13%
Beijing Datang Power Generation Co., Ltd. H
Shares (b)..................................... 1,860,000 852,165
Beijing Enterprises Holdings Ltd. (b)........... 264,000 678,015
China Everbright Ltd. (b)....................... 588,000 474,285
China Merchants Holdings International Co.,
Ltd. .......................................... 588,000 603,291
China Resources Enterprise Ltd. ................ 489,000 1,091,785
CNPC Hong Kong Ltd. (b)......................... 1,290,000 362,102
Cosco Pacific Ltd. ............................. 1,500,000 1,219,591
First Tractor Co., Ltd., H Shares (b)........... 600,000 362,006
Guandong Brewery Holdings Ltd. (b).............. 47,710 6,773
Guangdong Investment Ltd. ...................... 1,338,000 889,295
Guangdong Kelon Elec Holding H Shares........... 770,000 790,024
Guangnan Holdings............................... 870,000 712,977
Jiangsu Expressway Co., Ltd., H Shares (b)...... 3,026,000 624,843
Lippo China Resources Ltd. ..................... 200,000 29,425
New World Infrastructure Ltd. (b)............... 871,000 1,961,534
NG Fung Hong Ltd. .............................. 770,000 809,899
Qingling Motors Co. ............................ 2,306,000 1,130,903
Shanghai Industrial Holdings Ltd. .............. 242,000 899,477
Zhejiang Expressway Co., Ltd. H Shares (b)...... 3,150,000 638,253
-------------
14,136,643
-------------
HUNGARY - 1.19%
BorsodChem Rt. ................................. 8,000 288,310
Danubius Hotel and Spa Rt. (b).................. 3,852 116,942
EGIS Rt. ....................................... 3,700 231,901
Graboplast Rt. GDR (b,c)........................ 16,000 146,400
Graboplast Rt. ................................. 2,000 105,766
MOL Maygar Olaj-es Gazipari Rt. ................ 25,000 605,949
MOL Maygar Olaj-es Gazipari Rt. GDR Reg. S (c).. 13,000 317,200
Magyar Tavkozlesi Rt. (b)....................... 208,000 1,104,037
Mezogazdasagi Gepgyarto Rt. (b)................. 5,445 138,641
OTP Bank Rt. GDR (c)............................ 8,000 300,000
</TABLE>
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SHARES VALUE
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<S> <C> <C>
HUNGARY - (CONTINUED)
Pannonplast Rt. ................................ 5,580 $ 293,748
Pick Szeged Rt. ................................ 3,400 271,367
Richter Gedeon Rt. ............................. 9,700 1,101,684
Richter Gedeon Rt. GDR Reg. S (c)............... 500 52,500
Zalakeramia Rt. ................................ 6,500 301,726
-------------
5,376,171
-------------
INDIA - 5.22%
Aptech Ltd. .................................... 18,000 250,191
Arvind Mills Ltd., B Shares..................... 50 113
Asea Brown Boveri Ltd. ......................... 40,500 485,463
BSES Ltd. ...................................... 27,500 119,931
Bajaj Auto Ltd. ................................ 13,300 205,216
Bharat Heavy Electricals Ltd. .................. 65,100 576,121
Bharat Petroleum Corp. Ltd. .................... 57,700 612,538
Cipla Ltd. ..................................... 42,400 683,958
Cummins India Ltd. ............................. 22,000 266,514
Digital Equipment Ltd. ......................... 58,600 206,991
EIH Ltd. ....................................... 12,000 128,998
EIH Ltd. GDR (c)................................ 4,050 52,083
Glaxo India Ltd. ............................... 71,300 741,913
Gujarat Ambuja Cements Ltd. .................... 17,500 123,183
HDFC Bank Ltd. ................................. 145,000 288,447
Hindalco Industries Ltd. ....................... 22,100 418,778
Hindalco Industries Ltd. GDR (c)................ 3,000 59,062
Hindustan Lever Ltd. ........................... 40,000 1,411,375
Hindustan Petroleum Corp. Ltd. ................. 118,800 1,467,957
Icici Banking Corp. (b)......................... 537,500 579,173
India Cements Ltd. ............................. 37,500 64,078
India Public Sector Fund Ltd. .................. 147,059 1,442,649
Indian Hotels Co., Ltd. ........................ 17,000 270,110
Indian Hotels Co., Ltd. GDR (c)................. 20,300 381,894
Indian Petrochemicals Corp. Ltd. ............... 73,500 132,622
Indian Petrochemicals Corp. Ltd. GDR (c)........ 100,200 501,000
ITC Ltd. ....................................... 64,000 1,009,538
Kopran Ltd. .................................... 11,000 30,088
Larsen & Toubro Ltd. ........................... 5,000 25,854
Madras Cements, Ltd. Class B.................... 140 16,335
Mahanagar Telephone Nigam Ltd. ................. 276,000 1,816,067
Mahanagar Telephone Nigam Ltd. GDR (b,c)........ 25,000 386,250
Mahindra & Mahindra Ltd. ....................... 73,000 598,559
Morgan Stanley India Investment Fund, Inc.
(b,c).......................................... 231,600 1,939,650
National Aluminum Co., Ltd. .................... 300,000 225,708
Oriental Bank of Commerce....................... 76,000 123,565
Pfizer Ltd. .................................... 28,800 299,862
Reliance Industries Ltd. ....................... 210,000 886,381
Reliance Industries Ltd. GDR (c)................ 73,000 615,937
</TABLE>
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SHARES VALUE
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<S> <C> <C>
INDIA - (CONTINUED)
Satyam Computer Services........................ 132,000 $ 575,669
SKF Bearings India Ltd. ........................ 4,030 128,783
State Bank of India Ltd. ....................... 117,000 725,096
State Bank of India Ltd. GDR (c)................ 18,500 321,438
Steel Authority of India Ltd. .................. 700,000 174,063
Steel Authority of India Ltd. GDR (c)........... 95,200 304,640
TVS Suzuki Ltd. ................................ 41,550 469,967
Tata Engineering & Locomotive Co., Ltd. ........ 8,200 61,955
Tata Engineering & Locomotive Co., Ltd. GDR
(c)............................................ 11,300 94,185
Tata Iron & Steel Co., Ltd. .................... 50 171
Tata Power Co., Ltd. ........................... 33,000 92,158
Tata Tea Ltd. .................................. 17,000 182,747
Videsh Sanchar Nigam Ltd. ...................... 38,000 833,945
Videsh Sanchar Nigam Ltd. GDR (b,c)............. 10,600 137,005
Wockhardt Ltd. ................................. 7,000 32,983
-------------
23,578,957
-------------
INDONESIA - 3.78%
Astra Agro Niaga Lestari Tbk (b)................ 2,405,000 886,283
Astra International Inc. ....................... 1,665,000 431,779
Bank Bali....................................... 674,000 82,793
Bank Dagang Nasional Indonesia.................. 1,062 68
Bank Dagang Nasional Indonesia Warrants "20"
(b)............................................ 47,218 438
Bank Internasional Indonesia Warrants "00" (b).. 29,210 399
Bimantara Citra................................. 1,530,000 292,357
Ciputra Development............................. 141,000 6,415
Citra Marga Nusaphala Persada................... 4,730,000 516,470
Gadjah Tunggal.................................. 1,670,000 159,554
GT Kabel Indonesia.............................. 214,000 16,551
Gudang Garam.................................... 2,205,000 3,360,668
Gulf Indonesia Resources Ltd. (b)............... 47,000 1,034,000
Hanjaya Mandala Sampoerna....................... 844,000 637,416
Indah Kiat Pulp & Paper Corp. .................. 2,665,624 472,973
Indah Kiat Pulp & Paper Corp. Warrants "01"
(b)............................................ 8,510 333
Indah Kait Pulp & Paper Corp. Warrants "02"
(b)............................................ 62,368 1,703
Indocement Tunggal Prakarsa..................... 1,503,000 492,338
Indofood Sukses Makmur.......................... 666,715 218,396
Indosat......................................... 1,082,000 2,008,444
Inti Indorayon Utama (b)........................ 1,418,500 141,979
Kalbe Farma..................................... 360,000 63,876
Lippo Bank...................................... 888,500 97,015
London Sumatra Indonesia........................ 1,040,000 591,447
Matahari Putra Prima Tbk........................ 60,000 4,914
Modern Photo Film Co. .......................... 256,000 74,540
Ramayana Lestari Sentosa........................ 333,000 313,608
Semen Cibinong.................................. 743,000 33,803
Semen Gresik.................................... 426,500 250,312
</TABLE>
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<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
INDONESIA - (CONTINUED)
Tambang Timah................................... 745,000 $ 799,909
Telekomunikasi Indonesia........................ 7,626,000 4,059,336
Unilever Indonesia.............................. 3,000 16,379
United Tractors................................. 304,500 36,019
-------------
17,102,515
-------------
ISRAEL - 3.44%
Agis Industries Ltd. ........................... 70,800 576,423
Bank Hapoalim Ltd. ............................. 791,800 1,900,374
Bank Leumi Le-Israel............................ 632,000 1,061,254
Blue Square Chain Investments & Properties Ltd.
(b)............................................ 71,317 681,437
Clal Industries Ltd. ........................... 80,807 451,618
Clal Israel Ltd. ............................... 1,970,353 584,856
Dead Sea Bromine................................ 700 6,214
ECI Telecommunications Ltd. .................... 11,600 295,800
Formula Systems (1985) Ltd. (b)................. 27,600 849,675
IDB Development Corp. Ltd. ..................... 13,410 324,503
Industrial Buildings Corp. Warrants (b)......... 25,448 3,108
Israel Chemicals Ltd. .......................... 719,000 973,599
Koor Industries Ltd. ........................... 9,635 1,067,711
Makhteshim Chemical Works Ltd. (b).............. 76,164 551,195
Nice Systems Ltd. ADR (b,c)..................... 20,000 840,000
Orbotech Ltd. (b)............................... 14,000 447,125
Supersol Ltd. .................................. 77,980 221,106
Supersol Ltd. ADR (c)........................... 51,700 727,031
Tadiran Ltd. ................................... 29,077 1,037,349
Teva Pharmaceutical Industries Ltd. ............ 62,480 2,963,799
-------------
15,564,177
-------------
KAZAKHSTAN - 0.14%
Peregrine Kazakhstan Fund (b)................... 160,000 640,000
-------------
KOREA - 1.65%
Dae Duck Electronics Co. ....................... 2,000 55,575
Daeduck Industries.............................. 1,780 53,558
Daehan City Gas Co. ............................ 6,000 123,894
Daewoo Heavy Industries......................... 34,000 97,487
Housing & Commercial Bank, Korea GDR (c)........ 57,041 376,471
Hyundai Engineering & Construction Co. (b)...... 6,656 42,410
Hyundai Marine & Fire Insurance Co. (b)......... 5,000 46,018
Hyundai Merchant Marine (b)..................... 7,000 28,909
Kookmin Bank.................................... 11,392 60,152
Korea Asia Fund Ltd. IDR (b,c).................. 2,470 1,235,000
Korea Electric Power Corp. ..................... 27,260 252,497
Korea Europe Fund IDR (b,c)..................... 400 300,000
LG Chemical Ltd. ............................... 13,000 59,823
LG Construction Ltd. ........................... 8,000 20,484
LG Information & Communication Ltd. ............ 7,160 200,649
</TABLE>
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<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
KOREA - (CONTINUED)
LG Insurance Co., Ltd. .......................... 4,370 $ 82,759
Medison Co., Ltd. ............................... 17,420 573,473
Mirae Co. ....................................... 1,400 98,702
Nong Shim Co., Ltd. ............................. 2,286 38,302
Pohang Iron & Steel Co., Ltd. ................... 36,770 1,035,547
S1 Corp. ........................................ 1,020 102,301
Samchully Co. ................................... 5,500 73,982
Samsung Electronics Co. ......................... 13,818 314,610
Samsung Fire & Marine Insurance.................. 7,250 834,071
Seoul City Gas Co., Ltd. ........................ 5,680 87,127
Sindo Ricoh Co. ................................. 6,509 157,445
SK Telecom Co., Ltd. ............................ 880 273,196
Ssangyong Oil Refining Co., Ltd. ................ 9,670 40,905
Sungmi Telecom Electronics Co. .................. 4,420 125,168
Sunkyong Industries (b).......................... 180 654
Youngone Corp. .................................. 70,000 640,118
Yukong Ltd. ..................................... 5,000 39,823
-------------
7,471,110
-------------
MALAYSIA - 2.59%
Berjaya Sports Toto Bhd.......................... 203,000 518,908
Hume Industries Bhd.............................. 256,000 268,331
Jaya Tiasa Holdings Bhd.......................... 269,000 494,117
Kentucky Fried Chicken Bhd....................... 115,000 186,127
Kuala Lumpur Kepong Bhd.......................... 381,500 818,375
Land & General Holdings Bhd...................... 427,000 78,983
Malayan Banking Bhd.............................. 225,000 653,179
Malayan Cement Bhd............................... 327,000 222,620
Malaysian International Shipping Bhd (Frgn.)..... 316,000 462,736
Malaysian Pacific Industries Bhd................. 122,000 293,051
Nestle (Malaysia) Bhd............................ 154,000 712,139
New Strait Times Press Bhd....................... 315,000 390,058
Perusahaan Otomobil Nasional Bhd................. 58,000 56,622
Petronas Gas Bhd................................. 471,000 1,070,867
Public Bank Bhd (Frgn.).......................... 750,400 258,326
Public Bank Bhd Rights (Frgn.) (b)............... 125,066 6,426
Resorts World Bhd................................ 249,000 418,998
Rothmans of Pall Mall Bhd........................ 134,000 1,041,362
Sime Darby Bhd................................... 936,000 899,330
Tan Chong Motor Holdings Bhd..................... 217,000 94,772
Tanjong PLC...................................... 216,000 357,919
Telekom Malaysia Bhd............................. 237,500 701,670
Tenaga Nasional Bhd.............................. 340,000 724,984
UMW Holdings Bhd................................. 165,000 125,048
United Engineers Bhd............................. 190,000 158,150
YTL Corp. Bhd.................................... 506,000 682,466
YTL Power International Bhd (b).................. 16,400 12,598
-------------
11,708,162
-------------
</TABLE>
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<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
MEXICO - 7.68%
Alfa S.A., Series A............................. 238,226 $ 1,613,389
Apasco S.A. .................................... 125,500 860,847
ARA, S.A. (b)................................... 186,000 904,391
Carso Global Telecom Series A-1................. 350,276 1,418,570
Cemex S.A. Series A (b)......................... 207,744 941,831
Cemex S.A. CPO (b).............................. 289,000 1,312,007
Cifra S.A., Series C............................ 180,000 401,885
Cifra S.A., Series V............................ 945,130 2,323,552
Corporacion GEO, S.A., Series B (b)............. 135,000 830,563
Desc S.A. ADR (c)............................... 20,000 750,000
Desc S.A., Series B............................. 100,000 947,656
Desc S.A., Series C............................. 148,330 1,398,298
El Puerto de Liverpool S.A., Series 1........... 25,000 40,933
El Puerto de Liverpool S.A., Series C-1......... 1,250 1,752
Fomento Economico Mexicano S.A., Series B....... 256,011 2,045,039
Grupo Carso S.A., Series A1..................... 324,276 2,159,963
Grupo Casa Autrey S.A........................... 98,000 198,139
Grupo Casa Autrey S.A. ADR (c).................. 9,100 185,981
Grupo Elektra S.A. de C.V. CPO.................. 348,000 613,813
Grupo Elektra S.A. de C.V. CPO GDR (b,c)........ 3,250 114,359
Grupo Financeiro Banamex Accival S.A., Series B
(b)............................................ 107,000 319,859
Grupo Financiero Banamex Accival S.A., Series L
(b)............................................ 510 1,316
Grupo Financiero Bancomer S.A., Series B (b).... 1,120,000 727,958
Grupo Financiero Inbursa S.A., Series B......... 2,276 9,316
Grupo Imsa S.A. ADR (c)......................... 33,700 794,056
Hylsamex S.A. Series BCP........................ 129,000 768,048
Kimberly-Clark de Mexico S.A., Series A......... 140,020 663,454
Kimberly-Clark de Mexico S.A., Series B......... 20,585 97,027
Organizacion Soriana S.A. ...................... 158,000 689,854
Panamerican Beverages, Inc., Series A........... 25,000 815,625
TV Azteca, S.A. ADR (b,c)....................... 22,000 496,375
Telefonos de Mexico S.A., Series L.............. 2,197,850 6,202,070
Telefonos de Mexico S.A., Series L ADR (c)...... 47,000 2,634,937
Tubos de Acero de Mexico S.A. (b)............... 67,500 1,431,717
-------------
34,714,580
-------------
PAKISTAN - 1.33%
Engro Chemicals Ltd. ........................... 267,000 692,589
Fauji Fertilizer Co., Ltd. ..................... 448,000 857,701
Pakistan Investment Fund, Inc. (c).............. 335,600 1,636,050
Pakistan State Oil Co., Ltd. ................... 109,800 934,420
Pakistan Telecommunications Corp. GDR (c)....... 10,500 777,848
The Hub Power Co., Ltd. GDR (c)................. 35,000 1,089,375
-------------
5,987,983
-------------
</TABLE>
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<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
PERU - 1.86%
Cementos Lima S.A. ............................. 36,269 $ 790,041
Cerveceria Backus & Johnston S.A., T Shares..... 1,228,353 1,126,516
Cia de Minas Buenaventura S.A., A Shares........ 34,836 258,778
Cia de Minas Buenaventura S.A., Trabajo Shares.. 90,978 540,995
Credicorp Ltd. (c).............................. 87,207 1,569,726
Ferreyros S.A. ................................. 64,692 68,347
Ferreyros S.A., 144A ADR (c).................... 9,732 205,638
Telefonica del Peru S.A. ADR (c)................ 84,300 1,965,244
Telefonica del Peru S.A., B Shares.............. 844,115 1,885,789
-------------
8,411,074
-------------
PHILIPPINES - 3.98%
Ayala Corp. Class B............................. 4,509,875 1,780,214
Ayala Land, Inc., Class B....................... 2,352,250 943,258
Belle Corp. (b)................................. 12,070,000 471,910
Belle Corp. Warrants "00" (b)................... 818,800 1,283
Benpres Holdings Corp. GDR (b,c)................ 485,660 1,456,980
DMCI Holdings, Inc. (b)......................... 11,360,000 341,654
Digital Telecommunications Phils., Inc.
(Digitel) (b).................................. 1,513,000 55,363
Filivest Land Inc. (b).......................... 6,753,000 270,797
International Container Terminal Services, Inc.
(b)............................................ 3,027,000 379,323
JG Summit Holdings, Inc., Class B............... 1,000,000 82,707
Manila Electric Co., Class B.................... 641,465 2,154,293
Metropolitan Bank & Trust Co. .................. 157,718 1,077,149
Petron Corp. ................................... 7,173,600 602,295
Phillippine Long Distance Telephone Co. ........ 244,100 5,383,659
Robinson's Land Corp., Series B (b)............. 2,651,000 91,689
San Miguel Corp., Class B....................... 1,306,508 1,620,856
SM Prime Holdings, Inc. ........................ 8,353,400 1,256,150
-------------
17,969,580
-------------
POLAND - 2.06%
Agros Holdings S.A., Class C (b)................ 20,460 423,711
Amica Wronki S.A. (b)........................... 21,900 372,766
Bank Inicjatyw Gospodarczych S.A. .............. 624,000 610,723
Bank Rozwoju Eksportu S.A. ..................... 37,000 766,241
Bank Slaski S.A. ............................... 19,550 1,081,489
DROSED S.A. (b)................................. 22,013 293,507
Elektrim Spolka Akcyjna S.A. ................... 98,000 948,028
Exbud S.A. (b).................................. 22,500 210,638
Przedsiebiorstwo Farmaceutyczne JELFA S.A. (b).. 14,200 314,213
Mostostal-Export S.A. .......................... 55,000 138,865
Polifarb Cieszyn-Wroclaw S.A. (b)............... 175,000 829,078
Prokom Software S.A. GDR (b,c).................. 53,700 575,933
Sokolowskie Zaklady Miesne S.A. ................ 300,000 365,958
Stomil Olsztyn S.A. ............................ 97,000 742,979
Wielkopolski Bank Kredytowy S.A. ............... 135,753 681,653
</TABLE>
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<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
POLAND - (CONTINUED)
Zaklady Celulozy i Papieru w Swieciu S.A. (b)... 57,880 $ 290,631
Zaclady Metali Lekkich Kety (b)................. 12,100 185,362
Zaklady Piwowarskie w Zywcu S.A. ............... 2,300 193,135
Zaklady Przemyslu Cukierniczego Jutrzenka
S.A. .......................................... 16,200 298,723
-------------
9,323,633
-------------
PORTUGAL - 3.51%
BPI-SGPS, S.A. ................................. 16,000 389,448
Banco Comercial Portugues S.A. ................. 21,720 444,678
Banco Espirito Santo e Comercial de Lisboa
S.A. .......................................... 79,100 2,356,436
Banco Totta & Acores S.A. ...................... 25,354 498,392
Brisa-Auto Estradas de Portugal, S.A. (b)....... 28,000 1,004,101
Cimentos de Portugal S.A. ...................... 37,050 972,147
CIN-Corparacao Industrial do Norte, S.A. ....... 7,000 441,284
EDP Electricidade de Portugal S.A. ............. 37,000 701,360
EDP Electricidade de Portugal S.A. ADR (b,c).... 10,000 387,500
Engil-SGPS...................................... 23,500 229,695
INAPA-Investimentos Participacoes e Gestao,
S.A. .......................................... 33,000 385,912
Jeronimo Martins, SGPS, S.A. ................... 25,200 800,479
Mota e Companhia, S.A. ......................... 13,000 206,473
Mundicenter-Sociedade Imobiliaria, S.A. ........ 28,000 334,446
Portugal Telecom S.A. .......................... 50,400 2,341,126
Semapa-Sociedade de Investimento e Gestao, SGPS
S.A. .......................................... 45,000 1,097,770
Somague-SGPS S.A. .............................. 96,501 1,012,512
Sonae Imobiliaria S.A. (b)...................... 40,000 485,396
Sonae Investimentos-SGPS S.A. .................. 17,500 708,567
Telecel Commincacaoes Pessoais S.A. (b)......... 10,000 1,066,630
-------------
15,864,352
-------------
ROMANIA - 0.41%
Romanian Investment Fund (b,c).................. 1,950 1,866,091
-------------
RUSSIA - 2.19%
Firebird Republics Fund (b,c)................... 10,288 2,020,000
Framlington Russia Investment Fund (b).......... 9,721 80,198
Gazprom ADR (c)................................. 18,000 434,250
Gorkovsky Auto Plant (b)........................ 2,000 212,000
Kirowsky Tire (b,c)............................. 5,000 325,000
Krasny Oktyabr (RED October) RDC (b,c).......... 3 285,000
Lukoil Holding Co. (c).......................... 4,000 92,080
Lukoil Holding Co. ADR (c)...................... 22,000 2,020,150
Mosenergo ADR (c)............................... 11,000 411,400
Nizhny Novgorod Sviazinform RDC (b,c)........... 1 90,000
Norilsk Nickel (b,c)............................ 60,000 375,000
Regent Red Tiger Investment Fund (b,c).......... 20,000 878,200
Rostelcom Preferred (b,c)....................... 172,000 387,000
Surgutneftegaz Preferred ADR (c)................ 50,000 500,000
Trade House GUM ADR (c)......................... 25,000 137,885
</TABLE>
83
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
RUSSIA - (CONTINUED)
Unified Energy Systems GDR (b,c)................. 19,100 $ 582,550
Vimpel-Communications ADR (b,c).................. 26,200 933,375
Yuganskneftegaz (b,c)............................ 10,000 147,500
-------------
9,911,588
-------------
SOUTH AFRICA - 5.17%
Amalgamated Banks of South Africa................ 264,515 1,521,919
Anglo American Corp. of South Africa, Ltd. ...... 37,550 1,515,426
Anglo American Industrial Corp., Ltd. ........... 25,307 611,549
Anglovaal Ltd., N Shares......................... 37,268 412,004
Barlow Ltd. ..................................... 136,100 1,155,025
De Beers Centenary AG............................ 62,433 1,270,085
Dimension Data Holdings Ltd. .................... 309,600 1,335,991
Energy Africa Ltd. (b)........................... 66,000 349,224
Fedsure Holdings Ltd. ........................... 113,700 1,399,492
Gencor Ltd. ..................................... 12,400 20,512
Impala Platinum Holdings Ltd. ................... 73,822 705,378
Investec Bank Ltd. .............................. 20,600 792,422
Johannesburg Consolidated........................ 73,100 778,091
Liberty Life Association of Africa Ltd. ......... 90,000 2,311,723
Metro Cash & Carry Ltd. ......................... 499,900 436,571
Nedcor Ltd. ..................................... 100,768 2,236,298
Pick 'n Pay Stores Ltd. ......................... 253,300 369,032
Pick 'n Pay Stores Ltd., N Shares................ 75,800 102,801
Rembrandt Group Ltd. ............................ 228,619 1,667,723
SA Iron & Steel Industries Corp. ................ 1,098,061 324,917
Samancor Ltd. ................................... 60,000 274,324
Sappi Ltd. ...................................... 64,749 325,974
Sasol Ltd. ...................................... 177,312 1,854,553
South African Breweries Ltd. .................... 58,200 1,435,118
Tiger Oats Ltd. ................................. 7,000 96,661
Woolworths Holdings Ltd. (b)..................... 46,440 64,700
-------------
23,367,513
-------------
TAIWAN - 0.06%
Taiwan Fund, Inc. (c)............................ 17,700 292,050
-------------
THAILAND - 2.37%
Advanced Info Service Public Co., Ltd. .......... 35,000 168,640
Advanced Info Service Public Co., Ltd. (Frgn.)... 140,800 672,565
Bangkok Bank Public Co., Ltd. ................... 208,600 519,875
Bangkok Expressway Public Co., Ltd. (b).......... 882,000 490,000
Banpu Public Co., Ltd. .......................... 50,700 203,221
BEC World Public Co., Ltd. ...................... 60,700 242,044
BEC World Public Co., Ltd. (Frgn.) (b)........... 164,300 655,153
Delta Electronics Public Co., Ltd. .............. 9,500 78,920
Delta Electronics Public Co., Ltd. (Frgn.) (b)... 15,500 128,764
Electricity Generating Public Co., Ltd. ......... 657,000 1,228,037
</TABLE>
84
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
THAILAND - (CONTINUED)
Grammy Entertainment Public Co., Ltd. .......... 3,000 $ 13,084
Grammy Entertainment Public Co., Ltd. (Frgn.)... 40,000 174,455
K.R. Precision Public Co., Ltd. ................ 40,700 153,840
KCE Electronics Public Co., Ltd. ............... 50,000 132,918
KCE Electronics Public Co., Ltd. (Frgn.)........ 37,300 99,157
Lanna Lignite Public Co., Ltd. ................. 60,000 122,118
PTT Exploration & Production Public Co., Ltd. .. 175,800 2,022,704
Ruam Pattana Fund II (b)........................ 15,000,000 1,526,480
Saha-Union Public Co., Ltd. .................... 290,500 167,422
Shinawatra Satellite Public Co., Ltd. (Frgn.)... 551,100 45,782
Siam Cement Public Co., Ltd. ................... 37,500 295,950
Siam Makro Public Co., Ltd. .................... 45,300 54,097
Siam Makro Public Co., Ltd. (Frgn.)............. 234,700 280,275
Thai Farmers Bank Public Co., Ltd. (Frgn.)...... 382,000 694,185
Thai Petrochemical Industry Public Co., Ltd. ... 95,725 9,145
The Cogeneration Public Co., Ltd. (Frgn.)....... 422,800 250,255
TelecomAsia Corp. (Frgn.) (b)................... 573,000 109,483
Tipco Asphalt Public Co., Ltd. ................. 35,000 26,895
Tipco Asphalt Public Co., Ltd. (Frgn.).......... 69,000 53,022
Total Access Communication Public Co., Ltd. .... 210,000 71,400
-------------
10,689,886
-------------
TURKEY - 2.04%
Adana Cimento Sanayii, Class A.................. 5,360,000 452,867
Akbank T.A.S.................................... 6,600,000 581,533
Aksigorta A.S. ................................. 6,500,000 415,812
Alarko GayrimenKul Yatrium Ortakligi A.S. (b)... 12,400,000 335,256
Alarko Holding A.S. ............................ 3,400,000 730,477
Arcelik A.S. ................................... 5,445,000 512,625
Demirbank T.A.S. ............................... 728,000 22,143
Eczacibasi Yapi Gerecleri Sanayi ve Ticaret A.S.
(b)............................................ 11,500,000 521,907
Eczacibasi Yatrim Holding (b)................... 10,268,000 302,401
Enka Holding Yatirim A.S. ...................... 538,000 311,696
Eregli Demir Ve Celik Fabrikalari T.A.S. ....... 1,500,000 231,744
Guney Biracilik ve Malt Sanayii A.S. ........... 3,560,000 232,034
Kordsa Kord Bezi Sanayi......................... 7,000,000 608,328
Migros Turk T.A.S. ............................. 659,000 596,560
Netas-Northern Elektrik Telekomunikasyon A.S.
(b)............................................ 1,210,000 438,141
Olmuska Mukavva Sanayi Ve Ticaret A.S. (b)...... 3,940,000 171,201
Trakya Cam Sanayii A.S. ........................ 8,996,408 521,216
Turk Siemens Kablo Ve Elektrik Sanayii A.S. .... 4,118,000 308,167
Turk Sise Ve Cam Fabrikalari A.S. .............. 5,000,000 368,135
Turkiye Garanti Bankasi A.S. ................... 8,015,776 396,677
Yapi Ve Kredi Bankasi A.S. ..................... 28,583,000 1,090,190
-------------
9,149,110
-------------
</TABLE>
85
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
SHARES VALUE
--------------------- -------------
<S> <C> <C>
UKRAINE - 0.11%
Ukraine Investment Fund (b,c)........... 50,000 $ 506,500
-------------
UNITED STATES - 0.58%
Societe Generale Arab Fund (b,c)........ 16,000 1,616,000
Societe Generale Ladenburg Thalmann
(b,c).................................. 10,000 1,000,600
-------------
2,616,600
-------------
VENEZUELA - 0.80%
Ceramica Carabobo, Class B ADR (c)...... 311,770 247,296
Cia Anonima Nacional Telefonos de Vene-
zuela ADR (c).......................... 50,300 2,093,738
Mavesa, S.A. ADR (c).................... 38,000 242,250
Mercantil Services ADR (b,c)............ 20,000 315,000
Siderurgica Venezolana Sivensa S.A.C.A.
ADR (c)................................ 172,000 719,665
-------------
3,617,949
-------------
TOTAL EQUITIES (COST $420,248,484)...... 354,722,274
-------------
<CAPTION>
FACE
VALUE
---------------------
<S> <C> <C>
BONDS - 1.71%
CONVERTIBLE BOND - 0.02%
CHINA - 0.02%
Qingling Motors Co. Series 144A,
3.500%, due 01/22/02 (c)............... $ 100,000 94,500
-------------
NON-U.S. GOVERNMENT BOND - 1.69%
POLAND - 1.69%
Government of Poland, 12.000%, due
02/12/03............................... PLN 37,000,000 7,614,023
-------------
TOTAL BONDS (COST $7,897,717) .......... 7,708,523
-------------
SHORT-TERM INVESTMENTS - 21.63%
NON-U.S. GOVERNMENT OBLIGATION - 1.00%
TURKEY
Turkish Treasury Bill 114.492%, due
06/04/98............................... TRL 1,360,000,000,000 4,546,385
-------------
U.S. COMMERCIAL PAPER - 19.34%
American Stores Co., 5.950%, due
03/23/98............................... $ 2,500,000 2,467,778
Bausch & Lomb Inc.
8.000%, due 01/02/98................... 518,000 517,885
6.750%, due 01/05/98................... 8,000,000 7,994,000
Case Credit Corp.
6.000%, due 01/13/98................... 2,500,000 2,495,000
6.000%, due 01/23/98................... 2,000,000 1,992,667
6.030%, due 03/10/98................... 1,000,000 989,150
6.020%, due 03/12/98................... 2,000,000 1,977,652
6.050%, due 03/13/98................... 2,000,000 1,977,328
Crown Cork & Seal Co., Inc., 6.050%, due
01/28/98............................... 1,480,000 1,473,285
Eastman Chemical Co., 6.750%, due
01/08/98............................... 3,250,000 3,245,734
General American Transportation Corp.,
7.000%, due 01/16/98................... 2,500,000 2,492,708
GATX Capital Corp., 6.250%, due
01/22/98............................... 4,000,000 3,985,417
</TABLE>
86
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
VALUE VALUE
------------- -------------
<S> <C> <C>
U.S. COMMERCIAL PAPER - (CONTINUED)
GTE Corp.
6.100%, due 02/20/98.......................... $ 1,000,000 $ 991,528
6.120%, due 02/20/98.......................... 2,491,000 2,469,827
6.050%, due 02/23/98.......................... 3,000,000 2,973,279
6.050%, due 02/27/98.......................... 1,000,000 990,421
6.020%, due 03/02/98.......................... 2,500,000 2,475,949
Marriot Corp.
5.970%, due 01/28/98.......................... 5,000,000 4,977,613
5.990%, due 02/06/98.......................... 3,000,000 2,982,030
6.050%, due 02/09/98.......................... 2,000,000 1,986,892
Nabisco Inc., 6.120%, due 01/16/98............. 5,000,000 4,987,250
Norfolk Southern Corp., 6.100%, due 01/21/98... 5,000,000 4,983,056
Occidental Petroleum Corp., 6.000%, due
01/16/98...................................... 3,000,000 2,992,500
Safeway Inc.
6.700%, due 01/02/98.......................... 5,000,000 4,999,070
5.920%, due 01/22/98.......................... 5,000,000 4,982,734
Tenneco, Inc., 6.250%, due 01/22/98............ 3,000,000 2,989,063
Texas Utilities Co., 6.120%, due 01/09/98...... 5,000,000 4,993,200
U.S. West Capital Funding Corp., 6.100%, due
01/23/98...................................... 3,000,000 2,988,817
Whirpool Corp., 6.750%, due 01/05/98........... 2,000,000 1,998,500
-------------
87,370,333
-------------
NON-U.S. RUSSIAN TREASURY BILL - 1.29%
Cargill Russian GKO 17.750%, due 06/19/98...... 6,296,416 5,825,100
-------------
TOTAL SHORT TERM INVESTMENTS (COST
$100,982,473)................................. 97,741,818
-------------
TOTAL INVESTMENTS (COST $529,128,674) - 101.84%
(A)........................................... 460,172,615
-------------
LIABILITIES, LESS CASH AND OTHER ASSETS -
(1.84%)...................................... (8,299,277)
-------------
NET ASSETS - 100%.............................. $451,873,338
=============
</TABLE>
See accompanying notes to schedule of investments.
87
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
December 31, 1997
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $529,128,674; and net
unrealized depreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation........... $ 17,874,603
Gross unrealized depreciation........... (86,830,662)
-------------
Net unrealized depreciation......... $(68,956,059)
=============
</TABLE>
(b) Non-income producing security
(c) Denominated in U.S. Dollars.
(d) Denominated in Hong Kong Dollars.
ADR: American Depositary Receipt
GDR: Global Depositary Receipt
GKO: Russian Government Short-Term Obligations
PLN: Polish Zloty
TRL: Turkish Lira
RDC: Russian Depositary Certificates
144A: Security exempt from registration under Rule 144A of the Securities Act
of 1933. These Securities may resold in transactions exempt from
registration, normally to qualified institutional buyers. At December
31, 1997 the value of these securities amounted to $300,138 or 0.07% of
net assets.
EQUITY SWAP CONTRACTS (NOTE 4)
The Brinson Emerging Markets Equity Fund has entered into equity swap
contracts as of December 31, 1997. These swaps serve to reduce the Fund's
exposure to short-term investments, as a percentage of net assets, from
21.63% to 4.56% and increase the Fund's exposure to various countries. The
following reflects the open swap positions as of December 31, 1997,
aggregated by country exposure:
<TABLE>
<CAPTION>
NET UNREALIZED
NOTIONAL AMOUNTS MATURITY DATES COUNTRY GAIN/(LOSS) EXPOSURE
---------------- ----------------- -------- -------------- --------
<S> <C> <C> <C> <C>
$ 2,665,531 08/17/98 Hungary $ 467,799 0.69%
12,310,012 01/12/98-11/16/98 Korea (5,926,106) 1.41%
11,937,706 04/15/98-11/14/98 Malaysia (4,938,936) 1.55%
1,000,000 09/24/98 Mexico (23,239) 0.22%
8,737,839 09/25/98-12/12/98 Poland (862,962) 1.74%
22,869,829 01/15/98-11/16/98 Taiwan (1,611,131) 4.71%
8,382,772 06/11/98-11/14/98 Thailand (4,016,757) 0.97%
9,232,117 03/16/98-06/15/98 Turkey 1,889,405 2.46%
------------ ------------- ------
$77,135,806 $(15,021,927) 13.75%
============ ============= ======
</TABLE>
See accompanying notes to financial statements.
88
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $529,128,674) (Note 1)............... $460,172,615
Cash............................................................. 5,584,365
Foreign currency, at value (Cost $3,056,591)..................... 3,047,285
Receivables:
Dividends....................................................... 681,642
Interest........................................................ 276,258
Net unrealized appreciation on equity swap contracts (Note 4)... 108,470
Other assets..................................................... 259,380
-------------
TOTAL ASSETS.................................................. 470,130,015
-------------
LIABILITIES:
Payables:
Investment securities purchased................................. 3,066,664
Net unrealized depreciation on equity swap contracts (Note 4)... 15,130,397
Accrued expenses................................................. 59,616
-------------
TOTAL LIABILITIES............................................. 18,256,677
-------------
NET ASSETS:
Applicable to 49,312,343 shares; no par value, unlimited shares
authorized...................................................... $451,873,338
=============
Net asset value per share ($451,873,338 / 49,312,343 shares)..... $ 9.1635
=============
Maximum offering price per share (net asset value, plus 1.52% of
net asset value, or 1.50% of offering price) (Note 8)........... $ 9.3030
=============
Redemption price per share (net asset value, less 1.50% of net
asset value or 1.52% of redemption value) (Note 8).............. $ 9.0260
=============
NET ASSETS CONSIST OF:
Paid in capital.................................................. $534,407,672
Accumulated net investment income................................ 13,362,870
Accumulated net realized loss.................................... (11,866,490)
Net unrealized depreciation...................................... (84,030,714)
-------------
NET ASSETS.................................................... $451,873,338
=============
</TABLE>
See accompanying notes to financial statements.
89
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $520,098 for foreign taxes withheld)......... $ 5,368,853
Interest....................................................... 3,947,095
-------------
TOTAL INCOME................................................ 9,315,948
-------------
EXPENSES:
Custodian...................................................... 603,381
Administration................................................. 193,273
Professional................................................... 80,131
Other.......................................................... 73,319
-------------
TOTAL EXPENSES.............................................. 950,104
-------------
NET INVESTMENT INCOME....................................... 8,365,844
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................... (10,517,867)
Equity swap contracts......................................... 2,718,303
Foreign currency transactions................................. (1,683,698)
-------------
Net realized loss............................................ (9,483,262)
-------------
Change in net unrealized appreciation or depreciation on:
Investments, equity swap contracts and foreign currency....... (85,729,084)
Translation of other assets and liabilities denominated in
foreign currency............................................. (50,585)
-------------
Change in net unrealized appreciation or depreciation........ (85,779,669)
-------------
Net realized and unrealized loss............................... (95,262,931)
-------------
Net decrease in net assets resulting from operations........... $(86,897,087)
=============
</TABLE>
See accompanying notes to financial statements.
90
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income..................... $ 8,365,844 $ 4,002,337
Net realized loss......................... (9,483,262) (1,482,828)
Change in net unrealized appreciation
or depreciation.......................... (85,779,669) 5,411,782
------------- -------------
Net increase (decrease) in net assets re-
sulting from operations.................. (86,897,087) 7,931,291
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold (Note 8)...................... 366,188,354 130,419,803
Shares redeemed........................... (6,756,104) (49,141,891)
------------- -------------
Net increase in net assets resulting from
capital share transactions (a)........... 359,432,250 81,277,912
------------- -------------
TOTAL INCREASE IN NET ASSETS........... 272,535,163 89,209,203
NET ASSETS:
Beginning of year......................... 179,338,175 90,128,972
------------- -------------
End of year (including accumulated net
investment income of $13,362,870 and
$4,997,026, respectively)................ $451,873,338 $179,338,175
============= =============
(a)A summary of capital share transactions
follows:
SHARES SHARES
------------- -------------
Shares sold.............................. 32,314,985 12,742,970
Shares redeemed.......................... (608,644) (4,811,226)
------------- -------------
Net increase in shares outstanding...... 31,706,341 7,931,744
============= =============
</TABLE>
See accompanying notes to financial statements.
91
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------- PERIOD ENDED
1997 1996 DECEMBER 31, 1995*
----------- ----------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of pe-
riod............................ $ 10.1862 $ 9.3164 $10.0000
----------- ----------- --------
Income from investment
operations:
Net investment income........... 0.2561*** 0.1810 0.1028
Net realized and unrealized gain
(loss)......................... (1.2788) 0.6888 (0.7864)
----------- ----------- --------
Total income (loss) from
investment operations......... (1.0227) 0.8698 (0.6836)
----------- ----------- --------
Net asset value, end of period... $ 9.1635 $ 10.1862 $ 9.3164
=========== =========== ========
Total return (non-annualized).... (10.04)% 9.34% (6.84)%
Ratios/Supplemental data
Net assets, end of period (in
000s).......................... $ 451,873 $ 179,338 $ 90,129
Ratio of expenses to average net
assets......................... 0.28% 0.46% 0.50%**
Ratio of net investment income
to average net assets.......... 2.44% 3.42% 3.86%**
Portfolio turnover rate......... 62% 25% 2%
Average commission rate paid per
share.......................... $ 0.0027 $ 0.0016 $ 0.0016
</TABLE>
* The Fund commenced operations June 30, 1995
** Annualized
*** The net investment income per share data was determined by using average
shares outstanding during the period.
See accompanying notes to financial statements.
92
<PAGE>
BRINSON SHORT-TERM FUND
- --------------------------------------------------------------------------------
The Brinson Short-Term Fund provides an effective means for short-term
investment of assets designed for near-term disbursement or set aside as future
buying reserves. Investment emphasis with the Fund is on high quality, short-
term money market instruments with a high degree of marketability and
liquidity. Our investment staff is guided by two basic objectives when
investing the Fund's assets. The first is to provide for safety of principal,
and the second is to earn a rate of return that is competitive with alternative
short-term investment vehicles.
Since its inception on June 30, 1996, the Brinson Short-Term Fund has provided
an annualized return of 6.01% compared to the benchmark British Bank
Association 30-Day LIBOR (LIBOR) which returned 5.82% over the same period. In
1997, the Fund returned 5.92% which exceeded the 5.87% LIBOR return by 5 basis
points.
U.S. short-term interest rates were unusually stable during 1997, consistent
with the stable underlying performance of the real economy and the continued
decline in inflation. Federal Reserve interest rate policy changed only once
during the year when the overnight funds target was increased from 5.25% to
5.50% in March. The one month LIBOR began the year at 5.50% and rose in
parallel with the 25 basis point increase in the overnight funds target.
The Brinson Short-Term Fund derives its investment performance record from an
investment process which emphasizes portfolio maturity structure, credit risk
management, sector and issue selection and competitive execution. The Fund does
not utilize derivative securities with leveraged structures or other high risk
devices to enhance yield at the risk of safety of principal.
93
<PAGE>
BRINSON SHORT-TERM FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
------------ -------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 1,172.51%
COMMERCIAL PAPER - 1,172.51%
ITT Industries Inc., 6.250%, due 01/06/98....... $ 4,102,000 $ 4,098,439
Marriott Corp., 5.840%, due 01/30/98............ 10,000,000 9,952,956
Nabisco Inc., 6.750%, due 01/05/98.............. 5,155,000 5,151,134
Peco Energy Co., 6.430%, due 01/02/98........... 20,000,000 19,996,428
Raytheon Co., 6.500%, due 01/02/98.............. 20,000,000 19,996,388
Safeway Inc., 6.700%, due 01/02/98.............. 7,597,000 7,595,586
-------------
TOTAL INVESTMENTS (COST $66,790,931) -
1,172.51%...................................... 66,790,931
-------------
LIABILITIES, LESS CASH AND OTHER ASSETS -
(1,072.51%).................................... (61,094,533)
-------------
NET ASSETS - 100%............................... $ 5,696,398
=============
</TABLE>
See accompanying notes to financial statements.
94
<PAGE>
BRINSON SHORT-TERM FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $66,790,931) (Note 1)............... $66,790,931
Cash............................................................ 1,503
Due from Advisor (Note 2)....................................... 21,316
------------
TOTAL ASSETS................................................. 66,813,750
------------
LIABILITIES:
Payables:
Fund shares redeemed........................................... 61,105,012
Accrued expenses............................................... 12,340
------------
TOTAL LIABILITIES............................................ 61,117,352
------------
NET ASSETS:
Applicable to 521,838 shares; no par value; unlimited shares au-
thorized....................................................... $ 5,696,398
============
Net asset value, offering and redemption price per share
($5,696,398 / 521,838 shares).................................. $ 10.9160
============
NET ASSETS CONSIST OF:
Paid in capital................................................. $ 2,049,820
Accumulated net investment income............................... 3,648,319
Accumulated net realized loss................................... (1,741)
------------
NET ASSETS................................................... $ 5,696,398
============
</TABLE>
See accompanying notes to financial statements.
95
<PAGE>
BRINSON SHORT-TERM FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.......................................................... $3,113,519
-----------
TOTAL INCOME................................................... 3,113,519
-----------
EXPENSES:
Accounting........................................................ 21,027
Professional...................................................... 11,404
Transfer agent.................................................... 9,187
Administration.................................................... 3,552
Custodian......................................................... 3,527
Other............................................................. 3,788
-----------
TOTAL EXPENSES................................................. 52,485
Expenses reimbursed by Advisor (Note 2)........................ (26,044)
-----------
NET EXPENSES................................................... 26,441
-----------
NET INVESTMENT INCOME.......................................... 3,087,078
-----------
NET REALIZED LOSS:
Net realized loss................................................. (1,639)
-----------
Net increase in net assets resulting from operations.............. $3,085,439
===========
</TABLE>
See accompanying notes to financial statements.
96
<PAGE>
BRINSON SHORT-TERM FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996*
----------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income..................... $ 3,087,078 $ 561,241
Net realized loss......................... (1,639) (102)
-------------- --------------
Net increase in net assets resulting from
operations............................... 3,085,439 561,139
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................... 173,988,092 38,354,747
Shares redeemed........................... (193,084,500) (17,218,519)
-------------- --------------
Net increase (decrease) in net assets re-
sulting from capital share transactions
(a)...................................... (19,096,408) 21,136,228
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ (16,010,969) 21,697,367
NET ASSETS:
Beginning of period....................... 21,707,367 10,000
-------------- --------------
End of period (including accumulated net
investment income of $3,648,319 and
$561,241, respectively).................. $ 5,696,398 $ 21,707,367
============== ==============
(a)A summary of capital share transactions follows:
<CAPTION>
SHARES SHARES
-------------- --------------
<S> <C> <C>
Shares sold.............................. 16,246,918 3,789,397
Shares redeemed.......................... (17,831,378) (1,684,099)
-------------- --------------
Net increase (decrease) in shares out-
standing............................... (1,584,460) 2,105,298
============== ==============
</TABLE>
* The Fund commenced operations June 28, 1996.
See accompanying notes to the financial statements.
97
<PAGE>
BRINSON SHORT-TERM FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996*
----------------- ------------------
<S> <C> <C>
Net asset value, beginning of period...... $10.3059 $10.0000
--------- ---------
Income from investment operations:
Net investment income.................... 0.7642*** 0.3060***
Net realized loss........................ (0.1541) (0.0001)
--------- ---------
Total income from investment opera-
tions.................................. 0.6101 0.3059
--------- ---------
Net asset value, end of period............ $10.9160 $10.3059
========= =========
Total return (non-annualized)............. 5.92% 3.06%
Ratios/Supplemental data
Net assets, end of period (in 000s)...... $5,696 $21,707
Ratio of expenses to average net assets:
Before expense reimbursement............ 0.10% 0.94%**
After expense reimbursement............. 0.05% 0.05%**
Ratio of net investment income to average
net assets:
Before expense reimbursement............ 5.80% 4.84%**
After expense reimbursement............. 5.85% 5.73%**
</TABLE>
* The Fund commenced operations June 28, 1996.
** Annualized
*** The net investment income per share data was determined by using average
shares outstanding during the period.
See accompanying notes to financial statements.
98
<PAGE>
BRINSON HIGH YIELD FUND
- --------------------------------------------------------------------------------
The Brinson High Yield Fund is an actively managed portfolio that invests
primarily in the below-investment grade U.S. dollar-denominated fixed income
market. This can be an attractive asset class for those who wish to take
advantage of the higher expected returns in the higher risk segments of the
fixed income market. Diversification and intensive credit analysis are
emphasized as a means of managing overall risk.
The Brinson High Yield Fund has provided an annualized total return of 13.30%
since its performance inception on April 30, 1995, versus 13.10% for its
benchmark, the First Boston High Yield Bond Index. In 1997, the Brinson High
Yield Fund achieved a total return of 13.37%, exceeding the benchmark return of
12.63%. This relative performance advantage was due to good individual credit
selection and our focus on the middle quality tier of the market.
During 1997, the best performing quality tier of the index was the middle tier
which gained 14.14%. Our overweight throughout the year in the middle tier
benefited performance. The lower tier was the laggard with a 4.45% total
return, due largely to the poor performance of defaulted securities. Our
overweight of the lower tier detracted from performance, but only marginally
because the Fund has a 0% weight in defaulted securities. The upper tier gained
11.13% and not-rated securities achieved a total return of 12.96%. We believe
that with currently compressed yield spreads the upper tier can offer
potentially attractive total return opportunities and that the lower tier has
special credit situations where extensive due diligence will be rewarded.
The best performing industries in 1997 were conglomerates, communications and
media. Our underweights in communications and media detracted from performance.
The worst performing industries were supermarkets/drug stores, financial and
consumer manufacturing. Our underweights of supermarkets and financial bonds
benefited performance, but our overweight in consumer manufacturing reduced our
returns. Our largest industry overweights are a function of our bottom-up
credit selection process. Our largest industry underweights generally reflect
weak fundamental outlooks or poor risk/reward tradeoffs within the sector and
include communications, energy and gaming.
We purchased 29 new credits for the Fund in 1997. We sold, redeemed or tendered
41 issues. The Fund holds approximately 50 credits. During 1997, nearly 70% of
the new credits added to the Fund were bought in the new issue market. Included
in the new additions were several emerging market credits. Our benchmark
maintains a 7.4% weight in emerging market corporates and a 7.7% weight in non-
U.S./non-emerging market corporates. The Fund is well diversified by industry,
quality, coupon, maturity and security type.
The new issue market shattered all previous records with $126.0 billion of
issuance and approximately 700 issues in 1997. Of this amount, 79.8% were
completed as 144A issues. Mutual funds and the dramatic increase in high yield
collateralized bond obligations (CBO's) were the primary drivers of demand.
Despite the strong performance of high yield bonds, average spreads to
Treasuries widened from 355 to 386 basis points. The average yield of the index
declined from 9.71% to 9.58%. Defaults rose modestly to a 1.81% annual rate.
The current economic climate remains favorable for high yield bonds, pending
the outcome of the Asian crisis. Demand/supply fundamentals are positive, but
could change if high yield mutual fund outflows were spurred by an equity
market correction.
99
<PAGE>
BRINSON HIGH YIELD FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR ANNUALIZED
ENDED ENDED 04/30/95*
12/31/97 12/31/97 TO 12/31/97
- --------------------------------------------------------------------
<S> <C> <C> <C>
Brinson High Yield Fund 6.49% 13.37% 13.30%
- --------------------------------------------------------------------
First Boston High Yield Bond Index 6.40% 12.63% 13.10%
- --------------------------------------------------------------------
</TABLE>
*Performance inception date of the Brinson High Yield Fund.
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $100,000
This chart shows the growth in the value of an investment in the Brinson High
Yield Fund and the First Boston High Yield Bond Index if you had invested
$100,000 on April 30, 1995. Past performance is no guarantee of future results.
Share price and return will vary with market conditions; investors may realize
a gain or loss upon redemption.
BRINSON HIGH YIELD FUND
VS. FIRST BOSTON HIGH YIELD BOND INDEX
12783F-Hi_Yield-dg
<TABLE>
<CAPTION>
Brinson High Yield Fund First Boston High Yield Bond Index
----------------------- ----------------------------------
<S> <C> <C>
4/30/95 100,000 100,000
100,662 102,820
6/30/95 100,553 103,499
101,729 105,103
102,291 105,397
9/30/95 103,491 106,609
104,956 107,793
105,941 108,299
12/31/95 107,361 109,675
108,820 111,758
110,836 112,351
3/31/96 110,503 112,047
111,210 112,652
112,623 113,565
6/30/96 112,963 113,815
113,584 114,839
115,713 116,091
9/30/96 119,121 118,088
119,625 119,080
121,423 120,937
12/31/96 123,175 123,295
124,846 124,196
126,409 126,530
3/31/97 122,735 125,113
124,892 126,227
128,738 128,764
6/30/97 131,130 130,515
134,858 133,282
135,479 134,002
9/30/97 139,078 136,655
137,523 136,641
139,649 137,611
12/31/97 139,645 138,864
- -------------------------------------------------------------
</TABLE>
LOGO
Fund returns are net of all fees and costs, while the index returns are based
solely on market returns without deduction for fees or transaction costs for
rebalancing.
100
<PAGE>
BRINSON HIGH YIELD FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of December 31, 1997
<TABLE>
<S> <C>
U.S. BONDS
Corporate Bonds
Auto........................... 4.24%
Business Services.............. 3.64
Consumer Goods................. 16.47
Electronics and Electric
Components.................... 4.66
Energy......................... 4.81
Financial...................... 2.00
Health......................... 4.34
Industrial..................... 10.20
Leisure and Tourism............ 4.06
Retail......................... 4.22
Telecommunications............. 11.76
------
Total U.S. Corporate Bonds.... 70.40
------
International Dollar Bonds...... 10.72
------
Total U.S. Bonds.............. 81.12
------
U.S. EQUITIES
Common Stock.................... 0.34
Preferred Stock................. 11.92
Warrants........................ 0.48
------
Total U.S. Equities........... 12.74
------
SHORT-TERM INVESTMENTS.......... 5.59
------
TOTAL INVESTMENTS............. 99.45
CASH AND OTHER ASSETS,
LESS LIABILITIES............. 0.55
------
NET ASSETS.................... 100.00%
======
</TABLE>
101
<PAGE>
BRINSON HIGH YIELD FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
------------ -------------
<S> <C> <C>
U.S. BONDS - 81.12%
U.S. CORPORATE BONDS - 70.40%
Amphenol Corp., 9.875%, due 05/15/07............. $3,000,000 $ 3,195,000
BTI Telecom Corp., 144A, 10.500%, due 09/15/07... 3,000,000 3,060,000
Burke Industries Inc., 144A, 10.000%, due
08/15/07........................................ 3,000,000 3,123,750
California Energy Co., Inc., 9.500%, due
09/15/06........................................ 3,000,000 3,277,500
Cobblestone Golf Group, Inc., Series B,
11.500%, due 06/01/03........................... 3,000,000 3,255,000
Coinmach Corp., Series B, 11.750%, due 11/15/05.. 3,000,000 3,330,000
Communications Instruments Corp., 144A,
10.000%, due 09/15/04........................... 3,000,000 3,052,500
Corporate Express, Inc., 4.500%, due 07/01/00.... 3,000,000 2,731,080
Delco Remy International Inc., 8.625%, due
12/15/07........................................ 500,000 506,250
Details Inc., 144A, 0.000%, due 11/15/07 (c)..... 7,000,000 4,095,000
DVI Inc., 9.875%, due 02/01/04................... 3,000,000 3,127,500
E & S Holdings Corp., Series B, 10.375%, due
10/01/06........................................ 3,000,000 2,760,000
Florist Transworld Delivery, Series B,
14.000%, due 12/15/01........................... 3,000,000 3,337,500
Fortress Group, Inc., 13.750%, due 05/15/03...... 3,500,000 3,955,000
Fundy Cable Ltd., 11.000%, due 11/15/05.......... 3,000,000 3,217,500
Globalstar LP, 11.375%, due 02/15/04............. 3,000,000 3,015,000
Hines Horticulture Inc., Series B, 11.750%, due
10/15/05........................................ 3,000,000 3,300,000
Icon Fitness Corp., 0.000%, due 11/15/06 (d)..... 7,000,000 4,060,000
J.B. Poindexter & Co., 12.500%, due 05/15/04..... 3,000,000 3,060,000
Lear Seating Corp., 8.250%, due 02/01/02......... 3,000,000 3,041,250
Leslie's Poolmart, 10.375%, due 07/15/04......... 3,000,000 3,105,000
National Equipment Services, 144A, 10.000%,
due 11/30/04.................................... 3,000,000 2,970,000
Nextel Communications, Inc., 144A,
0.000%, due 09/15/07 (e)........................ 6,500,000 4,070,625
Nuevo Energy Co., 9.500%, due 04/15/06........... 4,000,000 4,255,000
Pillowtex Corp., 144A, 9.000%, due 12/15/07...... 500,000 512,500
Plastic Containers, Inc., Series B, 10.000%, due
12/15/06........................................ 3,000,000 3,195,000
Remington Product Co. LLC, Series B,
11.000%, due 05/15/06........................... 2,500,000 2,150,000
Riverwood International Corp., 10.875%, due
04/01/08........................................ 3,000,000 2,850,000
Specialty Foods Corp., Series B, 11.125%, due
10/01/02........................................ 3,000,000 3,045,000
Tultex Corp., 10.625%, due 03/15/05.............. 3,300,000 3,415,500
Vencor Inc., 8.625%, due 07/15/07................ 3,000,000 2,992,500
Vialog Corp., Units, 12.750%, due 11/15/01....... 1,000,000 1,045,000
Victory Markets, Inc., 12.500%, due 03/15/00
(b,h)........................................... 2,000,000 40,000
Werner Holdings Co., Inc., 144A, 10.000%, due
11/15/07........................................ 3,000,000 3,082,500
William Carter Co., Series A, 10.375%, due
12/01/06........................................ 3,000,000 3,150,000
Wireless One, Inc., 0.000%, due 08/01/06 (f)..... 5,000,000 1,000,000
Wright Medical Technology, 144A, Series C,
11.750%, due 07/01/00........................... 3,770,000 3,807,700
Young Broadcasting Corp., 9.000%, due 01/15/06... 3,000,000 3,000,000
-------------
110,186,155
-------------
</TABLE>
102
<PAGE>
BRINSON HIGH YIELD FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
----------- -------------
<S> <C> <C>
INTERNATIONAL DOLLAR BONDS - 10.72%
Euramax International PLC, 11.250%, due 10/01/06.. $3,000,000 $ 3,247,500
Fage Dairy Industries S.A., 9.000%, due 02/01/07.. 3,000,000 2,917,500
Mexican United States Global Bond, 9.875%, due
01/15/07......................................... 3,000,000 3,131,250
Royal Oak Mines Inc., Series B, 11.000%, due
08/15/06......................................... 3,000,000 2,160,000
Telesystem International Wireless Corp., 144A,
0.000%, due 11/01/07 (g)......................... 5,000,000 2,775,000
Venezuela - DCB, Series DL, FRN, 6.813%, due
12/18/07......................................... 2,857,143 2,557,143
-------------
16,788,393
-------------
TOTAL U.S. BONDS (COST $128,523,928).............. 126,974,548
-------------
<CAPTION>
SHARES
-----------
<S> <C> <C>
U.S. EQUITIES - 12.74%
American Radio Systems, Series B,
PIK Convertible Preferred, 11.375% (b)........... 31,584 3,647,952
Cablevision Systems Corp., Series M,
PIK Convertible Preferred, 11.125% (b)........... 31,944 3,721,476
F.T.D. Corp., Class B (b)......................... 40,625 325,000
Icon Health & Fitness Capital, Inc., Warrants "99"
(b).............................................. 4,000 200,000
Nextel Communications, Inc. (b)................... 7,746 201,396
Nextel Communications, Inc., Warrants "98" (b).... 2,315 278
Nextlink Communications, Inc.,
PIK Convertible Preferred, 14.000% (b)........... 66,547 4,109,277
Pegasus Communications, Series A,
PIK Convertible Preferred, 12.750% (b)........... 3,366 3,634,962
Pegasus Communications, Warrants "07" (b)......... 3,000 97,500
Renaissance Cosmetics, Inc.
PIK Convertible Preferred, 14.000% (b)........... 7,100 3,550,000
Renaissance Cosmetics, Inc., Warrants "01" (b).... 4,000 40,000
Renaissance Cosmetics, Inc., Warrants "06" (b).... 5,000 50,000
S.D. Warren Co., Warrants "06" (b)................ 60,000 300,000
Town & Country Corp., Convertible Preferred....... 20,871 0
Wright Medical Technology, Warrants "03" (b)...... 618 61,788
-------------
TOTAL U.S. EQUITIES (COST $18,967,506)............ 19,939,629
-------------
<CAPTION>
FACE
AMOUNT
-----------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 5.59%
COMMERCIAL PAPER - 5.59%
Bausch & Lomb Inc.
8.000%, due 01/02/98............................. $1,826,000 1,825,594
6.750%, due 01/05/98............................. 5,000,000 4,996,250
GTE Corp., 6.100%, due 02/20/98................... 934,000 926,087
Whirpool Corp., 6.750%, due 01/05/98.............. 1,000,000 999,250
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $8,747,181).... 8,747,181
-------------
TOTAL INVESTMENTS - (COST $156,238,615) - 99.45%
(A).............................................. 155,661,358
-------------
CASH AND OTHER ASSETS, LESS LIABILITIES - 0.55%... 859,168
-------------
NET ASSETS - 100%................................. $156,520,526
=============
</TABLE>
See accompanying notes to schedule of investments.
103
<PAGE>
BRINSON HIGH YIELD FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $156,238,615; and net
unrealized depreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation............ $ 7,622,366
Gross unrealized depreciation............ (8,199,623)
------------
Net unrealized depreciation.......... $ (577,257)
============
</TABLE>
(b)Non-income producing security
(c)Interest rate 0.000% until 11/15/02, then 12.500% to maturity
(d)Interest rate 0.000% until 11/15/01, then 14.000% to maturity
(e)Interest rate 0.000% until 09/15/02, then 10.650% to maturity
(f)Interest rate 0.000% until 08/01/01, then 13.500% to maturity
(g)Interest rate 0.000% until 11/01/02, then 10.500% to maturity
(h)Security in default as to payment of interest
FRN: Floating rate note--The rate disclosed is that in effect at December 31,
1997.
PIK: Payment in kind, interest payment in cash or additional securities.
144A: Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At
December 31, 1997, the value of these securities amounted to
$30,549,575 or 19.52% of net assets.
See accompanying note to financial statements.
104
<PAGE>
BRINSON HIGH YIELD FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $156,238,615) (Note 1)............... $155,661,358
Cash............................................................. 6,402
Receivables:
Fund shares sold................................................ 8,030,110
Dividend........................................................ 291,522
Interest........................................................ 2,732,839
Due from Advisor (Note 2)....................................... 36,816
-------------
TOTAL ASSETS.................................................. 166,759,047
-------------
LIABILITIES:
Payables:
Investment securities purchased................................. 201,705
Fund shares redeemed............................................ 10,000,000
Accrued expenses................................................ 36,816
-------------
TOTAL LIABILITIES............................................. 10,238,521
-------------
NET ASSETS:
Applicable to 11,208,425 shares; no par value, unlimited shares
authorized...................................................... $156,520,526
=============
Net asset value, offering price and redemption price per share
($156,520,526 / 11,208,425 shares).............................. $ 13.9645
=============
NET ASSETS CONSIST OF:
Paid in capital.................................................. $113,085,855
Accumulated net investment income................................ 32,438,054
Accumulated net realized gain.................................... 11,573,874
Net unrealized depreciation...................................... (577,257)
-------------
NET ASSETS.................................................... $156,520,526
=============
</TABLE>
See accompanying notes to financial statements.
105
<PAGE>
BRINSON HIGH YIELD FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest......................................................... $13,328,953
Dividends........................................................ 1,088,647
------------
TOTAL INCOME.................................................. 14,417,600
------------
EXPENSES:
Accounting....................................................... 33,623
Professional..................................................... 29,890
Administration................................................... 6,251
Other............................................................ 19,389
------------
TOTAL EXPENSES................................................ 89,153
------------
Expenses reimbursed by Advisor (Note 2)....................... (89,153)
------------
NET EXPENSES.................................................. 0
------------
NET INVESTMENT INCOME......................................... 14,417,600
------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain................................................ 10,125,145
Change in net unrealized appreciation or depreciation............ (6,492,577)
------------
Net realized and unrealized gain................................. 3,632,568
------------
Net increase in net assets resulting from operations............. $18,050,168
============
</TABLE>
See accompanying notes to financial statements.
106
<PAGE>
BRINSON HIGH YIELD FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................... $ 14,417,600 $ 12,582,895
Net realized gain.......................... 10,125,145 2,690,004
Change in net unrealized appreciation
or depreciation........................... (6,492,577) 3,781,750
------------- -------------
Net increase in net assets resulting
from operations........................... 18,050,168 19,054,649
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................ 33,985,265 118,474,046
Shares redeemed............................ (60,564,948) (80,431,576)
------------- -------------
Net increase (decrease) in net assets
resulting from capital share transactions
(a)....................................... (26,579,683) 38,042,470
------------- -------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................. (8,529,515) 57,097,119
NET ASSETS:
Beginning of year.......................... 165,050,041 107,952,922
------------- -------------
End of year (including accumulated net
investment income of $32,438,054 and
$18,020,454, respectively)................ $156,520,526 $165,050,041
============= =============
(a)A summary of capital share transactions follows:
<CAPTION>
SHARES SHARES
------------- -------------
<S> <C> <C>
Shares sold............................... 2,464,066 10,044,820
Shares redeemed........................... (4,655,305) (6,700,270)
------------- -------------
Net increase (decrease) in shares
outstanding............................. (2,191,239) 3,344,550
============= =============
</TABLE>
See accompanying notes to the financial statements.
107
<PAGE>
BRINSON HIGH YIELD FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------- PERIOD ENDED
1997 1996 DECEMBER 31, 1995*
----------- ----------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of pe-
riod............................ $ 12.3175 $ 10.7361 $10.0000
----------- ----------- ---------
Income from investment opera-
tions:
Net investment income........... 1.3299*** 0.8041 0.5408
Net realized and unrealized
gain........................... 0.3171 0.7773 0.1953
----------- ----------- ---------
Total income from investment
operations.................... 1.6470 1.5814 0.7361
----------- ----------- ---------
Net asset value, end of period... $ 13.9645 $ 12.3175 $10.7361
=========== =========== =========
Total return (non-annualized).... 13.37% 14.73% 7.36%
Ratios/Supplemental data
Net assets, end of period (in
000s).......................... $ 156,521 $ 165,050 $107,953
Ratio of expenses to average net
assets:
Before expense reimbursement... 0.06% 0.14% 0.33%**
After expense reimbursement.... 0.00% 0.00% 0.00%**
Ratio of net investment income
to average net assets:
Before expense reimbursement... 10.09% 9.17% 9.33%**
After expense reimbursement.... 10.15% 9.31% 9.66%**
Portfolio turnover rate......... 76% 45% 25%
</TABLE>
* The Fund commenced operations April 28, 1995
** Annualized
*** The net investment income per share data was determined by using average
shares outstanding during the period.
See accompanying notes to financial statements.
108
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND
- --------------------------------------------------------------------------------
The Brinson Emerging Markets Debt Fund is an actively managed diversified
portfolio of fixed income securities issued by sovereign, agency and corporate
borrowers domiciled in countries typically excluded from the definition of
"developed" markets. Fundamental economic and political analyses are the key
elements of the process. Relative value analysis drives our duration, country
allocation and security selection strategies.
Since July 31, 1995, the first month-end after the Fund became fully invested,
the Fund has earned an annualized return of 34.43%, compared to 28.62% for its
benchmark, the EMBI+ which is comprised of 63% Brady Bonds, 18% loans, 12%
Euro-bonds and 7% domestic issues as of year-end 1997.
For 1997, the Fund returned 19.82% versus 13.02% for the benchmark (equivalent
duration U.S. Treasury bonds returned 8.82% in 1997). The emerging debt market
enjoyed exceptional returns through September (+17.88%), and experienced a
significant correction in October (-11.52%) as concerns regarding currency
instability spread from Southeast Asia. The EMBI+ recovered somewhat in
November and December.
Emerging market credit spreads tightened by 0.34% during 1997, significantly
less than the 2.73% narrowing in 1996. During the first three quarters of 1997,
spreads tightened as reforms in several core markets became evident: Russian
debt restructuring negotiations, fair Mexican elections and Brazilian
privatization.
The term "emerging market debt" generally refers to the non-investment grade
sector of the sovereign bond market and the benchmark (EMBI+) currently
excludes debt of countries rated investment grade (with the exception of
Poland, which has been upgraded since its original inclusion in 1994). Until
recently, Korea and Indonesia were rated investment grade and so were not
represented in the EMBI+. Consequently, a large portion of the asset class (as
defined) avoided the summer turbulence in Asia until the Hong Kong dollar came
under speculative pressure at the end of October. At that point, panic spilled
over to Latin America, as investors feared that Brazil and Argentina would also
be forced to devalue. In short order, however, the Hong Kong and Brazilian
authorities demonstrated their desire and ability to defend their currencies.
Despite this quick partial recovery in sovereign debt prices, local interest
rates in most emerging debt countries are still significantly higher than pre-
crises levels. Moreover, Asia's new-found competitiveness and heightened
currency volatility signal an important shift from a benign to a potentially
malign global economic environment as we enter 1998.
Both market/country allocation strategies and security selection improved Fund
results in the past year. The most notable country strategies were timely
overweights in Russia, Bulgaria and Venezuela and underweights in Poland,
Nigeria and the Philippines. (U.S. interest rate duration strategy had no net
impact). Our current duration strategy (1.0 times the benchmark) reflects a
firmwide view that U.S. interest rates are at equilibrium levels.
At year-end, our Fund was defensively positioned with a cash weight of 22%,
allocations to non-index countries such as Guatemala, Croatia and Tunisia and
underweights in the major Latin markets of Brazil, Argentina and Mexico.
109
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR ANNUALIZED
ENDED ENDED 06/30/95*
12/31/97 12/31/97 TO 12/31/97
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Brinson Emerging Markets Debt Fund(/1/) 5.93% 19.82% 32.45%
- --------------------------------------------------------------------------
Brinson Emerging Markets Debt Fund(/2/) 5.40% 19.22% 32.45%
- --------------------------------------------------------------------------
JP Morgan EMBI+ 2.49% 13.02% 27.58%
- --------------------------------------------------------------------------
</TABLE>
* Inception date of the Brinson Emerging Markets Debt Fund.
(/1/Total)return based on NAV--Does not include the payment of a 0.50%
transaction charge on Fund share purchases.
(/2/Standardized)total return--Includes the payment of a 0.50% transaction
charge on Fund share purchases in each period presented where applicable.
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $100,000
This chart shows the growth in the value of an investment in the Brinson
Emerging Markets Debt Fund and in the JP Morgan EMBI+ if you had invested
$100,000 on June 30, 1995. Past performance is no guarantee of future results.
Share price and return will vary with market conditions; investors may realize
a gain or loss upon redemption.
BRINSON EMERGING MARKETS DEBT FUND
VS. JP MORGAN EMBI+
12783G-Em_Mkt_Debt-dg
<TABLE>
<CAPTION>
Brinson Emerging Markets Debt Fund/1/ Brinson Emerging Markets Debt Fund/1/
Brinson Emerging JP Morgan EMBI+
------------------------------------- ------------------------------------
<S> <C> <C>
6/30/95 100,000 100,000
98,952 100,074
101,671 102,435
105,713 105,964
104,843 104,876
108,802 108,546
12/31/95 116,401 116,772
127,448 125,646
118,868 118,715
121,904 121,419
129,544 128,043
132,236 130,259
6/30/96 136,384 134,838
139,238 137,656
145,236 142,712
156,324 151,916
158,248 153,109
167,000 160,744
12/31/96 168,816 162,676
175,557 167,181
178,950 170,082
172,262 163,948
176,672 168,802
185,086 175,352
6/30/97 190,048 179,389
199,060 186,831
199,245 186,075
205,585 191,761
185,908 169,672
195,410 177,728
12/31/97 202,275 183,853
- ---------------------------------------------------------------------------------
</TABLE>
LOGO
Fund returns are net of all fees and costs, while the index returns are based
solely on market returns without deduction for fees or transaction costs for
rebalancing.
110
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND
- --------------------------------------------------------------------------------
MARKET ALLOCATION
As of December 31, 1997
<TABLE>
<CAPTION>
INDEX STRATEGY
WEIGHTS WEIGHT
- --------------------------------------------------------------------------------
<S> <C> <C>
Argentina...................................................... 23.0% 15.4%
Brazil......................................................... 24.2 18.0
Bulgaria....................................................... 2.1 4.5
Ecuador........................................................ 2.5 3.0
Guatemala...................................................... 0.0 2.8
Mexico......................................................... 15.7 6.9
Morocco........................................................ 1.3 2.9
Nigeria........................................................ 2.4 0.0
Panama......................................................... 1.2 0.0
Peru........................................................... 1.5 0.0
Philippines.................................................... 1.8 0.9
Poland......................................................... 2.5 1.8
Romania........................................................ 0.0 0.2
Russia......................................................... 14.4 9.1
Turkey......................................................... 0.0 2.2
Tunisia........................................................ 0.0 2.9
Venezuela...................................................... 7.5 7.7
Cash........................................................... 0.0 21.7
----- -----
100.0% 100.0%
===== =====
</TABLE>
Note: Totals may not add due to rounding
111
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- -------------
<S> <C> <C>
BONDS - 82.57%
INTERNATIONAL DOLLAR BONDS - 74.01%
ARGENTINA - 15.09%
Argentina - Global Bond, 9.750%, due
09/19/27..................................... $ 17,500,000 $ 16,738,750
Argentina - BOCON PRE1, FRN, 5.688%, due
04/01/01..................................... 11,257,033 9,800,000
Argentina - BOCON PRO1, FRN, 5.688%, due
04/01/07..................................... 12,802,509 8,950,000
Argentina - FRN, 6.688%, due 03/31/05......... 19,200,000 17,160,000
Argentina - Par Series L, 5.500%, due
03/31/23..................................... 16,250,000 11,933,512
-------------
64,582,262
BRAZIL - 17.71%
Brazil - C PIK Bond, 8.000%, due 04/15/04..... 32,326,371 25,376,201
Brazil - DCB L FRN, 6.750%, due 04/15/12...... 15,750,000 11,930,625
Brazil - Global Bond, 10.125%, due 05/15/27... 28,926,000 27,118,125
Brazil - IDU, Series A FRN, 6.813%, due
01/01/01..................................... 5,887,500 5,616,676
Brazil - New Money Bond, FRN, 6.750%, due
4/15/09...................................... 4,000,000 3,220,000
Brazil - EI, Series L, FRN, 6.688%, due
04/15/06..................................... 2,940,000 2,535,750
-------------
75,797,377
BULGARIA - 4.39%
Bulgaria - FLIRB, Series A, FRN, 2.250%, due
07/28/12..................................... 12,000,000 7,290,000
Bulgaria - Discount, Series A, FRN,
6.688%, due 07/28/24......................... 15,000,000 11,512,500
-------------
18,802,500
CROSTIA - 2.87%
Croatia - Series A, FRN 6.625%, due 07/31/10.. 14,000,000 12,285,000
-------------
GUATEMALA - 2.66%
Guatemala - 144A, 8.500%, due 08/03/07........ 7,000,000 6,650,000
Guatemala - Reg S, 8.500%, due 08/03/07....... 5,000,000 4,750,000
-------------
11,400,000
LUXEMBOURG - 2.88%
Sultan Ltd. - FRN, 8.750%, due 06/11/99....... 12,700,000 12,310,110
-------------
MEXICO - 6.81%
Mexico - Par Series B, 6.250%, due 12/31/19... 14,000,000 11,690,000
Mexico - Global Bond, Series B, 11.500%, due
05/15/26..................................... 13,500,000 15,997,500
Petroleos Mexicanos 144A, 8.850%, due
09/15/07..................................... 1,500,000 1,485,000
-------------
29,172,500
MOROCCO - 2.83%
Morocco - Loan Tranche A FRN, 6.813%, due
01/01/09..................................... 14,000,000 12,118,680
-------------
RUSSIA - 9.20%
Russia - Interest Notes, Series US FRN,
6.719%, due 12/15/15......................... 29,414,530 20,847,548
Russia - Ministry of Finance Reg S,
10.000%, due 06/26/07........................ 20,000,000 18,530,000
-------------
39,377,548
TUNISIA - 2.13%
Banque Centrale de Tunisia, 8.250%, due
09/19/27..................................... 10,000,000 9,101,900
-------------
VENEZUELA - 7.44%
Venezuela - Global, 9.250%, due 09/15/27...... 24,276,000 21,751,296
Venezuela - DCB Series DL, FRN, 6.813%, due
12/18/07..................................... 8,333,333 7,473,958
Venezuela - FLIRB Series B, FRN,
6.750%, due 03/31/07......................... 2,940,476 2,639,077
-------------
31,864,331
-------------
316,812,208
-------------
</TABLE>
112
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
----------------- -------------
<S> <C> <C>
STRUCTURED NOTE - 0.91%
U.S. TREASURY BILL LINKED NOTE
ING Bank N.V. (London) 144A,
0.000%, due 08/14/98 (b).................. $ 4,000,000 $ 3,910,000
-------------
U.S. GOVERNMENT OBLIGATIONS - 6.00%
U.S. Treasury Note, 6.125%, due 08/15/07... 25,000,000 25,695,325
-------------
NON-U.S. GOVERNMENT OBLIGATIONS - 1.65%
GOVERNMENT OF POLAND
12.000%, due 02/12/03..................... PLN 11,000,000 2,263,628
12.000%, due 06/12/01..................... 22,500,000 4,784,745
-------------
7,048,373
-------------
TOTAL BONDS (COST $336,660,201)............ 353,465,906
-------------
SHORT TERM INVESTMENTS - 19.84%
U.S. GOVERNMENT OBLIGATIONS - 0.12%
U.S. Treasury Bill, 5.120%, due 05/28/98... 520,000 508,950
-------------
NON-U.S. GOVERNMENT OBLIGATIONS - 0.22%
ROMANIA
Treasury Bill Linked Note, 43.660%, due
02/12/98.................................. ROL 7,441,341,672 936,790
-------------
COMMERCIAL PAPER - 19.50%
American Stores Co., 5.950%, due 03/23/98.. $ 2,500,000 2,466,531
Bausch & Lomb Inc., 8.000%, due 01/02/98... 8,000,000 7,998,222
Case Credit Corp.
6.000%, due 01/13/98...................... 2,500,000 2,495,000
6.050%, due 03/13/98...................... 1,571,000 1,553,191
6.000%, due 01/23/98...................... 2,000,000 1,992,667
Crown Cork & Seal Co., Inc., 6.050%, due
01/28/98.................................. 1,500,000 1,493,194
Eastman Chemical Co., 6.750%, due
01/08/98.................................. 3,250,000 3,245,734
FMC Corp., 7.000%, due 01/02/98............ 8,160,000 8,158,414
General American Transportation Corp.,
7.000%, due 01/16/98...................... 3,448,000 3,437,943
GTE Corp.
6.050%, due 02/23/98...................... 3,000,000 2,973,279
6.020%, due 03/02/98...................... 2,500,000 2,475,949
Marriot Corp.
5.970%, due 01/28/98...................... 5,000,000 4,977,613
5.990%, due 02/06/98...................... 3,000,000 2,982,030
Nabisco Inc., 6.120%, due 01/16/98......... 5,000,000 4,987,250
Norfolk Southern Corp., 6.100%, due
01/21/98.................................. 4,300,000 4,285,428
Occidental Petroleum Corp., 6.000%, due
01/16/98.................................. 3,000,000 2,992,500
Safeway Inc.
6.700%, due 01/02/98...................... 5,000,000 4,999,069
5.920%, due 01/22/98...................... 5,000,000 4,982,733
Tenneco, Inc., 6.250%, due 01/22/98........ 3,000,000 2,989,063
Texas Utilities Co., 6.120%, due 01/09/98.. 5,000,000 4,993,200
Whirpool Corp., 6.750%, due 01/05/98....... 7,000,000 6,994,750
-------------
83,473,760
-------------
TOTAL SHORT TERM INVESTMENTS (COST
$84,918,476).............................. 84,919,500
-------------
TOTAL INVESTMENTS (COST $421,578,677) -
102.41% (A).............................. 438,385,406
-------------
LIABILITIES, LESS CASH AND OTHER ASSETS -
(2.41%).................................. (10,300,359)
-------------
NET ASSETS - 100%.......................... $428,085,047
=============
</TABLE>
See accompanying notes to schedule of investments.
113
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
December 31, 1997
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $421,578,677; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation............. $21,082,910
Gross unrealized depreciation............. (4,276,181)
------------
Net unrealized appreciation........... $16,806,729
============
</TABLE>
(b) No stated interest rate
FLIRB:Front Loaded Interest Reduction Bond
FRN:Floating rate note - The rate disclosed is that in effect at December 31,
1997
DCB:Debt Conversion bond
IRB:Interest reduction bond
PLN:Polish Zloty
ROL:Romanian Leu
PIK:Payment in kind, interest payment in cash or additional securities.
144A: Security exempt from registration under rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At
December 31, 1997, the value of these securities amounted to
$12,045,000 or 2.81% of net assets.
FUTURES CONTRACTS (NOTE 6)
The Brinson Emerging Markets Debt Fund had the following open futures
contracts as of December 31, 1997:
<TABLE>
<CAPTION>
SETTLEMENT COST/ CURRENT UNREALIZED
DATE PROCEEDS VALUE GAIN (LOSS)
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST RATE FUTURES BUY CON-
TRACTS
30 year U.S. Treasury Bonds,
365 contracts................ March 1998 $43,433,050 $43,971,094 $538,044
INTEREST RATE FUTURES SELL
CONTRACTS
10 year U.S. Treasury Notes,
172 contracts................ March 1998 19,226,366 19,290,875 (64,509)
---------
Total........................ $473,535
=========
</TABLE>
The market value of cash and investments pledged to cover margin
requirements for the open futures positions at December 31, 1997 were
$340,002 and $508,950, respectively.
See accompanying notes to financial statements.
114
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at value
(Cost $421,578,677) (Note
1)....................... $438,385,406
Cash...................... 355,249
Foreign currency, at value
(Cost $4,460)............ 4,341
Receivables:
Interest................. 6,652,629
Investment securities
sold.................... 487,280
Variation margin (Note
6)...................... 162,969
-------------
TOTAL ASSETS........... 446,047,874
-------------
LIABILITIES:
Payables:
Investment securities
purchased............... 17,897,073
Accrued expenses......... 65,754
-------------
TOTAL LIABILITIES...... 17,962,827
-------------
NET ASSETS:
Applicable to 21,163,254
shares; no par value, un-
limited shares autho-
rized.................... $428,085,047
=============
Net asset value and re-
demption price per share
($428,085,047 / 21,163,254
shares).................. $ 20.2278
=============
Maximum offering price per
share (net assets value,
plus 0.50% of net asset
value or 0.50% of offer-
ing price) (Note 8)...... $ 20.3294
=============
NET ASSETS CONSIST OF:
Paid in capital........... $304,657,755
Accumulated net investment
income................... 50,082,652
Accumulated net realized
gain..................... 56,073,125
Net unrealized apprecia-
tion..................... 17,271,515
-------------
NET ASSETS............. $428,085,047
=============
</TABLE>
See accompanying notes to financial statements.
115
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest........................................................ $26,163,272
Dividend........................................................ 51,597
------------
TOTAL INCOME................................................. 26,214,869
------------
EXPENSES:
Administration.................................................. 143,638
Professional.................................................... 69,396
Custodian....................................................... 57,807
Accounting...................................................... 43,428
Other........................................................... 32,426
------------
TOTAL EXPENSES............................................... 346,695
------------
NET INVESTMENT INCOME........................................ 25,868,174
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments.................................................... 35,703,681
Futures contracts.............................................. 1,568,916
Foreign currency transactions.................................. (211,787)
------------
Net realized gain............................................. 37,060,810
------------
Change in net unrealized appreciation or depreciation on:
Investments.................................................... (13,700,606)
Futures contracts.............................................. 738,097
Translation of other assets and liabilities denominated in for-
eign currency................................................. (8,630)
------------
Change in net unrealized appreciation or depreciation......... (12,971,139)
------------
Net realized and unrealized gain................................ 24,089,671
------------
Net increase in net assets resulting from operations............ $49,957,845
============
</TABLE>
See accompanying notes to financial statements.
116
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income..................... $ 25,868,174 $ 19,604,516
Net realized gain......................... 37,060,810 18,170,077
Change in net unrealized appreciation or
depreciation............................. (12,971,139) 24,138,171
------------- -------------
Net increase in net assets resulting from
operations............................... 49,957,845 61,912,764
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold (Note 8)...................... 222,421,261 152,532,783
Shares redeemed........................... (66,864,627) (111,529,172)
------------- -------------
Net increase in net assets resulting from
capital share transactions (a)........... 155,556,634 41,003,611
------------- -------------
TOTAL INCREASE IN NET ASSETS........... 205,514,479 102,916,375
NET ASSETS:
Beginning of year......................... 222,570,568 119,654,193
------------- -------------
End of year (including accumulated net
investment income of $50,082,652 and
$24,214,478, respectively)............... $428,085,047 $222,570,568
============= =============
(a)A summary of capital share transactions
follows:
SHARES SHARES
------------- -------------
Shares sold................................ 11,490,582 9,793,589
Shares redeemed............................ (3,511,554) (6,888,826)
------------- -------------
Net increase in shares outstanding...... 7,979,028 2,904,763
============= =============
</TABLE>
See accompanying notes to the financial statements.
117
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------- PERIOD ENDED
1997 1996 DECEMBER 31, 1995*
----------- ----------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of pe-
riod............................ $ 16.8816 $ 11.6401 $10.0000
----------- ----------- ---------
Income from investment
operations:
Net investment income........... 1.7757*** 1.3882 0.4485
Net realized and unrealized
gain........................... 1.5705 3.8533 1.1916
----------- ----------- ---------
Total income from investment
operations.................... 3.3462 5.2415 1.6401
----------- ----------- ---------
Net asset value, end of period... $ 20.2278 $ 16.8816 $11.6401
=========== =========== =========
Total return (non-annualized).... 19.82% 45.03% 16.40%
Ratios/Supplemental data
Net assets, end of period (in
000s).......................... $ 428,085 $ 222,571 $119,654
Ratio of expenses to average net
assets......................... 0.13% 0.18% 0.50%**
Ratio of net investment income
to average net assets.......... 9.83% 11.89% 12.95%**
Portfolio turnover rate......... 120% 71% 29%
</TABLE>
* The Fund commenced operations June 30, 1995.
** Annualized
*** The net investment income per share was determined by using average shares
outstanding during the period.
See accompanying notes to financial statements.
118
<PAGE>
THE BRINSON RELATIONSHIP FUNDS - NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Brinson Relationship Funds (the "Trust") is an open-end, management
investment company registered under the Investment Company Act of 1940, as
amended. The Trust currently offers shares of eight series representing
separate portfolios of investments, each of which is non-diversified. The eight
series are: Brinson Global Securities Fund, Brinson Global Equity Fund, Brinson
U.S. Equity Fund, Brinson Post-Venture Fund, Brinson Emerging Markets Equity
Fund, Brinson Short-Term Fund, Brinson High Yield Fund and Brinson Emerging
Markets Debt Fund (each a "Fund," and collectively the "Funds"). The following
is a summary of significant accounting policies followed by the Funds in the
preparation of their financial statements.
A. INVESTMENT VALUATION: Securities for which market quotations are readily
available are valued at the last available sales price on the exchange or
market on which they are principally traded, or lacking any sales, at the last
available bid price on the exchange or market on which such securities are
principally traded. U.S. equity securities traded over-the-counter are valued
at the most recent bid price. Equity securities traded in certain emerging
market countries may be subject to a foreign premium and are valued
accordingly. Investments in affiliated investment companies are valued each day
based on the closing net asset value of the respective Fund. Debt securities
are valued at the most recent bid price by using market quotations or
independent services. Securities for which market quotations are not readily
available, including restricted securities which are subject to limitations on
their sale, are valued at fair value as determined in good faith by or under
the direction of the Trust's Board of Trustees.
Futures contracts are valued at the settlement price established each day on
the exchange on which they are traded. Forward foreign currency contracts are
valued daily using the quoted forward exchange rates. Equity swap values are
derived based on the values, or estimates of the values, of the applicable
equity indices and foreign exchange rates underlying the contracts. Short-term
obligations with maturity of 60 days or less are valued at amortized cost,
which approximates market value.
B. FOREIGN CURRENCY TRANSLATION: Investment securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollars
using the WM/Reuters closing spot rates as of 4:00 p.m. London time. Purchases
and sales of portfolio securities, commitments under forward foreign currency
contracts and income receipts are translated at the prevailing exchange rate on
the date of each transaction. Realized and unrealized foreign exchange gains or
losses on investments are included as a component of net realized and
unrealized gain or loss on investments in the statement of operations.
C. INVESTMENT TRANSACTIONS: Investment transactions are accounted for on a
trade date basis. Gains and losses on securities sold are determined on an
identified cost basis.
D. INVESTMENT INCOME: Interest income, which includes amortization of premiums
and discounts, is recorded on the accrual basis. Dividend income is recorded on
the ex-dividend date, except that certain dividends from foreign securities are
recorded as soon as the information becomes available.
E. FEDERAL INCOME TAXES: The Trust has received rulings from the Internal
Revenue Service that each Fund will be treated as a separate partnership for
federal income tax purposes. Income taxes are not provided for by the Funds
because taxable income (loss) of the Funds is includable in the income tax
returns of the investors. The Funds do not intend to make any distributions to
investors.
119
<PAGE>
THE BRINSON RELATIONSHIP FUNDS - NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
F. PARTNERSHIP ALLOCATIONS: For federal income tax purposes, an investor's
distributive share of each item of a Fund's income, gain, loss, deduction and
credit will be determined by the Amended and Restated Agreement and Declaration
of Trust (the "Trust Agreement") so long as the allocation has "substantial
economic effect" within the meaning of Code Section 704 and the regulations
thereunder. The Trust has received rulings from the Internal Revenue Service
that this allocation method has substantial economic effect.
G. USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results may differ from those estimates.
2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Brinson Partners, Inc. (the "Advisor"), a registered investment advisor,
manages the assets of the Trust pursuant to an Investment Advisory Agreement
with the Trust (the "Advisory Agreement"). The Advisor does not receive any
compensation under the Advisory Agreement for providing investment advisory
services. The Advisor has agreed to reimburse the Brinson Post-Venture Fund and
Brinson High Yield Fund for all operating expenses. The Advisor has agreed to
reimburse the following funds to the extent that total operating expenses
exceed the following percentage of average daily net assets:
<TABLE>
<S> <C>
Brinson Global Securities Fund............................................ 0.05%
Brinson Global Equity Fund................................................ 0.05
Brinson U.S. Equity Fund.................................................. 0.01
Brinson Emerging Markets Equity Fund...................................... 0.50
Brinson Short-Term Fund................................................... 0.05
Brinson Emerging Markets Debt Fund........................................ 0.50
</TABLE>
Certain officers of the Funds are also officers and directors of the Advisor.
All officers serve without direct compensation from the Funds. Trustees' fees
paid to unaffiliated trustees were as follows:
<TABLE>
<S> <C>
Brinson Global Securities Fund......................................... $12,423
Brinson Global Equity Fund............................................. 636
Brinson U.S. Equity Fund............................................... 636
Brinson Post-Venture Fund.............................................. 3,851
Brinson Emerging Markets Equity Fund................................... 5,460
Brinson Short-Term Fund................................................ 3,691
Brinson High Yield Fund................................................ 2,442
Brinson Emerging Markets Debt Fund..................................... 5,001
</TABLE>
The Brinson Global Securities Fund invests in shares of certain affiliated
investment companies also sponsored by Brinson Partners, Inc. These investments
represent 13.7% of the Fund's total net assets. Amounts relating to those
investments at December 31, 1997 and for the year then ended is summarized as
follows:
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<TABLE>
<CAPTION>
NET NET
SALES REALIZED UNREALIZED
AFFILIATES PURCHASES PROCEEDS GAINS GAINS/(LOSSES) VALUE
- ------------------------ ------------ ------------ ----------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Brinson Post-Venture
Fund................... $ -- $ -- $ -- $ 8,063,772 $ 28,375,394
Brinson Emerging Markets
Equity Fund............ 34,517,001 6,675,000 463,634 (10,475,340) 53,026,733
Brinson High Yield
Fund................... 639,104 18,650,000 2,295,036 4,409,977 31,883,974
Brinson Emerging Markets
Debt Fund.............. 30,970,547 29,600,000 5,124,197 8,196,212 65,948,065
------------ ------------ ----------- ------------- --------------
$66,126,652 $54,925,000 $7,882,867 $ 10,194,621 $179,234,166
============ ============ =========== ============= ==============
</TABLE>
3. INVESTMENT TRANSACTIONS
Investment transactions for the year ended December 31, 1997, excluding short-
term investments, were as follows:
<TABLE>
<CAPTION>
PURCHASES PROCEEDS FROM SALES
--------------- -------------------
<S> <C> <C>
Brinson Global Securities Fund............. $ 2,281,124,562 $ 2,857,863,389
Brinson Global Equity Fund................. 25,819,087 3,393,161
Brinson U.S. Equity Fund................... 68,747,641 4,280,028
Brinson Post-Venture Fund.................. 176,372,829 144,160,234
Brinson Emerging Markets Equity Fund....... 467,196,259 167,100,086
Brinson High Yield Fund.................... 105,089,994 126,141,222
Brinson Emerging Markets Debt Fund......... 417,989,095 284,414,696
</TABLE>
4. EQUITY SWAP CONTRACTS
The Brinson Emerging Markets Equity Fund enters into equity swap contracts.
Equity swaps often provide a less expensive, and in some cases the only, means
of investing in certain emerging markets. In these swaps, the Fund agrees to
receive the return on an emerging market equity index and pay a floating
interest rate based on the notional amount of each contract.
Fluctuations in the value of open swap contracts are recorded daily as net
unrealized gains or losses. The Fund realizes a gain or loss upon termination
or reset of the contracts. The statement of operations reflects net realized
and net unrealized gains and losses on these contracts. Amounts receivable or
payable related to terminated or reset equity swap contracts are reflected as
receivable or payable for equity swap contracts closed on the statement of
assets and liabilities, if any.
Credit risk may arise as a result of the failure of the swap counterparty to
comply with the terms of the swap contract. The Fund considers the
creditworthiness of each counterparty to a swap contract in evaluating
potential credit risk. The credit risk to the Fund is limited to the net
unrealized gain by counterparty, if any, on the swap contracts. Additionally,
risks may arise from unanticipated movements in interest rates, foreign
exchange rates or in the value of the underlying indices.
At December 31, 1997, the Brinson Emerging Markets Equity Fund had open equity
swap contracts with a limited number of international dealers, including the
Fund's custodian. The Fund had short-
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- --------------------------------------------------------------------------------
term investments segregated with its custodian equal to, or in excess of, the
notional amount of its open equity swap contracts.
5. FORWARD FOREIGN CURRENCY CONTRACTS
The Brinson Global Securities and Global Equity Funds may engage in portfolio
hedging with respect to changes in currency exchange rates by entering into
forward foreign currency contracts to purchase or sell currencies. Forward
foreign currency contracts are also used to achieve currency allocation
strategies. A forward foreign currency contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated forward rate. Risks
associated with such contracts include movement in the value of the foreign
currency relative to the U.S. dollar and the ability of the counterparty to
perform. The unrealized gain, if any, represents the credit risk to the Fund on
a forward foreign currency contract. Fluctuations in the value of forward
foreign currency contracts are recorded daily as net unrealized gains or
losses. The Fund realizes a gain or loss upon settlement of the contracts. The
statement of operations reflects net realized and net unrealized gains and
losses on these contracts. The counterparty to all forward foreign currency
contracts during the year ended December 31, 1997 was the Fund's custodian.
6. FUTURES CONTRACTS
The Funds may purchase or sell exchange-traded futures contracts, which are
contracts that obligate the Funds to make or take delivery of a financial
instrument or the cash value of a securities index at a specified future date
at a specified price. The Funds enter into such contracts to hedge a portion of
their portfolio. Risks of entering into futures contracts include the
possibility that there may be an illiquid market or that a change in the value
of the contract may not correlate with changes in the value of the underlying
securities. Upon entering into a futures contract, the Funds are required to
deposit either cash or securities (initial margin). Subsequent payments
(variation margin) are made or received by the Funds, generally on a daily
basis. The variation margin payments are equal to the daily changes in the
contract value and are recorded as unrealized gains or losses. The Funds
recognize a realized gain or loss when the contract is closed or expires. The
statement of operations reflects net realized and net unrealized gains and
losses on these contracts.
7. SECURITY LENDING: The Brinson Global Securities Fund loaned securities to
certain brokers, with the Fund's custodian acting as the Fund's lending agent.
The Fund earned negotiated lenders' fees, which are included in interest income
in the statement of operations. Securities loaned are recorded at the amount of
cash collateral received. The Fund monitors the market value of securities
loaned on a daily basis and maintains collateral against the loaned securities
in an amount at least equal to 102% of the value of domestic securities loaned
and 105% of the value of non-U.S. securities loaned. The cash collateral
received is invested in commercial paper.
The value of loaned securities and related collateral outstanding at December
31, 1997 are as follows:
<TABLE>
<CAPTION>
VALUE OF LOANED VALUE OF
SECURITIES COLLATERAL
--------------- --------------
<S> <C> <C>
Brinson Global Securities Fund.................. $151,049,655 $155,096,060
============== ==============
</TABLE>
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8. TRANSACTION CHARGES
Investors in the Brinson Emerging Markets Equity Fund and the Brinson Emerging
Markets Debt Fund are subject to a transaction charge equal to 1.50% and 0.50%,
respectively, of the Fund's offering price on Fund share purchases. Therefore,
the shares of each of these Funds are sold at a price which is equal to the net
asset value of such shares, plus a transaction charge. The transaction charge
is retained by the Funds and is intended to defray transaction costs associated
with the purchase and sale of securities within the Funds. Investors in the
Brinson Emerging Markets Equity Fund are also subject to a transaction charge
equal to 1.50% of the Fund's offering price on Fund share redemptions.
Transaction charges received by the Brinson Emerging Markets Equity Fund and
the Brinson Emerging Markets Debt Fund were $5,541,127 and $1,094,422,
respectively, for the year ended December 31, 1997, and are included in shares
sold on the statements of changes in net assets.
This Report is submitted for the general information of the shareholders of the
Funds. It is not authorized for distribution to prospective investors in the
Funds unless preceded or accompanied by an effective Prospectus which includes
details regarding each Fund's objectives, policies, expenses and other
information.
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THE BRINSON RELATIONSHIP FUNDS - REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
The Brinson Relationship Funds -
Brinson Global Securities Fund
Brinson Global Equity Fund
Brinson U.S. Equity Fund
Brinson Post-Venture Fund
Brinson Emerging Markets Equity Fund
Brinson Short-Term Fund
Brinson High Yield Fund
Brinson Emerging Markets Debt Fund
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of The Brinson Relationship Funds -
Brinson Global Securities Fund, Brinson Global Equity Fund, Brinson U.S.
Equity Fund, Brinson Post-Venture Fund, Brinson Emerging Markets Equity Fund,
Brinson Short-Term Fund, Brinson High Yield Fund, and Brinson Emerging Markets
Debt Fund as of December 31, 1997, and the related statements of operations and
changes in net assets and the financial highlights for the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Brinson Relationship Funds - Brinson Global Securities Fund, Brinson Global
Equity Fund, Brinson U.S. Equity Fund, Brinson Post-Venture Fund, Brinson
Emerging Markets Equity Fund, Brinson Short-Term Fund, Brinson High Yield Fund
and Brinson Emerging Markets Debt Fund at December 31, 1997, the results of
their operations, the changes in their net assets and the financial highlights
for the periods indicated therein in conformity with generally accepted
accounting principles.
/s/ Ernest & Young LLP
Chicago, Illinois
February 11, 1998
124
