-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PArQ2+GfSTnLZpa6J8qDOcR6hb7IIDHDTMhxFMU4X7ye3fqjgOG1yCDHXy5laolz w1/8Z0EMkM7bUEWl78RKjw== 0000950109-97-007200.txt : 19971127 0000950109-97-007200.hdr.sgml : 19971127 ACCESSION NUMBER: 0000950109-97-007200 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971126 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERGER OMNI INVESTMENT TRUST CENTRAL INDEX KEY: 0000765924 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 363344166 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 033-15867 FILM NUMBER: 97729213 BUSINESS ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: STE 900 CITY: DENVER STATE: CO ZIP: 80206 BUSINESS PHONE: 3033290200 MAIL ADDRESS: STREET 1: 210 UNIVERSITY BLVD STREET 2: STE 900 CITY: DENVER STATE: CO ZIP: 80206 FORMER COMPANY: FORMER CONFORMED NAME: OMNI INVESTMENT FUND DATE OF NAME CHANGE: 19920703 N-30D 1 BERGER FUNDS - ANNUAL REPORT - VERSION F. The Berger Funds [PICTURE APPEARS HERE] September 30, 1997 Berger New Generation Fund Berger Small Company Growth Fund Berger Small Cap Value Fund Berger 100 Fund Berger/BIAM International Fund Berger Growth and Income Fund Berger Balanced Fund The Berger Funds are presenting a combined annual report which includes the Berger New Generation Fund, Berger Small Company Growth Fund, Berger Small Cap Value Fund, Berger 100 Fund, Berger BIAM/International Fund, Berger Growth and Income Fund, and Berger Balanced Fund. This report reflects the financial position of each Fund at September 30, 1997 and the results of their operations for the period then ended and changes in their net assets and their financial highlights for each of the periods indicated, in a single document. 2 A Letter from the President The Berger Funds 4 Berger New Generation Fund 10 Berger Small Company Growth Fund 17 Berger Small Cap Value - Investor Shares/Institutional Shares 23 Berger 100 Fund 29 Berger/BIAM International Fund 33 Berger Growth and Income Fund 39 Berger Balanced Fund 42 Berger Funds Notes to Financial Statements 46 Berger/BIAM International Portfolio 52 Berger/BIAM International Portfolio Notes to Financial Statements 55 Financial Highlights
[LOGO OF BERGER FUNDS APPEARS HERE] To obtain a prospectus for any of the Berger Funds, which contains more complete information, including management fees, charges and expenses, call 1.800.333.1001. Please read it carefully before you invest. Berger Distributors, Inc. - Distributor 2 Dear Fellow Shareholders A Letter from the President This past fiscal year was the most active and exciting year in The Berger Funds history. We concentrated on several clear goals * attracting more world class portfolio managers * expanding our innovative, fundamentally sound line-up of products * providing strong, consistent performance across all funds * and enhancing our customer services and support. I am pleased to report that we have made very significant progress on all fronts. Here are a few of the highlights: Our Small Company Growth and New Generation Funds both rebounded sharply from a small cap bear market earlier this year. The performance of both Funds has been recognized recently by major national publications/1,2/. The Funds are managed by Bill Keithler who was again listed among the nation's top 100 managers in Barron's recent annual issue that highlights the country's best mutual fund managers. We expanded our line-up of fund offerings this year by adding the Berger Small Cap Value Fund, the Berger/BIAM International Fund and the Berger Balanced Fund. By year-end we plan on offering you two more funds, a Select Fund and a Mid Cap Growth Fund. In all, we will have dramatically increased the range of Berger investment opportunities available to you. This expansion is driven by what we've heard loud and clear from you, our customers, in extensive research we conducted this year: give us more choice, more stock investment opportunities and excellent service. We intend to do just that. The Small Cap Value Fund, managed by 30-year investment veteran Bob Perkins, had a terrific year, and also offers a strong long-term track record/1/. Bob specializes in investing in sharply undervalued small cap companies that he believes have excellent future prospects./2/ We were delighted to form a joint venture with the Bank of Ireland Asset Management (U.S.) Limited ("BIAM")/3/, one of the oldest, most respected and successful managers of international investments in Europe. The partnership spawned the first of what is planned to be a series of international funds. The Berger/BIAM International Fund generally focuses on mid to large cap multinational companies outside the U.S. with strong balance sheets, proven management and diversified earnings in well-regulated, stable foreign markets. In February we hired Patrick Adams to take over management of the Berger 100 Fund. Although it had shown gains, the Fund had not performed up to our expectations. We searched for a proven portfolio manager with a successful track record in the growth fund area to reinvigorate it. Patrick fit the bill. It took him several months to reposition the portfolio, and today the Fund is performing better/1/. Money Magazine recently listed the Fund among its 10-year "winners." We also repositioned the Growth and Income Fund under new portfolio managers. It, too, is performing much better/1/. We made a major effort to improve and expand our shareholder services. We completely rewrote our prospectus in plain English to make it shorter and easier to understand (look for it in your mail in the coming weeks). We redesigned our information kit, making it easier to use and more helpful. We expanded the capabilities of our Quick Access toll-free number to provide you with more services. It has a simplified menu, faster and more personalized access to your investments, automated ordering of duplicate tax forms and complete instructions for communicating with us. This fall we launched our new web site at www.bergerfunds.com. It provides background information on all our Funds, performance listings, e-mail, access to your accounts, status reports, purchases, exchanges and much more. We have remained vigilant about controlling expenses. I'm pleased to report that we continue to reduce our expenses. Since 1991, we have cut expenses for the Berger 100 and Growth and Income Funds about 35% and 40%, respectively. Since 1994, expenses for Small Company Growth are down about 18%. We believe we are in excellent shape as we head into another year. With a little help from the markets we are looking forward to an outstanding year. Everyday we are appreciative of the trust you place in us here at Berger. We will do our absolute best to continue to earn it. /s/ Jerry Lavin Jerry Lavin, President To obtain a prospectus for any of The Berger Funds, which contains more complete information, including management fees, charges and expenses, call 1-800-333-1001. Please read it carefully before you invest. Berger Distributors, Inc.-Distributor 1. Past performance does not guarantee future results. 2. Investments in small companies may involve greater risks, including price volatility, and rewards than investments in larger companies. 3. Investments in the Berger/BIAM International Fund are not insured by the Federal Deposit Insurance Corporation, are not deposits, and are not obligations of, or endorsed or guaranteed in any way by, any bank. Mutual fund investments are subject to investment risk, including possible loss of the principal invested. 3 Annual Report September 30, 1997 The Berger Funds Berger New Generation Fund [ART WORK APPEARS HERE] Portfolio Manager's Commentary William Keithler Performance During the fiscal year ended September 30, 1997, the Berger New Generation Fund (the "Fund") delivered an annual total return to investors of 31.53%./1/ This compares to 40.43% for the S&P 500/2/ and 33.19% for the Russell 2000./3/ While the Fund is not directly comparable to either of these market indexes, it nevertheless is useful to compare fund performance with widely watched market indicators. Over the course of this fiscal year, shareholders experienced both extremes of performance. The bear market in aggressive growth stocks, which ran from October 1996 through mid-April 1997, caused the Fund to severely underperform the broad market. During this period, investors preferred to own slower growing, large cap "index" stocks, such as Procter and Gamble, Gillette and Coca-Cola, and eschewed owning the more aggressive stocks that are the staples of this Fund. That tide turned in April, however, when valuations of the narrow group of stocks that dominated the performance of the S&P 500 and of the emerging growth sector of the market got too far apart. As the market began to shift away from index/blue chip stocks to smaller and mid cap stocks, the latter began to significantly outperform. This outperformance was reflected in Fund performance. In the month of May 1997 the Fund was up 21.46%,/1/ and in the month of September it also was up strongly, rising 10.01%./1/ Although we would caution that the performance demonstrated these two months is unsustainable, we believe that the longer-term outlook is favorable for the emerging growth stocks in which the Fund invests. The economy continues to perk along, although not at a rate that puts pressure on interest rates. Inflation doesn't appear to be a serious threat, although we are keeping an eye on labor costs. Valuations, while higher than a few months ago, are not in the stratosphere. Market psychology seems favorably disposed toward growth companies. Year in Review The largest weighting in the Fund is technology. This sector is fertile ground for investment candidates for the Fund because of our charter, which is to seek investments in companies that are attempting to bring products/services to market that have the potential to change the way business is conducted in their industries. The Fund has wide-ranging holdings in technology, including software, semiconductor, semiconductor capital equipment, computer, peripheral and service companies. Possibly the most dramatic gains for the Fund were derived from its sizeable holdings in the semiconductor capital equipment industry. Significant performers included Applied Materials; ASM Lithography Holding N.V.; LAM Research Corporation; FEI Company; Credence Systems, Corp.; Integrated Process Equipment Corp.; and CMG Information Services, Inc. Yahoo, Inc.; Premenos Technology Corp.; CSG Systems International Inc.; Lycos, Inc.; and America Online, Inc. also had strong stock price gains. The Fund seeks to benefit from new ways of doing things and these three leaders in their fields are typical of the companies in which the Fund invests: Discreet Logic, Inc., is helping usher in the age of digital television; Sandisk Corporation, is developing technology for digital cameras; and E*Trade Group, Inc. is pioneering the use of on-line investment trading. Healthcare is another area in which new developments are constantly occurring. Some standout performers in this sector included Aurora Biosciences Corp., Theragenics Corp., and Qiagen N.V. Looking Ahead Stocks held in this Fund are often extremely volatile. Investors need to understand that this Fund is aggressive and can experience violent price swings. For example, the Fund declined some 17% early in the year and subsequently rebounded to stand at 34.55% year-to-date as of 9/30/97. That's a swing of over 50% in less than six months. Such performance is, of course, difficult to duplicate. But, as noted earlier, we believe that the outlook for aggressive growth stocks is favorable and that should bode well for the performance of the Fund. 1. Performance figures are based on historical results and are not intended to be indicative of future performance. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. 2. The S&P 500 is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. It is a generally recognized indicator used to measure overall performance of the U.S. stock market. One cannot invest directly in an index. 3. The Russell 2000 Index is an unmanaged index, with dividends reinvested, which consists of common stocks of 2000 U.S. companies with market capitalization of $172 million to $1.1 billion. It is a generally recognized indicator used to measure overall performance of small company stocks. One cannot invest directly in an index. 4 Annual Report September 30, 1997 The Berger Funds Berger New Generation Fund Performance Overview Comparison of Change in Value of Berger New Generation Fund vs. S&P 500 Stock Index and Cost of Living Index
Berger New Generation Cost of Living Date Fund S&P 500 Increase ---- -------------- ------- -------------- 3/29/96 10,000 10,000 10,000 6/30/96 11,290 10,504 10,064 9/30/96 11,820 10,826 10,135 12/31/96 11,555 11,727 10,186 3/31/97 9,643 12,043 10,276 6/30/97 11,977 14,141 10,295 9/30/97 15,547 15,199 10,328
The Berger New Generation Fund* Average Annual Total Return
As of September 30, 1997 - ------------------------ 1 Year 31.5% Life of Fund 33.9% (3/29/96)
* Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. Report of Independent Accountants To the Board of Trustees and Shareholders of Berger Investment Portfolio Trust - -------------------------------------------------------------------------------- In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Berger Small Company Growth Fund, Berger New Generation Fund and Berger Balanced Fund (constituting Berger Investment Portfolio Trust, hereafter referred to as the "Trust") at September 30, 1997, the results of each of their operations for each of the periods indicated, the changes in each of their net assets for each of the periods indicated and the financial highlights for each of the periods indicated, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 1997 by correspondence with the custodian and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for the opinion expressed above. The financial statements of Berger Small Company Growth Fund for the period ended September 30, 1994 were audited by other independent accountants whose report dated October 28, 1994 expressed an unqualified opinion on those financial statements. /s/ Price Waterhouse LLP Price Waterhouse LLP Denver, Colorado November 11, 1997 5 Annual Report September 30, 1997 The Berger Funds Berger New Generation Fund Schedule of Investments
Common Stock (80.7%) September 30, 1997 - ------------------------------------------------------------------------------ Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------ Commercial Services - Advertising (0.6%) 40,000 Outdoor Systems, Inc.* $ 1,050,000 - ------------------------------------------------------------------------------ Commercial Services - Miscellaneous (2.6%) 85,000 Inspire Insurance Solutions, Inc.* 1,540,625 40,000 NCO Group, Inc.* 1,480,000 65,000 Pegasus Systems, Inc.* 1,178,125 25,000 Vincam Group, Inc.* 718,750 - ------------------------------------------------------------------------------ 4,917,500 - ------------------------------------------------------------------------------ Commercial Services - Security/Safety (1.3%) 60,000 Childrens Comprehensive Services* 1,290,000 70,000 Vivid Technologies, Inc.* 1,085,000 - ------------------------------------------------------------------------------ 2,375,000 - ------------------------------------------------------------------------------ Commercial Services - Schools (0.4%) 17,500 Apollo Group, Inc. - Class A* 741,563 - ------------------------------------------------------------------------------ Computer - Graphics (0.8%) 100,000 Children's Place Retail Stores, Inc.* 1,450,000 - ------------------------------------------------------------------------------ Computer - Integrated Systems (1.8%) 35,000 Apex PC Solutions, Inc.* 1,325,625 80,000 Discreet Logic, Inc.* 2,125,000 - ------------------------------------------------------------------------------ 3,450,625 - ------------------------------------------------------------------------------ Computer - Local Networks (1.3%) 50,000 Daou Systems, Inc.* 1,562,500 60,000 New Era of Networks, Inc.* 825,000 - ------------------------------------------------------------------------------ 2,387,500 - ------------------------------------------------------------------------------ Computer - Memory Devices (1.3%) 70,000 Sandisk Corporation* 2,520,000 - ------------------------------------------------------------------------------ Computer - Mini/Micro (1.6%) 22,500 Compaq Computer Corporation 1,681,875 50,000 Data General Corporation* 1,331,250 - ------------------------------------------------------------------------------ 3,013,125 - ------------------------------------------------------------------------------ Computer - Peripheral Equipment (2.3%) 35,000 Micros Systems, Inc.* 1,750,000 150,000 Sigma Designs, Inc.* 1,246,875 35,000 Splash Technology Holdings, Inc.* 1,369,375 - ------------------------------------------------------------------------------ 4,366,250 - ------------------------------------------------------------------------------ Computer - Services (7.8%) 25,000 America Online, Inc.* 1,885,935 35,000 CSG Systems International, Inc.* 1,323,437 45,000 E*Trade Group, Inc.* 2,115,000 55,000 Excite, Inc.* 1,565,781 50,000 HBO & Company 1,887,500 40,000 Metro Information Services, Inc.* 875,000 48,000 Technology Solutions Company* 1,548,000 65,000 Whittman-Hart, Inc.* 1,982,500 33,000 Yahoo, Inc.* 1,654,125 - ------------------------------------------------------------------------------ 14,837,278 - ------------------------------------------------------------------------------ Computer - Software (8.5%) 65,000 Axent Technologies, Inc.* 1,348,750 35,000 Best Products Company* 511,875 20,000 BMC Software, Inc.* 1,295,000 51,000 J.D. Edwards* 1,708,500 60,000 Keane, Inc.* 1,905,000 120,000 Premenos Technology Corporation* 1,725,000 60,000 QAD, Inc.* 1,117,500 105,000 Quadramed Corporation* 1,811,250 8,700 Remedy Corporation* 299,606 30,000 Transaction System Architects, Inc.* 1,218,750 50,000 Tripos, Inc.* 950,000 22,500 Veritas Software Corporation* 988,594 25,000 VIASOFT, Inc.* 1,237,500 - ------------------------------------------------------------------------------ 16,117,325 - ------------------------------------------------------------------------------ Electrical Products - Miscellaneous (0.7%) 35,000 Powerwave Technologies, Inc.* 1,356,250 - ------------------------------------------------------------------------------ Electronic - Scientific Instruments (0.1%) 7,900 Molecular Dynamics* 213,300 - ------------------------------------------------------------------------------ Electronic - Semiconductor Equipment (3.3%) 10,400 Applied Materials, Inc.* 990,600 10,400 ASM Lithography Holding N.V.* 1,027,000 75,000 FEI Company* 1,556,250 32,500 Integrated Process Equipment Corporation* 1,198,438 13,000 KLA Tenor Corporation* 878,312 14,300 Lam Research Corporation* 664,950 - ------------------------------------------------------------------------------ 6,315,550 - ------------------------------------------------------------------------------ Electronic - Semiconductor Manufacturing (1.5%) 23,400 Credence Systems Corporation* 1,140,750 25,000 Linear Technology Corporation 1,718,750 - ------------------------------------------------------------------------------ 2,859,500 - ------------------------------------------------------------------------------ Financial - Equity Real Estate Investment Trust (0.6%) 30,000 CCA Prison Realty Trust 1,132,500 - ------------------------------------------------------------------------------ Finance - Small Business Investment Company & Commercial (0.5%) 30,000 Safeguard Scientifics, Inc.* 877,500 - ------------------------------------------------------------------------------ Financial Services - Miscellaneous (1.4%) 70,000 Checkfree Corporation* 1,478,750 100,000 Warrantech Corporation* 1,137,500 - ------------------------------------------------------------------------------ 2,616,250 - ------------------------------------------------------------------------------ Food - Miscellaneous Preparation (0.6%) 50,000 Worthington Foods, Inc. 1,156,250 - ------------------------------------------------------------------------------ Insurance - Life (1.0%) 100,000 AHL Services, Inc. 1,825,000 - ------------------------------------------------------------------------------ Leisure Products (0.6%) 45,000 The North Face, Inc.* 1,209,375 - ------------------------------------------------------------------------------ Media - Cable TV (1.4%) 100,000 Lodgenet Entertainment Corporation * 1,325,000 24,374 TCI Ventures Group - Class A* 502,724 42,625 Tele-Communications, Inc. - Class A* 873,822 - ------------------------------------------------------------------------------ 2,701,546 - ------------------------------------------------------------------------------ Media - TV/Radio (1.3%) 50,000 American Radio Systems* 2,381,250 - ------------------------------------------------------------------------------
6 Annual Report September 30, 1997 The Berger Funds Berger New Generation Fund Schedule of Investments
Common Stock (80.7%) - continued September 30, 1997 - ------------------------------------------------------------------------------ Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------ Medical - Biomedics/Genetics (2.7%) 33,000 Centocor, Inc.* $ 1,569,563 100,000 Creative Biomolecules, Inc.* 1,075,000 50,000 Genzyme Corporation* 1,487,500 35,000 Life Technologies, Inc. 1,058,750 - ------------------------------------------------------------------------------ 5,190,813 - ------------------------------------------------------------------------------ Medical - Dental - Supplies (0.5%) 42,500 Monarch Dental Corporation* 913,750 - ------------------------------------------------------------------------------ Medical - Ethical Drugs (3.8%) 100,000 Aurora Biosciences Corporation* 1,431,250 45,000 Dura Pharmaceuticals* 1,963,125 40,000 PathoGenesis Corporation* 1,420,000 50,000 Theragenics Corporation* 2,481,250 - ------------------------------------------------------------------------------ 7,295,625 - ------------------------------------------------------------------------------ Medical - Generic Drugs (0.6%) 27,000 Andrx Corporation* 1,228,500 - ------------------------------------------------------------------------------ Medical - Hospitals (0.9%) 40,000 Universal Health Services, Inc.* 1,730,000 - ------------------------------------------------------------------------------ Medical - Instruments (0.6%) 70,000 Ventana Medical Systems* 1,128,750 - ------------------------------------------------------------------------------ Medical - Outpatient/Home Care (1.3%) 35,000 Harbinger Corporation* 1,273,125 50,000 PMR Corporation* 1,112,500 - ------------------------------------------------------------------------------ 2,385,625 - ------------------------------------------------------------------------------ Medical - Wholesale Drug/Sundries (0.6%) 11,500 McKesson Corporation 1,172,281 - ------------------------------------------------------------------------------ Oil & Gas - Canadian Exploration & Production (0.7%) 62,500 Gulf Indonesia Resources, Ltd.* 1,390,625 - ------------------------------------------------------------------------------ Oil & Gas - U.S. Drilling (0.2%) 11,000 UTI Energy Corp.* 434,500 - ------------------------------------------------------------------------------ Oil & Gas - Field Services (0.4%) 18,700 Veritas DGC, Inc.* 795,919 - ------------------------------------------------------------------------------ Pollution Control - Equipment (0.7%) 30,000 Culligan Water Technologies, Inc. 1,380,000 - ------------------------------------------------------------------------------ Pollution Control - Services (4.1%) 55,000 American Disposal Services, Inc.* 1,718,750 55,000 Republic Industries, Inc.* 1,811,564 55,000 Superior Services, Inc.* 1,567,500 45,000 Waste Industries, Inc.* 1,077,188 90,000 Waterlink, Inc.* 1,687,500 - ------------------------------------------------------------------------------ 7,862,502 - ------------------------------------------------------------------------------ Real Estate Operations (1.0%) 52,500 Fairfield Communities, Inc.* 1,972,031 - ------------------------------------------------------------------------------ Retail - Miscellaneous Diversified (0.8%) 100,000 Ugly Duckling Corporation* 1,525,000 - ------------------------------------------------------------------------------ Retail - Restaurants (0.7%) 75,000 Schlotsky's, Inc.* 1,420,313 - ------------------------------------------------------------------------------ Retail/Wholesale Computers (1.5%) 50,000 Ingram Micro, Inc. - Class A* $ 1,353,125 75,000 Southern Electronics Corporation* 1,462,500 - ------------------------------------------------------------------------------ 2,815,625 - ------------------------------------------------------------------------------ Steel - Specialty Alloys (0.8%) 45,000 Carbide/Graphite Group, Inc.* 1,530,000 - ------------------------------------------------------------------------------ Telecommunications - Cellular (1.1%) 45,000 Cellstar Corporation* 2,092,500 - ------------------------------------------------------------------------------ Telecommunications - Equipment (8.1%) 55,000 Brightpoint, Inc.* 2,550,625 40,000 DSC Communications Corporation* 1,077,500 40,000 ECI Telecom Ltd. (Israel)* 1,295,000 75,000 Globecomm Systems, Inc.* 1,312,500 62,000 Innova Corporation (Washington)* 1,464,750 150,000 Intellect Communication Systems, Ltd.* 1,706,250 80,000 P-COM, Inc.* 1,915,000 52,500 Remec, Inc.* 1,916,250 54,000 Scientific-Atlanta, Inc. 1,221,750 18,000 Tellabs, Inc.* 927,000 - ------------------------------------------------------------------------------ 15,386,625 - ------------------------------------------------------------------------------ Telecommunications - Services (6.0%) 38,000 Intermedia Communications, Inc.* 1,783,625 55,000 LCI International, Inc.* 1,464,375 75,000 Nextel Communications, Inc.* 2,165,625 70,000 Nextlink Communications* 1,680,000 50,000 RSL Communications, Inc. - Class A* 1,100,000 32,000 Teleport Communications Group, Inc.* 1,436,000 50,000 WorldCom, Inc.* 1,768,750 - ------------------------------------------------------------------------------ 11,398,375 - ------------------------------------------------------------------------------ Textile - Mill Products (0.3%) 19,000 Novel Denim Holdings, Ltd.* 513,000 - ------------------------------------------------------------------------------ Total Common Stock (Cost $108,994,333) 153,432,796 - ------------------------------------------------------------------------------ U.S. Government Obligations (9.4%) - ------------------------------------------------------------------------------ $2,313,000 U.S. Treasury Bills due 10/16/97 2,308,123 5,270,000 U.S. Treasury Bills due 11/13/97 5,239,204 1,400,000 U.S. Treasury Bills due 11/20/97 1,390,822 9,000,000 U.S. Treasury Bills due 11/28/97 8,929,530 - ------------------------------------------------------------------------------ Total U.S. Government Obligations (Amortized Cost $17,867,679) 17,867,679 - ------------------------------------------------------------------------------ Federal National Mortgage Association Discount Notes (1.9%) - ------------------------------------------------------------------------------ $2,600,000 FNMA Discount Notes Due 10/20/97 2,592,659 980,000 FNMA Discount Notes Due 10/30/97 975,689 - ------------------------------------------------------------------------------ Total FNMA Discount Notes (Amortized Cost $3,568,348) 3,568,348 - ------------------------------------------------------------------------------ Total Investments (Cost $130,430,359) (92.0%) 174,868,823 (Cost for federal income tax purposes $130,975,985) Other Assets, Less Liabilities (8.0%) 15,295,220 - ------------------------------------------------------------------------------ Net Assets (100%) $190,164,043 - ------------------------------------------------------------------------------
* Non-Income Producing Security See notes to financial statements. 7 Annual Report September 30, 1997 The Berger Funds Berger New Generation Fund Statement of Assets and Liabilities (Amounts in Thousands Except Net Asset Value Per Share)
September 30, 1997 - ------------------------------------------------------------------------------------------------------- Assets Investments at cost $ 130,430 - ------------------------------------------------------------------------------------------------------- Investments at value $ 174,869 Cash 1,140 Receivables Fund shares sold 27,028 Investment securities sold 2,098 Dividends 17 - ------------------------------------------------------------------------------------------------------- Total Assets 205,152 - ------------------------------------------------------------------------------------------------------- Liabilities Payables Investment securities purchased 14,276 Fund shares redeemed 481 Accrued investment advisory fees 108 Accrued transfer agent fees 38 Accrued shareholder report expense 49 Accrued 12b-1 distribution & advertising fees 30 Other accrued expenses 6 - ------------------------------------------------------------------------------------------------------- Total Liabilities 14,988 - ------------------------------------------------------------------------------------------------------- Net Assets Applicable to Shares Outstanding $ 190,164 - ------------------------------------------------------------------------------------------------------- Capital Shares Authorized (Par Value $0.01) Unlimited Shares Outstanding 12,918 - ------------------------------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share $ 14.72 - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- Statement of Operations (Amounts in Thousands) - ------------------------------------------------------------------------------------------------------- For the Year Ended September 30, 1997 - ------------------------------------------------------------------------------------------------------- Investment Income Income Dividends $ 47 Interest 340 - ------------------------------------------------------------------------------------------------------- Total Income 387 - ------------------------------------------------------------------------------------------------------- Expenses Investment advisory fees 962 12b-1 distribution & advertising fees 267 Transfer agent fees 478 Postage, printing & reports 211 Registration fees 28 Custodian fees 12 Directors'/Trustees' fees & expenses 12 Accounting fees 11 Administrative services 20 Legal fees 10 Insurance & bonds 1 Audit fees 8 Other 1 - ------------------------------------------------------------------------------------------------------- Total Expenses 2,021 Less earnings credits (17) - ------------------------------------------------------------------------------------------------------- Expenses - Net 2,004 - ------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) (1,617) - ------------------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investment Transactions Net realized gain (loss) on security transactions 5,045 Net change in unrealized appreciation (depreciation) on security transactions 30,174 - ------------------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investment Transactions 35,219 - ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations $ 33,602 - -------------------------------------------------------------------------------------------------------
See notes to financial statements. 8 The Berger Funds September 30, 1997 Annual Report Berger New Generation Fund Statement of Changes in Net Assets (Amounts in Thousands)
Period From Year Ended 3/29/961 to 9/30/97 9/30/96 - ------------------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ (1,617) $ 5,577 Net realized gain (loss) on security transactions 5,045 (12,961) Net change in unrealized appreciation (depreciation) on security transactions 30,174 14,263 Net Increase (Decrease) in Net Assets Resulting from Operations 33,602 6,879 From Dividends and Distributions to Shareholders Net investment income (5,581) 0 Net realized gains on investments 0 0 - ------------------------------------------------------------------------------------------------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (5,581) 0 - ------------------------------------------------------------------------------------------------------- From Fund Share Transactions Proceeds from shares sold 188,054 152,836 Net asset value of shares issued in reinvestment of dividends 5,398 0 - ------------------------------------------------------------------------------------------------------- Total 193,452 152,836 Payments for shares redeemed (148,221) (42,803) - ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Derived From Fund Share Transactions 45,231 110,033 Increase (Decrease) in Net Assets 73,252 116,912 Net Assets Beginning of period 116,912 0 - ------------------------------------------------------------------------------------------------------- End of period $ 190,164 $ 116,912 - ------------------------------------------------------------------------------------------------------- Components of Net Assets Capital (par value and paid in surplus) $ 153,765 $ 110,033 Undistributed net investment income (loss) (7) 5,577 Undistributed net realized gain (loss) from investments (8,031) (12,961) Unrealized appreciation (depreciation) on investments 44,437 14,263 - ------------------------------------------------------------------------------------------------------- Total $ 190,164 $ 116,912 - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- Transactions in Fund Shares - ------------------------------------------------------------------------------------------------------- Shares sold 15,166 13,724 Shares issued to shareholders in reinvestment of dividends 499 0 - ------------------------------------------------------------------------------------------------------- Total 15,665 13,724 Shares repurchased (12,637) (3,834) - ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares 3,028 9,890 Shares outstanding, beginning of period 9,890 0 - ------------------------------------------------------------------------------------------------------- Shares outstanding, end of period 12,918 9,890 - -------------------------------------------------------------------------------------------------------
1. Commencement of investment operations. See notes to financial statements. 9 Annual Report September 30, 1997 The Berger Funds Berger Small Company Growth Fund [ARTWORK APPEARS HERE] Portfolio Manager's Commentary William Keithler Performance During the fiscal year ended September 30, 1997, the Berger Small Company Growth Fund's (the "Fund") annual total return was 17.68%/1/. This compares to 33.19% for the Russell 2000/2/. The Russell 2000-Growth index (a more accurate comparison for the Berger Small Company Growth Fund) was up 23.26% for the 12- month period ending September 30, 1997. The past 12 months have been volatile for investors in small company stocks. In many ways, there have been two markets during this period. Year in Review Although the Fund performed reasonably well in this schizophrenic market, the volatility (a characteristic that goes with small cap-aggressive growth) was sometimes difficult and unsettling. As has been noted in prior letters to shareholders, the Fund has invested extensively in technology stocks throughout its history. These stocks are often highly volatile, but generally have provided good long term returns to investors. This fiscal year was no exception. The Fund's exposure to technology drove performance on both the upside and the downside. Many technology stocks have been held by the Fund for a long time, including Kent Electronics Corp., Safeguard Scientifics, Inc., and Cambridge Technology Partners. The Fund's weighting in semiconductor capital equipment companies such as Kulicke and Soffa Industries, Inc., Integrated Process Technology, Inc., ADE Corp. of Massachusetts, and Etec Systems, Inc. gave the Fund an additional lift. While we took some profits in this sector and modestly downscaled our weighting, technology remains a significant sector in the Fund. By far, the most successful single investment for the Fund was the electronic auctioneer, Onsale Corp. The stock was purchased as an initial public offering when the market was very poor for such stocks. When these types of stocks came back into favor, however, Onsale Corp. was much sought after. As of the Fund's year-end, Onsale Corp.'s price had risen over five-fold. Other solid contributors to performance were Fairfield Communities, a vacation interval company; Consolidated Cigar Corp.; and broadcaster Clear Channel Communications, a long time holding. Incyte Pharmaceuticals Inc., a leader in the emerging field of human genomic, led the charge as the healthcare sector of the portfolio made a positive contribution to Fund performance. Other strong performers included Medic Computer Systems, Inc., a provider of healthcare information systems; FPA Medical Management, Inc., a healthcare service company; and Coventry Corp., a health maintenance organization. Less successful healthcare investments included Vertex Pharmaceuticals and Rotech Medical, emerging biotechnology firms that fell victim to proposed cuts in Medicare spending. Energy services, financial services, and commercial services provided positive momentum to the Fund. Marine Drilling Co., Sirrom Capital Corp., and Technology Solutions, all long time holdings of the Fund, were among the leaders in their respective sectors. Looking Ahead Small cap stocks are currently in favor with the market and we believe the outlook for their continued outperformance remains good. We remain focused on companies we believe have the potential to provide investors with sustained outperformance over the long term. If we are successful in finding enough of these companies, Fund shareholders should enjoy the benefits. We thank you for your continued confidence. 1. Performance figures are based on historical results and are not intended to be indicative of future performance. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. 2. The Russell 2000 Index is an unmanaged index, with dividends reinvested, which consists of common stocks of 2000 U.S. companies with market capitalization of $172 million to $1.1 billion. It is a generally recognized indicator used to measure overall performance of small company stocks. One cannot invest directly in an index. 10 The Berger Funds September 30, 1997 Annual Report Berger Small Company Growth Fund Performance Overview Comparison of Change In Value of Berger Small Company Growth Fund vs. Russel 2000 and Cost of Living Index
Berger Small Company Growth Cost of Living Date Fund Russell 2000 Index - ------------------------------------------------------------- 12/30/93 10,000 10,000 10,000 3/31/94 10,120 9,734 10,096 6/30/94 9,440 9,353 10,151 9/30/94 10,960 10,003 10,247 12/31/94 11,373 9,818 10,267 3/31/95 11,734 10,271 10,384 6/30/95 12,414 11,234 10,460 9/30/95 14,457 12,343 10,508 12/31/95 15,218 12,611 10,528 3/31/96 16,179 13,254 10,679 6/30/96 18,742 13,917 10,748 9/30/96 18,982 13,964 10,823 12/31/96 17,770 14,691 10,878 3/31/97 15,800 13,931 10,974 6/30/97 18,692 16,190 10,995 9/30/97 22,338 18,599 11,029
The Berger Small Company Growth Fund*
Average Annual Total Return As of September 30, 1997 - ------------------------ 1 Year 17.7% Life of Fund 23.9% (12/30/93)
*Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. Report of Independent Accountants To the Board of Trustees and Shareholders of Berger Investment Portfolio Trust - -------------------------------------------------------------------------------- In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Berger Small Company Growth Fund, Berger New Generation Fund and Berger Balanced Fund (constituting Berger Investment Portfolio Trust, hereafter referred to as the "Trust") at September 30, 1997, the results of each of their operations for each of the periods indicated, the changes in each of their net assets for each of the periods indicated and the financial highlights for each of the periods indicated, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 1997 by correspondence with the custodian and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for the opinion expressed above. The financial statements of Berger Small Company Growth Fund for the period ended September 30, 1994 were audited by other independent accountants whose report dated October 28, 1994 expressed an unqualified opinion on those financial statements. /s/ Price Waterhouse Price Waterhouse LLP Denver, Colorado November 11, 1997 11 Annual Report September 30, 1997 The Berger Funds Berger Small Company Growth Fund - ------------------------------------------------------------------------------ Schedule of Investments
Common Stock (89.6%) September 30, 1997 - ------------------------------------------------------------------------------ Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------ Building - Residential/Commercial (0.8%) 138,000 Hadco Corporation* $ 7,473,563 - ------------------------------------------------------------------------------ Commercial Services - Miscellaneous (2.6%) 238,500 American Oncology Resources, Inc.* 3,845,812 100,000 CMG Information Services* 2,462,500 350,000 FPA Medical Management, Inc.* 12,031,250 231,600 Labor Ready, Inc.* 5,384,700 - ------------------------------------------------------------------------------ 23,724,262 - ------------------------------------------------------------------------------ Commercial Services - Schools (0.3%) 80,500 Devry, Inc.* 2,404,938 - ------------------------------------------------------------------------------ Computer - Graphics (0.7%) 105,000 Applied Graphics Technologies, Inc.* 5,906,250 - ------------------------------------------------------------------------------ Computer - Integrated Systems (0.7%) 155,000 Wind River Systems, Inc.* 6,393,750 - ------------------------------------------------------------------------------ Computer - Local Networks (0.1%) 12,000 Ascend Communications, Inc. 388,500 - ------------------------------------------------------------------------------ Computer - Memory Devices (2.2%) 699,000 HMT Technology Corporation* 10,965,563 200,000 Microchip Technology, Inc.* 9,031,250 - ------------------------------------------------------------------------------ 19,996,813 - ------------------------------------------------------------------------------ Computer - Services (9.1%) 174,400 Ciber, Inc.* 8,240,400 289,700 E*Trade Group, Inc.* 13,615,900 5,000 Gartner Group, Inc.* 150,000 210,000 HBO & Company* 7,927,500 315,625 Lycos, Inc.* 10,731,250 65,000 National Data Corporation* 2,665,000 195,000 Quick Response Services, Inc* 6,678,750 370,000 Technology Solutions Co.* 11,932,500 375,000 Whittman-Hart, Inc.* 11,437,500 175,500 Yahoo, Inc.* 8,796,938 - ------------------------------------------------------------------------------ 82,175,738 - ------------------------------------------------------------------------------ Computer - Software (5.6%) 50,000 Baan Co. N.V.* 3,550,000 149,500 Bea Systems, Inc.* 2,672,312 250,000 Cambridge Technology Partners, Inc.* 8,953,125 135,000 CBT Group PLC ADR* 10,833,750 215,000 Cognos, Inc.* 5,106,250 750,000 Macromedia, Inc.* 9,046,875 47,000 Remedy Corporation* 1,618,563 170,000 VIASOFT, Inc.* 8,415,000 - ------------------------------------------------------------------------------ 50,195,875 - ------------------------------------------------------------------------------ Cosmetics/Personal Care (1.1%) 220,000 Rexall Sundown, Inc.* 10,037,500 - ------------------------------------------------------------------------------ Diversified Operations (0.8%) 115,650 Pittway Corporation - Class A 7,517,250 - ------------------------------------------------------------------------------ Electronic - Measuring Instruments (1.2%) 222,200 Genrad, Inc.* 6,416,025 101,025 Waters Corporation* 4,464,042 - ------------------------------------------------------------------------------ 10,880,067 - ------------------------------------------------------------------------------ Electronic - Miscellaneous Components (2.5%) 365,000 Chicago Miniature Lamp, Inc.* $ 12,136,250 340,000 Leitch Technology Corporation (Canada)* 10,349,270 - ------------------------------------------------------------------------------ 22,485,520 - ------------------------------------------------------------------------------ Electronic - Parts Distributors (1.0%) 230,000 Kent Electronics Corporation* 9,085,000 - ------------------------------------------------------------------------------ Electronic - Semiconductor Equipment (4.7%) 136,900 ADE Corporation of Massachusetts* 5,493,112 130,000 Etec Systems, Inc.* 7,410,000 160,000 FEI Company* 3,320,000 240,100 Kulicke & Soffa Industries, Inc.* 11,119,631 80,000 Lattice Semiconductor Corporation* 5,210,000 275,000 Silicon Valley Group* 9,779,688 - ------------------------------------------------------------------------------ 42,332,431 - ------------------------------------------------------------------------------ Electronic - Semiconductor Manufacturing (4.3%) 450,000 Cypress Semiconductor* 6,975,000 150,000 Maxim Integrated Products, Inc.* 10,715,625 650,000 Tower Semiconductor Ltd.*2 12,918,750 233,000 VLSI Technology, Inc.* 8,082,187 - ------------------------------------------------------------------------------ 38,691,562 - ------------------------------------------------------------------------------ Finance - Consumer Loans (0.5%) 210,000 Delta Financial Corp.* 4,239,375 - ------------------------------------------------------------------------------ Finance - Equity Real Estate Investment Trust (0.8%) 195,700 CCA Prison Realty Trust 7,387,675 - ------------------------------------------------------------------------------ Finance - Small Business Investment Company & Commercial (1.8%) 250,000 Safeguard Scientifics, Inc.* 7,312,500 171,000 Sirrom Capital Corp. 8,870,625 - ------------------------------------------------------------------------------ 16,183,125 - ------------------------------------------------------------------------------ Financial Services - Miscellaneous (1.3%) 185,500 Medaphis Corporation* 1,327,484 380,000 Pre-Paid Legal Services, Inc.* 10,735,000 - ------------------------------------------------------------------------------ 12,062,484 - ------------------------------------------------------------------------------ Funeral Services & Related (1.2%) 8,000 Equity Corporation International* 186,500 235,000 Stewart Enterprises, Inc. 10,281,250 - ------------------------------------------------------------------------------ 10,467,750 Household/Office Furniture (2.0%) 155,000 Herman Miller, Inc. 8,292,500 290,100 Knoll, Inc.* 9,718,350 - ------------------------------------------------------------------------------ 18,010,850 - ------------------------------------------------------------------------------ Insurance - Accident & Health (1.1%) 455,000 Healthcare Recoveries, Inc.* 10,237,500 - ------------------------------------------------------------------------------ Leisure - Hotels & Motels (0.1%) 23,000 Suburban Lodges of America, Inc.* 606,625 - ------------------------------------------------------------------------------ Leisure - Movies & Related (1.5%) 210,000 Avid Technology, Inc.* 6,825,000 562,500 Metromedia International Group* 6,820,313 - ------------------------------------------------------------------------------ 13,645,313 - ------------------------------------------------------------------------------
12 Annual Report September 30, 1997 The Berger Funds Berger Small Company Growth Fund - -------------------------------------------------------------------------------- Schedule of Investments
Common Stock (89.6%) - continued September 30, 1997 - ------------------------------------------------------------------------------ Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------ Leisure - Products (0.5%) 175,000 The North Face, Inc.* $ 4,703,125 - ------------------------------------------------------------------------------ Media - Books (0.5%) 109,800 Scholastic Corporation* 4,337,100 - ------------------------------------------------------------------------------ Media - Newspapers (0.7%) 90,000 Central Newspapers, Inc. - Class A 6,682,500 - ------------------------------------------------------------------------------ Media- TV/Radio (3.6%) 284,092 Chancellor Media Corporation* 14,950,341 150,000 Clear Channel Communications, Inc.* 9,731,250 28,000 Cox Radio, Inc.* 792,750 146,500 Emmis Broadcasting Corporation* 6,995,375 - ------------------------------------------------------------------------------ 32,469,716 - ------------------------------------------------------------------------------ Medical - Biomedics/Genetics (2.7%) 290,000 BioChem Pharma, Inc.* 9,135,000 105,000 Incyte Pharmaceuticals, Inc.* 8,820,000 180,000 Vertex Pharmaceuticals Corp.* 6,795,000 - ------------------------------------------------------------------------------ 24,750,000 - ------------------------------------------------------------------------------ Medical - Dental Supplies (1.5%) 273,300 Mentor Corporation 8,677,275 150,000 Omnicare, Inc. 4,875,000 - ------------------------------------------------------------------------------ 13,552,275 - ------------------------------------------------------------------------------ Medical - Drug/Diversified (0.4%) 150,000 Boron LePore* 3,468,750 - ------------------------------------------------------------------------------ Medical - Ethical Drug (2.6%) 225,000 Medicis Pharmaceutical Corporation* 10,321,875 265,000 Theragenics Corporation* 13,150,625 - ------------------------------------------------------------------------------ 23,472,500 - ------------------------------------------------------------------------------ Medical - Health Maintenance Organizations (0.8%) 420,000 Coventry Corporation* 6,930,000 - ------------------------------------------------------------------------------ Medical - Nursing Homes (0.5%) 200,000 Sun Healthcare Group, Inc.* 4,112,500 - ------------------------------------------------------------------------------ Medical - Outpatient/Home Care (2.9%) 100,000 Healthsouth Corporation* 2,668,750 20,000 PhyCor, Inc.* 581,250 360,000 Renal Care Group, Inc.* 12,960,000 207,700 Total Renal Care Holdings, Inc.* 10,385,000 - ------------------------------------------------------------------------------ 26,595,000 - ------------------------------------------------------------------------------ Medical - Products (0.9%) 215,000 PAREXEL International Corporation* 8,492,500 - ------------------------------------------------------------------------------ Oil & Gas - Drilling (1.2%) 350,000 Marine Drilling Companies, Inc.* 10,937,500 - ------------------------------------------------------------------------------ Oil & Gas - Field Services (0.8%) 100,000 BJ Services Co.* 7,425,000 - ------------------------------------------------------------------------------ Oil & Gas - U.S. Exploration & Production (1.0%) 195,000 Barrett Resources Corporation 7,592,812 32,400 St. Mary Land & Exploration Company 1,470,150 - ------------------------------------------------------------------------------ 9,062,962 - ------------------------------------------------------------------------------ Pollution Control - Services (3.6%) 600,000 Allied Waste Industries, Inc.* $ 11,475,000 252,000 Eastern Environmental Services, Inc.* 6,426,000 236,000 Newpark Resources, Inc.* 9,277,750 230,000 Tetra Tech, Inc.* 5,635,000 - ------------------------------------------------------------------------------ 32,813,750 - ------------------------------------------------------------------------------ Real Estate Operations (1.6%) 375,000 Fairfield Communities, Inc.* 14,085,938 - ------------------------------------------------------------------------------ Retail - Apparel/Shoe (1.1%) 260,000 Men's Wearhouse, Inc.* 9,685,000 - ------------------------------------------------------------------------------ Retail - Mail Order & Direct (3.3%) 200,000 Black Box Corporation* 8,750,000 660,100 Onsale, Inc.* 21,288,225 - ------------------------------------------------------------------------------ 30,038,225 - ------------------------------------------------------------------------------ Retail - Miscellaneous/Diversified (2.8%) 250,000 Guitar Center, Inc.* 6,187,500 210,100 Maxim Group, Inc.* 3,414,125 300,000 Michaels Stores, Inc.* 9,168,750 150,000 Petco Animal Supplies, Inc.* 4,706,250 292,000 Sunglass Hut International, Inc.* 2,263,000 - ------------------------------------------------------------------------------ 25,739,625 - ------------------------------------------------------------------------------ Telecommunications - Equipment (4.9%) 295,000 Brightpoint, Inc.* 13,680,625 148,500 Comverse Technology, Inc.* 7,833,375 540,000 P-COM, Inc.* 12,926,250 350,000 PairGain Technologies, Inc.* 9,975,000 - ------------------------------------------------------------------------------ 44,415,250 - ------------------------------------------------------------------------------ Telecommunications - Services (1.9%) 283,700 ACC Corporation* 9,326,637 310,000 ICG Communications, Inc.* 7,595,000 - ------------------------------------------------------------------------------ 16,921,637 - ------------------------------------------------------------------------------ Textile - Mill Products (0.6%) 190,500 Novel Denim Holdings, Ltd.* 5,143,500 - ------------------------------------------------------------------------------ Tobacco (1.2%) 275,000 Consolidated Cigar Holdings, Inc.* 11,240,625 - ------------------------------------------------------------------------------ Total Common Stock (Cost $473,539,710) 809,604,694 - ------------------------------------------------------------------------------ Preferred Stock (0.6%) - ------------------------------------------------------------------------------ Computer - Peripheral Equipment (0.6%) 665,000 Candescent Technologies Corp. Series E Preferred Stock/1,2,3/ 4,987,500 - ------------------------------------------------------------------------------ Total Preferred Stock (Cost $3,657,500) 4,987,500 - ------------------------------------------------------------------------------ U.S. Government Obligations (5.2%) - ------------------------------------------------------------------------------ $6,205,000 U.S. Treasury Bills due 11/6/97 6,174,844 20,000,000 U.S. Treasury Bills due 11/13/97 19,884,442 9,200,000 U.S. Treasury Bills due 11/20/97 9,139,689 12,050,000 U.S. Treasury Bills due 11/28/97 11,956,265 - ------------------------------------------------------------------------------ Total U.S. Government Obligations (Amortized Cost $47,155,240) 47,155,240 - ------------------------------------------------------------------------------
13 Annual Report September 30, 1997 The Berger Funds Berger Small Company Growth Fund - -------------------------------------------------------------------------------- Schedule of Investments
Federal National Mortgage Association Discount Notes (2.8%) - ------------------------------------------------------------------------------ $1,500,000 FNMA Discount Notes Due 10/14/97 $ 1,497,086 3,805,000 FNMA Discount Notes Due 10/20/97 3,794,151 8,500,000 FNMA Discount Notes Due 10/21/97 8,474,500 4,250,000 FNMA Discount Notes Due 10/24/97 4,235,446 1,720,000 FNMA Discount Notes Due 10/27/97 1,713,292 5,920,000 FNMA Discount Notes Due 10/30/97 5,893,962 - ------------------------------------------------------------------------------ Total FNMA Discount Notes (Amortized Cost $25,608,437) 25,608,437 - ------------------------------------------------------------------------------ Total Investments (Cost $549,960,887) (98.2%) 887,355,871 (Cost for federal income tax purposes $552,582,945) Other Assets, Less Liabilities (1.8%) 15,328,868 - ------------------------------------------------------------------------------ Net Assets (100.0%) $ 902,684,739 - ------------------------------------------------------------------------------
ADR - American Depository Receipt * Non-Income Producing Security 1. Valued in good faith. 2. The Investment Company Act of 1940 defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities. Following is a summary of the transactions with each such affiliate for the year ended September 30, 1997 (in thousands):
Candescent Tower Technologies Alrenco Semiconductor Vidamed Corporation - ------------------------------------------------------------------------------ Market Value at 9/30/96 $7,350 $ 0 $5,342 $3,658 Purchases at Cost 0 6,696 0 0 Sales at Cost 7,553 0 2,503 0 Change in Unrealized Appreciation (Depreciation) 203 6,223 (2,839) 1,330 - ------------------------------------------------------------------------------ Market Value at 9/30/97 0 12,919 0 4,988 - ------------------------------------------------------------------------------ Dividend Income 0 0 0 0 Realized Gain (Loss) (3,605) 0 1,663 0
3. Schedule of Restricted or Illiquid Securities (in thousands)
Fair Value as a Security Name Date Acquired Cost Fair Value % of Net Assets - ------------------------------------------------------------------------------ Candescent Tech. Corporation Series E Preferred Stock 5/1/96 $3,658 $4,988 0.6%
See notes to financial statements. 14 Annual Report September 30, 1997 The Berger Funds Berger Small Company Growth Fund - -------------------------------------------------------------------------------- Statement of Assets and Liabilities (Amounts in Thousands Except Net Asset Value) - --------------------------------------------------------------------------------
September 30, 1997 - --------------------------------------------------------------------------------------------- Assets Investments at cost $ 549,961 - --------------------------------------------------------------------------------------------- Investments at value $ 887,356 Cash 2,247 Receivables Fund shares sold 9,965 Investment securities sold 6,570 Dividends 768 - --------------------------------------------------------------------------------------------- Total Assets 906,906 - --------------------------------------------------------------------------------------------- Liabilities Payables Fund shares redeemed 2,038 Investment securities purchased 787 Accrued investment advisory fees 620 Accrued transfer agent fees 328 Accrued postage, printing & reports 219 Accrued 12b-1 distribution & advertising fees 172 Other accrued expenses 57 - --------------------------------------------------------------------------------------------- Total Liabilities 4,221 - --------------------------------------------------------------------------------------------- Net Assets Applicable to Shares Outstanding $ 902,685 - --------------------------------------------------------------------------------------------- Capital Shares Authorized (par value $0.01) Unlimited - --------------------------------------------------------------------------------------------- Shares Outstanding 169,243 - --------------------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share $ 5.33 - ---------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------- Statement of Operations (Amounts in Thousands) - --------------------------------------------------------------------------------------------- For the Year Ended September 30, 1997 - --------------------------------------------------------------------------------------------- Investment Income Income Dividends $ 1,413 Interest 2,920 - --------------------------------------------------------------------------------------------- Total Income 4,333 - --------------------------------------------------------------------------------------------- Expenses Investment advisory fees 6,831 12b-1 distribution & advertising fees 1,899 Transfer agent fees 2,473 Postage, printing & reports 1,008 Registration fees 89 Custodian fees 83 Directors'/Trustees' fees & expenses 86 Accounting fees 76 Administrative services 78 Legal fees 63 Insurance & bonds 11 Audit fees 13 Other 3 - --------------------------------------------------------------------------------------------- Total Expenses 12,713 Less fees paid indirectly (14) Less earnings credits (108) - --------------------------------------------------------------------------------------------- Expenses - Net 12,591 - --------------------------------------------------------------------------------------------- Net Investment Income (Loss) (8,258) - --------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions Net realized gain (loss) on securities and foreign currency transactions 78,748 Net change in unrealized appreciation (depreciation) on securities and foreign currency transactions 48,946 - --------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions 127,694 - --------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations $ 119,436 - ---------------------------------------------------------------------------------------------
See notes to financial statements. 15 Annual Report September 30, 1997 The Berger Funds Berger Small Company Growth Fund - -------------------------------------------------------------------------------- Statement of Changes in Net Assets (Amounts in Thousands) - --------------------------------------------------------------------------------
Year Ended Year Ended 9/30/97 9/30/96 - --------------------------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ (8,258) $ (6,306) Net realized gain (loss) on securities and foreign currency transactions 78,748 28,859 Net change in unrealized appreciation (depreciation) on securities and foreign currency transactions 48,946 152,013 Net Increase (Decrease) in Net Assets Resulting from Operations 119,436 174,566 From Dividends and Distributions to Shareholders Net Investment Income 0 0 Net realized gains on investments (34,716) 0 - --------------------------------------------------------------------------------------------------------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (34,716) 0 - --------------------------------------------------------------------------------------------------------------- From Fund Share Transactions Proceeds from shares sold 413,578 670,186 Net asset value of shares issued in reinvestment of distributions 33,942 0 - --------------------------------------------------------------------------------------------------------------- Total 447,520 670,186 Payments for shares redeemed (501,022) (495,952) Net Increase (Decrease) in Net Assets Derived From Fund Share Transactions (53,502) 174,234 - --------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets 31,218 348,800 Net Assets Beginning of period 871,467 522,667 - --------------------------------------------------------------------------------------------------------------- End of period $ 902,685 $ 871,467 - --------------------------------------------------------------------------------------------------------------- Components of Net Assets Capital (par value and paid in surplus) $ 504,096 $ 565,166 Undistributed net investment income (loss) (37) 0 Undistributed net realized gain (loss) from investments 61,231 17,852 Net unrealized appreciation (depreciation) on investments 337,395 288,449 Total $ 902,685 $ 871,467 - --------------------------------------------------------------------------------------------------------------- Transactions in Fund Shares - --------------------------------------------------------------------------------------------------------------- Shares sold 92,035 157,794 Shares issued to shareholders in reinvestment of distributions 8,062 0 - --------------------------------------------------------------------------------------------------------------- Total 100,097 157,794 Shares repurchased (114,558) (118,706) - --------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares (14,461) 39,088 Shares outstanding, beginning of period 183,704 144,616 - --------------------------------------------------------------------------------------------------------------- Shares outstanding, end of period 169,243 183,704 - ---------------------------------------------------------------------------------------------------------------
See notes to financial statements. 16 Annual Report September 30, 1997 The Berger Funds Berger Small Cap [PHOTO APPEARS HERE] Value Fund Portfolio Manager's Commentary Robert H. Perkins Performance The Berger Small Cap Value Fund (the "Fund") had a very rewarding year. The Fund had an annual total return of 48.32%/1/ (investor shares) and 48.66%/1/ (institutional shares) versus 37.67%, 40.43%, and 33.19% for the Dow Jones Industrial Average/2/, S&P 500/2/, and Russell 2000/3/ indexes, respectively/4/. Over the last five months of the fiscal year, small company stocks outperformed large company stocks by a significant margin. This is the first sustained period of outperformance since 1993, and we believe it will continue due to the wide disparity in valuations and relative growth rates that still exist. Of equal importance is the fact that smaller company outperformance has been largely the result of strong gains in the "growth" segment of the market, with the "value" segment lagging. This reinforces our belief that the "value" segment remains the most undervalued area of the market. With the S&P 500 trading at 23 to 24 times trailing 12-month earnings, there is little room for error regarding corporate earnings, interest rates, and economic surprises. The Russell 2000 - the market index most closely resembling the stocks in which our Fund typically invests - also sells at approximately 24 times trailing earnings. Historically, this index sells at a 25% premium to the S&P 500 based on earnings. At present, the vast majority of companies in the Russell 2000 are expected to have earnings growth that is 50% greater than the S&P 500 -15% versus 10%. In addition, smaller companies generally have less international exposure, which means less currency risk. These factors reinforce our belief that, for the near-term, the relative risk in a fully-priced investment environment is much less in the small cap market. Year in Review While the list of truly undervalued stocks has become shorter, we feel quite comfortable with our current holdings. We are maintaining a 20% position in the bank and thrift area. Earnings visibility remains high in this sector and consolidation continues to make this an attractive area. Our continuing search for companies that have fallen over 50% in price due to short-term problems has led us to increase our exposure in the consumer sector. As we have said in the past, we feel there is much less downside risk in stocks that are down over 50%, have strong balance sheets, and exhibit what we believe to be only temporary problems. One such stock is a company called Just for Feet, Inc. This shoe retailer was trading in the mid-30s last year. The company has experienced short-term earnings problems as a result of two recent acquisitions. Management believes it will take a few quarters to implement better internal controls while its superstore concept, which is posting positive same-store sales comparisons, remains intact. Another company in the consumer area that has fallen out of favor is West Marine, Inc., which dominates the boating supply industry. It, too, has experienced temporary earnings declines as a result of a major acquisition. Margins have already begun to improve, however, and the company is expected to return to 20%+ growth in 1998. Looking Ahead Going forward, we find it more important than ever to stress the risk side of the Fund's risk/reward equation. As of year-end, we had over 14% of Fund assets in cash and cash equivalents. This largely resulted from our inability to find many "true" values in the market. However, this cash position gives us the ability to capitalize on values created by general market corrections or weaknesses in specific companies due to short-term correctable problems. We thank you for your investment in the Berger Small Cap Value Fund. 1. Performance figures are based on historical results and are not intended to be indicative of future performance. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance data for the Investor Shares include periods prior to the adoption of class designations on February 14, 1997, and therefore do not reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares. 2. Dow Jones Industrial Average and the S&P 500 are unmanaged indexes, with dividends reinvested. One cannot invest directly in an index. 3. The Russell 2000 Index is an unmanaged index, with dividends reinvested, which consists of common stocks of 2000 U.S. companies with market capitalizations of $172 million to $1.1 billion. It is a generally recognized indicator used to measure overall performance of small company stocks. One cannot invest directly in an index. 4. For the nine month period covered by this Fund's annual report, the Fund's total return was 29.23% (investor shares, first offered February 14, 1997) and 35.50% (institutional shares). For the same period the return for the Dow Jones Industrial Average, S&P 500 and Russell 2000 were 24.91%, 29.61% and 26.60% respectively. 17 Annual Report September 30, 1997 The Berger Funds Berger Small Cap Value Fund Performance Overview Comparison of Change in Value of Berger Small Cap Value Fund vs. Russell 2000 and Cost of Living Index.
Cost of Institutional Investor Russell Living Date Shares Shares 2000 Index - ---- ------------- -------- ------- ------- 10/21/87 10,000 10,000 10,000 10,000 9/30/88 11,963 11,963 12,866 10,390 9/30/89 15,035 15,035 15,634 10,841 9/30/90 11,979 11,979 11,392 11,509 9/30/91 14,209 14,209 16,532 11,899 9/30/92 15,188 15,188 18,007 12,255 9/30/93 19,779 19,779 23,985 12,585 9/30/94 23,208 23,208 24,613 12,958 9/30/95 27,035 27,035 30,372 13,287 9/30/96 31,425 31,425 34,361 13,686 9/30/97 46,716 46,612 45,765 13,946
The Berger Small Cap Value Fund* Average Annual Total Return
As of September 30, 1997 Institutional Investor - ------------------------------------------------------- 1 Year 48.7% 48.3% 5 Year 25.2% 25.1% Life of Fund 16.8% 16.7% (10/21/87)
*Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. Performance data for the Investor Shares include periods prior to the adoption of class designations on February 14, 1997, and therefore do not reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares. Report of Independent Accountants To the Board of Trustees and Shareholders of Berger Omni Investment Trust - ------------------------------------------------------------------------------- In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Berger Small Cap Value Fund (constituting Berger Omni Investment Trust, formerly known as The Omni Investment Fund, hereafter referred to as the "Trust") at September 30, 1997, the results of its operations, the changes in its net assets and the financial highlights for the period from January 1, 1997 through September 30, 1997, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at September 30, 1997 by correspondence with the custodian and the application of alternative auditing procedures where securities purchased had not been received, provides a reasonable basis for the opinion expressed above. The financial statements of The Omni Investment Fund for the year ended December 31, 1996 were audited by other independent accountants whose report dated January 24, 1997 expressed an unqualified opinion on those financial statements. /s/ Price Waterhouse LLP Price Waterhouse LLP Denver, Colorado November 11, 1997 18 Annual Report September 30, 1997 The Berger Funds Berger Small Cap Value Fund Schedule of Investments
Common Stock (85.2%) September 30, 1997 - ------------------------------------------------------------------------------- Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------- Auto/Truck - Original Equipment (3.3%) 200,000 Simpson Industries, Inc. $ 2,312,500 70,000 Walbro Corp. 1,531,250 - ------------------------------------------------------------------------------- 3,843,750 - ------------------------------------------------------------------------------- Banks - Northeast (4.8%) 45,000 Banknorth Group, Inc. 2,458,125 140,000 CFX Corporation 3,001,250 - ------------------------------------------------------------------------------- 5,459,375 - ------------------------------------------------------------------------------- Banks - Southeast (3.9%) 55,000 CCB Financial Corporation 4,434,375 - ------------------------------------------------------------------------------- Banks - West (2.3%) 70,000 Imperial Bancorp* 2,616,250 - ------------------------------------------------------------------------------- Building - Construction Products/Miscellaneous (0.6%) 40,000 Juno Lighting, Inc. 685,000 - ------------------------------------------------------------------------------- Building - Mobile/Manufacturing & RV (2.1%) 230,000 Cavalier Homes, Inc. 2,386,250 - ------------------------------------------------------------------------------- Computer - Optical Recognition (1.4%) 95,000 Robotic Vision Systems* 1,603,125 - ------------------------------------------------------------------------------- Computer - Peripheral Equipment (2.3%) 75,000 Eltron International, Inc.* 2,573,437 - ------------------------------------------------------------------------------- Computer - Software (0.6%) 35,000 Network General Corporation* 678,125 - ------------------------------------------------------------------------------- Consumer Products - Miscellaneous (4.2%) 176,000 Jostens, Inc. 4,774,000 - ------------------------------------------------------------------------------- Diversified Operations (1.5%) 75,800 Glatfelter PH Co. 1,681,813 - ------------------------------------------------------------------------------- Finance-Equity Real Estate Investment Trust (3.8%) 60,000 IRT Property Co. 765,000 80,000 Summit Property, Inc. 1,750,000 96,100 Town & Country Trust 1,801,875 - ------------------------------------------------------------------------------- 4,316,875 - ------------------------------------------------------------------------------- Finance - Investment Management (2.8%) 100,000 Pioneer Group, Inc. 3,200,000 - ------------------------------------------------------------------------------- Finance - Public Investment Fund-Foreign (8.1%) 115,000 Emerging Markets Telecom Fund* 2,077,187 195,000 GT Global Developing Markets Fund 2,656,875 100,000 GT Global Eastern Europe Fund 1,962,500 200,000 Morgan Stanley Asia-Pacific Fund 1,837,500 40,200 New Germany Fund 630,638 - ------------------------------------------------------------------------------- 9,164,700 - ------------------------------------------------------------------------------- Finance - Savings & Loan (8.7%) 33,000 Commercial Federal Corp. 1,555,125 110,000 Mechanics Savings Bank* 2,887,500 71,000 Medford Savings Bank 2,556,000 140,000 Poncebank 2,887,500 - ------------------------------------------------------------------------------- 9,886,125 - ------------------------------------------------------------------------------- Household - Textiles & Furnishings (1.7%) 170,000 Congoleum Corp. - Class A* 1,901,875 - ------------------------------------------------------------------------------- Insurance - Multi Line (1.4%) 40,000 Old Republic International Corp. 1,560,000 - ------------------------------------------------------------------------------- Machinery - Construction/Mining (1.2%) 110,000 JLG Industries, Inc. 1,409,375 - ------------------------------------------------------------------------------- Machinery - Tools & Related Products (0.8%) 90,800 PPT Vision, Inc.* 873,950 - ------------------------------------------------------------------------------- Media - Cable TV (3.3%) 70,000 Jones Intercable, Inc. - Class A* 883,750 230,000 Jones Intercable, Inc.* 2,846,250 - ------------------------------------------------------------------------------- 3,730,000 - ------------------------------------------------------------------------------- Media - Newspapers (1.9%) 160,000 Hollinger International, Inc. 2,140,000 - ------------------------------------------------------------------------------- Media - Periodicals (2.7%) 210,000 Playboy Enterprises, Inc. - Class A* 3,123,750 - -------------------------------------------------------------------------------
19 Annual Report September 30, 1997 The Berger Funds Berger Small Cap Value Fund Schedule of Investments
Common Stock (85.2%) - continued September 30, 1997 - ------------------------------------------------------------------------------- Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------- Medical - Wholesale Drug/Sundries (1.1%) 80,000 Perrigo Co.* $ 1,260,000 - ------------------------------------------------------------------------------- Oil & Gas - U.S. Exploration & Production (4.6%) 115,000 Chieftain International, Inc.* 2,990,000 18,000 Pogo Producing Company 786,375 55,000 Seagull Energy Corporation* 1,402,500 - ------------------------------------------------------------------------------- 5,178,875 - ------------------------------------------------------------------------------- Retail - Apparel/Shoe (1.9%) 140,000 Just for Feet, Inc.* 2,213,750 - ------------------------------------------------------------------------------- Retail - Mail Order & Direct (1.3%) 80,000 Blair Corporation 1,450,000 - ------------------------------------------------------------------------------- Retail - Miscellaneous Diversified (2.4%) 120,000 West Marine Products* 2,745,000 - ------------------------------------------------------------------------------- Retail - Restaurants (2.5%) 30,000 Bob Evans Farms, Inc. 570,000 80,000 Sbarro, Inc. 2,240,000 - ------------------------------------------------------------------------------- 2,810,000 - ------------------------------------------------------------------------------- Telecommunications - Cellular (2.2%) 145,000 Centennial Cellular Corp. - Class A* 2,483,125 - ------------------------------------------------------------------------------- Telecommunications - Services (1.5%) 220,000 General Communication, Inc. - Class A* 1,732,500 - ------------------------------------------------------------------------------- Transportation - Shipping (4.3%) 160,000 Knightsbridge Tankers, Ltd. 4,530,000 100,000 M.C. Shipping, Inc. 362,500 - ------------------------------------------------------------------------------- 4,892,500 - ------------------------------------------------------------------------------- Total Common Stock (Cost $81,143,351) 96,807,900 - ------------------------------------------------------------------------------- U.S. Government Obligations (14.0%) - ------------------------------------------------------------------------------- $2,365,000 U.S. Treasury Bills due 10/9/97 $ 2,362,330 580,000 U.S. Treasury Bills due 10/16/97 578,776 3,420,000 U.S. Treasury Bills due 11/6/97 3,403,348 6,784,000 U.S. Treasury Bills due 11/13/97 6,744,830 1,500,000 U.S. Treasury Bills due 11/20/97 1,490,167 1,350,000 U.S. Treasury Bills due 11/28/97 1,339,466 - ------------------------------------------------------------------------------- Total U.S. Government Obligations (Amortized Cost $15,918,917) 15,918,917 - ------------------------------------------------------------------------------- Federal National Mortgage Association Discount Notes (2.9%) - ------------------------------------------------------------------------------- $2,000,000 FNMA Discount Notes Due 10/20/97 1,994,294 1,300,000 FNMA Discount Notes Due 10/27/97 1,294,935 - ------------------------------------------------------------------------------- Total FNMA Discount Notes (Amortized Cost $3,289,229) 3,289,229 - ------------------------------------------------------------------------------- Total Investments (Cost $100,351,497) (102.1%) 116,016,046 (Cost for federal income tax purposes $100,351,596) Other Liabilities, Less Assets (2.1%) (2,355,283) Net Assets (100.0%) $ 113,660,763
ADR - American Depository Receipt * Non-income producing security See notes to financial statements. 20 Annual Report September 30, 1997 The Berger Funds Berger Small Cap Value Fund Statement of Assets and Liabilities (Amounts in Thousands Except Net Asset Value Per Share)
September 30, 1997 - ------------------------------------------------------------------------------------------------------- Assets Investments at cost $ 100,351 - ------------------------------------------------------------------------------------------------------- Investments at value $ 116,016 Cash 254 Receivables Investment securities sold 57 Fund shares sold 937 Dividends and interest 77 - ------------------------------------------------------------------------------------------------------- Total Assets 117,341 - ------------------------------------------------------------------------------------------------------- Liabilities Payables Investment securities purchased 3,063 Fund shares redeemed 481 Accrued investment advisory fees 76 Other accrued expenses 60 - ------------------------------------------------------------------------------------------------------- Total Liabilities 3,680 - ------------------------------------------------------------------------------------------------------- Net Assets Applicable to Shares Outstanding (Par Value $0.01, unlimited shares authorized) $ 113,661 - ------------------------------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share Investor shares (based on net assets of $55,211 and 2,478 shares outstanding) $ 22.28 - ------------------------------------------------------------------------------------------------------- Institutional shares (based on net assets of $58,450 and 2,618 shares outstanding) $ 22.33 - -------------------------------------------------------------------------------------------------------
Statement of Operations (Amounts in Thousands)
For the Period Ended September 30, 1997 - ------------------------------------------------------------------------------------------------------- Investment Income Income Dividends $ 596 Interest 346 - ------------------------------------------------------------------------------------------------------- Total Income 942 - ------------------------------------------------------------------------------------------------------- Expenses Investment advisory fees 418 Administrative services 4 Legal fees 24 Custodian fees 15 12b-1 distribution & advertising fees - Investor Shares 36 Transfer agent fees - Investor Shares 28 Transfer agent fees - Institutional Shares 31 Postage, printing & reports 31 Insurance & bonds 3 Registration fees - Investor Shares 13 Registration fees - Institutional Shares 21 Accounting fees 13 Audit fees 17 Directors'/Trustees' fees & expenses 5 Other 2 - ------------------------------------------------------------------------------------------------------- Total Expenses 661 Less earnings credits (5) - ------------------------------------------------------------------------------------------------------- Expenses - Net 656 - ------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 286 - ------------------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investment Transactions Net realized gain (loss) on security transactions 13,449 Net change in unrealized appreciation (depreciation) on security transactions 7,589 - ------------------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investment Transactions 21,038 - ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations $ 21,324 - -------------------------------------------------------------------------------------------------------
See notes to financial statements. 21 Annual Report September 30, 1997 The Berger Funds Berger Small Cap Value Fund Statement of Changes in Net Assets (Amounts in Thousands)
Period from 1/1/97 to Year Ended 9/30/97 12/31/96 - ----------------------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ 286 $ 224 Net realized gain (loss) on security transactions 13,449 3,443 Net change in unrealized appreciation (depreciation) on security transactions 7,589 3,816 Net Increase (Decrease) in Net Assets Resulting from Operations 21,324 7,483 From Dividends and Distributions to Shareholders Net investment income 0 (208) Net realized gains on investments 0 (3,402) Net Decrease in Net Assets from Dividends and Distributions to Shareholders 0 (3,610) From Fund Share Transactions Proceeds from shares sold 73,022 3,119 Net asset value of shares issued in reinvestment of dividends and distributions 0 3,359 Total 73,022 6,478 Payments for shares redeemed (16,726) (6,143) Net Increase (Decrease) in Net Assets Derived From Fund Share Transactions 56,296 335 Increase (Decrease) in Net Assets 77,620 4,208 Net Assets Beginning of period 36,041 31,833 End of period $ 113,661 $ 36,041 Components of Net Assets Capital (par value and paid in surplus) $ 84,197 $ 27,873 Undistributed net investment income (loss) 262 16 Undistributed net realized gain (loss) from investments 13,537 76 Unrealized appreciation (depreciation) on investments 15,665 8,076 - ----------------------------------------------------------------------------------------------------------- Total $ 113,661 $ 36,041 - -----------------------------------------------------------------------------------------------------------
Transactions in Fund Shares (Amounts in Thousands)
Period from 1/1/97 to 9/30/97/1/ Year Ended December 31, 1996 Shares Amount Shares Amount - ----------------------------------------------------------------------------------------------------------- Institutional Shares Sold 978 $ 19,359 197 $ 3,119 Reinvestment of dividends and distributions 0 0 204 3,359 - ----------------------------------------------------------------------------------------------------------- Total 978 19,359 401 6,478 Repurchased (546) (10,308) (399) (6,143) - ----------------------------------------------------------------------------------------------------------- Net Increase (Decrease) 432 9,051 2 335 Beginning of period 2,186 27,873 2,184 27,538 - ----------------------------------------------------------------------------------------------------------- End of period 2,618 36,924 2,186 $ 27,873 - ----------------------------------------------------------------------------------------------------------- Investor Shares Sold 2,807 $ 53,663 Reinvestment of dividends and distributions 0 0 - ----------------------------------------------------------------------------------------------------------- Total 2,807 53,663 Repurchased (329) (6,418) - ----------------------------------------------------------------------------------------------------------- Net Increase (Decrease) 2,478 47,245 Beginning of period 0 0 - ----------------------------------------------------------------------------------------------------------- End of period 2,478 $ 47,245 - -----------------------------------------------------------------------------------------------------------
1. For the period from January 1, 1997 through September 30, 1997 for Institutional Shares and for the period from February 14, 1997 (commencement of investment operations) through September 30, 1997 for the Investor Shares. See notes to financial statements. 22 Annual Report September 30, 1997 The Berger Funds Berger One Hundred Fund [PICTURE APPEARS HERE] Portfolio Manager's Commentary Patrick S. Adams Performance As stated in Berger One Hundred Fund's (the "Fund") March 31, 1997 report to shareholders, our goal is to return our flagship Fund to its proper place as a performance leader among its peers. We have taken giant strides toward achieving this goal over the past six months, even though it is not reflected in the Fund's annual total return of 26.50%/1/ for the year ended September 30, 1997. We still trailed the Standard & Poor's (S&P) 500/2/ annual total return, which was 40.43% for the same period. The Fund's poor showing early in the year is the key reason why we lagged the index on an annualized basis. But the Fund's performance began to improve in April. For the period July 1 - September 30, 1997, the Fund's total return of 13.50%/1/ exceeded that of the S&P 500 by 6.01%. We feel we're back on track with a portfolio striving for excellent near-term and long-term performance. Year in Review In February we began to make numerous changes in the Fund that we believed would improve quality and maintain the long-term growth rate target. We broadened the portfolio, increasing the number of stocks from 53 in early February to 90 on March 31 (86 at year-end). We shifted assets away from energy services and into consumer products because we saw strong potential and a number of attractively valued stocks in the consumer sector. We maintained a high percentage of Fund assets in technology but added new stocks to the portfolio and reduced positions in others. Our restructuring was complete in April and our efforts began to pay off for shareholders in the third calendar quarter 1997, when the Fund outperformed broad market indexes. On the basis of this strong performance, we elected to take some profits during the quarter. Although we sold some technology holdings to take profits, we slightly increased the percentage of Fund assets invested in this sector from 24.3% at the end of the second quarter to 24.8% as of September 30. We remain overweighted in technology and healthcare and are selectively adding to our capital goods holdings. We reduced consumer holdings to approximately 10% of Fund assets as of year-end. At year-end, stocks held by the Fund were trading at about the same multiple of earnings per share as the S&P 500, but had long-term growth rates nearly twice that of the index. The fundamentals of companies owned by the Fund are strong. We had established core positions in many excellent companies (Motorola, GAP Stores, Tommy Hilfiger, and Nordstrom, among others) and were trading around those stocks. For example, we purchased more Cisco Systems on a price decline and sold some Cadence Design Systems, then our largest position, on a price run up. We identified two new stocks to add to the portfolio - Household International, parent of Coldwell Banker, and Safeway. We see excellent upside potential in both stocks based on our analysis. We still like the technology sector for the long-term and are actively seeking quality stocks to add to the portfolio, perhaps rebuilding technology, once again, to an overweighted position. Looking Ahead The key risk to the portfolio in the future, in our opinion, is a too-robust economy that the Federal Reserve Board could decide to hold down with interest rate increases. We do not see the portfolio adversely impacted by earnings announcements or currency fluctuations. Going forward, your Fund's performance should continue to strengthen as we continue to adhere closely to the philosophy that has guided this Fund since 1974 - seek high quality, predictable growth companies at attractive prices. We thank you for your investment in the Berger One Hundred Fund, and for your patience as we restructured it. 1. Performance figures are based on historical results and are not intended to be indicative of future performance. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. 2. The S&P 500 is an unmanaged index, with dividends reinvested, which consists of the common stocks of 500 publicly traded U.S. companies. One cannot invest directly in an index. 23 Annual Report September 30, 1997 The Berger Funds Berger One Hundred Fund Performance Overview Comparison of Change in Value of Berger One Hundred Fund vs. S&P 500 Stock Index and Cost of Living Index
Berger One S&P 500 Cost of Date Hundred Fund Stock Index Living Index ---- ------------ ----------- ------------ 9/30/87 10,000 10,000 10,000 9/30/88 9,522 8,757 10,417 9/30/89 14,026 11,637 10,870 9/30/90 11,664 10,563 11,539 9/30/91 21,345 13,843 11,930 9/30/92 22,833 15,365 12,287 9/30/93 32,195 17,353 12,617 9/30/94 31,067 17,999 12,991 9/30/95 36,770 23,334 13,322 9/30/96 40,210 28,063 13,722 9/30/97 50,866 39,398 14,017
The Berger One Hundred Fund* Average Annual Total Return
As of September 30, 1997 - ------------------------ 1 Year 26.5% 5 Year 17.4% 10 Year 17.7%
*Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. Report of Independent Accountants To the Board of Directors and Shareholders of Berger One Hundred Fund, Inc. - -------------------------------------------------------------------------------- In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Berger One Hundred Fund, Inc. (the "Fund") at September 30, 1997, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 1997 by correspondence with the custodian and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for the opinion expressed above. The financial statements of the Fund for the year ended September 30, 1994 were audited by other independent accountants whose report dated October 28, 1994 expressed an unqualified opinion on those financial statements. /s/ Price Waterhouse LLP Price Waterhouse LLP Denver, Colorado November 11, 1997 24 Annual Report September 30, 1997 The Berger Funds Berger One Hundred Fund Schedule of Investments
Common Stock (86.3%) September 30, 1997 - ------------------------------------------------------------------------------ Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------ Aerospace/Defense (0.9%) 312,000 The Boeing Company $ 16,984,500 - ------------------------------------------------------------------------------ Auto/Truck - Original Equipment (1.0%) 370,000 Lear Corporation* 18,222,500 - ------------------------------------------------------------------------------ Banks - Money Center (1.0%) 165,000 Chase Manhattan Corporation 19,470,000 - ------------------------------------------------------------------------------ Banks - Super Regional (1.0%) 363,100 First Union Corporation 18,177,694 - ------------------------------------------------------------------------------ Beverages - Soft Drinks (1.2%) 550,000 Pepsico, Inc. 22,309,375 - ------------------------------------------------------------------------------ Commercial Services - Miscellaneous (0.9%) 880,000 Medpartners, Inc.* 18,865,000 - ------------------------------------------------------------------------------ Computer - Graphics (3.5%) 813,600 Cadence Design Systems, Inc.* 43,527,600 869,000 Silicon Graphics, Inc.* 22,811,250 - ------------------------------------------------------------------------------ 66,338,850 - ------------------------------------------------------------------------------ Computer - Local Networks (4.1%) 220,000 Bay Networks, Inc.* 8,497,500 798,800 Cisco Systems, Inc.* 58,362,325 200,000 3 Com Corporation* 10,250,000 - ------------------------------------------------------------------------------ 77,109,825 - ------------------------------------------------------------------------------ Computer - Memory Devices (1.0%) 320,000 Iomega Corporation* 8,360,000 277,000 Quantum Corporation* 10,612,563 - ------------------------------------------------------------------------------ 18,972,563 - ------------------------------------------------------------------------------ Computer - Mini/Micro (1.9%) 240,000 Compaq Computer Corporation* 17,940,000 390,000 Sun Microsystems, Inc.* 18,256,875 - ------------------------------------------------------------------------------ 36,196,875 - ------------------------------------------------------------------------------ Computer - Services (2.0%) 341,700 Computer Sciences Corporation* 24,175,275 360,000 HBO & Company* 13,590,000 - ------------------------------------------------------------------------------ 37,765,275 - ------------------------------------------------------------------------------ Computer - Software (2.1%) 175,400 BMC Software, Inc.* 11,357,150 628,500 Parametric Technology Corporation* 27,732,563 - ------------------------------------------------------------------------------ 39,089,713 - ------------------------------------------------------------------------------ Electronic - Semiconductor Equipment (0.4%) 181,000 Lam Research Corporation* 8,416,500 - ------------------------------------------------------------------------------ Electronic - Semiconductor Manufacturing (5.6%) 141,000 Intel Corporation 13,016,063 162,000 Linear Technology Corporation 11,137,500 137,500 Maxim Integrated Products, Inc.* 9,822,656 555,000 Motorola, Inc. 39,890,625 390,500 National Semiconductor Corporation* 16,010,500 324,300 Xilinx, Inc.* 16,417,681 - ------------------------------------------------------------------------------ 106,295,025 - ------------------------------------------------------------------------------ Electrical -Equipment (1.3%) 375,000 Honeywell, Inc. $ 25,195,312 - ------------------------------------------------------------------------------ Finance - Consumer Loans (1.9%) 320,000 Household International, Inc. 36,220,000 - ------------------------------------------------------------------------------ Finance - Mortgage and Related Services (3.8%) 430,000 Federal Home Loan Mortgage Corp. 15,157,500 285,000 Federal National Mortgage Association 13,395,000 590,000 Green Tree Financial Corporation 27,730,000 580,000 Money Store, Inc.. 16,530,000 - ------------------------------------------------------------------------------ 72,812,500 - ------------------------------------------------------------------------------ Financial Services - Miscellaneous (0.6%) 310,000 First Data Corporation 11,644,375 - ------------------------------------------------------------------------------ Insurance - Life (1.6%) 633,000 Conseco, Inc. 30,898,313 - ------------------------------------------------------------------------------ Insurance - Multi Line (0.8%) 270,000 MGIC Investment Corporation 15,474,375 - ------------------------------------------------------------------------------ Insurance - Property/Casualty/Title (0.5%) 94,600 American International Group, Inc. 9,761,538 - ------------------------------------------------------------------------------ Leisure - Hotels and Motels (3.3%) 240,000 HFS, Inc.* 17,865,000 742,800 Hilton Hotels Corporation 25,023,075 850,000 La Quinta Inns, Inc. 20,028,125 - ------------------------------------------------------------------------------ 62,916,200 - ------------------------------------------------------------------------------ Leisure - Services (2.1%) 455,000 Royal Caribbean Cruises, Ltd. 19,906,250 255,000 The Walt Disney Company 20,559,375 - ------------------------------------------------------------------------------ 40,465,625 - ------------------------------------------------------------------------------ Leisure - Toys/Games/Hobby (0.5%) 325,000 Hasbro, Inc. 9,140,625 - ------------------------------------------------------------------------------ Machinery - Construction/Mining (1.4%) 483,600 Caterpillar, Inc. 26,084,175 - ------------------------------------------------------------------------------ Medical - Biomedics/Genetics (1.4%) 308,200 Amgen, Inc.* 14,774,338 230,300 Centocor, Inc.* 10,953,644 - ------------------------------------------------------------------------------ 25,727,982 - ------------------------------------------------------------------------------ Medical - Dental Supplies (1.0%) 595,000 Omnicare, Inc. 19,337,500 - ------------------------------------------------------------------------------ Medical - Drug/Diversified (3.1%) 255,000 Bristol-Myers Squibb Company 21,101,250 370,000 Johnson & Johnson 21,321,250 125,000 Warner-Lambert Company 16,867,188 - ------------------------------------------------------------------------------ 59,289,688 - ------------------------------------------------------------------------------ Medical - Ethical Drugs (1.1%) 90,000 Eli Lilly Co. 10,861,875 93,100 Merck & Company, Inc. 9,304,181 - ------------------------------------------------------------------------------ 20,166,056 - ------------------------------------------------------------------------------
25 Annual Report September 30, 1997 The Berger Funds Berger One Hundred Fund - ------------------------------------------------------------------------------ Schedule of Investments
Common Stock (86.3%) - continued September 30, 1997 - ------------------------------------------------------------------------------ Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------ Medical - Health Maintenance Organizations (0.8%) 200,000 Oxford Health Plans, Inc.* $ 14,975,000 - ------------------------------------------------------------------------------ Medical - Hospitals (2.3%) 760,000 Tenet Healthcare Corporation* 22,135,000 510,700 Vencor, Inc.* 21,066,375 - ------------------------------------------------------------------------------ 43,201,375 - ------------------------------------------------------------------------------ Medical - Wholesale Drug/Sundries (1.4%) 382,100 Cardinal Health, Inc. 27,129,100 - ------------------------------------------------------------------------------ Oil & Gas - Drilling (0.7%) 260,000 Transocean Offshore, Inc. 12,463,750 - ------------------------------------------------------------------------------ Oil & Gas - Machinery/Equipment (0.4%) 99,100 Cooper Cameron Corporation* 7,116,619 - ------------------------------------------------------------------------------ Office Equipment & Automation (0.4%) 100,000 Xerox Corporation 8,418,750 - ------------------------------------------------------------------------------ Pollution Control - Equipment (1.4%) 625,000 United States Filter Corporation* 26,914,063 - ------------------------------------------------------------------------------ Pollution Control - Services (3.5%) 538,700 Allied Waste Industries, Inc.* 10,302,638 950,000 Republic Industries, Inc.* 31,290,625 600,000 U.S.A. Waste Services, Inc.* 23,925,000 - ------------------------------------------------------------------------------ 65,518,263 - ------------------------------------------------------------------------------ Retail - Apparel/Shoes (3.4%) 565,000 Gap, Inc. 28,285,313 360,000 Gucci Group N.V. 16,875,000 308,600 Nordstrom, Inc. 19,673,250 - ------------------------------------------------------------------------------ 64,833,563 - ------------------------------------------------------------------------------ Retail - Department Stores (2.1%) 500,000 Federated Department Stores, Inc.* 21,562,500 350,000 May Department Stores Company 19,075,000 - ------------------------------------------------------------------------------ 40,637,500 - ------------------------------------------------------------------------------ Retail - Discount & Variety (1.1%) 500,000 Consolidated Stores Corporation* 20,937,500 - ------------------------------------------------------------------------------ Retail - Major Discount Chains (0.6%) 300,000 Wal-Mart Stores, Inc. 10,987,500 - ------------------------------------------------------------------------------ Retail - Supermarkets (3.8%) 940,000 American Stores Company 22,912,500 551,200 Kroger Company* 16,639,350 594,500 Safeway, Inc.* 32,325,938 - ------------------------------------------------------------------------------ 71,877,788 - ------------------------------------------------------------------------------ Retail/Wholesale - Auto Parts (0.8%) 533,100 Autozone, Inc.* 15,993,000 - ------------------------------------------------------------------------------ Retail/Wholesale - Building Products (1.2%) 220,000 Home Depot, Inc. 11,467,500 272,700 Lowes Cos., Inc. 10,601,213 - ------------------------------------------------------------------------------ 22,068,713 - ------------------------------------------------------------------------------ Retail/Wholesale - Computers (1.1%) 743,250 CHS Electronics, Inc.* 20,346,469 - ------------------------------------------------------------------------------ Steel - Specialty Alloys (0.6%) 252,000 Ucar International, Inc.* 12,033,000 - ------------------------------------------------------------------------------ Telecommunications - Equipment (1.7%) 270,000 Nokia Corporation - ADR 25,329,375 152,000 Tellabs, Inc.* 7,828,000 - ------------------------------------------------------------------------------ 33,157,375 - ------------------------------------------------------------------------------ Telecommunications - Services (1.6%) 1,122,500 Paging Network, Inc.* 14,241,719 450,000 WorldCom, Inc.* 15,918,750 - ------------------------------------------------------------------------------ 30,160,469 - ------------------------------------------------------------------------------ Textile - Apparel Manufacturing (3.9%) 254,500 Liz Claiborne, Inc. 13,981,594 314,200 Nautica Enterprises, Inc.* 8,836,875 1,030,500 Tommy Hilfiger Corporation* 51,460,594 - ------------------------------------------------------------------------------ 74,279,063 - ------------------------------------------------------------------------------ Tobacco (1.3%) 600,000 Philip Morris Companies, Inc. 24,937,500 - ------------------------------------------------------------------------------ Transportation - Airline (1.2%) 684,700 Southwest Airlines, Inc. 21,867,606 - ------------------------------------------------------------------------------ Total Common Stock (Cost $1,356,400,496) 1,639,201,925 - ------------------------------------------------------------------------------ U.S. Government Obligations (9.6%) - ------------------------------------------------------------------------------ $ 7,300,000 U.S. Treasury Bills due 10/16/97 7,284,882 14,750,000 U.S. Treasury Bills due 11/6/97 14,677,283 87,120,000 U.S. Treasury Bills due 11/13/97 86,617,151 66,950,000 U.S. Treasury Bills due 11/20/97 66,510,057 7,650,000 U.S. Treasury Bills due 11/28/97 7,591,210 - ------------------------------------------------------------------------------ Total U.S. Government Obligations (Amortized Cost $182,680,583) 182,680,583 - ------------------------------------------------------------------------------ Federal National Mortgage Association Discount Notes (3.1%) - ------------------------------------------------------------------------------ $ 8,300,000 FNMA Discount Notes due 10/14/97 8,283,875 31,000,000 FNMA Discount Notes due 10/15/97 30,935,141 10,600,000 FNMA Discount Notes due 10/20/97 10,569,846 8,300,000 FNMA Discount Notes due 10/27/97 8,267,690 - ------------------------------------------------------------------------------ Total FNMA Discount Notes (Amortized Cost $58,056,552) 58,056,552 - ------------------------------------------------------------------------------ Total Investments (Cost $1,597,137,631) (99.0%) 1,879,939,060 (Cost for federal income tax purposes $1,599,559,757) Other Assets, Less Liabilities (1.0%) 19,108,707 - ------------------------------------------------------------------------------ Net Assets (100.0%) $1,899,047,767 - ------------------------------------------------------------------------------
ADR - American Depository Receipt * Non-Income Producing Security See notes to financial statements. 26 Annual Report September 30, 1997 The Berger Funds Berger One Hundred Fund
Statement of Assets and Liabilities (Amounts in Thousands Except Net Asset Value Per Share) September 30, 1997 - ------------------------------------------------------------------------------------------------------------------ Assets Investments at cost $ 1,597,138 - ------------------------------------------------------------------------------------------------------------------ Investments at value $ 1,879,939 Cash 3,966 Receivables Investment securities sold 51,883 Fund shares sold 336 Dividends 1,084 Total Assets 1,937,208 - ------------------------------------------------------------------------------------------------------------------ Liabilities Payables Investment securities purchased 33,184 Fund shares redeemed 1,990 Accrued investment advisory fees 1,179 Accrued transfer agent fees 871 Accrued postage, printing & reports 393 Accrued 12b-1 distribution & advertising fees 393 Other accrued expenses 150 - ------------------------------------------------------------------------------------------------------------------ Total Liabilities 38,160 - ------------------------------------------------------------------------------------------------------------------ Net Assets Applicable to Shares Outstanding $ 1,899,048 Capital Shares Authorized (Par Value $0.01) 200,000 - ------------------------------------------------------------------------------------------------------------------ Shares Outstanding 88,267 - ------------------------------------------------------------------------------------------------------------------ Net Asset Value, Offering and Redemption Price Per Share $ 21.51 - ------------------------------------------------------------------------------------------------------------------ Statement of Operations (Amounts in Thousands) - ------------------------------------------------------------------------------------------------------------------ For the Year Ended September 30, 1997 - ------------------------------------------------------------------------------------------------------------------ Investment Income Income Dividends $ 9,326 Interest 9,575 - ------------------------------------------------------------------------------------------------------------------ Total Income 18,901 - ------------------------------------------------------------------------------------------------------------------ Expenses Investment advisory fees 14,424 12b-1 distribution & advertising fees 4,808 Transfer agent fees 4,937 Postage, printing & reports 1,905 Registration fees 115 Custodian fees 200 Directors'/Trustees' fees & expenses 216 Accounting fees 165 Administrative services 192 Legal fees 166 Insurance & bonds 21 Audit fees 22 Other 8 - ------------------------------------------------------------------------------------------------------------------ Total Expenses 27,179 Less fees paid indirectly (352) Less earnings credits (245) - ------------------------------------------------------------------------------------------------------------------ Expenses - Net 26,582 - ------------------------------------------------------------------------------------------------------------------ Net Investment Income (Loss) (7,681) - ------------------------------------------------------------------------------------------------------------------ Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions Net realized gain (loss) on securities and foreign currency transactions 626,967 Net change in unrealized appreciation (depreciation) on securities and foreign currency transactions (171,377) - ------------------------------------------------------------------------------------------------------------------ Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions 455,590 - ------------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets Resulting from Operations $ 447,909 - ------------------------------------------------------------------------------------------------------------------
See notes to financial statements. 27 Annual Report September 30, 1997 The Berger Funds Berger One Hundred Fund - -------------------------------------------------------------------------------- Statement of Changes in Net Assets (Amounts in Thousands) - --------------------------------------------------------------------------------
Year Ended Year Ended 9/30/97 9/30/96 - -------------------------------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ (7,681) $ (8,721) Net realized gain (loss) on securities and foreign currency transactions 626,967 318,175 Net change in unrealized appreciation (depreciation) on securities and foreign currency transactions (171,377) (100,483 Net realized gain (loss) on futures transactions 0 (28,569) Net Increase (Decrease) in Net Assets Resulting from Operations 447,909 180,402 From Dividends and Distributions to Shareholders Net investment income 0 0 Net realized gains on investments (270,495) (106,043) - -------------------------------------------------------------------------------------------------------------------- Net Decrease in Net Assets from Dividends and Distributions to Shareholders (270,495) (106,043) - -------------------------------------------------------------------------------------------------------------------- From Fund Share Transactions Proceeds from shares sold 221,412 323,649 Net asset value of shares issued in reinvestment of distributions 263,475 103,262 - -------------------------------------------------------------------------------------------------------------------- Total 484,887 426,911 Payments for shares redeemed (775,959) (694,242) - -------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Derived From Fund Share Transactions (291,072) (267,331) Increase (Decrease) in Net Assets (113,658) (192,972) Net Assets Beginning of period 2,012,706 2,205,678 - -------------------------------------------------------------------------------------------------------------------- End of period $ 1,899,048 $ 2,012,706 - -------------------------------------------------------------------------------------------------------------------- Components of Net Assets Capital (par value and paid in surplus) $ 1,026,117 $ 1,317,189 Undistributed net investment income (loss) (94) 0 Undistributed net realized gain (loss) from investments 590,224 241,339 Net unrealized appreciation (depreciation) on investments 282,801 454,178 - -------------------------------------------------------------------------------------------------------------------- Total $ 1,899,048 $ 2,012,706 - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- Transactions in Fund Shares - -------------------------------------------------------------------------------------------------------------------- Shares sold 11,630 17,279 Shares issued to shareholders in reinvestment of distributions 14,695 5,759 - -------------------------------------------------------------------------------------------------------------------- Total 26,325 23,038 Shares repurchased (40,552) (37,281) - -------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares (14,227) (14,243) Shares outstanding, beginning of period 102,494 116,737 - -------------------------------------------------------------------------------------------------------------------- Shares outstanding, end of period 88,267 102,494 - --------------------------------------------------------------------------------------------------------------------
See notes to financial statements. 28 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Fund [PICTURE APPEARS HERE] Portfolio Bank of Ireland Asset Manager's Commentary Management (U.S.) Ltd. - -------------------------------------------------------------------------------- Performance During the fiscal year ended September 30, 1997, the Berger/BIAM International Fund (the "Fund") delivered an annual total return to investors of 15.70%/1,2/. This compares to 12.49% for the MSCI EAFE Index/3/. The main contributors to the performance during the year were the Positive Banking, Healthcare and Growth in Telecommunications themes. There were a number of good individual stock performances, which helped the portfolio, particularly in the Healthcare Needs and Positive Banking Environment themes. Many Positive Banking Environment stocks reported profit increases ranging from 14% to 52% during the period. This strong performance continued into the third quarter. Themes directed at the developing markets in the Far East have disappointed throughout 1997. Increased Consumer Spending in the Pacific Basin and Infrastructural Development have had a negative impact on the Fund for reasons ranging from poor company results to the domino effect of financial crises and currency weakness which caused poor performance by your stocks in the region. Year in Review With the notable exception of the developing markets in the Pacific Basin and Japan, equity markets world-wide have done very well during the last twelve months. The ongoing U.S. bull market continues to boost international markets, and, with American inflation apparently under control and no sign of imminent interest-rate increases, European bourses have been hitting all-time highs. Equity markets in general, declined sharply during August, in what can be described as an almost inevitable correction after the strong gains earlier. Most markets rebounded in September. In the U.K., strong corporate earnings, particularly from the financial-services sector, and the expectation of even more corporate restructuring by major companies have been underpinning valuations. Towards the end of the period, U.K. equities rallied, prompted by evidence of increased warmth towards the European Monetary Union (EMU) which could mean earlier than expected interest rate cuts. Other European markets also produced strong returns during the year, helped by continuing optimism for economic recovery in Continental Europe and a positive Wall Street backdrop. In contrast, the Pacific Rim markets collapsed during 1997 as investors fled from the continued currency weakness, soaring domestic interest rates and policy indecision. Economic activity in Japan remains weak and the Japanese market continues to disappoint, down 16% for the twelve months ended September 30 1997. Looking Ahead Despite the negative move in August, international equity markets have been very strong for the third year in a row. These gains have pushed many company valuations to very high levels and are occurring against an interest-rate background which "if anything" is deteriorating. Many stocks, especially the blue chips have been re-rated beyond their fundamental value. After taking profits from some of the more highly priced U.K. and continental European stocks in the portfolio, we invested the proceeds in a number of selected Japanese holdings whose valuation levels are looking increasingly reasonable. This does not imply a shift in our views on Japan from a macro-economic perspective. We continue to monitor a number of Japanese companies, which are restructuring, focusing on enhancing shareholder value and delivering profit growth. Currency volatility in the Southeast Asian markets has led to some panic selling by investors. We do not feel that the current price levels of a number of the companies in which we are invested fully reflect their true value. The longer-term story for these stocks has not changed, but the impact of the recent currency devaluations is going to take some time to work its way through the markets. Consequently, we are constantly reviewing our investments in the area. Our view on the U.K. and core Europe has changed little since last quarter. The market perception on U.K. interest rates has undergone a complete turnaround during September with all expectations of higher rates evaporating on the back of the EMU speculation. EMU also continues to be the major focus in Europe. We thank you for your investment in the Berger/BIAM International Fund. /1./ Performance figures are based on historical results and are not intended to be indicative of future performance. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. /2./ Performance figures are historical and, in part, reflect the performance of a pool of assets advised by BIAM (Bank of Ireland Asset Management) for periods before the Fund commenced operations on October 11, 1996, adjusted to reflect any increased expenses associated with operating the Fund. The asset pool was not registered with the Securities and Exchange Commission and therefore was not subject to the investment restrictions imposed by law on registered mutual funds. If the pool had been registered, its performance might have been adversely affected. /3./ The Morgan Stanley Capital International EAFE Index represents major overseas stock markets. It is an unmanaged index. One cannot invest directly in an index. For information on security holdings please refer to the Berger/BIAM International Portfolio. 29 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Fund Performance Overview Comparison of Change in Value of Berger/BIAM International Fund vs. EAFE and Cost of Living Index [LINE GRAPH APPEARS HERE]
Berger/BIAM International Cost of Date Fund EAFE Living Index - ---- ------------- ---- ------------ 07/31/89 10,000 10,000 10,000 09/30/89 10,040 9,989 10,048 09/30/90 10,760 7,253 10,667 09/30/91 12,550 8,871 11,029 09/30/92 14,860 8,269 11,359 09/30/93 17,290 10,482 11,664 09/30/94 19,010 11,542 12,010 09/30/95 21,580 12,247 12,315 09/30/96 24,120 13,341 12,685 09/30/97 27,906 15,008 12,926
The Berger/BIAM International Fund* Average Annual Total Return
As of September 30, 1997 - ----------------------------------------------------------------------------- 1 Year 15.7% 5 Year 13.4% Life of Fund (7/31/89) 13.4%
*Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. Performance figures are historical and, in part, reflect the performance of a pool of assets advised by BIAM (Bank of Ireland Asset Management) for periods before the Fund commenced operations on October 11, 1996, adjusted to reflect any increased expenses associated with operating the Fund. The asset pool was not registered with the Securities and Exchange Commission and therefore was not subject to the investment restrictions imposed by law on registered mutual funds. If the pool had been registered, its performance might have been adversely affected. Report of Independent Accountants To the Board of Trustees and Shareholders of Berger/BIAM International Fund - -------------------------------------------------------------------------------- In our opinion, the accompanying statement of assets and liabilities and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Berger/BIAM International Fund (one of the funds constituting Berger/BIAM Worldwide Funds Trust, hereafter referred to as the "Fund") at September 30, 1997, the results of its operations, the changes in its net assets and the financial highlights for the period November 7, 1996 (commencement of investment operations) through September 30, 1997, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above. /s/ Price Waterhouse LLP Price Waterhouse LLP Denver, Colorado November 11, 1997 30 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Fund Statement of Assets and Liabilities (Amounts in Thousands Except Net Asset Value Per Share)
September 30, 1997 - -------------------------------------------------------------------------------------------- Assets Investment in Berger/BIAM International Portfolio ("Portfolio"), at value $ 18,789 Receivable for fund shares sold 29 - -------------------------------------------------------------------------------------------- Total Assets 18,818 - -------------------------------------------------------------------------------------------- Liabilities Payables Fund shares redeemed 129 Accrued administrative fee 7 Accrued registration fees 5 Accrued 12b-1 distribution and advertising fees 4 - -------------------------------------------------------------------------------------------- Total Liabilities 145 - -------------------------------------------------------------------------------------------- Net Assets Applicable to Shares Outstanding $ 18,673 Capital Shares Authorized (Par Value $0.01) Unlimited - -------------------------------------------------------------------------------------------- Shares Outstanding 1,630 - -------------------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share $ 11.46 Statement of Operations (Amounts in Thousands) For the Period from November 7, 1996* to September 30, 1997 - -------------------------------------------------------------------------------------------- Investment Income Allocated From Portfolio Interest and dividend income (net of $40 foreign withholding taxes) $ 336 Portfolio expenses (net of earnings credits and waivers of $26) (127) - -------------------------------------------------------------------------------------------- Net Investment Income Allocated From Portfolio 209 - -------------------------------------------------------------------------------------------- Fund Expenses Administrative fees 63 12b-1 distribution & advertising fees 35 Registration fees 20 Legal fees 6 Total Fund Expenses 124 - -------------------------------------------------------------------------------------------- Net Investment Income (Loss) 85 - -------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions Allocated From Portfolio Net realized gain (loss) on investments and foreign currency transactions 380 Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions 1,489 Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions Allocated From Portfolio 1,869 - -------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations $ 1,954 - --------------------------------------------------------------------------------------------
* Commencement of investment operations. See notes to financial statements. 31 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Fund Statement of Changes in Net Assets (Amounts in Thousands)
For the Period from November 7, 1996* to September 30, 1997 - ---------------------------------------------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ 85 Net realized gain (loss) on investments and foreign currency transactions allocated from Portfolio 380 Net unrealized appreciation (depreciation) on investments and foreign currency transactions allocated from Portfolio 1,489 Net Increase (Decrease) in Net Assets Resulting from Operations 1,954 - ---------------------------------------------------------------------------------------------------------------------------------- From Dividends and Distributions to Shareholders Net investment income 0 Net realized gains on investments 0 Net Decrease in Net Assets from Dividends and Distributions to Shareholders 0 - ---------------------------------------------------------------------------------------------------------------------------------- From Fund Share Transactions Proceeds from shares sold 25,761 Payments for shares redeemed (9,042) - ---------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Derived From Fund Share Transactions 16,719 Increase (Decrease) in Net Assets 18,673 Net Assets Beginning of period 0 - ---------------------------------------------------------------------------------------------------------------------------------- End of period $ 18,673 - ---------------------------------------------------------------------------------------------------------------------------------- Components of Net Assets: Capital (par value and paid in surplus) $ 16,719 Undistributed accumulated net investment income (loss) from investments 85 Undistributed accumulated net realized gain (loss) from investments 380 Net unrealized appreciation (depreciation) of investments and foreign currency transactions 1,489 - ---------------------------------------------------------------------------------------------------------------------------------- Total $ 18,673 - ---------------------------------------------------------------------------------------------------------------------------------- Transactions in Fund Shares - --------------------------------------------------------------------------------------------------------------------------------- Shares sold 2468 Shares repurchased (838) - ---------------------------------------------------------------------------------------------------------------------------------- Net increase in shares 1,630 Shares outstanding, beginning of period 0 - ---------------------------------------------------------------------------------------------------------------------------------- Shares outstanding, end of period 1,630 - ----------------------------------------------------------------------------------------------------------------------------------
* Commencement of investment operations. See notes to financial statements. 32 September 30, 1997 Annual Report The Berger funds Berger Growth and Income Fund [PICTURE APPEARS HERE] Co-Portfolio Patrick S. Adams Managers' Commentary Sheila J. Ohlsson Performance As of September 30, 1997, Berger Growth and Income Fund's (the "Fund") annual total return was 34.56%/1/. The Fund underperformed the Standard & Poor's (S&P) 500/2/, which rose 40.43% over the same period. The Fund underperformed the index primarily because of the nature of the stock market. During the first six months of our fiscal year (October 1996 - March 1997), the market was dominated by the largest stocks, such as GE and Procter & Gamble, which drive the performance of the S&P 500 Index. Investors, feeling uncertain about the economy and interest rates, flocked to the large stocks, because they offered high liquidity in case of an economic downturn. As a result, the prices of these stocks were driven to what, in our opinion, were unsustainable levels. We chose not to invest in the largest stocks and to stick with our goal of seeking reasonably priced growth companies. That decision kept the Fund from fully participating in the market's strong performance. In April, however, the market began to broaden. Investors considered the largest stocks' prices to be too expensive given their relatively low rates of revenue growth - a viewpoint bolstered by cautionary earnings comments from companies such as Coca-Cola and Gillette. Investors cast a wider net, seeking good growth companies beyond those with the largest market capitalizations, a move that benefited many of the companies owned by the Fund. As a result, our second half total return of 25.50% was far stronger than our first half total return of 7.22%. Year in Review We made some adjustments to the Fund's allocation of assets among growth industries during the year. We increased holdings in technology from 11% one year ago to 17.8% at year-end. We felt we were slightly underweighted in this vital sector, which clearly is driving the U.S. and world economies. We added to the financial sector, increasing holdings from 16% one year ago to 24.2% as of September 30, 1997. We shifted some assets in this category from bank stocks to insurance companies and specialty finance companies. We slightly reduced the Fund's position in real estate investment trusts (REITs) since last year, but have maintained our focus on full-service hotels and diversified office buildings. Since March 31, 1997, we have increased holdings in oil services because of improving fundamentals, but are still down overall from our exposure one year ago. We reduced our exposure to consumer staples and healthcare because we felt the values in these sectors had reached unrealistic proportions. To help bolster Fund yield over the year, we continued to purchase convertible bonds where appropriate. We believe in being fully invested at all times, so a higher percentage of cash simply indicated a period in which we were unable to find suitable investments for the Fund. Looking Ahead If the market remains strong and maintains the broader focus of the past six months,our portfolio should do very well. Two positive signs: the economy is strong and interest rates have been stable since the last Federal Reserve Board increase on March 25, 1997. We would not be shocked to see the market drop over the next year, however, due to some unforeseeable event, such as the Asian currency crisis that occurred in August and September this past year. A correction would help wring some of the excesses out of stock prices. Additionally, a correction would give us the opportunity to buy more good companies for the Fund at lower prices. Going forward, we believe that your Fund is properly diversified and structured to benefit from broad, positive market performance. We thank you for your investment in the Berger Growth and Income Fund. 1. Performance figures are based on historical results and are not intended to be indicative of future performance. The investment return and principal value of an investment will fluctuate so that an investors shares, when redeemed, may be worth more or less than their original cost. 2. The S&P 500 is an unmanaged index, with dividends reinvested, which consists of the common stock of 500 publicly traded U.S. companies. One cannot invest directly in an index. 33 Annual Report September 30, 1997 The Berger Funds Berger Growth and Income Fund Performance Overview Comparison of Change in Value of Berger Growth and Income Fund vs. S&P 500 Stock Index and Cost of Living Index
Berger Growth & Cost of Date Income Fund S&P 500 Living Index - ---- -------------------------------------------- 9/30/87 10,000 10,000 10,000 9/30/88 8,728 8,757 10,417 9/30/89 10,241 11,637 10,870 9/30/90 8,687 10,563 11,539 9/30/91 13,792 13,843 11,930 9/30/92 14,889 15,365 12,287 9/30/93 18,831 17,353 12,617 9/30/94 19,378 17,999 12,991 9/30/95 22,100 23,334 13,322 9/30/96 24,457 28,063 13,722 9/30/97 32,910 39,398 14,017
The Berger Growth & Income Fund* Average Annual Total Return As of September 30, 1997 - ------------------------------------- 1 Year 34.6% 5 Year 17.2% 10 Year 12.7%
*Performance figures are historical and do not represent future results. Investment returns and principal value will vary, and you may have a loss when you sell shares. Report of Independent Accountants To the Board of Directors and Shareholders of Berger Growth and Income Fund, Inc. - -------------------------------------------------------------------------------- In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Berger Growth and Income Fund, Inc. (the "Fund") at September 30, 1997, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 1997 by correspondence with the custodian and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for the opinion expressed above. The financial statements of the Fund for the year ended September 30, 1994 were audited by other independent accountants whose report dated October 28, 1994 expressed an unqualified opinion on those financial statements. /s/ Price Waterhouse LLP Price Waterhouse LLP Denver, Colorado November 11, 1997 34 September 30, 1997 Annual Report The Berger Funds Berger Growth and Income Fund - ------------------------------------------------------------------------------ Schedule of Investments
Common Stock (77.8%) September 30, 1997 - ------------------------------------------------------------------------------ Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------ Auto/Truck - Original Equipment (0.9%) 99,800 Hayes Wheels International, Inc. $ 3,368,250 - ------------------------------------------------------------------------------ Banks - Money Center (3.5%) 50,000 Chase Manhattan Corporation 5,900,000 50,000 Citicorp 6,696,875 - ------------------------------------------------------------------------------ 12,596,875 - ------------------------------------------------------------------------------ Banks - Northeast (1.9%) 110,000 State Street Corporation 6,703,125 - ------------------------------------------------------------------------------ Banks - Super Regional (1.5%) 85,000 Norwest Corporation 5,206,250 - ------------------------------------------------------------------------------ Commercial Services - Security/Safety (2.0%) 150,000 Diebold, Inc. 7,106,250 - ------------------------------------------------------------------------------ Computer - Local Networks (1.5%) 75,000 Cisco Systems, Inc.* 5,479,688 - ------------------------------------------------------------------------------ Computer - Memory Devices (1.3%) 100,000 Microchip Technology, Inc.* 4,515,625 - ------------------------------------------------------------------------------ Computer - Mini/Micro (2.1%) 100,000 Compaq Computer Corporation 7,475,000 - ------------------------------------------------------------------------------ Computer - Peripheral Equipment (2.6%) 200,000 Adaptec, Inc.* 9,350,000 - ------------------------------------------------------------------------------ Computer - Software (0.3%) 174,650 Informix Corporation* 1,222,550 - ------------------------------------------------------------------------------ Containers - Paper/Plastic (0.2%) 54,000 Ivex Packaging 878,400 - ------------------------------------------------------------------------------ Diversified Operations (1.3%) 110,000 Allied Signal, Inc. 4,675,000 - ------------------------------------------------------------------------------ Electronic - Semiconductor Equipment (1.8%) 140,000 Lam Research Corporation* 6,510,000 - ------------------------------------------------------------------------------ Electronic - Semiconductor Manufacturing (5.4%) 150,000 Atmel Corporation 5,465,625 70,000 Intel Corporation 6,461,875 100,000 Motorola, Inc. 7,187,500 - ------------------------------------------------------------------------------ 19,115,000 - ------------------------------------------------------------------------------ Electrical Equipment (1.9%) 100,000 Honeywell, Inc. 6,718,750 - ------------------------------------------------------------------------------ Finance - Equity Real Estate Investment Trust (10.1%) 100,000 Crescent Real Estate Equities Co. 4,012,500 600,000 Innkeepers USA Trust 10,312,500 350,004 Patriot American Hospitality Operating Co. 11,156,378 187,500 Starwood Lodging 10,769,531 - ------------------------------------------------------------------------------ 36,250,909 - ------------------------------------------------------------------------------ Finance - Mortgage Real Estate Investment Trust (1.3%) 149,800 Redwood Trust, Inc. 4,550,175 - ------------------------------------------------------------------------------ Household - Housewares (3.1%) 250,000 Sunbeam Corporation 11,093,750 - ------------------------------------------------------------------------------ Insurance - Life (2.4%) 175,000 Conseco, Inc. 8,542,188 - ------------------------------------------------------------------------------ Insurance - Property/Casualty/Title (3.5%) 99,800 Frontier Insurance Group, Inc. 3,792,400 100,000 Mercury General Corporation 8,750,000 - ------------------------------------------------------------------------------ 12,542,400 - ------------------------------------------------------------------------------ Medical - Biomedical/Genetics (1.7%) 125,000 Amgen, Inc.* 5,992,188 - ------------------------------------------------------------------------------ Medical - Ethical Drug (1.7%) 50,000 Eli Lilly & Co. 6,034,375 - ------------------------------------------------------------------------------ Medical - Wholesale Drug/Sundries (3.1%) 110,000 McKesson Corp. 11,213,125 - ------------------------------------------------------------------------------ Oil & Gas - Drilling (2.0%) 200,000 Falcon Drilling Company, Inc.* 7,062,500 - ------------------------------------------------------------------------------ Oil & Gas - Field Services (5.0%) 85,000 BJ Services Co.* 6,311,250 174,800 McDermott International, Inc. 6,380,200 60,000 Schlumberger Ltd. 5,051,250 - ------------------------------------------------------------------------------ 17,742,700 - ------------------------------------------------------------------------------ Oil & Gas - Machinery/Equipment (1.1%) 55,500 Cooper Cameron Corporation* 3,985,594 - ------------------------------------------------------------------------------ Pollution Control - Services (1.3%) 187,000 Eastern Environmental Services, Inc. 4,768,500 - ------------------------------------------------------------------------------ Retail - Drug Stores (2.5%) 160,000 Rite Aid Corporation 8,870,000 - ------------------------------------------------------------------------------ Retail - Major Discount Chains (1.7%) 100,000 Dayton-Hudson Corporation 5,993,750 - ------------------------------------------------------------------------------ Retail - Miscellaneous Diversified (1.0%) 90,300 Hertz 3,403,181 - ------------------------------------------------------------------------------ Retail - Supermarkets (1.4%) 200,000 American Stores Company 4,875,000 - ------------------------------------------------------------------------------ Retail/Wholesale - Computers (1.9%) 200,000 Tandy Corporation 6,725,000 - ------------------------------------------------------------------------------
35 Annual Report September 30, 1997 The Berger Funds Berger Growth and Income Fund Schedule of Investments
Common Stocks (77.8%) September 30, 1997 - ------------------------------------------------------------------------------ Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------ Telecommunications - Equipment (2.8%) 150,000 ECI Telecom, Ltd. $ 4,856,250 50,000 Northern Telecom, Ltd. 5,196,875 - ------------------------------------------------------------------------------ 10,053,125 - ------------------------------------------------------------------------------ Transportation - Airlines (2.0%) 174,475 U.S. Air Group, Inc.* 7,218,901 - ------------------------------------------------------------------------------ Total Common Stock (Cost $198,478,179) 277,838,124 - ------------------------------------------------------------------------------ Convertible Preferred Stock (2.2%) - ------------------------------------------------------------------------------ Leisure - Movies & Related (2.2%) 150,000 Metromedia International* 7,715,625 - ------------------------------------------------------------------------------ Total Convertible Preferred Stock (Cost $7,665,968) 7,715,625 - ------------------------------------------------------------------------------ Convertible Debentures (7.7%) - ------------------------------------------------------------------------------ Commercial Services - Miscellaneous (1.9%) $2,500,000 Career Horizons, Inc. 7.00% due 11/01/02 6,871,875 - ------------------------------------------------------------------------------ Diversified Operations (0.7%) 2,500,000 Loews Corp.- 3.13% due 09/15/07 2,615,625 - ------------------------------------------------------------------------------ Oil & Gas Drilling (0.8%) 2,000,000 Diamond Offshore Drilling, Inc.- 3.75% due 02/15/17 2,905,000 - ------------------------------------------------------------------------------ Pollution Control - Equipment (2.7%) 4,000,000 U.S. Filter Corp. - 6.00% due 09/1/05 9,540,000 - ------------------------------------------------------------------------------ Pollution Control - Services (1.6%) 4,000,000 United Waste Systems/1/ 4.50% due 6/1/01 5,780,000 - ------------------------------------------------------------------------------ Total Convertible Debentures (Cost $22,867,900) 27,712,500 - ------------------------------------------------------------------------------ Foreign Government Obligations (0.3%) - ------------------------------------------------------------------------------ A$ 700,000 Queensland Treasury-Global Note 8.00% due 08/14/01 (Australia) 553,475 A$ 700,000 Queensland Treasury-Global Note 12.00% due 08/15/01 (Australia) 620,486 - ------------------------------------------------------------------------------ Total Foreign Government Obligations (Cost $1,132,486) 1,173,961 - ------------------------------------------------------------------------------ U.S. Government Obligations (8.2%) - ------------------------------------------------------------------------------ $ 295,000 U.S. Treasury Bills due 10/09/97 $ 294,669 13,130,000 U.S. Treasury Bills due 10/16/97 13,102,675 2,570,000 U.S. Treasury Bills due 11/6/97 2,557,286 7,845,000 U.S. Treasury Bills due 11/13/97 7,799,221 5,550,000 U.S. Treasury Bills due 11/20/97 5,463,944 - ------------------------------------------------------------------------------ Total U.S. Government Obligations (Amortized Cost $29,217,795) 29,217,795 - ------------------------------------------------------------------------------ Federal National Mortgage Association Discount Notes (2.4%) - ------------------------------------------------------------------------------ $2,200,000 FNMA Discount Notes Due 10/20/97 2,193,789 1,300,000 FNMA Discount Notes Due 10/21/97 1,296,100 2,100,000 FNMA Discount Notes Due 10/24/97 2,092,809 2,900,000 FNMA Discount Notes Due 10/27/97 2,888,708 - ------------------------------------------------------------------------------ Total FNMA Discount Notes (Amortized Cost $8,471,406) 8,471,406 - ------------------------------------------------------------------------------ Total Investments (Cost $267,833,734) (98.6%) 352,129,411 (Cost for federal income tax purposes $267,942,924) Other Assets, Less Liabilities (1.4%) 4,893,586 - ------------------------------------------------------------------------------ Net Assets (100.0%) $ 357,022,997 - ------------------------------------------------------------------------------
* Non-Income Producing Security 1. Pursuant to Rule 144A, resale is restricted to qualified institutional buyers. A$ Australian Dollars See notes to financial statements. 36 Annual Report September 30, 1997 The Berger Funds Berger Growth and Income Fund Statement of Assets and Liabilities (Amounts in Thousands Except Net Asset Value Per Share)
September 30, 1997 - ---------------------------------------------------------------------------------------------------------- Assets Investments at cost $ 267,834 - ---------------------------------------------------------------------------------------------------------- Investments at value $ 352,129 Cash 634 Receivables Investment securities sold 8,350 Fund shares sold 118 Dividends and interest 760 - ---------------------------------------------------------------------------------------------------------- Total Assets 361,991 - ---------------------------------------------------------------------------------------------------------- Liabilities Payables Investment securities purchased 4,228 Fund shares redeemed 155 Accrued investment advisory fees 216 Accrued transfer agent fees 187 Accrued 12b-1 distribution & advertising fees 156 Other accrued expenses 26 - ---------------------------------------------------------------------------------------------------------- Total Liabilities 4,968 - ---------------------------------------------------------------------------------------------------------- Net Assets Applicable to Shares Outstanding $ 357,023 Capital Shares Authorized (Par Value $0.01) 100,000 - ---------------------------------------------------------------------------------------------------------- Shares Outstanding 21,349 - ---------------------------------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share $ 16.72 - ---------------------------------------------------------------------------------------------------------- Statement of Operations (Amounts in Thousands) - ---------------------------------------------------------------------------------------------------------- For the Year Ended September 30, 1997 - ---------------------------------------------------------------------------------------------------------- Investment Income Income Dividends $ 5,035 Interest 2,675 - ---------------------------------------------------------------------------------------------------------- Total Income 7,710 - ---------------------------------------------------------------------------------------------------------- Expenses Investment advisory fees 2,442 12b-1 distribution & advertising fees 814 Transfer agent fees 1,055 Postage, printing & reports 391 Registration fees 36 Custodian fees 38 Directors'/Trustees' fees & expenses 38 Accounting fees 32 Administrative services 32 Legal fees 32 Insurance & bonds 5 Audit fees 12 Other 2 - ---------------------------------------------------------------------------------------------------------- Total Expenses 4,929 Less fees paid indirectly (8) Less earnings credits (42) - ---------------------------------------------------------------------------------------------------------- Expenses - Net 4,879 - ---------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 2,831 - ---------------------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions Net realized gain (loss) on securities and foreign currency transactions 62,443 Net changes in unrealized appreciation (depreciation) on securities and foreign currency transactions 32,102 - ---------------------------------------------------------------------------------------------------------- Net Realized and Unrealized Gain (Loss) on Investments and foreign currency transactions 94,545 - ---------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Resulting from Operations $ 97,376 - ----------------------------------------------------------------------------------------------------------
See notes to financial statements. 37 Annual Report September 30, 1997 The Berger Funds Berger Growth and Income Fund Statements of Changes in Net Assets (Amounts in Thousands)
Year Ended Year Ended 9/30/97 9/30/96 - --------------------------------------------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ 2,831 $ 4,686 Net realized gain (loss) on securities and foreign currency transactions 62,443 49,901 Net change in unrealized appreciation (depreciation) on securities and foreign currency transactions 32,102 (17,526) Net realized gain (loss) on futures transactions 0 (3,748) Net Increase (Decrease) in Net Assets Resulting from Operations 97,376 33,313 From Dividends and Distributions to Shareholders Net investment income (2,752) (4,785) Net realized gains on investments (35,161) 0 - --------------------------------------------------------------------------------------------------------------------------------- Net Decrease in Net Assets from Distributions to Shareholders (37,913) (4,785) - --------------------------------------------------------------------------------------------------------------------------------- From Fund Share Transactions Proceeds from shares sold 50,210 50,365 Net asset value of shares issued in reinvestment of dividends 36,434 4,558 - --------------------------------------------------------------------------------------------------------------------------------- Total 86,644 54,923 Payments for shares redeemed (104,622) (122,309) - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Net Assets Derived From Fund Share Transactions (17,978) (67,386) Increase (Decrease) in Net Assets 41,485 (38,858) Net Assets Beginning of period 315,538 354,396 - --------------------------------------------------------------------------------------------------------------------------------- End of period $ 357,023 $ 315,538 - --------------------------------------------------------------------------------------------------------------------------------- Components of Net Assets Capital (par value and paid in surplus) $ 217,185 $ 235,163 Undistributed net investment income (loss) (39) (23) Undistributed net realized gain (loss) from investments 55,581 28,204 Unrealized appreciation (depreciation) on investments 84,296 52,194 - --------------------------------------------------------------------------------------------------------------------------------- Total $ 357,023 $ 315,538 - --------------------------------------------------------------------------------------------------------------------------------- Transactions in Fund Shares - --------------------------------------------------------------------------------------------------------------------------------- Shares sold 3,473 3,798 Shares issued to shareholders in reinvestment of dividends 2,713 339 - --------------------------------------------------------------------------------------------------------------------------------- Total 6,186 4,137 Shares repurchased (7,278) (9,196) - --------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares (1,092) (5,059) Shares outstanding beginning of period 22,441 27,500 - --------------------------------------------------------------------------------------------------------------------------------- Shares outstanding end of period 21,349 22,441 - ---------------------------------------------------------------------------------------------------------------------------------
See notes to financial statements. 38 Annual Report September 30, 1997 The Berger Funds Berger Balanced Fund [PICTURE APPEARS HERE] Co-Portfolio Patrick S. Adams Managers' Commentary John B. Jares Investment Approach The Berger Balanced Fund (the "Fund") is our most conservative fund - our "comfort" Fund. We always will have at least 25% of Fund net assets invested in stocks and 25% in fixed-income securities in order to achieve our objective of providing capital appreciation and current income. When we consider the stock market attractive, and when the number of potentially profitable investments is plentiful, we may invest up to 75% of Fund net assets in stocks. We primarily seek reasonably priced stocks of mid to large cap companies that have a history of strong, consistent, and predictable earnings, strong management, competitive products and services, and conservatively financed balance sheets. When we don't find stocks as attractive, or when the market is more volatile, we will reduce our stock holdings and increase our investment in fixed-income securities such as U.S. government and corporate debt securities, convertible securities, and preferred stock. Initial Trading We are building the portfolio for the Balanced Fund on a cautious, but optimistic basis. Subsequent to year end, we immediately invested the majority of total Fund assets in defensive fixed-income securities, i.e., securities with shorter maturities that pay interest. This gives us the liquidity and flexibility to move dollars into more attractive fixed-income securities or stocks as opportunities arise, while we generate current income for our shareholders. On the stock side, we are investing slowly, and, at least initially, in the promising growth companies we already have identified through bottom-up research for other Berger Funds. For example, two stocks we're high on in the Berger One Hundred Fund - Household International, a diversified financial services firm; and Safeway, a grocery store - have been purchased subsequent to year end for the Berger Balanced Fund portfolio. We will add to our stock holdings as we identify stocks that meet our selection criteria. Although we have been in a prolonged bull market that makes reasonably priced companies harder to find, we believe there still are many good opportunities available. One significant advantage of this Fund is that when we feel there are not as many good stock investments available, we can shift assets to fixed-income securities. We are optimistic about the market over the next several quarters, even though there is the risk that the Federal Reserve Board could raise interest rates if it feels the economy is growing at too brisk a pace. By investing in stocks as well as some bonds, however, the Fund is designed to weather a variety of market conditions. You might think of this Fund as a "Fund for all seasons." It is a more conservative way to take advantage of the Berger growth investment philosophy - and may provide critical diversification in the event of a stock market correction. Thank you for your investment in the Berger Balanced Fund. 39 Annual Report September 30, 1997 The Berger Funds Berger Balanced Fund Report of Independent Accountants To the Board of Trustees and Shareholders of Berger Investment Portfolio Trust - -------------------------------------------------------------------------------- In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Berger Small Company Growth Fund, Berger New Generation Fund and Berger Balanced Fund (constituting Berger Investment Portfolio Trust, hereafter referred to as the "Trust") at September 30, 1997, the results of each of their operations for each of the periods indicated, the changes in each of their net assets for each of the periods indicated and the financial highlights for each of the periods indicated, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 1997 by correspondence with the custodian and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for the opinion expressed above. The financial statements of Berger Small Company Growth Fund for the period ended September 30, 1994 were audited by other independent accountants whose report dated October 28, 1994 expressed an unqualified opinion on those financial statements. /s/ Price Waterhouse LLP Price Waterhouse LLP Denver, Colorado November 11, 1997 - -------------------------------------------------------------------------------- Schedule of Investments
Common Stock (28.9%) September 30, 1997 - ------------------------------------------------------------------------------ Shares, Units or Principal Amount Market Value - ------------------------------------------------------------------------------ Electrical Equipment (9.4%) 50,000 Power One, Inc.* $ 700,000 - ------------------------------------------------------------------------------ Oil & Gas - Drilling (4.8%) 9,000 UTI Energy Corporation* 355,500 - ------------------------------------------------------------------------------ Telecommunications - Services (14.8%) 50,000 RSL Communications - Class A* 1,100,000 - ------------------------------------------------------------------------------ Total Investments (Cost $2,155,500/1/) (28.9%) 2,155,500 - ------------------------------------------------------------------------------ Other Assets, Less Liabilities (71.1%) 5,306,344 - ------------------------------------------------------------------------------ Net Assets (100.0%) $ 7,461,844 - ------------------------------------------------------------------------------
* Non-Income Producing Security 1. Also represents cost for tax purposes. See notes to financial statements. 40 Annual Report September 30, 1997 The Berger Funds Berger Balanced Fund - -------------------------------------------------------------------------------- Statement of Assets and Liabilities
September 30, 1997 - ---------------------------------------------------------------------------------------- Assets Investments at cost $ 2,155,500 - ---------------------------------------------------------------------------------------- Investments at value $ 2,155,500 Cash 10,125 Receivables Fund shares sold 7,451,719 - ---------------------------------------------------------------------------------------- Total Assets 9,617,344 - ---------------------------------------------------------------------------------------- Liabilities Payables Investment securities purchased 2,155,500 - ---------------------------------------------------------------------------------------- Total Liabilities 2,155,500 - ---------------------------------------------------------------------------------------- Net Assets Applicable to Shares Outstanding 7,461,844 Capital Shares Authorized (par value $0.01) Unlimited - ---------------------------------------------------------------------------------------- Shares outstanding 746,184 - ---------------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share $ 10.00 - ---------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------- Statement of Changes in Net Assets - ---------------------------------------------------------------------------------------- Period Ended 9/30/97* - ---------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ 0 Net realized gain (loss) on security transactions 0 Net change in unrealized appreciation (depreciation) on security transactions 0 Net Increase (Decrease) in Net Assets Resulting from Operations 0 From Dividends and Distributions to Shareholders Net investment income 0 Net realized gains on investments 0 - ---------------------------------------------------------------------------------------- Net Decrease in Net Assets from Distributions to Shareholders 0 - ---------------------------------------------------------------------------------------- From Fund Share Transactions Proceeds from shares sold 7,461,844 - ---------------------------------------------------------------------------------------- Total 7,461,844 Net Increase (Decrease) in Net Assets Derived From Fund Share Transactions 7,461,844 Increase (Decrease) in Net Assets 7,461,844 Net Assets Beginning of period 0 - ---------------------------------------------------------------------------------------- End of period $ 7,461,844 - ---------------------------------------------------------------------------------------- Components of Net Assets Capital (par value and paid in surplus) $ 7,461,844 - ---------------------------------------------------------------------------------------- Total $ 7,461,844 - ---------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------- Transactions in Fund Shares Shares Sold 746,184 Shares issued to shareholders in reinvestment of dividends 0 - ---------------------------------------------------------------------------------------- Total 746,184 Shares repurchased 0 - ---------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares 746,184 Shares outstanding beginning of period 0 - ---------------------------------------------------------------------------------------- Shares outstanding end of period 746,184 - ----------------------------------------------------------------------------------------
* Commencement of investment operations. See notes to financial statements. 41 Annual Report September 30, 1997 The Berger Funds Notes to Financial Statements - -------------------------------------------------------------------------------- 1 Organization and Significant Accounting Policies Organization The Berger New Generation Fund ("BNG"), Berger Small Company Growth Fund ("BSCG"), Berger Small Cap Value Fund ("BSCV"), Berger One Hundred Fund ("100"), Berger/BIAM International Fund ("BBIF"), Berger Growth and Income Fund ("BG&I") and Berger Balanced Fund ("BBAL")(individually the "Fund" and collectively, the "Funds") are diversified open-end management investment companies registered under the Investment Company Act of 1940 (the "1940 Act"). Shares of each fund are fully paid and non-assessable when issued. All shares issued by a particular Fund participate equally in dividends and other distributions by that Fund. The investment objective of each Fund is capital appreciation, including the BBAL and BG&I which also pursue current income. The 100 and BG&I are corporations registered in the State of Maryland. BSCG, BNG and BBAL are separate series established under the Berger Investment Portfolio Trust, a Delaware business trust ("BIP Trust"). BBAL commenced investment operations on September 30, 1997. BSCV is the only portfolio established under the Berger Omni Investment Trust ("OMNI Trust"), a Massachusetts business trust and the BBIF (which commenced investment operations on November 7, 1996) is one of three series established under the Berger/BIAM Worldwide Funds Trust ("BBWF Trust"), a Delaware business trust. Other series or portfolios may be added under each Trust in the future. All costs in organizing the Trusts were paid by Berger Associates, Inc. ("Berger") or BBOI Worldwide LLC ("BBOI"). Prior to February 14, 1997, the BSCV and OMNI Trust were known as The Omni Investment Fund. On February 14, 1997, all of the outstanding shares of The Omni Investment Fund were designated Institutional Shares ("BSCV; Inst") of the BSCV series and a separate class of shares, Investor Shares ("BSCV; Inv"), were offered. Both classes of shares have identical rights to earnings, assets and voting privileges. BBIF invests all of its investable assets in the Berger/BIAM International Portfolio (the "Portfolio"), a series of Berger/BIAM Worldwide Portfolios Trust ("BBWP Trust"). The value of such investment reflects BBIF's proportionate interest in the net assets of the Portfolio (15.3% at September 30, 1997). The Portfolio is an open-end management investment company and has the same investment objective and policies as BBIF. The performance of BBIF will be derived from the investment performance of the Portfolio. The financial statements of the Portfolio, including the schedule of portfolio investments, are included elsewhere in this report and should be read in conjunction with BBIF's financial statements. Significant Accounting Policies The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with generally accepted accounting principles. Investment Valuation Securities are valued at the close of the regular trading session of the New York Stock Exchange (the "Exchange") on each day that the Exchange is open. Securities listed on national exchanges, the NASDAQ Stock Market and foreign exchanges are valued at the last sale price on such markets, or, if no last sale price is available, they are valued using the mean between their current bid and asked prices. Securities traded in the over-the-counter market are valued at the mean between their current bid and asked prices. Short-term obligations maturing within sixty days are valued at amortized cost, which approximates market value. Prices of foreign securities are converted to U.S. dollars using exchange rates determined prior to the close of the Exchange. Securities for which quotations are not readily available are valued at fair values as determined in good faith pursuant to consistently applied procedures established by the directors/trustees. Generally, trading in foreign securities markets is substantially completed each day at various times prior to the close of the Exchange. The values of foreign securities used in computing the net asset value of the shares in the Fund are determined as of the earlier of such market close or the closing time of the Exchange. Occasionally, events affecting the value of such securities may occur between the times at which they are determined and the close of the Exchange, or when the foreign market on which such securities trade is closed but the Exchange is open, which will not be reflected in the computation of net asset value. If during such periods, events occur which materially affect the value of such securities, the securities will be valued at their fair market value as determined in good faith pursuant to consistently applied procedures established by the directors/trustees. Since BBIF invests all of its investable assets in the Portfolio, the value of BBIF's investable assets will be equal to the value of its beneficial interest in the Portfolio. Valuation of securities by the Portfolio is discussed in Note 1 of the Portfolio's Notes to Financial Statements which are included elsewhere in this report. Calculation of Net Asset Value The per share calculation of net asset value is determined by dividing the total value of assets, less liabilities, by total number of shares outstanding. Federal Income Taxes It is the Funds' policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of their taxable income to shareholders. Therefore, no income tax provision is required. 42 Annual Report September 30, 1997 The Berger Funds - -------------------------------------------------------------------------------- 1 Organization and Significant Accounting Policies - Continued - -------------------------------------------------------------------------------- Foreign Currency Translation Assets and liabilities initially expressed in terms of foreign currencies are translated into U.S. dollars at the prevailing market rates as quoted by one or more banks or dealers on the date of valuation. The cost of securities is translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued. Investment Transactions and Investment Income Investment transactions are accounted for on the date investments are purchased or sold. Dividend income and distributions to shareholders are recorded on the ex-dividend date, except if the ex-dividend date has passed, certain dividends from foreign securities are reported as soon as the Fund is informed of the ex- dividend date. Interest income is recorded on the accrual basis and includes amortization of discounts and premiums. Gains and losses are computed on the identified cost basis for both financial statement and Federal income tax purposes for all securities. Allocation of Income, Expenses and Gains and Losses Income, expenses (other than those attributable to a specific class), gains and losses of the BSCV are allocated daily to each class of shares based upon the proportion of relative net assets represented by each class as a percentage of total net assets of the BSCV. Expenses directly attributable to a specific class are charged against the operations of such class. As an investor in the Portfolio, BBIF is allocated its pro rata share of the aggregate investment income and annual operating expenses of the Portfolio including the investment advisory fee, custodian fees, independent accountants' fees, record keeping and pricing agent fees. Such investment income and expenses are allocated on the day the expense is incurred in proportion to the prior day's relative net assets of BBIF and other investors in the Portfolio. Common Expenses Certain expenses which are not directly allocable to a specific Fund are allocated to the Funds on the basis of relative net assets. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and ass umptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results may differ from those estimates. - -------------------------------------------------------------------------------- 2 Agreements - -------------------------------------------------------------------------------- Berger renders investment advisory services to BNG, BSCG, BSCV, 100, BG&I and BBAL pursuant to agreements which provide for an investment advisory fee to be paid to Berger at the following annual rates as a percentage of average daily net assets; BNG, BSCG and BSCV - .90%, 100 and BG&I - .75% and BBAL - .70%. Berger has delegated the day-to-day investment management of BSCV to Perkins, Wolf & McDonnell ("PWM"). As compensation for services rendered to BSCV, PWM receives a sub-advisory fee from Berger at an annual rate of .90% of the BSCV's average daily net assets up to $75 million; .50% of average daily net assets between $75 million and $200 million and .20% of average daily net assets in excess of $200 million. All investment advisory fees are accrued daily and paid monthly. Berger has also agreed to voluntarily waive its advisory fee for BNG and BBAL to the extent that the each Fund's normal operating expenses in any fiscal year (including the management fee and the 12b-1 fee, but excluding brokerage commissions, interest, taxes and extraordinary expenses) exceeds 1.90% and 1.50%, respectively, of each Fund's average daily net assets for that fiscal year. Pursuant to an Administrative Services Agreement, whereby BBOI serves as the administrator to BBIF, the Fund pays BBOI a fee at an annual rate equal to the lesser of 0.45% of its average daily net assets or BBOI's annual cost to provide or procure such services plus 0.02% of the Fund's average daily net assets. Under the Agreement, BBOI is responsible, at its own expense, for providing or procuring all administrative services reasonably necessary for the operation of the Fund, including recordkeeping and pricing services, custodian services, transfer agency and dividend disbursing services, tax and audit services, insurance, printing and mailing to shareholders of prospectuses and other required communication and certain other administrative services. BBOI has delegated the administration of the Fund to Berger. For such services, BBOI has agreed to compensate Berger with a sub-administration annual fee equal to 0.25% of the Fund's average daily net assets. Such fee has been voluntarily waived by Berger for the period ended September 30, 1997. The Funds have adopted plans pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "Plans"). The BSCV Plan, which became effective February 14, 1997, applies only to BSCV; Inv. The Plans provide for the payment to Berger of a 12b-1 fee of .25% per annum of each Fund's average daily net assets (or the net assets of a particular class of shares, where applicable) to finance 43 Annual Report September 30, 1997 The Berger Funds Notes to Financial Statements - -------------------------------------------------------------------------------- 2 Agreements - Continued - -------------------------------------------------------------------------------- activities primarily intended to result in the sale of shares. The Plans provide that such payments will be made to Berger as compensation rather than as reimbursements for actual expenses incurred to promote the sale of shares of the Funds. The BNG, BSCG, BSCV, 100, BG&I and BBAL have each entered into an administrative services agreement with Berger. The administrative services agreement provides for an annual fee of .01 of 1% of the average daily net assets of each Fund, computed daily and payable monthly. The Funds have also entered into recordkeeping and pricing agreements with Investors Fiduciary Trust Company ("IFTC"), who also serves as the Funds' custodian and transfer agent. The recordkeeping and pricing agreement provides for the monthly payment of a base fee plus a fee computed as a percentage of average daily net assets on a total relationship basis with other Berger Funds. IFTC's fees for custody, recordkeeping and pricing, or transfer agency services are subject to reduction by credits earned by each Fund, based on the cash balances of each Fund held by IFTC as custodianor by credits received from directed brokerage transactions. DST Systems, Inc. ("DST"), an affiliate of Berger through a degree of common ownership, provides shareholder accounting services to the Funds. DST Securities, Inc., a wholly owned subsidiary of DST, is designated as an introductory broker on certain portfolio transactions. The Funds receive an amount equal to the brokerage commissions paid to DST Securities, Inc. as credits against transfer agent fees and expenses. For the period ended September 30, 1997, the 100, BG&I and BSCG, earned $352,000, $8,000 and $14,000 of such credits, respectively. Certain officers and directors of Berger and BBOI are also officers and/or directors/trustees of the Funds. Directors/ trustees who are not affiliated with Berger or BBOI received aggregate directors'/trustees' fees and reimbursed expenses from the Funds totaling $357,000 for the fiscal periods ended September 30, 1997. - -------------------------------------------------------------------------------- 3 Investment Transactions - -------------------------------------------------------------------------------- Purchases and Sales Purchases and sales of investment securities (excluding short-term securities) during the year or period ended September 30, 1997, as appropriate, were as follows:
Fund Purchases Sales - -------------------------------------------------------------------------------- BNG $ 192,828,205 $ 188,167,951 BSCG 782,658,169 882,945,866 BSCV 85,031,511 43,371,375 BBIF/1/ N/A N/A 100 3,433,519,711 4,152,139,367 BG&I 506,300,084 573,168,965 BBAL 2,155,500 0
/1./ See the Portfolio's Notes to Financial Statements for information regarding purchases and sales of investment securities. There were no purchases or sales of long-term govern-ment securities during the year or period ended September 30, 1997. Net Appreciation (Depreciation) At September 30, 1997, the composition of unrealized appreciation (the excess of value over tax cost) and unrealized depreciation (the excess of tax cost over value) for securities was as follows:
Unrealized Unrealized Fund Appreciation (Depreciation) Net - -------------------------------------------------------------------------------- BNG $ 44,645,912 $ (753,074) $ 43,892,838 BSCG 338,439,109 (3,666,183) 334,772,926 BSCV 16,257,734 (593,284) 15,664,450 BBIF/1/ N/A N/A N/A 100 296,972,507 (16,593,204) 280,379,303 BG&I 88,047,666 (3,861,179) 84,186,487 BBAL 0 0 0
/1./ See the Portfolio's Notes to Financial Statements for the composition of net unrealized appreciation. Futures, Forward Contracts and Options Each Fund may hold certain types of futures, forward contracts and/or options for the purpose of hedging each portfolio against exposure to market value fluctuations. The use of such instruments may involve certain risks as a result of unanticipated movements in the market. A lack of correlation between the value of such instruments and the assets being hedged, or unexpected adverse price movements, could render the Funds' hedging strategy unsuccessful. In addition, there can be no assurance that a liquid secondary market will exist for the instrument. Realized gains or losses on these securities are included in Net Realized Gain (Loss) on Securities Transactions in the Statements of Operations. A summary of options transactions for the Berger Small Cap Value Fund for the fiscal period ended September 30, 1997 is listed below:
Number of Contracts Premiums Received - -------------------------------------------------------------------------------- Options outstanding at January 1, 1997 52 $ 56,866 Options written 0 0 Options closed (52) (56,866) Options outstanding at September 30, 1997 0 $ 0
Federal Income Tax Status Dividends paid by the Funds from net investment income and distributions of net realized short-term capital gains are, for Federal income tax purposes, taxable as ordinary income to shareholders. Of the ordinary income distributions declared for the year ended September 30, 1997, 100% qualified for the dividends received deduction available to the corporate shareholders of the Berger Growth and Income Fund. 44 Annual Report September 30, 1997 The Berger Funds Notes to Financial Statements - -------------------------------------------------------------------------------- 3 Investment Transactions - Continued - -------------------------------------------------------------------------------- The Funds distribute net realized capital gains, if any, to their shareholders at least annually, if not offset by capital loss carryovers. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to the differing treatment for net operating losses. Accordingly, these permanent differences in the character of income and distributions between financial statements and tax basis have been reclassified to paid-in-capital. During the period ended September 30, 1997 the following reclassifications were made:
Berger Berger Berger Small Berger Berger One Growth & Company New Small Cap Hundred Income Growth Generation Value - -------------------------------------------------------------------------------- Paid in Capital -- -- (7,568,155) (1,498,979) 27,665 Undistributed Net Investment Income 7,587,389 (95,207) 8,220,827 1,614,221 (39,926) Undistributed Net Realized Gain (7,587,389) 95,207 (652,672) (115,242) 12,261
At September 30, 1997, BNG had capital loss carryovers in the amount of $7,485,327, expiring on September 30, 2005, which may be used to offset future realized capital gains for Federal income tax purposes. - -------------------------------------------------------------------------------- 4 Transactions With Affiliates - -------------------------------------------------------------------------------- During February 1997, pursuant to a policy adopted by the Funds' directors/trustees, Berger reimbursed the 100 Fund $794,000 as a result of a security trading error. - -------------------------------------------------------------------------------- 5 Line of Credit - -------------------------------------------------------------------------------- In July 1997, BNG, BSCG, BSCV, 100, BG&I and the Portfolio entered into an ongoing agreement with certain banks which allows the Funds, collectively, to borrow up to $150 million for temporary or emergency purposes. Interest on the borrowings, if any, is charged to the specific fund executing the borrowing at the Federal Funds Rate plus 75 basis points. In addition, the unsecured line of credit requires a quarterly payment of a commitment fee based on the average daily unused portion of the line of credit. - -------------------------------------------------------------------------------- 6 Change of Fiscal Year and Independent Accountants - -------------------------------------------------------------------------------- Effective April 11, 1997, the trustees of the OMNI Trust approved changing BSCV's fiscal year end from December 31 to September 30 and the trustees of BBWF Trust approved changing BBIF's fiscal year end from July 31 to September 30. Additionally, the trustees of OMNI Trust appointed Price Waterhouse LLP as independent accountants for BSCV for the fiscal period ended September 30, 1997. - -------------------------------------------------------------------------------- 7 Subsequent Event - -------------------------------------------------------------------------------- On October 20, 1997, the trustees of BIP Trust approved closing BSCG to new investors effective November 17, 1997. - -------------------------------------------------------------------------------- 8 Other Matters (Unaudited) - -------------------------------------------------------------------------------- A special meeting of shareholders of The OMNI Investment Fund was held on February 13, 1997, at which shareholders approved a number of proposals which facilitated BSCV becoming part of the Berger Funds family of mutual funds. The proposals approved included the following: Proposal 1. Election of ten new individuals as trustees of the OMNI Trust, each who also serve as trustees of other Berger Funds; Proposal 2. Approval of a new Investment Advisory Agreement with Berger, pursuant to which BSCV pays Berger a fee at the annual rate of 0.90% of BSCV's average daily net assets for its advisory services; Proposal 3. Approval of a new Sub-Advisory Agreement between Berger and PWM, pursuant to which Berger pays PWM a fee at the annual rate of 0.90% of the first $75 million of average daily net assets of BSCV, 0.50% of the next $125 million, and 0.20% of any amount in excess of $200 million for sub-advisory services; Proposal 4. Approval of amendments to The OMNI Investment Fund's Declaration of Trust to permit the establishment of multiple classes of shares. The following is a report of the votes cast:
Withheld/ For Against Abstain Total - -------------------------------------------------------------------------------- Proposal 1 Dennis E. Baldwin 1,452,216 -- 48,098 1,500,314 William M.B. Berger 1,450,892 -- 49,422 1,500,314 Louis R. Bindner 1,450,892 -- 49,422 1,500,314 Katherine A. Cattanach 1,452,681 -- 47,633 1,500,314 Lucy Black Creighton 1,452,216 -- 48,098 1,500,314 Paul R. Knapp 1,421,744 -- 78,570 1,500,314 Gerard M. Lavin 1,452,681 -- 47,633 1,500,314 Harry T. Lewis, Jr 1,453,027 -- 47,287 1,500,314 Michael Owen 1,451,902 -- 48,412 1,500,314 William Sinclaire 1,452,681 -- 47,633 1,500,314 Proposal 2 1,414,857 71,974 13,483 1,500,314 Proposal 3 1,415,784 66,775 17,755 1,500,314 Proposal 4 1,413,948 67,988 18,378 1,500,314
45 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Portfolio - -------------------------------------------------------------------------------- For the Period from October 11, 1996 (Commencement of Investment Operations) to September 30, 1997 The following pages should be read in conjunction with the Berger/BIAM International Fund Annual Report. Report of Independent Accountants - -------------------------------------------------------------------------------- To the Board of Trustees and Investors of Berger/BIAM International Portfolio - -------------------------------------------------------------------------------- In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the supplemental data present fairly, in all material respects, the financial position of Berger/BIAM International Portfolio (the sole portfolio comprising Berger/BIAM Worldwide Portfolios Trust, hereafter referred to as the "Portfolio") at September 30, 1997, and the results of its operations, the changes in its net assets and the supplementary data for the period October 11, 1996 (commencement of investment operations) through September 30, 1997, in conformity with generally accepted accounting principles. These financial statements and supplementary data (hereafter referred to as "financial statements") are the responsibility of the Portfolio's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at September 30, 1997 by correspondence with the custodian and brokers, and the application of alternative auditing procedures where securities purchased had not been received, provides a reasonable basis for the opinion expressed above. /s/ Price Waterhouse LLP Price Waterhouse LLP Denver, Colorado November 11, 1997 46 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Portfolio Schedule of Investments
Common Stock (91.1%) September 30, 1997 - ----------------------------------------------------------------------------------------------------------------------------- Country/Shares Company Industry Market Value - ----------------------------------------------------------------------------------------------------------------------------- Australia (5.6%) 106,970 Broken Hill Proprietary Mining, Metals & Minerals $ 1,247,314 194,800 National Australia Bank Commercial Banks & Other Banks 2,997,521 388,780 News Corporation Media 1,995,175 135,150 Western Mining Mining, Metals & Minerals 635,066 - ----------------------------------------------------------------------------------------------------------------------------- 6,875,076 - ----------------------------------------------------------------------------------------------------------------------------- France (2.2%) 19,510 Michelin Auto Componments 1,110,733 13,640 Total Co. Francaise Petrole 'B' Oil 1,564,611 - ----------------------------------------------------------------------------------------------------------------------------- 2,675,344 - ----------------------------------------------------------------------------------------------------------------------------- Germany (6.5%) 44,795 Hoechst Chemicals 1,992,583 5,381 Mannesmann Machining & Engineering Services 2,570,668 17,860 Siemens Electrical Equipment 1,209,413 37,580 Veba Diversified Industrials 2,201,495 - ----------------------------------------------------------------------------------------------------------------------------- 7,974,159 - ----------------------------------------------------------------------------------------------------------------------------- Great Britain (30.6%) 110,750 Barclays Bank Commercial Banks & Other Banks 2,983,278 325,290 BAT Industries Beverage Industry/Tobacco Manufacturing 2,851,466 323,500 BTR Diversified Industrials 1,316,050 156,200 Cable & Wireless Utilities 1,331,413 137,700 Cadbury Schweppes Beverage Industry/Tobacco Manufacturing 1,327,107 63,820 EMI Group - Class B Entertainment/Leisure/Toys 627,439 228,350 General Electric Co. Electronics & Instruments 1,437,684 99,350 Glaxo Wellcome Health & Personal Care 2,236,578 140,100 Granada Group Entertainment/Leisure/Toys 1,981,253 112,700 Grand Metropolitan Beverage Industry/Tobacco Manufacturing 1,073,429 89,800 Kingfisher Retail Trade 1,225,565 195,500 Ladbroke Group Entertainment/Leisure/Toys 864,759 213,100 Lloyds TSB Group Commercial Banks & Other Banks 2,863,950 95,800 Premier Farnell Wholesale Trade 821,217 184,630 Prudential Insurance Life & Agents/Brokers 2,058,087 202,450 Safeway Retail Trade 1,315,471 126,400 Scottish Power Utilities 977,418 316,550 Shell Transport & Trading Company Oil 2,317,487 109,891 Siebe Machinery & Engineering Services 2,212,210 154,100 TI Group Machinery & Engineering Services 1,654,329 250,200 Vodafone Group Utilities 1,340,982 77,700 Zeneca Group Health & Personal Care 2,540,059 - ----------------------------------------------------------------------------------------------------------------------------- 37,357,231 - ----------------------------------------------------------------------------------------------------------------------------- Hong Kong (1.5%) 56,400 HSBC Holdings Commercial Banks & Other Banks 1,887,775 - ----------------------------------------------------------------------------------------------------------------------------- Indonesia (1.6%) 256,000 Gudang Garam Beverage Industry/Tobacco Manufacturing 743,731 304,000 HM Sampoerna Beverage Industry/Tobacco Manufacturing 627,523 509,000 Telekomunikasi Utilities 564,258 - ----------------------------------------------------------------------------------------------------------------------------- 1,935,512 - ----------------------------------------------------------------------------------------------------------------------------- Ireland (1.0%) 47,230 Allied Irish Banks Commercial Banks & Other Banks 416,756 257,100 Smurfit (Jefferson) Group Forestry & Paper Products 859,616 - ----------------------------------------------------------------------------------------------------------------------------- 1,276,372 - -----------------------------------------------------------------------------------------------------------------------------
47 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Portfolio Schedule of Investments
Common Stock (91.1%) - continued September 30,1997 - ----------------------------------------------------------------------------------------------------------------------------- Country/Shares Company Industry Market Value - ----------------------------------------------------------------------------------------------------------------------------- Italy (1.6%) 42,206 ENI SPA ITL Oil $ 266,399 252,380 Telecom Italia Utilities 1,685,318 - ----------------------------------------------------------------------------------------------------------------------------- 1,951,717 - ----------------------------------------------------------------------------------------------------------------------------- Japan (13.8%) 115,000 Canon Computer/Commercial/Office Equipment 3,372,658 55,000 Dai Nippon Printing Media 1,178,914 73,000 Honda Motor Automobiles 2,553,317 87,000 Kao Corporation Food & Grocery 1,264,903 27,000 Murata Manufacturing Electronics & Instruments 1,170,938 11,000 Rohm Company Electronics & Instruments 1,297,719 73,000 Shiseido Health & Personal Care 1,176,588 26,000 Sony Corporation Household Durables & Appliances 2,462,510 78,000 Takeda Chemical Health & Personal Care 2,345,865 - ----------------------------------------------------------------------------------------------------------------------------- 16,823,412 - ----------------------------------------------------------------------------------------------------------------------------- Malaysia (1.2%) 103,000 Hume Industries Construction & Building Materials 222,085 304,400 Sime Darby Diversified Holding Companies 632,897 203,000 RHB Capital Commercial Banks & Other Banks 240,111 118,000 United Engineers Construction & Building Materials 378,007 - ----------------------------------------------------------------------------------------------------------------------------- 1,473,100 - ----------------------------------------------------------------------------------------------------------------------------- Mexico (0.5%) 203,670 Grupo Financiero Banamex - Class B Commercial Banks & Other Banks 633,681 - ----------------------------------------------------------------------------------------------------------------------------- Netherlands (7.6%) 75,130 ABN Amro Holdings Commercial Banks & Other Banks 1,525,156 86,600 Elsevier Media 1,260,699 57,302 ING Groep Insurance - Multi/Property/Casualty 2,638,224 35,055 Koninklijke PTT Nederland Utilities 1,380,869 35,350 Nutricia Ver Bedrijven Food Manufacturing 1,064,845 24,380 Royal Dutch Petroleum Oil 1,368,090 - ----------------------------------------------------------------------------------------------------------------------------- 9,237,883 - ----------------------------------------------------------------------------------------------------------------------------- Philippines (0.3%) 208,370 San Miguel Corporation - Class B Beverage Industry/Tobacco Manufacturing 335,204 - ----------------------------------------------------------------------------------------------------------------------------- Singapore (4.4%) 190,000 City Development Real Estate 1,230,618 192,412 Development Bank Of Singapore Commercial Banks & Other Banks 1,963,773 117,600 Fraser & Neave Beverage Industry/Tobacco Manufacturing 673,209 104,100 Singapore Press Holdings Media 1,532,385 - ----------------------------------------------------------------------------------------------------------------------------- 5,399,985 - ----------------------------------------------------------------------------------------------------------------------------- Spain (1.2%) 44,330 Banco De Santander Commercial Banks & Other Banks 1,456,519 - ----------------------------------------------------------------------------------------------------------------------------- Switzerland (11.0%) 1,511 Alusuisse Lonza Holdings Fabricated Metal Products 1,485,204 1,500 Nestle Food & Grocery Products 2,096,223 3,217 Novartis Health & Personal Care 4,949,612 207 Roche Holdings Health & Personal Care 1,841,904 2,053 Schw Ruckverischer Insurance - Multi/Property/Casualty 3,088,528 - ----------------------------------------------------------------------------------------------------------------------------- 13,461,471 - ----------------------------------------------------------------------------------------------------------------------------- Thailand (0.5%) 115,100 Bangkok Bank Commercial Banks & Other Banks 594,791 - ----------------------------------------------------------------------------------------------------------------------------- Total Common Stock (Cost $104,002,414) 111,349,232 - -----------------------------------------------------------------------------------------------------------------------------
48 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Portfolio Schedule of Investments
Preferred Stock (0.1%) September 30, 1997 - ----------------------------------------------------------------------------------------------------------------------------- Country/Shares/Principal Amount Company Industry Market Value - ----------------------------------------------------------------------------------------------------------------------------- Australia(0.1%) 19,750 News Corporation Media $ 87,505 - ----------------------------------------------------------------------------------------------------------------------------- Total Preferred Stock (cost $85,803) 87,505 - ----------------------------------------------------------------------------------------------------------------------------- U.S. Government Obligations (4.0%) - ----------------------------------------------------------------------------------------------------------------------------- $5,000,000 U.S. Treasury Bills due 12/11/97 (Amortized Cost $4,951,188) 4,951,188 - ----------------------------------------------------------------------------------------------------------------------------- Repurchase Agreement (4.0%) 4,879,000 Repurchase agreement with State Street Bank, 4.25% dated September 30, 1997, to be repurchased at $4,879,576 on October 1, 1997, collateralized by U.S. Treasury Bond, 6.25% - August 31, 1998, with a value of $4,977,513 (Cost $4,879,000) 4,879,000 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- Total Investments (Cost $113,918,405) (99.2%) 121,266,925 (Cost for federal income tax purposes $113,971,820) Other Assets, Less Liabilities (0.8%) 950,075 Net Assets (100%) $ 122,217,000 - -----------------------------------------------------------------------------------------------------------------------------
See notes to financial statements. 49 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Portfolio - -------------------------------------------------------------------------------- Statement of Assets and Liabilities (Amounts in Thousands) - --------------------------------------------------------------------------------
September 30, 1997 - ------------------------------------------------------------------------------------------------------------------ Assets Investments at cost $ 113,918 - ------------------------------------------------------------------------------------------------------------------ Investments at value $ 121,267 Foreign currency at value (cost $142) 146 Receivables Contributions 1,153 Investment securities sold 157 Dividends and interest 484 - ------------------------------------------------------------------------------------------------------------------ Total Assets 123,207 - ------------------------------------------------------------------------------------------------------------------ Liabilities Payables Withdrawals 561 Investment securities purchased 215 Accrued administration fees 63 Accrued investment advisory fees 83 Accrued legal fees 1 Net unrealized depreciation on open forward currency contracts 67 - ------------------------------------------------------------------------------------------------------------------ Total Liabilities 990 - ------------------------------------------------------------------------------------------------------------------ Net Assets $ 122,217 Represented by: Paid-in capital for beneficial interests $ 122,217 - ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------ Statement of Operations (Amounts in Thousands) - ------------------------------------------------------------------------------------------------------------------ Period From October 11, 1996* to September 30, 1997 - ------------------------------------------------------------------------------------------------------------------ Investment Income Income Dividend income (net of $194 foreign withholding taxes) $ 1,381 Interest 194 - ------------------------------------------------------------------------------------------------------------------ Total Income 1,575 - ------------------------------------------------------------------------------------------------------------------ Expenses Investment advisory fees 560 Accounting services 10 Trustees' fees & expenses 39 Custodian fees 56 Legal fees 7 Postage, printing and reports 6 Insurance & bonds 4 Audit fees 2 - ------------------------------------------------------------------------------------------------------------------ Total Expenses 684 Less earnings credits (66) - ------------------------------------------------------------------------------------------------------------------ Less fees waived by advisor (61) - ------------------------------------------------------------------------------------------------------------------ Expenses - Net 557 - ------------------------------------------------------------------------------------------------------------------ Net Investment income (Loss) 1,018 - ------------------------------------------------------------------------------------------------------------------ Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions Net realized gain (loss) on investments and foreign currency transactions 1,712 Net unrealized appreciation (depreciation) on investments and foreign currency transactions 6,713 - ------------------------------------------------------------------------------------------------------------------ Net change in realized and unrealized gain (loss) on investment and foreign currency transactions 8,425 - ------------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets Resulting from Operations $ 9,443 - ------------------------------------------------------------------------------------------------------------------
* Commencement of investment operations. See notes to financial statements. 50 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Portfolio Statement of Changes in Net Assets (Amounts in Thousands)
Period From October 11, 1996* to September 30, 1997 - ------------------------------------------------------------------------------------------------------------------ From Operations Net investment income (loss) $ 1,018 Net realized gain (loss) on investments and foreign currency transactions 1,712 Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions 6,713 - ------------------------------------------------------------------------------------------------------------------ Net Increase (Decrease) in Net Assets From Operations 9,443 - ------------------------------------------------------------------------------------------------------------------ From Transactions in Investors' Beneficial Interest Contributions 127,144 Withdrawals (14,370) Net Increase (Decrease) in Net Assets From Investors' Transactions 112,774 - ------------------------------------------------------------------------------------------------------------------ Increase (Decrease) in Net Assets 122,217 - ------------------------------------------------------------------------------------------------------------------ Net Assets Beginning of period 0 - ------------------------------------------------------------------------------------------------------------------ End of period $ 122,217 - ------------------------------------------------------------------------------------------------------------------ Components of Net Assets Capital (par value and paid-in-surplus) $ 112,774 Undistributed net investment income (loss) 1,018 Undistributed net realized gain (loss) from investments 1,712 Unrealized appreciation (depreciation) on investments and foreign currency transactions 6,713 - ------------------------------------------------------------------------------------------------------------------ Total $ 122,217 - ------------------------------------------------------------------------------------------------------------------ Ratios/Supplementary Data For the period from October 11, 1996* to September 30, 1997 Net assets, end of period (in thousands) $ 122,217 Ratios to Average Net Assets2 Net expense ratio to average net assets .89% Ratio of net income to average net assets 1.63% Gross expenses to average net assets1 1.10% Portfolio Turnover3 17% Average Commission Rate $ .0248
* Commencement of investment operations. 1. During the period, certain fees were reduced as a result of voluntary fee reductions and/or earning credits. If such earning credits and voluntary fee reductions had not occurred, the ratios would have been as indicated. 2. Annualized. 3. Based on operations for the period shown and, accordingly, is not representative of a full year. See notes to financial statements. 51 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Portfolio Notes to Financial Statements - -------------------------------------------------------------------------------- 1 Organization and Significant Accounting Policies Organization The Berger/BIAM International Portfolio (the "Portfolio") is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Portfolio is a series of the Berger/BIAM Worldwide Portfolios Trust (the "Trust"), which was organized as a Delaware business trust on May 31, 1996. All costs in organizing the Trust were paid by BBOI Worldwide LLC ("BBOI"), the investment advisor of the Portfolio. The Portfolio commenced investment operations on October 11, 1996 ("Commencement of Investment Operations") with the sale of 448,161 shares of beneficial interest to the International Equity Fund, formerly known as the Berger/BIAM International Institutional Fund, in exchange for portfolio assets with an aggregate value of $4,481,609 which were transferred from the Pooled Trust of Citizens Bank of New Hampshire ("Citizens NH") to the International Equity Fund and, in turn, transferred to the Portfolio. Such transaction was a tax-free exchange. Citizens NH is an affiliate of Bank of Ireland Asset Management (U.S.) Limited ("BIAM"), which was the investment sub-advisor to the Pooled Trust and is the investment sub-advisor to the Portfolio. Currently there are three investors in the Portfolio, the Berger/BIAM International Fund, the International Equity Fund and the Berger/BIAM International CORE Fund. The investment objective of the Portfolio is long-term capital appreciation. The Portfolio invests primarily in common stocks of well established companies located outside the United States. The Portfolio is advised by BBOI, which has delegated daily portfolio management of the Portfolio to BIAM. Berger Associates, Inc. ("Berger") and BIAM each own 50% of BBOI. Significant Accounting Policies The following is a summary of significant accounting policies consistently followed by the Portfolio in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. Investment Valuation The Portfolio's securities and other assets are valued at the close of the regular trading session of the New York Stock Exchange (the "Exchange") (normally 4:00 p.m. New York time) each day the Exchange is open. The Portfolio's securities and other assets are valued as follows: securities listed or traded primarily on foreign exchanges, national exchanges and the Nasdaq Stock market are valued at the last sale price on such markets, or, if such a price is lacking for the trading period immediately preceding the time of determination, such securities are valued at the mean of their current bid and asked prices. Securities that are traded in the over-the-counter market are valued at the mean between their current bid and asked prices. The market value of individual securities held by the Portfolio are determined by using pricing services which provide market prices to other mutual funds or, as needed, by obtaining market quotations from independent broker/dealers. Short-term money market securities maturing within 60 days are valued on the amortized cost basis, which approximates market value. Securities and assets for which quotations are not readily available are valued at fair values determined in good faith pursuant to consistently applied procedures established by the trustees. Generally, trading in foreign securities markets is substantially completed each day at various times prior to the close of the Exchange. The values of foreign securities used in computing the net asset value of the shares in the Portfolio are determined as of the earlier of such market close or the closing time of the Exchange. Occasionally, events affecting the value of such securities may occur between the times at which they are determined and the close of the Exchange, or when the foreign market on which such securities trade is closed but the Exchange is open, which will not be reflected in the computation of net asset value. If during such periods, events occur which materially affect the value of such securities, the securities will be valued at their fair market value as determined in good faith pursuant to consistently applied procedures established by the trustees. Foreign Currency Translation Assets and liabilities initially expressed in terms of foreign currencies are translated into U.S. dollars at the prevailing market rates as quoted by one or more banks or dealers on the date of valuation. The cost of securities is translated into U.S. dollars at the rates of exchange prevailing when such securities were acquired. Income and expenses are translated into U.S. dollars at rates of exchange prevailing when accrued. Federal Income Taxes The Portfolio is considered a partnership for Federal income tax purposes. As such, each investor in the Portfolio will be taxed on its share of the Portfolio's ordinary income and capital gains. It is intended that the Portfolio's assets will be managed in such a way that an investor in the Portfolio will be able to satisfy the requirements of Sub-Chapter M of the Internal Revenue Code. Investment Transactions and Investment Income Investment transactions are accounted for on the trade date. Gains and losses are computed on the identified cost basis for both financial statement and Federal income tax purposes for all securities. Dividend income and distributions to investors are recorded on the 52 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Portfolio 1 Organization and Significant Accounting Policies-Continued ex-dividend date, except if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Portfolio is informed of the ex-dividend date. Dividend income is recorded net of foreign taxes withheld where recovery of such taxes is not assured. Interest income is recorded on the accrual basis and includes amortization of discounts and premiums. 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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results may differ from those estimates. Forward Currency Contracts The Portfolio may enter into forward foreign currency exchange contracts for the purpose of hedging the Portfolio against exposure to market value fluctuations in foreign currencies. The use of such instruments may involve risks such as the possibility of illiquid markets or imperfect correlation between the value of the contracts and the underlying securities, or that the counterparty will fail to perform its obligations. Forward currency contracts and foreign denominated assets may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk, and market risk. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar. The forward foreign currency exchange contracts are adjusted to the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date. 2 Agreements BBOI renders investment advisory services to the Portfolio pursuant to an agreement which provides for an investment advisory fee to be paid to BBOI at the annual rate of .90 of 1% of the Portfolio's average daily net assets. Until at least April 30, 1998, BBOI has agreed voluntarily to waive its advisory fee to the extent that the Portfolio's normal operating expenses in any fiscal year (including the investment advisory fee and custodian fees, but excluding brokerage commissions, interest, taxes and extraordinary expenses) exceed 1.00% of the Portfolio's average daily net assets for that fiscal year. BBOI is also responsible for providing for or arranging for all managerial and administrative services necessary for the operations of the Portfolio. BBOI has delegated the daily investment management of the Portfolio to BIAM. For such services, BBOI pays BIAM a sub-advisory fee equal to .45% of the average daily net assets of the Portfolio. Such sub-advisory fee has been voluntarily waived by BIAM from the Commencement of Investment Operations through September 30, 1997, except for an amount payable on the Citizens NH converted assets. Investors Fiduciary Trust Company ("IFTC") has been appointed to provide recordkeeping and pricing services to the Portfolio, including calculating the net asset value of the Portfolio, and to perform certain accounting and recordkeeping functions required by the Portfolio. In addition, IFTC has been appointed to serve as the Portfolio's custodian and transfer agent. For custodian, recordkeeping and pricing services, the Portfolio pays a fee directly to IFTC based on a percentage of its net assets, subject to certain minimums, and reimburses IFTC for certain out-of-pocket expenses. IFTC's fees for custody, recordkeeping and pricing, or transfer agency services are subject to reduction by credits earned by the Portfolio, based on the cash balances of the Portfolio held by IFTC as custodian or by credits received from directed brokerage transactions. For the period from Commencement of Investment Operations through September 30, 1997, the Fund received $66,350 in earnings and brokerage credits which offset the fees payable to IFTC for services rendered. Certain officers and trustees of the Trust are officers and directors of Berger, BBOI or BIAM. Trustees who are not affiliated with Berger, BBOI or BIAM are compensated for their services according to a fee schedule, allocated among the Berger Funds (which consists of the One Hundred Fund, the Growth and Income Fund, the Small Company Growth Fund, the New Generation Fund, the Small Cap Value Fund and the Balanced Fund) and Berger/BIAM Portfolio, which includes an annual fee component and a per meeting component. Such fees are allocated directly to the Portfolio and, therefore, indirectly to each fund. Trustees' fees and expenses during the period from Commencement of Investment Operations through September 30, 1997, totaled $38,602. 53 Annual Report September 30, 1997 The Berger Funds Berger/BIAM International Portfolio 3 Investment Transactions - -------------------------------------------------------------------------------- Purchases and Sales Purchases and sales of investment securities (excluding short-term securities) during the period from Commencement of Investment Operations to September 30, 1997 were as follows:
Purchase of Sales of Investment Securities Investment Securities - -------------------------------------------------------------------------------- $113,541,487 $10,049,786
There were no purchases or sales of long-term U.S. Government securities during the period. At September 30, 1997, the composition of unrealized appreciation (the excess of value over tax cost) and unrealized depreciation (the excess of tax cost over value) for securities held was as follows:
Unrealized Unrealized Appreciation Depreciation Net - -------------------------------------------------------------------------------- $13,463,842 $(6,168,737) $7,295,105
4 Line of Credit - -------------------------------------------------------------------------------- In July 1997, the Portfolio, along with the Berger New Generation Fund, Berger Small Company Growth Fund, Berger Small Cap Value Fund, Berger One Hundred Fund and Berger Growth and Income Fund (the "Funds"), entered into an ongoing agreement with certain banks which allows the Funds and the Portfolio, collectively, to borrow up to $150 million, subject to certain conditions, for temporary or emergency purposes. Interest on any borrowings, if any, is charged to the specific fund executing the borrowing at the Federal Funds Rate plus 75 basis points. In addition, the unsecured line of credit requires a quarterly payment of a commitment Fee based on the average daily unused portion of the line of credit. 5 Change of Fiscal Year - -------------------------------------------------------------------------------- Effective April 11, 1997, the trustees of the Trust approved changing the fiscal year end of the Portfolio from July 31 to September 30. 54 Annual Report September 30, 1997 The Berger Funds Financial Highlights Berger New Generation Fund
For a Share Outstanding Throughout the Year Ended September 30, 1997 1996* - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 11.82 $ 10.00 - ------------------------------------------------------------------------------------------------------------------ Income from investment operations Net investment income (loss) (.13) .56 Net realized and unrealized gain (losses) on securities 3.64 1.26 Total from investment operations 3.51 1.82 - ------------------------------------------------------------------------------------------------------------------ Less distributions Dividends (from net investment income) (.61) .00 Dividends (from capital gains) .00 .00 - ------------------------------------------------------------------------------------------------------------------ Total distributions (.61) .00 - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 14.72 $ 11.82 - ------------------------------------------------------------------------------------------------------------------ Total Return 31.53% 18.20%/4/ - ------------------------------------------------------------------------------------------------------------------ Ratios/Supplemental Data Net assets, end of period (in thousands) $190,164 $116,912 Net expense ratio to average net assets 1.87% 1.88% Ratio of net income (loss) to average net assets (1.51)% 12.35%/1/ Gross expenses to average net assets/3/ 1.89% 2.09%/1/ Portfolio turnover rate 184% 474%/2/,/4/ Average commission rate $ .0693 $ .0291
* For the period March 29, 1996 (commencement of investment operations) to September 30, 1996. 1. Annualized 2. The Fund experienced higher than anticipated turnover during this period as a result of portfolio transactions undertaken in response to volatile markets and the short tax year for its initial period of operations. 3. During the period, certain fees were reduced as a result of voluntary fee reductions and/or earning credits. If such earning credits and voluntary fee reductions had not occurred, the ratios would have been as indicated. 4. Based on operations for the period shown and accordingly, is not representative of a full year. Berger Small Company Growth Fund
For a Share Outstanding Throughout the Year Ended September 30, 1997 1996 1995 1994* - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 4.74 $ 3.61 $ 2.74 $ 2.50 - ------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations Net investment income (loss) (.05) (.03) (.02) .00 Net realized and unrealized gain (losses) on securities .84 1.16 .89 .24 Total from investment operations .79 1.13 .87 .24 Less distributions Dividends (from net investment income) .00 .00 .00/1/ .00 Dividends (from capital gains) (.20) .00 .00 .00 - ------------------------------------------------------------------------------------------------------------------ Total distributions (.20) .00 .00 .00 - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 5.33 $ 4.74 $ 3.61 $ 2.74 - ------------------------------------------------------------------------------------------------------------------ Total Return 17.68% 31.30% 31.90% 9.60%/4/ - ------------------------------------------------------------------------------------------------------------------ Ratios/Supplemental Data Net assets, end of period (in thousands) $902,685 $871,467 $522,667 $211,852 Net expense ratio to average net assets 1.66% 1.67% 1.87% 2.05% Ratio of net income (loss) to average net assets (1.09)% (.97)% (.74)% .32%/2/ Gross expenses to average net assets/3/ 1.67 1.68 1.89 2.10%/2/ Portfolio turnover rate 111% 91% 109% 108%/4/ Average commission rate $ .0580 $ .0584 - -
* For the period December 30, 1993 (commencement of investment operations) to September 30, 1994. 1. Dividends from net investment income were less than $.01 per share. 2. Annualized 3. During the period, certain fees were reduced as a result of voluntary fee reductions and/or earning credits. If such earning credits and voluntary fee reductions had not occurred, the ratios would have been as indicated. 4. Based on operations for the period shown and accordingly, is not representative of a full year. See notes to financial statements. 55 Annual Report September 30, 1997 The Berger Funds Financial Highlights Berger Small Cap Value Fund - Institutional Shares
For a Share Outstanding Throughout the Nine Months Ended Year Ended September 30, December 31 1997 1996 1995 1994 1993 - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 16.48 $ 14.57 $ 12.75 $ 13.99 $ 13.39 Income (loss) from investment operations Net investment income (loss) 0.07 0.12 0.09 (.01) 0.03 Net realized and unrealized gain (loss) on securities 5.78 3.62 3.23 0.91 2.14 Total from investment operations 5.85 3.74 3.32 0.90 2.17 Less distributions Dividends (from net investment income) .00 (0.11) (0.09) 0.00 (0.03) Distributions (from capital gains) .00 (1.72) (1.41) (2.14) (1.54) - --------------------------------------------------------------------------------------------------------------------------- Total distributions .00 (1.83) (1.50) (2.14) (1.57) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 22.33 $ 16.48 $ 14.57 $ 12.75 $ 13.99 - --------------------------------------------------------------------------------------------------------------------------- Total return 35.50%/3/ 25.58% 26.07% 6.74% 16.25% - --------------------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $ 58,450 $ 36,041 $ 31,833 $ 18,270 $ 16,309 Net expense ratio to average net assets 1.33%/1/ 1.48% 1.64% 1.43% 1.31% Ratio of net income (loss) to average net assets 0.63%/1/ 0.69% 0.64% (.04) % 0.18% Gross expenses to average net assets/2/ 1.34%/1/ 1.48% 1.64% 1.43% 1.31% Portfolio turnover rate 81%/3/ 69% 90% 125% 108% Average commission rate $ 0.0726 $ 0.1015 -- -- --
1. Annualized. 2. During the period, certain fees were reduced as a result of voluntary fee reductions and/or earning credits. If such earning credits and voluntary fee reductions had not occurred, the ratios would have been as indicated. 3. Based on operations for the period shown and accordingly, is not representative of a full year. Berger Small Cap Value Fund - Investor Shares
For a Share Outstanding Throughout the Period from February 14, 1997* to September 30, 1997 Net asset value, beginning of period $ 17.24 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations Net investment income (loss) 0.03 Net realized and unrealized gain (loss) on securities 5.01 Total from investment operations 5.04 Less Distributions Dividends (from net investment income) .00 Distributions (from net realized gain on investments) .00 - --------------------------------------------------------------------------------------------------------------------------- Total distributions .00 - --------------------------------------------------------------------------------------------------------------------------- Net Asset Value, end of period $ 22.28 - --------------------------------------------------------------------------------------------------------------------------- Total Return 29.23%/3/ - --------------------------------------------------------------------------------------------------------------------------- Ratios/Supplemental Data Net assets, end of period (in thousands) $ 55,211 Net expense ratio to average net assets 1.65%/1/ Ratio of net income to average net assets .60%/1/ Gross expenses to average net assets/2/ 1.66%/1/ Portfolio turnover rate 81%/3/ Average commission rate $ 0.0726
* Commencement of Investor shares. 1. Annualized. 2. During the period, certain fees were reduced as a result of voluntary fee reductions and/or earning credits. If such earning credits and voluntary fee reductions had not occurred, the ratios would have been as indicated. 3. Based on operations for the period shown and accordingly, is not representative of a full year. See notes to financial statements. 56 Annual Report September 30, 1997 The Berger Funds Financial Highlights Berger One Hundred Fund
For a Share Outstanding Throughout the Year Ended September 30, 1997* 1996* 1995* 1994* 1993* - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 19.64 $ 18.89 $ 15.96 $ 16.54 $ 11.73 Income (loss) from investment operations: Net investment income (loss) (.09) (.08) (.04) (.12) (.14) Net realized and unrealized gain (losses) on securities 4.73 1.76 2.97 (.46) 4.95 Total from investment operations 4.64 1.68 2.93 (.58) 4.81 Less distributions: Dividends (from net investment income) .00 .00 .00 .00 .00 Dividends (from capital gains) (2.77) (.93) .00 .00 .00 Total distributions (2.77) (.93) .00 .00 .00 Net asset value, end of period $ 21.51 $ 19.64 $ 18.89 $ 15.96 $ 16.54 Total Return 26.50% 9.36% 18.36% (3.51)% 41.01% Ratios/Supplemental Data: Net assets, end of period (in thousands) $1,899,048 $2,012,706 $2,205,678 $2,228,743 $1,407,849 Net expense ratio to average net assets 1.38% 1.40 1.48% 1.70% 1.69% Ratio of net income (loss) to average net assets (0.40)% (0.43)% (0.28)% (0.74)% (1.00)% Gross expenses to average net assets/1/ 1.41% 1.42% 1.49% 1.95% 1.88% Portfolio turnover rate 200% 122% 114% 64% 74% Average commission rate $ .0608 $ .0624 -- -- --
* Per share calculations for the period were based on average shares outstanding. 1. During the period, certain fees were reduced as a result of voluntary fee reductions and/or earning credits. If such earning credits and voluntary fee reductions had not occurred, the ratios would have been as indicated. Berger/BIAM International Fund
For a Share Outstanding Throughout the Period from November 7, 1996* to September 30, 1997 Net asset value, beginning of period $ 10.00 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) .05 Net realized and unrealized gain (loss) on investments and foreign currency transactions 1.41 Total from investment operations 1.46 Less distributions: Dividends (from net investment income) 0.00 Distributions (from capital gains) 0.00 - ------------------------------------------------------------------------------------------------------------------------------------ Total distributions 0.00 - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 11.46 - ------------------------------------------------------------------------------------------------------------------------------------ Total Return/3/ 14.60% - ------------------------------------------------------------------------------------------------------------------------------------ Ratios/Supplemental Data Net assets, end of period (in thousands) $ 18,673 Net expense ratio to average net assets 1.80%/2/ Ratio of net income to average net assets 0.61%/2/ Gross expenses to average net assets/1/ 1.99%/2/
* Commencement of investment operations. 1. Reflects the Fund's expenses plus the Fund's pro rata share of the Portfolio's gross (total) and net expenses. The Portfolio's net expenses reflect its gross expenses, reduced by fees offset by earnings credits, fee waivers and expenses reimbursements. 2. Annualized 3. Based on operations for the period shown and, accordingly, is not representative of a full year. See notes to financial statements. 57 Annual Report September 30, 1997 The Berger Funds Financial Highlights Berger Growth and Income Fund
For a Share Outstanding Throughout the Year Ended September 30, 1997 1996 1995 1994 1993 - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 14.06 $ 12.89 $ 11.48 $ 11.27 $ 8.96 - ------------------------------------------------------------------------------------------------------------------------------ Income from investment operations Net investment income (loss) .14 .20 .16 .12 .08 Net realized and unrealized gain (losses) on securities 4.28 1.17 1.43 .21 2.29 Total from investment operations 4.42 1.37 1.59 .33 2.37 Less distributions Dividends (from net investment income) (.13) (.20) (.18) (.12) (.06) Distributions (from capital gains) (1.63) .00 .00 .00 .00 - ------------------------------------------------------------------------------------------------------------------------------ Total distributions (1.76) (.20) (.18) (.12) (.06) - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 16.72 $ 14.06 $ 12.89 $ 11.48 $ 11.27 - ------------------------------------------------------------------------------------------------------------------------------ Total Return 34.56% 10.66% 14.05% 2.91% 26.48% Ratios/Supplemental Data Net assets, end of period (in thousands) $ 357,023 $ 315,538 $ 354,396 $ 391,570 $ 112,932 Net expense ratio to average net assets 1.50% 1.54% 1.63% 1.81% 2.10% Ratio of net income to average net assets .87% 1.39% 1.33% 1.19% 1.05% Gross expenses to average net assets/1/ 1.51% 1.56% 1.64% 2.06% 2.29% Portfolio turnover rate 173% 112% 85% 23% 62% Average commission rate $ .0612 $ .0613 -- -- --
1. During the period, certain fees were reduced as a result of voluntary fee reductions and/or earning credits. If such earning credits and voluntary fee reductions had not occurred, the ratios would have been as indicated. See notes to financial statements. 58 Annual Report September 30, 1997 The Berger Funds [LOGO OF BERGER(R) APPEARS HERE] The Berger Funds 210 University Blvd. Denver, CO 80206 Shareholders with questions should write to The Berger Funds, c/o Berger Associates, Inc., P.O. Box 5005, Denver, CO. 80217, or call 1-800-333-1001. -----END PRIVACY-ENHANCED MESSAGE-----