<PAGE>
- --------------------------------------------------------------------------------
BRINSON RELATIONSHIP FUNDS
BRINSON GLOBAL SECURITIES FUND
BRINSON U.S. EQUITY FUND
BRINSON U.S. LARGE CAPITALIZATION VALUE EQUITY FUND
BRINSON POST-VENTURE FUND
BRINSON NON-U.S. EQUITY FUND
BRINSON EMERGING MARKETS EQUITY FUND
BRINSON EMERGING MARKETS DEBT FUND
BRINSON HIGH YIELD FUND
BRINSON U.S. CASH MANAGEMENT PRIME FUND
SEMI-ANNUAL REPORT
JUNE 30, 1998
[GRAPHIC APPEARS HERE]
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
Statement of Cash Flows................................................ 27
Financial Highlights................................................... 28
BRINSON U.S. EQUITY FUND.................................................. 29
Schedule of Investments................................................ 32
Statement of Assets and Liabilities.................................... 36
Statement of Operations................................................ 37
Statements of Changes in Net Assets.................................... 38
Financial Highlights................................................... 39
BRINSON U.S. LARGE CAPITALIZATION VALUE EQUITY FUND....................... 40
Schedule of Investments................................................ 41
Statement of Assets and Liabilities.................................... 44
Statement of Operations................................................ 45
Statement of Changes in Net Assets..................................... 46
Financial Highlights................................................... 47
BRINSON POST-VENTURE FUND................................................. 48
Schedule of Investments................................................ 51
Statement of Assets and Liabilities.................................... 56
Statement of Operations................................................ 57
Statements of Changes in Net Assets.................................... 58
Financial Highlights................................................... 59
BRINSON NON-U.S. EQUITY FUND.............................................. 60
Schedule of Investments................................................ 61
Statement of Assets and Liabilities.................................... 71
Statement of Operations................................................ 72
Statement of Changes in Net Assets..................................... 73
Financial Highlights................................................... 74
BRINSON EMERGING MARKETS EQUITY FUND...................................... 75
Schedule of Investments................................................ 78
Statement of Assets and Liabilities.................................... 92
Statement of Operations................................................ 93
Statements of Changes in Net Assets.................................... 94
Financial Highlights................................................... 95
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
BRINSON EMERGING MARKETS DEBT FUND........................................ 96
Schedule of Investments................................................ 98
Statement of Assets and Liabilities.................................... 101
Statement of Operations................................................ 102
Statements of Changes in Net Assets.................................... 103
Financial Highlights................................................... 104
BRINSON HIGH YIELD FUND................................................... 105
Schedule of Investments................................................ 108
Statement of Assets and Liabilities.................................... 112
Statement of Operations................................................ 113
Statements of Changes in Net Assets.................................... 114
Financial Highlights................................................... 115
BRINSON U.S. CASH MANAGEMENT PRIME FUND................................... 116
Schedule of Investments................................................ 116
Statement of Assets and Liabilities.................................... 117
Statement of Operations................................................ 118
Statement of Changes in Net Assets..................................... 119
Financial Highlights................................................... 120
The Brinson Relationship Funds--Notes to Financial Statements............. 121
</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. The 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
the portfolio, 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.
Since its performance inception on April 30, 1995, the Brinson Global
Securities Fund has produced an annualized return of 16.09%, compared to the
return of 16.54% for its benchmark, the Global Securities Relationship Fund
Index. The Fund achieved this performance with a volatility of 6.05%, well-
below the benchmark volatility of 7.40%. For the first half of 1998, the Fund
returned 6.59%, trailing the 10.16% return of the benchmark.
The Brinson Global Securities Fund market strategy centers on reducing the risk
of exposure to the overpriced equity markets; most global bond markets are
neutrally valued and, because they provide relative attraction, are the primary
overweights. The Japanese bond market is an exception and is extremely
overvalued at all points along the yield curve. Market allocation made a
substantial negative contribution to Fund performance during the first half of
1998 as developed global equity markets, with a few Asian exceptions, were
strong. Numerous developed equity markets provided double-digit returns in
dollar-hedged terms. Developed bond markets provided positive returns but
failed to match those of world equity markets.
The strategy for emerging markets equities is neutral to the normal policy
exposure of 3.0%. The emerging debt strategy mirrors the developed bond market
overweight, with a 5.0% exposure relative to the 2.0% normal policy. A small
underweight is carried in the U.S. high yield bond market. Active currency had
little impact on the performance of the portfolio. Current strategy involves
yen and sterling underweights and Australian and U.S. dollar overweights.
1
<PAGE>
BRINSON GLOBAL SECURITIES FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS ANNUALIZED
ENDED ENDED ENDED 4/30/95*
6/30/98 6/30/98 6/30/98 TO 6/30/98
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Brinson Global Securities Fund 6.59% 8.94% 15.38% 16.09%
- ------------------------------------------------------------------------------
Global Securities Relationship Fund Index
** 10.16% 13.76% 15.98% 16.54%
- ------------------------------------------------------------------------------
</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; 21% Salomon BIG
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 Relationship Fund 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 RELATIONSHIP FUND INDEX
[LINE GRAPH APPEARS HERE]
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 June 30, 1998
PERCENT OF
NET ASSETS
- --------------------------------------------------------------------------------
1. Xerox Corp. 1.49%
2. Lockheed Martin Corp. 1.45
3. Burlington Northern Santa Fe Corp. 1.34
4. Aon Corp. 1.03
5. FDX Corp. 0.98
6. Philip Morris Companies, Inc. 0.98
7. CIGNA Corp. 0.80
8. Automatic Data Processing, Inc. 0.78
9. Goodyear Tire & Rubber Co. 0.76
10. Baxter International, Inc. 0.72
- --------------------------------------------------------------------------------
TOP TEN NON-U.S. EQUITY HOLDINGS
As of June 30, 1998
PERCENT OF
NET ASSETS
- --------------------------------------------------------------------------------
1. Novartis AG (Reg.) 0.29%
2. Nokia Oyj A shares 0.28
3. Glaxo Wellcome PLC 0.28
4. Royal Dutch Petroleum Co. 0.23
5. Telecom Corp. of New Zealand Ltd. 0.23
6. British Petroleum Co. PLC 0.23
7. CS Holdings AG (Reg.) 0.22
8. British Telecommunications PLC 0.21
9. B.A.T. Industries PLC 0.21
10. Lloyds TSB Group PLC 0.21
- --------------------------------------------------------------------------------
TOP TEN U.S. BOND HOLDINGS
As of June 30, 1998
PERCENT OF
NET ASSETS
- --------------------------------------------------------------------------------
1. U.S. Treasury Notes and Bonds 8.000%, due 11/15/21 1.30%
2. U.S. Treasury Notes and Bonds 5.500%, due 02/29/00 0.88
3. U.S. Treasury Bill due 11/27/98 0.000%, due 11/27/98 0.48
4. U.S. Treasury Notes and Bonds 3.625%, due 01/15/08 0.47
5. Enron Corp. 6.750%, due 08/01/09 0.47
6. Prudential Home Mortgage Securities, 6.500%, due 02/25/24 0.43
7. Government National Mortgage Association 7.000%, due 08/15/24 0.43
8. Premier Auto Trust Series 1996-4A, Class A4, 6.400%, due 10/06/01 0.41
9. Tennesse Valley Authority 6.375%, due 06/15/05 0.38
10. World Omni Automobile Lease Securitization Trust 6.850%, due
06/25/03 0.38
- --------------------------------------------------------------------------------
TOP TEN NON-U.S. BOND HOLDINGS
As of June 30, 1998
PERCENT OF
NET ASSETS
- --------------------------------------------------------------------------------
1. Kingdom of Denmark 8.000%, due 05/15/03 1.01%
2. UK Treasury 8.000%, due 06/10/03 0.94
3. UK Treasury 9.000%, due 10/13/08 0.94
4. Government of Canada 4.250%, due 12/01/21 0.86
5. Treuhandanstalt 6.250%, due 03/04/04 0.81
6. Treuhandanstalt 7.375%, due 12/02/02 0.80
7. Kingdom of Denmark 7.000%, due 12/15/04 0.77
8. Government of France 5.750%, due 03/12/01 0.60
9. Government of France 4.500%, due 07/12/02 0.55
10. Bundesrepublik Deutscheland 7.750%, due 02/21/00 0.52
- --------------------------------------------------------------------------------
3
<PAGE>
BRINSON GLOBAL SECURITIES FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of June 30, 1998 (Unaudited)
<TABLE>
- -----------------------------------------
<S> <C>
U.S. EQUITIES
Basic Industries
Chemicals..................... 1.24%
Housing/Paper................. 2.42
Metals........................ 0.36
------
4.02
Capital Investment
Capital Goods................. 3.22
Technology.................... 3.01
------
6.23
Consumer
Autos/Durables................ 0.94
Discretionary................. 0.24
Health: Drugs................. 2.33
Health: Non-Drugs............. 1.74
Non-Durables.................. 2.17
Retail/Apparel................ 1.39
------
8.81
Energy......................... 0.78
Financial
Banks......................... 2.22
Non-Banks..................... 2.22
------
4.44
Services/Miscellaneous......... 2.02
Transportation................. 2.56
Utilities
Electric...................... 1.88
Telephone..................... 0.29
------
2.17
Post Venture................... 2.22
------
Total U.S. Equities.......... 33.25
------
NON-U.S. EQUITIES
Airlines...................... 0.07
Appliances & Household........ 0.24
Automobiles................... 0.55
Banking....................... 2.32
Beverages & Tobacco........... 0.48
Broadcasting & Publishing..... 0.46
Building Materials............ 0.32
Business & Public Service..... 0.45
Chemicals..................... 0.51
Construction.................. 0.07
Data Processing............... 0.09
Electric Components........... 0.12
Electronics................... 0.66
Energy........................ 1.33
Financial Services............ 0.19
Food & House Products......... 0.83
Forest Products............... 0.25
Gold Mining................... 0.01
Health: Drugs................. 0.05
Health: Non-Drugs............. 1.20
Industrial Components......... 0.31
</TABLE>
<TABLE>
<S> <C>
Insurance.................... 1.09%
Investment Companies......... 0.06
Leisure & Tourism............ 0.07
Machinery & Engineering...... 0.13
Merchandising................ 0.69
Metals-Steel................. 0.33
Miscellaneous Materials...... 0.02
Multi-Industry............... 0.86
Non-Ferrous Metals........... 0.29
Real Estate.................. 0.08
Recreation................... 0.06
Retail/Apparel............... 0.03
Service/Miscellaneous........ 0.08
Telecommunications........... 1.52
Textiles & Apparel........... 0.05
Transportation............... 0.21
Utilities.................... 0.48
Wholesale & International
Trade....................... 0.08
------
Total Non-U.S. Equities..... 16.64
EMERGING MARKETS EQUITIES..... 3.47
------
U.S. BONDS
U.S. Corporate Bonds
Airlines..................... 0.23
Asset-Backed................. 3.01
Banks........................ 0.26
Broadcasting................. 0.28
CMO.......................... 0.84
Energy....................... 0.02
Financial.................... 2.70
Government................... 0.50
Technology................... 0.39
Telecommunications........... 0.24
Utilities.................... 0.48
------
Total U.S. Corporate Bonds.. 8.95
International Dollar Bonds
Foreign Banks................ 1.43
Foreign Energy............... 0.70
Foreign Financial............ 0.30
Foreign Government........... 0.27
Foreign Telecommunications... 0.07
Foreign Utilities............ 0.05
------
Total International Dollar
Bonds...................... 2.82
U.S. Government Agencies...... 5.10
------
U.S. Government Obligation.... 3.63
------
Total U.S. Bonds............ 20.50
HIGH YIELD BONDS.............. 2.71
------
NON-U.S. BONDS
Foreign Financial Bonds...... 1.62
Foreign Government Bonds..... 15.90
------
Total Non-U.S. Bonds........ 17.52
EMERGING MARKETS DEBT......... 4.78
------
SHORT-TERM INVESTMENTS........ 16.97
------
TOTAL INVESTMENTS........... 115.84
LIABILITIES LESS CASH AND
OTHER ASSETS................. (15.84)
------
NET ASSETS.................... 100.00%
======
</TABLE>
4
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
EQUITIES - 53.36%
U.S. EQUITIES - 33.25%
Aetna Inc. ................................... 69,900 $ 5,321,138
Allergan, Inc. ............................... 108,400 5,027,050
Alza Corp. (b)................................ 110,300 4,770,475
American Home Products Corp. ................. 109,600 5,671,800
Aon Corp. .................................... 197,600 13,881,400
Automatic Data Processing, Inc. .............. 144,700 10,545,013
BankBoston Corp. ............................. 80,100 4,455,563
Baxter International, Inc. ................... 180,400 9,707,775
Beckman Coulter, Inc. ........................ 47,800 2,784,350
Bestfoods..................................... 96,600 5,608,838
Biogen, Inc. (b).............................. 43,200 2,116,800
Birmingham Steel Corp. ....................... 44,200 546,975
Brinson Post-Venture Fund (b)................. 1,414,294 29,906,368
Burlington Northern Santa Fe Corp. ........... 184,200 18,086,138
Champion Enterprises, Inc. (b)................ 35,900 1,054,563
Champion International Corp. ................. 55,000 2,705,313
CIGNA Corp. .................................. 156,600 10,805,400
Circuit City Stores--Circuit City Group....... 163,100 7,645,313
Citicorp...................................... 3,900 582,075
CMS Energy Corp. ............................. 142,500 6,270,000
Columbia/HCA Healthcare Corp. ................ 31,000 902,875
Comerica, Inc. ............................... 45,500 3,014,375
Commscope, Inc. (b)........................... 77,599 1,256,134
Comverse Technology, Inc. (b)................. 50,480 2,618,650
Consolidated Stores Corp. (b)................. 52,500 1,903,125
Corning, Inc. ................................ 262,600 9,125,350
Covance, Inc. (b)............................. 55,550 1,249,875
Crown Cork & Seal Co., Inc. .................. 52,500 2,493,750
Dial Corp. ................................... 57,100 1,481,031
Eastman Chemical Co. ......................... 60,800 3,784,800
EMC Corp. (b)................................. 98,300 4,405,069
Enron Corp. .................................. 122,100 6,601,031
Entergy Corp. ................................ 324,500 9,329,375
FDX Corp. (b)................................. 211,500 13,271,625
First American Corp. of Tennessee............. 28,900 1,390,813
First Data Corp. ............................. 266,970 8,893,438
First Security Corp. ......................... 54,650 1,169,852
FirstEnergy Corp. ............................ 22,470 690,953
Fleet Financial Group, Inc. .................. 68,000 5,678,000
Fleetwood Enterprises, Inc. .................. 2,600 104,000
Food Lion Inc., Class A....................... 213,900 2,272,688
Forest Laboratories, Inc. (b)................. 83,700 2,992,275
Fort James Corp. ............................. 141,900 6,314,550
Gannett Co., Inc. ............................ 46,100 3,275,981
General Instrument Corp. (b).................. 251,700 6,843,094
</TABLE>
5
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
U.S. EQUITIES - (CONTINUED)
General Semiconductor, Inc. (b)............... 57,275 $ 565,591
Genzyme Corp. (b)............................. 44,500 1,137,531
Geon Co. ..................................... 30,500 699,594
Goodyear Tire & Rubber Co. ................... 158,600 10,219,788
Great Lakes Chemical Corp. ................... 32,600 1,285,663
Harnischfeger Industries, Inc. ............... 77,000 2,180,063
Health Care and Retirement Corp. (b).......... 49,700 1,960,044
Hibernia Corp. ............................... 61,300 1,237,494
IMC Global, Inc. ............................. 59,000 1,777,375
Informix Corp. (b)............................ 58,900 465,678
Interpublic Group of Companies, Inc. ......... 47,950 2,909,966
Kimberly Clark Corp. ......................... 206,800 9,486,950
Lafarge Corp. ................................ 32,100 1,261,931
Lear Corp. (b)................................ 47,600 2,442,475
Lockheed Martin Corp. ........................ 184,940 19,580,523
Lyondell Petrochemical Co. ................... 147,200 4,480,400
Manor Care, Inc. ............................. 56,600 2,175,563
Martin Marietta Materials, Inc. .............. 32,363 1,456,335
Masco Corp. .................................. 128,700 7,786,350
Medusa Corp. ................................. 4,500 282,375
Nabisco Holdings Corp. ....................... 112,500 4,057,031
National Service Industries, Inc. ............ 21,600 1,098,900
Nextel Communications, Inc. (b)............... 154,200 3,835,725
Norfolk Southern Corp. ....................... 105,900 3,157,144
Peco Energy Co. .............................. 313,400 9,147,363
Pentair, Inc. ................................ 58,400 2,482,000
Philip Morris Companies, Inc. ................ 335,500 13,210,313
Praxair Inc. ................................. 102,200 4,784,238
Raytheon Co., Class B......................... 148,500 8,780,063
Regions Financial Corp. ...................... 28,400 1,166,175
Reynolds & Reynolds Co. ...................... 39,200 712,950
Schering Plough Corp. ........................ 105,700 9,684,763
Seagate Technology, Inc. (b).................. 98,700 2,350,294
Sears, Roebuck and Co. ....................... 113,800 6,948,913
Southdown, Inc. .............................. 22,600 1,613,075
St. Jude Medical, Inc. (b).................... 55,700 2,050,456
Timken Co. ................................... 19,400 597,763
Tyson Foods, Inc., Class A.................... 224,700 4,873,181
Ultramar Diamond Shamrock Corp. .............. 125,690 3,967,091
US Bancorp.................................... 141,652 6,091,036
Vencor, Inc. (b).............................. 116,800 846,800
Ventas, Inc. ................................. 117,000 1,616,063
Viad Corp. ................................... 108,300 3,005,325
Wells Fargo & Co. ............................ 14,000 5,166,000
Westvaco Corp. ............................... 26,400 745,800
Witco Corp. .................................. 58,200 1,702,350
</TABLE>
6
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
U.S. EQUITIES - (CONTINUED)
Xerox Corp. .................................. 197,400 $ 20,060,775
York International Corp. ..................... 68,800 2,997,100
--------------
TOTAL U.S. EQUITIES........................... 448,695,432
--------------
NON-U.S. EQUITIES - 16.64%
AUSTRALIA - 0.91%
Amcor Ltd. ................................... 54,330 237,881
Boral Ltd. ................................... 178,760 335,439
Brambles Industries Ltd. ..................... 26,410 518,311
Broken Hill Proprietary Co., Ltd. ............ 168,929 1,428,029
Coca-Cola Amatil Ltd. ........................ 31,230 208,880
CSR Ltd. ..................................... 99,070 285,909
David Jones Ltd. ............................. 345,090 395,370
Lend Lease Corp., Ltd. ....................... 23,440 473,959
Mayne Nickless Ltd. .......................... 84,000 444,780
National Australia Bank Ltd. ................. 120,900 1,594,799
News Corp. Ltd. .............................. 223,496 1,824,254
News Corp. Ltd., Preferred.................... 66,268 469,494
Orica Ltd. ................................... 29,300 173,289
Pacific Dunlop Ltd. .......................... 165,535 267,566
Qantas Airways Ltd. .......................... 166,467 250,515
Rio Tinto PLC................................. 37,309 443,624
Santos Ltd. .................................. 75,760 234,590
Telstra Corp., Ltd. .......................... 325,700 835,061
Westpac Banking Corp., Ltd. .................. 200,780 1,224,776
WMC Ltd. ..................................... 141,075 424,606
Woolworth's Ltd. ............................. 69,210 225,024
--------------
12,296,156
--------------
BELGIUM - 0.82%
Delhaize-Le Lion S.A. (b)..................... 12,290 858,748
Electrabel S.A. .............................. 6,730 1,908,129
Fortis AG..................................... 711 38
Fortis AG Strip (b)........................... 9,321 2,379,723
Groupe Bruxelles Lambert S.A. ................ 3,510 708,414
KBC Bancassurance Holding (b)................. 17,400 1,499,044
Petrofina S.A. ............................... 3,420 1,403,937
Solvay S.A., Class A.......................... 10,030 795,176
Tractebel..................................... 7,815 1,144,632
Tractebel Warrants (b)........................ 1,815 634
Union Miniere Group S.A. ..................... 5,969 368,952
--------------
11,067,427
--------------
CANADA - 0.54%
Agrium, Inc. ................................. 16,700 208,381
Alcan Aluminum Ltd. .......................... 12,700 349,755
Bank of Montreal.............................. 9,665 532,344
</TABLE>
7
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
CANADA - (CONTINUED)
Barrick Gold Corp. ........................... 8,395 $ 159,840
Canadian National Railway Co. ................ 8,850 470,604
Canadian Pacific Ltd. ........................ 29,158 820,849
Extendicare, Inc., Class A (b)................ 21,700 175,595
Hudson's Bay Co. ............................. 11,700 268,115
Imasco, Ltd. ................................. 16,200 299,082
Imperial Oil Ltd. ............................ 33,165 579,587
Magna International, Inc., Class A............ 4,000 273,902
Moore Corp., Ltd. ............................ 15,000 198,898
Newbridge Networks Corp. (b).................. 4,300 102,778
Noranda, Inc. ................................ 13,125 226,693
NOVA Corp. ................................... 35,540 407,214
Potash Corp. of Saskatchewan, Inc. ........... 3,900 293,839
Royal Bank of Canada.......................... 11,295 679,728
Seagram Co., Ltd. ............................ 5,475 223,192
Shaw Communications, Inc. Class B............. 22,800 443,411
TransCanada Pipelines Ltd. ................... 17,335 384,279
Westcoast Energy, Inc. ....................... 8,700 193,747
--------------
7,291,833
--------------
DENMARK - 0.06%
Den Danske Bank Group......................... 4,000 479,860
Tele Danmark A/S.............................. 4,200 403,083
--------------
882,943
--------------
FINLAND - 0.47%
Cultor Oyj.................................... 4,500 72,997
Merita Ltd., Class A.......................... 111,350 734,689
Metsa-Serla Oyj, Series B..................... 16,900 163,255
Nokia Oyj A shares............................ 51,500 3,787,524
Outokumpu Oyj, Class A........................ 17,420 222,255
Sampo Insurance Co., Ltd., Series A........... 7,680 363,948
UPM-Kymmene Corp. ............................ 27,130 746,674
Valmet OY..................................... 11,500 198,287
--------------
6,289,629
--------------
FRANCE - 1.61%
Air Liquide................................... 2,666 440,994
Alcatel Alsthom............................... 4,922 1,002,147
AXA-UAP....................................... 10,094 1,135,283
Banque Nationale de Paris..................... 10,890 889,788
Carrefour S.A. ............................... 1,190 752,853
Cie de Saint Gobain........................... 5,502 1,020,136
Dexia France.................................. 5,131 690,809
Elf Aquitaine S.A. ........................... 8,328 1,170,824
Eridania Beghin-Say S.A. ..................... 2,050 452,655
France Telecom S.A. .......................... 21,100 1,455,293
</TABLE>
8
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
FRANCE - (CONTINUED)
Groupe Danone................................. 3,060 $ 843,702
Lafarge S.A. ................................. 4,700 485,858
Lagardere S.C.A. ............................. 15,590 649,025
Lyonnaise des Eaux S.A. ...................... 7,768 1,278,392
Michelin, Class B............................. 10,298 594,443
Paribas(Ex-Banque Paribas) (b)................ 7,329 784,297
Pechiney S.A., Class A........................ 9,820 395,496
Peugeot S.A. ................................. 4,890 1,051,439
Pinault-Printemps-Redoute S.A. ............... 740 619,318
Rhone-Poulenc, Class A........................ 18,138 1,023,000
SEITA......................................... 17,930 812,574
Societe Generale.............................. 4,669 970,713
Thomson CSF................................... 14,870 565,680
Total S.A., Class B........................... 6,461 839,951
Usinor Sacilor................................ 15,150 234,041
Vivendi....................................... 7,280 1,554,495
Vivendi Warrants "01' (b)..................... 12,360 24,327
--------------
21,737,533
--------------
GERMANY - 1.89%
Allianz AG (b)................................ 255 83,352
Allianz AG Holding............................ 7,900 2,604,155
BASF AG....................................... 11,650 551,842
Bayer AG...................................... 28,870 1,489,084
Bayerische Motoren Werke AG (b)............... 226 224,748
Bayerische Motoren Werke AG (b)............... 756 762,701
Commerzbank AG................................ 6,210 237,391
Continental AG................................ 19,800 616,487
Daimler-Benz AG (b)........................... 12,132 1,189,675
Deutsche Bank AG.............................. 18,860 1,597,092
Deutsche Telekom AG........................... 80,120 2,161,686
Dresdner Bank AG.............................. 23,850 1,285,654
Hochtief AG................................... 6,850 328,269
Hoechst AG.................................... 9,130 455,741
M.A.N. AG..................................... 1,450 563,933
Mannesmann AG (b)............................. 11,950 1,212,213
Metro AG...................................... 15,998 970,516
Metrro AG-Rights (b).......................... 15,998 620
Muenchener Rueckver AG........................ 4,000 1,983,380
Preussag AG................................... 2,216 790,639
RWE AG........................................ 14,180 840,587
Schering AG................................... 7,250 854,335
Siemens AG.................................... 23,700 1,441,695
Thyssen AG.................................... 2,800 708,920
VEBA AG....................................... 16,770 1,142,776
Volkswagen AG................................. 1,508 1,449,518
--------------
25,547,009
--------------
</TABLE>
9
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
HONG KONG - 0.06%
Cheung Kong Holdings, Ltd. ................... 40,000 $ 196,681
Citic Pacific Ltd. ........................... 13,000 22,985
CLP Holdings Limited.......................... 13,500 61,501
Hang Seng Bank Ltd. .......................... 9,500 53,700
Hong Kong and China Gas Co., Ltd. ............ 71,000 80,634
Hong Kong and China Gas Wts 9/99 (b).......... 5,000 342
Hong Kong Telecommunications Ltd. ............ 47,400 89,006
Hutchinson Whampoa Ltd. ...................... 27,000 142,516
Johnson Electric Holdings Ltd. ............... 13,000 48,151
South China Morning Post Holdings Ltd. ....... 58,000 27,882
Sun Hung Kai Properties, Ltd. ................ 12,000 50,951
--------------
774,349
--------------
ITALY - 0.76%
Assicurazioni Generali........................ 34,826 1,132,425
Banca Commerciale Italiana.................... 13,900 83,124
Credito Italiano Spa.......................... 144,900 758,513
Danieli & Co. Savings (Risp).................. 79,800 370,369
Edison Spa.................................... 7,500 60,188
ENI Spa....................................... 132,000 865,123
ENI SpA ADR................................... 18,700 1,215,500
Fiat Spa-Priv Preferred....................... 246,880 614,578
INA-Instituto Mobiliare Italiano Spa.......... 41,000 647,408
INA-Istituto Nazionale delle Assicurazioni.... 71,400 202,847
Instituto Bancario San Paolo di Torino........ 33,000 476,189
Italgas Spa................................... 15,300 62,317
La Rinascente Spa............................. 46,760 465,614
Montedison Spa................................ 497,856 617,576
Parmalet Finanziaria Spa...................... 174,000 354,842
Telecom Italia Mobile Spa..................... 110,500 372,985
Telecom Italia Mobile Spa..................... 166,100 1,015,728
Telecom Italia Mobile Spa-RNC................. 21,051 101,906
Telecom Italia Spa............................ 119,833 882,121
--------------
10,299,353
--------------
JAPAN - 1.53%
Amada Co., Ltd. .............................. 45,000 218,864
Bank of Tokyo-Mitsubushi, Ltd. ............... 39,000 412,804
Canon Sales Co., Inc. ........................ 14,000 190,251
Canon, Inc. .................................. 36,000 817,091
Citizen Watch Co., Ltd. ...................... 41,000 338,257
Dai Nippon Printing Co., Ltd. ................ 41,000 654,357
Daiichi Pharmaceutical Co., Ltd. ............. 37,000 487,877
Daikin Industries Ltd. ....................... 46,000 296,314
Daiwa House Industry Co., Ltd. ............... 22,000 194,185
Fanuc......................................... 17,500 605,253
Fuji Photo Film............................... 3,000 104,406
</TABLE>
10
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
JAPAN - (CONTINUED)
Fujitsu....................................... 27,000 $ 284,036
Hitachi Ltd. ................................. 87,000 567,316
Honda Motor Co. .............................. 18,000 640,703
Hoya Corp. ................................... 10,000 283,172
Inax.......................................... 32,000 109,983
Ito Yokado Co., Ltd. ......................... 17,000 799,870
Kaneka Corp. ................................. 44,000 231,437
Keio Teito Electric Railway................... 50,000 181,936
Kinki Nippon Railway.......................... 51,000 238,859
Kirin Brewery Co., Ltd. ...................... 48,000 453,075
Kokuyo........................................ 14,000 237,057
Kuraray Co., Ltd. ............................ 54,000 458,738
Kyocera Corp. ................................ 5,100 249,148
Marui Co., Ltd. .............................. 23,000 343,049
Matsushita Electric Industrial Co. ........... 53,000 851,605
NGK Insulators................................ 72,000 625,140
Nintendo Corp., Ltd. ......................... 4,400 407,393
Nippon Denso Co., Ltd. ....................... 37,000 613,179
Nippon Meat Packers, Inc. .................... 28,000 342,775
Nippon Steel Co. ............................. 36,000 63,292
Okumura....................................... 46,000 161,415
Omron Corp. .................................. 13,000 198,581
Osaka Gas Co. ................................ 85,000 218,035
Sankyo Co., Ltd. ............................. 32,000 728,609
Secom Co., Ltd. .............................. 10,000 577,152
Sega Enterprises Ltd. ........................ 6,000 103,541
Seino Transportation.......................... 30,000 166,445
Sekisui House Ltd. ........................... 41,000 317,578
Shin-Etsu Chemical Co., Ltd. ................. 2,000 34,586
Sony Corp. ................................... 10,400 895,486
Sumitomo Bank................................. 6,000 58,364
Sumitomo Chemical Co. ........................ 52,000 160,363
Sumitomo Electric Industries.................. 36,000 363,930
Takeda Chemical Industries.................... 27,000 717,873
TDK Corp. .................................... 8,000 590,842
Tokio Marine & Fire Insurance Co. ............ 40,000 410,995
Tokyo Electric Power.......................... 11,300 221,465
Tonen Corp. .................................. 32,000 165,782
Toray Industries, Inc. ....................... 113,000 586,231
Toshiba Corp. ................................ 104,000 424,887
Toyo Suisan Kaisha............................ 25,000 152,394
Toyota Motor Corp. ........................... 31,000 801,888
Yamato Transport Co., Ltd. ................... 6,000 67,226
Yamazaki Banking Co., Ltd. ................... 19,000 168,390
--------------
20,593,480
--------------
</TABLE>
11
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
MALAYSIA - 0.08%
Berjaya Sports Toto Bhd...................... 46,000 $ 68,210
Kuala Lumpur Kepong Bhd...................... 67,500 109,042
Malayan Banking Berhad-A..................... 24,400 24,326
Malayan Banking Bhd.......................... 24,400 24,591
Malaysian International Shipping Bhd
(Frgn.)..................................... 27,000 39,385
Nestle (Malaysia) Bhd........................ 23,000 104,255
Petronas Gas Bhd............................. 42,000 77,975
Public Bank Bhd (Frgn.)...................... 40,599 12,236
Resorts World Bhd............................ 58,000 63,769
Rothmans of Pall Mall Bhd.................... 24,000 166,365
Sime Darby Bhd............................... 15,000 10,343
Tanjong PLC.................................. 18,000 24,955
Telekom Malaysia Bhd......................... 59,500 100,422
Tenaga Nasional Bhd.......................... 63,000 75,949
UMW Holdings Bhd............................. 44,000 19,732
YTL Corp. Bhd................................ 109,000 81,996
YTL Power International Bhd (b).............. 36,600 19,944
--------------
1,023,495
--------------
NETHERLANDS - 0.92%
ABN AMRO Holdings NV......................... 42,757 1,000,508
Akzo Nobel NV................................ 1,540 342,340
Elsevier NV.................................. 43,720 659,819
Heineken NV (b).............................. 20,125 790,477
Hoogovens NV................................. 4,696 203,150
ING Groep NV................................. 24,616 1,611,863
KLM Royal Dutch Air Lines NV................. 6,516 264,586
Philips Electronics NV....................... 13,065 1,098,277
Polygram NV.................................. 8,200 418,425
Royal Dutch Petroleum Co. ................... 57,180 3,170,732
Royal PTT Nederland NV....................... 21,618 832,115
TNT Post Group NV............................ 21,618 552,618
Unilever NV.................................. 18,660 1,480,545
--------------
12,425,455
--------------
NEW ZEALAND - 0.50%
Brierley Investments Ltd. ................... 1,800,570 897,289
Carter Holt Harvey Ltd. ..................... 624,190 544,349
Fletcher Challenge Building.................. 205,825 256,425
Fletcher Challenge Energy.................... 227,195 542,510
Fletcher Challenge Forests Ltd. ............. 422,350 236,781
Fletcher Challenge Paper..................... 409,560 454,970
Lion Nathan Ltd. ............................ 159,900 355,258
Telecom Corp. New Zealand Ltd. ADS........... 10,840 355,010
Telecom Corp. of New Zealand Ltd. ........... 756,070 3,116,261
--------------
6,758,853
--------------
</TABLE>
12
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
NORWAY - 0.04%
Norsk Hydro ASA............................... 9,700 $ 426,631
Norske Skogindustrier ASA..................... 3,500 108,099
--------------
534,730
--------------
SINGAPORE - 0.22%
City Developments Ltd. ....................... 57,000 159,242
Creative Technology Limited (b)............... 6,000 72,802
DBS Land Ltd. ................................ 118,000 97,780
Development Bank of Singapore Ltd. ........... 26,400 146,102
Elec & Eltek International Co., Ltd. ......... 16,500 55,770
Fraser & Neave Ltd. .......................... 24,000 64,492
Keppel Corp., Ltd. ........................... 62,500 93,963
Keppel Land, Ltd. ............................ 74,000 67,890
Oversea-Chinese Banking Corp., Ltd. .......... 64,600 219,858
Rothmans Industries Ltd. ..................... 18,000 79,905
Singapore Airlines Ltd. (Frgn.)............... 72,000 336,668
Singapore Press Holdings Ltd. (Foreign)....... 58,730 392,808
Singapore Technologies Engineering (b)........ 74,000 52,122
Singapore Telecommunications, Ltd. ........... 500,000 710,269
United Overseas Bank Ltd. (Frgn.)............. 142,000 441,255
Venture Manufacturing (Singapore) Ltd. (b).... 17,000 32,199
--------------
3,023,125
--------------
SWEDEN - 0.56%
ABB AB, A Shares.............................. 31,600 447,755
Astra AB, A Shares............................ 41,400 846,180
Electrolux AB, B Shares (b)................... 18,100 310,938
Fastighthets AB Balder-Unit Right............. 8,500 8,527
Investor AB................................... 15,300 893,071
Nordbanken Holding AB......................... 114,800 842,117
Skandia Forsakrings AB (b).................... 30,300 433,134
Skanska AB, B Shares.......................... 10,800 484,821
Svenska Handelsbanken, A Shares............... 12,200 566,026
Swedish Match AB.............................. 122,000 405,397
Swedish Match Rights.......................... 1,000 64
Telefonaktiebolaget LM Ericsson, B Shares..... 53,400 1,560,170
Volvo AB, B Shares............................ 24,700 735,589
--------------
7,533,789
--------------
SWITZERLAND - 1.26%
ABB AG........................................ 528 779,747
CS Holdings AG (Reg.)......................... 13,481 2,999,629
Holderbank Financiere Glarus AG, B Shares..... 488 620,939
Julius Baer Holding AG........................ 222 694,482
Nestle S.A. (Reg.)............................ 1,091 2,334,774
Novartis AG (Reg.)............................ 2,335 3,885,509
Roche Holding AG (Gen.)....................... 276 2,710,324
</TABLE>
13
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
SWITZERLAND - (CONTINUED)
Sairgroup (b)................................. 1,435 $ 472,089
Saurer AG (Reg)............................... 494 504,813
Sulzer AG..................................... 513 404,840
Swiss Reinsurance Co. (Reg.).................. 642 1,623,623
--------------
17,030,769
--------------
UNITED KINGDOM - 4.41%
Abbey National PLC............................ 55,380 984,077
B.A.T. Industries PLC......................... 278,700 2,790,069
Barclays PLC.................................. 70,000 2,018,220
Bass PLC...................................... 30,080 563,617
Billiton PLC.................................. 318,000 644,659
BOC Group PLC................................. 35,000 476,816
Booker PLC.................................... 171,180 699,755
British Petroleum Co. PLC..................... 213,147 3,108,260
British Sky Broadcasting Group PLC............ 95,000 682,376
British Steel PLC............................. 608,530 1,337,702
British Telecommunications PLC................ 226,570 2,797,441
BTR PLC (b)................................... 85,283 241,901
Cable & Wireless PLC.......................... 53,000 643,775
Cadbury Schweppes PLC......................... 76,000 1,176,127
Charter PLC................................... 105,091 1,096,780
Coats Viyella PLC............................. 585,240 717,708
Diageo PLC.................................... 101,288 1,199,895
FKI PLC....................................... 324,887 937,789
General Electric Co. PLC...................... 191,650 1,651,604
Glaxo Wellcome PLC............................ 125,600 3,770,054
Greenalls Group PLC........................... 103,000 891,931
Hanson PLC.................................... 119,122 723,966
Hillsdown Holdings PLC........................ 281,380 765,257
House of Fraser PLC........................... 299,300 868,926
HSBC Holdings PLC............................. 71,548 1,815,739
Inchcape PLC.................................. 147,530 465,231
Legal & General Group PLC..................... 36,100 385,190
Lloyds TSB Group PLC.......................... 199,370 2,789,264
Marks & Spencer PLC........................... 269,760 2,455,269
Mirror Group PLC.............................. 263,450 989,025
National Westminster Bank PLC................. 45,420 811,640
Peninsular & Oriental Steam Navigation Co. ... 105,087 1,513,166
Prudential Corp. PLC.......................... 39,000 513,740
Reckitt & Colman PLC.......................... 30,095 574,443
Reed International PLC........................ 125,000 1,130,410
Reuters Holdings PLC.......................... 26,740 305,618
Rio Tinto Ltd. ............................... 75,920 855,041
RJB Mining PLC................................ 197,130 404,562
Royal & Sun Alliance Insurance Group PLC...... 81,539 842,817
</TABLE>
14
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------------- --------------
<S> <C> <C>
UNITED KINGDOM - (CONTINUED)
Scottish Hydro-Electric PLC.................. 84,820 $ 752,899
Sears PLC.................................... 381,820 334,460
Sedgwick Group PLC........................... 240,640 521,961
SmithKline Beecham PLC....................... 209,020 2,551,108
Smurfit (Jefferson) Group PLC................ 285,304 852,094
Tate & Lyle PLC.............................. 139,000 1,102,208
Tesco PLC.................................... 107,860 1,052,793
Thames Water PLC............................. 73,690 1,341,405
The Great Universal Stores PLC............... 9,000 118,630
Unilever PLC................................. 155,960 1,660,201
United News & Media PLC...................... 53,000 741,048
Vodafone Group PLC........................... 85,393 1,083,548
Williams PLC................................. 92,990 597,343
Willis Corroon Group......................... 51,000 129,342
--------------
59,478,900
--------------
TOTAL NON-U.S. EQUITIES...................... 224,588,828
--------------
EMERGING MARKETS EQUITIES - 3.47%
Brinson Emerging Markets Equity Fund (b)..... 5,787,049 46,785,400
--------------
TOTAL EQUITIES (COST $612,503,734)........... 720,069,660
--------------
<CAPTION>
FACE
AMOUNT
---------------
<S> <C> <C>
BONDS - 45.51%
U.S. BONDS - 20.50%
U.S. CORPORATE BONDS - 8.95%
Aid Israel, Series 10-Z 5.700%, due
02/15/03.................................... $ 2,000,000 2,001,466
Aid Israel, Series 10-Z 00.000%, due
02/15/03.................................... 5,670,000 4,384,838
Aid Israel, Series 10-Z 00.000%, due
08/15/19.................................... 1,105,000 320,229
Bank of America National Trust Variable Rate,
due 09/24/98................................ 4,000,000 3,999,459
Capital One Bank 6.830%, due 05/17/99........ 1,000,000 1,005,627
Chase Manhattan Auto Owner Trust 96-4
6.150%, due 03/15/02........................ 265,000 266,953
Chemical Master Credit Card 95-2A Trust
6.230%, due 06/15/03........................ 3,915,000 3,956,342
Citicorp Mortgage Securities, Inc. 94-9 Class
A8
5.750%, due 06/25/09........................ 4,707,883 4,477,997
Computer Associates International 144A
6.250%, due 04/15/03........................ 2,295,000 2,295,946
Continental Airlines, Inc. 97-4A 6.900%, due
01/02/18.................................... 3,000,000 3,120,540
Countrywide Funding Corp. FRN,
5.230%, due 12/01/03........................ 3,000,000 2,977,500
Dayton Hudson Co. 9.750%, due 11/1/98........ 610,000 617,486
Dayton Hudson Credit Card Master Trust 95-1A,
6.100%, due 02/25/02........................ 650,000 650,793
</TABLE>
15
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- --------------
<S> <C> <C>
U.S. CORPORATE BONDS - (CONTINUED)
Donaldson Lufkin & Jenrette, FRN,
6.700%, due 06/30/00........................ $ 4,650,000 $ 4,717,104
Enron Corp. 6.750%, due 08/01/09............. 6,250,000 6,395,488
First National Bank of Chicago Series E,
7.000%, due 05/08/00........................ 2,500,000 2,535,433
GMAC Series MTN 5.875%, due 01/12/99......... 1,000,000 999,456
Green Tree Financial 94-6 8.250%, due
01/15/20.................................... 460,000 484,901
Kern River Funding Corp. 144A, Series B
6.720%, due 09/30/01........................ 275,000 279,618
Lehman Bros. Holdings Series E 6.300%, due
08/11/99.................................... 5,000,000 5,020,004
Lehman Brothers, Inc., 7.250%, due 04/15/03.. 250,000 260,488
Lockheed Martin Corp. 6.550%, due 05/15/99... 12,450,000 12,514,791
McDonnell Douglas Financial Sub-Notes MTN
5.480% 02/08/99............................. 2,000,000 1,994,192
Nationsbanc Asset Securities, Inc. Series
1997-1, 5.958%, due 09/20/27................ 3,766,469 3,775,396
News America Holdings 7.750%, due 12/01/45... 680,000 729,762
Premier Auto Trust Series 1996-4A, Class A4,
6.400%, due 10/06/01........................ 5,475,000 5,515,844
Prudential Home Mortgage Securities,
6.750%, due 10/25/23........................ 3,119,523 3,132,625
Prudential Home Mortgage Securities,
6.500%, due 02/25/24........................ 5,970,000 5,785,169
Residential Asset Securitization Trust
7.250%, due 12/25/27........................ 2,595,000 2,650,380
Residential Asset Securitization Trust 97-A11
A2, 7.000%, due 01/25/28.................... 2,520,000 2,536,128
SASCO 98-RF1 A 8.712%, due 03/15/27.......... 2,157,223 2,313,622
Salomon, Inc. 6.500%, due 03/01/00........... 2,780,000 2,801,653
Salomon, Inc. 6.750%, due 02/15/03........... 3,800,000 3,892,427
Tele-Communications Inc. 9.800%, due
02/01/12.................................... 1,000,000 1,285,051
Tele-Communications, Inc. 7.875%, due
08/01/13.................................... 1,735,000 2,002,825
The Money Store 97-B, A-8, 6.900%, due
07/15/38.................................... 3,000,000 3,075,900
Time Warner Inc. 8.375%, due 03/15/23........ 1,250,000 1,463,443
Time Warner Inc. 7.570%, due 02/01/24........ 1,490,000 1,613,190
UCFC Home Equity Loan, Series C, Class A8
5.888%, due 09/15/27........................ 1,184,958 1,186,285
Union Oil of California Series B MTN
7.240%, due 04/01/99........................ 2,500,000 2,523,763
Vendee Mortgage Trust 6.750%, due 06/15/28... 4,000,000 4,065,000
World Omni Automobile Lease Securitization
Trust 6.850%, due 06/25/03.................. 5,057,382 5,102,241
--------------
120,727,355
--------------
</TABLE>
16
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- --------------
<S> <C> <C>
INTERNATIONAL DOLLAR BONDS - 2.82%
Abbey National plc 6.700%,
Resettable Perpetual Preferred............... $ 1,590,000 $ 1,596,773
ABN AMRO Bank NV (Chicago) 6.625%, due
10/31/01..................................... 1,000,000 1,018,958
AT&T Corp. 8.250%, due 01/11/00............... 30,000 30,997
Banca Commercial Italian 8.250%, due
07/15/07..................................... 30,000 33,541
Banque Paribas, 6.875%, due 03/01/09.......... 640,000 656,191
Bayerische Landesbank 6.850%, due 07/19/01.... 2,000,000 2,054,396
Credit Suisse-London 144-A 7.900%, due
05/01/07 Resettable Perpetual Preferred...... 3,610,000 3,859,758
DR Investments 144A 7.450%, due 05/15/07...... 30,000 32,023
Empresa Nacional Electric
7.875%, due 02/01/27......................... 875,000 875,415
8.125%, due 02/01/69......................... 4,320,000 4,190,400
Government of Poland, FRN 6.688%, due
10/27/24..................................... 2,600,000 2,544,750
International Telecom Satelite 8.125%, due
02/28/05..................................... 890,000 987,152
Japanese Development Bank 8.375%, due
02/15/01..................................... 30,000 31,746
Korea Development Bank 7.125%, due 09/17/01... 1,200,000 1,057,560
National Australia Bank, 6.400%, due
12/10/07..................................... 630,000 635,261
Pan Pacific Industry PLC 144A 00.000%, due
04/28/07..................................... 250,000 87,500
Petronas Nasional Bhd 144A 7.125%, due
08/15/05..................................... 730,000 643,462
Province of Quebec
7.500%, due 07/15/23......................... 375,000 416,899
7.500%, due 07/15/02......................... 600,000 629,478
Ras Laffan Liquefied Natural Gas Co. Ltd.,
144A 8.294%, due 03/15/14.................... 4,340,000 4,333,104
Royal Bank of Scotland 7.375%,
Resettable Perpetual Preferred............... 1,185,000 1,261,896
Southern Investments UK 6.800%, due 12/01/06.. 2,740,000 2,838,944
Skandinaviaka Enskilda Banken 144A 6.625%,
Resettable Perpetual Preferred............... 8,195,000 8,239,253
--------------
38,055,457
--------------
U.S. GOVERNMENT AGENCIES - 5.10%
Federal Home Loan Mortgage Corp.
7.000%, due 10/15/13......................... 409,292 421,940
6.950%, due 04/15/22......................... 3,900,000 3,987,567
7.500%, due 01/15/23......................... 3,006,059 3,220,736
6.600%, due 12/15/23......................... 3,000,000 3,064,527
7.238%, due 05/01/26......................... 945,027 977,905
Federal National Mortgage Assoc. Series 1991-
64
8.500%, due 06/25/06......................... 4,470,017 4,613,058
6.820%, due 10/01/07......................... 4,801,081 5,039,695
6.238%, due 04/01/08......................... 1,957,730 1,982,201
6.500%, due 05/01/08......................... 1,198,986 1,238,193
8.000%, due 03/01/11......................... 2,194,599 2,263,867
</TABLE>
17
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- --------------
<S> <C> <C>
U.S. GOVERNMENT AGENCIES - (CONTINUED)
Federal National Mortgage Assoc. (continued)
6.000%, due 12/01/12........................ $ 4,545,000 $ 4,493,846
8.500%, due 07/15/21........................ 2,452,979 2,548,295
9.000%, due 04/25/25........................ 1,608,419 1,687,545
6.500%, due 12/01/27........................ 2,210,000 2,200,316
6.000%, due 12/01/27........................ 3,255,000 3,166,480
Federal National Mortgage Association Strip
3.500%, due 05/01/28 principal only......... 2,010,866 1,727,091
6.220%, due 03/13/06........................ 1,000,000 1,031,871
Government National Mortgage Association
8.000%, due 12/15/22........................ 1,721,979 1,792,218
7.500%, due 12/15/22........................ 2,851,447 2,937,504
7.500%, due 12/15/23........................ 2,927,564 3,007,164
7.500%, due 12/15/23........................ 1,852,130 1,906,675
7.000%, due 08/15/24........................ 5,646,289 5,750,519
7.500%, due 01/15/24........................ 963,161 989,349
7.500%, due 12/15/27........................ 3,500,000 3,597,318
Tennesse Valley Authority 6.375%, due
06/15/05.................................... 5,000,000 5,191,045
--------------
68,836,925
--------------
U.S. GOVERNMENT OBLIGATIONS - 3.63%
U.S. Treasury Notes and Bonds
5.500%, due 02/29/00........................ 11,920,000 11,916,281
6.625%, due 07/31/01........................ 1,450,000 1,493,500
6.250%, due 08/31/02........................ 4,785,000 4,909,113
7.000%, due 07/15/06........................ 1,780,000 1,944,650
3.625%, due 01/15/08........................ 6,480,000 6,407,100
8.000%, due 11/15/21........................ 13,560,000 17,479,694
6.000%, due 02/15/26........................ 4,690,000 4,879,068
--------------
49,029,406
--------------
TOTAL U.S. BONDS............................. 276,649,143
--------------
<CAPTION>
SHARES
---------------
<S> <C> <C>
HIGH YIELD BONDS - 2.71%
Brinson High Yield Fund (b).................. 2,560,932 36,512,237
--------------
<CAPTION>
FACE
AMOUNT
---------------
<S> <C> <C>
NON-U.S. BONDS - 17.52%
AUSTRALIA - 1.20%
Government of Australia
9.750%, due 03/15/02........................ AUD 3,800,000 2,699,745
9.000%, due 09/15/04........................ 8,800,000 6,461,425
Queensland Treasury Global Notes,
8.000%, due 05/14/03........................ 10,300,000 7,024,626
--------------
16,185,796
--------------
</TABLE>
18
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- --------------
<S> <C> <C>
NON-U.S. BONDS - (CONTINUED)
CANADA - 1.82%
Government of Canada
7.500%, due 12/01/03......................... CAD 2,450,000 $ 1,832,719
6.500%, due 06/01/04......................... 7,390,000 5,316,870
8.750%, due 12/01/05......................... 2,950,000 2,418,113
4.250%, due 12/01/21 (d)..................... 14,800,000 11,652,006
4.250%, due 12/01/26......................... 4,410,000 3,309,149
--------------
24,528,857
--------------
DENMARK - 1.84%
Kingdom of Denmark
8.000%, due 05/15/03......................... DKK 81,700,000 13,587,362
7.000%, due 12/15/04......................... 63,800,000 10,390,577
7.000%, due 11/10/24......................... 5,000,000 882,144
--------------
24,860,083
--------------
FRANCE - 2.05%
Government of France (BTAN)
5.750%, due 03/12/01......................... FRF 47,000,000 8,079,242
4.500%, due 07/12/02......................... 44,500,000 7,402,044
Government of France (OAT)
6.750%, due 10/25/04......................... 9,400,000 1,739,762
7.500%, due 04/25/05......................... 5,900,000 1,137,258
5.250%, due 04/25/08......................... 28,000,000 4,775,190
8.500%, due 12/26/12......................... 12,500,000 2,797,924
6.000%, due 10/25/25......................... 10,000,000 1,797,883
--------------
27,729,303
--------------
GERMANY - 3.83%
Bundesrepublik Deutscheland
7.000%, due 09/20/99......................... DEM 5,900,000 3,388,986
8.500%, due 08/21/00......................... 5,050,000 3,047,626
7.750%, due 02/21/00......................... 12,000,000 7,040,443
4.750%, due 11/20/01......................... 6,350,000 3,574,097
6.500%, due 07/15/03......................... 7,200,000 4,352,709
6.000%, due 07/04/07......................... 9,300,000 5,607,823
6.000%, due 06/20/16......................... 3,500,000 2,135,291
6.250%, due 01/04/24......................... 1,160,000 724,277
Treuhandanstalt
7.375%, due 12/02/02......................... 17,500,000 10,838,366
6.250%, due 03/04/04......................... 18,200,000 10,941,174
--------------
51,650,792
--------------
</TABLE>
19
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
---------------- --------------
<S> <C> <C>
NON-U.S. BONDS - (CONTINUED)
ITALY - 1.03%
Republic of Italy (BTP)
9.500%, due 02/01/01........................ ITL2,000,000,000 $ 1,260,049
6.250%, due 03/01/02........................ 5,000,000,000 2,968,327
9.000%, due 10/01/03........................ 6,000,000,000 4,032,629
11.500%, due 03/01/03....................... 6,000,000,000 4,315,491
8.500%, due 04/01/04........................ 1,900,000,000 1,264,707
--------------
13,841,203
--------------
NETHERLANDS - 1.53%
Government of Netherlands
9.000%, due 05/15/00........................ NLG 6,900,000 3,687,779
8.250%, due 06/15/02........................ 7,000,000 3,917,756
5.750%, due 09/15/02........................ 8,200,000 4,236,250
5.750%, due 01/15/04........................ 2,600,000 1,353,554
7.250%, due 10/01/04........................ 9,500,000 5,333,301
7.500%, due 01/15/23........................ 3,300,000 2,102,286
--------------
20,630,926
--------------
SPAIN - 1.14%
Government of Spain
6.750%, due 04/15/00........................ ESP 360,000,000 2,452,675
7.900%, due 02/28/02........................ 100,000,000 727,513
5.250%, due 01/31/03........................ 630,000,000 4,228,807
8.000%, due 05/30/04........................ 490,000,000 3,736,694
10.000%, due 02/28/05....................... 500,000,000 4,219,740
--------------
15,365,429
--------------
SWEDEN - 0.42%
Government of Sweden
10.250%, due 05/05/00....................... SEK 3,400,000 470,532
13.000%, due 06/15/01....................... 12,000,000 1,855,968
6.000%, due 02/09/05........................ 24,500,000 3,284,485
--------------
5,610,985
--------------
UNITED KINGDOM - 2.66%
UK Treasury
7.000%, due 11/06/01........................ GBP 2,370,000 3,991,442
8.000%, due 06/10/03........................ 7,135,000 12,734,375
9.000%, due 10/13/08........................ 6,135,000 12,673,769
8.000%, due 09/27/13........................ 3,220,000 6,569,654
--------------
35,969,240
--------------
TOTAL NON-U.S. BONDS......................... 236,372,614
--------------
EMERGING MARKETS BOND - 4.78%
Brinson Emerging Markets Debt Fund (b)....... $ 3,164,737 64,547,025
--------------
TOTAL BONDS (COST $596,622,144).............. 614,081,019
--------------
SHORT-TERM INVESTMENTS - 16.97%
U.S. GOVERNMENT OBLIGATIONS - 0.48%
U.S. Treasury Bill 00.000%, due 11/27/98..... 6,600,000 6,462,872
--------------
</TABLE>
20
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- ---------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - (CONTINUED)
CERTIFICATES OF DEPOSIT - 0.89%
Canadian Imperial Bank Series 5.940%, due
10/23/98.................................. $ 7,000,000 $ 6,998,747
Societe General Yankee 5.900%, due
10/20/98.................................. 5,000,000 4,998,547
---------------
11,997,294
---------------
COMMERCIAL PAPER - 13.15%
Arco Chemical 5.730%, due 07/10/98......... 5,000,000 4,992,837
American Stores 5.720%, due 08/03/98....... 10,000,000 9,947,567
Bausch & Lomb
5.750%, due 07/08/98...................... 7,500,000 7,491,615
5.700%, due 07/13/98...................... 15,000,000 14,971,500
Centex 6.000%, due 07/20/98................ 3,000,000 2,990,500
Cincinnati Bell Inc.
5.850%, due 07/13/98...................... 5,000,000 4,990,250
5.900%, due 07/17/98...................... 7,500,000 7,480,334
Crown Cork & Seal 5.680%, due 07/23/98..... 2,000,000 1,993,058
CVS Corp. 5.750%, due 07/10/98............. 10,000,000 9,985,625
GATC 6.000%, due 07/09/98.................. 3,000,000 2,996,000
GATX Capital 6.000%, due 07/14/98.......... 1,500,000 1,496,750
Hilton Hotels Corp.
5.750%, due 10/01/98...................... 10,000,000 9,853,055
5.780%, due 10/13/98...................... 5,000,000 4,916,511
IMC Global
5.720%, due 07/30/98...................... 10,000,000 9,953,922
5.730%, due 08/06/98...................... 2,500,000 2,485,675
ITT Industries 5.720%, due 07/09/98........ 5,000,000 4,993,644
Madiaone Group Funding 5.730%, due
07/24/98.................................. 10,000,000 9,963,392
Occidental Petroleum 5.700%, due 07/06/98.. 15,000,000 14,988,125
PG & E Gas Transmission
6.000%, due 07/10/98...................... 1,725,000 1,722,412
6.000%, due 07/13/98...................... 1,565,000 1,561,870
Raytheon Co. 5.700%, due 07/20/98.......... 15,000,000 14,954,875
Texas Utilities Co.
5.750%, due 07/01/98...................... 2,500,000 2,500,000
5.730%, due 07/17/98...................... 2,500,000 2,493,634
5.750%, due 08/21/98...................... 10,000,000 9,918,542
Textron Inc. 5.720%, due 08/17/98.......... 2,000,000 1,985,065
Union Pacific Resources
5.730%, due 07/27/98...................... 10,000,000 9,958,617
5.740%, due 08/31/98...................... 1,000,000 990,274
5.760%, due 10/30/98...................... 5,000,000 4,903,200
---------------
177,478,849
---------------
INVESTMENT COMPANY - 2.45%
Brinson Supplementary Trust U.S. Cash Man-
agement Prime Fund........................ 33,037,507 33,037,507
---------------
TOTAL SHORT-TERM INVESTMENTS (COST
$228,973,650)............................. 228,976,522
---------------
TOTAL INVESTMENTS (COST $1,438,099,528) -
115.84% (A).............................. 1,563,127,201
---------------
LIABILITIES, LESS CASH AND OTHER ASSETS -
(15.84%)................................. (213,821,330)
---------------
NET ASSETS - 100%.......................... $1,349,305,871
===============
</TABLE>
See accompanying notes to schedule of investments.
21
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $1,438,099,528; and
net unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation............ $178,699,612
Gross unrealized depreciation............ (53,671,939)
-------------
Net unrealized appreciation.......... $125,027,673
=============
</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 June 30,
1998.
MTN: Medium term note
TBA: When issued security. Security is subject to delayed delivery.
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 June 30,
1998, the value of these securities amounted to $19,770,664 or 1.47% 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 returns the right to call
such a bond.
FORWARD FOREIGN CURRENCY CONTRACTS
The Brinson Global Securities Fund had the following open forward foreign
currency contracts as of June 30, 1998:
<TABLE>
<CAPTION>
SETTLEMENT LOCAL CURRENT UNREALIZED
DATE CURRENCY VALUE GAIN/(LOSS)
---------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
FORWARD FOREIGN CURRENCY
BUY CONTRACTS:
Australian Dollar......... 08/05/98 52,700,000 $32,651,999 $(2,828,441)
British Pound............. 08/05/98 2,000,000 3,330,225 95,025
Canadian Dollar........... 08/05/98 1,900,000 1,292,948 (18,754)
Danish Krone.............. 08/05/98 7,500,000 1,092,279 (11,555)
French Franc.............. 08/05/98 50,000,000 8,288,190 39,271
German Mark............... 08/05/98 8,700,000 4,830,569 (56,522)
Japanese Yen.............. 08/05/98 2,735,000,000 19,812,566 (2,263,453)
Netherlands Guilder....... 08/05/98 1,000,000 492,691 (5,714)
Spanish Peseta............ 08/05/98 1,580,000,000 10,334,011 27,086
Swiss Franc............... 08/05/98 14,400,000 9,528,347 (463,327)
FORWARD FOREIGN CURRENCY
SALE CONTRACTS:
British Pound............. 08/05/98 45,900,000 76,428,666 (1,718,937)
Canadian Dollar........... 08/05/98 22,400,000 15,243,176 173,605
Danish Krone.............. 08/05/98 163,200,000 23,767,982 (103,493)
French Franc.............. 08/05/98 6,100,000 1,011,159 (8,793)
German Mark............... 08/05/98 73,700,000 40,921,029 (106,698)
Netherlands Guilder....... 08/05/98 29,500,000 14,534,382 (45,094)
Spanish Peseta............ 08/05/98 1,580,000,000 10,334,011 (69,605)
Swiss Franc............... 08/05/98 4,800,000 3,176,116 74,595
------------
Total..................... $(7,290,804)
============
</TABLE>
22
<PAGE>
BRINSON GLOBAL SECURITIES FUND SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
NOTES TO SCHEDULE OF INVESTMENTS
FUTURES CONTRACTS
The Brinson Global Securities Fund had the following open futures contracts
as of June 30, 1998:
<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,
993 contracts.......... September 1998 $108,277,533 $108,919,688 $ 642,155
10 Year U.S. Treasury
Notes,
198 contracts.......... September 1998 22,265,657 22,541,063 275,406
30 Year U.S. Treasury
Bond,
72 contracts........... September 1998 8,572,478 8,898,750 326,272
INDEX FUTURES SALE
CONTRACTS
S&P 500 Index, 481
contracts.............. September 1998 134,585,408 137,445,750 (2,860,342)
------------
Total................. $(1,616,509)
============
</TABLE>
The segregated cash and market value of investments pledged to cover margin
requirements for the open futures positions at June 30, 1998 were $3,949,511
and $6,462,872, respectively.
See accompanying notes to financial statements.
23
<PAGE>
BRINSON GLOBAL SECURITIES FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value:
Unaffiliated issuers (Cost $1,232,576,574)................ $1,352,338,664
Affiliated issuers (Cost $205,522,954).................... 210,788,537
Foreign currency, at value (Cost $5,668,302)............... 5,627,870
Cash....................................................... 2,022,690
Receivables:
Investment securities sold................................ 26,628,819
Dividends................................................. 1,821,639
Interest.................................................. 9,488,307
Variation margin.......................................... 1,219,146
---------------
TOTAL ASSETS............................................ 1,609,935,672
---------------
LIABILITIES:
Payables:
Investment securities purchased........................... 39,120,834
Securities loaned......................................... 214,169,955
Net unrealized depreciation on forward foreign currency
contracts................................................. 7,290,804
Other liabilities.......................................... 48,208
---------------
TOTAL LIABILITIES....................................... 260,629,801
---------------
NET ASSETS:
Applicable to 84,077,217 shares; no par value, unlimited
shares authorized........................................ $1,349,305,871
===============
Net asset value, offering price and redemption price per
share ($1,349,305,871 / 84,077,217 shares)............... $ 16.0484
===============
NET ASSETS CONSIST OF:
Paid in capital........................................... $ 736,021,830
Accumulated net investment income......................... 173,423,274
Accumulated net realized gain............................. 323,762,744
Net unrealized appreciation............................... 116,098,023
---------------
NET ASSETS.............................................. $1,349,305,871
===============
</TABLE>
See accompanying notes to financial statements.
24
<PAGE>
BRINSON GLOBAL SECURITIES FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (net of $63,094 for foreign taxes withheld, including
securities lending income of $279,040)........................ $ 15,409,303
Dividends (net of $466,226 for foreign taxes withheld)......... 7,274,020
-------------
TOTAL INCOME................................................ 22,683,323
-------------
EXPENSES:
Custodian...................................................... 137,264
Administration................................................. 102,684
Professional................................................... 83,531
Other.......................................................... 19,943
-------------
TOTAL EXPENSES.............................................. 343,422
-------------
NET INVESTMENT INCOME....................................... 22,339,901
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................... 59,696,038
Futures contracts............................................. (16,448,886)
Foreign currency transactions................................. (7,765,237)
-------------
Net realized gain............................................ 35,481,915
-------------
Change in net unrealized appreciation or depreciation on:
Investments and foreign currency.............................. 31,970,480
Futures contracts............................................. (1,364,570)
Forward contracts............................................. (2,160,550)
Translation of other assets and liabilities denominated in
foreign currency............................................. 220,188
-------------
Change in net unrealized appreciation or depreciation........ 28,665,548
-------------
Net realized and unrealized gain............................... 64,147,463
-------------
Net increase in net assets resulting from operations........... $ 86,487,364
=============
</TABLE>
See accompanying notes to financial statements.
25
<PAGE>
BRINSON GLOBAL SECURITIES FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
--------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income..................... $ 22,339,901 $ 64,807,288
Net realized gain......................... 35,481,915 167,608,264
Change in net unrealized appreciation or
depreciation............................. 28,665,548 (37,368,433)
--------------- ---------------
Net increase in net assets resulting from
operations............................... 86,487,364 195,047,119
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................... 130,409,196 350,379,894
Shares redeemed........................... (172,122,998) (999,404,170)
--------------- ---------------
Net decrease in net assets resulting from
capital share transactions (a)........... (41,713,802) (649,024,276)
--------------- ---------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 44,773,562 (453,977,157)
--------------- ---------------
NET ASSETS:
Beginning of period....................... 1,304,532,309 1,758,509,466
--------------- ---------------
End of period (including accumulated net
investment income of $173,423,274 and
$151,083,373, respectively).............. $1,349,305,871 $1,304,532,309
=============== ===============
(a) A summary of capital share transactions
follows:
SHARES SHARES
--------------- ---------------
Shares sold.............................. 9,682,600 24,152,140
Shares redeemed.......................... (12,253,207) (67,968,919)
--------------- ---------------
Net decrease in shares outstanding...... (2,570,607) (43,816,779)
=============== ===============
</TABLE>
See accompanying notes to financial statements.
26
<PAGE>
BRINSON GLOBAL SECURITIES FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
CASH FLOWS FROM INVESTING AND OPERATING ACTIVITIES:
Proceeds from sale of investments......................... $ 458,794,268
Purchase of investments................................... (427,995,336)
Net decrease in short term investments.................... 249,910,356
Net realized loss on foreign currency transactions........ (3,673,620)
Net decrease from futures contracts....................... (17,412,438)
Interest and dividend income received..................... 28,601,650
Expenses paid............................................. (365,313)
--------------
Net cash provided by investing and operating activi-
ties................................................... 287,859,567
--------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net capital share transactions............................ (291,070,637)
--------------
Net cash used for financing activities.................. (291,070,637)
--------------
Net decrease in cash........................................ (3,211,070)
CASH AT BEGINNING OF PERIOD................................. 5,233,760
--------------
CASH AT END OF PERIOD....................................... $ 2,022,690
==============
RECONCILIATION OF NET INVESTMENT INCOME TO NET CASH PROVIDED
BY INVESTING AND OPERATING ACTIVITIES:
Net investment income..................................... $ 22,339,901
Proceeds from sale of investments......................... 458,794,268
Purchase of investments................................... (427,995,336)
Net decrease in short term investments.................... 249,910,356
Net realized loss on foreign currency transactions........ (3,673,620)
Net decrease from futures contracts....................... (17,412,438)
Net decrease in receivables pertaining to investing and
operating activities..................................... 5,651,314
Net decrease in payables pertaining to investing and oper-
ating activities......................................... (21,891)
(Accretion)/amortization of premium/discount.............. 267,013
--------------
Net cash provided by investing and operating activi-
ties................................................... $ 287,859,567
==============
</TABLE>
See accompanying notes to financial statements.
27
<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>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1998 ------------------------ PERIOD ENDED
(UNAUDITED) 1997 1996 DECEMBER 31, 1995*
------------- ---------- ---------- ------------------
<S> <C> <C> <C> <C>
Net asset value, begin-
ning of period......... $15.0556 $13.4788 $11.7181 $10.0000
---------- ---------- ---------- ----------
Income from investment
operations:
Net investment income.. 0.3190 0.5456*** 0.2844 0.3769
Net realized and
unrealized gain....... 0.6738 1.0312 1.4763 1.3412
---------- ---------- ---------- ----------
Total income from
investment
operations........... 0.9928 1.5768 1.7607 1.7181
---------- ---------- ---------- ----------
Net asset value, end of
period................. $16.0484 $15.0556 $13.4788 $11.7181
========== ========== ========== ==========
Total return (non-
annualized)............ 6.59% 11.70% 15.03% 17.18%
Ratios/Supplemental data
Net assets, end of pe-
riod (in 000s)........ $1,349,306 $1,304,532 $1,758,509 $967,554
Ratio of expenses to
average net
assets:
Before expense reim-
bursement............ 0.05%** 0.05% 0.05% 0.14%**
After expense reim-
bursement............ N/A N/A N/A 0.05%**
Ratio of net investment
income to average net
assets:
Before expense reim-
bursement............ 3.25%** 3.72% 4.36% 4.95%**
After expense reim-
bursement............ N/A N/A N/A 5.04%**
Portfolio turnover
rate.................. 33% 134% 155% 158%
Average commission rate
paid per share........ $0.0332 $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.
28
<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 an annualized return of 17.60% compared to 24.33% for the
Wilshire 5000 Equity Index. For the first six months of 1998, the total
return of the Brinson U.S. Equity Fund was 14.10% versus the 15.47% return
for the Wilshire 5000 Equity Index.
Market exposure (average beta of .95) detracted modestly from Fund relative
performance in the strong equity market environment which characterized the
first half of 1998. Factor weightings generally subtracted from results. The
most significant negative factor positions were the underexposure in the
relative strength and size measures. Large capitalization stocks continued to
dominate market performance. Most of these stocks are perceived as high
quality companies with predictable, substantial growth rates, attributes that
have been highly favored in an environment with increasing economic
uncertainty exacerbated by South East Asian problems. The Fund has minimal
exposure to these largest stocks because they are overvalued. Some positive
benefit to Fund performance was derived from an underweighting in the price
volatility and growth factors.
Industry weightings had the largest negative impact on active returns in the
first half. The overweight in the tobacco industry detracted from performance
as the industry continues to struggle with political and legal issues. Other
negative industry positions were the overweights in the railroad, tire and
rubber and paper industries, and the underweights in miscellaneous finance
and retail industries. The non-health related consumer sector, especially the
retail industry, was very strong in the first half of 1998 due to high
employment levels combined with low inflation and the positive wealth effect
associated with the strong stock market. However, our valuation work
continues to suggest that consumer stock valuations already reflect this
positive outlook and are not attractive while many of the basic industries
appear much more undervalued. A partial offset to these negative
contributions were positive industry positions including underweights in
energy, producer goods, and electronics.
Stock selection had a positive effect on the Fund for the first six months.
Among large capitalization issues, the best performers were EMC Corp., Xerox,
and Enron while the worst were Federal Express, Lockheed Martin and Corning.
In the intermediate capitalization segment of the Fund, the most positive
contributors were General Instrument, Comverse Technology and Peco Energy
while the weakest were Nabisco Holdings, Harnischfeger and Nextel
Communications.
29
<PAGE>
BRINSON U.S. EQUITY FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
SIX
MONTHS 8/31/97*
ENDED TO
6/30/98 6/30/98
---------------------------------------------
<S> <C> <C>
Brinson U.S. Equity Fund 14.10% 17.60%
---------------------------------------------
Wilshire 5000 Equity Index 15.47% 24.33%
---------------------------------------------
</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 Equity 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 EQUITY INDEX
[LINE GRAPH APPEARS HERE]
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.
30
<PAGE>
BRINSON U.S. EQUITY FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of June 30, 1998
<TABLE>
<CAPTION>
- -----------------------------------------
<S> <C>
U.S. Equities
Basic Industries
Chemicals..................... 4.25%
Housing/Paper................. 7.56
Metals........................ 0.71
------
12.52
Capital Investment
Capital Goods................. 10.12
Technology.................... 9.44
------
19.56
Consumer
Autos/Durables................ 2.91
Discretionary................. 0.76
Health: Drugs................. 7.33
Health: Non-Drugs............. 5.39
Non-Durables.................. 6.78
Retail/Apparel................ 4.35
------
27.52
Energy......................... 2.45
Financial
Banks......................... 6.90
Non-Banks..................... 7.04
------
13.94
Services/Miscellaneous......... 6.20
Transportation................. 7.98
Utilities
Electric...................... 5.95
Telephone..................... 0.87
------
6.82
------
Total U.S. Equities.......... 96.99
------
SHORT-TERM INVESTMENTS......... 2.51
------
TOTAL INVESTMENTS............ 99.50
CASH AND OTHER ASSETS, LESS
LIABILITIES................... 0.50
------
NET ASSETS..................... 100.00%
======
</TABLE>
TOP TEN U.S. EQUITY HOLDINGS
As of June 30, 1998
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- --------------------------------------------------
<S> <C>
1. Xerox Corp. 4.62%
2. Lockheed Martin Corp. 4.53
3. Burlington Northern Santa Fe Corp. 4.18
4. Aon Corp. 3.21
5. FDX Corp. 3.07
6. Philip Morris Companies, Inc. 3.06
7. CIGNA Corp. 2.59
8. Automatic Data Processing, Inc. 2.44
9. Goodyear Tire & Rubber Co. 2.35
10. Baxter International, Inc. 2.24
- --------------------------------------------------
</TABLE>
31
<PAGE>
BRINSON U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
U.S. EQUITIES - 96.99%
Aetna Inc. ........................................ 26,800 $ 2,040,150
Allergan, Inc. .................................... 43,400 2,012,675
Alza Corp. (b)..................................... 42,300 1,829,475
American Home Products Corp........................ 41,600 2,152,800
Aon Corp........................................... 75,450 5,300,362
Automatic Data Processing, Inc. ................... 55,200 4,022,700
BankBoston Corp.................................... 30,700 1,635,375
Baxter International, Inc.......................... 68,800 3,702,300
Beckman Coulter, Inc. ............................. 18,300 1,065,975
Bestfoods.......................................... 37,000 2,148,312
Biogen, Inc. (b)................................... 16,500 808,500
Birmingham Steel Corp. ............................ 16,900 209,137
Burlington Northern Santa Fe Corp. ................ 70,300 6,902,581
Champion Enterprises, Inc. (b)..................... 14,900 467,062
Champion International Corp. ...................... 21,000 1,032,937
CIGNA Corp. ....................................... 61,100 4,278,000
Circuit City Stores--Circuit City Group............ 62,500 2,929,687
Citicorp........................................... 1,400 268,650
CMS Energy Corp. .................................. 54,600 2,402,400
Columbia/HCA Healthcare Corp. ..................... 11,200 343,675
Comerica, Inc. .................................... 17,400 1,152,750
Commscope, Inc. ................................... 31,366 507,737
Comverse Technology, Inc. ......................... 19,220 997,037
Consolidated Stores Corp. (b)...................... 19,700 714,125
Corning, Inc. ..................................... 100,200 3,481,950
Covance, Inc. ..................................... 21,250 478,125
Crown Cork & Seal Co., Inc. ....................... 20,200 959,500
Dial Corp. ........................................ 21,900 568,031
Eastman Chemical Co. .............................. 23,400 1,456,650
EMC Corp. (b)...................................... 37,700 1,689,431
Enron Corp. ....................................... 46,800 2,530,125
Entergy Corp. ..................................... 126,500 3,636,875
FDX Corp. ......................................... 80,800 5,070,200
First American Corp. of Tennessee.................. 11,100 534,187
First Data Corp. .................................. 102,124 3,402,006
First Security Corp. .............................. 20,850 446,320
FirstEnergy Corp. ................................. 8,590 264,143
Fleet Financial Group, Inc. ....................... 26,000 2,171,000
Fleetwood Enterprises, Inc. ....................... 1,100 44,000
Food Lion Inc., Class A............................ 84,700 899,937
Forest Laboratories, Inc. (b)...................... 32,200 1,151,150
Fort James Corp. .................................. 54,200 2,411,900
Gannett Co., Inc. ................................. 17,600 1,250,700
General Instrument Corp. .......................... 93,900 2,552,906
General Semiconductor, Inc. (b).................... 21,300 210,338
Genzyme Corp. (b).................................. 16,700 426,894
</TABLE>
32
<PAGE>
BRINSON U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------ ------------
<S> <C> <C>
U.S. EQUITIES - (CONTINUED)
Geon Co............................................ 11,600 $ 266,075
Goodyear Tire & Rubber Co.......................... 60,200 3,879,138
Great Lakes Chemical Corp.......................... 10,800 425,925
Harnischfeger Industries, Inc. .................... 32,100 908,831
Health Care and Retirement Corp. (b)............... 18,850 743,397
Hibernia Corp. .................................... 23,400 472,388
IMC Global, Inc. .................................. 22,500 677,813
Informix Corp. .................................... 22,400 177,100
Interpublic Group of Companies, Inc. .............. 17,350 1,083,272
Kimberly Clark Corp. .............................. 77,800 3,569,075
Lafarge Corp. ..................................... 12,200 479,613
Lear Corp. ........................................ 18,200 933,888
Lockheed Martin Corp. ............................. 70,534 7,467,787
Lyondell Petrochemical Co. ........................ 57,100 1,701,456
Manor Care, Inc. .................................. 21,550 828,328
Martin Marietta Materials, Inc. ................... 12,363 556,335
Masco Corp. ....................................... 49,300 2,982,650
Medusa Corp. ...................................... 800 50,200
Nabisco Holdings Corp. ............................ 43,100 1,554,294
National Service Industries, Inc. ................. 8,200 417,175
Nextel Communications, Inc. ....................... 57,500 1,430,313
Norfolk Southern Corp. ............................ 40,000 1,192,500
Peco Energy Co. ................................... 118,200 3,502,500
Pentair, Inc. ..................................... 22,400 952,000
Philip Morris Companies, Inc. ..................... 128,000 5,040,000
Praxair Inc. ...................................... 39,000 1,825,688
Raytheon Co., Class B.............................. 57,600 3,381,950
Regions Financial Corp. ........................... 10,800 443,475
Reynolds & Reynolds Co. ........................... 8,000 145,500
Schering Plough Corp. ............................. 40,400 3,701,650
Seagate Technology, Inc. (b)....................... 37,800 900,113
Sears, Roebuck and Co. ............................ 43,200 2,637,900
Southdown, Inc. ................................... 8,500 578,138
St. Jude Medical, Inc. (b)......................... 20,900 769,381
Timken Co. ........................................ 8,900 274,231
Tyson Foods, Inc., Class A......................... 86,100 1,867,294
Ultramar Diamond Shamrock Corp. ................... 48,122 1,518,851
US Bancorp......................................... 53,955 2,320,065
Vencor, Inc. ...................................... 44,900 325,525
Ventas, Inc. ...................................... 44,900 620,181
Viad Corp. ........................................ 41,500 1,151,625
Wells Fargo & Co. ................................. 5,300 1,955,700
Westvaco Corp. .................................... 10,100 285,325
Witco Corp. ....................................... 22,300 652,275
Xerox Corp. ....................................... 75,000 7,621,875
York International Corp. .......................... 26,300 1,145,694
------------
TOTAL U.S. EQUITIES (COST $155,732,194)............ 159,975,259
------------
</TABLE>
33
<PAGE>
BRINSON U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
------------ -------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 2.51%
INVESTMENT COMPANY - 1.91%
Brinson Supplementary Trust U.S. Cash Management
Prime Fund...................................... $ 3,157,249 $ 3,157,249
-------------
COMMERCIAL PAPER - 0.60%
Union Pacific Corp.
5.750%, due 08/31/98............................ 1,000,000 990,545
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $4,147,811)... 4,147,794
-------------
TOTAL INVESTMENTS (COST $159,880,005) - 99.50%
(A)............................................. 164,123,053
-------------
CASH AND OTHER ASSETS, LESS LIABILITIES - 0.50%.. 815,955
-------------
NET ASSETS - 100%................................ $164,939,008
=============
</TABLE>
See accompanying notes to schedule of investments.
34
<PAGE>
BRINSON U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $159,880,005; and
net unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation............ $10,012,938
Gross unrealized depreciation............ (5,769,890)
------------
Net unrealized appreciation.......... $ 4,243,048
============
</TABLE>
(b) Non-income producing security.
FUTURES CONTRACTS
The Brinson U.S. Equity Fund had the following open futures contracts as of
June 30, 1998:
<TABLE>
<CAPTION>
SETTLEMENT CURRENT UNREALIZED
DATE COST VALUE GAIN
-------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INDEX FUTURES BUY
CONTRACTS
S&P 500 Index, 15
contracts.............. September 1998 $4,237,080 $4,286,250 $49,170
========
</TABLE>
The segregated cash pledged to cover margin requirements for the open
futures positions at June 30, 1998 was $375,000.
See accompanying notes to financial statements.
35
<PAGE>
BRINSON U.S. EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value:
Unaffiliated issuers (Cost $156,722,756).................... $160,965,804
Affiliated issuers (Cost $3,157,249)........................ 3,157,249
Cash......................................................... 183,837
Receivables:
Investment securities sold.................................. 705,148
Dividends................................................... 346,929
Interest.................................................... 3,056
Due from Advisor............................................ 13,506
Other Assets................................................. 3,967
-------------
TOTAL ASSETS.............................................. 165,379,496
-------------
LIABILITIES:
Payables:
Investment securities purchased............................. 405,384
Variation margin............................................ 31,875
Accrued expenses............................................ 3,229
-------------
TOTAL LIABILITIES......................................... 440,488
-------------
NET ASSETS:
Applicable to 14,025,938 shares; no par value, unlimited
shares authorized........................................... $164,939,008
=============
Net asset value, offering price and redemption price per
share
($164,939,008 / 14,025,938 shares).......................... $ 11.7596
=============
NET ASSETS CONSIST OF:
Paid in capital.............................................. $154,695,111
Accumulated net investment income............................ 1,536,516
Accumulated net realized gain................................ 4,415,163
Net unrealized appreciation.................................. 4,292,218
-------------
NET ASSETS................................................ $164,939,008
=============
</TABLE>
See accompanying notes to financial statements.
36
<PAGE>
BRINSON U.S. EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends....................................................... $1,101,435
Interest........................................................ 85,093
-----------
TOTAL INCOME................................................. 1,186,528
-----------
EXPENSES:
Professional.................................................... 7,245
Other........................................................... 4,962
-----------
TOTAL EXPENSES............................................... 12,207
-----------
Expenses reimbursed by Advisor............................... (6,190)
-----------
NET EXPENSES................................................. 6,017
-----------
NET INVESTMENT INCOME........................................ 1,180,511
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain on:
Investments.................................................... 3,915,189
Futures contracts.............................................. 430,571
-----------
Net realized gain............................................. 4,345,760
-----------
Change in net unrealized appreciation or depreciation on:
Investments.................................................... 3,997,170
Futures contracts.............................................. 46,408
-----------
Change in net unrealized appreciation or depreciation......... 4,043,578
-----------
Net realized and unrealized gain................................ 8,389,338
-----------
Net increase in net assets resulting from operations............ $9,569,849
===========
</TABLE>
See accompanying notes to financial statements.
37
<PAGE>
BRINSON U.S. EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1998 PERIOD ENDED
(UNAUDITED) DECEMBER 31, 1997*
------------- ------------------
<S> <C> <C>
OPERATIONS:
Net investment income..................... $ 1,180,511 $ 356,005
Net realized gain......................... 4,345,760 69,403
Change in net unrealized appreciation or
depreciation............................. 4,043,578 248,640
------------- ------------
Net increase in net assets resulting from
operations............................... 9,569,849 674,048
------------- ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................... 89,012,961 72,956,730
Shares redeemed........................... (7,274,590) --
------------- ------------
Net increase in net assets resulting from
capital share transactions (a)........... 81,738,371 72,956,730
------------- ------------
TOTAL INCREASE IN NET ASSETS........... 91,308,220 73,630,778
------------- ------------
NET ASSETS:
Beginning of period....................... 73,630,788 10
------------- ------------
End of period (including accumulated net
investment income of $1,536,516 and
$356,005, respectively).................. $164,939,008 $73,630,788
============= ============
(a) A summary of capital share transactions
follows:
SHARES SHARES
------------- ------------
Shares sold.............................. 7,541,613 7,143,966
Shares redeemed.......................... (659,642) --
------------- ------------
Net increase in shares outstanding...... 6,881,971 7,143,966
============= ============
</TABLE>
* The Fund commenced operations August 29, 1997.
See accompanying notes to the financial statements.
38
<PAGE>
BRINSON U.S. EQUITY FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1998 PERIOD ENDED
(UNAUDITED) DECEMBER 31, 1997*
------------- ------------------
<S> <C> <C>
Net asset value, beginning of period....... $10.3067 $10.0000
--------- ---------
Income from investment operations:
Net investment income..................... 0.0597 0.0498
Net realized and unrealized gain.......... 1.3932 0.2569
--------- ---------
Total income from investment operations.. 1.4529 0.3067
--------- ---------
Net asset value, end of period............. $11.7596 $10.3067
========= =========
Total return (non-annualized).............. 14.10% 3.07%
Ratios/Supplemental data
Net assets, end of period (in 000s)....... $164,939 $73,631
Ratio of expenses to average net assets:
Before expense reimbursement............. 0.02%** 0.05%**
After expense reimbursement.............. 0.01%** 0.01%**
Ratio of net investment income to average
net assets:
Before expense reimbursement............. 1.96%** 2.01%**
After expense reimbursement.............. 1.97%** 2.05%**
Portfolio turnover rate................... 25% 9%
Average commission rate paid per share.... $0.0457 $0.0309
</TABLE>
*The Fund commenced operations August 29, 1997.
**Annualized
See accompanying notes to financial statements.
39
<PAGE>
BRINSON U.S. LARGE CAPITALIZATION VALUE EQUITY FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of June 30, 1998
<TABLE>
- ----------------------------------------
<S> <C>
U.S. EQUITIES
Basic Industries
Chemicals.................... 8.51%
Housing/Paper................ 5.69
Metals....................... 0.00
-------
14.20
Capital Investment
Capital Goods................ 8.91
Technology................... 3.62
-------
12.53
Consumer
Autos/Durables............... 5.90
Discretionary................ 0.00
Health: Drugs................ 3.30
Health: Non-Drugs............ 1.97
Non-Durables................. 2.13
Retail/Apparel............... 4.78
18.08
Energy......................... 8.15
Financial
Banks........................ 14.53
Non-Banks.................... 5.51
-------
20.04
Services/Miscellaneous......... 2.11
Transportation................. 8.24
Utilities
Electric..................... 8.47
Telephone.................... 6.25
-------
14.72
-------
Total U.S. Equites............. 98.07
-------
SHORT-TERM INVESTMENTS......... 1.90
-------
TOTAL INVESTMENTS.............. 99.97
CASH AND OTHER ASSETS, LESS
LIABILITIES................... 0.03
-------
NET ASSETS................... 100.00%
=======
- ----------------------------------------
</TABLE>
TOP TEN U.S. EQUITY HOLDINGS
As of June 30, 1998
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- ----------------------------------------------------
<S> <C>
1. Lockheed Martin Corp. 4.07%
2. Wells Fargo & Co. 4.05
3. Raytheon Co., Class B 3.88
4. Burlington Northern Santa Fe Corp. 3.37
5. Kimberly Clark Corp. 3.02
6. Aetna Inc. 2.92
7. Sears, Roebuck and Co. 2.68
8. Aon Corp. 2.59
9. General Motors Corp. 2.56
10. Kerr-McGee Corp. 2.54
- ----------------------------------------------------
</TABLE>
40
<PAGE>
BRINSON U.S. LARGE CAPITALIZATION VALUE EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
----------- ------------
<S> <C> <C>
U.S. EQUITIES - 98.07%
Aetna Inc. ........................................... 42,000 $ 3,197,250
Allergan, Inc......................................... 30,000 1,391,250
Alltel Corp........................................... 53,900 2,506,350
Amerada Hess Corp..................................... 41,900 2,275,694
American Home Products Corp. ......................... 25,000 1,293,750
Amoco Corp. .......................................... 65,800 2,738,925
Aon Corp. ............................................ 40,300 2,831,075
Archer-Daniels-Midland Co. ........................... 120,000 2,325,000
AT&T Corp. ........................................... 38,300 2,187,888
BankBoston Corp. ..................................... 35,900 1,996,937
Baxter International, Inc. ........................... 40,000 2,152,500
Betzdearborn Inc. .................................... 47,900 1,981,863
Burlington Northern Santa Fe Corp. ................... 37,500 3,682,031
Champion International Corp. ......................... 42,000 2,065,875
Circuit City Stores--Circuit City Group............... 25,000 1,171,875
CMS Energy Corp. ..................................... 52,800 2,323,200
Comerica, Inc. ....................................... 33,600 2,226,000
Dow Chemical Co. ..................................... 18,000 1,740,375
Entergy Corp. ........................................ 81,600 2,346,000
FDX Corp.(b).......................................... 42,000 2,635,500
First Security Corp................................... 72,000 1,541,250
Firstar Corp.......................................... 59,900 2,276,200
Fleet Financial Group, Inc............................ 24,000 2,004,000
General Motors Corp................................... 41,900 2,799,444
Genzyme Corp. ........................................ 36,000 920,250
Goodyear Tire & Rubber Co. ........................... 37,500 2,416,406
Harnischfeger Industries, Inc......................... 84,000 2,378,250
IBP Inc............................................... 59,900 1,085,688
Illinova Corp......................................... 71,800 2,154,000
IMC Global, Inc....................................... 27,200 819,400
Kerr-McGee Corp. ..................................... 47,900 2,772,212
Kimberly Clark Corp. ................................. 72,000 3,303,000
Lear Corp.(b)......................................... 24,000 1,231,500
Lockheed Martin Corp.................................. 42,000 4,446,750
Lyondell Petrochemical Co............................. 83,800 2,550,662
National Semiconductor Corp.(b)....................... 119,700 1,578,544
Norfolk Southern Corp................................. 90,300 2,692,069
Northeast Utilities(b)................................ 143,700 2,433,919
Praxair Inc. ......................................... 24,000 1,123,500
Public Service Enterprise Group....................... 67,000 2,307,312
Raytheon Co., Class B................................. 71,800 4,245,175
Sears, Roebuck and Co................................. 48,000 2,931,000
Ultramar Diamond Shamrock Corp........................ 36,000 1,136,250
Union Planters Corp................................... 24,000 1,411,500
US West Inc. ......................................... 45,500 2,138,500
Wells Fargo & Co...................................... 12,000 4,428,000
</TABLE>
41
<PAGE>
BRINSON U.S. LARGE CAPITALIZATION VALUE EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -------------
<S> <C> <C>
U.S. EQUITIES - (CONTINUED)
Wendy's International Inc........................... 47,900 $ 1,125,650
Westvaco Corp....................................... 30,000 847,500
York International Corp. ........................... 24,000 1,045,500
-------------
TOTAL U.S. EQUITIES (COST $106,083,741)............. 107,212,769
-------------
INVESTMENT COMPANY - 1.83%
Brinson Supplementary Trust U.S. Cash Management
Prime Fund (COST $1,998,875)....................... 1,998,875 1,998,875
-------------
<CAPTION>
FACE
AMOUNT
-----------
<S> <C> <C>
TREASURY BILLS - 0.07%
U.S. Treasury Bill 0%, due 11/27/98 (COST $78,331).. $ 80,000 78,338
-------------
TOTAL INVESTMENTS (COST $108,160,947) - 99.97% (A).. 109,289,982
-------------
CASH AND OTHER ASSETS, LESS LIABILITIES - 0.03%..... 28,745
-------------
NET ASSETS - 100%................................... $109,318,727
=============
</TABLE>
See accompanying notes to schedule of investments.
42
<PAGE>
BRINSON U.S. LARGE CAPITALIZATION VALUE EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $108,160,947; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation.............. $1,909,335
Gross unrealized depreciation.............. (780,300)
-----------
Net unrealized appreciation............ $1,129,035
===========
</TABLE>
(b) Non-income producing security.
FUTURES CONTRACTS
The Brinson U.S. Large Capitalization Value Equity Fund had the following open
futures contracts as of June 30, 1998:
<TABLE>
<CAPTION>
SETTLEMENT CURRENT UNREALIZED
DATE COST VALUE GAIN
-------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INDEX FUTURES BUY CONTRACTS
S&P 500 Index, 7 contracts..... September 1998 $1,999,424 $2,000,250 $826
=====
</TABLE>
The market value of investments pledged to cover margin requirements for the
open futures positions at June 30, 1998 was $78,338.
See accompanying notes to financial statements.
43
<PAGE>
BRINSON U.S. LARGE CAPITALIZATION VALUE EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value:
Unaffiliated issuers (Cost $106,162,072)....................... $107,291,107
Affiliated issuers (Cost $1,998,875)........................... 1,998,875
Cash............................................................ 108,082,434
Receivables:
Dividends...................................................... 43,534
Interest....................................................... 317
-------------
TOTAL ASSETS................................................. 217,416,267
-------------
LIABILITIES:
Payables:
Investment securities purchased................................ 108,082,606
Variation margin............................................... 14,875
Accrued expenses............................................... 59
-------------
TOTAL LIABILITIES............................................ 108,097,540
-------------
NET ASSETS:
Applicable to 10,814,505 shares; no par value, unlimited shares
authorized..................................................... $109,318,727
=============
Net asset value, offering price and redemption price per share
($109,318,727 / 10,814,505 shares)............................. $ 10.1085
=============
NET ASSETS CONSIST OF:
Paid in capital................................................. $108,145,052
Accumulated net investment income............................... 43,814
Net unrealized appreciation..................................... 1,129,861
-------------
NET ASSETS................................................... $109,318,727
=============
</TABLE>
See accompanying notes to financial statements.
44
<PAGE>
BRINSON U.S. LARGE CAPITALIZATION VALUE EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998* (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends......................................................... $ 43,534
Interest.......................................................... 339
-----------
TOTAL INCOME................................................... 43,873
-----------
EXPENSES:
Custodian......................................................... 15
Miscellaneous..................................................... 44
-----------
TOTAL EXPENSES................................................. 59
-----------
NET INVESTMENT INCOME.......................................... 43,814
-----------
NET UNREALIZED GAIN:
Change in net unrealized appreciation or depreciation on:
Investments...................................................... 1,129,035
Futures contracts................................................ 826
-----------
Change in net unrealized appreciation........................... 1,129,861
-----------
Net increase in net assets resulting from operations.............. $1,173,675
===========
</TABLE>
* The Fund commenced operations on June 25, 1998.
See accompanying notes to financial statements.
45
<PAGE>
BRINSON U.S. LARGE CAPITALIZATION VALUE EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1998*
(UNAUDITED)
--------------
<S> <C>
OPERATIONS:
Net investment income.......................................... $ 43,814
Change in net unrealized appreciation.......................... 1,129,861
-------------
Net increase in net assets resulting from operations........... 1,173,675
-------------
CAPITAL SHARE TRANSACTIONS:
Shares sold.................................................... 108,145,042
-------------
Net increase in net assets resulting from capital share trans-
actions (a)................................................... 108,145,042
-------------
TOTAL INCREASE IN NET ASSETS................................ 109,318,717
-------------
NET ASSETS:
Beginning of period............................................ 10
-------------
End of period (including accumulated net investment income of
$43,814)...................................................... $109,318,727
=============
(a)A summary of capital share transactions follows:
SHARES
-------------
Shares sold................................................... 10,814,504
-------------
Net increase in shares outstanding........................... 10,814,504
=============
</TABLE>
* The Fund commenced operations June 25, 1998.
See accompanying notes to financial statements.
46
<PAGE>
BRINSON U.S. LARGE CAPITALIZATION VALUE EQUITY FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout the period presented.
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1998*
(UNAUDITED)
--------------
<S> <C>
Net asset value, beginning of period............................. $10.0000
---------
Net investment income........................................... 0.0040
Net unrealized gain............................................. 0.1045
---------
Total income from investment operations........................ 0.1085
---------
Net asset value, end of period................................... $10.1085
=========
Total return (non-annualized).................................... 1.09 %
Ratios/Supplemental data
Net assets, end of period (in 000s)............................. $109,319
Ratio of expenses to average net assets......................... 0.01 %**
Ratio of net investment income to average net assets............ 2.94 %**
Portfolio turnover rate......................................... 0%
Average commission rate paid per share.......................... $ 0.0443
</TABLE>
* The Fund commenced operations June 25, 1998.
** Annualized
See accompanying notes to financial statements.
47
<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 represent the lower 75% 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.
Since its performance inception on April 30, 1995, the Brinson Post-Venture
Fund has provided an annualized return of 26.65% compared to 21.49% for the
Wilshire Small Stock Index, a capitalization weighted index of companies which
represents the lower 7.50% of market capitalizations within the Wilshire 5000
Equity Index. The Fund's performance was achieved at an annualized volatility
of 12.74% which was lower than index volatility of 5.41%. For the first six
months of 1998, the Brinson Post-Venture Fund had a return of 5.39% versus the
6.13% return of the Wilshire Small Stock Index.
Industry selection had a modestly negative impact on Fund performance in the
first half. An underweighting in business services had the most negative affect
on Fund performance, as internet related companies had very strong performance.
Underweightings in business machines and real property and an overweighting in
business machines also detracted from overall Fund performance. On the positive
side, underweightings in drugs and medicine and energy and an overweighting in
apparel enhanced Fund performance.
The overall stock specific influence was also modestly negative in the first
six months. The Fund's better performing stocks included NCI Building Systems,
Financial Security Assurance, Stanley Furniture, National Computer Systems, and
Trans Financial Corp. The worst performing stocks included Microsemi Corp, DT
Industries, and Sholodge Inc.
48
<PAGE>
BRINSON POST-VENTURE FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS ANNUALIZED
ENDED ENDED ENDED 4/30/95*
6/30/98 6/30/98 6/30/98 TO 6/30/98
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Brinson Post-Venture Fund 5.39% 23.62% 26.13% 26.65%
- ---------------------------------------------------------------
Wilshire Small Stock Index 6.13% 18.31% 19.72% 21.49%
- ---------------------------------------------------------------
</TABLE>
* Performance inception date of the Brinson Post-Venture 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
[LINE GRAPH APPEARS HERE]
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 POST-VENTURE FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of June 30, 1998
<TABLE>
<S> <C>
U.S. EQUITIES
Capital Goods................... 8.00%
Consumer
Durables....................... 8.30
Non-Durables................... 14.38
------
22.68
Energy.......................... 1.45
Finance
Banks.......................... 5.38
Non Banks...................... 20.60
------
25.98
Materials & Services............ 15.26
Technology...................... 15.13
Transportation.................. 4.10
Utilities....................... 3.40
------
Total U.S. Equites............ 96.00
------
Brinson Relationship Fund....... 3.14
------
SHORT-TERM INVESTMENTS.......... 0.67
------
TOTAL INVESTMENTS............. 99.81
CASH AND OTHER ASSETS,
LESS LIABILITIES............... 0.19
------
NET ASSETS.................... 100.00%
======
</TABLE>
TOP TEN U.S. EQUITY HOLDINGS
As of June 30, 1998
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- ------------------------------------------
<S> <C>
1. Financial Security Assur-
ance Holdings Ltd. 3.15%
2. LTC Properties, Inc. 2.33
3. Indymac Mortgage Holdings,
Inc. 2.18
4. RFS Hotel Investors, Inc. 2.07
5. Shorewood Packaging Corp. 1.97
6. North Fork Bancorporation,
Inc. 1.87
7. Coachmen Industries, Inc. 1.84
8. Scotsman Industries, Inc. 1.66
9. Innkeepers USA Trust 1.58
10. Connecticut Energy Corp. 1.47
- ------------------------------------------
</TABLE>
50
<PAGE>
BRINSON POST-VENTURE FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
--------- --------------
<S> <C> <C>
EQUITIES - 96.00%
U.S. EQUITIES - 96.00%
AFC Cable Systems, Inc. (b)......................... 40,062 $ 1,422,201
Align-Rite International, Inc. (b).................. 142,000 2,112,250
Allied Capital Corp. II............................. 158,240 3,876,880
Allied Life Financial Corp. ........................ 132,325 3,820,884
Altron Inc. (b)..................................... 251,300 3,235,487
American Business Products, Inc. ................... 296,270 6,073,535
AmerUs Life Holdings, Inc., Class A................. 175,200 5,672,100
Apartment Investment & Management Co. .............. 86,522 3,417,619
Applied Power, Inc., Class A........................ 125,000 4,296,875
Ascent Entertainment Group, Inc. (b)................ 140,800 1,566,400
Atmos Energy Corp. ................................. 113,850 3,472,425
Bacou USA, Inc. (b)................................. 283,000 5,889,938
BancTec, Inc. (b)................................... 264,800 6,123,500
BEI Medical Systems Co., Inc. ...................... 222,800 891,200
BEI Technologies, Inc. ............................. 214,200 4,096,575
Bell Microproducts, Inc. (b)........................ 117,200 933,938
Benchmark Electronics, Inc. (b)..................... 186,300 3,726,000
Bon-Ton Stores, Inc. (b)............................ 165,919 2,665,074
Cadmus Communications Corp. ........................ 177,200 4,297,100
Callon Petroleum Co. (b)............................ 113,300 1,621,606
Carmike Cinemas, Inc., Class A (b).................. 165,200 4,450,075
Celadon Group, Inc. (b)............................. 201,800 3,834,200
Centerpoint Properties Corp. ....................... 178,600 5,904,962
CFI ProServices, Inc. (b)........................... 155,600 2,645,200
Chandler Insurance Co., Ltd. (b).................... 119,900 929,225
Clean Harbors, Inc. (b)............................. 200,600 388,662
Coachmen Industries, Inc. .......................... 312,599 8,166,649
Commonwealth Industries, Inc........................ 304,000 3,040,000
Connecticut Energy Corp. ........................... 232,800 6,489,300
Continental Natural Gas, Inc. (b)................... 108,300 758,100
Coventry Health Care, Inc. (b)...................... 96,395 1,433,876
Crown Crafts, Inc. ................................. 189,600 2,915,100
Dayton Superior Corp. (b)........................... 190,300 3,425,400
Delta Financial Corp. (b)........................... 245,800 4,516,575
Department 56, Inc. (b)............................. 114,400 4,061,200
Dress Barn, Inc. (b)................................ 49,950 1,242,506
Drug Emporium, Inc. (b)............................. 33,200 128,650
DT Industries, Inc.................................. 215,600 5,228,300
Electromagnetic Sciences, Inc. (b).................. 189,200 3,594,800
Emmis Broadcasting Corp., Class A (b)............... 106,400 5,087,250
Emulex Corp. (b).................................... 109,700 651,344
Eskimo Pie Corp. ................................... 80,100 1,011,263
Evans & Sutherland Computer Corp. (b)............... 143,700 3,619,444
Exabyte Corp. (b)................................... 328,700 2,742,591
FBL Financial Group, Inc., Class A.................. 154,500 3,959,063
Fidelity National Corp. (b)......................... 150,100 1,688,625
Financial Security Assurance Holdings Ltd. ......... 237,373 13,945,664
Golf Trust of America, Inc. ........................ 130,600 4,489,375
GP Strategies Corp. (b)............................. 45,380 663,682
</TABLE>
51
<PAGE>
BRINSON POST-VENTURE FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
-------- -------------
<S> <C> <C>
EQUITIES - (CONTINUED)
U.S. EQUITIES - (CONTINUED)
Gradall Industries, Inc. (b)............. 213,200 $ 3,118,050
Granite Broadcasting Corp. (b)........... 242,100 2,874,938
Granite Broadcasting Corp., Preferred.... 31,100 1,834,900
Haggar Corp.............................. 201,400 2,567,850
Harborside Healthcare Corp. (b).......... 141,400 3,375,925
Hardinge, Inc............................ 167,250 4,076,719
Hartmarx Corp. (b)....................... 389,100 2,942,569
Helen of Troy Ltd. (b)................... 291,100 6,404,200
Hollywood Park, Inc. .................... 70,800 893,850
Huffy Corp............................... 114,250 2,070,781
Hycor Biomedical, Inc. (b)............... 217,500 435,000
Indymac Mortgage Holdings, Inc. ......... 424,000 9,646,000
Innkeepers USA Trust..................... 555,900 7,018,237
Insilco Corp. (b)........................ 63,000 2,795,625
Integrated Circuit Systems, Inc. (b)..... 96,700 1,607,638
InterTan, Inc. (b)....................... 279,700 1,503,387
inTEST Corp. (b)......................... 170,500 1,023,000
Jason, Inc. (b).......................... 411,000 3,596,250
JLM Industries, Inc. (b)................. 191,000 1,862,250
Kellwood Co.............................. 141,375 5,054,156
Kevco, Inc. (b).......................... 142,800 3,150,525
KLLM Transport Services, Inc. (b)........ 148,265 1,760,647
Landstar System, Inc. (b)................ 163,100 5,698,306
LTC Properties, Inc...................... 554,600 10,329,425
M & F Worldwide Corp. (b)................ 185,400 1,842,413
M.S. Carriers, Inc. (b).................. 87,800 2,381,575
M/A/R/C, Inc............................. 161,270 2,660,955
MacNeal-Schwendler Corp. (b)............. 105,220 1,032,471
Mariner Health Group, Inc. (b)........... 80,900 1,344,963
Marquette Medical Systems (b)............ 204,100 5,236,441
Maxim Group, Inc. (b).................... 285,700 5,678,288
Methode Electronics, Inc., Class A....... 267,980 4,153,690
Microsemi Corp. (b)...................... 289,400 2,676,950
Midway Airlines, Corp. (b)............... 133,800 2,558,925
National Computer Systems, Inc. ......... 154,640 3,711,360
National Information Group .............. 122,350 1,070,562
NCI Building Systems, Inc. (b)........... 104,300 6,023,325
Nichols Research Corp. (b)............... 220,054 6,010,225
North Fork Bancorporation, Inc........... 338,100 8,262,319
Norton McNaughton, Inc. (b).............. 179,700 1,168,050
OEA, Inc. (b)............................ 122,100 1,953,600
Optek Technology, Inc. (b)............... 107,200 2,050,200
OSI Systems, Inc. ....................... 291,200 2,912,000
PBOC Holdings, Inc....................... 164,200 2,268,012
Piccadilly Cafeterias, Inc............... 214,000 2,755,250
Pluma, Inc. (b)...........................164,600.. 1,100,762
Pool Energy Services Co. (b)..............272,400.. 4,017,900
Premier Financial Bancorp, Inc........... 116,300 2,369,612
ProCyte Corp. (b)........................ 448,000 364,000
</TABLE>
52
<PAGE>
BRINSON POST-VENTURE FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
---------- -------------
<S> <C> <C>
EQUITIES - (CONTINUED)
U.S. EQUITIES - (CONTINUED)
Quixote Corp. ..................................... 224,300 $ 2,747,675
Rainbow Technologies, Inc. (b)..................... 189,600 3,886,800
Ramsay Health Care, Inc. (b)....................... 160,900 321,800
Rare Hospitality International, Inc. (b)........... 118,861 1,745,771
Regal Beloit Corp.................................. 195,620 5,575,170
RFS Hotel Investors, Inc........................... 481,800 9,154,200
Safeguard Health Enterprises, Inc. (b)............. 142,100 888,125
Sanfilippo (John B.) & Son, Inc. (b)............... 262,700 1,280,662
Scotsman Industries, Inc........................... 265,200 7,359,300
Shaw Group, Inc. (b)............................... 129,300 3,361,800
Shelby Williams Industries, Inc. .................. 197,000 2,955,000
Sholodge, Inc. (b)................................. 273,200 2,151,450
Shorewood Packaging Corp. (b)...................... 549,700 8,726,487
Silicon Valley Bancshares (b)...................... 132,180 4,704,782
SOS Staffing Services, Inc. (b).................... 154,000 2,704,625
Southern Pacific Funding Corp. (b)................. 92,950 1,458,153
Special Metals Corp. (b)........................... 122,500 1,715,000
Stanley Furniture Co., Inc. (b).................... 220,520 5,595,695
Storage USA, Inc. ................................. 161,100 5,638,500
Sun Healthcare Group, Inc. (b)..................... 190,580 2,787,232
TBC Corp. (b)...................................... 269,600 1,786,100
Team, Inc. (b)..................................... 134,480 621,970
The Middleby Corp. (b)............................. 194,600 1,191,925
Tractor Supply Co. (b)............................. 97,000 2,412,875
Trimble Navigation Limited (b)..................... 90,800 1,469,825
USA Networks Inc. (b).............................. 96,948 2,435,819
Vans, Inc. (b)..................................... 152,600 1,478,312
Varlen Corp. ...................................... 97,000 3,346,500
Weider Nutrition International, Inc................ 134,100 2,279,700
York Group, Inc.................................... 102,500 1,947,500
-------------
TOTAL EQUITIES (COST $353,888,905)................. 425,195,497
-------------
INVESTMENT COMPANY - 3.14%
Brinson Supplementary Trust U.S. Cash Management
Prime Fund (COST $13,887,402)..................... 13,887,402 13,887,402
-------------
</TABLE>
53
<PAGE>
BRINSON POST-VENTURE FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
---------- -------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 0.67%
U.S. GOVERNMENT OBLIGATIONS - 0.11%
U.S. Treasury Bill 5.07%, due 11/27/98............. $ 500,000 $ 489,612
-------------
COMMERCIAL PAPER - 0.56%
Raytheon Co. 5.700%, due 07/01/98.................. 1,000,000 1,000,000
Union Pacific Corp. 5.750%, due 08/31/98........... 1,500,000 1,485,818
-------------
2,485,818
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $2,975,236)..... 2,975,430
-------------
TOTAL INVESTMENTS (COST $370,751,543) - 99.81%
(A)............................................... 442,058,329
-------------
CASH AND OTHER ASSETS, LESS LIABILITIES - 0.19%.... 826,627
-------------
NET ASSETS - 100%.................................. $442,884,956
=============
</TABLE>
See accompanying notes to schedule of investments.
54
<PAGE>
BRINSON POST-VENTURE FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $370,751,543; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation........... $ 93,638,917
Gross unrealized depreciation........... (22,332,131)
-------------
Net unrealized appreciation.......... $ 71,306,786
=============
</TABLE>
(b) Non-income producing security.
FUTURES CONTRACTS
The Brinson Post-Venture Fund had the following open futures contracts as of
June 30, 1998:
<TABLE>
<CAPTION>
SETTLEMENT CURRENT UNREALIZED
DATE COST VALUE GAIN
-------------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
INDEX FUTURES BUY CON-
TRACTS
S&P 500 Index, 42 con-
tracts................... September 1998 $11,799,144 $12,001,500 $202,356
=========
</TABLE>
The market value of investments pledged to cover margin requirements for the
open futures positions at June 30, 1998 was $489,612.
See accompanying notes to financial statements.
55
<PAGE>
BRINSON POST-VENTURE FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value:
Unaffiliated issuers (Cost $356,864,141).................... $ 428,170,927
Affiliated issuers (Cost $13,887,402)....................... 13,887,402
Cash......................................................... 306,600
Receivables:
Investment securities sold.................................. 957,890
Interest.................................................... 15,304
Dividends................................................... 781,978
Due from Advisor............................................ 23,281
-------------
TOTAL ASSETS.............................................. 444,143,382
-------------
LIABILITIES:
Payables:
Investment securities purchased............................. 1,145,895
Variation margin............................................ 89,250
Accrued expenses............................................ 23,281
-------------
TOTAL LIABILITIES......................................... 1,258,426
-------------
NET ASSETS:
Applicable to 20,944,331 shares; no par value, unlimited
shares authorized........................................... $442,884,956
=============
Net asset value, offering and redemption price per share
($442,884,956 / 20,944,331 shares).......................... $ 21.1458
=============
NET ASSETS CONSIST OF:
Paid in capital.............................................. $217,523,173
Accumulated net investment income............................ 18,318,014
Accumulated net realized gain................................ 135,534,627
Net unrealized appreciation.................................. 71,509,142
-------------
NET ASSETS................................................ $442,884,956
=============
</TABLE>
See accompanying notes to financial statements.
56
<PAGE>
BRINSON POST-VENTURE FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends..................................................... $ 3,275,385
Interest...................................................... 464,822
-------------
TOTAL INCOME............................................... 3,740,207
-------------
EXPENSES:
Professional.................................................. 16,376
Custodian..................................................... 5,401
Other......................................................... 4,583
-------------
TOTAL EXPENSES............................................. 26,360
-------------
Expenses reimbursed by Advisor............................. (26,360)
-------------
NET EXPENSES............................................... 0
-------------
NET INVESTMENT INCOME...................................... 3,740,207
-------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain on:
Investments.................................................. 27,832,500
Futures contracts............................................ 1,243,090
-------------
Net realized gain........................................... 29,075,590
-------------
Change in net unrealized appreciation or depreciation on:
Investments.................................................. (11,832,489)
Futures contracts............................................ 209,601
-------------
Change in net unrealized appreciation or depreciation....... (11,622,888)
-------------
Net realized and unrealized gain.............................. 17,452,702
-------------
Net increase in net assets resulting from operations.......... $ 21,192,909
=============
</TABLE>
See accompanying notes to financial statements.
57
<PAGE>
BRINSON POST-VENTURE FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
JUNE 30, 1998 ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................... $ 3,740,207 $ 6,192,998
Net realized gain.......................... 29,075,590 50,571,206
Change in net unrealized appreciation or
depreciation.............................. (11,622,888) 38,360,184
------------- -------------
Net increase in net assets resulting from
operations................................ 21,192,909 95,124,388
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................ 119,150,000 44,110,536
Shares redeemed............................ (102,810,000) (32,861,125)
------------- -------------
Net increase in net assets resulting from
capital share transactions (a)............ 16,340,000 11,249,411
------------- -------------
TOTAL INCREASE IN NET ASSETS............ 37,532,909 106,373,799
------------- -------------
NET ASSETS:
Beginning of period........................ 405,352,047 298,978,248
------------- -------------
End of period (including accumulated net
investment income of $18,318,014 and
$14,577,807, respectively)................ $442,884,956 $405,352,047
============= =============
(a)A summary of capital share transactions follows:
SHARES SHARES
------------- -------------
Shares sold............................... 5,837,448 2,434,473
Shares redeemed........................... (5,096,600) (1,835,022)
------------- -------------
Net increase in shares outstanding....... 740,848 599,451
============= =============
</TABLE>
See accompanying notes to financial statements.
58
<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>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1998 DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1997 1996 1995*
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period.... $20.0635 $15.2509 $11.9936 $10.0000
--------- --------- --------- ---------
Income from investment
operations:
Net investment income.. 0.1531 0.2938 0.2617 0.1660
Net realized and
unrealized gain....... 0.9292 4.5188 2.9956 1.8276
--------- --------- --------- ---------
Total income from
investment
operations........... 1.0823 4.8126 3.2573 1.9936
--------- --------- --------- ---------
Net asset value, end of
period................. $21.1458 $20.0635 $15.2509 $11.9936
========= ========= ========= =========
Total return (non-
annualized)............ 5.39% 31.56% 27.16% 19.94%
Ratios/Supplemental data
Net assets, end of
period
(in 000s)............. $442,885 $405,352 $298,978 $256,810
Ratio of expenses to
average net assets:
Before expense
reimbursement........ 0.01%** 0.03% 0.09% 0.17%**
After expense
reimbursement........ 0.00%** 0.00% 0.00% 0.00%**
Ratio of net investment
income to average net
assets:
Before expense
reimbursement........ 1.72%** 1.76% 1.78% 1.85%**
After expense
reimbursement........ 1.73%** 1.79% 1.87% 2.02%**
Portfolio turnover
rate.................. 18% 45% 39% 25%
Average commission rate
paid per share........ $0.0517 $0.0598 $0.0359 $0.0255
</TABLE>
*The Fund commenced operations April 28, 1995.
**Annualized
See accompanying notes to financial statements.
59
<PAGE>
BRINSON NON-U.S. EQUITY FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of June 30, 1998
<TABLE>
- ----------------------------------------
<S> <C>
NON-U.S. EQUITIES
Common Stock
Aerospace.................... 0.22%
Airlines..................... 0.38
Autos/Durables............... 3.49
Banks........................ 11.85
Beverages & Tobacco.......... 2.48
Broadcasting & Publishing.... 2.37
Building Materials........... 1.57
Business & Public Service.... 3.43
Chemicals.................... 3.10
Construction................. 0.95
Data Processing.............. 0.88
Electric Components.......... 1.26
Electronics.................. 6.47
Energy....................... 6.74
Financial Services........... 1.84
Food & House Products........ 4.71
Forest Products.............. 1.26
Gold Mining.................. 0.06
Health: Drugs................ 3.44
Health: Non-Drugs............ 4.42
Industrial Components........ 1.62
Insurance.................... 5.24
Investment Companies......... 0.14
Leisure & Tourism............ 0.71
Machinery & Emgineering...... 0.66
Merchandising................ 3.99
Metals--Non-Ferrous.......... 1.58
Metals--Steel................ 1.80
Miscellaneous Materials...... 0.04
Multi-Industry............... 5.00
Real Estate.................. 0.46
Recreation................... 0.50
Retail/Apparel............... 0.21
Shipping..................... 0.02
Telecommunications........... 7.70
Textiles and Apparel......... 0.29
Transportation............... 1.10
Utilities.................... 3.24
Wholesale & International
Trade....................... 0.47
-------
95.69
Preferred Stock
Broadcasting & Publishing.... 0.19
Warrants....................... 0.01
-------
TOTAL INVESTMENTS.............. 95.89
CASH AND OTHER ASSETS, LESS
LIABILITIES................... 4.11
-------
NET ASSETS................... 100.00%
=======
- ----------------------------------------
</TABLE>
TOP TEN NON-U.S. EQUITY HOLDINGS
As of June 30, 1998
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- -----------------------------------------
<S> <C>
1. Novartis AG (Reg.) 1.55%
2. Glaxo Wellcome PLC 1.54%
3. Nokia Oyj, Class A 1.32%
4. British Petroleum Co.
PLC 1.25%
5. Roche Holding AG (Gen.) 1.21%
6. Royal Dutch Petroleum
Co. 1.20%
7. CS Holdings AG (Reg.) 1.18%
8. British Telecommunica-
tions PLC 1.13%
9. B.A.T. Industries PLC 1.12%
10. Telecom Corp. of New
Zealand Ltd. 1.08%
- -----------------------------------------
</TABLE>
60
<PAGE>
BRINSON NON-U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
EQUITIES - 95.89%
AUSTRALIA - 4.62%
Amcor Ltd. ........................................ 8,700 $ 38,092
Boral Ltd. ........................................ 25,700 48,225
Brambles Industries Ltd. .......................... 4,100 80,465
Broken Hill Proprietary Co., Ltd................... 25,400 214,717
CSR Ltd............................................ 15,800 45,598
Coca-Cola Amatil Ltd............................... 5,000 33,442
David Jones Ltd. .................................. 55,100 63,128
Lend Lease Corp., Ltd. ............................ 3,800 76,836
Mayne Nickless Ltd. ............................... 12,700 67,247
National Australia Bank Ltd. ...................... 18,000 237,439
News Corp. Ltd. ................................... 31,900 260,379
News Corp. Ltd., Preferred......................... 10,700 75,807
Orica Ltd. ........................................ 5,800 34,303
Pacific Dunlop Ltd. ............................... 26,400 42,672
Qantas Airways Ltd. ............................... 26,500 39,880
Rio Tinto PLC...................................... 6,200 73,721
Santos Ltd......................................... 11,400 35,300
Telstra Corp., Ltd. ............................... 53,900 138,194
WMC Ltd. .......................................... 21,200 63,808
Westpac Banking Corp., Ltd......................... 29,100 177,513
Woolworth's Ltd.................................... 11,100 36,090
-------------
1,882,856
-------------
BELGIUM - 4.32%
Delhaize-Le Lion S.A. (b).......................... 2,000 139,747
Electrabel S.A. ................................... 1,100 311,879
Fortis AG (b)...................................... 100 5
Fortis AG Strip.................................... 1,500 382,962
Groupe Bruxelles Lambert S.A. (b).................. 600 121,097
KBC Bancassurance Holding (b)...................... 2,700 232,687
Petrofina S.A...................................... 500 205,254
Solvay S.A., Class A............................... 1,600 126,848
Tractebel.......................................... 1,200 175,759
Union Miniere S.A.................................. 1,000 61,811
-------------
1,758,049
-------------
CANADA - 2.95%
Agrium, Inc........................................ 2,800 34,938
Alcan Aluminum Ltd................................. 2,100 57,834
Bank of Montreal................................... 1,600 88,127
Barrick Gold Corp. ................................ 1,300 24,752
Canadian National Railway Co....................... 1,500 79,763
Canadian Pacific Ltd............................... 4,900 137,944
Extendicare, Inc., Class A (b)..................... 3,600 29,131
Hudson's Bay Co. .................................. 1,900 43,540
Imasco, Ltd........................................ 2,500 46,155
</TABLE>
61
<PAGE>
BRINSON NON-U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
Imperial Oil Ltd. ................................. 5,300 $ 92,622
Magna International, Inc., Class A................. 600 41,085
Moore Corp., Ltd. ................................. 2,400 31,824
NOVA Corp.......................................... 6,000 68,747
Newbridge Networks Corp. (b)....................... 700 16,731
Noranda, Inc....................................... 2,200 37,998
Potash Corp. of Saskatchewan, Inc.................. 700 52,740
Royal Bank of Canada............................... 1,900 114,341
Seagram Co., Ltd. ................................. 900 36,689
Shaw Communications, Inc. Class B.................. 3,400 66,123
TransCanada Pipelines Ltd.......................... 2,900 64,287
Westcoast Energy, Inc. ............................ 1,500 33,405
-------------
1,198,776
-------------
DENMARK - 0.19%
Den Danske Bank Group.............................. 400 47,986
Tele Danmark A/S................................... 300 28,792
-------------
76,778
-------------
FINLAND - 2.20%
Cultor Oyj......................................... 700 11,355
Merita Ltd., Class A............................... 15,400 101,610
Metsa-Serla Oyj, Series B.......................... 3,000 28,980
Nokia Oyj, Class A (b)............................. 7,300 536,872
Outokumpu Oyj, Class A............................. 2,800 35,724
Sampo Insurance Co., Ltd., Series A................ 1,100 52,128
UPM-Kymmene Corp................................... 3,500 96,328
Valmet OY.......................................... 1,800 31,036
-------------
894,033
-------------
FRANCE - 8.67%
Air Liquide........................................ 400 66,159
Alcatel Alsthom.................................... 800 162,884
AXA-UAP-Ctf de Valeur Garant....................... 1,600 179,954
AXA-UAP-Ctf de Valeur Warrants (b)................. 900 307
Banque Nationale de Paris.......................... 1,800 147,072
Carrefour S.A...................................... 200 126,530
Cie de Saint Gobain................................ 900 166,871
Dexia France (b) .................................. 800 107,708
Elf Aquitaine S.A. ................................ 1,400 196,824
Eridania Beghin-Say S.A............................ 300 66,242
France Telecom S.A................................. 3,400 234,502
Groupe Danone...................................... 500 137,860
Lafarge S.A........................................ 800 82,699
Lagardere S.C.A.................................... 2,500 104,077
Michelin, Class B.................................. 1,700 98,131
Paribas (Ex-Banque Paribas) (b) ................... 1,200 128,415
Pechiney S.A., Class A............................. 1,700 68,467
</TABLE>
62
<PAGE>
BRINSON NON-U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
Peugeot S.A. ...................................... 800 $ 172,014
Pinault-Printemps-Redoute S.A...................... 100 83,692
Rhone-Poulenc, Class A............................. 3,000 169,203
SEITA.............................................. 3,000 135,958
Societe Generale................................... 800 166,325
Suez Lyonnaise des Eaux S.A. (b) .................. 1,200 197,486
Thomson CSF........................................ 2,400 91,300
Total S.A., Class B................................ 1,100 143,004
Usinor Sacilor..................................... 2,500 38,621
Vivendi............................................ 1,200 256,235
Vivendi Warrants "01' (b).......................... 1,200 2,362
-------------
3,530,902
-------------
GERMANY - 10.03%
Allianz AG Holding (b)............................. 1,300 428,532
BASF AG............................................ 1,900 90,000
Bayer AG........................................... 4,700 242,421
Bayerische Motoren Werke AG (b).................... 100 100,886
Commerzbank AG..................................... 1,000 38,227
Continental AG..................................... 3,300 102,748
Daimler-Benz AG.................................... 2,000 196,122
Deutsche Bank AG................................... 3,100 262,512
Deutsche Telekom AG................................ 13,000 350,748
Dresdner Bank AG................................... 3,800 204,842
Hochtief AG........................................ 1,100 52,715
Hoechst AG......................................... 1,500 74,875
M.A.N. AG.......................................... 200 77,784
Mannesmann AG (b).................................. 2,000 202,881
Metro AG........................................... 2,600 157,729
Metro AG-Rts (b)................................... 2,600 101
Muenchener Rueckver AG............................. 700 347,091
Preussag AG........................................ 400 142,715
RWE AG............................................. 2,300 136,343
Schering AG........................................ 1,200 141,407
Siemens AG......................................... 3,800 231,158
Thyssen AG......................................... 500 126,593
VEBA AG............................................ 2,700 183,989
Volkswagen AG...................................... 200 192,244
-------------
4,084,663
-------------
HONG KONG - 0.59%
CLP Holdings Limited............................... 5,000 22,778
Cheung Kong Holdings, Ltd.......................... 9,000 44,253
Citic Pacific Ltd.................................. 5,000 8,840
Hang Seng Bank Ltd................................. 3,600 20,350
Hong Kong Telecommunications Ltd. ................. 10,400 19,529
Hong Kong and China Gas Co., Ltd................... 24,000 27,257
Hong Kong and China Gas Wts 9/99 (b) .............. 1,000 68
</TABLE>
63
<PAGE>
BRINSON NON-U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
Hutchinson Whampoa Ltd............................. 10,000 $ 52,784
Johnson Electric Holdings Ltd...................... 5,000 18,519
South China Morning Post Holdings Ltd.............. 10,000 4,807
Sun Hung Kai Properties, Ltd. ..................... 5,000 21,230
-------------
240,415
-------------
ITALY - 4.10%
Assicurazioni Generali............................. 6,000 195,100
Banca Commerciale Italiana......................... 4,000 23,920
Credito Italiano Spa............................... 23,000 120,399
Danieli & Co. Savings (Risp)....................... 12,000 55,695
ENI SpA ADR........................................ 1,800 117,000
ENI Spa............................................ 35,000 229,389
Edison Spa......................................... 2,000 16,050
Fiat Spa-Priv Preferred............................ 39,000 97,086
INA-Instituto Mobiliare Italiano Spa............... 6,000 94,512
INA-Istituto Nazionale delle Assicurazioni......... 11,000 31,251
Instituto Bancario San Paolo di Torino............. 5,000 72,150
Italgas Spa........................................ 3,000 12,219
La Rinascente Spa.................................. 7,000 69,703
Montedison Spa..................................... 84,000 104,200
Parmalet Finanziaria Spa........................... 28,000 57,101
Telecom Italia Mobile Spa RNC...................... 22,000 74,259
Telecom Italia Mobile Spa.......................... 26,000 158,994
Telecom Italia Spa................................. 19,000 139,864
-------------
1,668,892
-------------
JAPAN - 16.45%
Amada Co., Ltd..................................... 14,000 68,091
Bank of Tokyo-Mitsubushi, Ltd...................... 13,000 137,601
Canon Sales Co., Inc. ............................. 5,000 67,947
Canon, Inc. ....................................... 11,000 249,667
Citizen Watch Co., Ltd............................. 13,000 107,252
Dai Nippon Printing Co., Ltd. ..................... 13,000 207,479
Daiichi Pharmaceutical Co., Ltd.................... 13,000 171,416
Daikin Industries Ltd.............................. 15,000 96,624
Daiwa House Industry Co., Ltd. .................... 8,000 70,613
Denso Corp......................................... 11,000 182,296
Fanuc.............................................. 6,000 207,515
Fuji Photo Film.................................... 1,000 34,802
Fujitsu............................................ 9,000 94,679
Hitachi Ltd........................................ 27,000 176,064
Honda Motor Co..................................... 6,000 213,568
Hoya Corp. ........................................ 3,000 84,952
Inax............................................... 11,000 37,807
Ito Yokado Co., Ltd. .............................. 5,000 235,256
Kaneka Corp........................................ 15,000 78,899
Keio Teito Electric Railway........................ 17,000 61,858
</TABLE>
64
<PAGE>
BRINSON NON-U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
Kinki Nippon Railway............................... 17,000 $ 79,620
Kirin Brewery Co., Ltd. ........................... 16,000 151,025
Kokuyo............................................. 5,000 84,663
Kuraray Co., Ltd. ................................. 17,000 144,418
Kyocera Corp....................................... 2,000 97,705
Marui Co., Ltd..................................... 8,000 119,321
Matsushita Electric Industrial Co.................. 16,000 257,088
NGK Insulators..................................... 25,000 217,062
Nintendo Corp., Ltd. .............................. 1,000 92,589
Nippon Meat Packers, Inc........................... 9,000 110,178
Nippon Steel Co. .................................. 14,000 24,614
Okumura............................................ 16,000 56,144
Omron Corp......................................... 4,000 61,102
Osaka Gas Co....................................... 27,000 69,258
Sankyo Co., Ltd.................................... 14,000 318,766
Secom Co., Ltd..................................... 3,000 173,146
Sega Enterprises Ltd............................... 2,000 34,514
Seino Transportation............................... 12,000 66,578
Sekisui House Ltd.................................. 13,000 100,695
Shin-Etsu Chemical Co., Ltd........................ 1,000 17,293
Sony Corp.......................................... 3,000 258,313
Sumitomo Bank...................................... 3,000 29,182
Sumitomo Chemical Co............................... 19,000 58,594
Sumitomo Electric Industries....................... 12,000 121,310
TDK Corp........................................... 2,000 147,710
Takeda Chemical Industries......................... 9,000 239,291
Tokio Marine & Fire Insurance Co................... 14,000 143,848
Tokyo Electric Power............................... 4,000 78,395
Tonen Corp......................................... 10,000 51,807
Toray Industries, Inc.............................. 37,000 191,952
Toshiba Corp....................................... 37,000 151,162
Toyo Suisan Kaisha................................. 7,000 42,670
Toyota Motor Corp.................................. 10,000 258,674
Yamato Transport Co., Ltd.......................... 1,000 11,204
Yamazaki Banking Co., Ltd.......................... 6,000 53,176
-------------
6,697,453
-------------
MALAYSIA - 0.42%
Berjaya Sports Toto Bhd............................ 7,000 10,380
Kuala Lumpur Kepong Bhd............................ 11,000 17,770
Malayan Banking Bhd (b)............................ 8,000 8,063
Malaysian International Shipping Bhd (Frgn.)....... 5,000 7,293
Nestle (Malaysia) Bhd.............................. 5,000 22,664
Petronas Gas Bhd................................... 7,000 12,996
Public Bank Bhd (Frgn.)............................ 7,000 2,110
Resorts World Bhd.................................. 10,000 10,995
Rothmans of Pall Mall Bhd.......................... 4,000 27,728
</TABLE>
65
<PAGE>
BRINSON NON-U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
Sime Darby Bhd..................................... 2,000 $ 1,379
Tanjong PLC........................................ 3,000 4,159
Telekom Malaysia Bhd............................... 10,000 16,878
Tenaga Nasional Bhd................................ 10,000 12,055
UMW Holdings Bhd................................... 5,000 2,242
YTL Corp. Bhd...................................... 15,000 11,284
YTL Power International Bhd (b).................... 6,000 3,269
-------------
171,265
-------------
NETHERLANDS - 4.73%
ABN AMRO Holdings NV............................... 6,600 154,439
Akzo Nobel NV...................................... 200 44,460
Elsevier NV........................................ 7,100 107,153
Heineken NV (b) ................................... 3,000 117,835
Hoogovens NV....................................... 700 30,282
ING Groep NV....................................... 3,800 248,825
KLM Royal Dutch Air Lines NV....................... 1,000 40,606
Philips Electronics NV............................. 2,000 168,125
Polygram NV........................................ 1,300 66,336
Royal Dutch Petroleum Co........................... 8,800 487,976
Royal PTT Nederland NV............................. 3,600 138,570
TNT Post Group NV (b).............................. 3,600 92,026
Unilever NV........................................ 2,900 230,095
-------------
1,926,728
-------------
NEW ZEALAND - 2.37%
Brierley Investments Ltd........................... 255,100 127,125
Carter Holt Harvey Ltd. ........................... 88,400 77,093
Fletcher Challenge Building........................ 29,200 36,378
Fletcher Challenge Energy.......................... 32,300 77,128
Fletcher Challenge Forests Ltd..................... 62,700 35,151
Fletcher Challenge Paper........................... 58,000 64,431
Lion Nathan Ltd.................................... 23,400 51,989
Telecom Corp. New Zealand Ltd. ADS................. 1,700 55,675
Telecom Corp. of New Zealand Ltd................... 106,700 439,781
-------------
964,751
-------------
NORWAY - 0.11%
Norsk Hydro ASA.................................... 900 39,584
Norske Skogindustrier ASA.......................... 200 6,177
-------------
45,761
-------------
SINGAPORE - 1.15%
City Developments Ltd. ............................ 8,000 22,350
Creative Technology Limited (b).................... 1,000 12,134
DBS Land Ltd....................................... 16,000 13,258
Development Bank of Singapore Ltd. ................ 6,000 33,205
Elec & Eltek International Co., Ltd................ 2,500 8,450
</TABLE>
66
<PAGE>
BRINSON NON-U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
Fraser & Neave Ltd................................. 3,000 $ 8,062
Keppel Corp., Ltd. ................................ 10,000 15,034
Keppel Land, Ltd. ................................. 10,000 9,174
Oversea-Chinese Banking Corp., Ltd. ............... 7,000 23,824
Rothmans Industries Ltd. .......................... 2,000 8,878
Singapore Airlines Ltd. (Frgn.).................... 12,000 56,111
Singapore Press Holdings Ltd. (Foreign)............ 9,000 60,195
Singapore Technologies Engineering (b)............. 11,000 7,748
Singapore Telecommunications, Ltd.................. 83,000 117,905
United Overseas Bank Ltd. (Frgn.).................. 21,000 65,256
Venture Manufacturing (Singapore) Ltd.............. 3,000 5,682
-------------
467,266
-------------
SWEDEN - 2.29%
ABB AB, A Shares................................... 3,700 52,427
Astra AB, A Shares................................. 6,200 126,722
Electrolux AB, B Shares............................ 2,400 41,229
Ericsson, B Shares................................. 7,000 204,517
Fastighets AB Balder-Units......................... 1,300 1,304
Investor AB........................................ 1,000 58,371
Nordbanken Holding AB.............................. 16,100 118,102
Skandia Forsakrings AB............................. 3,700 52,891
Skanska AB, B Shares............................... 1,400 62,847
Svenska Handelsbanken, A Shares.................... 1,500 69,593
Swedish Match AB................................... 16,100 53,499
Swedish Rights AB.................................. 100 6
Volvo AB, B Shares................................. 3,000 89,343
-------------
930,851
-------------
SWITZERLAND - 6.90%
ABB AG............................................. 80 118,143
CS Holdings AG (Reg.).............................. 2,160 480,617
Holderbank Financiere Glarus AG, B Shares.......... 80 101,793
Julius Baer Holding AG............................. 40 125,132
Nestle S.A. (Reg.)................................. 180 385,206
Novartis AG (Reg.)................................. 380 632,331
Roche Holding AG (Gen.)............................ 50 491,001
Sairgroup.......................................... 230 75,666
Saurer AG (Reg).................................... 80 81,751
Sulzer AG.......................................... 80 63,133
Swiss Reinsurance Co. (Reg.)....................... 100 252,901
-------------
2,807,674
-------------
UNITED KINGDOM - 23.8%
Abbey National PLC................................. 8,700 154,595
B.A.T. Industries PLC.............................. 45,400 454,500
BOC Group PLC...................................... 5,900 80,378
BTR PLC (b)........................................ 16,800 47,652
</TABLE>
67
<PAGE>
BRINSON NON-U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- ----------------
<S> <C> <C>
Barclays PLC.................................... 11,100 $ 320,032
Bass PLC........................................ 4,700 88,065
Billiton PLC.................................... 52,700 106,835
Booker PLC...................................... 26,900 109,963
British Petroleum Co. PLC....................... 35,000 510,395
British Sky Broadcasting Group PLC.............. 15,600 112,053
British Steel PLC............................... 100,800 221,584
British Telecommunications PLC.................. 37,200 459,305
Cable & Wireless PLC............................ 8,800 106,891
Cadbury Schweppes PLC........................... 12,800 198,085
Charter PLC..................................... 17,300 180,551
Coats Viyella PLC............................... 94,800 116,258
Diageo PLC...................................... 15,700 185,988
FKI PLC......................................... 52,500 151,542
General Electric Co. PLC........................ 30,400 261,982
Glaxo Wellcome PLC.............................. 20,900 627,342
Greenalls Group PLC............................. 16,800 145,480
HSBC Holdings PLC............................... 11,900 301,997
Hanson PLC...................................... 19,600 119,119
Hillsdown Holdings PLC.......................... 46,500 126,464
House of Fraser PLC............................. 49,200 142,837
Inchcape PLC.................................... 26,200 82,621
Legal & General Group PLC....................... 8,900 94,964
Lloyds TSB Group PLC............................ 30,300 423,909
Marks & Spencer PLC............................. 43,100 392,282
Mirror Group PLC................................ 46,500 174,567
National Westminster Bank PLC................... 7,800 139,383
Peninsular & Oriental Steam Navigation Co....... 17,000 244,786
Prudential Corp. PLC............................ 6,200 81,672
RJB Mining PLC.................................. 31,000 63,620
Reckitt & Colman PLC............................ 4,700 89,712
Reed International PLC.......................... 20,000 180,866
Reuters Holdings PLC............................ 4,400 50,289
Rio Tinto Ltd................................... 12,300 138,527
Royal & Sun Alliance Insurance Group PLC........ 13,100 135,406
Scottish Hydro-Electric PLC..................... 13,800 122,495
Sears PLC....................................... 66,800 58,514
Sedgwick Group PLC.............................. 39,200 85,027
SmithKline Beecham PLC.......................... 33,400 407,650
Smurfit (Jefferson) Group PLC................... 47,200 140,968
Tate & Lyle PLC................................. 23,000 182,380
Tesco PLC....................................... 17,000 165,933
Thames Water PLC................................ 11,600 211,159
Unilever PLC.................................... 26,000 276,771
United News & Media PLC......................... 8,900 124,440
Vodafone Group PLC.............................. 14,100 178,914
</TABLE>
68
<PAGE>
BRINSON NON-U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
Williams PLC...................................... 15,400 $ 98,925
Willis Corroon Group.............................. 6,900 17,499
-------------
9,693,172
-------------
TOTAL EQUITIES (COST $38,486,755)................. 39,040,285
-------------
INVESTMENT COMPANY - 0.00%
Brinson Supplementary Trust U.S. Cash Management
Prime Fund (COST $10)............................ 10 10
-------------
TOTAL INVESTMENTS (COST $38,486,765) - 95.89%
(A).............................................. 39,040,295
-------------
CASH AND OTHER ASSETS, LESS LIABILITIES - 4.11% .. 1,672,306
-------------
NET ASSETS - 100%................................. $ 40,712,601
=============
</TABLE>
69
<PAGE>
BRINSON NON-U.S. EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $38,486,765; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation................ $802,827
Gross unrealized depreciation................ (249,297)
---------
Net unrealized appreciation.............. $553,530
=========
</TABLE>
(b) Non-income producing security.
See accompanying notes to financial statements.
70
<PAGE>
BRINSON NON-U.S. EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value:
Unaffiliated issuers (Cost $38,486,755)........................ $ 39,040,285
Affiliated issuers (Cost $10).................................. 10
Cash............................................................ 40,463,431
Dividends receivable............................................ 7,121
-------------
TOTAL ASSETS................................................. 79,510,847
-------------
LIABILITIES:
Payable for investment securities purchased..................... 38,798,179
Accrued expenses................................................ 67
-------------
TOTAL LIABILITIES............................................ 38,798,246
-------------
NET ASSETS:
Applicable to 4,046,344 shares; no par value, unlimited shares
authorized..................................................... $ 40,712,601
=============
Net asset value, offering price and redemption price per share
($40,712,601 / 4,046,344 shares)............................... $ 10.0616
=============
NET ASSETS CONSIST OF:
Paid in capital................................................. $ 40,463,441
Accumulated net investment income............................... 7,031
Net unrealized appreciation..................................... 242,129
-------------
NET ASSETS................................................... $ 40,712,601
=============
</TABLE>
See accompanying notes to financial statements.
71
<PAGE>
BRINSON NON-U.S. EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998* (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $1,253 for foreign taxes withheld)............... $ 7,098
----------
TOTAL INCOME.................................................... 7,098
----------
EXPENSES:
TOTAL EXPENSES.................................................. 67
----------
NET INVESTMENT INCOME........................................... 7,031
----------
NET UNREALIZED GAIN (LOSS):
Change in net unrealized appreciation or depreciation on:
Investments and foreign currency.................................. 553,530
Forwards and other translations................................... (311,401)
----------
Change in net unrealized appreciation or depreciation............ 242,129
----------
Net increase in net assets resulting from operations............... $ 249,160
==========
</TABLE>
* The Fund commenced operations on June 26, 1998.
See accompanying notes to financial statements.
72
<PAGE>
BRINSON NON-U.S. EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1998*
(UNAUDITED)
--------------
<S> <C>
OPERATIONS:
Net investment income.......................................... $ 7,031
Change in net unrealized appreciation or depreciation.......... 242,129
------------
Net increase in net assets resulting from operations........... 249,160
------------
CAPITAL SHARE TRANSACTIONS:
Shares sold.................................................... 40,463,431
------------
Net increase in net assets resulting from capital share trans-
actions (a)................................................... 40,463,431
------------
TOTAL INCREASE IN NET ASSETS................................ 40,712,591
------------
NET ASSETS:
Beginning of period............................................ 10
------------
End of period (including accumulated net investment income of
$7,031)....................................................... $40,712,601
============
(a) A summary of capital share transactions follows:
SHARES
------------
Shares sold................................................... 4,046,343
============
</TABLE>
* The Fund commenced operations June 26, 1998.
See accompanying notes to financial statements.
73
<PAGE>
BRINSON NON-U.S. EQUITY FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout the period presented.
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1998*
(UNAUDITED)
--------------
<S> <C>
Net asset value, beginning of period............................. $ 10.0000
----------
Net investment income.......................................... 0.0018
Net realized and unrealized gain............................... 0.0598
----------
Total income from investment operations...................... 0.0616
----------
Net asset value, end of period................................... $ 10.0616
==========
Total return (non-annualized).................................... 0.62%
Ratios/Supplemental data
Net assets, end of period (in 000s)............................ $ 40,713
Ratio of expenses to average net assets........................ 0.06%**
Ratio of net investment income to average net assets........... 3.15%**
Portfolio turnover rate........................................ 0%
Average commission rate paid per share......................... $ 0.0000
</TABLE>
* The Fund commenced operations June 26, 1998.
** Annualized
See accompanying notes to financial statements.
74
<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 return of
- -6.86%, compared to the - 8.68% return of its benchmark, the Brinson Emerging
Markets Normal Index. The International Finance Corporation Investable Index
(IFCI), a widely followed market-capitalization weighted benchmark, returned -
9.30% during the same period. In the first half of 1998, the Fund returned -
11.77%, versus -11.55% for the Normal Index and -15.71% for the IFCI.
The Brinson Normal Index utilizes equal country weights within liquidity tiers
to minimize country-specific risk, while maintaining broad exposure to emerging
growth economies. Much of the incremental portfolio return versus the IFCI over
the first half of this year can be attributed to this more equal-weighted
approach. A "flight-to-quality" on the part of foreign investors has generally
hurt the largest and most liquid of the emerging markets, while leaving smaller
markets - especially in Europe and the Middle East - unscathed.
The marginal underperformance of the Fund relative to the Normal Index during
the first half of the year arose primarily from our failure to participate in a
very sharp and temporary early-year bounce in Asian markets. The Brinson
Emerging Markets Normal Index is heavily weighted in Asian markets while our
strategy has remained significantly underweight in this region because of the
malign influence of domestic debt crises and very poor cyclical growth
prospects. This was a strategy which was proven profitable during the course of
the second quarter, when our Fund outperformed the Brinson Emerging Markets
Normal Index by 401 basis points. Positive security selection largely offset a
negative contribution from market/currency allocation. In particular, our macro
overweights in China, Russia and Kazakhstan, markets which all performed
poorly, were counterbalanced to a significant extent by positive security
selection in Indonesia, Korea and Russia, where we successfully picked
securities which benefited either from currency devaluation or from the high
prevailing interest rate environment.
75
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR ANNUALIZED
ENDED ENDED 06/30/95*
6/30/98 6/30/98 TO 6/30/98
- -----------------------------------------------------------------------
<S> <C> <C> <C>
BRINSON EMERGING MARKETS EQUITY FUND/1/ -11.77% -34.08% -6.84%
- -----------------------------------------------------------------------
BRINSON EMERGING MARKETS EQUITY FUND/2/ -14.40% -36.05% -7.30%
- -----------------------------------------------------------------------
Brinson Emerging Markets Normal Index -11.55% -36.75% -7.59%
- -----------------------------------------------------------------------
IFCI Index -15.71% -38.10% -8.10%
- -----------------------------------------------------------------------
</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
[LINE GRAPH APPEARS HERE]
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.
76
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND
- --------------------------------------------------------------------------------
MARKET ALLOCATION
As of June 30, 1998
<TABLE>
<CAPTION>
BENCHMARK NORMAL STRATEGY
CLASS EXPOSURE* EXPOSURE** EXPOSURE
- -------------------------------------------------------
<S> <C> <C> <C> <C>
LATIN AMERICA 38.3% 24.1% 26.1%
Argentina....... 1 4.7 5.6 5.6
Brazil.......... 1 12.2 5.6 8.6
Chile........... 1 5.7 5.6 4.6
Mexico.......... 1 12.6 5.6 6.6
Peru............ 3 1.3 1.9 0.9
Columbia........ 4 1.1 0.0 0.0
Venezuela....... 4 0.7 0.0 0.0
ASIA 23.3 44.4 26.6
India........... 1 2.0 5.6 5.6
Indonesia....... 1 0.9 5.6 1.6
Korea........... 1 3.9 5.6 3.1
Malaysia........ 1 5.0 5.6 3.1
Philippines..... 1 1.5 5.6 4.1
Taiwan.......... 1 8.3 5.6 3.6
Thailand........ 1 0.8 5.6 3.6
China........... 2 0.5 3.7 3.2
Pakistan........ 3 0.3 1.9 0.0
Sri Lanka....... 4 0.1 0.0 0.0
Vietnam......... 4 0.0 0.0 0.0
EUROPE/MIDEAST/
AFRICA 38.4 31.5 40.9
South Africa.... 1 13.1 5.6 6.6
Turkey.......... 1 4.8 5.6 5.6
Greece.......... 2 4.1 3.7 3.7
Israel.......... 2 3.2 3.7 4.2
Poland.......... 2 1.2 3.7 6.3
Portugal........ 2 5.0 3.7 3.7
Czech Republic.. 3 0.3 1.9 0.9
Hungary......... 3 1.8 1.9 1.9
Russia.......... 3 2.2 1.9 5.4
Bulgaria........ 4 0.0 0.0 0.2
Egypt........... 4 1.0 0.0 0.7
Jordan.......... 4 0.2 0.0 0.0
Kazakhstan...... 4 0.0 0.0 1.3
Morocco......... 4 1.3 0.0 0.0
Romania......... 4 0.0 0.0 0.4
Slovakia........ 4 0.1 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 6.4
----- ----- ------
TOTALS.......... 100.0% 100.0% 100.00%
===== ===== ======
- -------------------------------------------------------
</TABLE>
* International Finance Corporation investable index as of June 30, 1998.
**Current Strategy will fall in this range with 95% frequency.
Note: Totals may not add due to rounding.
TOP TEN HOLDINGS
As of June 30, 1998
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
- -------------------------------------------------------------
<S> <C>
1. Telecomunicacoes Brasileiras S.A., Preferred 2.79%
2. Chile Fund, Inc. 1.51
3. Phillippines Long Distance Telephone Co. 1.36
4. Telefonos de Mexico S.A.,
Series L 1.33
5. Telefonica de Argentina S.A., Class B 1.06
6. Bank Hapoalim Ltd. 0.96
7. YPF Sociedad Anonima S.A., Class D ADR 0.94
8. Perez Companc S.A., B Shares 0.90
9. Telecomunicacoes de Sao Paulo S.A., Preferred 0.83
10. Petroleo Brasileiro S.A., Preferred 0.74
- -------------------------------------------------------------
</TABLE>
77
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
EQUITIES - 75.48%
ARGENTINA - 5.68%
Banco Frances del Rio de la Plata S.A. ........... 314,597 $ 2,312,519
Banco de Galicia y Buenos Aires S.A. ............. 345,622 1,520,889
CEI Citicorp Holdings S.A. ....................... 152,291 609,225
Inversiones Y Representaciones S.A................ 234,000 688,029
Perez Companc S.A., B Shares...................... 726,126 3,638,255
Quilmes Industrial S.A. ADR (c)................... 74,700 728,325
Siderca S.A., Class A............................. 1,186,629 2,017,471
Telecom Argentina S.A., Class B................... 338,000 1,926,793
Telefonica de Argentina S.A., Class B............. 1,326,000 4,283,408
Transportadora de Gas del Sur S.A., Class B....... 242,000 537,294
YPF Sociedad Anonima S.A. Class D................. 27,300 820,706
YPF Sociedad Anonima S.A., Class D ADR (c)........ 127,000 3,797,680
-------------
22,880,594
-------------
ASIA - 1.16%
Central Asia Regional Growth Fund................. 97,150 680,050
IS Himalayan Fund................................. 139,218 1,635,812
Regent Central Asia Investments................... 415,000 2,336,450
-------------
4,652,312
-------------
BALKAN REPUBLIC - 0.16%
Regent Balkan Fund................................ 115,000 632,500
-------------
BRAZIL - 8.89%
Banco Bradesco S.A. .............................. 175,000,000 1,467,664
Brazil Fund, Inc. (c)............................. 20,266 367,321
Centrais Electricas Brasileiras S.A............... 59,500,000 1,723,370
Centrais Electricas Brasileiras S.A., Preferred
B................................................ 20,000,000 610,410
Cia Electric est Rio Janeiro...................... 320,000,000 154,937
Cia Energetica de Minas Gerais, ADR (c) .......... 65,920 2,040,385
Cia Energetica de Minas Gerais, Preferred......... 42,097,688 1,303,041
Cia Paranaense de Energia......................... 89,120,000 685,776
Cia Paranaense de Energia-Copel, Preferred B...... 131,300,000 1,214,690
Cia Vale Do Rio Doce, Preferred (b) .............. 128,246 2,550,284
Electricas de Santa Catarina S.A., Preferred B.... 1,145,000 920,673
Petroleo Brasileiro S.A., Preferred............... 16,050,000 2,983,529
Telebras ADR...................................... 27,200 2,969,900
Telecomunicacoes Brasileiras S.A., Preferred...... 102,030,000 11,247,471
Telecomunicacoes de Sao Paulo S.A. (b)............ 3,330,000 503,819
Telecomunicacoes de Sao Paulo S.A. Preferred (b)
................................................. 835,043 16,952
Telecomunicacoes de Sao Paulo S.A., Preferred (b)
................................................. 14,067,724 3,356,988
Telerj Celular S.A., Preffered B.................. 3,330,000 141,221
Telesp Celular S.A................................ 14,767,724 1,238,517
Uniao de Bancos Brasileiros S.A. GDR.............. 4,700 138,650
Uniao de Bancos Brasileiros S.A., Preferred....... 7,700,000 183,080
-------------
35,818,678
-------------
</TABLE>
78
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- ------------
<S> <C> <C>
BULGARIA - 0.25%
Farmlington Bulgaria Fund............................ 124,500 $ 996,000
------------
CHILE - 4.30%
Chile Fund, Inc. .................................... 449,700 6,099,056
Chilectra S.A. ADR................................... 50,100 1,073,954
Cia Cervecerias Unidas S.A. ADR...................... 26,400 557,700
Cia de Telecomunicaciones de Chile S.A. ADR.......... 106,250 2,158,203
Distribucion y Servicio D&S S.A. ADR................. 16,900 253,500
Emboteliadora Andina S.A., Class B, ADR.............. 2,200 34,375
Embotelladora Andina S.A., Class B ADR............... 77,200 1,206,250
Empresa Nacional Electricidad Chile S.A ADR.......... 154,600 2,203,050
Enersis S.A. ADR..................................... 74,400 1,818,150
Madeco S.A. ADR...................................... 26,000 229,125
Quimica Y Minera Chile S.A. ADR...................... 32,800 1,098,800
Vina Concha y Toro S.A. ADR.......................... 20,000 570,000
------------
17,302,163
------------
CHINA - 0.33%
First Tractor Co., Ltd., H Shares.................... 2,176,000 575,691
Huaneng Power International, Inc. H Shares........... 2,300,000 764,332
------------
1,340,023
------------
CZECH REPUBLIC - 1.20%
CKD Praha Holding A.S................................ 12,058 302,609
Ceska Sporitelna A.S................................. 35,000 287,426
Cokoladovny A.S...................................... 1,900 327,782
Czeske Energeticke Zavody A.S........................ 23,000 639,302
Ceske Radiokomunikace GDR 144A ...................... 19,250 314,353
Inzenyrske a Prumyslove Stavby A.S................... 152,710 824,558
Leciva Praha......................................... 3,838 294,014
SPT Telecom a.s...................................... 102,800 1,422,243
Tabak A.S............................................ 1,039 250,433
Unipetrol A.S........................................ 81,000 180,221
------------
4,842,941
------------
EGYPT - 0.48%
Egypt Investment Co.................................. 61,000 808,250
Egypt Trust.......................................... 5,000 57,500
The Egypt Fund....................................... 76,300 1,068,200
------------
1,933,950
------------
GREECE - 3.98%
Alpha Credit Bank.................................... 23,594 1,912,535
Alpha Credit Bank Rights (b) ........................ 24,894 42,406
Athens Medical Center S.A............................ 49,790 980,157
Attica Enterprises S.A............................... 65,994 952,129
Chipita International S.A............................ 33,350 904,225
</TABLE>
79
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
GREECE - (CONTINUED)
Ergo Bank S.A........... 22,902 $ 1,957,298
Goody's S.A............. 27,490 683,907
Hellenic Bottling Co.
S.A.................... 38,410 1,186,585
Hellenic Telecommunica-
tions Organization
S.A. .................. 45,352 1,162,569
Heracles General Cement
Co. S.A................ 20,940 487,921
Intracom S.A............ 31,400 1,063,419
Maillis................. 33,650 707,216
Minoan Lines............ 3,910 96,760
National Bank of Greece
S.A.................... 11,498 1,473,337
Omega Fund.............. 14,530 1,200,000
Sarantis S.A............ 19,460 394,918
Titan Cement Co. S.A. .. 1,530 100,088
Titan Cement Co. S.A.,
Preferred.............. 12,720 731,563
-------------
16,037,033
-------------
HONG KONG - 2.22%
Beijing Datang Power
Generation Co. Ltd. H
Shares................. 2,660,000 746,651
Chinatrust Resources
Beijing Land........... 2,020,000 651,731
Cosco Pacific Ltd....... 3,626,000 1,298,577
Guangdong Kelon Elec
Holding H Shares....... 870,000 684,898
Guangnan Holdings....... 1,110,000 372,454
Jiangsu Expressway Co.,
Ltd., H Shares......... 2,526,000 479,212
Legend Holdings Ltd..... 2,250,000 675,122
Mahanagar Telephone
Nigam Ltd.............. 1,110,000 766,397
New World Infrastructure
Ltd.................... 925,000 1,062,450
Shanghai Industrial
Holdings Ltd........... 262,000 617,079
Yanzhou Coal Mining Co.
Ltd. H Shares.......... 5,150,000 983,662
Zhehuang Expressway Co.
Ltd. Class H........... 3,660,000 614,046
-------------
8,952,279
-------------
HUNGARY - 1.10%
BorsodChem Rt........... 4,500 131,536
Danubius Hotel and Spa
Rt..................... 3,852 77,470
EGIS Rt................. 3,700 130,222
Graboplast Rt........... 2,000 50,644
Graboplast Rt. GDR...... 16,000 67,600
Magyar Tavkozlesi Rt.... 210,600 1,222,516
Mezogazdasagi Gepgyarto
Rt..................... 5,445 129,418
MOL Maygar Olaj-es
Gazipari Rt............ 13,000 350,580
MOL Maygar Olaj-es
Gazipari Rt. GDR Reg.
S...................... 15,000 404,250
OPT Bank Right.......... 1,633 80,239
OTP Bank Rt. GDR........ 8,000 392,000
Pannonplast Rt.......... 5,925 219,364
Pick Szeged Rt.......... 3,400 198,766
Richter Gedeon Rt....... 9,239 743,242
</TABLE>
80
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
HUNGARY - (CONTINUED)
Richter Gedeon Rt. GDR Reg. S..................... 500 $ 41,000
Zalakeramia Rt. .................................. 5,700 202,436
-------------
4,441,283
-------------
INDIA - 5.33%
Aptech Ltd........................................ 38,000 443,221
Arvind Mills Ltd., B Shares....................... 50 50
Asea Brown Boveri Ltd............................. 46,950 471,162
Associated Cement Cos., Ltd....................... 12,500 359,882
Bajaj Auto Ltd.................................... 67,300 908,451
Bank of Baroda.................................... 237,600 464,546
Bharat Heavy Electricals Ltd...................... 100,700 596,477
Bharat Petroleum Corp. Ltd........................ 101,700 841,800
BSES Ltd.......................................... 107,000 393,911
Cipla Ltd......................................... 31,400 512,033
Corporation Bank.................................. 250,000 595,280
Digital Equipment (India) Ltd..................... 36,600 115,133
EIH Ltd........................................... 4,200 21,736
Glaxo India Ltd. ................................. 43,800 379,600
Gujarat Ambuja Cements Ltd........................ 300 1,849
HDFC Bank Ltd. ................................... 52,900 80,208
Hindalco Industries Ltd........................... 37,700 593,858
Hindustan Lever Ltd. ............................. 40,000 1,424,897
Hindustan Petroleum Corp. Ltd..................... 157,800 1,454,180
Icici Banking Corp. .............................. 6,700 5,186
India Cements Ltd. ............................... 4,400 5,192
India Public Sector Fund Ltd...................... 147,059 1,139,707
Indian Hotels Co. Ltd............................. 17,000 172,407
Indian Hotels Co., Ltd. GDR....................... 13,300 103,075
Indian Petrochemical Corp., Ltd. GDR.............. 50,200 160,640
Indian Petrochemicals Corp. Ltd................... 100 121
Industrial Credit & Investment Corp. of India
Ltd.............................................. 190,000 347,044
ITC Ltd........................................... 53,000 815,481
Kirloskar Cummins Ltd. ........................... 10,450 86,991
Larsen & Toubro Ltd............................... 1,500 8,117
Larsen & Toubro Ltd. GDR.......................... 53,000 495,550
Mahanagar Telephone Nigam Ltd..................... 260,500 1,096,713
Mahindra & Mahindra Ltd........................... 36,750 186,634
Morgan Stanley India Investment Fund, Inc. (b).... 231,600 1,490,925
National Aluminum Co. Ltd......................... 100 50
NIIT Ltd.......................................... 7,500 251,416
Oriental Bank of Commerce......................... 800 889
Pfizer Ltd........................................ 251 3,261
Ranbaxy Labortories Ltd. ......................... 41,000 529,735
Reliance Industries GDR........................... 79,000 521,400
Reliance Industries Ltd. GDR...................... 167,000 564,746
</TABLE>
81
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- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
INDIA - (CONTINUED)
Satyam Computer................................... 71,000 $ 695,339
SKF Bearings India Ltd. .......................... 55 1,018
Software Solution Integrated...................... 100,700 614,537
State Bank of India GDR........................... 117,000 583,412
State Bank of India Ltd. GDR...................... 12,500 141,250
Steel Authority India Ltd. GDR.................... 60,200 149,597
Steel Authority of India.......................... 100 21
Tata Engineering & Locomotive Co. Ltd. (b)........ 80,350 315,712
Tata Engineering & Locomotive Co. Ltd. GDR........ 11,300 36,160
Tata Iron & Steel Co. Ltd......................... 50 149
Tata Power Co. Ltd. .............................. 10,000 21,628
TVS Suzuki Ltd.................................... 41,550 436,826
Videsh Sanchar Nigam Ltd.......................... 41,000 841,770
-------------
21,480,973
-------------
INDONESIA - 1.74%
Aneka Tambang..................................... 1,750,000 177,365
Bank Dagang Nasional Indonesia (Frgn.) (b) ....... 1,062 5
Bank Dagang Nasional Indonesia Warrants (b) ...... 47,219 22
Bank Internasional Indonesia Warrants............. 29,210 134
Daya Guna Samudera................................ 1,345,000 817,905
Gudang Garam (Frgn.) (b).......................... 3,057,000 1,797,020
Gulf Indonesia Resources Ltd...................... 34,700 399,050
Indah Kiat Pulp & Paper Corp. Warrants (b)........ 8,892 1,322
Indosat........................................... 590,000 685,676
International Nickel Indonesia.................... 325,500 171,547
PT Astra Agro Niaga Lestari TBK................... 1,990,000 376,486
PT Indah Kiat Pulp & Paper Corp................... 5,150,000 983,024
PT Tambang Timah (b).............................. 663,500 297,006
PT Tambang Timah GDR S Shares..................... 605,000 270,819
PT Telekomunikasi Indonesia....................... 3,606,000 1,017,233
-------------
6,994,614
-------------
ISRAEL - 4.62%
Bank Hapoalim Ltd................................. 1,278,909 3,867,141
Bank Leumi Le-Israel.............................. 775,000 1,545,398
Bezeq Israeli Telecommunications Corp. Ltd........ 145,000 463,333
Blue Square Chain Stores Properties & Invest-
ments............................................ 36,000 443,270
Crystal Systems Solutions......................... 46,100 645,400
ECI Telecommunications Ltd........................ 45,900 1,738,462
First International Bank of Israel................ 139,000 1,086,736
Formula Systems (1985) Ltd........................ 38,420 1,343,847
Israel Chemicals Ltd.............................. 356,000 454,831
Makhteshim-Agan Industries Ltd.................... 386,563 1,229,959
NICE Systems Ltd.................................. 5,000 185,922
Nice Systems Ltd. ADR............................. 28,800 1,080,000
Orbotech, Ltd..................................... 33,500 1,218,562
</TABLE>
82
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BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
ISRAEL - (CONTINUED)
Supersol Ltd....................................... 135,000 $ 444,618
Tadiran Ltd........................................ 37,390 1,233,466
Tadiran Telecommunications Ltd. ................... 5,500 81,812
Teva Pharmaceutical Industries Ltd................. 43,480 1,561,106
-------------
18,623,863
-------------
KAZAKHSTAN - 0.16%
Peregrine Kazakhstan Fund.......................... 160,000 660,800
-------------
KOREA - 1.08%
Dae Duck Electronics Co. .......................... 1,300 75,747
Daewoo Heavy Industries............................ 31,900 97,117
Housing & Commercial Bank, Korea GDR............... 22,041 50,143
Housing & Commercial Bank, Korea GDR 144A ......... 6,862 15,611
Hyundai Heavy Industries........................... 2,900 61,253
Kookmin Bank....................................... 16,360 60,769
Korea Asia Fund Ltd. IDR........................... 2,120 1,060,000
Korea Electric Power Corp.......................... 36,460 389,031
L.G. Chemical Ltd.................................. 26,100 144,472
LG Electronics..................................... 11,970 98,079
LG Information & Communication Ltd................. 11,060 159,496
Medison Co. Ltd. .................................. 24,760 218,205
Mirae Co........................................... 34,733 57,678
Nong Shim Co. Ltd.................................. 3,093 133,812
Pohang Iron & Steel Co. Ltd........................ 8,570 276,088
S1 Corp. .......................................... 390 39,483
Samchully Co....................................... 15,010 185,849
Samsung Display Devices Co......................... 3,300 90,131
Samsung Electronics Co............................. 16,958 524,920
Samsung Fire & Marine Insurance.................... 490 81,726
Sindo Ricoh Co. ................................... 1,949 53,090
SK Telecom Co. Ltd................................. 446 195,569
Ssangyong Oil Refining Co. Ltd..................... 32,000 216,752
Sunkyong Industries................................ 180 257
Youngone Corp...................................... 3,600 70,532
-------------
4,355,810
-------------
MALAYSIA - 1.36%
Berjaya Sports Toto Bhd............................ 310,000 459,674
Genting Bhd........................................ 123,000 222,423
Jaya Tiasa Holdings Bhd............................ 193,000 239,650
Kentucky Fried Chicken Bhd......................... 113,000 59,940
Kian Joo Can Factory Bhd........................... 90,000 82,459
Kuala Lumpur Kepong Bhd............................ 274,500 443,436
Malayan Banking Bhd................................ 250,000 251,959
Malayan Cement Bhd................................. 162,000 52,731
Malaysian International Shipping Bhd (Frgn.)....... 181,000 264,027
</TABLE>
83
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BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
MALAYSIA - (CONTINUED)
Malaysian Pacific Industries Bhd.................. 69,000 $ 81,519
Nestle (Malaysia) Bhd............................. 56,000 253,840
Perusahaan Otomobil Nasional Bhd.................. 58,000 37,058
Petronas Gas Bhd.................................. 271,000 503,122
Public Bank Bhd................................... 400,000 118,626
Resorts World Bhd................................. 179,000 196,803
Rothmans of Pall Mall Bhd......................... 67,000 464,436
Sime Darby Bhd.................................... 644,000 444,084
Tan Chong International Ltd....................... 651,000 61,751
Tan Chong Motor Holdings Bhd...................... 217,000 39,502
Tanjong PLC....................................... 155,000 214,888
Telekom Malaysia Bhd.............................. 158,500 267,511
Tenaga Nasional Bhd............................... 229,000 276,070
UMW Holdings Bhd.................................. 165,000 73,996
United Engineers Ltd.............................. 190,000 77,420
YTL Corp. Bhd..................................... 206,000 154,966
YTL Power International Bhd (b)................... 236,400 128,816
-------------
5,470,707
-------------
MEXICO - 6.39%
ARA, S.A. ........................................ 211,000 671,556
Apasco S.A........................................ 85,000 442,689
Grupo Televisa S.A., GDR.......................... 42,000 1,580,250
Carso Global Telecom Series A-1................... 450,276 1,405,547
Cemex S.A......................................... 131,744 491,144
Cemex S.A. CPO.................................... 460,622 1,722,335
Cifra S.A., Series C.............................. 180,000 248,386
Cifra S.A., Series V.............................. 2,020,619 2,959,197
Corporacion GEO, S.A., Series B................... 149,000 796,734
Formento Economico Mexica UBD Units............... 43,202 1,346,156
Grupo Carso S.A., Series A1....................... 188,276 774,182
Grupo Elektra S.A. de C.V. CPO.................... 438,000 430,884
Grupo Elektra S.A. de C.V. CPO GDR................ 22,500 219,375
Grupo Financeiro Banamex Accival S.A., Series B
(b).............................................. 527,000 998,168
Grupo Financiero Bancomer S.A., Series B.......... 2,720,000 1,001,914
Grupo Financiero Inbursa S.A., Series B........... 510 804
Grupo Televisa S.A. Series CPO.................... 10,000 188,293
Kimberly-Clark de Mexico S.A., Series B........... 18,585 96,586
Organizacion Soriana S.A.......................... 257,000 737,881
Telefonos de Mexico S.A. Class l ADR.............. 47,000 2,258,937
Telefonos de Mexico S.A., Series L................ 2,237,850 5,341,852
Tubos de Acero de Mexico S.A. (b)................. 79,500 1,026,263
Tubos de Acero de Mexico S.A. ADR................. 77,000 986,562
-------------
25,725,695
-------------
</TABLE>
84
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BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
PAKISTAN - 0.49%
Engro Chemicals (Pakistan) Ltd.................... 55,420 $ 58,900
Fauji Fertilizer Co. Ltd.......................... 648,000 699,230
Pakistan Investment Fund Inc...................... 335,600 859,975
Pakistan State Oil Co. Ltd........................ 65,800 104,184
Pakistan Telecommunications Corp., Class A........ 750,000 261,089
-------------
1,983,378
-------------
PERU - 1.21%
Cementos Lima S.A................................. 27,582 515,139
Cementos Norte Pacasmayo S.A...................... 92,184 147,394
Cerveceria Backus & Johnston S.A., T Shares....... 1,037,522 529,438
Cia de Minas Buenaventura S.A., A Shares.......... 34,836 232,280
Cia de Minas Buenaventura S.A., Trabajo Shares.... 70,978 395,999
Credicorp......................................... 17,095 251,083
Edegel S.A........................................ 530,000 153,257
Ferreyros S.A..................................... 64,692 87,151
Ferreyros S.A., 144A ADR.......................... 9,732 262,210
LUZ del Sur S.A., B Shares........................ 430,000 314,509
Telefonica del Peru S.A. ADR...................... 11,300 230,944
Telefonica del Peru S.A., B Shares................ 844,115 1,737,335
-------------
4,856,739
-------------
PHILIPPINES - 4.00%
Ayala Corp........................................ 7,066,050 1,821,584
Ayala Land, Inc., Class B......................... 6,077,700 1,748,978
Benpres Holdings Corp. GDR........................ 550,660 1,514,315
International Container Terminal Services, Inc.... 4,934,000 562,026
Manila Electric Co. Class B....................... 753,765 1,988,349
Phillippines Long Distance Telephone Co. ......... 239,800 5,463,070
Queenbee Resources Corp. (b)...................... 2,500,000 764,388
San Miguel Corp. Class B.......................... 707,908 933,692
SM Prime Holdings, Inc............................ 8,243,600 1,304,742
-------------
16,101,144
-------------
POLAND - 2.30%
Amica Wronki S.A.................................. 4,423 43,887
BIG Bank Gdanski S.A.............................. 603,968 805,406
Bank Rozwoju Eksportu S.A. ....................... 42,700 1,157,198
Bank Slaski S.A................................... 16,850 1,130,743
Celuloza Zacklady Celulozy; Papieru w Swie cin
S.A ............................................. 83,630 496,456
DROSED S.A........................................ 1,300 9,879
Elektrim Spolka Akcyjna S.A....................... 39,007 475,422
Elektrobudowa S.A................................. 38,000 343,275
Exbud S.A. (b).................................... 53,300 641,984
KGHM Polska Miedz................................. 164,000 658,446
Polifarb Cieszyn-Wroclaw S.A...................... 269,875 696,551
Przedsiebiorstwo Farmaceutyczne JELFA S.A......... 18,500 437,697
</TABLE>
85
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BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
POLAND - (CONTINUED)
Sokolowskie Zaklady Miesne S.A..................... 231,245 $ 215,528
Stomil Olsztyn S.A................................. 114,000 778,090
Wielkopolski Bank Kredytowy S.A.................... 141,199 1,093,310
Zaclady Metali Lekkich Kety........................ 100 1,506
Zaklady Piwowarskie w Zywcu S.A.................... 2,200 264,984
-------------
9,250,362
-------------
PORTUGAL - 3.79%
BPI-SGPS, S.A...................................... 51,600 1,665,156
Banco Comercial Portugues S.A...................... 54,632 1,551,239
Banco Espirito Santo e Comercial de Lisboa S.A..... 44,607 1,339,514
Banco Pinto & Sotto Mayor, S.A..................... 45,200 1,121,925
Brisa-Auto Estradas de Portugal, S.A............... 10,800 461,888
Cimentos de Portugal S.A........................... 24,850 873,086
Corticeira Amorim S.A.............................. 25,000 479,104
EDP Electricidade de Portugal S.A.................. 31,000 720,626
EDP Electricidade de Portugal S.A. ADR............. 10,000 460,625
Engil-SGPS......................................... 33,000 374,984
Inparsa-Industria e Participacoes, SGPS S.A........ 18,000 796,124
Jeronimo Martins, SGPS, S.A........................ 16,700 802,273
Mota e Companhia, S.A.............................. 23,100 390,169
Portugal Telecom S.A............................... 37,300 1,976,868
Sonae Imobiliaria S.A.............................. 32,900 573,150
Sonae Investimentos-SGPS S.A....................... 11,500 628,105
Telecel Commincacaoes Pessoais S.A................. 6,000 1,065,396
-------------
15,280,232
-------------
ROMANIA - 0.31%
Romanian Investment Fund (b)....................... 1,950 1,267,500
-------------
RUSSIA - 2.22%
Aeroflot - Russian International Airlines ......... 2,800 191,800
Borskoie Glass Co.................................. 5,500 89,375
Chelyabinksvyazinform Preferred.................... 11,192 153,330
Chelyabinsksvyazinform............................. 4,300 141,900
Firebird Republics Fund............................ 10,288 1,406,780
Framlington Russia Investment Fund................. 9,721 68,047
Gaz Auto Plant Preferred........................... 10,000 426,866
Gorkovsky Auto Plant............................... 5,400 388,800
Kirowsky Shinniy................................... 6,000 94,320
Kirowsky Tire...................................... 5,000 325,000
Krasny Oktyabr (RED October) RDC................... 3 90,000
Lukoil Holding Co. ADR............................. 53,000 1,771,774
Mosenergo ADR 144A ................................ 30,000 149,286
Mosenergo ADR...................................... 32,100 159,736
Rostelcom Preferred................................ 172,000 190,920
Rostelecom......................................... 60,000 135,000
</TABLE>
86
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
RUSSIA - (CONTINUED)
Rostovenergo....................................... 265,683 $ 20,600
Rostovenergo Preferred............................. 1,450,000 64,941
SUN Brewing Limited................................ 25,000 318,750
Sberbank of Russia................................. 3,700 353,405
Surguntneftegaz Preferred ADR...................... 9,200,000 331,200
Surgutneftegaz Preferred ADR....................... 50,000 200,000
Trading House Tsum................................. 500,000 87,500
Unified Energy Systems............................. 6,300,000 814,590
Unified Energy Systems GDR......................... 13,500 177,918
Unified Energy Systems S Shares GDR................ 15,000 197,687
Vimpel-Communications ADR.......................... 12,800 572,800
Yuganskneftegaz.................................... 10,000 15,000
-------------
8,937,325
-------------
SOUTH AFRICA - 5.15%
Amalgamated Banks of South Africa.................. 271,115 1,703,099
Anglo American Corp. of South Africa, Ltd.......... 25,200 855,688
Anglo American Platinum Corp. Ltd.................. 54,800 600,102
Anglogold Ltd...................................... 19,017 771,658
Barlow Ltd......................................... 1,100 5,836
Bidvest Group Ltd.................................. 87,000 668,379
De Beers Centenary AG.............................. 25,433 449,935
Dimension Data Holdings Ltd........................ 230,200 1,250,662
FirstRand Ltd...................................... 1,147,500 1,772,878
Investec Bank Ltd.................................. 18,600 726,316
Liberty Life Association of Africa Ltd............. 81,008 1,589,902
Metro Cash & Carry Ltd. ........................... 852,000 545,338
Nampak Ltd. ....................................... 210,000 499,151
NBS Boland Group Ltd............................... 423,200 553,250
Nedcor Ltd......................................... 114,665 2,472,403
Persetel Q Data Holdings Ltd....................... 140,200 1,261,562
Pick 'n Pay Stores Ltd............................. 253,300 309,637
Pick 'n Pay Stores Ltd. N Shares................... 267,100 285,693
Primedia Ltd., N Shares............................ 88,800 586,472
Sasol Ltd.......................................... 140,412 818,871
South African Breweries Ltd........................ 101,100 2,094,092
Standard Bank Investment Corp. Ltd................. 214,400 920,937
-------------
20,741,861
-------------
SWITZERLAND - 0.38%
Compagnie Financiere Richmont AG Depository........ 120,300 1,544,088
-------------
TAIWAN - 0.12%
Asia Cement Corp................................... 3,300 3,073
Cathay Life Insurance Co........................... 19,000 58,061
Compeq Manufacturing Co., Ltd. .................... 2,400 12,782
Hung Poo Real Estate Development Corp. ............ 12,500 11,350
</TABLE>
87
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------- -------------
<S> <C> <C>
TAIWAN - (CONTINUED)
Kang Na Hsiung Enterprise......................... 7,500 $ 9,058
Siliconware Precision Industries Co............... 8,280 12,025
Taiwan Fund, Inc.................................. 250,000 312,844
Taiwan Semiconductor Manufacturing Co. ........... 31,050 64,159
-------------
483,352
-------------
THAILAND - 1.55%
Advanced Info Service PLC......................... 55,800 237,447
BEC World Public Co. Ltd. (Frgn.)................. 260,000 989,598
Bangkok Bank PLC.................................. 115,000 141,371
Bangkok Expressway PLC (b) ....................... 426,000 171,206
Delta Electronics (Thailand) PLC.................. 120,000 680,851
Electricity Generating PLC........................ 405,200 627,437
Grammy Entertainment PLC (Frgn.).................. 43,000 99,622
Hana Microelectronics Public Co., Ltd............. 50,000 127,660
KCE Electronics PLC (Frgn.)....................... 62,300 235,650
Lanna Lignite PLC................................. 58,100 39,832
PTT Exploration & Production PLC (b) ............. 151,400 1,145,343
Ruam Pattana Fund II.............................. 15,000,000 1,312,057
Saha-Union PLC.................................... 290,500 176,841
Siam Makro PLC (Frgn.)............................ 190,000 260,520
-------------
6,245,435
-------------
TURKEY - 2.85%
Adana Cimento Sanayii, Class A.................... 6,164,000 229,068
Akbank T.A.S...................................... 39,950,000 1,289,677
Aksigorta A.S..................................... 4,500,000 291,385
Arcelik A.S....................................... 6,425,000 301,473
Carsi Buyuk Magazacilik A.S. ..................... 5,135,000 510,801
Efes Sinai Yatrim Holding A.S. ................... 1,700,000 344,595
Ege Biracilik Ve Malt Sanayi A.S.................. 3,200,000 378,378
Enka Holding Yatirim A.S.......................... 921,500 484,272
Guney Biracilik ve Malt Sanayii A.S............... 1,110,000 108,333
Haci Omer Sabanci Holding A.S..................... 19,700,000 1,220,158
Koc Holding A.S. ................................. 3,667,000 715,781
Migros Turk T.A.S. ............................... 410,000 400,150
Netas-Northern Elektrik Telekomunikasyon A.S.
(b).............................................. 1,780,000 474,399
Tofas Turk Otomobil Fabrikasi A.S................. 12,000,000 506,757
Turk Siemens Kablo Ve Elektrik Sanayii A.S. ...... 4,118,000 247,327
Turk Sise Ve Cam Fabrikalari A.S.................. 24,947,500 824,092
Turkiye Garanti Bankasi A.S. (b).................. 23,815,776 1,095,132
Turkiye Is Bankasi Class C........................ 35,250,000 1,422,438
Yapi Kredi Bankasi................................ 10,730,570 273,903
Yapi Ve Kredi Bankasi A.S......................... 13,583,000 346,713
-------------
11,464,832
-------------
</TABLE>
88
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BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
-------------- -------------
<S> <C> <C>
UKRAINE - 0.10%
Ukraine Investment Fund (b)...................... 50,000 $ 400,000
-------------
UNITED STATES - 0.57%
First NIS Regional Fund.......................... 13,000 156,000
Societe Generale Arab Fund....................... 16,000 1,440,000
Societe Generale Ladenburg Thalmann.............. 10,000 700,000
-------------
2,296,000
-------------
VENEZUELA - 0.01%
Ceramica Carabobo, Class B ADR................... 17,794 37,019
-------------
TOTAL EQUITIES (COST $381,115,782)............... 304,031,485
-------------
INVESTMENT COMPANY - 11.33%
Brinson Supplementary Trust U.S. Cash Management
Prime Fund (COST $45,651,465)................... 45,651,465 45,651,465
-------------
<CAPTION>
FACE
VALUE
--------------
<S> <C> <C>
BONDS - 5.62%
CONVERTIBLE BOND - 0.46%
CHINA - 0.25%
Qingling Motors Co. Series 144A
3.500%, due 01/22/02 (c)........................ $ 1,925,000 1,001,000
-------------
POLAND - 0.21%
Elektrim S.A. Regis 2.000%, due 05/30/04......... PLN 1,250,000 829,294
-------------
1,830,294
-------------
NON-U.S. GOVERNMENT BOND - 5.16%
POLAND - 2.25%
Government of Poland, 12.000%, due 02/12/03...... PLN 37,000,000 9,072,268
-------------
RUSSIA - 2.91%
Gargill Russian GKO 17.750%, due 09/23/98 ....... $ 2,219,835 2,141,588
Russia GKO 0%, due 05/19/99...................... RUB 41,914,000 4,969,320
Russia GKO Series 1114 0%, due 11/18/98 ......... 33,270,000 4,606,986
-------------
11,717,894
-------------
20,790,162
-------------
TOTAL BONDS (COST $21,758,296)................... 22,620,456
-------------
</TABLE>
89
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
VALUE VALUE
------------- -------------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 10.63%
U.S. COMMERCIAL PAPER - 10.63%
Hilton Hotels Corp. 5.720%, due 07/15/98......... $ 3,500,000 $ 3,492,214
Mediaone Group Funding CP 5.750%, due 08/14/98... 3,000,000 2,978,917
Raytheon Co. 5.700%, due 07/01/98................ 3,000,000 3,000,000
Raytheon Co. 5.700%, due 07/09/98................ 4,000,000 3,994,933
Texas Utilities CP 6.150%, due 07/17/98.......... 10,030,000 10,002,585
Texas Utilities Co. 5.730%, due 08/31/98......... 6,000,000 5,941,745
Textron Inc. 5.720%, due 08/17/98................ 5,500,000 5,458,927
Union Pacific Co. 5.750%, due 08/31/98........... 3,000,000 7,923,690
-------------
TOTAL SHORT TERM INVESTMENTS (COST $42,791,571).. 42,793,011
-------------
TOTAL INVESTMENTS (COST $491,317,114) - 103.06%
(A)............................................. 415,096,417
-------------
LIABILITIES, LESS CASH AND OTHER ASSETS -
(3.06%)........................................ (12,325,612)
-------------
NET ASSETS - 100%................................ $402,770,805
=============
</TABLE>
See accompanying notes to schedule of investments.
90
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $491,317,114; and net
unrealized depreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation.............. $ 14,983,536
Gross unrealized depreciation.............. (91,204,233)
------------
Net unrealized depreciation............ $(76,220,697)
============
</TABLE>
(b) Non-income producing security.
(c) Denominated in U.S. Dollars.
ADR: American Depositary Receipt
GDR: Global Depositary Receipt
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 June 30,
1998 the value of these securities amounted to $262,210 or 0.07% of net
assets.
EQUITY SWAP CONTRACTS
The Brinson Emerging Markets Equity Fund has entered into equity swap contracts
as of June 30, 1998. These Swaps serve to reduce the Fund's exposure to short-
term investments and increase the Fund's exposure to various countries. The
following reflects the open swap positions as of June 30, 1998, aggregated by
country exposure.
<TABLE>
<CAPTION>
NET
NOTIONAL AMOUNTS MATURITY DATES COUNTRY UNREALIZED LOSS EXPOSURE
- ---------------- ------------------- -------- --------------- --------
<S> <C> <C> <C> <C>
3,437,435 08/17/98 Hungary (319,052) 0.78%
15,000,000 10/15/98 - 05/14/99 Korea (5,044,074) 2.47%
13,800,000 08/17/98 - 04/15/99 Malaysia (7,082,731) 1.67%
898,862 09/24/98 Mexico (147,260) 0.19%
300,626 08/17/98 Pakistan (175,749) 0.03%
10,388,287 08/17/98 - 04/15/99 Poland (1,065,364) 2.31%
19,112,261 08/15/98 - 04/15/99 Taiwan (3,349,049) 3.91%
6,900,000 10/15/98 - 11/16/98 Thailand (4,086,566) 0.70%
11,460,570 03/15/99 - 05/14/99 Turkey (779,509) 2.65%
------------ ------------- -------
$81,298,041 $(22,049,354) 14.71%
============ ============= =======
</TABLE>
See accompanying notes to financial statements.
91
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value:
Unaffiliated issuers (Cost $445,665,649)......................... $369,444,952
Affiliated issuers (Cost $45,651,465)............................ 45,651,465
Cash.............................................................. 10,342,166
Foreign currency, at value (Cost $6,454,406)...................... 6,369,022
Receivables:
Dividends........................................................ 1,270,983
Interest......................................................... 556,359
Investment Securities Sold....................................... 12,890,940
Net unrealized appreciation on equity swap contracts............. 357,273
Other assets...................................................... 193,290
------------
TOTAL ASSETS................................................... 447,076,450
------------
LIABILITIES:
Payables:
Investment securities purchased.................................. 21,821,375
Net unrealized depreciation on equity swap contracts............. 22,406,627
Accrued expenses ................................................ 77,643
------------
TOTAL LIABILITIES ............................................. 44,305,645
------------
NET ASSETS:
Applicable to 49,819,878 shares; no par value, unlimited shares
authorized....................................................... $402,770,805
============
Net asset value per share ($402,770,805 / 49,819,878 shares)...... $ 8.0845
============
Maximum offering price per share (net asset value, plus 1.50% of
net asset value, or 1.50% of offering price)..................... $ 8.2058
============
Redemption price per share (net asset value, less 1.50% of net as-
set value, or 1.52% of redemption value)......................... $ 7.9632
============
NET ASSETS CONSIST OF:
Paid in capital................................................... $534,155,588
Accumulated net investment income................................. 28,043,678
Accumulated net realized loss..................................... (60,667,391)
Net unrealized depreciation....................................... (98,761,070)
------------
NET ASSETS..................................................... $402,770,805
============
</TABLE>
See accompanying notes to financial statements.
92
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $176,437 for foreign taxes withheld)............. $ 6,078,663
Interest (net of $28,707 for foreign taxes withheld)............... 9,459,470
-------------
TOTAL INCOME.................................................... 15,538,133
-------------
EXPENSES:
Custodian.......................................................... 625,802
Administration..................................................... 182,237
Professional....................................................... 42,112
Other.............................................................. 7,174
-------------
TOTAL EXPENSES.................................................. 857,325
-------------
NET INVESTMENT INCOME........................................... 14,680,808
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments....................................................... (49,745,191)
Equity swap contracts............................................. 150,705
Foreign currency transactions..................................... 793,585
-------------
Net realized loss................................................ (48,800,901)
-------------
Change in net unrealized appreciation or depreciation on:
Investments, equity swap contracts and foreign currency........... (14,650,774)
Translation of other assets and liabilities denominated in foreign
currency......................................................... (79,582)
-------------
Change in net unrealized appreciation or depreciation............ (14,730,356)
-------------
Net realized and unrealized loss................................... (63,531,257)
-------------
Net decrease in net assets resulting from operations............... $(48,850,449)
=============
</TABLE>
See accompanying notes to financial statements.
93
<PAGE>
BRINSON EMERGING MARKETS EQUITY FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income.......................... $ 14,680,808 $ 8,365,844
Net realized loss.............................. (48,800,901) (9,483,262)
Change in net unrealized appreciation or
depreciation.................................. (14,730,356) (85,779,669)
------------ ------------
Net decrease in net assets resulting from
operations.................................... (48,850,449) (86,897,087)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold.................................... 79,485,008 366,188,354
Shares redeemed................................ (79,737,092) (6,756,104)
------------ ------------
Net increase (decrease) in net assets resulting
from capital share transactions (a)........... (252,084) 359,432,250
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..... (49,102,533) 272,535,163
------------ ------------
NET ASSETS:
Beginning of period............................ 451,873,338 179,338,175
------------ ------------
End of period (including accumulated net
investment
income of $28,043,678 and $13,362,870,
respectively)................................. $402,770,805 $451,873,338
============ ============
(a)A summary of capital share transactions follows:
SHARES SHARES
------------ ------------
Shares sold................................... 8,937,488 32,314,985
Shares redeemed............................... (8,429,953) (608,644)
------------ ------------
Net increase in shares outstanding........... 507,535 31,706,341
============ ============
</TABLE>
See accompanying notes to financial statements.
94
<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>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1998 DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1997 1996 1995*
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.1635 $10.1862 $ 9.3164 $10.0000
-------- -------- -------- --------
Income from investment
operations:
Net investment
income................ 0.2919 0.2561*** 0.1810 0.1028
Net realized and
unrealized gain
(loss)................ (1.3709) (1.2788) 0.6888 (0.7864)
-------- -------- -------- --------
Total income (loss)
from investment
operations.......... (1.0790) (1.0227) 0.8698 (0.6836)
-------- -------- -------- --------
Net asset value, end of
period................. $ 8.0845 $ 9.1635 $10.1862 $ 9.3164
======== ======== ======== ========
Total return (non-
annualized)............ (11.77)% (10.04)% 9.34% (6.84)%
Ratios/Supplemental data
Net assets, end of
period (in 000s)...... $402,771 $451,873 $179,338 $ 90,129
Ratio of expenses to
average net assets.... 0.35%** 0.28% 0.46% 0.50%**
Ratio of net investment
income to average net
assets................ 6.05%** 2.44% 3.42% 3.86%**
Portfolio turnover
rate.................. 59% 62% 25% 2%
Average commission rate
paid per share........ $ 0.0001 $ 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.
95
<PAGE>
BRINSON EMERGING MARKET 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 its performance inception on July 31, 1995, the first month-end after
the Fund became fully invested, the Brinson Emerging Markets Debt Fund has
earned an annualized return of 28.14%, compared to the 22.73% return of its
benchmark. For the first half of the year, the Fund returned 0.83% versus -
1.08% for its benchmark, J.P. Morgan's Emerging Markets Bond Index Plus
(EMBI+). The EMBI+ comprises 61% Brady bonds, 8% loans, 24% Eurobonds and 7%
domestic issues as of June 1998.
The underperformance of the EMBI+ relative to equivalent duration U.S.
Treasury securities year-to-date, - 5.39%, was due to principal losses
resulting from credit spreads widening approximately 1.31%. Both market and
country allocation strategies and security selection improved Fund results,
the most notable of which was an overweight in local currency Polish bonds.
In April, South Korea entered the EMBI+ after it issued 4 billion dollars
worth of eurobonds; part of the proceeds from the issue was used to support
Korea's debt ridden banking system. Until recently, Korea's A1 rating
precluded its entry into the EMBI+. U.S. interest rates declined
significantly over the first half of the year; our interest rate duration
strategy of 1.0 times the index did not add or detract from our performance.
Our current duration strategy (1.0 times the index) reflects a benign view
of U.S. interest rates. Notable country strategies are overweights in
Russia, Croatia and Colombia, and underweights in Brazil, Mexico and
Venezuela.
96
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR ANNUALIZED
ENDED ENDED 06/30/95*
6/30/98 6/30/98 TO 6/30/98
- --------------------------------------------------------------------
<S> <C> <C> <C>
Brinson Emerging Markets Debt Fund/(1)/ 0.83% 6.81% 26.79%
- --------------------------------------------------------------------
Brinson Emerging Markets Debt Fund/(2)/ 0.33% 6.28% 26.44%
- --------------------------------------------------------------------
JP Morgan EMBI+ -1.08% 1.39% 22.06%
- --------------------------------------------------------------------
</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+
[LINE GRAPH APPEARS HERE]
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.
97
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- -------------
<S> <C> <C>
BONDS - 94.74%
INTERNATIONAL DOLLAR BONDS - 90.63%
ARGENTINA - 22.57%
Argentina - Global Bond, 9.750%, due 09/19/27... $ 22,500,000 $ 20,846,250
Argentina - Par Series L, 6.625%, due 03/31/05.. 42,465,000 37,539,060
Argentina - Par Series L, 5.750%, due 03/31/23.. 16,250,000 12,075,781
Argentina - FRN, 8.726%, due 04/10/05........... 30,050,000 30,050,000
-------------
100,511,091
BRAZIL - 10.97%
Brazil - C PIK Bond, 8.000%, due 04/15/04....... 21,289,854 15,674,655
Brazil - DCB L, FRN, 6.688%, due 04/15/12....... 9,750,000 6,794,483
Brazil - Global Bond, 10.125%, due 05/15/27..... 9,326,000 8,029,686
Brazil - IDU, Series A, FRN, 6.875%, due
01/01/01....................................... 5,250,000 4,982,250
Brazil - New Money Bond, FRN, 6.688%, due
4/15/09........................................ 3,250,000 2,478,125
Brazil - EI, Series L, FRN, 6.625%, due
04/15/06....................................... 2,910,000 2,393,475
Brazil - Global Bond 9.375%, due 04/07/08....... 9,500,000 8,516,750
-------------
48,869,424
BULGARIA - 1.65%
Bulgaria--FLIRB, Series A, FRN
2.250%, due 07/28/12........................... 12,000,000 7,365,000
-------------
COLUMBIA - 3.98%
Columbia - Global Bond 8.625%, due 04/01/08..... 9,000,000 8,536,500
Columbia - 144A 7.270%, due 06/15/03............ 9,900,000 9,194,625
-------------
17,731,125
CROATIA - 5.13%
Croatia - Series A, 6.500%, due 07/30/10........ 26,500,000 22,856,250
-------------
GUATEMALA - 3.28%
Guatemala - 8.500%, due 08/03/07................ 15,000,000 14,596,695
-------------
HONG KONG - 0.64%
Hong Kong - Silver Grant International Indus-
tries, 1.000%, due 08/19/04.................... 5,400,000 2,835,000
-------------
KOREA - 2.13%
Korea - Development Bank Global Bond, 8.090%,
due 10/06/04................................... 900,000 868,331
Korea - Global Bond 8.875%, due 04/15/08........ 9,500,000 8,621,402
-------------
9,489,733
MEXICO - 8.92%
Mexico - Global Bond, Series B, 6.250%, due
12/31/19....................................... 14,000,000 11,593,750
Mexico - Monterray Power S.A.,144A 9.625%, due
11/15/09....................................... 11,300,000 10,226,500
Mexico - Bufete Industries, 11.375%, due
7/15/99........................................ 1,800,000 1,416,078
Mexico - Petacal Trust, Regs, 10.160%, due
12/23/09....................................... 6,200,000 6,138,000
Mexico - Conproca S.A., Series 144A, 12.000%,
due 06/16/10................................... 10,260,000 10,362,600
-------------
39,736,928
MOROCCO - 4.59%
Morocco - Loan Tranche A FRN 6.563%, due
01/01/09....................................... 24,000,000 20,460,000
-------------
PHILIPPINES - 1.84%
Philippines - Global Bond, 8.875%, due
04/15/08....................................... 8,600,000 8,213,000
-------------
</TABLE>
98
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
--------------- -------------
<S> <C> <C>
RUSSIA - 13.80%
Russia - Interest Notes, Series US FRN 6.625%,
due 12/15/15% $ 48,129,046 $ 26,771,782
Russia - Ministry of Finance Reg S 10.000%, due
06/26/07...................................... 45,850,000 34,662,600
-------------
61,434,382
TUNISIA - 2.01%
Banque Centrale de Tunisie, 8.250%, due
09/19/27...................................... 9,500,000 8,942,797
-------------
TURKEY - 2.84%
Sultan Ltd. - FRN, 8.500%, due 06/11/99........ 13,000,000 12,642,500
-------------
VENEZUELA - 6.28%
Venezuela - Global, 9.250%, due 09/15/27....... 24,776,000 19,201,400
Venezuela - DCB Series DL, FRN 6.625%, due
12/18/07...................................... 7,916,667 6,471,875
Venezuela - FLIRB Series B FRN 6.625%, due
03/31/07...................................... 2,785,714 2,305,179
-------------
27,978,454
-------------
403,662,379
-------------
STRUCTURED NOTE - 0.93%
U.S. TREASURY BILL LINKED NOTE
ING Bank N.V. (London) 144A
0.000%, due 08/14/98 (b)...................... 4,000,000 4,120,000
-------------
NON-U.S. GOVERNMENT OBLIGATIONS - 3.18%
GOVERNMENT OF POLAND
12.000%, due 02/12/03......................... PLN 11,000,000 2,697,161
12.000%, due 06/12/03......................... 24,000,000 5,901,921
12.000%, due 06/12/01......................... 22,500,000 5,568,540
-------------
14,167,622
-------------
TOTAL BONDS (COST $437,619,641)................ 421,950,001
-------------
SHORT TERM INVESTMENTS - 2.09%
TREASURY OBLIGATIONS - 0.22%
U.S. Treasury Bill 0.000%, due 11/27/98........ $ 1,000,000 979,223
-------------
COMMERCIAL PAPER - 1.87%
Hilton Hotels Corp., 5.720%, due 07/15/98...... 1,500,000 1,496,663
Raytheon Co.
5.700%, due 07/01/98.......................... 1,000,000 1,000,000
5.700%, due 07/09/98.......................... 2,000,000 1,997,467
Union Pacific Corp., 5.740%, due 08/31/98...... 3,881,000 3,843,930
-------------
TOTAL COMMERCIAL PAPER......................... 8,338,060
-------------
TOTAL SHORT TERM INVESTMENTS (COST
$8,338,104)................................... 9,317,283
-------------
INVESTMENT COMPANY - 3.22%
Brinson Supplementary Trust U.S. Cash Manage-
ment Prime Fund (COST $14,322,201)............ 14,322,201 14,322,201
-------------
TOTAL INVESTMENTS (COST $460,279,946) -
100.05%...................................... 445,589,485
-------------
LIABILITIES, LESS CASH AND OTHER ASSETS -
(0.05)%...................................... (218,502)
-------------
NET ASSETS - 100%.............................. $445,370,983
=============
</TABLE>
See accompanying notes to schedule of investments.
99
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $460,279,946; and net
unrealized appreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation........... $ 8,786,547
Gross unrealized depreciation........... (23,477,008)
-------------
Net unrealized depreciation......... $(14,690,461)
=============
</TABLE>
(b) No stated interest rate
FLIRB:Front Loaded Interest Reduction Bond
FRN:Floating rate note - The rate disclosed is that in effect at June 30, 1998
DCB:Debt Conversion bond
PLN:Polish Zloty
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 June 30,
1998, the value of these securities amounted to $24,709,100 or 5.55% of
net assets.
FUTURES CONTRACTS
The Brinson Emerging Markets Debt Fund had the following open futures contracts
as of June 30, 1998:
<TABLE>
<CAPTION>
SETTLEMENT COST/ CURRENT UNREALIZED
DATE PROCEEDS VALUE GAIN/(LOSS)
-------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST RATE FUTURES BUY
CONTRACTS
10 year U.S. Treasury
Notes, 342 contracts.... September 1998 $38,579,310 $38,934,563 $(355,253)
INTEREST RATE FUTURES
SELL CONTRACTS
10 year U.S. Treasury
Bond, 270 contracts..... September 1998 32,612,963 33,370,313 757,350
---------
Total................... $402,097
=========
</TABLE>
The market value of cash and investments pledged to cover margin requirements
for the open futures positions at June 30, 1998 were $75,938 and $979,223,
respectively.
See accompanying notes to financial statements.
100
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value:
Unaffiliated issuers (Cost $445,957,745).................... $ 431,267,284
Affiliated issuers (Cost $14,322,201)....................... 14,322,201
Receivables:
Interest.................................................... 9,993,096
Investment securities sold.................................. 720,376
Variation margin............................................ 75,938
-------------
TOTAL ASSETS.............................................. 456,378,895
-------------
LIABILITIES:
Payables:
Due to custodian bank....................................... 10,824,625
Variation margin............................................ 64,125
Accrued expenses............................................ 119,162
-------------
TOTAL LIABILITIES......................................... 11,007,912
-------------
NET ASSETS:
Applicable to 21,836,518 shares; no par value, unlimited
shares authorized........................................... $445,370,983
=============
Net asset value and redemption price per share ($445,370,983
/ 21,836,518 shares)........................................ $ 20.3957
=============
Maximum offering price per share (net assets value, plus
0.50% of net asset value or 0.50% of offering price)........ $ 20.4977
=============
NET ASSETS CONSIST OF:
Paid in capital.............................................. $318,677,536
Accumulated net investment income............................ 72,731,624
Accumulated net realized gain................................ 68,251,830
Net unrealized depreciation.................................. (14,290,007)
-------------
NET ASSETS................................................ $445,370,983
=============
</TABLE>
101
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest....................................................... $ 22,911,990
-------------
TOTAL INCOME................................................ 22,911,990
-------------
EXPENSES:
Administration................................................. 171,241
Professional................................................... 42,255
Custodian...................................................... 43,381
Other.......................................................... 6,141
-------------
TOTAL EXPENSES.............................................. 263,018
-------------
NET INVESTMENT INCOME....................................... 22,648,972
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................... 10,276,472
Futures contracts............................................. 1,965,767
Foreign currency transactions................................. (63,534)
-------------
Net realized gain............................................ 12,178,705
-------------
Change in net unrealized appreciation or depreciation on:
Investments................................................... (31,497,071)
Futures contracts............................................. (71,438)
Translation of other assets and liabilities denominated in
foreign currency............................................. 6,987
-------------
Change in net unrealized appreciation or depreciation........ (31,561,522)
-------------
Net realized and unrealized loss............................... (19,382,817)
-------------
Net increase in net assets resulting from operations........... $ 3,266,155
=============
</TABLE>
See accompanying notes to financial statements.
102
<PAGE>
BRINSON EMERGING MARKETS DEBT FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income........................ $ 22,648,972 $ 25,868,174
Net realized gain............................ 12,178,705 37,060,810
Change in net unrealized appreciation or
depreciation................................ (31,561,522) (12,971,139)
------------- -------------
Net increase in net assets resulting from op-
erations.................................... 3,266,155 49,957,845
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold ................................. 55,386,300 222,421,261
Shares redeemed.............................. (41,366,519) (66,864,627)
------------- -------------
Net increase in net assets resulting from
capital share transactions (a).............. 14,019,781 155,556,634
------------- -------------
TOTAL INCREASE IN NET ASSETS.............. 17,285,936 205,514,479
------------- -------------
NET ASSETS:
Beginning of period.......................... 428,085,047 222,570,568
------------- -------------
End of period (including accumulated net
investment income of $72,731,624 and
$50,082,652, respectively).................. $445,370,983 $428,085,047
============= =============
(a)A summary of capital share transactions
follows:
SHARES SHARES
------------- -------------
Shares sold.................................. 2,645,191 11,490,582
Shares redeemed.............................. (1,971,927) (3,511,554)
------------- -------------
Net increase in shares outstanding.......... 673,264 7,979,028
============= =============
</TABLE>
103
<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>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1998 ---------------------- PERIOD ENDED
(UNAUDITED) 1997 1996 DECEMBER 31, 1995*
------------- --------- --------- ------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period... $20.2278 $16.8816 $11.6401 $10.0000
--------- --------- --------- ---------
Income from investment
operations:
Net investment in-
come................. 0.9642 1.7757*** 1.3882 0.4485
Net realized and
unrealized
gain(loss)........... (0.7963) 1.5705 3.8533 1.1916
--------- --------- --------- ---------
Total income from
investment
operations.......... 0.1679 3.3462 5.2415 1.6401
--------- --------- --------- ---------
Net asset value, end of
period................ $20.3957 $20.2278 $16.8816 $11.6401
========= ========= ========= =========
Total return
(non-annualized)...... 0.83% 19.82% 45.03% 16.40%
Ratios/Supplemental
data
Net assets, end of pe-
riod (in 000s)....... $445,371 $428,085 $222,571 $119,654
Ratio of expenses to
average net assets... 0.12%** 0.13% 0.18% 0.50%**
Ratio of net
investment income to
average net assets... 9.92%** 9.83% 11.89% 12.95%**
Portfolio turnover
rate................. 56% 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.
104
<PAGE>
BRINSON HIGH YIELD FUND
- --------------------------------------------------------------------------------
Brinson Partners is an active manager of high yield fixed income client
portfolios. We believe successful high yield investing involves capturing the
market's high total return potential while minimizing losses due to credit
deterioration or default. We believe that our research-intensive effort and our
focus on long-term performance will result in superior risk-adjusted terms. At
the forefront of our philosophy is a focus on diversification and preservation
of principal.
The Brinson High Yield Fund has provided an annualized total return of 11.84%
since inception on April 30, 1995, versus 12.41% for its benchmark, the First
Boston High Yield Bond Index. This performance was achieved at an annualized
volatility of 3.98% versus 2.64% for the index. The Fund significantly
underperformed its benchmark in the first half of the year, registering a 2.10%
gain versus the 4.31% return of the index. The average yield to worst of the
index, has increased modestly from 9.58% to 9.66% in the first half. Despite
this the average spread of the index has widened 31 basis points to 417 basis
points because of the relative performance versus Treasuries. Although the high
yield market has benefited from modest economic growth and rising corporate
earnings, new issue supply has overwhelmed the demand for paper and default
rates have begun to gradually increase, influenced largely by foreign issuers
of bonds.
During the first half of 1998 the middle segment has been the best performing
quality tier with a 4.93% total return. The upper tier lags modestly with a
4.34% total return, despite a very strong second quarter. The lower tier had a
1.97% loss in the first half. Quality tier weights had a neutral impact on
performance. The Fund has been increasing its weight in the upper tier bonds.
All industry groups had positive returns during the first half. The best
performers included restaurants, gaming, cable TV and airlines. Our Fund has no
exposure to restaurants, gaming or airlines, which together constitute 5.39% of
the index. The worst performers were energy, packaging and utilities. Our
underweights of each of these industries benefited performance and the net
attribution from sector weights was neutral.
The Fund owns 60 different issues in an effort to achieve diversification by
industry, quality, security type, maturity and coupon. During the first half of
1998 we added 23 new credits to the Fund of which 70% were new issues. In
excess of $100 billion of new issues have accessed the market in the first
half. Credit selection remains the primary driver of relative performance and
the Fund experienced several deteriorating credits which severly impacted
performance. The average yield of the Fund is 10.21% and the average maturity
is 8.08 years.
105
<PAGE>
BRINSON HIGH YIELD FUND
- --------------------------------------------------------------------------------
TOTAL RETURN
<TABLE>
<CAPTION>
6 MONTHS 1 YEAR 3 YEARS ANNUALIZED
ENDED ENDED ENDED 04/30/95*
6/30/98 6/30/98 6/30/98 TO 6/30/98
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Brinson High Yield Fund 2.10% 8.73% 12.33% 11.84%
- ---------------------------------------------------------------------------
First Boston High Yield Bond Index 4.31% 10.98% 11.86% 12.41%
- ---------------------------------------------------------------------------
</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
[LINE GRAPH APPEARS HERE]
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.
106
<PAGE>
BRINSON HIGH YIELD FUND
- --------------------------------------------------------------------------------
INDUSTRY DIVERSIFICATION
As a Percent of Net Assets
As of June 30, 1998
<TABLE>
<S> <C>
U.S. BONDS
Corporate Bonds
Appliances & Household
Durables...................... 2.26%
Auto........................... 1.83
Broadcasting & Public Service.. 3.55
Business Services.............. 2.97
Construction................... 2.32
Consumer Goods................. 7.41
Electronics and Electric
Components.................... 4.01
Energy......................... 1.56
Financial...................... 1.60
Food & House Products.......... 3.23
Health......................... 3.23
Industrial..................... 15.89
Machinery & Engineering........ 1.57
Multi-Industry................. 1.57
Real Estate.................... 0.79
Recreation..................... 1.08
Retail......................... 4.98
Services....................... 1.56
Telecommunications............. 10.74
Utilities...................... 1.66
Wholesale & International
Trade......................... 1.53
------
Total U.S. Corporate Bonds.... 75.34
------
International Dollar Bonds..... 14.08
------
Total U.S. Bonds.............. 89.42
------
U.S. EQUITIES
Common Stock................... 0.41
Preferred Stock................ 7.91
Warrants....................... 0.11
------
Total U.S. Equities........... 8.43
------
SHORT-TERM INVESTMENTS......... 0.51
------
TOTAL INVESTMENTS.............. 98.36
CASH AND OTHER ASSETS,
LESS LIABILITIES.............. 1.64
------
NET ASSETS.................... 100.00%
======
</TABLE>
107
<PAGE>
BRINSON HIGH YIELD FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
------------ -------------
<S> <C> <C>
U.S. BONDS - 89.42%
U.S. CORPORATE BONDS - 75.34%
21st Century Telecom Group 144A 0.000%,
due 02/15/08 (h)................................ $6,000,000 $ 3,390,000
Advanced Lighting Technologies 144A
8.000%, due 03/15/08............................ 3,500,000 3,482,500
American Business Information Services 144A
9.500%, due 06/15/08............................ 3,000,000 3,015,000
BTI Telecommunications Corp.,10.500%, due
09/15/07........................................ 3,000,000 2,940,000
Boyds Collection Ltd. 144A 9.000%, due 05/15/08.. 3,000,000 2,992,500
Burke Industries Inc., 144A, 10.000%, due
08/15/07........................................ 3,000,000 3,052,500
California Energy Co., Inc., 9.500%, due
09/15/06........................................ 3,000,000 3,236,250
Century Communications Corp. 0.000%, due 01/15/08
(b)............................................. 8,000,000 3,660,000
Coinmach Corp., Series B, 11.750%, due 11/15/05.. 3,000,000 3,345,000
Communications Instruments, Series B,
10.000%, due 09/15/04........................... 3,000,000 3,060,000
Corporate Express, Inc., 4.500%, due 07/01/00.... 3,000,000 2,773,410
DVI Inc., 9.875%, due 02/01/04................... 3,000,000 3,127,500
Delco Remy International Inc., 8.625%, due
12/15/07........................................ 3,500,000 3,561,250
Details Holding Corp., Series B, 0.000%, due
11/15/07 (c).................................... 7,000,000 4,305,000
Fortress Group, Inc., 13.750%, due 05/15/03...... 4,000,000 4,520,000
Fresh Foods Inc. 144A 10.750%, due 06/01/06...... 3,000,000 3,000,000
Fundy Cable Ltd., 11.000%, due 11/15/05.......... 3,000,000 3,315,000
Globalstar LP, 11.375%, due 02/15/04............. 3,500,000 3,386,250
Hadco Corp. 144A 9.500%, due 06/15/08............ 3,500,000 3,500,000
Hines Horticulture Inc., Series B, 11.750%, due
10/15/05........................................ 3,000,000 3,300,000
Hudson Respiratory Care 144A 9.125%, due
04/15/08........................................ 3,500,000 3,325,000
Icon Fitness Corp., 0.000%, due 11/15/06 (d)..... 7,000,000 2,100,000
J.B. Poindexter & Co., 12.500%, due 05/15/04..... 3,000,000 2,985,000
James Cable Partners LP, Series B 10.750%, due
08/15/04........................................ 3,000,000 3,195,000
KMC Telecom Holdings, Inc. Units 144A 0.000%,
due 02/15/08 (h)................................ 6,000,000 3,540,000
LES, Inc. 144A 9.250%, due 06/01/08.............. 1,500,000 1,537,500
Leslie's Poolmart, 10.375%, due 07/15/04......... 2,000,000 2,100,000
National Equipment Services, 144A, 10.000%,
due 11/30/04.................................... 3,000,000 3,030,000
Nextel Communications Inc.,144A Step, 0.000%,
due 09/15/07 (e)................................ 6,500,000 4,403,750
Nuevo Energy Co. 144A 8.875%, due 06/01/08....... 3,000,000 3,037,500
OshKosh Truck Corp. 8.750%, due 03/01/08......... 3,000,000 3,030,000
Parker Drilling Corp., Snr-Nts Series B,
9.750%, due 11/15/06............................ 3,500,000 3,578,750
Packaged Ice, Inc. 144A 9.750%, due 02/01/05..... 4,000,000 4,030,000
Plastic Containers Inc., Series B, 10.000%, due
12/15/06........................................ 3,000,000 3,225,000
Premier Parks, Inc. 0.000%, due 04/01/08......... 5,000,000 3,325,000
Remington Product Co. LLC, Series B,
11.000%, due 05/15/06........................... 3,000,000 2,737,500
</TABLE>
108
<PAGE>
BRINSON HIGH YIELD FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
------------ -------------
<S> <C> <C>
U.S. CORPORATE BONDS - (CONTINUED)
Riverwood International Corp., 10.875%, due
04/01/08........................................ $3,000,000 $ 3,030,000
Spin Cycle, Inc. Units 144A 0.000%, due 05/01/05
(I)............................................. 4,500,000 3,172,500
Tultex Corp., 10.625%, due 03/15/05.............. 3,300,000 3,341,250
USN Communications, Inc., Series B 0.000%,
due 08/15/04 (j)................................ 4,000,000 2,960,000
Vialog, Inc. 12.750%, due 11/15/01............... 1,000,000 1,030,000
Victory Markets, Inc., 12.500%, due 03/15/00
(h)............................................. 2,000,000 40,000
Vintage Petroleum 9.000%, due 12/15/05........... 4,000,000 4,110,000
Werner Holdings Co., Series A 10.000%, due
11/15/07........................................ 3,000,000 3,120,000
William Carter Co., Series A, 10.375%, due
12/01/06........................................ 3,000,000 3,195,000
Wireless One, Inc., Step, 0.000%, due 08/01/06
(f)............................................. 5,000,000 450,000
Wright Medical Technology, Series D,
11.750%, due 07/01/00........................... 3,000,000 2,970,000
Young Broadcasting Corp., 9.000%, due 01/15/06... 3,000,000 3,157,500
-------------
146,718,410
-------------
INTERNATIONAL DOLLAR BONDS - 14.08%
Croatia - Series A, 6.500%, due 07/30/10......... 3,000,000 2,587,500
Fage Dairy Industries S.A., 9.000%, due
02/01/07........................................ 4,000,000 3,890,000
Global Crossing 9.625%, 144A, due 05/15/08....... 3,000,000 3,131,250
International Utility Structures 144A 10.750%,
due 02/01/08.................................... 3,000,000 3,060,000
Mexican United States Global Bond, 9.875%, due
01/15/07........................................ 3,500,000 3,627,750
Morocco - Loan Tranche A FRN, 6.563%, due
01/01/09........................................ 3,500,000 2,983,750
Royal Oak Mines Inc., Series B, 11.000%, due
08/15/06........................................ 3,000,000 2,550,000
Telesystems International Wireless, Series C
0.000%,
due 11/01/07 (g)................................ 5,000,000 2,962,500
Venezuela - DCB, Series DL, FRN, 6.625%, due
12/18/07........................................ 3,166,666 2,612,499
-------------
27,405,249
-------------
TOTAL U.S. BONDS (COST $181,180,038)............. 174,123,659
-------------
<CAPTION>
SHARES
------------
<S> <C> <C>
U.S. EQUITIES - 8.43%
CBS Radio, PIK Preferred, 11.375% (b)............ 31,584 3,750,600
CSC Holdings, Inc., Series M (b)................. 28,606 3,296,851
F.T.D., Class B, (b)............................. 81,250 812,500
Icon Health & Fitness Capital, Inc., Warrants
144A (b)........................................ 4,000 20,000
Nextel Communications, Inc., Warrants "98" (b)... 2,315 139
Nextlink Communications, Inc.,
PIK Convertible Preferred, 14.000% (b).......... 71,286 4,241,517
Pegasus Communications, Series A,
PIK Convertible Preferred, 12.750% (b).......... 3,579 4,026,375
Pegasus Communications, Warrants "07" (b)........ 3,000 97,500
Renaissance Cosmetics, Inc.
PIK Convertible Preferred, 14.000% (b).......... 7,618 76,180
</TABLE>
109
<PAGE>
BRINSON HIGH YIELD FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------------ -------------
<S> <C> <C>
U.S. EQUITIES - (CONTINUED)
Renaissance Cosmetics, Inc., Warrants "01" (b)... 4,000 $ 40
Renaissance Cosmetics, Inc., Warrants "06" (b)... 5,000 50
Vialog Corp., 144A, (b).......................... 1,000 40,000
Wright Medical Technology, Warrants "03" (b)..... 618 61,788
-------------
TOTAL U.S. EQUITIES (COST $18,352,752)........... 16,423,540
-------------
INVESTMENT COMPANY - 0.51%
Brinson Supplementary Trust U.S. Cash Management
Prime Fund (Cost $995,966)...................... 995,966 995,966
-------------
TOTAL INVESTMENTS - (COST $200,528,756) 98.36%
(A)............................................. 191,543,165
-------------
CASH AND OTHER OTHER ASSETS, LESS LIABILITIES -
1.64%.......................................... 3,192,381
-------------
NET ASSETS - 100%................................ $194,735,546
=============
</TABLE>
See accompanying notes to schedule of investments.
110
<PAGE>
BRINSON HIGH YIELD FUND SCHEDULE OF INVESTMENTS
- -------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
NOTES TO SCHEDULE OF INVESTMENTS
(a) Aggregate cost for federal income tax purposes was $200,528,756; and net
unrealized depreciation consisted of:
<TABLE>
<S> <C>
Gross unrealized appreciation........... $ 7,023,955
Gross unrealized depreciation........... (16,009,546)
-------------
Net unrealized depreciation......... $ (8,985,591)
=============
</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)Interest rate 0.000% until 02/15/03, then 12.250% to maturity
(i)Interest rate 0.000% until 05/15/01, then 12.750% to maturity
(j)Interest rate 0.000% until 08/15/00, then 14.625% to maturity
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 June 30,
1998, the value of these securities amounted to $10,486,250 or 5.38% of
net assets.
PIK: Payment in kind bond--Interest is paid in additional bonds.
See accompanying notes to financial statements.
111
<PAGE>
BRINSON HIGH YIELD FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value:
Unaffiliated issuers (Cost $199,532,790)..................... $190,547,199
Affiliated issuers (Cost $995,966)........................... 995,966
Receivables:
Dividends.................................................... 77,408
Interest..................................................... 3,368,631
Due from Advisor............................................. 46,490
-------------
TOTAL ASSETS............................................... 195,035,694
-------------
LIABILITIES:
Payables:
Investment securities purchased.............................. 77,408
Due to custodian bank........................................ 176,250
Accrued expenses............................................. 46,490
-------------
TOTAL LIABILITIES.......................................... 300,148
-------------
NET ASSETS:
Applicable to 13,658,606 shares; no par value, unlimited
shares authorized............................................ $194,735,546
=============
Net asset value, offering price and redemption price per share
($194,735,546 / 13,658,606 shares)........................... $ 14.2574
=============
NET ASSETS CONSIST OF:
Paid in capital............................................... $147,733,110
Accumulated net investment income............................. 42,654,043
Accumulated net realized gain................................. 13,333,984
Net unrealized depreciation................................... (8,985,591)
-------------
NET ASSETS................................................. $194,735,546
=============
</TABLE>
See accompanying notes to financial statements.
112
<PAGE>
BRINSON HIGH YIELD FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest....................................................... $ 9,248,515
Dividends...................................................... 967,474
------------
TOTAL INCOME................................................ 10,215,989
------------
EXPENSES:
Professional................................................... 14,692
Other.......................................................... 6,518
------------
TOTAL EXPENSES.............................................. 21,210
------------
Expenses reimbursed by Advisor.............................. (21,210)
------------
NET EXPENSES................................................ 0
------------
NET INVESTMENT INCOME....................................... 10,215,989
------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain.............................................. 1,760,110
Change in net unrealized appreciation or depreciation.......... (8,408,334)
------------
Net realized and unrealized loss............................... (6,648,224)
------------
Net increase in net assets resulting from operations........... $ 3,567,765
============
</TABLE>
See accompanying notes to financial statements.
113
<PAGE>
BRINSON HIGH YIELD FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................... $ 10,215,989 $ 14,417,600
Net realized gain.......................... 1,760,110 10,125,145
Change in net unrealized appreciation or
depreciation.............................. (8,408,334) (6,492,577)
------------- -------------
Net increase in net assets resulting from
operations................................ 3,567,765 18,050,168
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold................................ 39,649,344 33,985,265
Shares redeemed............................ (5,002,089) (60,564,948)
------------- -------------
Net increase (decrease) in net assets
resulting from capital share transactions
(a)....................................... 34,647,255 (26,579,683)
------------- -------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................. 38,215,020 (8,529,515)
------------- -------------
NET ASSETS:
Beginning of period........................ 156,520,526 165,050,041
------------- -------------
End of period (including accumulated net
investment income of $42,654,043 and
$32,438,054, respectively)................ $194,735,546 $156,520,526
============= =============
(a) A summary of capital share transactions follows:
SHARES SHARES
------------- -------------
Shares sold............................... 2,867,866 2,464,066
Shares redeemed........................... (417,685) (4,655,305)
------------- -------------
Net increase (decreases) in shares out-
standing................................ 2,450,181 (2,191,239)
============= =============
</TABLE>
See accompanying notes to financial statements.
114
<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>
SIX MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
JUNE 30, 1998 DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1997 1996 1995*
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period.... $13.9645 $12.3175 $10.7361 $10.0000
--------- --------- --------- ---------
Income from investment
operations:
Net investment income.. 0.2288 1.3299*** 0.8041 0.5408
Net realized and
unrealized gain....... 0.0641 0.3171 0.7773 0.1953
--------- --------- --------- ---------
Total income from
investment
operations........... 0.2929 1.6470 1.5814 0.7361
--------- --------- --------- ---------
Net asset value, end of
period................. $14.2574 $13.9645 $12.3175 $10.7361
========= ========= ========= =========
Total return (non-
annualized)............ 2.10% 13.37% 14.73% 7.36%
Ratios/Supplemental data
Net assets, end of
period (in 000s)...... $194,736 $156,521 $165,050 $107,953
Ratio of expenses to
average net assets:
Before expense
reimbursement........ 0.02%** 0.06% 0.14% 0.33%**
After expense
reimbursement........ 0.00%** 0.00% 0.00% 0.00%**
Ratio of net investment
income to average net
assets:
Before expense
reimbursement........ 11.02%** 10.09% 9.17% 9.33%**
After expense
reimbursement........ 11.04%** 10.15% 9.31% 9.66%**
Portfolio turnover
rate.................. 24% 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.
115
<PAGE>
BRINSON U.S. CASH MANAGEMENT PRIME FUND SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
------------- -------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 100.35%
Brinson Supplementary Trust U.S. Cash Management
Prime Fund (COST $255,204,194).................. $ 255,204,194 $255,204,194
LIABILITIES, LESS CASH AND OTHER ASSETS --
(0.35%)........................................ (898,309)
-------------
NET ASSETS -- 100%............................... $254,305,885
=============
</TABLE>
See accompanying notes to financial statements.
116
<PAGE>
BRINSON U.S. CASH MANAGEMENT PRIME FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $255,204,194)......................... $255,204,194
Receivables:
Interest......................................................... 288,652
Due from Advisor................................................. 2,471
-------------
TOTAL ASSETS................................................. 255,495,317
-------------
LIABILITIES:
Payables:
Dividends........................................................ 1,183,657
Accrued expenses................................................. 5,775
-------------
TOTAL LIABILITIES............................................ 1,189,432
-------------
NET ASSETS:
Applicable to 254,306,729 shares; no par value, unlimited shares
authorized....................................................... $254,305,885
=============
Net asset value, offering price and redemption price per share
price per share ($254,305,885 / 254,306,729 shares).............. $ 1.0000
=============
NET ASSETS CONSIST OF:
Paid in capital................................................... $254,306,729
Accumulated net realized loss..................................... (844)
-------------
NET ASSETS .................................................. $254,305,885
=============
</TABLE>
See accompanying notes to financial statements.
117
<PAGE>
BRINSON U.S. CASH MANAGEMENT PRIME FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998* (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.......................................................... $4,542,116
-----------
TOTAL INCOME................................................... 4,542,116
-----------
EXPENSES:
Professional...................................................... 4,655
Other............................................................. 5,870
-----------
TOTAL EXPENSES................................................. 10,525
-----------
Expenses reimbursed by Advisor................................. (2,471)
-----------
NET EXPENSES................................................... 8,054
-----------
NET INVESTMENT INCOME.......................................... 4,534,062
NET REALIZED LOSS:
Net realized loss................................................. (844)
-----------
Net increase in net assets resulting from operations.............. $4,533,218
===========
</TABLE>
* The Fund commenced operations February 18, 1998.
See accompanying notes to financial statements.
118
<PAGE>
BRINSON U.S. CASH MANAGEMENT PRIME FUND FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1998*
(UNAUDITED)
--------------
<S> <C>
OPERATIONS:
Net investment income.......................................... $ 4,534,062
Net realized loss.............................................. (844)
-------------
Net increase in net assets resulting from operations........... 4,533,218
-------------
DISTRIBUTIONS:
Net Investment Income.......................................... (4,534,062)
-------------
CAPITAL SHARE TRANSACTIONS:
Shares sold.................................................... 397,317,778
Shares reinvested.............................................. 16,779
Shares redeemed................................................ (143,027,829)
-------------
Net increase in net assets resulting from capital share trans-
actions (a)................................................... 254,306,728
-------------
TOTAL INCREASE IN NET ASSETS.................................. 254,305,884
=============
NET ASSETS:
Beginning of period............................................ 1
-------------
End of period.................................................. $254,305,885
=============
(a)A summary of capital share transactions follows:
SHARES
-------------
Shares sold.................................................... 397,317,778
Shares reinvested.............................................. 16,779
Shares redeemed................................................ (143,027,829)
-------------
Net increase in shares outstanding............................. 254,306,728
=============
</TABLE>
* The Fund commenced operations February 18, 1998.
See accompanying notes to financial statements.
119
<PAGE>
BRINSON U.S. CASH MANAGEMENT PRIME FUND FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout the period presented.
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1998*
(UNAUDITED)
--------------
<S> <C>
Net asset value, beginning of period............................. $ 1.0000
----------
Income from investment operations:
Net investment income........................................... 0.0140
Net realized and unrealized gain................................ 0.0000
----------
Total income from investment operations........................ 0.0140
----------
Distributions:
Net investment income........................................... (0.0140)
----------
Net asset value, end of period................................... $ 1.0000
==========
Total return (non-annualized).................................... 0.00%
Ratios/Supplemental data
Net assets, end of period (in 000s)............................. $ 254,306
Ratio of expenses to average net assets:
Before expense reimbursement................................... 0.01%**
After expense reimbursement.................................... 0.01%**
Ratio of net investment income to average net assets:
Before expense reimbursement................................... 5.61%**
After expense reimbursement.................................... 5.61%**
</TABLE>
* The Fund commenced operations February 18, 1998.
** Annualized
120
<PAGE>
THE BRINSON RELATIONSHIP FUNDS - NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
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 nine series representing separate
portfolios of investments, each of which is non-diversified. The nine series
are: Brinson Global Securities Fund, Brinson Post-Venture Fund, Brinson U.S.
Equity Fund, Brinson High Yield Fund, Brinson Emerging Markets Equity Fund,
Brinson Emerging Markets Debt Fund, Brinson U.S. Large Capitalization Value
Equity Fund, Brinson Non-U.S. Equity Fund and Brinson Cash Management Prime
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 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.
121
<PAGE>
THE BRINSON RELATIONSHIP FUNDS - NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
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 U.S. Equity Fund.................................................. 0.01
Brinson U.S. Large Capitalization Value Equity Fund....................... 0.01
Brinson Non-U.S. Equity Fund.............................................. 0.06
Brinson Emerging Markets Equity Fund...................................... 0.50
Brinson Emerging Markets Debt Fund........................................ 0.50
Brinson U.S. Cash Management Prime Fund................................... 0.01
</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.......................................... $7,639
Brinson U.S. Equity Fund................................................ 2,108
Brinson U.S. Large Capitalization Value Equity Fund..................... --
Brinson Post-Venture Fund............................................... 2,851
Brinson Non-U.S. Equity Fund............................................ --
Brinson Emerging Markets Equity Fund.................................... 3,006
Brinson Emerging Markets Debt Fund...................................... 2,670
Brinson High Yield Fund................................................. 2,132
Brinson Cash Management Prime Fund...................................... 1,064
</TABLE>
The Brinson Global Securities Fund invests in shares of certain affiliated
investment companies also sponsored by Brinson Partners, Inc. These investments
represent 15.62% of the Fund's total net assets. Amounts relating to those
investments at June 30, 1998 and for the six months ended is summarized as
follows:
122
<PAGE>
THE BRINSON RELATIONSHIP FUNDS - NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET
SALES REALIZED UNREALIZED
AFFILIATES PURCHASES PROCEEDS GAINS GAINS/(LOSSES) VALUE
- ------------------------ ------------- ------------ ----------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Brinson Post-Venture
Fund................... -- -- -- $ 1,530,974 $ 29,906,368
Brinson High Yield
Fund................... 4,000,000 -- -- 628,263 36,512,237
Brinson Emerging Markets
Equity Fund............ -- -- -- (6,241,333) 46,785,400
Brinson Emerging Markets
Debt Fund.............. 4,000,000 6,000,000 1,445,902 598,960 64,547,025
Brinson Supplementary
Trust U.S. Cash
Management Prime Fund.. 267,828,698 12,624,504 -- -- 255,204,194
------------- ------------ ----------- ------------ -------------
$275,828,698 $18,624,504 $1,445,902 $(3,483,136) $432,955,224
============= ============ =========== ============ =============
</TABLE>
The Brinson U.S. Equity Fund invests in shares of certain affiliated investment
companies also sponsored by Brinson Partners, Inc. These investments represent
1.91% of the Fund's total net assets. Amounts relating to those investments at
June 30, 1998 and for the six months ended is summarized as follows:
<TABLE>
<CAPTION>
NET NET
SALES REALIZED UNREALIZED
AFFILIATES PURCHASES PROCEEDS GAINS GAINS/(LOSSES) VALUE
- ----------------------- ---------- -------- -------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Brinson Supplementary
Trust U.S. Cash
Management Prime
Fund.................. $4,146,882 $989,634 -- -- $3,157,249
</TABLE>
The Brinson U.S. Large Capitalization Value Equity Fund invests in shares of
certain affiliated investment companies also sponsored by Brinson Partners,
Inc. These investments represent 1.83% of the Fund's total net assets. Amounts
relating to those investments at June 30, 1998 and for the six months ended is
summarized as follows:
<TABLE>
<CAPTION>
NET NET
SALES REALIZED UNREALIZED
AFFILIATES PURCHASES PROCEEDS GAINS GAINS/(LOSSES) VALUE
- ----------------------- ---------- -------- -------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Brinson Supplementary
Trust U.S. Cash
Management Prime
Fund.................. $1,998,875 -- -- -- $1,998,875
</TABLE>
The Brinson Post Venture Fund invests in shares of certain affiliated
investment companies also sponsored by Brinson Partners, Inc. These investments
represent 3.14% of the Fund's total net assets. Amounts relating to those
investments at June 30, 1998 and for the six months ended is summarized as
follows:
<TABLE>
<CAPTION>
NET NET
SALES REALIZED UNREALIZED
AFFILIATES PURCHASES PROCEEDS GAINS GAINS/(LOSSES) VALUE
- ----------------------- ----------- ---------- -------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Brinson Supplementary
Trust U.S. Cash
Management Prime
Fund.................. $17,228,241 $3,340,839 -- -- $13,887,402
</TABLE>
123
<PAGE>
THE BRINSON RELATIONSHIP FUNDS - NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
The Brinson Emerging Markets Equity Fund invests in shares of certain
affiliated investment companies also sponsored by Brinson Partners, Inc. These
investments represent 11.33% of the Fund's total net assets. Amounts relating
to those investments at June 30, 1998 and for the six months ended is
summarized as follows:
<TABLE>
<CAPTION>
NET NET
SALES REALIZED UNREALIZED
AFFILIATES PURCHASES PROCEEDS GAINS GAINS/(LOSSES) VALUE
- ----------------------- ------------- ------------ -------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Brinson Supplementary
Trust U.S. Cash
Management Prime
Fund.................. $ 59,532,396 $13,880,931 -- -- $ 45,651,465
The Brinson Emerging Markets Debt Fund invests in shares of certain affiliated
investment companies also sponsored by Brinson Partners, Inc. These investments
represent 3.22% of the Fund's total net assets. Amounts relating to those
investments at June 30, 1998 and for the six months ended is summarized as
follows:
<CAPTION>
NET NET
SALES REALIZED UNREALIZED
AFFILIATES PURCHASES PROCEEDS GAINS GAINS/(LOSSES) VALUE
- ----------------------- ------------- ------------ -------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Brinson Supplementary
Trust U.S. Cash
Management Prime
Fund.................. $ 31,969,338 $17,647,137 -- -- $ 14,322,201
The Brinson High Yield Fund invests in shares of certain affiliated investment
companies also sponsored by Brinson Partners, Inc. These investments represent
0.51% of the Fund's total net assets. Amounts relating to those investments at
June 30, 1998 and for the six months ended is summarized as follows:
<CAPTION>
NET NET
SALES REALIZED UNREALIZED
AFFILIATES PURCHASES PROCEEDS GAINS GAINS/(LOSSES) VALUE
- ----------------------- ------------- ------------ -------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Brinson Supplementary
Trust U.S. Cash
Management Prime
Fund.................. $ 2,187,039 $ 1,191,073 -- -- $ 995,966
The Brinson U.S. Cash Management Prime Fund invests in shares of certain
affiliated investment companies also sponsored by Brinson Partners, Inc. These
investments represent 100.00% of the Fund's total net assets. Amounts relating
to those investments at June 30, 1998 and for the six months ended is
summarized as follows:
<CAPTION>
NET NET
SALES REALIZED UNREALIZED
AFFILIATES PURCHASES PROCEEDS GAINS GAINS/(LOSSES) VALUE
- ----------------------- ------------- ------------ -------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Brinson Supplementary
Trust U.S. Cash
Management Prime
Fund.................. $267,828,698 $12,624,504 -- -- $255,204,194
</TABLE>
124
<PAGE>
THE BRINSON RELATIONSHIP FUNDS - NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Investment transactions for the six months ended June 30, 1998, excluding
short-term investments, were as follows:
<TABLE>
<CAPTION>
PURCHASES PROCEEDS FROM SALES
-------------- -------------------
<S> <C> <C>
Brinson Global Securities Fund............. $ 445,394,201 $ 440,991,179
Brinson U.S. Equity Fund................... 115,554,333 28,759,768
Brinson U.S. Large Capitalization Value Eq-
uity Fund................................. 106,083,740 --
Brinson Post-Venture Fund.................. 99,197,324 76,454,883
Brinson Non-U.S. Equity Fund............... 38,486,755 --
Brinson Emerging Markets Equity Fund....... 237,253,890 229,200,044
Brinson Emerging Markets Debt Fund......... 326,914,932 228,424,085
Brinson High Yield Fund.................... 90,059,454 42,303,841
</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 June 30, 1998, the Brinson Emerging Markets Equity Fund had open equity swap
contracts with international dealers, including the Fund's custodian. The Fund
had short-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 Fund 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
125
<PAGE>
THE BRINSON RELATIONSHIP FUNDS - NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
losses on these contracts. The counterparty to all forward foreign currency
contracts during the six months ended June 30, 1998 was the Fund's custodian,
of an affiliate of 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 initially requires collateral against the loaned securities
in an amount at least to equal 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 June 30,
1998, were as follows:
<TABLE>
<CAPTION>
VALUE OF LOANED VALUE OF
SECURITIES COLLATERAL
--------------- -------------
<S> <C> <C>
Brinson Global Securities Fund.................... $213,304,901 $214,169,955
============= =============
</TABLE>
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 $2,197,359 and $278,325,
respectively, for the six months ended June 30, 1998, 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.
126
