UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File No. 811-07261
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CREDIT SUISSE TRUST
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(Exact Name of Registrant as Specified in Charter)
466 Lexington Avenue, New York, New York 10017-3140
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(Address of Principal Executive Offices) (Zip Code)
J. Kevin Gao, Esq.
Credit Suisse Trust
466 Lexington Avenue
New York, New York 10017-3140
Registrant's telephone number, including area code: (212) 875-3500
Date of fiscal year end: December 31st
Date of reporting period: January 1, 2005 to December 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
CREDIT SUISSE [LOGO]
CREDIT SUISSE FUNDS
Annual Report
December 31, 2005
CREDIT SUISSE TRUST
o GLOBAL SMALL CAP PORTFOLIO
Credit Suisse Trust (the "Trust") shares are not available directly to
individual investors, but may be offered only through certain insurance products
and pension and retirement plans.
The Trust's investment objectives, risks, charges and expenses (which should be
considered carefully before investing), and more complete information about the
Trust, are provided in the Prospectus, which should be read carefully before
investing. You may obtain additional copies by calling 800-222-8977 or by
writing to Credit Suisse Trust, P.O. Box 55030, Boston, MA 02205-5030.
Credit Suisse Asset Management Securities, Inc., Distributor, is located at
466 Lexington Ave., New York, NY 10017-3140. The Trust is advised by
Credit Suisse Asset Management, LLC.
THE VIEWS OF THE PORTFOLIO'S MANAGEMENT ARE AS OF THE DATE OF THE LETTER AND THE
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF DECEMBER 31, 2005; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
PORTFOLIO SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC ("CREDIT SUISSE") OR ANY AFFILIATE, ARE NOT FDIC-INSURED AND ARE
NOT GUARANTEED BY CREDIT SUISSE OR ANY AFFILIATE. PORTFOLIO INVESTMENTS ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
January 19, 2006
Dear Shareholder:
For the 12 months ended December 31, 2005, Credit Suisse Trust--Global
Small Cap Portfolio *,1 (the "Portfolio") had a gain of 16.14%, vs. an increase
of 12.10% for the Russell MidCap (R) Growth Index 2, an increase of 14.25% for
the Morgan Stanley Capital International World Small Cap Index (Price Only) 2,
and an increase of 10.02% for the Morgan Stanley World Index. 2
THE MARKET: FOREIGN STOCKS OUTPERFORM US EQUITIES
The year was a broadly positive one for equities globally, and most
foreign markets handily outpaced US stocks, at least in local currency terms.
European markets generally posted double-digit gains in euro terms, aided in
part by a relatively benign interest-rate backdrop. Japan was a notable
standout, up about 40% locally, amid signs that the world's second largest
economy may be poised for a sustainable recovery at long last. For dollar-based
investors, a decline in major currencies vs. the dollar reduced returns, though
most foreign markets still outperformed the US on that basis. Emerging markets
generally had the best dollar-based results in 2005.
From a sector standpoint, energy was the best performing area of the US
stock market. Energy stocks also outperformed abroad, though materials and
industrials stocks had even better returns overseas for the period. Consumer
stocks generally underperformed globally.
STRATEGIC REVIEW: AIDED BY STOCK SELECTION
The Portfolio was supported by the favorable environment for small caps
globally, and its outperformance reflected good stock selection in a variety of
sectors. Stocks that contributed positively to the Portfolio's absolute and
relative performance included its materials, industrials, health care and
consumer-related holdings. The Portfolio's technology and utilities holdings
modestly underperformed in the period.
With respect to noteworthy recent portfolio activity, our purchases
included Salesforce.com (1.4% of the Portfolio's net assets as of December 31,
2005), a software company that licenses its enterprise resource planning
applications to a number of large companies. Our late-period sales included Colt
Telecom, a UK based provider of business telecommunications services across
Europe. The stock had rallied to reach our sell target. We also exited our
position in Mega
1
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
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Bloks, a Canadian toy company, based on valuation along with our concerns
regarding an acquisition the company made recently.
Going forward, we will continue to employ a bottom-up investment approach,
seeking to identify companies trading at a discount to their projected growth
rates or intrinsic asset values. Factors we incorporate include price/earnings
growth, book value, strong returns on capital and reliability and effectiveness
of management.
The Portfolio ordinarily holds equity securities of small companies from
at least three countries, including the US, and we seek to take advantage of
both growth and value opportunities. The Portfolio's investable universe is
hence broad and large, and our focus remains on attempting to find innovative
companies with unrecognized potential.
The Credit Suisse Global Small Cap Team
Calvin E. Chung
Leo M. Bernstein
Crispin Finn
* Effective February 21, 2005, the Portfolio changed its name to "Credit
Suisse Trust - Global Small Cap Portfolio".
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING
CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND
DIFFERENCES IN ACCOUNTING METHODS. BECAUSE OF THE NATURE OF THE PORTFOLIO'S
INVESTMENTS IN START-UP AND OTHER SMALL COMPANIES AND CERTAIN AGGRESSIVE
STRATEGIES IT MAY USE, AN INVESTMENT IN THE PORTFOLIO MAY BE MORE VOLATILE AND
LESS LIQUID THAN INVESTMENTS IN LARGER COMPANIES AND MAY NOT BE APPROPRIATE FOR
ALL INVESTORS.
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS
FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND
FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT
REGULATION AND THEIR POTENTIAL IMPACT ON THE PORTFOLIO'S INVESTMENTS. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS,
DEVELOPMENTS AND REGULATIONS IN THE FUTURE, AND THEIR IMPACT ON THE PORTFOLIO
COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE
PORTFOLIO HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
2
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
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COMPARISON OF CHANGE IN VALUE OF $10,000
INVESTMENT IN THE CREDIT SUISSE TRUST--GLOBAL SMALL CAP PORTFOLIO 1,
THE RUSSELL MIDCAP(R) GROWTH INDEX 2, THE MSCI WORLD INDEX 2
AND MSCI WORLD SMALL CAP INDEX 2
FROM INCEPTION (9/30/96).
[LINE CHART]
CREDIT SUISSE
TRUST -- GLOBAL RUSSELL MIDCAP
SMALL CAP GROWTH MSCI WORLD MSCI WORLD SMALL
PORTFOLIO 1 INDEX 2,3 INDEX 2,3 CAP INDEX 2,3
--------------- -------------- ----------- ----------------
9/96 10000 10000 10000 10000
9730 9883 10072 9950
9760 10465 10638 10257
12/96 9760 10289 10469 10169
10200 10744 10597 10232
9520 10507 10721 10213
8870 9914 10511 9770
8900 10156 10856 9561
9880 11066 11528 10482
10090 11373 12105 10806
10950 12461 12664 10949
10860 12340 11818 10667
11570 12964 12462 10938
10840 12315 11808 10363
10840 12444 12019 9886
12/97 11062 12608 12167 9588
10932 12381 12508 9773
12032 13545 13357 10624
12742 14113 13923 10918
12912 14304 14061 10990
12022 13716 13887 10713
12522 14104 14218 10441
11312 13500 14197 9947
8941 10923 12306 8296
9591 11749 12526 8280
9952 12615 13661 8862
10762 13465 14475 9336
12/98 11822 14860 15184 9533
12182 15305 15519 9539
11262 14557 15108 9110
12132 15368 15740 9440
12232 16068 16362 10158
12062 15861 15767 10035
13282 16969 16504 10587
12682 16428 16456 10842
12682 16258 16429 10876
12702 16119 16272 10844
13762 17366 17120 10707
15832 19164 17604 11163
12/99 19263 22482 19031 11946
18983 22478 17944 11854
22303 27203 17994 13286
22383 27230 19240 12791
20293 24586 18429 11875
19073 22793 17965 11647
20223 25212 18572 12506
19613 23616 18051 11931
22453 27177 18641 12748
21683 25848 17652 12330
19153 24080 17358 11738
15172 18848 16307 11162
12/00 15615 19841 16573 11574
16085 20974 16895 11996
13975 17346 15469 11639
12107 14863 14456 10968
13207 17341 15528 11814
12955 17259 15335 11913
12554 17268 14857 11870
11671 16104 14661 11467
10937 14937 13960 11432
9367 12468 12732 9913
9928 13778 12977 10565
10719 15262 13747 11222
12/01 11144 15842 13835 11498
10719 15328 13417 11254
10330 14459 13303 11152
10868 15562 13894 11991
10559 14739 13427 12162
10249 14299 13458 12110
9573 12721 12645 11466
8358 11484 11580 10211
8025 11444 11604 10154
7246 10535 10331 9367
7463 11352 11095 9471
8014 12241 11696 9996
12/02 7337 11501 11131 9528
7108 11389 10795 9354
6867 11290 10610 9183
6753 11500 10581 9169
7486 12283 11526 10090
8369 13464 12190 11122
8702 13657 12406 11469
9057 14144 12660 11919
9630 14924 12937 12656
9688 14634 13019 12873
10467 15814 13794 13998
10582 16238 14007 14241
12/03 10834 16415 14889 14820
11350 16956 15132 15450
11545 17241 15390 15760
11522 17208 15294 16156
11338 16723 14990 15399
11293 17118 15137 15437
11671 17390 15454 16102
10731 16239 14953 15259
10616 16039 15025 15225
10880 16637 15314 15754
11178 17201 15693 16202
12107 18089 16524 17479
12/04 12783 18955 17160 18171
12680 18447 16776 17935
12909 18914 17316 18506
12794 18638 16987 18032
12336 17900 16628 17289
12978 18925 16937 17794
13414 19277 17091 18294
14044 20401 17691 19231
14228 20277 17833 19407
14365 20538 18301 19869
13884 19935 17861 19195
14273 21017 18466 19961
12/05 14847 21248 18880 20761
3
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
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AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005 1
SINCE
1 YEAR 5 YEARS INCEPTION
------ ------- ---------
16.14% (1.00)% 4.36%
RETURNS REPRESENT PAST PERFORMANCE AND INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE
FUTURE RESULTS. THE CURRENT PERFORMANCE OF THE PORTFOLIO MAY BE LOWER OR HIGHER
THAN THE FIGURES SHOWN. RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION
VALUE MAY BE MORE OR LESS THAN ORIGINAL COST. THE PERFORMANCE RESULTS DO NOT
REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON PORTFOLIO
DISTRIBUTIONS OR THE REDEMPTION OF PORTFOLIO SHARES. PERFORMANCE INCLUDES THE
EFFECT OF DEDUCTING EXPENSES, BUT DOES NOT INCLUDE CHARGES AND EXPENSES
ATTRIBUTABLE TO ANY PARTICULAR VARIABLE CONTRACT OR PLAN. ACCORDINGLY, THE
PROSPECTUS OF THE SPONSORING PARTICIPATING INSURANCE COMPANY SEPARATE ACCOUNT OR
PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS SHOULD
BE CAREFULLY REVIEWED FOR INFORMATION ON RELEVANT CHARGES AND EXPENSES.
EXCLUDING THESE CHARGES AND EXPENSES FROM QUOTATIONS OF PERFORMANCE HAS THE
EFFECT OF INCREASING THE PERFORMANCE QUOTED, AND THE EFFECT OF THESE CHARGES
SHOULD BE CONSIDERED WHEN COMPARING PERFORMANCE TO THAT OF OTHER MUTUAL FUNDS.
PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH-END IS AVAILABLE AT
WWW.CREDIT-SUISSE.COM/US.
_______________
1 Fee waivers and/or expense reimbursements may reduce expenses for the
Portfolio, without which performance would be lower. Waivers and/or
reimbursements may be discontinued at any time.
2 The Russell MidCap(R) Growth Index and the Morgan Stanley Capital
International World Index were benchmarks for the Global Small Cap
Portfolio. The Russell MidCap(R) Growth Index measures the performance of
those companies in the Russell MidCap(R) Index with higher price-to-book
ratios and higher forecasted growth values. The stocks are also members of
the Russell 1000(R) Growth Index. It is an unmanaged index of common
stocks that includes reinvestment of dividends and is compiled by Frank
Russell Company. The Morgan Stanley Capital International World Index is a
free float-adjusted market-capitalization index that is designed to
measure global developed-market equity performance. It is the exclusive
property of Morgan Stanley Capital International Inc. The Morgan Stanley
Capital International World Small Cap Index is an unmanaged broadbased
index comprised of small cap companies from 23 developed markets. The
index returns shown above are price only and do not reflect the
reinvestment of dividends. It is the exclusive property of Morgan Stanley
Capital International Inc. In order to reflect changes to the Portfolio's
investment policy and name, the Morgan Stanley Capital International World
Small Cap Index replaced the Morgan Stanley Capital International World
Index and the Russell MidCap(R) Growth Index as the Portfolio's benchmark
effective February 21, 2005. Investor cannot invest directly in an index.
3 Performance for the index is not available for the period beginning
9/30/96 (inception date). For that reason, performance is shown for the
period beginning 10/1/96.
4
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
INFORMATION ABOUT YOUR PORTFOLIO'S EXPENSES
As an investor of the Portfolio, you incur two types of costs: ongoing
expenses and transaction costs. Ongoing expenses include management fees,
distribution and service (12b-1) fees and other Portfolio expenses. Examples of
transaction costs include sales charges (loads), redemption fees and account
maintenance fees, which are not shown in this section and which would result in
higher total expenses. The following table is intended to help you understand
your ongoing expenses of investing in the Portfolio and to help you compare
these expenses with the ongoing expenses of investing in other mutual funds. The
table is based on an investment of $1,000 made at the beginning of the six month
period ended December 31, 2005.
The table illustrates your Portfolio's expenses in two ways:
o ACTUAL PORTFOLIO RETURN. This helps you estimate the actual dollar
amount of ongoing expenses paid on a $1,000 investment in the
Portfolio using the Portfolio's actual return during the period. To
estimate the expenses you paid over the period, simply divide your
account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in
the "Expenses Paid per $1,000" line under the share class you hold.
o HYPOTHETICAL 5% PORTFOLIO RETURN. This helps you to compare your
Portfolio's ongoing expenses with those of other mutual funds using
the Portfolio's actual expense ratio and a hypothetical rate of
return of 5% per year before expenses. Examples using a 5%
hypothetical fund return may be found in the shareholder reports of
other mutual funds. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or
expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight
your ongoing expenses only and do not reflect any transaction costs, such as
sales charges (loads) or redemption fees. If these transaction costs had been
included, your costs would have been higher. The "Expenses Paid per $1,000" line
of the tables is useful in comparing ongoing expenses only and will not help you
determine the relative total expenses of owning different funds.
5
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
EXPENSES AND VALUE OF A $1,000 INVESTMENT
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 2005
- --------------------------------------------------------------------------------
ACTUAL PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,106.80
Expenses Paid per $1,000* $ 7.43
HYPOTHETICAL 5% PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,018.15
Expenses Paid per $1,000* $ 7.12
ANNUALIZED EXPENSE RATIOS* 1.40%
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* EXPENSES ARE EQUAL TO THE PORTFOLIO'S ANNUALIZED EXPENSE RATIO MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF
DAYS IN THE MOST RECENT FISCAL HALF YEAR PERIOD, THEN DIVIDED BY 365.
THE "EXPENSES PAID PER $1,000" AND THE "ANNUALIZED EXPENSE RATIOS" IN THE
TABLES ARE BASED ON ACTUAL EXPENSES PAID BY THE PORTFOLIO DURING THE
PERIOD, NET OF FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IF THOSE FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS HAD NOT BEEN IN EFFECT, THE
PORTFOLIO'S ACTUAL EXPENSES WOULD HAVE BEEN HIGHER. EXPENSES DO NOT
REFLECT ADDITIONAL CHARGES AND EXPENSES THAT ARE, OR MAY BE, IMPOSED UNDER
THE VARIABLE CONTRACTS OR PLANS. SUCH CHARGES AND EXPENSES ARE DESCRIBED
IN THE PROPECTUS OF THE INSURANCE COMPANY SEPERATE ACCOUNT OR IN THE PLAN
DOCUMENTS OR OTHER INFOMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS. THE
PORTFOLIO'S EXPENSES SHOULD BE CONSIDERED WITH THESE CHARGES AND EXPENSES
IN EVALUATING THE OVERALL COST OF INVESTING IN THE SEPARATE ACCOUNT.
For more information, please refer to the Portfolio's prospectus.
6
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
SECTOR BREAKDOWN*
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
Information Technology 24.3%
Industrials 20.7%
Consumer Discretionary 16.5%
Financials 11.6%
Health Care 9.5%
Short-Term Investments 6.5%
Energy 3.6%
Consumer Staples 2.6%
Limited Partnerships 2.1%
Materials 1.9%
Utilities 0.7%
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* Expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
7
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------- ------------
COMMON STOCKS (91.5%)
AUSTRALIA (3.9%)
CHEMICALS (0.4%)
Nufarm, Ltd. 58,000 $ 491,385
------------
COMMERCIAL SERVICES & SUPPLIES (0.4%)
Downer EDI, Ltd. 100,000 526,155
------------
DISTRIBUTION & WHOLESALE (0.4%)
Metcash, Ltd. ss. 145,000 478,037
------------
DIVERSIFIED FINANCIALS (1.0%)
Australian Infrastructure Fund 256,000 442,221
Babcock & Brown Infrastructure Group ss. 345,000 409,191
ConnectEast Group 480,000 403,159
------------
1,254,571
------------
HEALTHCARE PROVIDERS & SERVICES (0.3%)
DCA Group, Ltd. ss. 155,000 451,528
------------
MACHINERY (1.1%)
Bradken, Ltd. 449,431 1,449,986
------------
MEDIA (0.3%)
STW Communications Group, Ltd. 205,000 457,535
------------
TOTAL AUSTRALIA 5,109,197
------------
AUSTRIA (0.7%)
ELECTRIC UTILITIES (0.7%)
EVN AG 11,180 903,489
------------
TOTAL AUSTRIA 903,489
------------
BELGIUM (0.6%)
HEALTHCARE EQUIPMENT & SUPPLIES (0.6%)
Omega Pharma SA 15,050 781,275
------------
TOTAL BELGIUM 781,275
------------
BERMUDA (2.0%)
DIVERSIFIED FINANCIALS (1.1%)
Assured Guaranty, Ltd. 54,700 1,388,833
------------
HOTELS, RESTAURANTS & LEISURE (0.9%)
Orient-Express Hotels, Ltd. Class A ss. 37,100 1,169,392
------------
TOTAL BERMUDA 2,558,225
------------
See Accompanying Notes to Financial Statements.
8
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------- ------------
COMMON STOCKS
CANADA (1.6%)
SPECIALTY RETAIL (1.6%)
Gildan Activewear, Inc. Class A* 48,000 $ 2,056,800
------------
TOTAL CANADA 2,056,800
------------
CHINA (3.2%)
AIRLINES (1.2%)
Air China, Ltd. Series H* 4,940,000 1,574,265
------------
COMMUNICATIONS EQUIPMENT (0.9%)
ZTE Corp. Series H 352,800 1,183,409
------------
INTERNET SOFTWARE & SERVICES (1.1%)
Netease.com, Inc. ADR* ss. 13,650 766,584
Shanda Interactive Entertainment, Ltd. ADR* ss. 37,095 565,328
------------
1,331,912
------------
TOTAL CHINA 4,089,586
------------
DENMARK (0.9%)
HOUSEHOLD DURABLES (0.9%)
Bang & Olufsen AS B Shares ss. 11,600 1,188,116
------------
TOTAL DENMARK 1,188,116
------------
FINLAND (0.7%)
COMMUNICATIONS EQUIPMENT (0.7%)
Elcoteq Network Class A 40,850 970,514
------------
TOTAL FINLAND 970,514
------------
FRANCE (3.0%)
AEROSPACE & DEFENSE (0.8%)
Zodiac SA* ss. 16,340 1,044,848
------------
COMPUTERS & PERIPHERALS (0.7%)
Gemplus International SA* ss. 322,500 844,519
------------
HOTELS, RESTAURANTS & LEISURE (0.6%)
Elior ss. 64,500 843,050
------------
REAL ESTATE (0.9%)
Nexity 23,650 1,196,970
------------
TOTAL FRANCE 3,929,387
------------
See Accompanying Notes to Financial Statements.
9
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------- ------------
COMMON STOCKS
GERMANY (2.3%)
BUILDING PRODUCTS (0.7%)
Pfleiderer AG* 47,300 $ 898,658
------------
COMMERCIAL SERVICES & SUPPLIES (0.8%)
CeWe Color Holding AG 21,500 1,048,649
------------
ENERGY EQUIPMENT & SERVICES (0.2%)
Q-Cells AG* 4,737 275,186
------------
SPECIALTY RETAIL (0.6%)
Fielmann AG* ss. 11,700 786,291
------------
TOTAL GERMANY 3,008,784
------------
ISRAEL (0.9%)
INTERNET SOFTWARE & SERVICES (0.9%)
Check Point Software Technologies, Ltd.* 57,200 1,149,720
------------
TOTAL ISRAEL 1,149,720
------------
JAPAN (13.4%)
CHEMICALS (1.6%)
Kuraray Company, Ltd. ss. 194,000 2,008,671
------------
DIVERSIFIED FINANCIALS (4.2%)
Asset Managers Company, Ltd. ss. 205 1,420,859
Creed Corp. 240 1,394,180
Nissin Company, Ltd. ss. 670,000 1,645,547
RHJ International* 39,909 917,534
------------
5,378,120
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (2.1%)
NIDEC Corp. ss. 31,800 2,703,186
------------
HOTELS, RESTAURANTS & LEISURE (2.9%)
Round One Corp. ss. 844 3,759,528
------------
MEDIA (1.5%)
USEN Corp. ss. 71,000 1,966,472
------------
SPECIALTY RETAIL (1.1%)
USS Company, Ltd. 23,250 1,482,687
------------
TOTAL JAPAN 17,298,664
------------
See Accompanying Notes to Financial Statements.
10
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------- ------------
COMMON STOCKS
NORWAY (1.6%)
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.7%)
Tandberg ASA ss. 138,730 $ 844,818
------------
MACHINERY (0.9%)
Tomra Systems ASA ss. 172,000 1,226,101
------------
TOTAL NORWAY 2,070,919
------------
SOUTH KOREA (2.5%)
MACHINERY (2.3%)
Samsung Heavy Industries Company, Ltd.* 167,700 2,899,564
------------
SOFTWARE (0.2%)
Gravity Company, Ltd. ADR* ss. 39,400 283,680
------------
TOTAL SOUTH KOREA 3,183,244
------------
SPAIN (2.2%)
BANKS (0.8%)
Banco Pastor SA ss. 21,500 1,028,421
------------
CONSTRUCTION & ENGINEERING (0.8%)
Abengoa SA 73,100 1,072,470
------------
FOOD PRODUCTS (0.6%)
Ebro Puleva SA ss. 47,300 782,334
------------
TOTAL SPAIN 2,883,225
------------
SWEDEN (3.6%)
COMMERCIAL SERVICES & SUPPLIES (0.6%)
Observer AB ss. 164,000 686,642
------------
FOOD & DRUG RETAILING (0.7%)
Axfood AB ss. 32,250 899,590
------------
HEALTHCARE EQUIPMENT & SUPPLIES (0.8%)
Getinge AB Class B ss. 77,200 1,062,175
------------
MACHINERY (1.5%)
Alfa Laval AB ss. 90,000 1,944,254
------------
TOTAL SWEDEN 4,592,661
------------
See Accompanying Notes to Financial Statements.
11
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------- ------------
COMMON STOCKS
SWITZERLAND (1.2%)
BIOTECHNOLOGY (0.5%)
Actelion, Ltd.* ss. 7,740 $ 637,629
------------
MACHINERY (0.7%)
Georg Fischer AG* 2,580 878,477
------------
TOTAL SWITZERLAND 1,516,106
------------
TAIWAN (0.9%)
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.9%)
AU Optronics Corp. ADR ss. 76,191 1,143,627
------------
TOTAL TAIWAN 1,143,627
------------
UNITED KINGDOM (8.5%)
COMMERCIAL SERVICES & SUPPLIES (2.5%)
Enterprise PLC 140,000 944,382
Michael Page International PLC 229,073 1,061,397
Serco Group PLC 240,000 1,293,508
------------
3,299,287
------------
DIVERSIFIED FINANCIALS (0.8%)
Melrose PLC* 400,000 974,594
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.8%)
Laird Group PLC 144,419 1,040,619
------------
HOUSEHOLD DURABLES (0.8%)
Bovis Homes Group PLC 75,000 1,026,012
------------
INDUSTRIAL CONGLOMERATES (0.5%)
Synergy Healthcare PLC 81,215 680,572
------------
INSURANCE (0.9%)
Admiral Group PLC 150,000 1,172,189
------------
SOFTWARE (1.6%)
isoft Group PLC 140,000 936,220
Sage Group PLC 250,000 1,107,082
------------
2,043,302
------------
SPECIALTY RETAIL (0.6%)
Halfords Group PLC 125,000 761,157
------------
TOTAL UNITED KINGDOM 10,997,732
------------
See Accompanying Notes to Financial Statements.
12
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------- ------------
COMMON STOCKS
UNITED STATES (37.8%)
BANKS (2.0%)
NewAlliance Bancshares, Inc. ss. 80,900 $ 1,176,286
Susquehanna Bancshares, Inc. 57,900 1,371,072
------------
2,547,358
------------
COMMERCIAL SERVICES & SUPPLIES (1.6%)
Greenfield Online, Inc.* 120,100 703,786
Watson Wyatt Worldwide, Inc. Class A ss. 47,200 1,316,880
------------
2,020,666
------------
COMMUNICATIONS EQUIPMENT (1.1%)
Kanbay International, Inc.* ss. 91,600 1,455,524
------------
COMPUTERS & PERIPHERALS (1.2%)
Avid Technology, Inc.* 27,900 1,527,804
------------
DISTRIBUTION & WHOLESALE (1.1%)
Beacon Roofing Supply, Inc.* ss. 49,200 1,413,516
------------
DIVERSIFIED FINANCIALS (1.6%)
Affiliated Managers Group, Inc.* ss. 25,700 2,062,425
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.9%)
Veeco Instruments, Inc.* 64,800 1,122,984
------------
ENERGY EQUIPMENT & SERVICES (1.2%)
Unit Corp.* 28,700 1,579,361
------------
FOOD PRODUCTS (0.9%)
Herbalife, Ltd.* 37,400 1,216,248
------------
HEALTHCARE EQUIPMENT & SUPPLIES (1.1%)
Immucor, Inc.* ss. 63,700 1,488,032
------------
HEALTHCARE PROVIDERS & SERVICES (4.8%)
Centene Corp.* ss. 73,900 1,942,831
Pediatrix Medical Group, Inc.* 16,500 1,461,405
Psychiatric Solutions, Inc.* ss. 24,176 1,420,098
United Surgical Partners International, Inc.* ss. 42,950 1,380,843
------------
6,205,177
------------
HOUSEHOLD DURABLES (0.9%)
Knoll, Inc. ss. 68,300 1,168,613
------------
INSURANCE (1.1%)
Hanover Insurance Group, Inc. 33,300 1,390,941
------------
See Accompanying Notes to Financial Statements.
13
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------- ------------
COMMON STOCKS
UNITED STATES
INTERNET SOFTWARE & SERVICES (2.7%)
Corillian Corp.* ss. 5,500 $ 14,960
Digitas, Inc.* ss. 118,300 1,481,116
Openwave Systems, Inc.* 73,300 1,280,551
ValueClick, Inc.* ss. 37,600 680,936
------------
3,457,563
------------
IT CONSULTING & SERVICES (1.0%)
SI International, Inc.* ss. 42,800 1,308,396
------------
LEISURE EQUIPMENT & PRODUCTS (1.4%)
RC2 Corp.* ss. 51,300 1,822,176
------------
MACHINERY (1.6%)
NACCO Industries, Inc. Class A ss. 17,500 2,050,125
------------
OIL & GAS (2.4%)
Comstock Resources, Inc.* 47,100 1,437,021
W&T Offshore, Inc. ss. 55,600 1,634,640
------------
3,071,661
------------
REAL ESTATE (1.0%)
HouseValues, Inc.* 104,500 1,361,635
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (2.8%)
FormFactor, Inc.* ss. 44,400 1,084,692
Integrated Device Technology, Inc.* 90,400 1,191,472
Tessera Technologies, Inc.* ss. 52,200 1,349,370
------------
3,625,534
------------
SOFTWARE (3.2%)
Salesforce.com, Inc.* ss. 54,900 1,759,545
Take-Two Interactive Software, Inc.* ss. 83,700 1,481,490
THQ, Inc.* ss. 37,650 897,952
------------
4,138,987
------------
SPECIALTY RETAIL (2.2%)
Hot Topic, Inc.* ss. 118,400 1,687,200
PETCO Animal Supplies, Inc.* 54,000 1,185,300
------------
2,872,500
------------
TOTAL UNITED STATES 48,907,226
------------
TOTAL COMMON STOCKS (Cost $95,595,747) 118,338,497
------------
See Accompanying Notes to Financial Statements.
14
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------- ------------
LIMITED PARTNERSHIPS (2.1%)
UNITED STATES (2.1%)
VENTURE CAPITAL (2.1%)
Austin Ventures VIII L.P.*++ 370,001 $ 273,243
CVC European Equity III L.P.*++ 916,143 757,839
Madison Dearborn Capital Partners IV L.P.*++ 756,640 725,951
Oak Investment Partners X L.P.*++ 1,225,876 922,216
------------
TOTAL LIMITED PARTNERSHIPS (Cost $2,483,984) 2,679,249
------------
SHORT-TERM INVESTMENTS (35.3%)
State Street Navigator Prime Fund ss.ss. 37,343,092 37,343,092
PAR
(000)
-------------
State Street Bank and Trust Co. Euro Time
Deposit, 3.350%, 1/03/06 $ 8,348 8,348,000
------------
TOTAL SHORT-TERM INVESTMENTS (Cost $45,691,092) 45,691,092
------------
TOTAL INVESTMENTS AT VALUE (128.9%) (Cost $143,770,823) 166,708,838
LIABILITIES IN EXCESS OF OTHER ASSETS (-28.9%) (37,400,858)
------------
NET ASSETS (100.0%) $129,307,980
============
INVESTMENT ABBREVIATION
ADR = American Depositary Receipt
- --------------------------------------------------------------------------------
* Non-income producing security.
++ Restricted security; not readily marketable; security is valued at fair
value as determined in good faith by, or under the direction of, the
Board of Trustees.
ss. Security or portion thereof is out on loan.
ss.ss. Represents security purchased with cash collateral received for
securities on loan.
See Accompanying Notes to Financial Statements.
15
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2005
- --------------------------------------------------------------------------------
ASSETS
Investments at value, including collateral for securities
on loan of $37,343,092 (Cost $143,770,823) (Note 2) $ 166,708,838 1
Cash 865
Foreign currency at value (cost $205,586) 210,021
Dividend and interest receivable 49,831
Receivable for portfolio shares sold 29,188
Prepaid expenses and other assets 15,393
----------------
Total Assets 167,014,136
----------------
LIABILITIES
Advisory fee payable (Note 3) 114,620
Administrative services fee payable (Note 3) 26,032
Payable upon return of securities loaned (Note 2) 37,343,092
Payable for portfolio shares redeemed 172,415
Other accrued expenses payable 49,997
----------------
Total Liabilities 37,706,156
----------------
NET ASSETS
Capital stock, $0.001 par value (Note 7) 9,983
Paid-in capital (Note 7) 154,568,265
Accumulated net investment loss (11,454)
Accumulated net realized loss on investments and foreign currency transactions (48,201,486)
Net unrealized appreciation from investments and foreign currency translations 22,942,672
----------------
Net Assets $ 129,307,980
================
Shares outstanding 9,982,651
----------------
Net asset value, offering price, and redemption price per share $ 12.95
================
- --------------------------------------------------------------------------------
1 Including $35,893,276 of securities on loan.
See Accompanying Notes to Financial Statements.
16
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME (Note 2)
Dividends $ 897,483
Interest 197,262
Securities lending 153,845
Net investment income allocated from partnerships 4,696
Foreign taxes withheld (80,505)
----------------
Total investment income 1,172,781
----------------
EXPENSES
Investment advisory fees (Note 3) 1,445,342
Administrative services fees (Note 3) 206,645
Custodian fees 52,350
Printing fees (Note 3) 50,355
Legal fees 20,113
Audit and tax fees 24,942
Transfer agent fees 6,058
Insurance expense 6,819
Commitment fees (Note 4) 2,947
Trustees' fees 2,778
Registration fees 1,766
Miscellaneous expense 16,034
----------------
Total expenses 1,836,149
Less: fees waived (Note 3) (217,554)
----------------
Net expenses 1,618,595
----------------
Net investment loss (445,814)
----------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY RELATED ITEMS
Net realized gain from investments 24,419,097
Net realized loss on foreign currency transactions (106,841)
Net change in unrealized appreciation (depreciation) from investments (6,557,225)
Net change in unrealized appreciation (depreciation) from
foreign currency translations (8,566)
----------------
Net realized and unrealized gain from investments and
foreign currency related items 17,746,465
----------------
Net increase in net assets resulting from operations $ 17,300,651
================
See Accompanying Notes to Financial Statements.
17
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------
FROM OPERATIONS
Net investment loss $ (445,814) $ (913,789)
Net realized gain on investments and foreign currency transactions 24,312,256 9,286,112
Net change in unrealized appreciation (depreciation) from investments
and foreign currency translations (6,565,791) 7,355,743
----------------- -----------------
Net increase in net assets resulting from operations 17,300,651 15,728,066
----------------- -----------------
FROM CAPITAL SHARE TRANSACTIONS (Note 7)
Proceeds from sale of shares 37,385,132 35,955,192
Net asset value of shares redeemed (35,487,395) (44,150,961)
----------------- -----------------
Net increase (decrease) in net assets from capital share transactions 1,897,737 (8,195,769)
----------------- -----------------
Net increase in net assets 19,198,388 7,532,297
NET ASSETS
Beginning of Year 110,109,592 102,577,295
----------------- -----------------
End of Year $ 129,307,980 $ 110,109,592
================= =================
ACCUMULATED NET INVESTMENT LOSS $ (11,454) $ (6,484)
================= =================
See Accompanying Notes to Financial Statements.
18
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
2005 2004 2003 2002 2001
---------- ---------- ---------- --------- ----------
PER SHARE DATA
Net asset value, beginning of year $ 11.15 $ 9.45 $ 6.40 $ 9.72 $ 13.62
---------- ---------- ---------- --------- ----------
INVESTMENT OPERATIONS
Net investment loss (0.04) (0.09) (0.06) (0.08) (0.09)
Net gain (loss) on investments
and foreign currency related items
(both realized and unrealized) 1.84 1.79 3.11 (3.24) (3.81)
---------- ---------- ---------- --------- ----------
Total from investment operations 1.80 1.70 3.05 (3.32) (3.90)
---------- ---------- ---------- --------- ----------
NET ASSET VALUE, END OF YEAR $ 12.95 $ 11.15 $ 9.45 $ 6.40 $ 9.72
========== ========== ========== ========= ==========
Total return 1 16.14% 17.99% 47.66% (34.16)% (28.63)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (000s omitted) $ 129,308 $ 110,110 $ 102,577 $ 60,633 $ 160,658
Ratio of expenses to average net
assets 1.40% 1.40% 1.40% 1.40% 1.40%
Ratio of net investment loss
to average net assets (0.39)% (0.85)% (0.94)% (0.90)% (0.84)%
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements 0.19% 0.17% 0.23% 0.31% 0.21%
Portfolio turnover rate 75% 79% 86% 86% 121%
- --------------------------------------------------------------------------------
1 Total returns are historical and assume changes in share price and
reinvestment of all dividends and distributions. Had certain expenses not
been reduced during the years shown, total returns would have been lower.
Total returns do not reflect charges and expenses attributable to any
particular variable contract or plan.
See Accompanying Notes to Financial Statements.
19
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Credit Suisse Trust, (the "Trust") is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, and
currently offers eight managed investment portfolios of which one, the Global
Small Cap Portfolio (the "Portfolio"), is included in this report. The Portfolio
is a diversified investment fund that seeks long-term growth of capital. Shares
of the Portfolio are not available directly to individual investors but may be
offered only through (a) variable annuity contracts and variable life insurance
contracts offered by separate accounts of certain insurance companies and (b)
tax-qualified pension and retirement plans. The Portfolio may not be available
in connection with a particular contract or plan. The Trust was organized under
the laws of The Commonwealth of Massachusetts as a business trust on March 15,
1995. The name of the Portfolio was changed from Credit Suisse Trust - Global
Post-Venture Capital Portfolio effective February 21, 2005.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A) SECURITY VALUATION - The net asset value of the Portfolio is determined
daily as of the close of regular trading on the New York Stock Exchange, Inc.
(the "Exchange") on each day the Exchange is open for business. The Portfolio's
equity investments are valued at market value, which is generally determined
using the closing price on the exchange or market on which the security is
primarily traded at the time of valuation (the "Valuation Time"). If no sales
are reported, equity investments are generally valued at the most recent bid
quotation as of the Valuation Time or at the lowest asked quotation in the case
of a short sale of securities. Debt securities with a remaining maturity greater
than 60 days are valued in accordance with the price supplied by a pricing
service, which may use a matrix, formula or other objective method that takes
into consideration market indices, yield curves and other specific adjustments.
Debt obligations that will mature in 60 days or less are valued on the basis of
amortized cost, which approximates market value, unless it is determined that
using this method would not represent fair value. Investments in mutual funds
are valued at the mutual fund's closing net asset value per share on the day of
valuation. Securities and other assets for which market quotations are not
readily available, or whose values have been materially affected by events
occurring before the Portfolio's Valuation Time but after the close of the
securities' primary markets, are valued at fair value as determined in good
faith by, or under the direction of, the Board of Trustees
20
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
under procedures established by the Board of Trustees. The Portfolio may utilize
a service provided by an independent third party which has been approved by the
Board of Trustees to fair value certain securities. When fair-value pricing is
employed, the prices of securities used by a fund to calculate its net asset
value may differ from quoted or published prices for the same securities.
The Portfolio initially values its investments in private-equity
portfolios ("Private Funds") at the amount invested in the Private Funds, less
related expenses, where identifiable, unless and until Credit Suisse Asset
Management, LLC ("Credit Suisse") determines that such value does not represent
fair value. Thereafter, investments in Private Funds held by the Portfolio are
valued at their "fair values" using procedures approved by the Board of
Trustees. Credit Suisse shall review daily the Portfolio's fair valued
securities.
B) FOREIGN CURRENCY TRANSACTIONS - The books and records of the Portfolio
are maintained in U.S. dollars. Transactions denominated in foreign currencies
are recorded at the current prevailing exchange rates. All assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at the current exchange rate at the end of the period. Translation gains
or losses resulting from changes in the exchange rate during the reporting
period and realized gains and losses on the settlement of foreign currency
transactions are reported in the results of operations for the current period.
The Portfolio does not isolate that portion of realized gains and losses on
investments in EQUITY securities which is due to changes in the foreign exchange
rate from that which is due to changes in market prices of equity securities.
The Portfolio isolates that portion of realized gains and losses on investments
in DEBT securities which is due to changes in the foreign exchange rate from
that which is due to changes in market prices of debt securities.
C) SECURITY TRANSACTIONS AND INVESTMENT INCOME - Security transactions are
accounted for on a trade date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date. The cost of investments
sold is determined by use of the specific identification method for both
financial reporting and income tax purposes.
D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net
investment income and distributions of net realized capital gains, if any, are
declared and paid at least annually. However, to the extent that a net
21
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
realized capital gain can be reduced by a capital loss carryforward, such gain
will not be distributed. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States of America ("GAAP").
E) FEDERAL INCOME TAXES - No provision is made for federal taxes as it is
the Trust's intention to have the Portfolio continue to qualify for and elect
the tax treatment applicable to regulated investment companies under the
Internal Revenue Code of 1986, as amended, and to make the requisite
distributions to its shareholders, which will be sufficient to relieve it from
federal income and excise taxes.
F) USE OF ESTIMATES - The preparation of financial statements in
conformity with GAAP 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 revenues and expenses during the reporting period.
Actual results could differ from these estimates.
G) SHORT TERM INVESTMENTS - The Portfolio, together with other funds/
portfolios advised by Credit Suisse, an indirect, wholly-owned subsidiary of
Credit Suisse Group, pools available cash into either a short-term variable rate
time deposit issued by State Street Bank and Trust Company ("SSB"), the
Portfolio's custodian, or a money market fund advised by Credit Suisse. The
short-term time deposit issued by SSB is a variable rate account classified as a
short-term investment.
H) FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into
forward foreign currency contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the value
of a foreign currency. The Portfolio will enter into forward foreign currency
contracts primarily for hedging purposes. Forward foreign currency contracts are
adjusted by the daily forward exchange rate of the underlying currency and any
gains or losses are recorded for financial statement purposes as unrealized
until the contract settlement date or an offsetting position is entered into. At
December 31, 2005, the Portfolio had no open forward foreign currency contracts.
22
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
I) SECURITIES LENDING - Loans of securities are required at all times to
be secured by collateral at least equal to 102% of the market value of domestic
securities on loan (including any accrued interest thereon) and 105% of the
market value of foreign securities on loan (including any accrued interest
thereon). Cash collateral received by the Portfolio in connection with
securities lending activity may be pooled together with cash collateral for
other funds/portfolios advised by Credit Suisse and may be invested in a variety
of investments, including certain Credit Suisse-advised funds, funds advised by
SSB, the Portfolio's securities lending agent, or money market instruments.
However, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings.
SSB has been engaged by the Portfolio to act as the Portfolio's securities
lending agent. The Portfolio's securities lending arrangement provides that the
Portfolio and SSB will share the net income earned from securities lending
activities. During the year ended December 31, 2005, total earnings from the
Portfolio's investment in cash collateral received in connection with securities
lending arrangements was $941,870, of which $722,872 was rebated to borrowers
(brokers). The Portfolio retained $153,845 in income from the cash collateral
investment, and SSB, as lending agent, was paid $65,153. The Portfolio may also
be entitled to certain minimum amounts of income from its securities lending
activities. Securities lending income is accrued as earned.
J) PARTNERSHIP ACCOUNTING POLICY - The Portfolio records its pro-rata
share of the income/(loss) and capital gains/(losses) allocated from the
underlying partnerships and adjusts the cost of the underlying partnerships
accordingly. These amounts are included in the Portfolio's Statement of
Operations.
K) OTHER - The Portfolio may invest in securities of foreign countries and
governments which involve certain risks in addition to those inherent in
domestic investments. Such risks generally include, among others, currency risk
(fluctuations in currency exchange rates), information risk (key information may
be inaccurate or unavailable) and political risk (expropriation, nationalization
or the imposition of capital or currency controls or punitive taxes). Other
risks of investing in foreign securities include liquidity and valuation risks.
23
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The Portfolio may be subject to taxes imposed by countries in which it
invests, with respect to its investments in issuers existing or operating in
such countries. Such taxes are generally based on income earned or repatriated
and capital gains realized on the sale of such investments. The Portfolio
accrues such taxes when the related income is earned or gains are realized.
The Portfolio may invest up to 15% of its net assets in non-publicly
traded securities. Non-publicly traded securities may be less liquid than
publicly traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized from such sales could differ from
the price originally paid by the Portfolio or the current carrying values, and
the difference could be material.
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Credit Suisse serves as investment adviser for the Portfolio. For its
investment advisory services, Credit Suisse is entitled to receive a fee from
the Portfolio at an annual rate of 1.25% of the Portfolio's average daily net
assets. For the year ended December 31, 2005, investment advisory fees earned
and voluntarily waived for the Portfolio were $1,445,342 and $217,554,
respectively. Credit Suisse will not recapture from the Portfolio any fees it
waived during the fiscal year ended December 31, 2005. Fee waivers and
reimbursements are voluntary and may be discontinued by Credit Suisse at any
time.
Credit Suisse Asset Management Limited (U.K.) ("Credit Suisse U.K."), and
Credit Suisse Asset Management Limited (Australia) ("Credit Suisse Australia"),
each an affiliate of Credit Suisse, are sub-investment advisers to the Portfolio
(the "Sub-Advisers"). Credit Suisse U.K.'s and Credit Suisse Australia's
sub-investment advisory fees are paid by Credit Suisse out of Credit Suisse's
net investment advisory fee and are not paid by the Portfolio.
Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate
of Credit Suisse, and SSB serve as co-administrators to the Portfolio.
For its co-administrative services, CSAMSI currently receives a fee
calculated at an annual rate of 0.10% of the Portfolio's average daily net
assets. For the year ended December 31, 2005, co-administrative services fees
earned by CSAMSI were $115,628.
For its co-administrative services, SSB receives a fee, exclusive of
out-of-pocket expenses, calculated in total for all the Credit Suisse
funds/portfolios
24
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
co-administered by SSB and allocated based upon relative average net assets of
each fund/portfolio, subject to an annual minimum fee. For the year ended
December 31, 2005, co-administrative services fees earned by SSB (including
out-of-pocket expenses) were $91,017.
In addition to serving as the Portfolio's co-administrator, CSAMSI
currently serves as distributor of the Portfolio's shares without compensation.
Merrill Corporation ("Merrill"), an affiliate of Credit Suisse, has been
engaged by the Portfolio to provide certain financial printing and fulfillment
services. For the year ended December 31, 2005, Merrill was paid $8,778 for its
services to the Portfolio.
NOTE 4. LINE OF CREDIT
The Portfolio, together with other funds/portfolios advised by Credit
Suisse (collectively, the "Participating Funds"), participates in a $75 million
committed, unsecured line of credit facility ("Credit Facility") for temporary
or emergency purposes with Deutsche Bank, A.G. as administrative agent and
syndication agent and SSB as operations agent. Under the terms of the Credit
Facility, the Participating Funds pay an aggregate commitment fee at a rate of
0.10% per annum on the average unused amount of the Credit Facility, which is
allocated among the Participating Funds in such manner as is determined by the
governing Boards of the Participating Funds. In addition, the Participating
Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At
December 31, 2005, and during the year ended December 31, 2005, the Portfolio
had no borrowings under the Credit Facility.
NOTE 5. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 2005, purchases and sales of investment
securities (excluding short-term investments) were $81,690,819 and $81,110,193,
respectively.
NOTE 6. RESTRICTED SECURITIES
Certain investments of the Portfolio are restricted as to resale and are
valued at fair value as determined in good faith by, or under the direction of,
the Board of Trustees under procedures established by the Board of Trustees. The
Portfolio does not have the right to demand that such securities be registered.
25
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 6. RESTRICTED SECURITIES
PERCENTAGE
SECURITY NUMBER OF ACQUISITION FAIR VALUE PER OF NET DISTRIBUTIONS OPEN
SECURITY TYPE SHARES DATE COST VALUE SHARE ASSETS RECEIVED COMMITMENTS
- ---------------- ---------------- --------- ----------- ---------- ---------- --------- ---------- ------------- -----------
Austin Ventures
VIII L.P. Ltd. Partnership 370,001 7/13/01 $ 307,223 $ 273,243 $0.74 0.21% $ 53,755 $ 183,332
CVC European
Equity III L.P. Ltd. Partnership 916,143 9/04/01 628,791 757,839 0.83 0.59% 639,614 83,857
Madison Dearborn
Capital
Partners,
IV, L.P. Ltd. Partnership 756,640 4/02/01 591,169 725,951 0.96 0.56% 239,267 243,360
Oak Investment
Partners
X L.P. Ltd. Partnership 1,225,876 1/18/01 956,801 922,216 0.75 0.71% 283,490 274,124
---------- ---------- ------- ---------- ---------
$2,483,984 $2,679,249 2.07% $1,216,126 $ 784,673
========== ========== ======= ========== =========
NOTE 7. CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, $.001 par value per share.
Transactions in capital shares of the Portfolio were as follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
------------------ ------------------
Shares sold 3,149,654 3,577,338
Shares redeemed (3,040,456) (4,558,615)
----------- ----------
Net increase (decrease) 109,198 (981,277)
=========== ==========
On December 31, 2005, the number of shareholders that held 5% or more of
the outstanding shares of the Portfolio was as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ----------------------
4 75%
Some of the shareholders are omnibus accounts, which hold shares on behalf
of individual shareholders.
NOTE 8. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
The tax basis of components of distributable earnings differ from the
amounts reflected in the Statement of Assets and Liabilities by temporary
book/tax differences. These differences are primarily due to post-October
losses.
26
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 8. FEDERAL INCOME TAXES
At December 31, 2005, the components of distributable earnings on a tax
basis for the Portfolio was as follows:
Accumulated net realized loss $ (48,201,486)
Unrealized appreciation 22,942,672
Deferral of post-October currency losses (11,454)
-------------
$ (25,270,268)
=============
At December 31, 2005, the Portfolio had capital loss carryforwards
available to offset possible future capital gains as follows:
EXPIRES DECEMBER 31,
---------------------------------------------------
2009 2010 2011
----------- ----------- ----------
$23,847,620 $19,475,667 $4,878,199
During the tax year ended December 31, 2005, the Portfolio utilized
$24,420,041 of the capital loss carryforward.
Under current tax law, certain capital losses realized after October 31
within a taxable year may be deferred and treated as occurring on the first day
of the following tax year. For the tax period ended December 31, 2005 the
Portfolio elected to defer net losses arising between November 1, 2005 and
December 31, 2005 as follows:
CURRENCY CAPITAL
------------ ---------
$11,454 $--
At December 31, 2005, the identified cost for federal income tax purposes,
as well as the gross unrealized appreciation from investments for those
securities having an excess of value over cost, gross unrealized depreciation
from investments for those securities having an excess of cost over value and
the net unrealized appreciation from investments were as follows: $143,770,823,
$26,060,414, $(3,122,399) and $ 22,938,015, respectively.
At December 31, 2005, the Portfolio reclassified $440,844 to accumulated
net investment loss and $107,785 to accumulated net realized loss from
investments from paid-in capital, to adjust for current period permanent
book/tax differences which arose principally from differing book/tax treatments
of net operating losses, foreign currency transactions and security litigation.
Net assets were not affected by these reclassifications.
27
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 9. CONTINGENCIES
In the normal course of business, the Portfolio may provide general
indemnifications pursuant to certain contracts and organizational documents. The
Portfolio's maximum exposure under these arrangements is dependent on future
claims that may be made against the Portfolio and, therefore, cannot be
estimated; however, based on experience, the risk of loss from such claims is
considered remote.
28
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees of Credit Suisse Trust and Shareholders of
Credit Suisse Trust - Global Small Cap 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 financial highlights present fairly, in all
material respects, the financial position of Global Small Cap Portfolio (the
"Portfolio"), a portfolio of the Credit Suisse Trust, at December 31, 2005, 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 five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolio's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards 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 December 31, 2005 by
correspondence with the custodian and issuers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 6, 2006
29
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
- --------------------------------------------------------------------------------
In approving the Advisory and Sub-Advisory Agreements, the Board of
Trustees, including the Independent Trustees, considered the following factors
with respect to the Global Small Cap Portfolio (the "Portfolio"):
INVESTMENT ADVISORY FEE RATES
The Board reviewed and considered the contractual advisory fee rate of
1.25% paid by the Portfolio ("Contractual Advisory Fee") to Credit Suisse Asset
Management LLC ("Credit Suisse") in light of the extent and quality of the
advisory services provided by Credit Suisse or Credit Suisse Asset Management
Limited U.K. ("Credit Suisse U.K.") and Credit Suisse Asset Management Australia
("Credit Suisse Australia"). The Board also reviewed and considered the fee
waivers and/or expense reimbursement arrangements currently in place for the
Portfolio and considered the actual fee rate of 1.08% paid by the Portfolio
after taking waivers and reimbursements into account ("Net Advisory Fee"). The
Board acknowledged that the fee waivers and reimbursements could be discontinued
at any time. In addition, the Board noted that the compensation paid to Credit
Suisse U.K. and Credit Suisse Australia (collectively, the "Sub-Advisers") does
not increase the fees or expenses otherwise incurred by the Portfolio's
shareholders because the Sub-Advisers are paid by Credit Suisse, not the
Portfolio.
Additionally, the Board received and considered information comparing each
Portfolio's Contractual Advisory Fee and Net Advisory Fee and the Portfolio's
overall expenses with those of funds in both the relevant expense group ("Peer
Group") and universe of funds (the "Universe") provided by Lipper Inc., an
independent provider of investment company data.
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AND
SUB-ADVISORY AGREEMENTS
The Board received and considered information regarding the nature, extent
and quality of services provided to the Portfolio by Credit Suisse under the
Advisory Agreement and by the Sub-Advisers under the Sub-Advisory Agreements.
The Board also noted information received at regular meetings throughout the
year related to the services rendered by Credit Suisse and the Sub-Advisers. The
Board reviewed background information about Credit Suisse and the Sub-Advisers,
including their respective Forms ADV. The Board considered the background and
experience of both Credit Suisse's and the Sub-Advisers' senior management and
the expertise of, and the amount of attention given to the Portfolio by, senior
personnel of Credit Suisse and the Sub-Advisers. With respect to the
Sub-Advisers, the Board also considered their expertise in managing the types of
global investments that the Portfolio utilizes in its investment strategy. In
addition, the Board reviewed the qualifications, backgrounds and
responsibilities of the portfolio management team primarily responsible for the
day-to-day portfolio management of the Portfolio and the extent of the resources
devoted to research and analysis of actual and potential investments. The Board
also received and considered information about the nature, extent and quality of
services and fee rates offered to other Credit Suisse clients for comparable
services.
30
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
In approving the Sub-Advisory Agreements, the Board also considered the
benefits of retaining Credit Suisse's United Kingdom and Australian affiliates
given the increased complexity of the domestic and international securities
markets, specifically that retention of Credit Suisse U.K. and Credit Suisse
Australia expands the universe of companies and countries from which investment
opportunities could be sought and enhances the ability of the Portfolio to
obtain the best price and execution on trades in international markets.
PORTFOLIO PERFORMANCE
The Board received and considered the one-, two-, three-, four- and
five-year performance of the Portfolio, along with comparisons, for all
presented periods, both to the relevant performance group ("Performance Group")
and universe of funds ("Performance Universe") for the Portfolio. The Board was
provided with a description of the methodology used to arrive at the funds
included in the Performance Group and the Performance Universe.
The Board reviewed information comparing the performance of various Credit
Suisse Funds to performance benchmarks that the Board had previously established
and progress that had been made in certain instances toward achieving those
benchmarks. The Board also reviewed comparisons between the Portfolio and its
identified benchmark over various time periods.
CREDIT SUISSE PROFITABILITY
The Board received and considered a profitability analysis of Credit
Suisse based on the fees payable under the Advisory Agreement for the Portfolio,
including any fee waivers or fee caps, as well as other relationships between
the Portfolio on the one hand and Credit Suisse affiliates on the other. The
Board received profitability information for the other funds in the Credit
Suisse family of funds.
ECONOMIES OF SCALE
The Board considered whether economies of scale in the provision of
services to the Portfolio were being passed along to the shareholders.
Accordingly, the Board considered whether alternative fee structures (such as
breakpoint fee structures) would be more appropriate or reasonable taking into
consideration economies of scale or other efficiencies that might accrue from
increases in the Portfolio's asset levels.
OTHER BENEFITS TO CREDIT SUISSE
The Board considered other benefits received by Credit Suisse, the
Sub-Advisers and their affiliates as a result of their relationships with the
Portfolio. Such benefits include, among others, research arrangements with
brokers who execute transactions on behalf of the Portfolio, administrative and
brokerage relationships with affiliates of Credit Suisse and the Sub-Advisers
and benefits potentially derived from an increase in Credit Suisse's and the
Sub-Advisers' businesses as a result of their relationship with the Portfolio
(such as the ability to market to shareholders other financial products offered
by Credit Suisse, the Sub-Advisers and their affiliates).
31
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
The Board considered the standards applied in seeking best execution,
whether and to what extent soft dollar credits are sought and how any such
credits are utilized, any benefits that may be achieved by using an affiliated
broker and the existence of quality controls applicable to brokerage allocation
procedures. The Board also reviewed Credit Suisse's and the Sub-Advisers' method
for allocating portfolio investment opportunities among their advisory clients.
CONCLUSIONS
In selecting Credit Suisse and the Sub-Advisers, and approving the
Advisory Agreement and the investment advisory fee under such agreement and the
Sub-Advisory Agreements, the Board concluded that:
o Although both the Contractual and Net Advisory Fees were higher than
the median of the Portfolio's Peer Group, the Board recognized that
Credit Suisse has historically evidenced a willingness to waive fees.
o The Portfolio's one-, two- and three-year performance was above the
Performance Universe's median and the highest in its Performance
Group. The Portfolio's four-year performance was at the median for its
Performance Group and below the median in its Performance Universe,
while its five-year performance was the lowest in its Performance
Group and below the median in its Performance Universe. The Board
noted that Credit Suisse had made changes to the Portfolio's
investment strategies and management team in response to performance
issues previously raised by the Board.
o The Board was satisfied with the nature, extent and quality of the
investment advisory services provided to the Portfolio by Credit
Suisse and the Sub-Advisers and that, based on dialogue with
management and counsel, the services provided by Credit Suisse under
the Advisory Agreement and by the Sub-Advisers under the Sub-Advisory
Agreements are typical of, and consistent with, those provided to
mutual funds by other investment advisers.
o In light of the costs of providing investment management and other
services to the Portfolio and Credit Suisse's ongoing commitment to
the Portfolio and willingness to cap fees and expenses, the profits
and other ancillary benefits that Credit Suisse and its affiliates
received were considered reasonable.
o Credit Suisse's profitability based on fees payable under the Advisory
Agreement was reasonable in light of the nature, extent and quality of
the services provided to the Portfolio thereunder.
o In light of the relatively small size of the Portfolio and the amount
of the Net Advisory Fees, the Portfolio's current fee structure
(without breakpoints) was considered reasonable.
No single factor reviewed by the Board was identified by the Board as the
principal factor in determining whether to approve the Advisory Agreement and
the Sub-Advisory Agreements. The Independent Trustees were advised by separate
independent legal counsel throughout the process.
32
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS IN
AND FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------ ----------- ----------- ------------------------ ------------- -----------------------
INDEPENDENT TRUSTEES
Enrique Arzac Trustee, Since Professor of Finance 47 Director of The
c/o Credit Suisse Asset Nominating 2005 and Economics, Adams Express
Management, LLC Committee Graduate School of (a closed-end
Attn: General Counsel Member and Business, Columbia investment
466 Lexington Avenue Audit University since 1971 company); Director
New York, New York Committee of Petroleum
10017-3140 Chairman and Resources
Corporation
Date of Birth: 10/02/41 (a closed-end
investment
company)
Richard H. Francis Trustee, Since Currently retired 41 None
c/o Credit Suisse Asset Nominating 1999
Management, LLC and Audit
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 04/23/32
Jeffrey E. Garten Trustee, Since The Juan Trippe 40 Director of Aetna,
Box 208200 Nominating 1998 2 Professor in the Practice Inc. (insurance
New Haven, Connecticut and Audit of International Trade, company); Director
06520-8200 Committee Finance and Business of CarMax Group
Member from July 2005 to present; (used car dealers)
Partner and Chairman
Date of Birth: 10/29/46 of Garten Rothkopf
(consulting firm) from
October 2005 to present;
Dean of Yale School of
Management from
November 1995 to
June 2005
Peter F. Krogh Trustee, Since Dean Emeritus and 40 Director of Carlisle
301 ICC Nominating 2001 Distinguished Professor Companies
Georgetown University and Audit of International Affairs Incorporated
Washington, DC 20057 Committee at the Edmund A. (diversified
Member Walsh School of manufacturing
Date of Birth: 02/11/37 Foreign Service, company)
Georgetown University
from June 1995
to present
_______________
1 Each Trustee and Officer serves until his or her respective successor has
been duly elected and qualified.
2 Mr. Garten was initially appointed as a Trustee of the Trust on February
6, 1998. He resigned as Trustee on February 3, 2000, and was subsequently
re-appointed on December 21, 2000.
33
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS IN
AND FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------ ----------- ----------- ------------------------ ------------- -----------------------
INDEPENDENT TRUSTEES
James S. Pasman, Jr. Trustee, Since Currently retired 42 Director of Education
c/o Credit Suisse Asset Nominating 1999 Management Corp.
Management, LLC and Audit
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 12/20/30
Steven N. Rappaport Chairman of Trustee Partner of Lehigh Court, 46 Director of Presstek,
Lehigh Court, LLC the Board Since LLC and RZ Capital Inc. (digital imaging
40 East 52nd Street of Trustees, 1999 (private investment firms) technologies
New York, New York Nominating and from July 2002 to present; company); Director of
10022 Committee Chairman Transition Adviser to Wood Resources, LLC.
Chairman since SunGard Securities (plywood manufacturing
Date of Birth: 07/10/48 and Audit 2005 Finance, Inc. from company)
Committee February 2002 to July
Member 2002; President of
SunGard Securities
Finance, Inc. from 2001
to February 2002;
President of Loanet,
Inc. (on-line accounting
service) from 1997 to 2001
INTERESTED TRUSTEE
Michael E. Kenneally 3,4 Trustee Since Chairman and Global 40 None
c/o Credit Suisse Asset 2004 Chief Executive Officer
Management, LLC of Credit Suisse from March
Attn: General Counsel 2003 to July 2005;
466 Lexington Avenue Chairman and Chief
New York, New York Investment Officer of
10017-3140 Banc of America Capital
Management from 1998
Date of Birth: 03/30/54 to March 2003
________________
3 Mr. Kenneally is a Trustee who is an "interested person" of the Trust as
defined in the 1940 Act, because he was an officer of Credit Suisse within
the last two fiscal years.
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
34
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM
OF OFFICE 1
AND
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH TRUST SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------------------ ----------- ----------- ----------------------------------------------------------------
OFFICERS
Steven B. Plump 4 Chief Since Managing Director; Associated with Credit Suisse or its
Credit Suisse Asset Executive 2005 predecessor since 1995; Officer of other Credit
Management, LLC Officer and Suisse Funds
466 Lexington Avenue President
New York, New York
10017-3140
Date of Birth: 02/08/59
Michael A. Pignataro Chief Since Director and Director of Fund Administration of Credit Suisse;
Credit Suisse Asset Financial 1999 Associated with Credit Suisse or its predecessors since 1984;
Management, LLC Officer and Officer of other Credit Suisse Funds
466 Lexington Avenue Treasurer
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Since Director and Global Head of Compliance of Credit Suisse;
Credit Suisse Asset Compliance 2004 Associated with Credit Suisse since July 2000; Vice President
Management, LLC Officer and Director of Compliance of Forstmann-Leff
466 Lexington Avenue Associates from 1998 to June 2000; Officer of other
New York, New York Credit Suisse Funds
10017-3140
Date of Birth: 09/21/66
Ajay Mehra Chief Since Director and Head of Legal Americas Traditional Asset
Credit Suisse Asset Legal 2004 Management and Hedge Funds; Associated with Credit Suisse
Management, LLC Officer since September 2004; Senior Associate of Shearman & Sterling
466 Lexington Avenue LLP from September 2000 to September 2004; Senior Counsel
New York, New York of the SEC Division of Investment Management from June
10017-3140 1997 to September 2000; Officer of other Credit Suisse Funds
Date of Birth: 08/14/70
J. Kevin Gao Vice Since Director and Legal Counsel of Credit Suisse; Associated with
Credit Suisse Asset President 2004 Credit Suisse since July 2003; Associated with the law firm of
Management, LLC and Willkie Farr & Gallagher LLP from 1998 to 2003; Officer of
466 Lexington Avenue Secretary other Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 10/13/67
Robert Rizza Assistant Since Vice President of Credit Suisse; Associated with Credit Suisse
Credit Suisse Asset Treasurer 2002 since 1998; Officer of other Credit Suisse Funds
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
________________
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
The Statement of Additional Information includes additional information
about the Trustees and is available, without charge, upon request, by calling
800-222-8977.
35
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
TAX INFORMATION LETTER
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS
Corporate Shareholders should note for the year ended December 31, 2005,
the percentage of the Fund's investment income (i.e., net investment income plus
short-term capital gains) that qualified for the intercorporate dividends
received deduction is 0.0%.
36
CREDIT SUISSE TRUST - GLOBAL SMALL CAP PORTFOLIO
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION
- --------------------------------------------------------------------------------
Information regarding how the Portfolio voted proxies related to its
portfolio securities during the 12-month period ended June 30 of each year, as
well as the policies and procedures that the Portfolio uses to determine how to
vote proxies relating to its portfolio securities are available:
o By calling 1-800-222-8977
o On the Portfolio's website, www.credit-suisse.com/us
o On the website of the Securities and Exchange Commission,
http://www.sec.gov.
The Portfolio files a complete schedule of its portfolio holdings for the
first and third quarters of its fiscal year with the SEC on Form N-Q. The
Portfolio's Forms N-Q are available on the SEC's website at http://www.sec.gov
and may be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. Information on the operation of the SEC's Public Reference Room may be
obtained by calling 1-800-SEC-0330.
37
CREDIT SUISSE [LOGO]
P.O. BOX 55030, BOSTON, MA 02205-5030
800-222-8977 o www.credit-suisse.com/us
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. TRGSC-AR-1205
CREDIT SUISSE [LOGO]
CREDIT SUISSE FUNDS
Annual Report
December 31, 2005
CREDIT SUISSE TRUST
o INTERNATIONAL FOCUS PORTFOLIO
Credit Suisse Trust (the "Trust") shares are not available directly to
individual investors, but may be offered only through certain insurance products
and pension and retirement plans.
The Trust's investment objectives, risks, charges and expenses (which should be
considered carefully before investing), and more complete information about the
Trust, are provided in the PROSPECTUS, which should be read carefully before
investing. You may obtain additional copies by calling 800-222-8977 or by
writing to Credit Suisse Trust, P.O. Box 55030, Boston, MA 02205-5030.
Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466
Lexington Ave., New York, NY 10017-3140. The Trust is advised by Credit Suisse
Asset Management, LLC.
THE VIEWS OF THE PORTFOLIO'S MANAGEMENT ARE AS OF THE DATE OF THE LETTER AND THE
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF DECEMBER 31, 2005; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
PORTFOLIO SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC ("CREDIT SUISSE") OR ANY AFFILIATE, ARE NOT FDIC-INSURED AND ARE
NOT GUARANTEED BY CREDIT SUISSE OR ANY AFFILIATE. PORTFOLIO INVESTMENTS ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
January 19, 2006
Dear Shareholder:
For the 12 months ended December 31, 2005, Credit Suisse
Trust--International Focus Portfolio (the "Portfolio") had a gain of 17.56%, vs.
an increase of 17.12% for the Morgan Stanley Capital International All Country
World Ex-USA Index. 1
THE MARKETS: STRONG LOCALLY, BUT ERODED BY DOLLAR'S STRENGTH
The year was a broadly positive one for equities globally, and most
foreign markets handily outpaced US stocks, at least in local currency terms.
European markets generally posted double-digit gains in euro terms, aided in
part by a relatively benign interest-rate backdrop. Japan was a notable
standout, up about 40% locally, amid signs that the world's second largest
economy may be poised for a sustainable recovery at long last. For dollar-based
investors, a decline in major currencies vs. the dollar reduced returns, though
most foreign markets still outperformed the US on that basis. Emerging markets
generally had the best dollar-based results in 2005.
From a sector standpoint, materials, industrials and energy stocks were
the best performing areas of the market abroad. Consumer stocks had positive
absolute returns as a group but underperformed.
STRATEGIC REVIEW: GOOD STOCK SELECTION IN JAPAN
The Portfolio outperformed its benchmark for the period. Factors that
aided the Portfolio's performance included strong stock selection in Japan.
Standouts represented a variety of sectors, including Komatsu (2.1% of the
Portfolio's net assets as of December 31, 2005), a manufacturer of construction
equipment with customers in Japan, the US, and China; and Yamada Denki (2.9% of
the Portfolio's net assets as of December 31, 2005), a retailer of electronics
goods that has improved its competitive position. Other good performers for the
Fund included Samsung Heavy (1.6% of the Portfolio's net assets as of December
31, 2005), a South Korean ship builder with an order book geared to liquid
natural gas (LNG) tankers.
1
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
On the negative side, relatively speaking, the Portfolio's European
holdings as a group underperformed. Laggards included Royal Bank of Scotland
(1.4% of the Portfolio's net assets as of December 31, 2005), which was hampered
in part by acquisition worries, and Kingfisher, a UK "do it yourself" retailer.
We opted to eliminate the position in the period.
In terms of noteworthy sector allocation, we ended the period with a
modest overweighting in the industrials area. We began the period with a large
overweighting in the sector, but reduced it on profit taking as certain holdings
reached our price target. Within health care, we went from being underweighted
to about neutrally positioned, adding to specific European pharmaceutical
holdings such as GlaxoSmithKline (2.1% of the Portfolio's net assets as of
December 31, 2005), based on our view of its valuation and product pipeline. We
also established a position in Novo Nordisk (2.0% of the Portfolio's net assets
as of December 31, 2005), a Denmark-based leader in diabetes treatments. During
the period we raised our exposure to the telecommunications sector, becoming
overweighted for the first time in over a year based on stock-specific factors.
Going forward, we will maintain a value-based, bottom-up stock selection
process that seeks stocks we believe are trading at a discount, relative to
factors such as company earnings, assets or projected growth. Our focus is on
the world's major foreign equity markets, though we will maintain limited
exposure to emerging market companies when we deem them attractive.
The Credit Suisse International Equity Team
Nancy Nierman
Anne S. Budlong
Emily Alejos
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING
CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND
DIFFERENCES IN ACCOUNTING METHODS. THE PORTFOLIO'S FIFTEEN LARGEST HOLDINGS MAY
ACCOUNT FOR 40% OR MORE OF THE PORTFOLIO'S ASSETS. AS A RESULT OF THIS STRATEGY,
THE PORTFOLIO MAY BE SUBJECT TO GREATER VOLATILITY THAN A PORTFOLIO THAT INVESTS
IN A LARGER NUMBER OF ISSUERS.
2
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS
FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND
FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT
REGULATION AND THEIR POTENTIAL IMPACT ON THE PORTFOLIO'S INVESTMENTS. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS,
DEVELOPMENTS AND REGULATIONS IN THE FUTURE, AND THEIR IMPACT ON THE PORTFOLIO
COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE
PORTFOLIO HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
3
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
CREDIT SUISSE TRUST--INTERNATIONAL FOCUS PORTFOLIO AND THE MORGAN STANLEY
CAPITAL INTERNATIONAL ACWI FREE EX-USA INDEX 1 FOR TEN YEARS.
[LINE CHART]
Credit Suisse Trust -- Morgan Stanley Capital
International Focus Portfolio International ACWI Free Ex-USA
Date Portfolio Index 1
----- ----------------------------- ------------------------------
12/95 10000 10000
10329 10137
10291 10138
10573 10327
11089 10640
10864 10480
10995 10533
10404 10183
10488 10243
10704 10497
10563 10392
10977 10793
12/96 10999 10668
11027 10472
11209 10664
11142 10642
11382 10731
12158 11394
12646 12023
12963 12266
11909 11301
12455 11912
11152 10898
10864 10762
12/97 10750 10886
10884 11211
11632 11960
12277 12373
12564 12461
12513 12235
12175 12189
12380 12305
10597 10570
10115 10347
10689 11431
11222 12045
12/98 11325 12460
11377 12446
11026 12168
11459 12755
11706 13393
11191 12764
12108 13351
12778 13664
12964 13711
13159 13804
13809 14318
15468 14890
12/99 17376 16311
16617 15425
17782 15842
17303 16438
15805 15521
15285 15124
15857 15768
15025 15145
15472 15333
14338 14482
13381 14022
12538 13393
12/00 12877 13850
13069 14058
11772 12945
10776 12030
11280 12848
11004 12493
10824 12014
10644 11747
10344 11455
9192 10240
9432 10527
9828 11008
12/01 10008 11150
9840 10672
9804 10749
10344 11378
10308 11452
10284 11577
9852 11077
8772 9997
8808 9998
7704 8938
8040 9418
8292 9871
12/02 8016 9552
7656 9217
7524 9031
7344 8855
8100 9709
8496 10327
8724 10613
8940 10894
9264 11218
9258 11533
9922 12280
9970 12548
12/03 10669 13506
10814 13723
10910 14069
11007 14156
10621 13716
10645 13759
10777 14057
10452 13648
10548 13758
10731 14200
11170 14694
11828 15714
12/04 12230 16388
12096 16106
12607 16901
12291 16442
12083 16037
12083 16137
12291 16441
12753 17047
13155 17484
13824 18385
13455 17716
13762 18312
12/05 14377 19193
4
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005
SINCE
1 YEAR 5 YEARS 10 YEARS INCEPTION 2
-------- --------- ---------- -------------
17.56% 2.23% 3.70% 4.21%
RETURNS REPRESENT PAST PERFORMANCE AND INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE
FUTURE RESULTS. THE CURRENT PERFORMANCE OF THE PORTFOLIO MAY BE LOWER OR HIGHER
THAN THE FIGURES SHOWN. RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION
VALUE MAY BE MORE OR LESS THAN ORIGINAL COST. THE PERFORMANCE RESULTS DO NOT
REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON PORTFOLIO
DISTRIBUTIONS OR THE REDEMPTION OF PORTFOLIO SHARES. PERFORMANCE INCLUDES THE
EFFECT OF DEDUCTING EXPENSES, BUT DOES NOT INCLUDE CHARGES AND EXPENSES
ATTRIBUTABLE TO ANY PARTICULAR VARIABLE CONTRACT OR PLAN. ACCORDINGLY, THE
PROSPECTUS OF THE SPONSORING PARTICIPATING INSURANCE COMPANY SEPARATE ACCOUNT OR
PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS SHOULD
BE CAREFULLY REVIEWED FOR INFORMATION ON RELEVANT CHARGES AND EXPENSES.
EXCLUDING THESE CHARGES AND EXPENSES FROM QUOTATIONS OF PERFORMANCE HAS THE
EFFECT OF INCREASING THE PERFORMANCE QUOTED, AND THE EFFECT OF THESE CHARGES
SHOULD BE CONSIDERED WHEN COMPARING PERFORMANCE TO THAT OF OTHER MUTUAL FUNDS.
PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH-END IS AVAILABLE AT
WWW.CREDIT-SUISSE.COM/US.
_______________
1 The Morgan Stanley Capital International All Country World Ex-USA Index is
a free float-adjusted market capitalization index that is designed to
measure equity-market performance in the global developed and emerging
markets, excluding the U.S. It is the exclusive property of Morgan Stanley
Capital International Inc. Investors cannot invest directly in an index.
2 Inception date: 6/30/95.
5
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
INFORMATION ABOUT YOUR PORTFOLIO'S EXPENSES
As an investor of the Portfolio, you incur two types of costs: ongoing
expenses and transaction costs. Ongoing expenses include management fees,
distribution and service (12b-1) fees and other Portfolio expenses. Examples of
transaction costs include sales charges (loads), redemption fees and account
maintenance fees, which are not shown in this section and which would result in
higher total expenses. The following table is intended to help you understand
your ongoing expenses of investing in the Portfolio and to help you compare
these expenses with the ongoing expenses of investing in other mutual funds. The
table is based on an investment of $1,000 made at the beginning of the six month
period ended December 31, 2005.
The table illustrates your Portfolio's expenses in two ways:
o ACTUAL PORTFOLIO RETURN. This helps you estimate the actual dollar
amount of ongoing expenses paid on a $1,000 investment in the
Portfolio using the Portfolio's actual return during the period. To
estimate the expenses you paid over the period, simply divide your
account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in
the "Expenses Paid per $1,000" line under the share class you hold.
o HYPOTHETICAL 5% PORTFOLIO RETURN. This helps you to compare your
Portfolio's ongoing expenses with those of other mutual funds using
the Portfolio's actual expense ratio and a hypothetical rate of
return of 5% per year before expenses. Examples using a 5%
hypothetical fund return may be found in the shareholder reports of
other mutual funds. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or
expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight
your ongoing expenses only and do not reflect any transaction costs, such as
sales charges (loads) or redemption fees. If these transaction costs had been
included, your costs would have been higher. The "Expenses Paid per $1,000" line
of the tables is useful in comparing ongoing expenses only and will not help you
determine the relative total expenses of owning different funds.
6
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
EXPENSES AND VALUE OF A $1,000 INVESTMENT
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 2005
- --------------------------------------------------------------------------------
ACTUAL PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,169.70
Expenses Paid per $1,000* $ 7.93
HYPOTHETICAL 5% PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,017.90
Expenses Paid per $1,000* $ 7.37
ANNUALIZED EXPENSE RATIOS* 1.45%
________________
* EXPENSES ARE EQUAL TO THE PORTFOLIO'S ANNUALIZED EXPENSE RATIO MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF
DAYS IN THE MOST RECENT FISCAL HALF YEAR PERIOD, THEN DIVIDED BY 365.
THE "EXPENSES PAID PER $1,000" AND THE "ANNUALIZED EXPENSE RATIOS" IN THE
TABLES ARE BASED ON ACTUAL EXPENSES PAID BY THE PORTFOLIO DURING THE
PERIOD, NET OF FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IF THOSE FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS HAD NOT BEEN IN EFFECT, THE
PORTFOLIO'S ACTUAL EXPENSES WOULD HAVE BEEN HIGHER. EXPENSES DO NOT
REFLECT ADDITIONAL CHARGES AND EXPENSES THAT ARE, OR MAY BE, IMPOSED UNDER
THE VARIABLE CONTRACTS OR PLANS. SUCH CHARGES AND EXPENSES ARE DESCRIBED
IN THE PROSPECTUS OF THE INSURANCE COMPANY SEPARATE ACCOUNT OR IN THE PLAN
DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS. THE
PORTFOLIO'S EXPENSES SHOULD BE CONSIDERED WITH THESE CHARGES AND EXPENSES
IN EVALUATING THE OVERALL COST OF INVESTING IN THE SEPARATE ACCOUNT.
For more information, please refer to the Portfolio's prospectus.
7
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
SECTOR BREAKDOWN*
[BAR GRAPH]
Financials 25.6%
Industrials 13.4%
Energy 10.3%
Consumer Discretionary 9.5%
Consumer Staples 8.9%
Telecommunication Services 8.4%
Health Care 8.3%
Information Technology 5.8%
Materials 4.1%
Utilities 3.3%
Short-Term Investment 2.4%
________________
* Expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
8
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS (94.4%)
ARGENTINA (2.4%)
OIL & GAS (2.4%)
Repsol YPF SA ss. 74,937 $ 2,185,546
-------------
TOTAL ARGENTINA 2,185,546
-------------
BELGIUM (1.7%)
BEVERAGES (1.7%)
InBev NV 36,260 1,571,003
-------------
TOTAL BELGIUM 1,571,003
-------------
CANADA (1.4%)
DIVERSIFIED TELECOMMUNICATION SERVICES (1.4%)
Rogers Communications, Inc. Class B ss. 30,500 1,284,595
-------------
TOTAL CANADA 1,284,595
-------------
DENMARK (2.0%)
PHARMACEUTICALS (2.0%)
Novo Nordisk AS Series B 32,150 1,802,547
-------------
TOTAL DENMARK 1,802,547
-------------
EGYPT (1.6%)
INDUSTRIAL CONGLOMERATES (1.6%)
Orascom Telecom Holding SAE GDR 27,124 1,451,134
-------------
TOTAL EGYPT 1,451,134
-------------
FRANCE (14.1%)
BANKS (2.4%)
Societe Generale ss. 18,125 2,219,257
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES (1.7%)
France Telecom SA ss. 63,392 1,569,213
-------------
INSURANCE (2.2%)
Axa ss. 62,890 2,023,553
-------------
MEDIA (2.1%)
Lagardere S.C.A. ss. 24,835 1,902,267
-------------
OIL & GAS (2.4%)
Total SA ss. 8,873 2,229,327
-------------
PHARMACEUTICALS (1.1%)
Sanofi-Aventis ss. 11,864 1,034,850
-------------
See Accompanying Notes to Financial Statements.
9
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS (94.4%)
FRANCE
TEXTILES & APPAREL (2.2%)
LVMH Moet Hennessy Louis Vuitton SA ss. 22,494 $ 1,989,574
-------------
TOTAL FRANCE 12,968,041
-------------
GERMANY (6.0%)
AEROSPACE & DEFENSE (1.3%)
MTU Aero Engines Holding AG* 39,554 1,221,988
-------------
AUTO COMPONENTS (1.3%)
Continental AG 13,458 1,188,860
-------------
BANKS (1.0%)
Bayerische Hypo-und Vereinsbank AG* ss. 29,874 898,460
-------------
ELECTRIC UTILITIES (2.4%)
E.ON AG 21,145 2,176,824
-------------
TOTAL GERMANY 5,486,132
-------------
GREECE (1.4%)
DIVERSIFIED TELECOMMUNICATION SERVICES (1.4%)
Hellenic Telecommunications Organization
SA (OTE)* 63,150 1,336,555
-------------
TOTAL GREECE 1,336,555
-------------
HONG KONG (0.9%)
INDUSTRIAL CONGLOMERATES (0.9%)
Hutchison Whampoa, Ltd. 86,000 817,498
-------------
TOTAL HONG KONG 817,498
-------------
ITALY (3.8%)
BANKS (1.8%)
SanPaolo IMI SpA ss. 108,600 1,693,606
-------------
OIL & GAS (2.0%)
Eni SpA ss. 65,973 1,836,676
-------------
TOTAL ITALY 3,530,282
-------------
JAPAN (21.5%)
AUTO COMPONENTS (1.0%)
Bridgestone Corp. ss. 43,000 895,616
-------------
BANKS (2.4%)
Bank of Yokohama, Ltd. ss. 275,000 2,249,136
-------------
See Accompanying Notes to Financial Statements.
10
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS
JAPAN
CHEMICALS (3.5%)
Kuraray Company, Ltd. 95,500 $ 988,804
Shin-Etsu Chemical Company, Ltd. 42,400 2,255,165
-------------
3,243,969
-------------
DIVERSIFIED FINANCIALS (3.8%)
Nikko Cordial Corp. ss. 115,000 1,828,218
ORIX Corp. 6,500 1,653,110
-------------
3,481,328
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (1.1%)
Omron Corp. 44,800 1,033,732
-------------
HOUSEHOLD PRODUCTS (0.9%)
Uni-Charm Corp. ss. 19,300 866,389
-------------
MACHINERY (2.1%)
Komatsu, Ltd. 118,000 1,949,028
-------------
SPECIALTY RETAIL (2.9%)
Yamada Denki Company, Ltd. 21,200 2,648,106
-------------
TRADING COMPANIES & DISTRIBUTORS (3.8%)
Mitsubishi Corp. 158,000 3,485,633
-------------
TOTAL JAPAN 19,852,937
-------------
MEXICO (1.2%)
WIRELESS TELECOMMUNICATION SERVICES (1.2%)
America Movil SA de CV ADR Series L 36,500 1,067,990
-------------
TOTAL MEXICO 1,067,990
-------------
NETHERLANDS (3.8%)
BANKS (2.4%)
ABN AMRO Holding NV 86,444 2,248,515
-------------
FOOD PRODUCTS (1.4%)
Royal Numico NV* 30,570 1,263,192
-------------
TOTAL NETHERLANDS 3,511,707
-------------
NORWAY (1.0%)
BANKS (1.0%)
DNB NOR ASA 86,800 921,099
-------------
TOTAL NORWAY 921,099
-------------
See Accompanying Notes to Financial Statements.
11
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS
SINGAPORE (1.4%)
BANKS (1.4%)
United Overseas Bank, Ltd. 150,847 $ 1,323,595
-------------
TOTAL SINGAPORE 1,323,595
-------------
SOUTH KOREA (1.6%)
MACHINERY (1.6%)
Samsung Heavy Industries Company, Ltd. 85,020 1,470,012
-------------
TOTAL SOUTH KOREA 1,470,012
-------------
SPAIN (1.5%)
TOBACCO (1.5%)
Altadis SA 31,272 1,412,163
-------------
TOTAL SPAIN 1,412,163
-------------
SWEDEN (2.7%)
COMMUNICATIONS EQUIPMENT (1.4%)
Telefonaktiebolaget LM Ericsson 389,800 1,340,669
-------------
MACHINERY (1.3%)
Sandvik AB ss. 25,250 1,170,976
-------------
TOTAL SWEDEN 2,511,645
-------------
SWITZERLAND (4.2%)
BANKS (2.4%)
UBS AG 23,030 2,182,542
-------------
PHARMACEUTICALS (1.8%)
Novartis AG 32,286 1,688,389
-------------
TOTAL SWITZERLAND 3,870,931
-------------
TAIWAN (1.3%)
METALS & MINING (0.6%)
China Steel Corp. 745,500 566,481
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (0.7%)
MediaTek, Inc. 56,100 655,948
-------------
TOTAL TAIWAN 1,222,429
-------------
UNITED KINGDOM (18.9%)
BANKS (4.5%)
Barclays PLC 83,960 878,882
HSBC Holdings PLC 125,200 2,008,420
Royal Bank of Scotland Group PLC 42,152 1,269,263
-------------
4,156,565
-------------
See Accompanying Notes to Financial Statements.
12
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS
UNITED KINGDOM
BEVERAGES (1.4%)
SABMiller PLC 70,722 $ 1,285,875
-------------
COMMERCIAL SERVICES & SUPPLIES (2.3%)
Capita Group PLC 125,608 898,784
Hays PLC 553,280 1,190,859
-------------
2,089,643
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES (1.2%)
Cable & Wireless PLC 525,647 1,083,278
-------------
METALS & MINING (1.0%)
BHP Billiton PLC 58,540 955,981
-------------
OIL & GAS (2.1%)
BP PLC 177,433 1,895,700
-------------
PHARMACEUTICALS (3.4%)
AstraZeneca PLC 24,622 1,194,151
GlaxoSmithKline PLC 77,184 1,944,230
-------------
3,138,381
-------------
TOBACCO (1.3%)
Imperial Tobacco Group PLC 40,757 1,212,448
-------------
WIRELESS TELECOMMUNICATION SERVICES (1.7%)
Vodafone Group PLC 748,670 1,607,586
-------------
TOTAL UNITED KINGDOM 17,425,457
-------------
TOTAL COMMON STOCKS (Cost $64,337,817) 87,023,298
-------------
PREFERRED STOCK (0.5%)
BRAZIL (0.5%)
METALS & MINING (0.5%)
Companhia Vale do Rio Doce ADR (Cost $428,948) 13,400 485,750
-------------
SHORT-TERM INVESTMENTS (22.8%)
State Street Navigator Prime Fund ss.ss. 17,296,332 17,296,332
PAR
(000)
------------
State Street Bank and Trust Co. Euro Time
Deposit, 3.350%, 1/03/06 $ 3,748 3,748,000
-------------
TOTAL SHORT-TERM INVESTMENTS (Cost $21,044,332) 21,044,332
-------------
See Accompanying Notes to Financial Statements.
13
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
VALUE
-------------
TOTAL INVESTMENTS AT VALUE (117.7%) (Cost $85,811,097) $ 108,553,380
LIABILITIES IN EXCESS OF OTHER ASSETS (-17.7%) (16,341,547)
-------------
NET ASSETS (100.0%) $ 92,211,833
=============
INVESTMENT ABBREVIATIONS
ADR = American Depositary Receipt
GDR = Global Depositary Receipt
- --------------------------------------------------------------------------------
* Non-income producing security.
ss. Security or portion thereof is out on loan.
ss.ss. Represents security purchased with cash collateral received for
securities on loan.
See Accompanying Notes to Financial Statements.
14
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2005
- --------------------------------------------------------------------------------
ASSETS
Investments at value, including collateral for securities
on loan of $17,296,332 (Cost $85,811,097) (Note 2) $ 108,553,380 1
Cash 360
Foreign currency at value (Cost $1,013,006) 1,030,781
Dividend and interest receivable 149,630
Receivable for portfolio shares sold 10,840
Prepaid expenses and other assets 3,425
-------------
Total Assets 109,748,416
-------------
LIABILITIES
Advisory fee payable (Note 3) 77,528
Administrative services fee payable (Note 3) 18,927
Payable upon return of securities loaned (Note 2) 17,296,332
Payable for portfolio shares redeemed 93,735
Other accrued expenses payable 50,061
-------------
Total Liabilities 17,536,583
-------------
NET ASSETS
Capital stock, $0.001 par value (Note 6) 7,881
Paid-in capital (Note 6) 181,480,211
Undistributed net investment income 945,976
Accumulated net realized loss on investments and foreign currency transactions (112,983,300)
Net unrealized appreciation from investments and foreign currency translations 22,761,065
-------------
Net Assets $ 92,211,833
=============
Shares outstanding 7,880,719
-------------
Net asset value, offering price, and redemption price per share $ 11.70
=============
- --------------------------------------------------------------------------------
1 Including $16,456,692 of securities on loan.
See Accompanying Notes to Financial Statements.
15
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME (Note 2)
Dividends $ 2,358,579
Interest 64,092
Securities lending 81,179
Foreign taxes withheld (286,409)
-------------
Total investment income 2,217,441
-------------
EXPENSES
Investment advisory fees (Note 3) 856,480
Administrative services fees (Note 3) 155,163
Printing fees (Note 3) 73,758
Custodian fees 55,140
Audit and tax fees 23,363
Legal fees 17,457
Insurance expense 6,227
Transfer agent fees 3,120
Trustees' fees 2,778
Commitment fees (Note 4) 2,179
Miscellaneous expense 18,001
-------------
Total expenses 1,213,666
-------------
Net investment income 1,003,775
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND
FOREIGN CURRENCY RELATED ITEMS
Net realized gain from investments 7,664,551
Net realized loss on foreign currency transactions (56,754)
Net change in unrealized appreciation (depreciation) from investments 5,113,873
Net change in unrealized appreciation (depreciation) from foreign currency translations (9,022)
-------------
Net realized and unrealized gain from investments and foreign currency related items 12,712,648
-------------
Net increase in net assets resulting from operations $ 13,716,423
=============
See Accompanying Notes to Financial Statements.
16
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------
FROM OPERATIONS
Net investment income $ 1,003,775 $ 834,703
Net realized gain on investments and foreign currency transactions 7,607,797 12,667,577
Net change in unrealized appreciation (depreciation)
from investments and foreign currency translations 5,104,851 (2,110,148)
----------------- -----------------
Net increase in net assets resulting from operations 13,716,423 11,392,132
----------------- -----------------
FROM DIVIDENDS
Dividends from net investment income (739,766) (824,282)
----------------- -----------------
Net decrease in net assets resulting from dividends (739,766) (824,282)
----------------- -----------------
FROM CAPITAL SHARE TRANSACTIONS (Note 6)
Proceeds from sale of shares 15,423,150 19,768,766
Reinvestment of dividends 739,766 824,325
Net asset value of shares redeemed (24,228,669) (34,829,572)
----------------- -----------------
Net decrease in net assets from capital share transactions (8,065,753) (14,236,481)
----------------- -----------------
Net increase (decrease) in net assets 4,910,904 (3,668,631)
NET ASSETS
Beginning of year 87,300,929 90,969,560
----------------- -----------------
End of year $ 92,211,833 $ 87,300,929
================= =================
UNDISTRIBUTED NET INVESTMENT INCOME $ 945,976 $ 739,704
================= =================
See Accompanying Notes to Financial Statements.
17
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------
2005 2004 2003 2002 2001
----------- ----------- ----------- ----------- -----------
PER SHARE DATA
Net asset value, beginning of year $ 10.04 $ 8.85 $ 6.68 $ 8.34 $ 10.73
----------- ----------- ----------- ----------- -----------
INVESTMENT OPERATIONS
Net investment income 0.14 0.11 0.09 0.06 0.05
Net gain (loss) on investments
and foreign currency related items
(both realized and unrealized) 1.62 1.17 2.12 (1.72) (2.44)
----------- ----------- ----------- ----------- -----------
Total from investment operations 1.76 1.28 2.21 (1.66) (2.39)
----------- ----------- ----------- ----------- -----------
LESS DIVIDENDS
Dividends from net investment income (0.10) (0.09) (0.04) -- --
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF YEAR $ 11.70 $ 10.04 $ 8.85 $ 6.68 $ 8.34
=========== =========== =========== =========== ===========
Total return 1 17.56% 14.63% 33.09% (19.90)% (22.27)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (000s omitted) $ 92,212 $ 87,301 $ 90,970 $ 86,387 $ 147,725
Ratio of expenses to average net assets 1.42% 1.37% 1.41% 1.42% 1.30%
Ratio of net investment income
to average net assets 1.17% 0.98% 1.01% 0.61% 0.34%
Portfolio turnover rate 47% 90% 131% 134% 166%
- --------------------------------------------------------------------------------
1 Total returns are historical and assume changes in share price and
reinvestment of all dividends and distributions. Total returns do not
reflect charges and expenses attributable to any particular variable
contract or plan.
See Accompanying Notes to Financial Statements.
18
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Credit Suisse Trust (the "Trust") is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, and
currently offers eight managed investment portfolios of which one, the
International Focus Portfolio (the "Portfolio"), is included in this report. The
Portfolio is a diversified investment fund that seeks long-term capital
appreciation. Shares of the Portfolio are not available directly to individual
investors but may be offered only through (a) variable annuity contracts and
variable life insurance contracts offered by separate accounts of certain
insurance companies and (b) tax-qualified pension and retirement plans. The
Portfolio may not be available in connection with a particular contract or plan.
The Trust was organized under the laws of The Commonwealth of Massachusetts as a
business trust on March 15, 1995.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A) SECURITY VALUATION -- The net asset value of the Portfolio is
determined daily as of the close of regular trading on the New York Stock
Exchange, Inc. (the "Exchange") on each day the Exchange is open for business.
The Portfolio's equity investments are valued at market value, which is
generally determined using the closing price on the exchange or market on which
the security is primarily traded at the time of valuation (the "Valuation
Time"). If no sales are reported, equity investments are generally valued at the
most recent bid quotation as of the Valuation Time or at the lowest asked
quotation in the case of a short sale of securities. Debt securities with a
remaining maturity greater than 60 days are valued in accordance with the price
supplied by a pricing service, which may use a matrix, formula or other
objective method that takes into consideration market indices, yield curves and
other specific adjustments. Debt obligations that will mature in 60 days or less
are valued on the basis of amortized cost, which approximates market value,
unless it is determined that using this method would not represent fair value.
Investments in mutual funds are valued at the mutual fund's closing net asset
value per share on the day of valuation. Securities and other assets for which
market quotations are not readily available, or whose values have been
materially affected by events occurring before the Portfolio's Valuation Time
but after the close of the securities' primary markets, are valued at fair value
as determined in good faith by, or under the direction of, the Board of Trustees
under procedures established by the Board of Trustees. The Portfolio may utilize
a service provided by an independent
19
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
third party which has been approved by the Board of Trustees to fair value
certain securities. When fair-value pricing is employed, the prices of
securities used by a fund to calculate its net asset value may differ from
quoted or published prices for the same securities.
B) FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Portfolio
are maintained in U.S. dollars. Transactions denominated in foreign currencies
are recorded at the current prevailing exchange rates. All assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at the current exchange rate at the end of the period. Translation gains
or losses resulting from changes in the exchange rate during the reporting
period and realized gains and losses on the settlement of foreign currency
transactions are reported in the results of operations for the current period.
The Portfolio does not isolate that portion of realized gains and losses on
investments in EQUITY securities which is due to changes in the foreign exchange
rate from that which is due to changes in market prices of equity securities.
The Portfolio isolates that portion of realized gains and losses on investments
in DEBT securities which is due to changes in the foreign exchange rate from
that which is due to changes in market prices of debt securities.
C) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions
are accounted for on a trade date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date. The cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes.
D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net
investment income and distributions of net realized capital gains, if any, are
declared and paid at least annually. However, to the extent that a net realized
capital gain can be reduced by a capital loss carryforward, such gain will not
be distributed. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States of America ("GAAP").
E) FEDERAL INCOME TAXES -- No provision is made for federal taxes as it is
the Trust's intention to have the Portfolio continue to qualify for and elect
the tax treatment applicable to regulated investment companies under the
Internal Revenue Code of 1986, as amended, and to make the requisite
20
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
distributions to its shareholders, which will be sufficient to relieve it from
federal income and excise taxes.
F) USE OF ESTIMATES -- The preparation of financial statements in
conformity with GAAP 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 revenues and expenses during the reporting period.
Actual results could differ from these estimates.
G) SHORT-TERM INVESTMENTS -- The Portfolio, together with other
funds/portfolios advised by Credit Suisse Asset Management, LLC ("Credit
Suisse"), an indirect, wholly-owned subsidiary of Credit Suisse Group, pools
available cash into either a short-term variable rate time deposit issued by
State Street Bank and Trust Company ("SSB"), the Portfolio's custodian, or a
money market fund advised by Credit Suisse. The short-term time deposit issued
by SSB is a variable rate account classified as a short-term investment.
H) FORWARD FOREIGN CURRENCY CONTRACTS -- The Portfolio may enter into
forward foreign currency contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the value
of a foreign currency. The Portfolio will enter into forward foreign currency
contracts primarily for hedging purposes. Forward foreign currency contracts are
adjusted by the daily forward exchange rate of the underlying currency and any
gains or losses are recorded for financial statement purposes as unrealized
until the contract settlement date or an offsetting position is entered into. At
December 31, 2005, the Portfolio had no open forward foreign currency contracts.
I) SECURITIES LENDING -- Loans of securities are required at all times to
be secured by collateral at least equal to 102% of the market value of domestic
securities on loan (including any accrued interest thereon) and 105% of the
market value of foreign securities on loan (including any accrued interest
thereon). Cash collateral received by the Portfolio in connection with
securities lending activity may be pooled together with cash collateral for
other funds/portfolios advised by Credit Suisse and may be invested in a variety
of investments, including certain Credit Suisse-advised funds, funds advised by
21
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
SSB, the Portfolio's securities lending agent, or money market instruments.
However, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings.
SSB has been engaged by the Portfolio to act as the Portfolio's securities
lending agent. The Portfolio's securities lending arrangement provides that the
Portfolio and SSB will share the net income earned from the securities lending
activities. During the year ended December 31, 2005, total earnings from the
Portfolio's investment in cash collateral received in connection with securities
lending arrangements was $668,397, of which $552,755 was rebated to borrowers
(brokers). The Portfolio retained $81,179 in income from the cash collateral
investment, and SSB, as lending agent, was paid $34,463. The Portfolio may also
be entitled to certain minimum amounts of income from its securities lending
activities. Securities lending income is accrued as earned.
J) OTHER -- The Portfolio may invest in securities of foreign countries
and governments which involve certain risks in addition to those inherent in
domestic investments. Such risks generally include, among others, currency risk
(fluctuations in currency exchange rates), information risk (key information may
be inaccurate or unavailable) and political risk (expropriation, nationalization
or the imposition of capital or currency controls or punitive taxes). Other
risks of investing in foreign securities include liquidity and valuation risks.
The Portfolio may be subject to taxes imposed by countries in which it
invests with respect to its investments in issuers existing or operating in such
countries. Such taxes are generally based on income earned or repatriated and
capital gains realized on the sale of such investments. The Portfolio accrues
such taxes when the related income or gains are earned.
The Portfolio may invest up to 15% of its net assets in non-publicly
traded securities. Non-publicly traded securities may be less liquid than
publicly traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized from such sales could differ from
the price originally paid by the Portfolio or the current carrying values, and
the difference could be material.
22
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Credit Suisse serves as investment adviser for the Portfolio. For its
investment advisory services, Credit Suisse is entitled to receive a fee from
the Portfolio at an annual rate of 1.00% of the Portfolio's average daily net
assets. For the year ended December 31, 2005, investment advisory fees earned
were $856,480.
Credit Suisse Asset Management Limited (U.K.) ("Credit Suisse U.K.") and
Credit Suisse Asset Management Limited (Australia) ("Credit Suisse Australia"),
each an affiliate of Credit Suisse, are sub-investment advisers to the Portfolio
(the "Sub-Advisors"). Credit Suisse U.K.'s and Credit Suisse Australia's
sub-investment advisory fees are paid by Credit Suisse out of Credit Suisse's
net investment advisory fee and are not paid by the Portfolio.
Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate
of Credit Suisse, and SSB serve as co-administrators to the Portfolio.
For its co-administrative services, CSAMSI currently receives a fee
calculated at an annual rate of 0.10% of the average daily net assets of the
Portfolio. For the year ended December 31, 2005, co-administrative services fees
earned by CSAMSI were $85,648.
For its co-administrative services, SSB receives a fee, exclusive of
out-of-pocket expenses, calculated in total for all the Credit Suisse
funds/portfolios co-administered by SSB and allocated based upon relative
average net assets of each fund/portfolio, subject to an annual minimum fee. For
the year ended December 31, 2005, co-administrative services fees earned by SSB
(including out-of-pocket expenses) were $69,515.
In addition to serving as the Portfolio's co-administrator, CSAMSI
currently serves as distributor of the Portfolio's shares without compensation.
Merrill Corporation ("Merrill"), an affiliate of Credit Suisse, has been
engaged by the Portfolio to provide certain financial printing and fulfillment
services. For the year ended December 31, 2005, Merrill was paid $8,270 for its
services to the Portfolio.
NOTE 4. LINE OF CREDIT
The Portfolio, together with other funds/portfolios advised by Credit
Suisse (collectively, the "Participating Funds"), participates in a $75 million
committed, unsecured line of credit facility ("Credit Facility") for temporary
or emergency purposes with Deutsche Bank, A.G. as administrative agent and
23
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 4. LINE OF CREDIT
syndication agent and SSB as operations agent. Under the terms of the Credit
Facility, the Participating Funds pay an aggregate commitment fee at a rate of
0.10% per annum on the average unused amount of the Credit Facility, which is
allocated among the Participating Funds in such manner as is determined by the
governing Boards of the Participating Funds. In addition, the Participating
Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At
December 31, 2005, and during the year ended December 31, 2005, the Portfolio
had no borrowings under the Credit Facility.
NOTE 5. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 2005, purchases and sales of investment
securities (excluding short-term investments) were $38,560,558 and $47,682,691,
respectively.
NOTE 6. CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, $.001 par value per share.
Transactions in capital shares of the Portfolio were as follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
------------------ ------------------
Shares sold 1,446,359 2,182,090
Shares issued in reinvestment of dividends 67,559 93,994
Shares redeemed (2,324,558) (3,858,141)
---------- ----------
Net decrease (810,640) (1,582,057)
========== ==========
On December 31, 2005, the number of shareholders that held 5% or more of
the outstanding shares of the Portfolio was as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ----------------------
4 90%
Some of the shareholders are omnibus accounts, which hold shares on behalf
of individual shareholders.
NOTE 7. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
24
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 7. FEDERAL INCOME TAXES
The tax character of dividends paid during the years ended December 31,
2005, and 2004, respectively, for the Portfolio were as follows:
ORDINARY INCOME
----------------------
2005 2004
-------- ---------
$739,766 $824,282
The tax basis of components of distributable earnings differ from the
amounts reflected in the Statement of Assets and Liabilities by temporary
book/tax differences. These differences are primarily due to losses deferred on
wash sales and deferral of post-October losses.
At December 31, 2005, the components of distributable earnings on a tax
basis for the Portfolio were as follows:
Undistributed net investment income $ 967,038
Accumulated net realized loss (112,870,927)
Unrealized appreciation 22,648,692
Deferral of post-October currency losses (21,062)
-------------
$ (89,276,259
=============
At December 31, 2005, the Portfolio had capital loss carryforwards
available to offset possible future capital gains as follows:
EXPIRES DECEMBER 31,
--------------------------------------
2009 2010 2011
----------- ----------- ----------
$72,374,131 $37,413,453 $3,083,343
During the tax year ended December 31, 2005, the Portfolio utilized
$7,552,063 of the capital loss carryforward.
At December 31, 2005, the identified cost for federal income tax purposes,
as well as the gross unrealized appreciation from investments for those
securities having an excess of value over cost, gross unrealized depreciation
from investments for those securities having an excess of cost over value and
the net unrealized appreciation from investments were as follows: $85,923,470,
$23,371,476, $(741,566) and $22,629,910, respectively.
At December 31, 2005, the Portfolio reclassified $57,737 from
undistributed net investment income to accumulated net realized loss from
investments, to adjust for current period permanent book/tax differences which
arose principally from differing book/tax treatments of foreign currency
transactions and security litigation. Net assets were not affected by these
reclassifications.
25
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 8. CONTINGENCIES
In the normal course of business, the Portfolio may provide general
indemnifications pursuant to certain contracts and organizational documents. The
Portfolio's maximum exposure under these arrangements is dependent on future
claims that may be made against the Portfolio and, therefore, cannot be
estimated; however, based on experience, the risk of loss from such claims is
considered remote.
26
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees of Credit Suisse Trust and Shareholders of Credit
Suisse Trust - International Focus 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 financial highlights present fairly, in all
material respects, the financial position of International Focus Portfolio (the
"Portfolio"), a portfolio of the Credit Suisse Trust, at December 31, 2005, 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 five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolio's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards 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 December 31, 2005 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 6, 2006
27
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
- --------------------------------------------------------------------------------
In approving the Advisory and Sub-Advisory Agreements, the Board of
Trustees, including the Independent Trustees, considered the following factors
with respect to the International Focus Portfolio (the "Portfolio"):
INVESTMENT ADVISORY FEE RATES
The Board reviewed and considered the contractual advisory fee rate of
1.00% paid by the Portfolio ("Contractual Advisory Fee") to Credit Suisse Asset
Management LLC ("Credit Suisse") in light of the extent and quality of the
advisory services provided by Credit Suisse or Credit Suisse Asset Management
Limited U.K. ("Credit Suisse U.K.") and Credit Suisse Asset Management Limited
Australia ("Credit Suisse Australia"). The Board noted that the compensation
paid to Credit Suisse U.K. and Credit Suisse Australia (collectively, the
"Sub-Advisers") does not increase the fees or expenses otherwise incurred by the
Portfolio's shareholders because the Sub-Advisers are paid by Credit Suisse, not
the Portfolio.
Additionally, the Board received and considered information comparing the
Portfolio's Contractual Advisory Fee and the Portfolio's overall expenses with
those of funds in both the relevant expense group ("Peer Group") and universe of
funds (the "Universe") provided by Lipper Inc., an independent provider of
investment company data.
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AND
SUB-ADVISORY AGREEMENTS
The Board received and considered information regarding the nature, extent
and quality of services provided to the Portfolio by Credit Suisse under the
Advisory Agreement and by the Sub-Advisers under the Sub-Advisory Agreements.
The Board also noted information received at regular meetings throughout the
year related to the services rendered by Credit Suisse and the Sub-Advisers. The
Board reviewed background information about Credit Suisse and the Sub-Advisers,
including their respective Form ADV. The Board considered the background and
experience of both Credit Suisse's and the Sub-Advisers' senior management and
the expertise of, and the amount of attention given to the Portfolio by, senior
personnel of Credit Suisse and the Sub-Advisers. With respect to the
Sub-Advisers, the Board also considered their expertise in managing the types of
global investments that the Portfolio utilizes in its investment strategy. In
addition, the Board reviewed the qualifications, backgrounds and
responsibilities of the portfolio management team primarily responsible for the
day-to-day portfolio management of the Portfolio and the extent of the resources
devoted to research and analysis of actual and potential
28
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
investments. The Board also received and considered information about the
nature, extent and quality of services and fee rates offered to other Credit
Suisse clients for comparable services.
In approving the Sub-Advisory Agreements, the Board also considered the
benefits of retaining Credit Suisse's United Kingdom and Australian affiliates
given the increased complexity of the domestic and international securities
markets, specifically that retention of Credit Suisse U.K. and Credit Suisse
Australia expands the universe of companies and countries from which investment
opportunities could be sought and enhances the ability of the Portfolio to
obtain the best price and execution on trades in international markets.
PORTFOLIO PERFORMANCE
The Board received and considered the one-, two-, three-, four-, five- and
ten-year performance of the Portfolio, along with comparisons, for all presented
periods, both to the relevant performance group ("Performance Group") and
universe of funds ("Performance Universe") for the Portfolio. The Board was
provided with a description of the methodology used to arrive at the funds
included in the Performance Group and the Performance Universe.
The Board reviewed information comparing the performance of various Credit
Suisse Funds to performance benchmarks that the Board had previously established
and progress that had been made in certain instances toward achieving those
benchmarks. The Board also reviewed comparisons between the Portfolio and its
identified benchmark over various time periods.
CREDIT SUISSE PROFITABILITY
The Board received and considered a profitability analysis of Credit
Suisse based on the fees payable under the Advisory Agreement for the Portfolio,
including other relationships between the Portfolio on the one hand and Credit
Suisse affiliates on the other. The Board received profitability information for
the other funds in the Credit Suisse family of funds.
ECONOMIES OF SCALE
The Board considered whether economies of scale in the provision of
services to the Portfolio were being passed along to the shareholders.
Accordingly, the Board considered whether alternative fee structures (such as
breakpoint fee structures) would be more appropriate or reasonable taking into
consideration economies of scale or other efficiencies that might accrue from
increases in the Portfolio's asset levels.
29
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
OTHER BENEFITS TO CREDIT SUISSE
The Board considered other benefits received by Credit Suisse, the
Sub-Advisers and their affiliates as a result of their relationships with the
Portfolio. Such benefits include, among others, research arrangements with
brokers who execute transactions on behalf of the Portfolio, administrative and
brokerage relationships with affiliates of Credit Suisse and the Sub-Advisers
and benefits potentially derived from an increase in Credit Suisse's and the
Sub-Advisers' businesses as a result of their relationship with the Portfolio
(such as the ability to market to shareholders other financial products offered
by Credit Suisse, the Sub-Advisers and their affiliates).
The Board considered the standards applied in seeking best execution,
whether and to what extent soft dollar credits are sought and how any such
credits are utilized, any benefits that may be achieved by using an affiliated
broker and the existence of quality controls applicable to brokerage allocation
procedures. The Board also reviewed Credit Suisse's and the Sub-Advisers' method
for allocating portfolio investment opportunities among their advisory clients.
CONCLUSIONS
In selecting Credit Suisse and the Sub-Advisers, and approving the
Advisory Agreement and the investment advisory fee under such agreement and the
Sub-Advisory Agreements, the Board concluded that:
o Both the Contractual Advisory Fee of 1.00% and the net advisory fee
of 0.95% (when the voluntary fee waiver described below is taken
into account) were higher than the median of the Portfolio's Peer
Group. The Board considered the fee to be reasonable taking the fee
waiver and the relatively small size of the Portfolio into account.
o The Portfolio's performance was in the fourth or fifth quintile of
its Performance Group for all periods except the one-year
performance, where it ranked in the second quintile. The Portfolio's
performance was in the fourth or fifth quintile of its Performance
Universe for all periods except the one-year performance, where it
ranked in the third quintile. The Board noted that the Portfolio's
performance for the one-, two-, three-, four- and five-year periods
was above or reasonably close, within one standard deviation, of the
Performance Universe's and Performance Group's median, while the
Portfolio's ten-year performance was within two standard deviations
below the median for its Performance Group and Performance Universe.
The Board had previously identified the need to
30
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
address the Portfolio's performance, and noted that Credit Suisse
had taken steps in response to performance issues raised by the
Board. After discussion with the Board, Credit Suisse had agreed to
a one-year voluntary fee reduction of five basis points. The Board
would continue to monitor steps undertaken by Credit Suisse to
improve performance.
o Aside from performance (as described above), the Board was satisfied
with the nature, extent and quality of the investment advisory
services provided to the Portfolio by Credit Suisse and the
Sub-Advisers and that, based on dialogue with management and
counsel, the services provided by Credit Suisse under the Advisory
Agreement and by the Sub-Advisers under the Sub-Advisory Agreements
are typical of, and consistent with, those provided to mutual funds
by other investment advisers. The Board understood that Credit
Suisse had addressed or was in the process of addressing any
performance issues.
o In light of the costs of providing investment management and other
services to the Portfolio and Credit Suisse's ongoing commitment to
the Portfolio, the profits and other ancillary benefits that Credit
Suisse and its affiliates received were considered reasonable.
o Credit Suisse's profitability based on fees payable under the
Advisory Agreement was reasonable in light of the nature, extent and
quality of the services provided to the Portfolio thereunder.
o In light of the relatively small size of the Portfolio and the
amount of the Contractual Advisory Fees, the Portfolio's current fee
structure (without breakpoints) was considered reasonable.
No single factor reviewed by the Board was identified by the Board as the
principal factor in determining whether to approve the Advisory Agreement and
the Sub-Advisory Agreements. The Independent Trustees were advised by separate
independent legal counsel throughout the process.
31
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS
AND IN FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------- ----------- ------------ -------------------------- ----------- ---------------------
INDEPENDENT TRUSTEES
Enrique Arzac Trustee, Since Professor of Finance 47 Director of The
c/o Credit Suisse Asset Nominating 2005 and Economics, Adams Express
Management, LLC Committee Graduate School of (a closed-end
Attn: General Counsel Member and Business, Columbia investment
466 Lexington Avenue Audit University since 1971 company); Director
New York, New York Committee of Petroleum
10017-3140 Chairman and Resources
Corporation
Date of Birth: 10/02/41 (a closed-end
investment company)
Richard H. Francis Trustee, Since Currently retired 41 None
c/o Credit Suisse Asset Nominating 1999
Management, LLC and Audit
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 04/23/32
Jeffrey E. Garten Trustee, Since The Juan Trippe 40 Director of Aetna,
Box 208200 Nominating 1998 2 Professor in the Practice Inc. (insurance
New Haven, Connecticut and Audit of International Trade, company); Director
06520-8200 Committee Finance and Business of CarMax Group
Member from July 2005 to present; (used car dealers)
Date of Birth: 10/29/46 Partner and Chairman
of Garten Rothkopf
(consulting firm) from
October 2005 to present;
Dean of Yale School of
Management from
November 1995 to
June 2005
Peter F. Krogh Trustee, Since Dean Emeritus and 40 Director of Carlisle
301 ICC Nominating 2001 Distinguished Professor Companies
Georgetown University and Audit of International Affairs Incorporated
Washington, DC 20057 Committee at the Edmund A. (diversified
Member Walsh School of manufacturing
Date of Birth: 02/11/37 Foreign Service, company)
Georgetown University
from June 1995
to present
_____________
1 Each Trustee and Officer serves until his or her respective successor has
been duly elected and qualified.
2 Mr. Garten was initially appointed as a Trustee of the Trust on February
6, 1998. He resigned as Trustee on February 3, 2000, and was subsequently
re-appointed on December 21, 2000.
32
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS
AND IN FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------- ----------- ------------ -------------------------- ----------- ---------------------
INDEPENDENT TRUSTEES
James S. Pasman, Jr. Trustee, Since Currently retired 42 Director of Education
c/o Credit Suisse Asset Nominating 1999 Management Corp.
Management, LLC and Audit
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 12/20/30
Steven N. Rappaport Chairman of Trustee Partner of Lehigh Court, 46 Director of Presstek,
Lehigh Court, LLC the Board Since LLC and RZ Capital Inc. (digital imaging
40 East 52nd Street of Trustees, 1999 (private investment firms) technologies
New York, New York Nominating and from July 2002 to present; company); Director of
10022 Committee Chairman Transition Adviser to Wood Resources, LLC.
Chairman since SunGard Securities (plywood
Date of Birth: 07/10/48 and Audit 2005 Finance, Inc. from manufacturing
Committee February 2002 to July company)
Member 2002; President of
SunGard Securities
Finance, Inc. from 2001
to February 2002;
President of Loanet,
Inc. (on-line accounting
service) from 1997 to 2001
INTERESTED TRUSTEE
Michael E. Kenneally 3,4 Trustee Since Chairman and Global 40 None
c/o Credit Suisse Asset 2004 Chief Executive Officer
Management, LLC of Credit Suisse from
Attn: General Counsel March 2003 to July 2005;
466 Lexington Avenue Chairman and Chief
New York, New York Investment Officer of
10017-3140 Banc of America Capital
Management from 1998
Date of Birth: 03/30/54 to March 2003
_____________
3 Mr. Kenneally is a Trustee who is an "interested person" of the Trust as
defined in the 1940 Act, because he was an officer of Credit Suisse within
the last two fiscal years.
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
33
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM OF
OFFICE 1 AND
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH TRUST SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ----------------------- ---------- ------------ --------------------------------------------------------------
OFFICERS
Steven B. Plump 4 Chief Since Managing Director; Associated with Credit Suisse or its
Credit Suisse Asset Executive 2005 predecessor since 1995; Officer of other Credit Suisse Funds
Management, LLC Officer and
466 Lexington Avenue President
New York, New York
10017-3140
Date of Birth: 02/08/59
Michael A. Pignataro Chief Since Director and Director of Fund Administration of Credit Suisse;
Credit Suisse Asset Financial 1999 Associated with Credit Suisse or its predecessors since 1984;
Management, LLC Officer and Officer of other Credit Suisse Funds
466 Lexington Avenue Treasurer
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Since Director and Global Head of Compliance of Credit Suisse;
Credit Suisse Asset Compliance 2004 Associated with Credit Suisse since July 2000; Vice President
Management, LLC Officer and Director of Compliance of Forstmann-Leff
466 Lexington Avenue Associates from 1998 to June 2000; Officer of other
New York, New York Credit Suisse Funds
10017-3140
Date of Birth: 09/21/66
Ajay Mehra Chief Since Director and Head of Legal Americas Traditional Asset
Credit Suisse Asset Legal 2004 Management and Hedge Funds; Associated with Credit Suisse
Management, LLC Officer since September 2004; Senior Associate of Shearman & Sterling
466 Lexington Avenue LLP from September 2000 to September 2004; Senior Counsel
New York, New York of the SEC Division of Investment Management from June
10017-3140 1997 to September 2000; Officer of other Credit Suisse Funds
Date of Birth: 08/14/70
J. Kevin Gao Vice Since Director and Legal Counsel of Credit Suisse; Associated with
Credit Suisse Asset President 2004 Credit Suisse since July 2003; Associated with the law firm of
Management, LLC and Willkie Farr & Gallagher LLP from 1998 to 2003; Officer of other
466 Lexington Avenue Secretary Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 10/13/67
Robert Rizza Assistant Since Vice President of Credit Suisse; Associated with Credit Suisse
Credit Suisse Asset Treasurer 2002 since 1998; Officer of other Credit Suisse Funds
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
_________________
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
The Statement of Additional Information includes additional information
about the Trustees and is available, without charge, upon request, by calling
800-222-8977.
34
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
TAX INFORMATION LETTER
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS
Corporate Shareholders should note for the year ended December 31, 2005,
the percentage of the Portfolio's investment income (i.e., net investment income
plus short-term capital gains) that qualified for the intercorporate dividends
received deduction is 0%.
35
CREDIT SUISSE TRUST -- INTERNATIONAL FOCUS PORTFOLIO
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION
- --------------------------------------------------------------------------------
Information regarding how the Portfolio voted proxies related to its
portfolio securities during the 12 month period ended June 30 of each year, as
well as the policies and procedures that the Portfolio uses to determine how to
vote proxies relating to its portfolio securities are available:
o By calling 1-800-222-8977
o On the Portfolio's website, www.credit-suisse.com/us
o On the website of the Securities and Exchange Commission,
http://www.sec.gov.
The Portfolio files a complete schedule of its portfolio holdings for the
first and third quarters of its fiscal year with the SEC on Form N-Q. The
Portfolio's Forms N-Q are available on the SEC's website at http://www.sec.gov
and may be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. Information on the operation of the SEC's Public Reference Room may be
obtained by calling 1-800-SEC-0330.
36
CREDIT SUISSE [LOGO]
P.O. BOX 55030, BOSTON, MA 02205-5030
800-222-8977 o www.credit-suisse.com/us
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. TRINT-AR-1205
CREDIT SUISSE [LOGO]
CREDIT SUISSE FUNDS
Annual Report
December 31, 2005
CREDIT SUISSE TRUST
o SMALL CAP GROWTH PORTFOLIO
Credit Suisse Trust (the "Trust") shares are not available directly to
individual investors, but may be offered only through certain insurance products
and pension and retirement plans.
The Trust's investment objectives, risks, charges and expenses (which should be
considered carefully before investing), and more complete information about the
Trust, are provided in the PROSPECTUS, which should be read carefully before
investing. You may obtain additional copies by calling 800-222-8977 or by
writing to Credit Suisse Trust, P.O. Box 55030, Boston, MA 02205-5030.
Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466
Lexington Ave., New York, NY 10017-3140. The Trust is advised by Credit Suisse
Asset Management, LLC.
THE VIEWS OF THE PORTFOLIO'S MANAGEMENT ARE AS OF THE DATE OF THE LETTER AND THE
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF DECEMBER 31, 2005; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
PORTFOLIO SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC ("CREDIT SUISSE") OR ANY AFFILIATE, ARE NOT FDIC-INSURED AND ARE
NOT GUARANTEED BY CREDIT SUISSE OR ANY AFFILIATE. PORTFOLIO INVESTMENTS ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
January 19, 2006
Dear Shareholder:
For the 12 months ended December 31, 2005, Credit Suisse Trust--Small Cap
Growth Portfolio (the "Portfolio") had a loss of 2.68%, vs. an increase of 4.15%
for the Russell 2000(R) Growth Index. 1
THE MARKET: POSITIVE DESPITE RISING ENERGY COSTS, INTEREST RATES
The period was an overall positive one for equities. Stocks initially
struggled, but rallied into the summer, aided by benign inflation data and good
earnings reports from a number of visible companies. To be sure, headwinds were
ever-present, notably in the form of hurricane activity, surging energy prices
and a Federal Reserve that continued to raise short-term interest rates in small
but steady increments. In the face of all this, the economy nonetheless appeared
resilient, at least as of late 2005: Third-quarter GDP growth was reported at an
annualized rate of 4.1%, the tenth consecutive quarter of 3% or greater growth.
The earnings backdrop remained generally supportive late in the year.
In the market, high energy prices helped drive the outperformance of
energy related stocks, which, despite some late-period weakness, outpaced all
other economic sectors in the period. This was reflected in the outperformance
of value stocks over growth stocks, as energy companies comprise a relatively
large share of the value universe. Mid-capitalization stocks generally
outperformed both large- and small-cap stocks for the period.
STRATEGIC REVIEW: TECHNOLOGY HOLDINGS OUTPERFORM, BUT HEALTH CARE DISAPPOINTS
The Portfolio underperformed its benchmark in the period, which we
attribute in large measure to stock selection in the health care sector. This
included sizable declines by Amerigroup and Molina Healthcare, two managed care
companies with significant Medicaid patient exposure. We opted to eliminate
these two positions late in the period based on their unexpectedly high costs
and dimmer intermediate-term prospects. The Portfolio's consumer discretionary
holdings also underperformed. Greenfield Online (0.5% of the Portfolio's net
assets as of December 31, 2005), an internet marketing services company, fell
amid disappointing demand for its information management services.
1
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
On the positive side, factors that aided the Portfolio included good stock
selection in the technology sector, where the Portfolio's holdings collectively
advanced despite a generally lackluster year for small-cap technology stocks.
Trident Microsystems and Genesis Microchip were among the standouts, and we
eliminated the positions based on valuation. Both companies provide graphics
manipulation tools used in markets such as video games and high-definition
television. The Portfolio's financial services stocks also had good performance
in absolute as well as relative terms.
Going forward, we will continue to seek to identify companies with
attractive capital-growth potential. Our stock-selection process emphasizes
companies we believe to have accelerating earnings, improving fundamentals,
competent management and compelling business models, and includes companies
still in their developmental stage as well as older companies that appear to be
entering a new stage of growth. Our general strategy is focused on a company's
longer-term prospects, though we also attempt to identify stocks we feel are
poised to benefit from specific market catalysts over the nearer term.
The Credit Suisse Small Cap Growth Team
Marian U. Pardo
Leo M. Bernstein
Calvin E. Chung
BECAUSE OF THE NATURE OF THE PORTFOLIO'S INVESTMENTS IN SPECIAL-SITUATION,
START-UP AND OTHER SMALL COMPANIES, AN INVESTMENT IN THE PORTFOLIO MAY BE MORE
VOLATILE AND LESS LIQUID THAN INVESTMENTS IN LARGER COMPANIES.
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS
FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND
FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT
REGULATION AND THEIR POTENTIAL IMPACT ON THE PORTFOLIO'S INVESTMENTS. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS,
DEVELOPMENTS AND REGULATIONS IN THE FUTURE, AND THEIR IMPACT ON THE PORTFOLIO
COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE
PORTFOLIO HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
2
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
THE CREDIT SUISSE TRUST--SMALL CAP GROWTH PORTFOLIO AND
THE RUSSELL 2000(R) GROWTH INDEX 1 FOR TEN YEARS.
[LINE CHART]
Credit Suisse Trust-
Small Cap Growth Russell 2000(R)
Date Portfolio Growth Index 1
------- --------------------- ---------------
12/95 10000 10000
9880 9917
10264 10369
10496 10574
11527 11386
12110 11970
11415 11192
10144 9826
10951 10553
11487 11097
11127 10618
11135 10913
12/96 11383 11126
11655 11404
10807 10716
9944 9959
9792 9844
11175 11324
11687 11708
12310 12308
12646 12677
13757 13689
13126 12866
12902 12560
12/97 13174 12567
12678 12399
13773 13494
14476 14060
14572 14146
13461 13118
13805 13252
12486 12146
9960 9342
10672 10289
11087 10826
11895 11666
12/98 12798 12721
13110 13294
11863 12077
12390 12508
12390 13612
12462 13634
13661 14352
13629 13908
13573 13388
14149 13646
15188 13996
17618 15476
12/99 21638 18203
21209 18034
28790 22229
25000 19893
21448 17884
19301 16318
22159 18426
19830 16847
22563 18619
20887 17694
19284 16258
16163 13306
12/00 17719 14120
17762 15263
15435 13171
13396 11973
15350 13439
15106 13750
15318 14126
14490 12921
13544 12113
11239 10158
12503 11135
13799 12065
12/01 14883 12816
14373 12360
13194 11561
14277 12565
13831 12294
12864 11575
11653 10593
9784 8965
9646 8960
9210 8314
9816 8734
10570 9600
12/02 9869 8937
9720 8694
9539 8462
9677 8590
10411 9403
11622 10462
11728 10664
12631 11470
13342 12086
12748 11781
14299 12798
14575 13216
12/03 14660 13275
15510 13972
15541 13951
15924 14017
15000 13313
15371 13578
15754 14030
14054 12770
13767 12496
14352 13187
14660 13507
15605 14648
12/04 16253 15174
15605 14490
15849 14688
15488 14138
14447 13238
15244 14172
16147 14629
16795 15652
16497 15431
16158 15553
15499 14978
15934 15826
12/05 15818 15802
3
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005
SINCE
1 YEAR 5 YEARS 10 YEARS INCEPTION 2
-------- ------- -------- -----------
(2.68%) (2.24%) 4.69% 6.71%
RETURNS REPRESENT PAST PERFORMANCE AND INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE
FUTURE RESULTS. THE CURRENT PERFORMANCE OF THE PORTFOLIO MAY BE LOWER OR HIGHER
THAN THE FIGURES SHOWN. RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION
VALUE MAY BE MORE OR LESS THAN ORIGINAL COST. THE PERFORMANCE RESULTS DO NOT
REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON PORTFOLIO
DISTRIBUTIONS OR THE REDEMPTION OF PORTFOLIO SHARES. PERFORMANCE INCLUDES THE
EFFECT OF DEDUCTING EXPENSES, BUT DOES NOT INCLUDE CHARGES AND EXPENSES
ATTRIBUTABLE TO ANY PARTICULAR VARIABLE CONTRACT OR PLAN. ACCORDINGLY, THE
PROSPECTUS OF THE SPONSORING PARTICIPATING INSURANCE COMPANY SEPARATE ACCOUNT OR
PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS SHOULD
BE CAREFULLY REVIEWED FOR INFORMATION ON RELEVANT CHARGES AND EXPENSES.
EXCLUDING THESE CHARGES AND EXPENSES FROM QUOTATIONS OF PERFORMANCE HAS THE
EFFECT OF INCREASING THE PERFORMANCE QUOTED, AND THE EFFECT OF THESE CHARGES
SHOULD BE CONSIDERED WHEN COMPARING PERFORMANCE TO THAT OF OTHER MUTUAL FUNDS.
PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH-END IS AVAILABLE AT
WWW.CREDIT-SUISSE.COM/US.
________________
1 The Russell 2000(R) Growth Index measures the performance of those
companies in the Russell 2000(R) Index with higher price-to-book ratios
and higher forecasted growth values. It is an unmanaged index of common
stocks that includes reinvestment of dividends and is compiled by Frank
Russell Company. Investors cannot invest directly in an index.
2 Inception Date: 6/30/95
4
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
INFORMATION ABOUT YOUR PORTFOLIO'S EXPENSES
As an investor of the Portfolio, you incur two types of costs: ongoing
expenses and transaction costs. Ongoing expenses include management fees,
distribution and service (12b-1) fees and other Portfolio expenses. Examples of
transaction costs include sales charges (loads), redemption fees and account
maintenance fees, which are not shown in this section and which would result in
higher total expenses. The following table is intended to help you understand
your ongoing expenses of investing in the Portfolio and to help you compare
these expenses with the ongoing expenses of investing in other mutual funds. The
table is based on an investment of $1,000 made at the beginning of the six month
period ended December 31, 2005.
The table illustrates your Portfolio's expenses in two ways:
o ACTUAL PORTFOLIO RETURN. This helps you estimate the actual dollar
amount of ongoing expenses paid on a $1,000 investment in the
Portfolio using the Portfolio's actual return during the period. To
estimate the expenses you paid over the period, simply divide your
account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in
the "Expenses Paid per $1,000" line under the share class you hold.
o HYPOTHETICAL 5% PORTFOLIO RETURN. This helps you to compare your
Portfolio's ongoing expenses with those of other mutual funds using
the Portfolio's actual expense ratio and a hypothetical rate of
return of 5% per year before expenses. Examples using a 5%
hypothetical fund return may be found in the shareholder reports of
other mutual funds. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or
expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight
your ongoing expenses only and do not reflect any transaction costs, such as
sales charges (loads) or redemption fees. If these transaction costs had been
included, your costs would have been higher. The "Expenses Paid per $1,000" line
of the tables is useful in comparing ongoing expenses only and will not help you
determine the relative total expenses of owning different funds.
5
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
EXPENSES AND VALUE OF A $1,000 INVESTMENT
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 2005
- --------------------------------------------------------------------------------
ACTUAL PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $ 979.60
Expenses Paid per $1,000* $ 5.74
HYPOTHETICAL 5% PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,019.41
Expenses Paid per $1,000* $ 5.85
ANNUALIZED EXPENSE RATIOS* 1.15%
______________
* EXPENSES ARE EQUAL TO THE PORTFOLIO'S ANNUALIZED EXPENSE RATIO MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF
DAYS IN THE MOST RECENT FISCAL HALF YEAR PERIOD, THEN DIVIDED BY 365.
THE "EXPENSES PAID PER $1,000" AND THE "ANNUALIZED EXPENSE RATIOS" IN THE
TABLES ARE BASED ON ACTUAL EXPENSES PAID BY THE PORTFOLIO DURING THE
PERIOD, NET OF FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IF THOSE FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS HAD NOT BEEN IN EFFECT, THE
PORTFOLIO'S ACTUAL EXPENSES WOULD HAVE BEEN HIGHER. EXPENSES DO NOT
REFLECT ADDITIONAL CHARGES AND EXPENSES THAT ARE, OR MAY BE, IMPOSED UNDER
THE VARIABLE CONTRACTS OR PLANS. SUCH CHARGES AND EXPENSES ARE DESCRIBED
IN THE PROSPECTUS OF THE INSURANCE COMPANY SEPARATE ACCOUNT OR IN THE PLAN
DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS. THE
PORTFOLIO'S EXPENSES SHOULD BE CONSIDERED WITH THESE CHARGES AND EXPENSES
IN EVALUATING THE OVERALL COST OF INVESTING IN THE SEPARATE ACCOUNT.
For more information, please refer to the Portfolio's prospectus.
6
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
SECTOR BREAKDOWN*
[BAR GRAPH]
Technology 27.0%
Consumer Discretionary 25.1%
Health Care 18.0%
Materials & Processing 7.6%
Financial Services 7.4%
Other Energy 6.4%
Producer Durables 3.6%
Short-Term Investment 3.5%
Consumer Staples 0.9%
Integrated Oils 0.5%
_________________
* Expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
7
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS (96.7%)
AGRICULTURE (1.2%)
Delta and Pine Land Co. ss. 277,600 $ 6,387,576
-------------
BANKS (1.9%)
Boston Private Financial Holdings, Inc. ss. 228,500 6,950,970
UCBH Holdings, Inc. ss. 186,800 3,339,984
-------------
10,290,954
-------------
BIOTECHNOLOGY (1.7%)
LifeCell Corp.* ss. 282,700 5,391,089
Martek Biosciences Corp.* ss. 169,800 4,178,778
-------------
9,569,867
-------------
CHEMICALS (2.0%)
Airgas, Inc. ss. 344,200 11,324,180
-------------
COMMERCIAL SERVICES & SUPPLIES (2.8%)
Greenfield Online, Inc.* 440,150 2,579,279
Kforce, Inc.* ss. 535,300 5,973,948
Universal Technical Institute, Inc.* ss. 230,300 7,125,482
-------------
15,678,709
-------------
COMMUNICATIONS EQUIPMENT (3.4%)
InPhonic, Inc.* ss. 91,357 793,892
Kanbay International, Inc.* ss. 463,900 7,371,371
Sonus Networks, Inc.* ss. 1,354,700 5,039,484
Symmetricom, Inc.* ss. 691,800 5,859,546
-------------
19,064,293
-------------
COMPUTERS & PERIPHERALS (2.5%)
Avid Technology, Inc.* ss. 154,400 8,454,944
Mercury Computer Systems, Inc.* 271,900 5,609,297
-------------
14,064,241
-------------
CONTAINERS & PACKAGING (1.4%)
Crown Holdings, Inc.* ss. 405,600 7,921,368
-------------
DISTRIBUTION & WHOLESALE (1.5%)
Beacon Roofing Supply, Inc.* ss. 297,700 8,552,921
-------------
DIVERSIFIED FINANCIALS (4.7%)
Affiliated Managers Group, Inc.* ss. 133,550 10,717,388
National Financial Partners Corp. ss. 170,500 8,959,775
Texas Capital Bancshares, Inc.* ss. 298,900 6,698,349
-------------
26,375,512
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (2.1%)
FLIR Systems, Inc. ss. 277,400 6,194,342
Veeco Instruments, Inc.* ss. 313,800 5,438,154
-------------
11,632,496
-------------
See Accompanying Notes to Financial Statements.
8
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS
ENERGY EQUIPMENT & SERVICES (1.1%)
Newpark Resources, Inc.* ss. 791,000 $ 6,035,330
-------------
FOOD PRODUCTS (0.9%)
Peet's Coffee & Tea, Inc.* ss. 161,607 4,904,772
-------------
HEALTHCARE EQUIPMENT & SUPPLIES (2.5%)
Haemonetics Corp.* ss. 137,000 6,693,820
Immucor, Inc.* ss. 303,300 7,085,088
-------------
13,778,908
-------------
HEALTHCARE PROVIDERS & SERVICES (10.6%)
Advisory Board Co.* ss. 182,100 8,680,707
Centene Corp.* ss. 307,500 8,084,175
Gentiva Health Services, Inc.* ss. 342,700 5,051,398
Lifeline Systems, Inc.* ss. 174,420 6,376,795
LifePoint Hospitals, Inc.* ss. 74,700 2,801,250
Matria Healthcare, Inc.* ss. 115,621 4,481,470
PSS World Medical, Inc.* ss. 378,100 5,611,004
Psychiatric Solutions, Inc.* ss. 106,400 6,249,936
Sunrise Senior Living, Inc.* ss. 192,400 6,485,804
United Surgical Partners International, Inc.* ss. 162,350 5,219,553
-------------
59,042,092
-------------
HOTELS, RESTAURANTS & LEISURE (5.6%)
Aztar Corp.* ss. 188,000 5,713,320
Carmike Cinemas, Inc. ss. 221,500 5,617,240
Great Wolf Resorts, Inc.* ss. 491,300 5,065,303
Orient-Express Hotels, Ltd. Class A ss. 243,500 7,675,120
Shuffle Master, Inc.* ss. 281,600 7,079,424
-------------
31,150,407
-------------
HOUSEHOLD DURABLES (1.2%)
Dolby Laboratories, Inc. Class A* 402,300 6,859,215
-------------
INTERNET & CATALOG RETAIL (0.3%)
Alloy, Inc. ss. 612,800 1,770,992
-------------
INTERNET SOFTWARE & SERVICES (9.2%)
Chordiant Software, Inc.* ss. 1,655,800 4,338,196
CNET Networks, Inc.* ss. 500,500 7,352,345
Digitas, Inc.* ss. 508,700 6,368,924
Jupitermedia Corp.* ss. 468,100 6,918,518
MatrixOne, Inc.* ss. 979,188 4,886,148
Openwave Systems, Inc.* 616,866 10,776,649
Opsware, Inc.* ss. 1,554,900 10,557,771
-------------
51,198,551
-------------
See Accompanying Notes to Financial Statements.
9
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS
IT CONSULTING & SERVICES (3.1%)
CACI International, Inc. Class A* ss. 103,000 $ 5,910,140
Redback Networks, Inc.* ss. 452,400 6,360,744
TNS, Inc.* ss. 244,900 4,697,182
-------------
16,968,066
-------------
LEISURE EQUIPMENT & PRODUCTS (1.7%)
RC2 Corp.* ss. 268,300 9,530,016
-------------
MACHINERY (1.5%)
Kennametal, Inc. ss. 167,300 8,538,992
-------------
MEDIA (1.6%)
Lions Gate Entertainment Corp.* ss. 1,187,700 9,121,536
-------------
OIL & GAS (5.8%)
Comstock Resources, Inc.* ss. 234,700 7,160,697
Denbury Resources, Inc.* ss. 355,800 8,105,124
KCS Energy, Inc.* ss. 118,000 2,857,960
Remington Oil & Gas Corp.* ss. 155,800 5,686,700
W&T Offshore, Inc. ss. 295,800 8,696,520
-------------
32,507,001
-------------
PHARMACEUTICALS (5.8%)
Adolor Corp.* ss. 174,216 2,543,554
Angiotech Pharmaceuticals, Inc.* ss. 472,100 6,208,115
DOV Pharmaceutical, Inc.* ss. 411,200 6,036,416
Durect Corp.* ss. 575,600 2,918,292
Medicines Co.* ss. 361,200 6,302,940
Taro Pharmaceutical Industries, Ltd.* 577,600 8,069,072
-------------
32,078,389
-------------
REAL ESTATE (1.7%)
Brookdale Senior Living, Inc. ss. 29,000 864,490
HouseValues, Inc.* 654,600 8,529,438
-------------
9,393,928
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (5.8%)
Adaptec, Inc.* ss. 516,600 3,006,612
FormFactor, Inc.* ss. 273,100 6,671,833
Integrated Device Technology, Inc.* ss. 863,700 11,383,566
Tessera Technologies, Inc.* ss. 439,700 11,366,245
-------------
32,428,256
-------------
See Accompanying Notes to Financial Statements.
10
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS
SOFTWARE (7.2%)
Cognos, Inc.* ss. 226,500 $ 7,861,815
Gravity Company, Ltd. ADR* ss. 258,000 1,857,600
Intellisync Corp.* ss. 671,600 3,465,456
Open Solutions, Inc.* ss. 317,200 7,270,224
Take-Two Interactive Software, Inc.* ss. 325,300 5,757,810
THQ, Inc.* ss. 244,050 5,820,592
VeriFone Holdings, Inc.* ss. 324,900 8,219,970
-------------
40,253,467
-------------
SPECIALTY RETAIL (5.4%)
Aaron Rents, Inc. ss. 268,000 5,649,440
Children's Place Retail Stores, Inc.* ss. 120,300 5,945,226
Cost Plus, Inc.* ss. 272,900 4,680,235
Hot Topic, Inc.* ss. 560,100 7,981,425
PETCO Animal Supplies, Inc.* ss. 271,300 5,955,035
-------------
30,211,361
-------------
TEXTILES & APPAREL (0.5%)
dELiA*s, Inc. ss. 306,400 2,543,120
-------------
TOTAL COMMON STOCKS (Cost $510,600,271) 539,176,516
-------------
SHORT-TERM INVESTMENTS (32.5%)
State Street Navigator Prime Fund ss.ss. 161,412,115 161,412,115
PAR
(000)
------------
State Street Bank and Trust Co. Euro Time
Deposit, 3.350%, 1/03/06 $ 19,461 19,461,000
-------------
TOTAL SHORT-TERM INVESTMENTS (Cost $180,873,115) 180,873,115
-------------
TOTAL INVESTMENTS AT VALUE (129.2%)
(Cost $691,473,386) 720,049,631
LIABILITIES IN EXCESS OF OTHER ASSETS (-29.2%) (162,672,939)
-------------
NET ASSETS (100.0%) $ 557,376,692
=============
INVESTMENT ABBREVIATION
ADR=American Depositary Receipt
- --------------------------------------------------------------------------------
* Non-income producing security.
ss. Security or portion thereof is out on loan.
ss.ss. Represents security purchased with cash collateral received for
securities on loan.
See Accompanying Notes to Financial Statements.
11
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2005
- --------------------------------------------------------------------------------
ASSETS
Investments at value, including collateral for securities
on loan of $161,412,115 (Cost $691,473,386) (Note 2) $ 720,049,631 1
Receivable for investments sold 1,355,880
Receivable for portfolio shares sold 601,625
Dividend and interest receivable 96,393
Prepaid expenses and other assets 41,232
--------------
Total Assets 722,144,761
--------------
LIABILITIES
Advisory fee payable (Note 3) 438,599
Administrative services fee payable (Note 3) 112,179
Payable upon return of securities loaned (Note 2) 161,412,115
Due to custodian 1,355,632
Payable for investments purchased 854,124
Payable for portfolio shares redeemed 527,653
Other accrued expenses payable 67,767
--------------
Total Liabilities 164,768,069
--------------
NET ASSETS
Capital stock, $0.001 par value (Note 6) 37,431
Paid-in capital (Note 6) 657,856,221
Accumulated net realized loss on investments (129,093,205)
Net unrealized appreciation from investments 28,576,245
--------------
Net Assets $ 557,376,692
==============
Shares outstanding 37,430,796
--------------
Net asset value, offering price and redemption price per
share $ 14.89
==============
- --------------------------------------------------------------------------------
1 Including $156,936,646 of securities on loan.
See Accompanying Notes to Financial Statements.
12
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME (Note 2)
Dividends $ 821,908
Interest 738,921
Securities lending 347,679
--------------
Total investment income 1,908,508
--------------
EXPENSES
Investment advisory fees (Note 3) 5,795,796
Administrative services fees (Note 3) 1,082,646
Printing fees (Note 3) 228,543
Audit and tax fees 68,034
Custodian fees 58,678
Insurance expense 21,434
Legal fees 18,453
Commitment fees (Note 4) 16,307
Transfer agent fees 11,183
Trustees' fees 2,445
Miscellaneous expense 11,147
--------------
Total expenses 7,314,666
--------------
Net investment loss (5,406,158)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain from investments 68,108,464
Net change in unrealized appreciation (depreciation)
from investments (83,839,851)
--------------
Net realized and unrealized loss from investments (15,731,387)
--------------
Net decrease in net assets resulting from operations $ (21,137,545)
==============
See Accompanying Notes to Financial Statements.
13
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER DECEMBER
31, 2005 31, 2004
------------- -------------
FROM OPERATIONS
Net investment loss $ (5,406,158) $ (7,172,470)
Net realized gain on investments 68,108,464 82,152,502
Net change in unrealized appreciation
(depreciation) from investments (83,839,851) (967,702)
------------- -------------
Net increase (decrease) in net assets
resulting from operations (21,137,545) 74,012,330
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS (Note 6)
Proceeds from sale of shares 14,297,997 74,556,645
Net asset value of shares redeemed (202,887,845) (156,812,085)
------------- -------------
Net decrease in net assets from capital
share transactions (188,589,848) (82,255,440)
------------- -------------
Net decrease in net assets (209,727,393) (8,243,110)
NET ASSETS
Beginning of year 767,104,085 775,347,195
------------- -------------
End of year $ 557,376,692 $ 767,104,085
============= =============
See Accompanying Notes to Financial Statements.
14
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
2005 2004 2003 2002 2001
--------- --------- --------- --------- ---------
PER SHARE DATA
Net asset value, beginning of year $ 15.30 $ 13.80 $ 9.29 $ 14.01 $ 16.68
--------- --------- --------- --------- ---------
INVESTMENT OPERATIONS
Net investment loss (0.14) (0.14) (0.10) (0.11) (0.10)
Net gain (loss) on investments
(both realized and unrealized) (0.27) 1.64 4.61 (4.61) (2.57)
--------- --------- --------- --------- ---------
Total from investment operations (0.41) 1.50 4.51 (4.72) (2.67)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR $ 14.89 $ 15.30 $ 13.80 $ 9.29 $ 14.01
========= ========= ========= ========= =========
Total return 1 (2.68)% 10.87% 48.55% (33.69)% (16.01)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (000s omitted) $ 557,377 $ 767,104 $ 775,347 $ 501,613 $ 864,819
Ratio of expenses to average net assets 1.14% 1.10% 1.12% 1.14% 1.12%
Ratio of net investment loss
to average net assets (0.84)% (0.92)% (0.97)% (0.94)% (0.73)%
Portfolio turnover rate 82% 99% 76% 69% 91%
- --------------------------------------------------------------------------------
1 Total returns are historical and assume changes in share price and
reinvestment of all dividends and distributions. Total returns do not
reflect charges and expenses attributable to any particular variable
contract or plan.
See Accompanying Notes to Financial Statements.
15
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Credit Suisse Trust (the "Trust") is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, and
currently offers eight managed investment portfolios of which one, the Small Cap
Growth Portfolio (the "Portfolio"), is included in this report. The Portfolio is
a diversified investment fund that seeks capital growth. Shares of the Portfolio
are not available directly to individual investors but may be offered only
through (a) variable annuity contracts and variable life insurance contracts
offered by separate accounts of certain insurance companies and (b)
tax-qualified pension and retirement plans. The Portfolio may not be available
in connection with a particular contract or plan. The Trust was organized under
the laws of the Commonwealth of Massachusetts as a business trust on March 15,
1995.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A) SECURITY VALUATION -- The net asset value of the Portfolio is
determined daily as of the close of regular trading on the New York Stock
Exchange, Inc. (the "Exchange") on each day the Exchange is open for business.
The Portfolio's equity investments are valued at market value, which is
generally determined using the closing price on the exchange or market on which
the security is primarily traded at the time of valuation (the "Valuation
Time"). If no sales are reported, equity investments are generally valued at the
most recent bid quotation as of the Valuation Time or at the lowest asked
quotation in the case of a short sale of securities. Debt securities with a
remaining maturity greater than 60 days are valued in accordance with the price
supplied by a pricing service, which may use a matrix, formula or other
objective method that takes into consideration market indices, yield curves and
other specific adjustments. Debt obligations that will mature in 60 days or less
are valued on the basis of amortized cost, which approximates market value,
unless it is determined that using this method would not represent fair value.
Investments in mutual funds are valued at the mutual fund's closing net asset
value per share on the day of valuation. Securities and other assets for which
market quotations are not readily available, or whose values have been
materially affected by events occurring before the Portfolio's Valuation Time
but after the close of the securities' primary markets, are valued at fair value
as determined in good faith by, or under the direction of, the Board of Trustees
under procedures established by the Board of Trustees. The Portfolio may utilize
a service provided by an independent
16
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
third party which has been approved by the Board of Trustees to fair value
certain securities. When fair-value pricing is employed, the prices of
securities used by a fund to calculate its net asset value may differ from
quoted or published prices for the same securities.
B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions
are accounted for on a trade date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date. The cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes.
C) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net
investment income and distributions of net realized capital gains, if any, are
declared and paid at least annually. However, to the extent that a net realized
capital gain can be reduced by a capital loss carryforward, such gain will not
be distributed. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States of America ("GAAP").
D) FEDERAL INCOME TAXES -- No provision is made for federal taxes as it is
the Trust's intention to have the Portfolio continue to qualify for and elect
the tax treatment applicable to regulated investment companies under the
Internal Revenue Code of 1986, as amended, and to make the requisite
distributions to its shareholders, which will be sufficient to relieve it from
federal income and excise taxes.
E) USE OF ESTIMATES -- The preparation of financial statements in
conformity with GAAP 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 revenues and expenses during the reporting period.
Actual results could differ from these estimates.
F) SHORT-TERM INVESTMENTS -- The Portfolio, together with other
funds/portfolios advised by Credit Suisse Asset Management, LLC ("Credit
Suisse"), an indirect, wholly-owned subsidiary of Credit Suisse Group, pools
available cash into either a short-term variable rate time deposit issued by
State Street Bank and Trust Company ("SSB"), the Portfolio's custodian, or a
money
17
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
market fund advised by Credit Suisse. The short-term time deposit issued by SSB
is a variable rate account classified as a short-term investment.
G) SECURITIES LENDING -- Loans of securities are required at all times to
be secured by collateral at least equal to 102% of the market value of domestic
securities on loan (including any accrued interest thereon) and 105% of the
market value of foreign securities on loan (including any accrued interest
thereon). Cash collateral received by the Portfolio in connection with
securities lending activity may be pooled together with cash collateral for
other funds/portfolios advised by Credit Suisse and may be invested in a variety
of investments, including certain Credit Suisse-advised funds, funds advised by
SSB, the Portfolio's securities lending agent, or money market instruments.
However, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings.
SSB has been engaged by the Portfolio to act as the Portfolio's securities
lending agent. The Portfolio's securities lending arrangement provides that the
Portfolio and SSB will share the net income earned from the securities lending
activities. During the year ended December 31, 2005, total earnings from the
Portfolio's investment in cash collateral received in connection with securities
lending arrangements was $5,791,276, of which $5,295,748 was rebated to
borrowers (brokers). The Portfolio retained $347,679 in income from the cash
collateral investment, and SSB, as lending agent, was paid $147,849. The
Portfolio may also be entitled to certain minimum amounts of income from its
securities lending activities. Securities lending income is accrued as earned.
H) OTHER -- The Portfolio may invest up to 15% of its net assets in
non-publicly traded securities. Non-publicly traded securities may be less
liquid than publicly traded securities. Although these securities may be resold
in privately negotiated transactions, the prices realized from such sales could
differ from the price originally paid by the Portfolio or the current carrying
values, and the difference could be material.
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Credit Suisse serves as investment adviser for the Portfolio. For its
investment advisory services, Credit Suisse is entitled to receive a fee from
the Portfolio at an annual rate of 0.90% of the average daily net assets of the
18
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Portfolio. For the year ended December 31, 2005, investment advisory fees
earned were $5,795,796.
Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate
of Credit Suisse, and SSB serve as co-administrators to the Portfolio.
For its co-administrative services, CSAMSI currently receives a fee
calculated at an annual rate of 0.10% of the average daily net assets of the
Portfolio. For the year ended December 31, 2005, co-administrative services fees
earned by CSAMSI were $643,977.
For its co-administrative services, SSB receives a fee, exclusive of
out-of-pocket expenses, calculated in total for all the Credit Suisse
funds/portfolios co-administered by SSB and allocated based upon relative
average net assets of each fund/portfolio, subject to an annual minimum fee. For
the year ended December 31, 2005, co-administrative services fees earned by SSB
(including out-of-pocket expenses) were $438,669.
In addition to serving as the Portfolio's co-administrator, CSAMSI
currently serves as distributor of the Portfolio's shares without compensation.
Merrill Corporation ("Merrill"), an affiliate of Credit Suisse, has been
engaged by the Portfolio to provide certain financial printing and fulfillment
services. For the year ended December 31, 2005, Merrill was paid $7,504 for its
services to the Portfolio.
NOTE 4. LINE OF CREDIT
The Portfolio, together with other funds/portfolios advised by Credit
Suisse (collectively, the "Participating Funds"), participates in a $75 million
committed, unsecured line of credit facility ("Credit Facility") for temporary
or emergency purposes with Deutsche Bank, A.G. as administrative agent and
syndication agent and SSB as operations agent. Under the terms of the Credit
Facility, the Participating Funds pay an aggregate commitment fee at a rate of
0.10% per annum on the average unused amount of the Credit Facility, which is
allocated among the Participating Funds in such manner as is determined by the
governing Boards of the Participating Funds. In addition, the Participating
Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At
December 31, 2005 and during the year ended December 31, 2005, the Portfolio had
no borrowings under the Credit Facility.
19
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 5. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 2005, purchases and sales of investment
securities (excluding short-term investments) were $509,116,006 and
$712,462,333, respectively.
NOTE 6. CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, $.001 par value per share.
Transactions in capital shares of the Portfolio were as follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
---------------------- ---------------------
Shares sold 960,940 5,103,557
Shares redeemed (13,667,854) (11,169,224)
-------------- --------------
Net decrease (12,706,914) (6,065,667)
============== ==============
On December 31, 2005, the number of shareholders that held 5% or more of
the outstanding shares of the Portfolio was as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ----------------------
3 86%
Some of the shareholders are omnibus accounts, which hold shares on behalf
of individual shareholders.
NOTE 7. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
The tax basis of components of distributable earnings differ from the
amounts reflected in the Statement of Assets and Liabilities by temporary
book/tax differences. These differences are primarily due to losses deferred on
wash sales.
At December 31, 2005, the components of distributable earnings on a tax
basis for the Portfolio were as follows:
Accumulated net realized loss $(125,618,971)
Unrealized appreciation $ 25,102,011
-------------
$(100,516,960)
=============
20
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 7. FEDERAL INCOME TAXES
At December 31, 2005, the Portfolio had capital loss carryforwards
available to offset possible future capital gains as follows:
EXPIRES DECEMBER 31,
--------------------------------------
2009 2010 2011
----------- ----------- ----------
$27,132,018 $93,228,766 $5,258,187
During the tax year ended December 31, 2005, the Portfolio utilized
$69,726,382 of the capital loss carryforward.
At December 31, 2005, the identified cost for federal income tax purposes,
as well as the gross unrealized appreciation from investments for those
securities having an excess of value over cost, gross unrealized depreciation
from investments for those securities having an excess of cost over value and
the net unrealized appreciation from investments were as follows: $694,947,620
$80,887,208 ($55,785,197) and $25,102,011, respectively.
At December 31, 2005, the Portfolio reclassified $6,603 to accumulated net
realized loss from investments and $5,406,158 to net investment loss from paid
in capital to adjust for current period permanent book/tax differences which
arose principally from differing book/tax treatments of net operating losses and
security litigation. Net assets were not affected by these reclassifications.
NOTE 8. CONTINGENCIES
In the normal course of business, the Portfolio may provide general
indemnifications pursuant to certain contracts and organizational documents. The
Portfolio's maximum exposure under these arrangements is dependent on future
claims that may be made against the Portfolio and, therefore, cannot be
estimated; however, based on experience, the risk of loss from such claims is
considered remote.
21
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees of Credit Suisse Trust and Shareholders of Credit
Suisse Trust - Small Cap Growth Portfolio:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Small Cap Growth Portfolio (the
"Portfolio"), a portfolio of the Credit Suisse Trust, at December 31, 2005, 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 five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolio's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards 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 December 31, 2005 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 6, 2006
22
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
- --------------------------------------------------------------------------------
In approving the Advisory Agreement, the Board of Trustees, including the
Independent Trustees, considered the following factors with respect to the Small
Cap Growth Portfolio (the "Portfolio"):
INVESTMENT ADVISORY FEE RATES
The Board reviewed and considered the actual and contractual advisory fee
rate of 0.90% paid by the Portfolio ("Contractual Advisory Fee") to Credit
Suisse Asset Management LLC ("Credit Suisse") in light of the extent and quality
of the advisory services provided by Credit Suisse. Additionally, the Board
received and considered information comparing the Portfolio's Contractual
Advisory Fee and the Portfolio's overall expenses with those of funds in both
the relevant expense group ("Peer Group") and universe of funds (the "Universe")
provided by Lipper Inc., an independent provider of investment company data.
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AGREEMENTS
The Board received and considered information regarding the nature, extent
and quality of services provided to the Portfolio by Credit Suisse under the
Advisory Agreement. The Board also noted information received at regular
meetings throughout the year related to the services rendered by Credit Suisse.
The Board reviewed background information about Credit Suisse, including its
Form ADV. The Board considered the background and experience of Credit Suisse's
senior management and the expertise of, and the amount of attention given to the
Portfolio by, senior personnel of Credit Suisse. In addition, the Board reviewed
the qualifications, backgrounds and responsibilities of the portfolio management
team primarily responsible for the day-to-day portfolio management of the
Portfolio and the extent of the resources devoted to research and analysis of
actual and potential investments. The Board also received and considered
information about the nature, extent and quality of services and fee rates
offered to other Credit Suisse clients for comparable services.
PORTFOLIO PERFORMANCE
The Board received and considered the one-, two-, three-, four-, five- and
ten-year performance of the Portfolio, along with comparisons, for all presented
periods, both to the relevant performance group ("Performance Group") and
universe of funds ("Performance Universe") for the Portfolio. The Board was
provided with a description of the methodology used to arrive at the funds
included in the Performance Group and the Performance Universe.
23
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
The Board reviewed information comparing the performance of various Credit
Suisse Funds to performance benchmarks that the Board had previously established
and progress that had been made in certain instances toward achieving those
benchmarks. The Board also reviewed comparisons between the Portfolio and its
identified benchmark over various time periods.
CREDIT SUISSE PROFITABILITY
The Board received and considered a profitability analysis of Credit
Suisse based on the fees payable under the Advisory Agreement for the Portfolio,
including other relationships between the Portfolio on the one hand and Credit
Suisse affiliates on the other. The Board received profitability information for
the other funds in the Credit Suisse family of funds.
ECONOMIES OF SCALE
The Board considered whether economies of scale in the provision of
services to the Portfolio were being passed along to the shareholders.
Accordingly, the Board considered whether alternative fee structures (such as
breakpoint fee structures) would be more appropriate or reasonable taking into
consideration economies of scale or other efficiencies that might accrue from
increases in the Portfolio's asset levels.
OTHER BENEFITS TO CREDIT SUISSE
The Board considered other benefits received by Credit Suisse and its
affiliates as a result of their relationship with the Portfolio. Such benefits
include, among others, research arrangements with brokers who execute
transactions on behalf of the Portfolio, administrative and brokerage
relationships with affiliates of Credit Suisse and benefits potentially derived
from an increase in Credit Suisse's businesses as a result of its relationship
with the Portfolio (such as the ability to market to shareholders other
financial products offered by Credit Suisse and its affiliates).
The Board considered the standards applied in seeking best execution,
whether and to what extent soft dollar credits are sought and how any such
credits are utilized, any benefits that may be achieved by using an affiliated
broker and the existence of quality controls applicable to brokerage allocation
procedures. The Board also reviewed Credit Suisse's method for allocating
portfolio investment opportunities among its advisory clients.
24
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
CONCLUSIONS
In selecting Credit Suisse, and approving the Advisory Agreement and the
investment advisory fee under such agreement, the Board concluded that:
o Although the Contractual Advisory Fee was higher than the median of
the Portfolio's Peer Group, the fee was reasonable given the
Portfolio's asset size.
o Over the review period, the Portfolio's performance did not exceed
the third quintile of its Performance Group. The Portfolio's
performance was above the median for the three- and four-year period
in the Performance Universe and within or close to one standard
deviation from the median for the one-, two-, five- and ten-year
periods. The Board noted that it would continue to monitor steps
undertaken by Credit Suisse to improve performance.
o Aside from performance (as described above), the Board was satisfied
with the nature, extent and quality of the investment advisory
services provided to the Portfolio by Credit Suisse and that, based
on dialogue with management and counsel, the services provided by
Credit Suisse under the Advisory Agreement are typical of, and
consistent with, those provided to mutual funds by other investment
advisers. The Board understood that Credit Suisse had addressed or
was in the process of addressing any performance issues.
o In light of the costs of providing investment management and other
services to the Portfolio and Credit Suisse's ongoing commitment to
the Portfolio, the profits and other ancillary benefits that Credit
Suisse and its affiliates received were considered reasonable.
o Credit Suisse's profitability based on fees payable under the
Advisory Agreement was reasonable in light of the nature, extent and
quality of the services provided to the Portfolio thereunder.
o In light of the relatively small size of the Portfolio, the
Portfolio's current fee structure (without breakpoints) was
considered reasonable.
No single factor reviewed by the Board was identified by the Board as the
principal factor in determining whether to approve the Advisory Agreement. The
Independent Trustees were advised by separate independent legal counsel
throughout the process.
25
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS
AND IN FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------- ----------- ------------ -------------------------- ----------- ---------------------
INDEPENDENT TRUSTEES
Enrique Arzac Trustee, Since 2005 Professor of Finance 47 Director of The
c/o Credit Suisse Asset Nominating and Economics, Adams Express
Management, LLC Committee Graduate School of (a closed-end
Attn: General Counsel Member and Business, Columbia investment
466 Lexington Avenue Audit University since 1971 company); Director
New York, New York Committee of Petroleum
10017-3140 Chairman and Resources
Corporation
Date of Birth: 10/02/41 (a closed-end
investment
company)
Richard H. Francis Trustee, Since 1999 Currently retired 41 None
c/o Credit Suisse Asset Nominating
Management, LLC and Audit
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 04/23/32
Jeffrey E. Garten Trustee, Since 1998 2 The Juan Trippe 40 Director of Aetna,
Box 208200 Nominating Professor in the Practice Inc. (insurance
New Haven, Connecticut and Audit of International Trade, company); Director
06520-8200 Committee Finance and Business of CarMax Group
Member from July 2005 to present; (used car dealers)
Date of Birth: 10/29/46 Partner and Chairman
of Garten Rothkopf
(consulting firm)
from October 2005 to
present; Dean of Yale
School of Management
from November 1995 to
June 2005
Peter F. Krogh Trustee, Since 2001 Dean Emeritus and 40 Director of Carlisle
301 ICC Nominating Distinguished Professor Companies
Georgetown University and Audit of International Affairs Incorporated
Washington, DC 20057 Committee at the Edmund A. (diversified
Member Walsh School of manufacturing
Date of Birth: 02/11/37 Foreign Service, company)
Georgetown
University from June
1995 to present
_______________
1 Each Trustee and Officer serves until his or her respective successor has
been duly elected and qualified.
2 Mr. Garten was initially appointed as a Trustee of the Trust on February
6, 1998. He resigned as Trustee on February 3, 2000, and was subsequently
re-appointed on December 21, 2000.
26
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS
AND IN FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------- ----------- ------------ -------------------------- ----------- ---------------------
INDEPENDENT TRUSTEES
James S. Pasman, Jr. Trustee, Since 1999 Currently retired 42 Director of Education
c/o Credit Suisse Asset Nominating Management Corp.
Management, LLC and Audit
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 12/20/30
Steven N. Rappaport Chairman of Trustee Partner of Lehigh Court, 46 Director of Presstek,
Lehigh Court, LLC the Board Since LLC and RZ Capital Inc. (digital imaging
40 East 52nd Street of Trustees, 1999 (private investment technologies
New York, New York Nominating and firms) from July 2002 company); Director of
10022 Committee Chairman to present; Transition Wood Resources, LLC.
Chairman since 2005 Adviser to SunGard (plywood
Date of Birth: 07/10/48 and Audit Securities Finance, Inc. manufacturing
Committee from February 2002 to company)
Member July 2002; President of
SunGard Securities
Finance, Inc. from 2001
to February 2002;
President of Loanet,
Inc. (on-line accounting
service) from 1997
to 2001
INTERESTED TRUSTEE
Michael E. Kenneally 3,4 Trustee Since 2004 Chairman and Global 40 None
c/o Credit Suisse Asset Chief Executive Officer
Management, LLC of Credit Suisse from
Attn: General Counsel March 2003 to July 2005;
466 Lexington Avenue Chairman and Chief
New York, New York Investment Officer of
10017-3140 Banc of America Capital
Management from 1998
Date of Birth: 03/30/54 to March 2003
_______________
3 Mr. Kenneally is a Trustee who is an "interested person" of the Trust as
defined in the 1940 Act, because he was an officer of Credit Suisse within
the last two fiscal years.
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
27
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM
OF OFFICE 1
AND
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------------------- ----------- ------------ -------------------------------------------------------------
OFFICERS
Steven B. Plump 4 Chief Since 2005 Managing Director; Associated with Credit Suisse or its
Credit Suisse Asset Executive predecessor since 1995; Officer of other Credit Suisse Funds
Management, LLC Officer and
466 Lexington Avenue President
New York, New York
10017-3140
Date of Birth: 02/08/59
Michael A. Pignataro Chief Since 1999 Director and Director of Fund Administration of Credit Suisse;
Credit Suisse Asset Financial Associated with Credit Suisse or its predecessors since 1984;
Management, LLC Officer and Officer of other Credit Suisse Funds
466 Lexington Avenue Treasurer
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Since 2004 Director and Global Head of Compliance of Credit Suisse;
Credit Suisse Asset Compliance Associated with Credit Suisse since July 2000; Vice President
Management, LLC Officer and Director of Compliance of Forstmann-Leff
466 Lexington Avenue Associates from 1998 to June 2000; Officer of other
New York, New York Credit Suisse Funds
10017-3140
Date of Birth: 09/21/66
Ajay Mehra Chief Since 2004 Director and Head of Legal Americas Traditional Asset
Credit Suisse Asset Legal Management and Hedge Funds; Associated with Credit Suisse
Management, LLC Officer since September 2004; Senior Associate of Shearman & Sterling
466 Lexington Avenue LLP from September 2000 to September 2004; Senior Counsel
New York, New York of the SEC Division of Investment Management from June
10017-3140 1997 to September 2000; Officer of other Credit Suisse Funds
Date of Birth: 08/14/70
J. Kevin Gao Vice Since 2004 Director and Legal Counsel of Credit Suisse; Associated with
Credit Suisse Asset President Credit Suisse since July 2003; Associated with the law firm of
Management, LLC and Willkie Farr & Gallagher LLP from 1998 to 2003; Officer of other
466 Lexington Avenue Secretary Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 10/13/67
Robert Rizza Assistant Since 2002 Vice President of Credit Suisse; Associated with Credit Suisse
Credit Suisse Asset Treasurer since 1998; Officer of other Credit Suisse Funds
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
_______________
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
The Statement of Additional Information includes additional information
about the Trustees and is available, without charge, upon request, by calling
800-222-8977.
28
CREDIT SUISSE TRUST -- SMALL CAP GROWTH PORTFOLIO
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION
- --------------------------------------------------------------------------------
Information regarding how the Portfolio voted proxies related to its
portfolio securities during the 12-month period ended June 30 of each year, as
well as the policies and procedures that the Portfolio uses to determine how to
vote proxies relating to its portfolio securities are available:
o By calling 1-800-222-8977
o On the Portfolio's website, www.credit-suisse.com/us
o On the website of the Securities and Exchange Commission,
http://www.sec.gov.
The Portfolio files a complete schedule of its portfolio holdings for the
first and third quarters of its fiscal year with the SEC on Form N-Q. The
Portfolio's Forms N-Q are available on the SEC's website at http://www.sec.gov
and may be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. Information on the operation of the SEC's Public Reference Room may be
obtained by calling 1-800-SEC-0330.
29
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30
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31
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32
CREDIT SUISSE [LOGO]
P.O. BOX 55030, BOSTON, MA 02205-5030
800-222-8977 o www.credit-suisse.com/us
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. TRSCG-AR-1205
CREDIT SUISSE [LOGO]
CREDIT SUISSE FUNDS
Annual Report
December 31, 2005
CREDIT SUISSE TRUST
o MID-CAP GROWTH PORTFOLIO
Credit Suisse Trust (the "Trust") shares are not available directly to
individual investors, but may be offered only through certain insurance products
and pension and retirement plans.
The Trust's investment objectives, risks, charges and expenses (which should be
considered carefully before investing), and more complete information about the
Trust, are provided in the PROSPECTUS, which should be read carefully before
investing. You may obtain additional copies by calling 800-222-8977 or by
writing to Credit Suisse Trust, P.O. Box 55030, Boston, MA 02205-5030.
Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466
Lexington Ave., New York, NY 10017-3140. The Trust is advised by Credit Suisse
Asset Management, LLC.
THE VIEWS OF THE PORTFOLIO'S MANAGEMENT ARE AS OF THE DATE OF THE LETTER AND THE
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF DECEMBER 31, 2005; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
PORTFOLIO SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC ("CREDIT SUISSE") OR ANY AFFILIATE, ARE NOT FDIC-INSURED AND ARE
NOT GUARANTEED BY CREDIT SUISSE OR ANY AFFILIATE. PORTFOLIO INVESTMENTS ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
January 19, 2006
Dear Shareholder:
For the 12 months ended December 31, 2005, Credit Suisse Trust--Mid-Cap
Growth Portfolio 1 (the "Portfolio") had a gain of 6.97%, vs. an increase of
12.10% for the Russell Midcap(R) Growth Index 2 and an increase of 8.18% for
the Russell 2500 TM Growth Index 3.
THE MARKET: POSITIVE DESPITE RISING ENERGY COSTS, INTEREST RATES
The period was an overall positive one for equities. Stocks initially
struggled, but rallied into the summer, aided by benign inflation data and good
earnings reports from a number of visible companies. To be sure, headwinds were
ever-present, notably in the form of hurricane activity, surging energy prices
and a Federal Reserve that continued to raise short-term interest rates in small
but steady increments. In the face of all this, the economy nonetheless appeared
resilient, at least as of late 2005: Third-quarter GDP growth was reported at an
annualized rate of 4.1%, the tenth consecutive quarter of 3% or greater growth.
The earnings backdrop remained generally supportive late in the year.
In the market, high energy prices helped drive the outperformance of
energy related stocks, which, despite some late-period weakness, outpaced all
other economic sectors in the period. This was reflected in the outperformance
of value stocks over growth stocks, as energy companies comprise a relatively
large share of the value universe. Mid-capitalization stocks generally
outperformed both large and small-cap stocks for the period.
STRATEGIC REVIEW: HEALTH CARE HOLDINGS COUNTER GOOD STOCK SELECTION ELSEWHERE
The Portfolio participated in the market's rally but underperformed its
benchmarks, which we attribute primarily to stock selection in the health care
sector. Amerigroup, a managed care company, had a sizable decline in share price
as rising medical costs weighed on the company's earnings. We decided to
eliminate the position in the period. Another underperformer was Taro
Pharmaceuticals (1.3% of the Portfolio's net assets as of December 31, 2005), a
maker of prescription and over-the-counter drugs. The stock struggled amid
pressure on its earnings due to heightened competition. In addition, the
Portfolio's financial services holdings collectively underperformed.
1
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
On the positive side, strong stock selection in the consumer discretionary
and consumer staples sectors aided the Portfolio's relative performance. The
Portfolio's producer durables holdings also outperformed, led by Crown Castle
International (1.3% of the Portfolio's net assets as of December 31, 2005),
which owns and operates wireless communication towers. The stock's appreciation
in 2005 reflected rising demand for the company's services. Also of note,
Macromedia, a Portfolio holding in the technology sector, was purchased by Adobe
(2.6% of the Portfolio's net assets as of December 31, 2005) late in the period,
and the stock was a solid performer in 2005 as a result. We opted to keep the
merged entity in the Portfolio. We believe the company has an attractively
expanded suite of products.
Going forward, we will continue to seek to identify companies with
attractive capital-growth potential. Our stock-selection process emphasizes
companies we believe to have accelerating earnings, improving fundamentals,
competent management and compelling business models, including companies still
in their developmental stage as well as older companies that appear to be
entering a new stage of growth.
The Credit Suisse Small/Mid-Cap Growth Team
Marion U. Pardo
Leo M. Bernstein
Calvin E. Chung
Eric M. Wiegand
INVESTING IN SMALL TO MEDIUM-SIZED COMPANIES MAY BE MORE VOLATILE AND LESS
LIQUID THAN INVESTMENTS IN LARGER COMPANIES.
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS
FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND
FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT
REGULATION AND THEIR POTENTIAL IMPACT ON THE PORTFOLIO'S INVESTMENTS. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS,
DEVELOPMENTS AND REGULATIONS IN THE FUTURE, AND THEIR IMPACT ON THE PORTFOLIO
COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE
PORTFOLIO HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
2
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE
TRUST - MID-CAP GROWTH PORTFOLIO 1, THE RUSSELL 2500 TM GROWTH INDEX, 2 AND
THE RUSSELL MIDCAP(R) GROWTH INDEX 3 FROM INCEPTION (9/13/99).
[LINE GRAPH OMITTED]
Credit Suisse
Trust-Mid-Cap Russell
Growth MidCap(R) Russell 2500 TM
Portfolio 1 Growth Index 2 Growth Index 3
------------- -------------- ---------------
9/99 10000 10000 10000
9530 9508 9568
9950 10243 10034
11200 11304 11219
12/99 13195 13261 13334
13286 13259 13260
17233 16046 16661
15961 16062 15354
13791 14502 13858
12862 13445 12624
14831 14871 14293
14033 13930 13122
15406 16031 14832
15174 15247 13873
14134 14204 13015
11923 11117 10536
12/00 12993 11703 11189
12892 12372 11914
10952 10232 10075
9821 8767 8961
11074 10229 10326
10912 10181 10626
11266 10186 10867
10659 9499 10066
10084 8810 9397
8871 7354 7925
9528 8127 8707
10387 9002 9459
12/01 10862 9345 9978
10366 9041 9551
9780 8528 8961
10407 9179 9682
10195 8694 9361
9740 8435 8889
9043 7503 8072
7790 6774 7070
7790 6750 7068
7275 6214 6534
7689 6696 6909
8154 7220 7552
12/02 7679 6784 7075
7689 6718 6921
7578 6659 6759
7679 6783 6848
8214 7245 7446
9013 7942 8235
9215 8056 8405
9639 8343 8964
10185 8803 9445
9831 8632 9242
10781 9328 10001
11013 9578 10340
12/03 11013 9682 10351
11619 10002 10783
11761 10170 10883
11943 10150 10921
11306 9864 10458
11498 10097 10675
11741 10258 10936
10750 9578 10080
10437 9461 9877
10841 9814 10322
11246 10146 10616
11842 10670 11319
12/04 12458 11181 11862
12215 10881 11443
12488 11157 11671
12226 10994 11348
11771 10558 10736
12529 11163 11451
12660 11371 11753
13216 12034 12516
13357 11960 12372
13165 12115 12492
12690 11759 12083
13145 12397 12759
12/05 13327 12533 12831
3
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005 1
SINCE
1 YEAR 5 YEARS INCEPTION
------ ------- ---------
6.97% 0.51% 4.66%
RETURNS REPRESENT PAST PERFORMANCE AND INCLUDE CHANGE IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE
FUTURE RESULTS. THE CURRENT PERFORMANCE OF THE PORTFOLIO MAY BE LOWER OR HIGHER
THAN THE FIGURES SHOWN. RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION
VALUE MAY BE MORE OR LESS THAN ORIGINAL COST. THE PERFORMANCE RESULTS DO NOT
REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON PORTFOLIO
DISTRIBUTIONS OR THE REDEMPTION OF PORTFOLIO SHARES. PERFORMANCE INCLUDES THE
EFFECT OF DEDUCTING EXPENSES, BUT DOES NOT INCLUDE CHARGES AND EXPENSES
ATTRIBUTABLE TO ANY PARTICULAR VARIABLE CONTRACT OR PLAN. ACCORDINGLY, THE
PROSPECTUS OF THE SPONSORING PARTICIPATING INSURANCE COMPANY SEPARATE ACCOUNT OR
PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS SHOULD
BE CAREFULLY REVIEWED FOR INFORMATION ON RELEVANT CHARGES AND EXPENSES.
EXCLUDING THESE CHARGES AND EXPENSES FROM QUOTATIONS OF PERFORMANCE HAS THE
EFFECT OF INCREASING THE PERFORMANCE QUOTED, AND THE EFFECT OF THESE CHARGES
SHOULD BE CONSIDERED WHEN COMPARING PERFORMANCE TO THAT OF OTHER MUTUAL FUNDS.
PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH-END IS AVAILABLE AT
WWW.CREDIT-SUISSE.COM/US.
_____________
1 Fee waivers and/or expense reimbursements may reduce expenses for the
Portfolio, without which performance would be lower. Waivers and/or
reimbursements may be discontinued at any time.
2 The Russell Midcap(R) Growth Index measures the performance of those
companies in the Russell Midcap(R) Index with higher price-to-book ratios
and higher forecasted growth values. The stocks are also members of the
Russell 1000(R) Growth Index. It is an unmanaged index of common stocks
that includes reinvestment of dividends and is compiled by Frank Russell
Company. Investors cannot invest directly in an index.
3 The Russell 2500 TM Growth Index measures the performance of those
companies in the Russell 2500 TM Index with higher price-to-book ratios
and higher forecasted growth values. It is an unmanaged index of common
stocks that includes reinvestment of dividends and is compiled by Frank
Russell Company. Investors cannot invest directly in an index.
4
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
INFORMATION ABOUT YOUR PORTFOLIO'S EXPENSES
As an investor of the Portfolio, you incur two types of costs: ongoing
expenses and transaction costs. Ongoing expenses include management fees,
distribution and service (12b-1) fees and other Portfolio expenses. Examples of
transaction costs include sales charges (loads), redemption fees and account
maintenance fees, which are not shown in this section and which would result in
higher total expenses. The following table is intended to help you understand
your ongoing expenses of investing in the Portfolio and to help you compare
these expenses with the ongoing expenses of investing in other mutual funds. The
table is based on an investment of $1,000 made at the beginning of the six month
period ended December 31, 2005.
The table illustrates your Portfolio's expenses in two ways:
o ACTUAL PORTFOLIO RETURN. This helps you estimate the actual dollar
amount of ongoing expenses paid on a $1,000 investment in the
Portfolio using the Portfolio's actual return during the period. To
estimate the expenses you paid over the period, simply divide your
account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in
the "Expenses Paid per $1,000" line under the share class you hold.
o HYPOTHETICAL 5% PORTFOLIO RETURN. This helps you to compare your
Portfolio's ongoing expenses with those of other mutual funds using
the Portfolio's actual expense ratio and a hypothetical rate of
return of 5% per year before expenses. Examples using a 5%
hypothetical fund return may be found in the shareholder reports of
other mutual funds. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or
expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight
your ongoing expenses only and do not reflect any transaction costs, such as
sales charges (loads) or redemption fees. If these transaction costs had been
included, your costs would have been higher. The "Expenses Paid per $1,000" line
of the tables is useful in comparing ongoing expenses only and will not help you
determine the relative total expenses of owning different funds.
5
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
EXPENSES AND VALUE OF A $1,000 INVESTMENT
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 2005
- --------------------------------------------------------------------------------
ACTUAL PORTFOLIO RETURN
Beginning Account Value 7/1/05 $ 1,000.00
Ending Account Value 12/31/05 $ 1,052.70
Expenses Paid per $1,000* $ 6.47
HYPOTHETICAL 5% PORTFOLIO RETURN
Beginning Account Value 7/1/05 $ 1,000.00
Ending Account Value 12/31/05 $ 1,018.90
Expenses Paid per $1,000* $ 6.36
ANNUALIZED EXPENSE RATIOS* 1.25%
_____________
* EXPENSES ARE EQUAL TO THE PORTFOLIO'S ANNUALIZED EXPENSE RATIO MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF
DAYS IN THE MOST RECENT FISCAL HALF YEAR PERIOD, THEN DIVIDED BY 365.
THE "EXPENSES PAID PER $1,000" AND THE "ANNUALIZED EXPENSE RATIOS" IN THE
TABLES ARE BASED ON ACTUAL EXPENSES PAID BY THE PORTFOLIO DURING THE
PERIOD, NET OF FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IF THOSE FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS HAD NOT BEEN IN EFFECT, THE
PORTFOLIO'S ACTUAL EXPENSES WOULD HAVE BEEN HIGHER. EXPENSES DO NOT
REFLECT ADDITIONAL CHARGES AND EXPENSES THAT ARE, OR MAY BE, IMPOSED UNDER
THE VARIABLE CONTRACTS OR PLANS. SUCH CHARGES AND EXPENSES ARE DESCRIBED
IN THE PROSPECTUS OF THE INSURANCE COMPANY SEPARATE ACCOUNT OR IN THE PLAN
DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS. THE
PORTFOLIO'S EXPENSES SHOULD BE CONSIDERED WITH THESE CHARGES AND EXPENSES
IN EVALUATING THE OVERALL COST OF INVESTING IN THE SEPARATE ACCOUNT.
For more information, please refer to the Portfolio's prospectus.
6
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
SECTOR BREAKDOWN*
[BAR GRAPH]
Consumer Discretionary 26.2%
Health Care 18.8%
Technology 17.1%
Other Energy 9.5%
Financial Services 9.2%
Producer Durables 7.5%
Materials & Processing 5.9%
Short-Term Investment 4.2%
Consumer Staples 1.1%
Utilities 0.5%
______________
* Expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
7
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS (95.9%)
AEROSPACE & DEFENSE (6.9%)
Alliant Techsystems, Inc.* 8,100 $ 616,977
Goodrich Corp. 11,300 464,430
L-3 Communications Holdings, Inc. 6,100 453,535
Precision Castparts Corp. 20,700 1,072,467
-------------
2,607,409
-------------
BANKS (4.4%)
Hudson City Bancorp, Inc. 36,200 438,744
Mellon Financial Corp. 22,400 767,200
Northern Trust Corp. 8,800 456,016
-------------
1,661,960
-------------
BEVERAGES (1.2%)
Constellation Brands, Inc. Class A* 16,500 432,795
-------------
BIOTECHNOLOGY (4.6%)
Amylin Pharmaceuticals, Inc.* ss. 11,600 463,072
Neurocrine Biosciences, Inc.* ss. 8,200 514,386
Protein Design Labs, Inc.* ss. 27,000 767,340
-------------
1,744,798
-------------
CHEMICALS (3.0%)
Chemtura Corp. 44,000 558,800
Monsanto Co. 7,400 573,722
-------------
1,132,522
-------------
COMMERCIAL SERVICES & SUPPLIES (3.3%)
Brink's Co. 11,900 570,129
Corporate Executive Board Co. 4,900 439,530
Laureate Education, Inc.* 4,700 246,797
-------------
1,256,456
-------------
COMMUNICATIONS EQUIPMENT (2.2%)
Avaya, Inc.* ss. 27,900 297,693
Comverse Technology, Inc.* 20,300 539,777
-------------
837,470
-------------
DIVERSIFIED FINANCIALS (2.3%)
American Capital Strategies, Ltd. 13,100 474,351
Nuveen Investments, Class Ass 8,700 370,794
-------------
845,145
-------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (4.8%)
Broadcom Corp. Class A* 17,600 829,840
Intersil Corp. Class A 7,700 191,576
Roper Industries, Inc. 19,800 782,298
-------------
1,803,714
-------------
See Accompanying Notes to Financial Statements.
8
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS
ENERGY EQUIPMENT & SERVICES (3.9%)
Grant Prideco, Inc.* 6,900 $ 304,428
National-Oilwell Varco, Inc.* 11,900 746,130
Smith International, Inc. 10,800 400,788
-------------
1,451,346
-------------
HEALTHCARE EQUIPMENT & SUPPLIES (3.6%)
Dade Behring Holdings, Inc. 21,100 862,779
Varian Medical Systems, Inc.* 10,100 508,434
-------------
1,371,213
-------------
HEALTHCARE PROVIDERS & SERVICES (4.9%)
Covance, Inc.* ss. 13,000 631,150
Omnicare, Inc. 16,107 921,643
Quest Diagnostics, Inc. 5,800 298,584
-------------
1,851,377
-------------
HOTELS, RESTAURANTS & LEISURE (4.6%)
Cheesecake Factory, Inc.* 7,300 272,947
Penn National Gaming, Inc.* 18,300 602,985
Royal Caribbean Cruises, Ltd. ss. 4,100 184,746
Starwood Hotels & Resorts Worldwide, Inc. 10,500 670,530
-------------
1,731,208
-------------
HOUSEHOLD DURABLES (2.0%)
Snap-On, Inc. 20,100 754,956
-------------
INSURANCE (2.5%)
Genworth Financial, Inc. Class A 27,600 954,408
-------------
INTERNET SOFTWARE & SERVICES (2.6%)
CNET Networks, Inc.* ss. 29,100 427,479
VeriSign, Inc.* ss. 25,700 563,344
-------------
990,823
-------------
IT CONSULTING & SERVICES (4.8%)
CACI International, Inc. Class A* 14,300 820,534
NAVTEQ Corp.* 18,000 789,660
SRA International, Inc. Class A* ss. 6,700 204,618
-------------
1,814,812
-------------
LEISURE EQUIPMENT & PRODUCTS (1.7%)
SCP Pool Corp. ss. 17,100 636,462
-------------
MEDIA (4.1%)
E.W. Scripps Co. Class A 6,300 302,526
Getty Images, Inc.* ss. 9,500 848,065
Univision Communications, Inc. Class A* 13,700 402,643
-------------
1,553,234
-------------
See Accompanying Notes to Financial Statements.
9
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
------------ -------------
COMMON STOCKS
METALS & MINING (1.3%)
Peabody Energy Corp. 5,700 $ 469,794
-------------
OIL & GAS (5.0%)
Kinder Morgan, Inc. 2,100 193,095
Newfield Exploration Co.* 16,700 836,169
Noble Energy, Inc. 6,900 278,070
XTO Energy, Inc. 12,700 558,038
-------------
1,865,372
-------------
PHARMACEUTICALS (5.6%)
Barr Pharmaceuticals, Inc.* 8,200 510,778
Forest Laboratories, Inc.* 20,900 850,212
Sepracor, Inc.* ss. 5,000 258,000
Taro Pharmaceutical Industries, Ltd.* 34,600 483,362
-------------
2,102,352
-------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (1.5%)
International Rectifier Corp.* 8,800 280,720
Maxim Integrated Products, Inc. 8,000 289,920
-------------
570,640
-------------
SOFTWARE (6.2%)
Activision, Inc.* 41,821 574,621
Adobe Systems, Inc.* 26,114 965,173
Salesforce.com, Inc.* ss. 24,500 785,225
-------------
2,325,019
-------------
SPECIALTY RETAIL (5.0%)
Circuit City Stores, Inc. 21,000 474,390
Michaels Stores, Inc. 12,900 456,273
Williams-Sonoma, Inc.* 22,100 953,615
-------------
1,884,278
-------------
TEXTILES & APPAREL (1.3%)
Coach, Inc.* 14,500 483,430
-------------
WIRELESS TELECOMMUNICATION SERVICES (2.6%)
American Tower Corp. Class A* 17,900 485,090
Crown Castle International Corp.* 18,000 484,380
-------------
969,470
-------------
TOTAL COMMON STOCKS (Cost $30,030,948) 36,102,463
-------------
SHORT-TERM INVESTMENTS (19.8%)
State Street Navigator Prime Fund ss.ss. 5,861,871 5,861,871
PAR
(000)
------------
State Street Bank and Trust Co. Euro Time
Deposit, 3.350%, 1/03/06 $ 1,600 1,600,000
-------------
See Accompanying Notes to Financial Statements.
10
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
VALUE
-------------
TOTAL SHORT-TERM INVESTMENTS (Cost $7,461,871) $ 7,461,871
-------------
TOTAL INVESTMENTS AT VALUE (115.7%) (Cost $37,492,819) 43,564,334
LIABILITIES IN EXCESS OF OTHER ASSETS (-15.7%) (5,905,472)
-------------
NET ASSETS (100.0%) $ 37,658,862
=============
- --------------------------------------------------------------------------------
* Non-income producing security.
ss. Security or portion thereof is out on loan.
ss.ss. Represents security purchased with cash collateral received for
securities on loan.
See Accompanying Notes to Financial Statements.
11
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2005
- --------------------------------------------------------------------------------
ASSETS
Investments at value, including collateral for securities
on loan of $5,861,871 (Cost $37,492,819) (Note 2) $ 43,564,334 1
Cash 725
Dividend and interest receivable 16,384
Receivable for portfolio shares sold 5,088
Prepaid expenses and other assets 1,745
-------------
Total Assets 43,588,276
-------------
LIABILITIES
Advisory fee payable (Note 3) 28,137
Administrative services fee payable (Note 3) 8,953
Payable upon return of securities loaned (Note 2) 5,861,871
Other accrued expenses payable 30,453
-------------
Total Liabilities 5,929,414
-------------
NET ASSETS
Capital stock, $0.001 par value (Note 6) 2,855
Paid-in capital (Note 6) 44,500,250
Accumulated net realized loss on investments (12,915,758)
Net unrealized appreciation from investments 6,071,515
-------------
Net Assets $ 37,658,862
=============
Shares outstanding 2,854,761
-------------
Net asset value, offering price, and redemption price
per share $ 13.19
=============
- --------------------------------------------------------------------------------
1 Including $5,735,946 of securities on loan.
See Accompanying Notes to Financial Statements.
12
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME (Note 2)
Dividends $ 164,307
Interest 47,490
Securities lending 4,581
-------------
Total investment income 216,378
-------------
EXPENSES
Investment advisory fees (Note 3) 352,110
Administrative services fees (Note 3) 78,428
Printing fees (Note 3) 39,701
Audit and tax fees 18,318
Legal fees 15,832
Custodian fees 12,309
Insurance expense 5,342
Trustees' fees 2,445
Transfer agent fees 1,866
Commitment fees (Note 4) 1,001
Miscellaneous expense 8,232
-------------
Total expenses 535,584
Less: fees waived (Note 3) (46,999)
-------------
Net expenses 488,585
-------------
Net investment loss (272,207)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain from investments 4,952,683
Net change in unrealized appreciation (depreciation)
from investments (2,119,147)
-------------
Net realized and unrealized gain from investments 2,833,536
-------------
Net increase in net assets resulting from operations $ 2,561,329
=============
See Accompanying Notes to Financial Statements.
13
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER DECEMBER
31, 2005 31, 2004
------------- -------------
FROM OPERATIONS
Net investment loss $ (272,207) $ (362,186)
Net realized gain from investments 4,952,683 6,346,899
Net change in unrealized appreciation
(depreciation) from investments (2,119,147) (982,192)
------------- -------------
Net increase in net assets resulting from
operations 2,561,329 5,002,521
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS (Note 6)
Proceeds from sale of shares 438,922 2,162,435
Net asset value of shares redeemed (7,793,312) (6,282,401)
------------- -------------
Net decrease in net assets from capital
share transactions (7,354,390) (4,119,966)
------------- -------------
Net increase (decrease) in net assets (4,793,061) 882,555
NET ASSETS
Beginning of year 42,451,923 41,569,368
------------- -------------
End of year $ 37,658,862 $ 42,451,923
============= =============
See Accompanying Notes to Financial Statements.
14
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
2005 2004 2003 2002 2001
--------- --------- --------- --------- ---------
PER SHARE DATA
Net asset value, beginning of year $ 12.33 $ 10.90 $ 7.60 $ 10.75 $ 12.86
--------- --------- --------- --------- ---------
INVESTMENT OPERATIONS
Net investment loss (0.10) (0.11) (0.08) (0.08) (0.08)
Net gain (loss) on investments
(both realized and unrealized) 0.96 1.54 3.38 (3.07) (2.03)
--------- --------- --------- --------- ---------
Total from investment operations 0.86 1.43 3.30 (3.15) (2.11)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF YEAR $ 13.19 $ 12.33 $ 10.90 $ 7.60 $ 10.75
========= ========= ========= ========= =========
Total return 1 6.97% 13.12% 43.42% (29.30)% (16.41)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (000s omitted) $ 37,659 $ 42,452 $ 41,569 $ 30,75 $ 51,290
Ratio of expenses to average net assets 1.25% 1.25% 1.25% 1.25% 1.25%
Ratio of net investment loss
to average net assets (0.70)% (0.87)% (0.90)% (0.84)% (0.81)%
Decrease reflected in above operating
expense ratios due to waivers/
reimbursements 0.12% 0.08% 0.14% 0.11% 0.04%
Portfolio turnover rate 95% 124% 73% 74% 173%
- --------------------------------------------------------------------------------
1 Total returns are historical and assume changes in share price and
reinvestment of all dividends and distributions. Had certain expenses not
been reduced during the years shown, total returns would have been lower.
Total returns do not reflect charges and expenses attributable to any
particular variable contract or plan.
See Accompanying Notes to Financial Statements.
15
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Credit Suisse Trust (the "Trust") is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, and
currently offers eight managed investment portfolios of which one, the Mid-Cap
Growth Portfolio, is included in this report. The Portfolio is a diversified
investment fund that seeks maximum capital appreciation. Shares of the Portfolio
are not available directly to individual investors but may be offered only
through (a) variable annuity contracts and variable life insurance contracts
offered by separate accounts of certain insurance companies and (b)
tax-qualified pension and retirement plans. The Portfolio may not be available
in connection with a particular contract or plan. The Trust was organized under
the laws of The Commonwealth of Massachusetts as a business trust on March 15,
1995.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A) SECURITY VALUATION -- The net asset value of the Portfolio is
determined daily as of the close of regular trading on the New York Stock
Exchange, Inc. (the "Exchange") on each day the Exchange is open for business.
The Portfolio's equity investments are valued at market value, which is
generally determined using the closing price on the exchange or market on which
the security is primarily traded at the time of valuation (the "Valuation
Time"). If no sales are reported, equity investments are generally valued at the
most recent bid quotation as of the Valuation Time or at the lowest asked
quotation in the case of a short sale of securities. Debt securities with a
remaining maturity greater than 60 days are valued in accordance with the price
supplied by a pricing service, which may use a matrix, formula or other
objective method that takes into consideration market indices, yield curves and
other specific adjustments. Debt obligations that will mature in 60 days or less
are valued on the basis of amortized cost, which approximates market value,
unless it is determined that this method would not represent fair value.
Investments in mutual funds are valued at the mutual fund's closing net asset
value per share on the day of valuation. Securities and other assets for which
market quotations are not readily available, or whose values have been
materially affected by events occurring before the Portfolio's Valuation Time
but after the close of the securities' primary markets, are valued at fair value
as determined in good faith by, or under the direction of, the Board of Trustees
under procedures established by the Board of Trustees. The Portfolio may utilize
a service provided by an independent third party which has been
16
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
approved by the Board of Trustees to fair value certain securities. When
fair-value pricing is employed, the prices of securities used by a portfolio to
calculate its net asset value may differ from quoted or published prices for the
same securities.
B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions
are accounted for on a trade date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date. The cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes.
C) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net
investment income and distributions of net realized capital gains, if any, are
declared and paid at least annually. However, to the extent that a net realized
capital gain can be reduced by a capital loss carryforward, such gain will not
be distributed. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States of America ("GAAP").
D) FEDERAL INCOME TAXES -- No provision is made for federal taxes as it is
the Trust's intention to have the Portfolio continue to qualify for and elect
the tax treatment applicable to regulated investment companies under the
Internal Revenue Code of 1986, as amended, and to make the requisite
distributions to its shareholders, which will be sufficient to relieve it from
federal income and excise taxes.
E) USE OF ESTIMATES -- The preparation of financial statements in
conformity with GAAP 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 revenues and expenses during the reporting period.
Actual results could differ from these estimates.
F) SHORT-TERM INVESTMENTS -- The Portfolio, together with other
funds/portfolios advised by Credit Suisse Asset Management, LLC ("Credit
Suisse"), an indirect, wholly-owned subsidiary of Credit Suisse Group, pools
available cash into either a short-term variable rate time deposit issued by
State Street Bank and Trust Company ("SSB"), the Portfolio's custodian, or a
money
17
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
market fund advised by Credit Suisse. The short-term time deposit issued by SSB
is a variable rate account classified as a short-term investment.
G) SECURITIES LENDING -- Loans of securities are required at all times to
be secured by collateral at least equal to 102% of the market value of domestic
securities on loan (including any accrued interest thereon) and 105% of the
market value of foreign securities on loan (including any accrued interest
thereon). Cash collateral received by the Portfolio in connection with
securities lending activity may be pooled together with cash collateral for
other funds/portfolios advised by Credit Suisse and may be invested in a variety
of investments, including certain Credit Suisse-advised funds, funds advised by
SSB, the Portfolio's securities lending agent, or money market instruments.
However, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings.
SSB has been engaged by the Portfolio to act as the Portfolio's securities
lending agent. The Portfolio's securities lending arrangement provides that the
Portfolio and SSB will share the net income earned from the securities lending
activities. During the year ended December 31, 2005, total earnings from the
Portfolio's investment in cash collateral received in connection with securities
lending arrangements was $160,765, of which $154,246 was rebated to borrowers
(brokers). The Portfolio retained $4,581 in income from the cash collateral
investment, and SSB, as lending agent, was paid $1,938. The Portfolio may also
be entitled to certain minimum amounts of income from its securities lending
activities. Securities lending income is accrued as earned.
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Credit Suisse serves as investment adviser for the Portfolio. For its
investment advisory services, Credit Suisse is entitled to receive a fee from
the Portfolio at an annual rate of 0.90% of the Portfolio's average daily net
assets. For the year ended December 31, 2005, investment advisory fees earned
and voluntarily waived for the Portfolio were $352,110 and $46,999,
respectively. Credit Suisse will not recapture from the Portfolio any fees it
waived during the fiscal year ended December 31, 2005. Fee waivers and
reimbursements are voluntary and may be discontinued by Credit Suisse at any
time.
18
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate
of Credit Suisse, and SSB serve as co-administrators to the Portfolio.
For its co-administrative services, CSAMSI currently receives a fee
calculated at an annual rate of 0.10% of the Portfolio's average daily net
assets. For the year ended December 31, 2005, co-administrative services fees
earned by CSAMSI were $39,123.
For its co-administrative services, SSB receives a fee, exclusive of
out-of pocket expenses, calculated in total for all the Credit Suisse
funds/portfolios co-administered by SSB and allocated based upon relative
average net assets of each fund/portfolio, subject to an annual minimum fee. For
the year ended December 31, 2005, co-administrative services fees earned by SSB
(including out-of-pocket expenses) were $39,305.
In addition to serving as the Portfolio's co-administrator, CSAMSI
currently serves as distributor of the Portfolio's shares without compensation.
Merrill Corporation ("Merrill"), an affiliate of Credit Suisse, has been
engaged by the Portfolio to provide certain financial printing and fulfillment
services. For the year ended December 31, 2005, Merrill was paid $3,976 for its
services to the Portfolio.
NOTE 4. LINE OF CREDIT
The Portfolio, together with other funds/portfolios advised by Credit
Suisse (collectively, the "Participating Funds"), participates in a $75 million
committed, unsecured line of credit facility ("Credit Facility") for temporary
or emergency purposes with Deutsche Bank, A.G. as administrative agent and
syndication agent and SSB as operations agent. Under the terms of the Credit
Facility, the Participating Funds pay an aggregate commitment fee at a rate of
0.10% per annum on the average unused amount of the Credit Facility, which is
allocated among the Participating Funds in such manner as is determined by the
governing Boards of the Participating Funds. In addition, the Participating
Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At
December 31, 2005 and during the year ended December 31, 2005, the Portfolio had
no borrowings under the Credit Facility.
19
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 5. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 2005, purchases and sales of investment
securities (excluding short-term investments) were $35,233,403 and $41,540,373,
respectively.
NOTE 6. CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, $0.001 par value per share.
Transactions in capital shares of the Portfolio were as follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
------------------ ------------------
Shares sold 34,637 189,024
Shares redeemed (623,241) (558,423)
---------- ----------
Net decrease (588,604) (369,399)
========== ==========
On December 31, 2005, the number of shareholders that held 5% or more of
the outstanding shares of the Portfolio was as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ----------------------
1 95%
Some of the shareholders are omnibus accounts, which hold shares on behalf
of individual shareholders.
NOTE 7. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
The tax basis of components of distributable earnings differ from the
amounts reflected in the Statement of Assets and Liabilities by temporary
book/tax differences. These differences are primarily due to losses deferred on
wash sales.
At December 31, 2005, the components of distributable earnings on a tax
basis for the Portfolio were as follows:
Accumulated net realized loss $(12,884,952)
Unrealized appreciation 6,040,709
------------
$ (6,844,243)
============
20
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 7. FEDERAL INCOME TAXES
At December 31, 2005, the Portfolio had capital loss carryforwards
available to offset possible future capital gains as follows:
EXPIRES DECEMBER 31,
------------------------------
2009 2010
----------- -----------
$ 8,819,060 $ 4,065,892
During the tax year ended December 31, 2005, the Portfolio utilized
$4,977,294 of the capital loss carryforward.
At December 31, 2005, the identified cost for federal income tax purposes,
as well as the gross unrealized appreciation from investments for those
securities having an excess of value over cost, gross unrealized depreciation
from investments for those securities having an excess of cost over value and
the net unrealized appreciation from investments were as follows: $37,523,625,
$7,002,439, $(961,730) and $6,040,709, respectively.
At December 31, 2005, the Portfolio reclassified $1,797 to accumulated net
realized loss from investments and $272,207 to net investment loss from paid-in
capital, to adjust for current period permanent book/tax differences which arose
principally from differing book/tax treatments of net operating losses and
dividends received from Real Estate Investment Trusts. Net assets were not
affected by these reclassifications.
NOTE 8. CONTINGENCIES
In the normal course of business, the Portfolio may provide general
indemnifications pursuant to certain contracts and organizational documents. The
Portfolio's maximum exposure under these arrangements is dependent on future
claims that may be made against the Portfolio and, therefore, cannot be
estimated; however, based on experience, the risk of loss from such claims is
considered remote.
21
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees of Credit Suisse Trust and Shareholders of Credit
Suisse Trust - Mid-Cap Growth Portfolio:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Mid-Cap Growth Portfolio (the
"Portfolio"), a portfolio of the Credit Suisse Trust, at December 31, 2005, 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 five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolio's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards 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 December 31, 2005 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 6, 2006
22
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
- --------------------------------------------------------------------------------
In approving the Advisory Agreement, the Board of Trustees, including the
Independent Trustees, considered the following factors with respect to the
Mid-Cap Growth Portfolio (the "Portfolio"):
INVESTMENT ADVISORY FEE RATES
The Board reviewed and considered the contractual advisory fee rate of
0.90% paid by the Portfolio ("Contractual Advisory Fee") to Credit Suisse Asset
Management LLC ("Credit Suisse") in light of the extent and quality of the
advisory services provided by Credit Suisse. The Board also reviewed and
considered the fee waivers and/or expense reimbursement arrangements currently
in place for the Portfolio and considered the actual fee rates of 0.82% paid by
the Portfolio ("Net Advisory Fee") after taking waivers and reimbursements into
account. The Board acknowledged that the fee waivers and reimbursements could be
discontinued at any time.
Additionally, the Board received and considered information comparing the
Portfolio's Contractual Advisory Fee and Net Advisory Fee and the Portfolio's
overall expenses with those of funds in both the relevant expense group ("Peer
Group") and universe of funds (the "Universe") provided by Lipper Inc., an
independent provider of investment company data.
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AGREEMENT
The Board received and considered information regarding the nature, extent
and quality of services provided to the Portfolio by Credit Suisse under the
Advisory Agreement. The Board also noted information received at regular
meetings throughout the year related to the services rendered by Credit Suisse.
The Board reviewed background information about Credit Suisse, including its
Form ADV. The Board considered the background and experience of Credit Suisse's
senior management and the expertise of, and the amount of attention given to the
Portfolio by, senior personnel of Credit Suisse. In addition, the Board reviewed
the qualifications, backgrounds and responsibilities of the portfolio management
team primarily responsible for the day-to-day portfolio management of the
Portfolio and the extent of the resources devoted to research and analysis of
actual and potential investments. The Board also received and considered
information about the nature, extent and quality of services and fee rates
offered to other Credit Suisse clients for comparable services.
23
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
PORTFOLIO PERFORMANCE
The Board received and considered the one-, two-, three-, four- and
five-year performance of the Portfolio, along with comparisons, for all
presented periods, both to the relevant performance group ("Performance Group")
and universe of funds ("Performance Universe") for the Portfolio. The Board was
provided with a description of the methodology used to arrive at the funds
included in the Performance Group and the Performance Universe.
The Board reviewed information comparing the performance of various Credit
Suisse Funds to performance benchmarks that the Board had previously established
and progress that had been made in certain instances toward achieving those
benchmarks. The Board also reviewed comparisons between the Portfolio and its
identified benchmark over various time periods.
CREDIT SUISSE PROFITABILITY
The Board received and considered a profitability analysis of Credit
Suisse based on the fees payable under the Advisory Agreement for the Portfolio,
including any fee waivers or fee caps, as well as other relationships between
the Portfolio on the one hand and Credit Suisse affiliates on the other. The
Board received profitability information for the other funds in the Credit
Suisse family of funds.
ECONOMIES OF SCALE
The Board considered whether economies of scale in the provision of
services to the Portfolio were being passed along to the shareholders.
Accordingly, the Board considered whether alternative fee structures (such as
breakpoint fee structures) would be more appropriate or reasonable taking into
consideration economies of scale or other efficiencies that might accrue from
increases in the Portfolio's asset levels.
OTHER BENEFITS TO CREDIT SUISSE
The Board considered other benefits received by Credit Suisse and its
affiliates as a result of their relationship with the Portfolio. Such benefits
include, among others, research arrangements with brokers who execute
transactions on behalf of the Portfolio, administrative and brokerage
relationships with affiliates of Credit Suisse and benefits potentially derived
from an increase in Credit Suisse's businesses as a result of its relationship
with the Portfolio (such as the ability to market to shareholders other
financial products offered by Credit Suisse and its affiliates).
24
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
The Board considered the standards applied in seeking best execution,
whether and to what extent soft dollar credits are sought and how any such
credits are utilized, any benefits that may be achieved by using an affiliated
broker and the existence of quality controls applicable to brokerage allocation
procedures. The Board also reviewed Credit Suisse's method for allocating
portfolio investment opportunities among its advisory clients.
CONCLUSIONS
In selecting Credit Suisse, and approving the Advisory Agreement and the
investment advisory fee under such agreement, the Board concluded that:
o Although the Contractual Advisory Fee was above the median of the
Portfolio's Expense Group, the Net Advisory Fee was slightly below
the median of the Portfolio's Expense Group and would be reduced
further to 0.77% when the additional voluntary fee waiver (described
below) is taken into account. The Board considered the fee to be
reasonable taking into account the fee waiver and the Portfolio's
relatively small size.
o The Portfolio's one-, two- three-, four- and five-year performance
was higher than the median of the Portfolio's Performance Group,
Performance Universe and benchmark, except that the Portfolio's
two-year performance was equal to the median for the Performance
Universe. The Board had previously identified the need to address
the Portfolio's performance, and noted that Credit Suisse was in the
process of addressing performance issues. After discussion with the
Board, Credit Suisse had agreed to an additional one-year voluntary
fee waiver of five basis points. The Board would continue to monitor
steps undertaken by Credit Suisse to improve performance.
o The Board was satisfied with the nature and extent of the investment
advisory services provided to the Portfolio by Credit Suisse, and
that, based on dialogue with management and counsel, the services
provided by Credit Suisse under the Advisory Agreement are typical
of, and consistent with, those provided to mutual funds by other
investment advisers. The Board understood that Credit Suisse was in
the process of addressing any performance issues.
o In light of the costs of providing investment management and other
services to the Portfolio and Credit Suisse's ongoing commitment to
the Portfolio and willingness to cap fees and expenses, the profits
and other ancillary benefits that Credit Suisse and its affiliates
received were considered reasonable.
25
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
o Credit Suisse's profitability based on fees payable under the
Advisory Agreement was reasonable in light of the nature, extent and
quality of the services provided to the Portfolio thereunder.
o In light of the relatively small size of the Portfolio, the amount
of the Net Advisory Fees and the additional voluntary fee reduction,
the Portfolio's current fee structure (without breakpoints) was
considered reasonable.
No single factor reviewed by the Board was identified by the Board as the
principal factor in determining whether to approve the Advisory Agreement. The
Independent Trustees were advised by separate independent legal counsel
throughout the process.
26
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER OF
TERM OF PORTFOLIOS
OFFICE 1 IN FUND
POSITION(S) AND LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S)DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------- ----------- ------------ -------------------------- ----------- ---------------
INDEPENDENT TRUSTEES
Enrique Arzac Trustee, Since 2005 Professor of Finance 47 Director of The
c/o Credit Suisse Asset Nominating and Economics, Adams Express
Management, LLC Committee Graduate School of (a closed-end
Attn: General Counsel Member and Business, Columbia investment
466 Lexington Avenue Audit University since 1971 company); Director
New York, New York Committee of Petroleum
10017-3140 Chairman and Resources
Corporation
Date of Birth: 10/02/41 (a closed-end
investment
company)
Richard H. Francis Trustee, Since Currently retired 41 None
c/o Credit Suisse Asset Nominating Portfolio
Management, LLC and Audit Inception
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 04/23/32
Jeffrey E. Garten Trustee, Since The Juan Trippe 40 Director of Aetna,
Box 208200 Nominating Portfolio Professor in the Practice Inc. (insurance
New Haven, Connecticut and Audit Inception 2 of International Trade, company); Director
06520-8200 Committee Finance and Business of CarMax Group
Member from July 2005 to present; (used car dealers)
Date of Birth: 10/29/46 Partner and Chairman
of Garten Rothkopf
(consulting firm) from
October 2005 to present;
Dean of Yale School of
Management from
November 1995 to
June 2005
Peter F. Krogh Trustee, Since 2001 Dean Emeritus and 40 Director of Carlisle
301 ICC Nominating Distinguished Professor Companies
Georgetown University and Audit of International Affairs Incorporated
Washington, DC 20057 Committee at the Edmund A. (diversified
Member Walsh School of manufacturing
Date of Birth: 02/11/37 Foreign Service, company)
Georgetown University
from June 1995
to present
_________________
1 Each Trustee and Officer serves until his or her respective successor has
been duly elected and qualified.
2 Mr. Garten was initially appointed as a Trustee of the Trust on September
13, 1999. He resigned as Trustee on February 3, 2000, and was subsequently
re-appointed on December 21, 2000.
27
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
NUMBER OF
TERM OF PORTFOLIOS
OFFICE 1 IN FUND
POSITION(S) AND LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S)DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------- ----------- ------------ -------------------------- ----------- ---------------
INDEPENDENT TRUSTEES
James S. Pasman, Jr. Trustee, Since Currently retired 42 Director of Education
c/o Credit Suisse Asset Nominating Portfolio Management Corp.
Management, LLC and Audit Inception
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 12/20/30
Steven N. Rappaport Chairman of Trustee Partner of Lehigh Court, 46 Director of Presstek,
Lehigh Court, LLC the Board Since LLC and RZ Capital Inc. (digital imaging
40 East 52nd Street of Trustees, Portfolio (private investment firms) technologies
New York, New York Nominating Inception from July 2002 to present; company); Director of
10022 Committee and Transition Adviser to Wood Resources, LLC.
Chairman Chairman SunGard Securities (plywood
Date of Birth: 07/10/48 and Audit Since 2005 Finance, Inc. from manufacturing
Committee February 2002 to July company)
Member 2002; President of
SunGard Securities
Finance, Inc. from 2001
to February 2002;
President of Loanet,
Inc. (on-line accounting
service) from 1997 to 2001
INTERESTED TRUSTEE
Michael E. Kenneally 3,4 Trustee Since 2004 Chairman and Global 40 None
c/o Credit Suisse Asset Chief Executive Officer
Management, LLC of Credit Suisse from
Attn: General Counsel March 2003 to July 2005;
466 Lexington Avenue Chairman and Chief
New York, New York Investment Officer of
10017-3140 Banc of America Capital
Management from 1998
Date of Birth: 03/30/54 to March 2003
__________________
3 Mr. Kenneally is a Trustee who is an "interested person" of the Trust as
defined in the 1940 Act, because he was an officer of Credit Suisse within
the last two fiscal years.
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
28
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM
OF OFFICE 1
POSITION(S) AND LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH TRUST SERVED PRINCIPAL OCCUPATION(S)DURING PAST FIVE YEARS
- ------------------------- ----------- ------------ ---------------------------------------------
OFFICERS
Steven B. Plump 4 Chief Since 2005 Managing Director; Associated with Credit Suisse or its
Credit Suisse Asset Executive predecessor since 1995; Officer of other Credit Suisse Funds
Management, LLC Officer and
466 Lexington Avenue President
New York, New York
10017-3140
Date of Birth: 02/08/59
Michael A. Pignataro Chief Since 1999 Director and Director of Fund Administration of Credit Suisse;
Credit Suisse Asset Financial Associated with Credit Suisse or its predecessors since 1984;
Management, LLC Officer and Officer of other Credit Suisse Funds
466 Lexington Avenue Treasurer
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Since 2004 Director and Global Head of Compliance of Credit Suisse;
Credit Suisse Asset Compliance Associated with Credit Suisse since July 2000; Vice President
Management, LLC Officer and Director of Compliance of Forstmann-Leff
466 Lexington Avenue Associates from 1998 to June 2000; Officer of other
New York, New York Credit Suisse Funds
10017-3140
Date of Birth: 09/21/66
Ajay Mehra Chief Since 2004 Director and Head of Legal Americas Traditional Asset
Credit Suisse Asset Legal Management and Hedge Funds; Associated with Credit Suisse
Management, LLC Officer since September 2004; Senior Associate of Shearman & Sterling
466 Lexington Avenue LLP from September 2000 to September 2004; Senior Counsel
New York, New York of the SEC Division of Investment Management from June
10017-3140 1997 to September 2000; Officer of other Credit Suisse Funds
Date of Birth: 08/14/70
J. Kevin Gao Vice Since 2004 Director and Legal Counsel of Credit Suisse; Associated with
Credit Suisse Asset President Credit Suisse since July 2003; Associated with the law firm of
Management, LLC and Willkie Farr & Gallagher LLP from 1998 to 2003; Officer of other
466 Lexington Avenue Secretary Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 10/13/67
Robert Rizza Assistant Since 2002 Vice President of Credit Suisse; Associated with Credit Suisse
Credit Suisse Asset Treasurer since 1998; Officer of other Credit Suisse Funds
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
_________________
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
The Statement of Additional Information includes additional information
about the Trustees and is available, without charge, upon request, by calling
800-222-8977.
29
CREDIT SUISSE TRUST -- MID-CAP GROWTH PORTFOLIO
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION
- --------------------------------------------------------------------------------
Information regarding how the Portfolio voted proxies related to its
portfolio securities during the 12-month period ended June 30 of each year, as
well as the policies and procedures that the Portfolio uses to determine how to
vote proxies relating to its portfolio securities are available:
o By calling 1-800-222-8977
o On the Portfolio's website, www.credit-suisse.com/us
o On the website of the Securities and Exchange Commission,
http://www.sec.gov.
The Portfolio files a complete schedule of its portfolio holdings for the
first and third quarters of its fiscal year with the SEC on Form N-Q. The
Portfolio's Forms N-Q are available on the SEC's website at http://www.sec.gov
and may be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. Information on the operation of the SEC's Public Reference Room may be
obtained by calling 1-800-SEC-0330.
30
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31
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32
CREDIT SUISSE [LOGO]
P.O. BOX 55030, BOSTON, MA 02205-5030
800-222-8977 o www.credit-suisse.com/us
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. TRMCG-AR-1205
CREDIT SUISSE [LOGO]
CREDIT SUISSE FUNDS
Annual Report
December 31, 2005
CREDIT SUISSE TRUST
o LARGE CAP VALUE PORTFOLIO
Credit Suisse Trust (the "Trust") shares are not available directly to
individual investors, but may be offered only through certain insurance products
and pension and retirement plans.
The Trust's investment objectives, risks, charges and expenses (which should be
considered carefully before investing), and more complete information about the
Trust, are provided in the PROSPECTUS, which should be read carefully before
investing. You may obtain additional copies by calling 800-222-8977 or by
writing to Credit Suisse Trust, P.O. Box 55030, Boston, MA 02205-5030.
Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466
Lexington Ave., New York, NY 10017-3140. The Trust is advised by Credit Suisse
Asset Management, LLC.
THE VIEWS OF THE PORTFOLIO'S MANAGEMENT ARE AS OF THE DATE OF THE LETTER AND THE
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF DECEMBER 31, 2005; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
PORTFOLIO SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC ("CREDIT SUISSE") OR ANY AFFILIATE, ARE NOT FDIC-INSURED AND ARE
NOT GUARANTEED BY CREDIT SUISSE OR ANY AFFILIATE. PORTFOLIO INVESTMENTS ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
January 26, 2006
Dear Shareholder:
For the 12 months ended December 31, 2005, Credit Suisse Trust-Large Cap
Value Portfolio 1 (the "Portfolio") had a gain of 8.14%, vs. an increase of
7.05% for the Russell 1000(R) Value Index. 2
THE MARKET: POSITIVE DESPITE RISING ENERGY COSTS, INTEREST RATES
The period was an overall positive one for equities. Stocks initially
struggled, but rallied into the summer, aided by benign inflation data and good
earnings reports from a number of visible companies. To be sure, headwinds were
ever-present, notably in the form of hurricane activity, surging energy prices
and a Federal Reserve that continued to raise short-term interest rates in small
but steady increments. In the face of all this, the economy nonetheless appeared
resilient, at least as of late 2005: Third-quarter GDP growth was reported at an
annualized rate of 4.1%, the tenth consecutive quarter of 3% or greater growth.
The earnings backdrop remained generally supportive late in the year.
In the market, high energy prices helped drive the outperformance of
energy related stocks, which, despite some late-period weakness, outpaced all
other economic sectors in the period. This was reflected in the outperformance
of value stocks over growth stocks, as energy companies comprise a relatively
large portion of the value universe. Mid-capitalization stocks generally
outperformed both large- and small-cap stocks for the period.
STRATEGIC REVIEW: CONSUMER AND ENERGY HOLDINGS DRIVE OUTPERFORMANCE
The Portfolio outperformed its benchmark in the period, aided by good
stock selection in the consumer sector, in particular retailers and providers of
consumer staples products. The Portfolio's performance also reflected favorable
stock selection in the energy, utilities and transportation areas. On the
negative side, the Portfolio's materials and technology holdings struggled.
With regard to noteworthy recent portfolio activity, our purchases
included Chevron (3.2% of the Portfolio's net assets as of December 31, 2005), a
major integrated oil company that we believe could benefit from a recent
acquisition, in part due to expanded exploration opportunities. We also
established a position in AT&T (1.5% of the Portfolio's net assets as of
December 31, 2005).
1
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
The stock was attractively valued in our view, and offered a relatively high
dividend yield. Our sales included the elimination of Burlington Resources, an
energy exploration and production company focused primarily on natural gas. The
stock had a sharp upward spike late in the period and it reached our valuation
target.
Going forward, we will continue to adhere to our general strategy of
investing in dividend-paying stocks of companies with large market
capitalizations. Using proprietary bottom-up equity research and detailed
quantitative analyses, we look for stocks that are deeply discounted relative to
our view of their upside potential, in terms of valuation and/or income, with an
emphasis on companies that stand to benefit from the positive impact of a likely
significant event.
The Credit Suisse Value Team
Stephen J. Kaszynski
Robert E. Rescoe
Adam Scheiner
THE VALUE OF INVESTMENTS GENERALLY WILL FLUCTUATE IN RESPONSE TO MARKET
MOVEMENTS AND THE PORTFOLIO'S PERFORMANCE WILL LARGELY DEPEND ON THE PERFORMANCE
OF VALUE STOCKS, WHICH MAY BE MORE VOLATILE THAN THE OVERALL MARKET.
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS
FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND
FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT
REGULATION AND THEIR POTENTIAL IMPACT ON THE PORTFOLIO'S INVESTMENTS. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS,
DEVELOPMENTS AND REGULATIONS IN THE FUTURE, AND THEIR IMPACT ON THE PORTFOLIO
COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE
PORTFOLIO HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
2
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
CREDIT SUISSE TRUST--LARGE CAP VALUE PORTFOLIO 1 AND THE
RUSSELL 1000(R) VALUE INDEX 2 FROM INCEPTION (10/31/97).
[LINE GRAPH]
Credit Suisse
Trust -- Large Cap Russell 1000(R)
Date Value Portfolio 1 Value Index 2
----- ------------------ ---------------
10/97 10000 10000
10130 10442
12/97 10389 10747
10450 10595
11134 11308
11556 12000
11596 12080
11566 11901
11677 12053
11375 11841
9756 10079
10037 10657
10741 11483
11355 12018
12/98 11650 12427
11721 12526
11447 12349
11578 12605
12877 13782
13019 13631
13425 14027
12959 13616
12715 13110
12380 12652
12441 13381
12370 13276
12/99 12377 13340
11398 12905
10753 11946
12158 13404
12221 13248
12668 13388
12075 12776
12148 12936
12918 13656
12887 13782
13178 14121
12606 13597
12/00 13479 14278
13777 14332
13777 13934
13320 13442
13968 14100
14350 14418
13926 14098
13851 14068
13437 13504
12449 12553
12523 12445
13267 13168
12/01 13607 13478
13384 13375
13479 13396
13894 14030
13384 13548
13203 13616
12290 12835
11174 11641
11079 11729
9804 10425
10442 11198
11005 11903
12/02 10464 11386
10271 11111
10099 10814
10121 10833
10733 11786
11281 12547
11388 12704
11431 12893
11603 13095
11582 12966
12145 13760
12329 13947
12/03 13098 14806
13238 15067
13422 15389
13130 15254
12946 14881
13054 15033
13455 15388
13238 15171
13260 15386
13451 15625
13495 15884
14170 16688
12/04 14583 17247
14420 16940
14942 17501
14747 17261
14366 16952
14768 17361
14997 17550
15530 18057
15443 17979
15617 18231
15212 17768
15771 18353
12/05 15771 18465
3
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005 1
SINCE
1 YEAR 5 YEARS INCEPTION
------ ------- ---------
8.14% 3.19% 5.73%
RETURNS REPRESENT PAST PERFORMANCE AND INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE
FUTURE RESULTS. THE CURRENT PERFORMANCE OF THE PORTFOLIO MAY BE LOWER OR HIGHER
THAN THE FIGURES SHOWN. RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION
VALUE MAY BE MORE OR LESS THAN ORIGINAL COST. THE PERFORMANCE RESULTS DO NOT
REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON PORTFOLIO
DISTRIBUTIONS OR THE REDEMPTION OF PORTFOLIO SHARES. PERFORMANCE INCLUDES THE
EFFECT OF DEDUCTING EXPENSES, BUT DOES NOT INCLUDE CHARGES AND EXPENSES
ATTRIBUTABLE TO ANY PARTICULAR VARIABLE CONTRACT OR PLAN. ACCORDINGLY, THE
PROSPECTUS OF THE SPONSORING PARTICIPATING INSURANCE COMPANY SEPARATE ACCOUNT OR
PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS SHOULD
BE CAREFULLY REVIEWED FOR INFORMATION ON RELEVANT CHARGES AND EXPENSES.
EXCLUDING THESE CHARGES AND EXPENSES FROM QUOTATIONS OF PERFORMANCE HAS THE
EFFECT OF INCREASING THE PERFORMANCE QUOTED, AND THE EFFECT OF THESE CHARGES
SHOULD BE CONSIDERED WHEN COMPARING PERFORMANCE TO THAT OF OTHER MUTUAL FUNDS.
PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH-END IS AVAILABLE AT
WWW.CREDIT-SUISSE.COM/US.
_______________
1 Fee waivers and/or expense reimbursements may reduce expenses for the
Portfolio, without which performance would be lower. Waivers and/or
reimbursements may be discontinued at any time.
2 The Russell 1000(R) Value Index measures the performance of those
companies in the Russell 1000(R) Index with lower price-to-book ratios
and lower forecasted growth values. It is an unmanaged index of common
stocks that includes reinvestment of dividends and is compiled by Frank
Russell Company. Investors cannot invest directly in an index.
4
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
INFORMATION ABOUT YOUR PORTFOLIO'S EXPENSES
As an investor of the Portfolio, you incur two types of costs: ongoing
expenses and transaction costs. Ongoing expenses include management fees,
distribution and service (12b-1) fees and other Portfolio expenses. Examples of
transaction costs include sales charges (loads), redemption fees and account
maintenance fees, which are not shown in this section and which would result in
higher total expenses. The following table is intended to help you understand
your ongoing expenses of investing in the Portfolio and to help you compare
these expenses with the ongoing expenses of investing in other mutual funds. The
table is based on an investment of $1,000 made at the beginning of the six month
period ended December 31, 2005.
The table illustrates your Portfolio's expenses in two ways:
o ACTUAL PORTFOLIO RETURN. This helps you estimate the actual dollar
amount of ongoing expenses paid on a $1,000 investment in the
Portfolio using the Portfolio's actual return during the period. To
estimate the expenses you paid over the period, simply divide your
account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in
the "Expenses Paid per $1,000" line under the share class you hold.
o HYPOTHETICAL 5% PORTFOLIO RETURN. This helps you to compare your
Portfolio's ongoing expenses with those of other mutual funds using
the Portfolio's actual expense ratio and a hypothetical rate of
return of 5% per year before expenses. Examples using a 5%
hypothetical fund return may be found in the shareholder reports of
other mutual funds. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or
expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight
your ongoing expenses only and do not reflect any transaction costs, such as
sales charges (loads) or redemption fees. If these transaction costs had been
included, your costs would have been higher. The "Expenses Paid per $1,000" line
of the tables is useful in comparing ongoing expenses only and will not help you
determine the relative total expenses of owning different funds.
5
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
EXPENSES AND VALUE OF A $1,000 INVESTMENT
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 2005
- --------------------------------------------------------------------------------
ACTUAL PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,051.60
Expenses Paid per $1,000* $ 5.17
HYPOTHETICAL 5% PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,020.16
Expenses Paid per $1,000* $ 5.09
ANNUALIZED EXPENSE RATIOS* 1.00%
________________
* EXPENSES ARE EQUAL TO THE PORTFOLIO'S ANNUALIZED EXPENSE RATIO MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF
DAYS IN THE MOST RECENT FISCAL HALF YEAR PERIOD, THEN DIVIDED BY 365.
THE "EXPENSES PAID PER $1,000" AND THE "ANNUALIZED EXPENSE RATIOS" IN THE
TABLES ARE BASED ON ACTUAL EXPENSES PAID BY THE PORTFOLIO DURING THE
PERIOD, NET OF FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IF THOSE FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS HAD NOT BEEN IN EFFECT, THE
PORTFOLIO'S ACTUAL EXPENSES WOULD HAVE BEEN HIGHER. EXPENSES DO NOT
REFLECT ADDITIONAL CHARGES AND EXPENSES THAT ARE, OR MAY BE, IMPOSED UNDER
THE VARIABLE CONTRACTS OR PLANS. SUCH CHARGES AND EXPENSES ARE DESCRIBED
IN THE PROSPECTUS OF THE INSURANCE COMPANY SEPARATE ACCOUNT OR IN THE PLAN
DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS. THE
PORTFOLIO'S EXPENSES SHOULD BE CONSIDERED WITH THESE CHARGES AND EXPENSES
IN EVALUATING THE OVERALL COST OF INVESTING IN THE SEPARATE ACCOUNT.
For more information, please refer to the Portfolio's prospectus.
6
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
SECTOR BREAKDOWN*
[BAR CHART]
Financial Services 31.6%
Health Care 10.0%
Consumer Discretionary 10.0%
Integrated Oils 8.4%
Utilities 6.9%
Technology 6.4%
Consumer Staples 5.6%
Other Energy 5.4%
Producer Durables 5.0%
Other 4.5%
Materials & Processing 3.1%
Short-Term Investments 3.1%
_____________
* Expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
7
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCKS (97.9%)
AEROSPACE & DEFENSE (4.2%)
L-3 Communications Holdings, Inc. 13,800 $ 1,026,030
United Technologies Corp. 25,400 1,420,114
------------
2,446,144
------------
BANKS (14.7%)
Bank of America Corp.* 41,100 1,896,765
Bank of New York Company, Inc. 19,100 608,335
Hudson City Bancorp, Inc. ss. 47,665 577,700
Mellon Financial Corp. 17,700 606,225
Mercantile Bankshares Corp. ss. 10,700 603,908
North Fork Bancorporation, Inc. 35,900 982,224
South Financial Group, Inc. ss. 19,900 548,046
U.S. Bancorp 29,300 875,777
Wells Fargo & Co. 29,000 1,822,070
------------
8,521,050
------------
BUILDING PRODUCTS (1.6%)
American Standard Companies, Inc. 22,600 902,870
------------
CHEMICALS (1.6%)
Du Pont (E. I.) de Nemours & Co. 21,800 926,500
------------
COMPUTERS & PERIPHERALS (2.1%)
International Business Machines Corp. 14,800 1,216,560
------------
DIVERSIFIED FINANCIALS (9.0%)
American Express Co. 6,700 344,782
Capital One Financial Corp. 8,900 768,960
Citigroup, Inc. 35,800 1,737,374
Freddie Mac 14,800 967,180
Lehman Brothers Holdings, Inc.* 6,100 781,837
MBNA Corp. 22,900 621,735
------------
5,221,868
------------
DIVERSIFIED TELECOMMUNICATION SERVICES (3.6%)
ALLTEL Corp. 11,100 700,410
AT&T, Inc. 35,100 859,599
Sprint Nextel Corp. 23,400 546,624
------------
2,106,633
------------
ELECTRIC UTILITIES (3.3%)
Dominion Resources, Inc. 3,700 285,640
Exelon Corp. 10,200 542,028
TXU Corp. 21,600 1,084,104
------------
1,911,772
------------
See Accompanying Notes to Financial Statements.
8
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCKS
ELECTRICAL EQUIPMENT (1.0%)
Emerson Electric Co. 8,100 $ 605,070
------------
ENERGY EQUIPMENT & SERVICES (1.5%)
Weatherford International, Ltd. * 24,000 868,800
------------
FOOD PRODUCTS (1.5%)
Kellogg Co. 20,300 877,366
------------
HEALTHCARE EQUIPMENT & SUPPLIES (0.5%)
Boston Scientific Corp. * 11,100 271,839
------------
HEALTHCARE PROVIDERS & SERVICES (2.7%)
Aetna, Inc. 16,400 1,546,684
------------
HOTELS, RESTAURANTS & LEISURE (1.3%)
McDonald's Corp. 21,400 721,608
------------
HOUSEHOLD PRODUCTS (1.5%)
Procter & Gamble Co. 15,400 891,352
------------
INDUSTRIAL CONGLOMERATES (4.0%)
General Electric Co. 37,800 1,324,890
Tyco International, Ltd. 33,800 975,468
------------
2,300,358
------------
INSURANCE (8.1%)
Allstate Corp. 13,900 751,573
AMBAC Financial Group, Inc. 8,100 624,186
Hartford Financial Services Group, Inc. 26,000 2,233,140
St. Paul Travelers Companies, Inc. 24,300 1,085,481
------------
4,694,380
------------
MACHINERY (2.2%)
Deere & Co. 13,400 912,674
ITT Industries, Inc. 3,200 329,024
------------
1,241,698
------------
MEDIA (2.4%)
Time Warner, Inc. 80,100 1,396,944
------------
MULTILINE RETAIL (2.2%)
J.C. Penney Company, Inc. 11,600 644,960
Kohl's Corp. * 12,500 607,500
------------
1,252,460
------------
See Accompanying Notes to Financial Statements.
9
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCKS
OIL & GAS (12.4%)
Apache Corp. 13,200 $ 904,464
Chevron Corp. * 32,500 1,845,025
ConocoPhillips 19,904 1,158,014
Exxon Mobil Corp. 33,600 1,887,312
Newfield Exploration Co. * 12,300 615,861
Noble Energy, Inc. 18,200 733,460
------------
7,144,136
------------
PERSONAL PRODUCTS (0.7%)
Avon Products, Inc. 15,100 431,105
------------
PHARMACEUTICALS (7.0%)
Johnson & Johnson 21,000 1,262,100
Mylan Laboratories, Inc. ss. 30,100 600,796
Pfizer, Inc. 56,400 1,315,248
Wyeth 19,200 884,544
------------
4,062,688
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (1.1%)
Intel Corp. 24,300 606,528
------------
SOFTWARE (1.5%)
Microsoft Corp. 33,500 876,025
------------
SPECIALTY RETAIL (3.6%)
Best Buy Company, Inc. 8,850 384,798
Home Depot, Inc. 23,800 963,424
Office Depot, Inc. * 23,000 722,200
------------
2,070,422
------------
TOBACCO (2.6%)
Altria Group, Inc. 19,800 1,479,456
------------
TOTAL COMMON STOCKS (Cost $49,101,137) 56,592,316
------------
SHORT-TERM INVESTMENTS (5.0%)
State Street Navigator Prime Fund ss.ss. 1,818,243 1,818,243
PAR
(000)
-----------
State Street Bank and Trust Co. Euro Time
Deposit, 3.350%, 1/03/06 $ 1,091 1,091,000
------------
TOTAL SHORT-TERM INVESTMENTS (Cost $2,909,243) 2,909,243
------------
See Accompanying Notes to Financial Statements.
10
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
VALUE
------------
TOTAL INVESTMENTS AT VALUE (102.9%) (Cost $52,010,380) $ 59,501,559
------------
LIABILITIES IN EXCESS OF OTHER ASSETS (-2.9%) (1,696,243)
------------
NET ASSETS (100.0%) $ 57,805,316
============
- --------------------------------------------------------------------------------
* Non-income producing security.
ss. Security or portion thereof is out on loan.
ss.ss. Represents security purchased with cash collateral received for
securities on loan.
See Accompanying Notes to Financial Statements.
11
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2005
- --------------------------------------------------------------------------------
ASSETS
Investments at value including collateral for securities
on loan of $1,818,243 (Cost $52,010,380) (Note 2) $ 59,501,559 1
Cash 450
Receivable for investments sold 533,050
Dividend and interest receivable 75,388
Receivable for portfolio shares sold 19,454
Prepaid expenses and other assets 1,592
------------
Total Assets 60,131,493
------------
LIABILITIES
Advisory fee payable (Note 3) 39,801
Administrative services fee payable (Note 3) 13,036
Payable upon return of securities loaned (Note 2) 1,818,243
Payable for investments purchased 435,533
Payable for portfolio shares redeemed 1,036
Other accrued expenses payable 18,528
------------
Total Liabilities 2,326,177
------------
NET ASSETS
Capital stock, $0.001 par value (Note 6) 4,019
Paid-in capital (Note 6) 50,004,615
Undistributed net investment income 559,598
Accumulated net realized loss from investments (254,075)
Net unrealized appreciation from investments and foreign
currency translations 7,491,159
------------
Net Assets $ 57,805,316
============
Shares outstanding 4,019,124
------------
Net asset value, offering price, and redemption price per share $ 14.38
============
- --------------------------------------------------------------------------------
1 Including $1,770,138 of securities on loan.
See Accompanying Notes to Financial Statements.
12
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME (Note 2)
Dividends $ 1,075,242
Interest 27,737
Securities lending 3,490
Foreign taxes withheld (2,503)
-----------
Total investment income 1,103,966
-----------
EXPENSES
Investment advisory fees (Note 3) 408,312
Administrative services fees (Note 3) 103,497
Audit and tax fees 18,478
Legal fees 17,006
Printing fees (Note 3) 14,677
Custodian fees 11,226
Insurance expense 5,492
Trustees' fees 2,445
Transfer agent fees 2,102
Commitment fees (Note 4) 1,441
Interest expense (Note 4) 881
Miscellaneous expense 9,113
-----------
Total expenses 594,670
Less: fees waived (Note 3) (50,255)
-----------
Net expenses 544,415
-----------
Net investment income 559,551
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND
FOREIGN CURRENCY RELATED ITEMS
Net realized gain from investments 4,001,886
Net realized gain on foreign currency transactions 66
Net change in unrealized appreciation (depreciation)
from investments (549,863)
Net change in unrealized appreciation (depreciation)
from foreign currency translations (105)
-----------
Net realized and unrealized gain from investments and foreign
currency related items 3,451,984
-----------
Net increase in net assets resulting from operations $ 4,011,535
===========
See Accompanying Notes to Financial Statements.
13
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2005 2004
------------ ------------
FROM OPERATIONS
Net investment income $ 559,551 $ 473,415
Net realized gain (loss) on investments and foreign currency translations 4,001,952 (308,313)
Net change in unrealized appreciation (depreciation) from
investments and foreign currency translations (549,968) 4,193,073
------------ ------------
Net increase in net assets resulting from operations 4,011,535 4,358,175
------------ ------------
FROM DIVIDENDS
Dividends from net investment income (473,434) (221,475)
------------ ------------
Net decrease in net assets resulting from dividends (473,434) (221,475)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS (Note 6)
Proceeds from sale of shares 18,628,241 19,361,895
Reinvestment of dividends 473,434 221,484
Net asset value of shares redeemed (9,687,245) (8,403,195)
------------ ------------
Net increase in net assets from capital share transactions 9,414,430 11,180,184
------------ ------------
Net increase in net assets 12,952,531 15,316,884
NET ASSETS
Beginning of year 44,852,785 29,535,901
------------ ------------
End of year $ 57,805,316 $ 44,852,785
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME $ 559,598 $ 473,415
============ ============
See Accompanying Notes to Financial Statements.
14
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
2005 2004 2003 2002 2001
---------- ---------- ---------- ---------- ----------
PER SHARE DATA
Net asset value, beginning of year $ 13.40 $ 12.10 $ 9.74 $ 12.81 $ 12.69
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS
Net investment income 0.11 0.12 0.09 0.09 0.11
Net gain (loss) on investments
and foreign currency related items
(both realized and unrealized) 0.98 1.25 2.35 (3.05) 0.01
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.09 1.37 2.44 (2.96) 0.12
---------- ---------- ---------- ---------- ----------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (0.11) (0.07) (0.08) (0.11) --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (0.11) (0.07) (0.08) (0.11) --
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 14.38 $ 13.40 $ 12.10 $ 9.74 $ 12.81
========== ========== ========== ========== ==========
Total return 1 8.14% 11.34% 25.16% (23.09)% 0.95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (000s omitted) $ 57,805 $ 44,853 $ 29,536 $ 21,486 $ 30,280
Ratio of expenses to average net assets 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of net investment income
to average net assets 1.03% 1.15% 0.97% 0.68% 0.90%
Decrease reflected in above operating expense
ratios due to waivers/reimbursements 0.09% 0.14% 0.25% 0.35% 0.24%
Portfolio turnover rate 81% 53% 86% 43% 46%
- --------------------------------------------------------------------------------
1 Total returns are historical and assume changes in share price and
reinvestment of all dividends and distributions. Had certain expenses not
been reduced during the years shown, total returns would have been lower.
Total returns do not reflect charges and expenses attributable to any
particular variable contract or plan.
See Accompanying Notes to Financial Statements.
15
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Credit Suisse Trust (the "Trust") is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, and
currently offers eight managed investment portfolios of which one, the Large Cap
Value Portfolio (the "Portfolio"), is included in this report. The Portfolio is
a diversified investment fund that seeks long-term growth of capital and income.
Shares of the Portfolio are not available directly to individual investors but
may be offered only through (a) variable annuity contracts and variable life
insurance contracts offered by separate accounts of certain insurance companies
and (b) tax-qualified pension and retirement plans. The Portfolio may not be
available in connection with a particular contract or plan. The Trust was
organized under the laws of The Commonwealth of Massachusetts as a business
trust on March 15, 1995.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A) SECURITY VALUATION -- The net asset value of the Portfolio is
determined daily as of the close of regular trading on the New York Stock
Exchange, Inc. (the "Exchange") on each day the Exchange is open for business.
The Portfolio's equity investments are valued at market value, which is
generally determined using the closing price on the exchange or market on which
the security is primarily traded at the time of valuation (the "Valuation
Time"). If no sales are reported, equity investments are generally valued at the
most recent bid quotation as of the Valuation Time or at the lowest asked
quotation in the case of a short sale of securities. Debt securities with a
remaining maturity greater than 60 days are valued in accordance with the price
supplied by a pricing service, which may use a matrix, formula or other
objective method that takes into consideration market indices, yield curves and
other specific adjustments. Debt obligations that will mature in 60 days or less
are valued on the basis of amortized cost, which approximates market value,
unless it is determined that using this method would not represent fair value.
Investments in mutual funds are valued at the mutual fund's closing net asset
value per share on the day of valuation. Securities and other assets for which
market quotations are not readily available, or whose values have been
materially affected by events occurring before the Portfolio's Valuation Time
but after the close of the securities' primary markets, are valued at fair value
as determined in good faith by, or under the direction of, the Board of Trustees
under procedures established by the Board of Trustees. The Portfolio may utilize
a service provided by an independent
16
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
third party which has been approved by the Board of Trustees to fair value
certain securities. When fair-value pricing is employed, the price of securities
used by the fund to calculate its net asset value may differ from quoted or
published prices for the same securities.
B) FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Portfolio
are maintained in U.S. dollars. Transactions denominated in foreign currencies
are recorded at the current prevailing exchange rates. All assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at the current exchange rate at the end of the period. Translation gains
or losses resulting from changes in the exchange rate during the reporting
period and realized gains and losses on the settlement of foreign currency
transactions are reported in the results of operations for the current period.
The Portfolio does not isolate that portion of realized gains and losses on
investments in EQUITY securities which is due to changes in the foreign exchange
rate from that which is due to changes in market prices of equity securities.
The Portfolio isolates that portion of realized gains and losses on investments
in DEBT securities which is due to changes in the foreign exchange rate from
that which is due to changes in market prices of debt securities.
C) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions
are accounted for on a trade date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date. The cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes.
D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net
investment income and distributions of net realized capital gains, if any, are
declared and paid at least annually. However, to the extent that a net realized
capital gain can be reduced by a capital loss carryforward, such gain will not
be distributed. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States of America ("GAAP").
E) FEDERAL INCOME TAXES -- No provision is made for federal taxes as it is
the Trust's intention to have the Portfolio continue to qualify for and elect
the tax treatment applicable to regulated investment companies under the
Internal Revenue Code of 1986, as amended, and to make the requisite
17
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
distributions to its shareholders, which will be sufficient to relieve it from
federal income and excise taxes.
F) USE OF ESTIMATES -- The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent asset and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting year. Actual
results could differ from these estimates.
G) SHORT-TERM INVESTMENTS -- The Portfolio, together with other
funds/portfolios advised by Credit Suisse Asset Management, LLC ("Credit
Suisse"), an indirect, wholly-owned subsidiary of Credit Suisse Group, pools
available cash into either a short-term variable rate time deposit issued by
State Street Bank and Trust Company ("SSB"), the Portfolio's custodian, or a
money market fund advised by Credit Suisse. The short-term time deposit issued
by SSB is a variable rate account classified as a short-term investment.
H) SECURITIES LENDING -- Loans of securities are required at all times to
be secured by collateral at least equal to 102% of the market value of domestic
securities on loan (including any accrued interest thereon) and 105% of the
market value of foreign securities on loan (including any accrued interest
thereon). Cash collateral received by the Portfolio in connection with
securities lending activity may be pooled together with cash collateral for
other funds/portfolios advised by Credit Suisse and may be invested in a variety
of investments, including certain Credit Suisse-advised funds, funds advised by
SSB, the Portfolio's securities lending agent, or money market instruments.
However, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings.
SSB has been engaged by the Portfolio to act as the Portfolio's securities
lending agent. The Portfolio's securities lending arrangement provides that the
Portfolio and SSB will share the net income earned from securities lending
activities. During the year ended December 31, 2005, total earnings from the
Portfolio's investment in cash collateral received in connection with securities
lending arrangements was $31,089 of which $26,111 was rebated to borrowers
(brokers). The Portfolio retained $3,490 in income from the cash collateral
investment, and SSB, as lending agent, was paid $1,488. The Portfolio may also
18
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
be entitled to certain minimum amounts of income from its securities lending
activities. Securities lending income is accrued as earned.
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Credit Suisse serves as investment adviser for the Portfolio. For its
investment advisory services, Credit Suisse is entitled to receive a fee from
the Portfolio at an annual rate of 0.75% of the Portfolio's average daily net
assets. For the year ended December 31, 2005, investment advisory fees earned
and voluntarily waived were $408,312 and $50,255 respectively. Credit Suisse
will not recapture from the Portfolio any fees it waived during the fiscal year
ended December 31, 2005. Fee waivers and reimbursements are voluntary and may be
discontinued by Credit Suisse at any time.
Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate
of Credit Suisse, and SSB serve as co-administrators to the Portfolio.
For its co-administrative services, CSAMSI currently receives a fee
calculated at an annual rate of 0.10% of the average daily net assets of the
Portfolio. For the year ended December 31, 2005, co-administrative services fees
earned by CSAMSI were $54,442.
For its co-administrative services, SSB receives a fee, exclusive of
out-of-pocket expenses, calculated in total for all the Credit Suisse
funds/portfolios co-administered by SSB and allocated based upon relative
average net assets of each fund/portfolio, subject to an annual minimum fee. For
the year ended December 31, 2005, co-administrative services fees earned by SSB
(including out-of-pocket expenses) were $49,055.
In addition to serving as the Portfolio's co-administrator, CSAMSI
currently serves as distributor of the Portfolio's shares without compensation.
Merrill Corporation ("Merrill"), an affiliate of Credit Suisse, has been
engaged by the Portfolio to provide certain financial printing and fulfillment
services. For the year ended December 31, 2005, Merrill was paid $4,184 for its
services to the Portfolio.
NOTE 4. LINE OF CREDIT
The Portfolio, together with other funds/portfolios advised by Credit
Suisse (collectively, the "Participating Funds"), participates in a $75 million
committed, unsecured line of credit facility ("Credit Facility") for temporary
or
19
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 4. LINE OF CREDIT
emergency purposes with Deutsche Bank, A.G. as administrative agent and
syndication agent and SSB as operations agent. Under the terms of the Credit
Facility, the Participating Funds pay an aggregate commitment fee at a rate of
0.10% per annum on the average unused amount of the Credit Facility, which is
allocated among the Participating Funds in such manner as is determined by the
governing Boards of the Participating Funds. In addition, the Participating
Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At
December 31, 2005, the Portfolio had no loans outstanding under the Credit
Facility. During the year ended December 31, 2005, the Portfolio had borrowings
under the Credit Facility as follows:
AVERAGE DAILY WEIGHTED AVERAGE MAXIMUM DAILY
LOAN BALANCE INTEREST RATE LOAN OUTSTANDING
------------- ---------------- ----------------
$3,477,000 4.563% $3,477,000
NOTE 5. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 2005, purchases and sales of investment
securities (excluding short-term investments) were $52,114,453 and $42,677,631,
respectively.
NOTE 6. CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, $0.001 par value per share.
Transactions in capital shares of the Portfolio were as follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------
Shares sold 1,322,280 1,554,282
Shares issued in reinvestment
of dividends 33,672 17,977
Shares redeemed (683,694) (666,506)
----------- ----------
Net increase 672,258 905,753
=========== ==========
On December 31, 2005, the number of shareholders that held 5% or more of
the outstanding shares of the Portfolio was as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ----------------------
2 96%
Some of the shareholders are omnibus accounts, which hold shares on behalf
of individual shareholders.
20
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 7. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
The tax characteristics of dividends paid during the year ended December
31, 2005 and 2004, respectively, for the Portfolio were as follows:
ORDINARY INCOME
--------------------
2005 2004
-------- --------
$473,434 $221,475
The tax basis of components of distributable earnings differ from the
amounts reflected in the Statement of Assets and Liabilities by temporary
book/tax differences. These differences are primarily due to losses deferred on
wash sales and deferral of post-October losses.
At December 31, 2005, the components of distributable earnings on a tax
basis for the Portfolio were as follows:
Undistributed net investment income $ 560,486
Accumulated net realized loss (159,564)
Unrealized appreciation 7,396,648
Deferral of post-October currency losses (888)
----------
$7,796,682
==========
At December 31, 2005, the Portfolio had capital loss carryforwards
available to offset possible future capital gains as follows:
EXPIRES DECEMBER 31,
--------------------
2012
--------
$159,564
Under current tax law, certain capital losses realized after October 31
within a taxable year may be deferred and treated as occuring on the first day
of the following tax year. For the tax period ended December 31, 2005, the
Portfolio elected to defer net losses arising between November 1, 2005 and
December 31, 2005 of $888.
During the tax year ended December 31, 2005, the Portfolio utilized
$4,016,886 of the capital loss carryforward.
At December 31, 2005, the identified cost for federal income tax purposes,
as well as the gross unrealized appreciation from investments for those
securities having an excess of value over cost, gross unrealized depreciation
from investments for those securities having an excess of cost over value and
the net unrealized appreciation from investments were as follows: $52,104,891,
$7,979,751, $(583,083) and $7,396,668, respectively.
21
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 7. FEDERAL INCOME TAXES
At December 31, 2005, the Portfolio reclassified $66 to undistributed net
investment income from accumulated net realized loss, to adjust for current
period permanent book/tax treatments on foreign currency transactions. Net
assets were not affected by these reclassifications.
NOTE 8. CONTINGENCIES
In the normal course of business, the Portfolio may provide general
indemnifications pursuant to certain contracts and organizational documents. The
Portfolio's maximum exposure under these arrangements is dependent on future
claims that may be made against the Portfolio and, therefore, cannot be
estimated; however, based on experience, the risk of loss from such claims is
considered remote.
22
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees of Credit Suisse Trust and Shareholders of Credit
Suisse Trust - Large Cap Value 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 financial highlights present fairly, in all
material respects, the financial position of Large Cap Value Portfolio (the
"Portfolio"), a portfolio of the Credit Suisse Trust, at December 31, 2005, 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 five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolio's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards 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 December 31, 2005 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 6, 2006
23
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
- --------------------------------------------------------------------------------
In approving the Advisory Agreement, the Board of Trustees, including the
Independent Trustees, considered the following factors with respect to the Large
Cap Value Portfolio (the "Portfolio"):
INVESTMENT ADVISORY FEE RATES
The Board reviewed and considered the contractual advisory fee rate of
0.75% for the Portfolio ("Contractual Advisory Fee") in light of the extent and
quality of the advisory services provided by Credit Suisse Asset Management LLC
("Credit Suise"). The Board also reviewed and considered the fee waivers and/or
expense reimbursement arrangements currently in place for the Portfolio and
considered the actual fee rates after taking waivers and reimbursements into
account of 0.61% paid by the Portfolio ("Net Advisory Fee"). The Board
acknowledged that the fee waivers and reimbursements could be discontinued at
any time.
Additionally, the Board received and considered information comparing the
Portfolio's Contractual Advisory Fee and Net Advisory Fee and the Portfolio's
overall expenses with those of funds in both the relevant expense group ("Peer
Group") and universe of funds (the "Universe") provided by Lipper Inc., an
independent provider of investment company data.
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AGREEMENT
The Board received and considered information regarding the nature, extent
and quality of services provided to the Portfolio by Credit Suisse under the
Advisory Agreement. The Board also noted information received at regular
meetings throughout the year related to the services rendered by Credit Suisse.
The Board reviewed background information about Credit Suisse, including its
Form ADV. The Board considered the background and experience of Credit Suisse's
senior management and the expertise of, and the amount of attention given to the
Portfolio by, senior personnel of Credit Suisse. In addition, the Board reviewed
the qualifications, backgrounds and responsibilities of the portfolio management
team primarily responsible for the day-to-day portfolio management of the
Portfolio and the extent of the resources devoted to research and analysis of
actual and potential investments. The Board also received and considered
information about the nature, extent and quality of services and fee rates
offered to other Credit Suisse clients for comparable services.
PORTFOLIO PERFORMANCE
The Board received and considered the one-, two-, three-, four- and
five-year performance of the Portfolio, along with comparisons, for all
presented periods, both to the relevant performance group ("Performance Group")
and universe
24
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
of funds ("Performance Universe") for the Portfolio. The Board was provided with
a description of the methodology used to arrive at the funds included in the
Performance Group and the Performance Universe.
The Board reviewed information comparing the performance of various Credit
Suisse Funds to performance benchmarks that the Board had previously established
and progress that had been made in certain instances toward achieving those
benchmarks. The Board also reviewed comparisons between the Portfolio and its
identified benchmark over various time periods.
CREDIT SUISSE PROFITABILITY
The Board received and considered a profitability analysis of Credit
Suisse based on the fees payable under the Advisory Agreement for the Portfolio,
including any fee waivers or fee caps, as well as other relationships between
the Portfolio on the one hand and Credit Suisse affiliates on the other. The
Board received profitability information for the other funds in the Credit
Suisse family of funds.
ECONOMIES OF SCALE
The Board considered whether economies of scale in the provision of
services to the Portfolio were being passed along to the shareholders.
Accordingly, the Board considered whether alternative fee structures (such as
breakpoint fee structures) would be more appropriate or reasonable taking into
consideration economies of scale or other efficiencies that might accrue from
increases in the Portfolio's asset levels.
OTHER BENEFITS TO CREDIT SUISSE
The Board considered other benefits received by Credit Suisse and its
affiliates as a result of their relationship with the Portfolio. Such benefits
include, among others, research arrangements with brokers who execute
transactions on behalf of the Portfolio, administrative and brokerage
relationships with affiliates of Credit Suisse and benefits potentially derived
from an increase in Credit Suisse's businesses as a result of its relationship
with the Portfolio (such as the ability to market to shareholders other
financial products offered by Credit Suisse and its affiliates).
The Board considered the standards applied in seeking best execution,
whether and to what extent soft dollar credits are sought and how any such
credits are utilized, any benefits that may be achieved by using an affiliated
broker and the existence of quality controls applicable to brokerage allocation
25
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
procedures. The Board also reviewed Credit Suisse's method for allocating
portfolio investment opportunities among its advisory clients.
CONCLUSIONS
In selecting Credit Suisse, and approving the Advisory Agreement and the
investment advisory fee under such agreement, the Board concluded that:
o Although the Contractual Advisory Fee was higher than that of the
Portfolio's Peer Group, the Net Advisory Fee was below the median of
the Portfolio's Peer Group. In addition, the Board recognized that
Credit Suisse has historically evidenced a willingness to waive
fees. In light of the Portfolio's relatively small size, the fee was
considered reasonable.
o The Portfolio's one- and two-year performance was in the third and
second quintile, respectively, for its Performance Group and in the
second quintile for both periods in its Performance Universe. The
Portfolio's three-, four- and five-year performance was below the
median for its Performance Universe, although the Portfolio's five
year performance was in the second quintile for its Performance
Group. The Board noted that the Portfolio's performance for the
periods under review was above or within a reasonable range, one
standard deviation, of the median for its Performance Group. The
Board noted the Portfolio's performance was improving in absolute
terms and that Credit Suisse was in the process of addressing
performance issues.
o Aside from performance (as described above), the Board was satisfied
with the nature and extent of the investment advisory services
provided to the Portfolio by Credit Suisse, and that based on
dialogue with management and counsel, the services provided by
Credit Suisse under the Advisory Agreement are typical of, and
consistent with, those provided to mutual funds by other investment
advisers. The Board understood that Credit Suisse had or was in the
process of addressing any performance issues.
o In light of the costs of providing investment management and other
services to the Portfolio and Credit Suisse's ongoing commitment to
the Portfolio and willingness to cap fees and expenses, the profits
and other ancillary benefits that Credit Suisse and its affiliates
received were considered reasonable.
o Credit Suisse's profitability based on fees payable under the
Advisory Agreement was reasonable in light of the nature, extent and
quality of the services provided to the Portfolio thereunder.
26
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
o In light of the relatively small size of the Portfolio and the
amount of the Net Advisory Fees, the Portfolio's current fee
structure (without breakpoints) was considered reasonable.
No single factor reviewed by the Board was identified by the Board as the
principal factor in determining whether to approve the Advisory Agreement. The
Independent Trustees were advised by separate independent legal counsel
throughout the process.
27
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS IN
AND FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------ ----------- ----------- -------------------- -------------- ----------------
INDEPENDENT TRUSTEES
Enrique Arzac Trustee, Since Professor of Finance 47 Director of The
c/o Credit Suisse Asset Nominating 2005 and Economics, Adams Express
Management, LLC Committee Graduate School of (a closed-end
Attn: General Counsel Member and Business, Columbia investment
466 Lexington Avenue Audit University since 1971 company); Director
New York, New York Committee of Petroleum
10017-3140 Chairman and Resources
Corporation
Date of Birth: 10/02/41 (a closed-end
investment
company)
Richard H. Francis Trustee, Since Currently retired 41 None
c/o Credit Suisse Asset Nominating 1999
Management, LLC and Audit
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 04/23/32
Jeffrey E. Garten Trustee, Since The Juan Trippe 40 Director of Aetna,
Box 208200 Nominating 1998 2 Professor in the Practice Inc. (insurance
New Haven, Connecticut and Audit of International Trade, company); Director
06520-8200 Committee Finance and Business of CarMax Group
Member from July 2005 to present; (used car dealers)
Date of Birth: 10/29/46 Partner and Chairman
of Garten Rothkopf
(consulting firm) from
October 2005 to present;
Dean of Yale School of
Management from
November 1995 to
June 2005
Peter F. Krogh Trustee, Since Dean Emeritus and 40 Director of Carlisle
301 ICC Nominating 2001 Distinguished Professor Companies
Georgetown University and Audit of International Affairs Incorporated
Washington, DC 20057 Committee at the Edmund A. (diversified
Member Walsh School of manufacturing
Date of Birth: 02/11/37 Foreign Service, company)
Georgetown University
from June 1995
to present
________________
1 Each Trustee and Officer serves until his or her respective successor has
been duly elected and qualified.
2 Mr. Garten was initially appointed as a Trustee of the Trust on February
6, 1998. He resigned as Trustee on February 3, 2000, and was subsequently
re-appointed on December 21, 2000.
28
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS IN
AND FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------ ----------- ----------- -------------------- -------------- ----------------
INDEPENDENT TRUSTEES
James S. Pasman, Jr. Trustee, Since Currently retired 42 Director of Education
c/o Credit Suisse Asset Nominating 1999 Management Corp.
Management, LLC and Audit
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 12/20/30
Steven N. Rappaport Chairman of Trustee Partner of Lehigh Court, 46 Director of Presstek,
Lehigh Court, LLC the Board Since LLC and RZ Capital Inc. (digital imaging
40 East 52nd Street of Trustees, 1999 (private investment firms) technologies
New York, New York Nominating and from July 2002 to present; company); Director
10022 Committee Chairman Transition Adviser to of Wood Resources,
Chairman since SunGard Securities LLC. (plywood
Date of Birth: 07/10/48 and Audit 2005 Finance, Inc. from manufacturing
Committee February 2002 to July company)
Member 2002; President of
SunGard Securities
Finance, Inc. from 2001
to February 2002;
President of Loanet,
Inc. (on-line accounting
service) from 1997 to 2001
INTERESTED TRUSTEE
Michael E. Kenneally 3,4 Trustee Since Chairman and Global 40 None
c/o Credit Suisse Asset 2004 Chief Executive Officer
Management, LLC of Credit Suisse from
Attn: General Counsel March 2003 to July 2005;
466 Lexington Avenue Chairman and Chief
New York, New York Investment Officer of
10017-3140 Banc of America Capital
Management from 1998
Date of Birth: 03/30/54 to March 2003
__________________
3 Mr. Kenneally is a Trustee who is an "interested person" of the Trust as
defined in the 1940 Act, because he was an officer of Credit Suisse within
the last two fiscal years.
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
29
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM OF
OFFICE 1 AND
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------------------ ----------- ------------ ----------------------------------------------
OFFICERS
Steven B. Plump 4 Chief Since Managing Director; Associated with Credit Suisse or its
Credit Suisse Asset Executive 2005 predecessor since 1995; Officer of other Credit Suisse Funds
Management, LLC Officer and
466 Lexington Avenue President
New York, New York
10017-3140
Date of Birth: 02/08/59
Michael A. Pignataro Chief Since Director and Director of Fund Administration of Credit Suisse;
Credit Suisse Asset Financial 1999 Associated with Credit Suisse or its predecessors since 1984;
Management, LLC Officer and Officer of other Credit Suisse Funds
466 Lexington Avenue Treasurer
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Since Director and Global Head of Compliance of Credit Suisse;
Credit Suisse Asset Compliance 2004 Associated with Credit Suisse since July 2000; Vice President
Management, LLC Officer and Director of Compliance of Forstmann-Leff
466 Lexington Avenue Associates from 1998 to June 2000; Officer of other
New York, New York Credit Suisse Funds
10017-3140
Date of Birth: 09/21/66
Ajay Mehra Chief Since Director and Head of Legal Americas Traditional Asset
Credit Suisse Asset Legal 2004 Management and Hedge Funds; Associated with Credit Suisse
Management, LLC Officer since September 2004; Senior Associate of Shearman & Sterling
466 Lexington Avenue LLP from September 2000 to September 2004; Senior Counsel
New York, New York of the SEC Division of Investment Management from June
10017-3140 1997 to September 2000; Officer of other Credit Suisse Funds
Date of Birth: 08/14/70
J. Kevin Gao Vice Since Director and Legal Counsel of Credit Suisse; Associated with
Credit Suisse Asset President 2004 Credit Suisse since July 2003; Associated with the law firm of
Management, LLC and Willkie Farr & Gallagher LLP from 1998 to 2003; Officer of other
466 Lexington Avenue Secretary Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 10/13/67
Robert Rizza Assistant Since Vice President of Credit Suisse; Associated with Credit Suisse
Credit Suisse Asset Treasurer 2002 since 1998; Officer of other Credit Suisse Funds
Management,s LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
___________________
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
The Statement of Additional Information includes additional information
about the Trustees and is available, without charge, upon request, by calling
800-222-8977.
30
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
TAX INFORMATION LETTER
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS
Corporate Shareholders should note for the year ended December 31, 2005,
the percentage of the Portfolio's investment income (i.e., net investment income
plus short-term capital gains) that qualified for the intercorporate dividends
received deduction is 100.00%.
31
CREDIT SUISSE TRUST -- LARGE CAP VALUE PORTFOLIO
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION
- --------------------------------------------------------------------------------
Information regarding how the Portfolio voted proxies related to its
portfolio securities during the 12-month period ended June 30 of each year, as
well as the policies and procedures that the Portfolio uses to determine how to
vote proxies relating to its portfolio securities are available:
o By calling 1-800-222-8977
o On the Portfolio's website, www.credit-suisse.com/us
o On the website of the Securities and Exchange Commission,
http://www.sec.gov.
The Portfolio files a complete schedule of its portfolio holdings for the
first and third quarters of its fiscal year with the SEC on Form N-Q. The
Portfolio's Forms N-Q are available on the SEC's website at http://www.sec.gov
and may be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. Information on the operation of the SEC's Public Reference Room may be
obtained by calling 1-800-SEC-0330.
32
CREDIT SUISSE [LOGO]
P.O. BOX 55030, BOSTON, MA 02205-5030
800-222-8977 o www.credit-suisse.com/us
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. TRLCV-AR-1205
CREDIT SUISSE [LOGO]
CREDIT SUISSE FUNDS
Annual Report
December 31, 2005
CREDIT SUISSE TRUST
o SMALL CAP VALUE PORTFOLIO
Credit Suisse Trust (the "Trust") shares are not available directly to
individual investors, but may be offered only through certain insurance products
and pension and retirement plans.
The Trust's investment objectives, risks, charges and expenses (which should be
considered carefully before investing), and more complete information about the
Trust, are provided in the PROSPECTUS, which should be read carefully before
investing. You may obtain additional copies by calling 800-222-8977 or by
writing to Credit Suisse Trust, P.O. Box 55030, Boston, MA 02205-5030.
Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466
Lexington Ave., New York, NY 10017-3140. The Trust is advised by Credit Suisse
Asset Management, LLC.
THE VIEWS OF THE PORTFOLIO'S MANAGEMENT ARE AS OF THE DATE OF THE LETTER AND THE
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF DECEMBER 31, 2005; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
PORTFOLIO SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC ("CREDIT SUISSE") OR ANY AFFILIATE, ARE NOT FDIC-INSURED AND ARE
NOT GUARANTEED BY CREDIT SUISSE OR ANY AFFILIATE. PORTFOLIO INVESTMENTS ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
January 26, 2006
Dear Shareholder:
For the 12 months ended December 31, 2005, Credit Suisse Trust--Small Cap
Value Portfolio 1 (the "Portfolio") had a gain of 7.67%, vs. an increase of
4.55% for the Russell 2000(R) Index 2 and an increase of 4.71% for the Russell
2000(R) Value Index. 3
THE MARKET: POSITIVE DESPITE RISING ENERGY COSTS, INTEREST RATES
The period was an overall positive one for equities. Stocks initially
struggled, but rallied into the summer, aided by benign inflation data and good
earnings reports from a number of visible companies. To be sure, headwinds were
ever-present, notably in the form of hurricane activity, surging energy prices
and a Federal Reserve that continued to raise short-term interest rates in small
but steady increments. In the face of all this, the economy nonetheless appeared
resilient, at least as of late 2005: Third-quarter GDP growth was reported at an
annualized rate of 4.1%, the tenth consecutive quarter of 3% or greater growth.
The earnings backdrop remained generally supportive late in the year.
In the market, high energy prices helped drive the outperformance of
energy related stocks, which, despite some late-period weakness, outpaced all
other economic sectors in the period. This was reflected in the outperformance
of value stocks over growth stocks, as energy companies comprise a relatively
large portion of the value universe. Mid-capitalization stocks generally
outperformed both large and small-cap stocks for the period.
STRATEGIC REVIEW: AIDED BY STOCK SELECTION
The Portfolio's outperformance was attributable to good stock selection in
the energy, producer durables, financial services and transportation sectors.
The Portfolio's overweighting in the energy sector also proved beneficial to its
performance. Negative contributors to the Portfolio's performance in the period
included its consumer discretionary and health care holdings, as well as its
underweighting in the utilities sector, as it outpaced the broader market in
2005.
1
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
With regard to noteworthy portfolio activity, our recent purchases
included Salem Communications (1.4% of the Portfolio's net assets as of December
31, 2005), a leading provider of religious radio programming. While the audience
for traditional radio formats has continued to decline, Salem's audience has
been growing. The market, however, was valuing Salem's shares similarly to other
radio broadcasters, which were trading at historically low valuations, at our
time of purchase. We also established a position in CACI International (1.6% of
the Portfolio's net assets as of December 31, 2005), a provider of information
technology solutions to government defense and intelligence agencies. Investors'
concerns about congressional budget delays led to a market price decline for the
shares, creating an attractive buying opportunity in our judgment.
Our late-period sales included Eagle Materials, whose materials are used
in residential and commercial construction. The stock had rallied to reach our
sell target. We also pared our overall exposure to energy companies before
energy stocks tumbled in the fourth quarter of 2005, selling stocks such as
Oceaneering International that had performed well.
Going forward, we will continue to seek to identify undervalued stocks of
small US companies. Using proprietary bottom-up equity research, we look for
stocks that are deeply discounted relative to our view of their upside
potential, with an emphasis on companies we believe stand to benefit from the
positive impact of a likely significant event.
The Credit Suisse Value Team
Stephen J. Kaszynski
Robert E. Rescoe
T. Ryan Harkins
BECAUSE OF THE NATURE OF THE PORTFOLIO'S INVESTMENTS IN SPECIAL-SITUATION,
START-UP AND OTHER SMALL COMPANIES, AN INVESTMENT IN THE PORTFOLIO MAY BE MORE
VOLATILE AND LESS LIQUID THAN INVESTMENTS IN LARGER COMPANIES.
2
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS
FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND
FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT
REGULATION AND THEIR POTENTIAL IMPACT ON THE PORTFOLIO'S INVESTMENTS. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS,
DEVELOPMENTS AND REGULATIONS IN THE FUTURE AND THEIR IMPACT ON THE PORTFOLIO
COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE
PORTFOLIO HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
3
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
CREDIT SUISSE TRUST--SMALL CAP VALUE PORTFOLIO 1, THE RUSSELL 2000(R) INDEX 2,4
AND THE RUSSELL 2000(R) VALUE INDEX 3 FROM INCEPTION (11/30/01).
[LINE CHART]
CREDIT
SUISSE RUSSELL
TRUST--SMALL RUSSELL 2000(R)
CAP VALUE 2000(R) VALUE
PORTFOLIO 1,4 INDEX 2,4 INDEX 3,4
------------- --------- ---------
11/1 10000 10000 10000
12/01 10600 10617 10612
10720 10507 10753
11010 10219 10819
11510 11041 11629
11730 11141 12038
11240 10646 11640
10910 10118 11383
9800 8590 9691
10050 8569 9649
9310 7954 8960
9430 8209 9094
9840 8941 9820
12/02 9640 8443 9400
9260 8209 9135
9140 7961 8828
9080 8064 8923
9740 8829 9771
10260 9776 10768
10320 9953 10950
10610 10576 11497
10970 11060 11933
10696 10856 11796
11266 11768 12758
11616 12185 13247
12/03 12027 12433 13727
12267 12973 14202
12437 13090 14478
12537 13212 14677
12347 12538 13918
12427 12738 14087
13027 13274 14803
12597 12380 14122
12497 12317 14260
13067 12895 14825
13157 13149 15054
14148 14289 16390
12/04 14478 14712 16782
14088 14099 16132
14818 14337 16453
14528 13927 16114
13797 13129 15283
14408 13989 16215
14978 14529 16932
15879 15450 17895
15759 15164 17483
15712 15211 17454
15065 14738 17016
15610 15453 17706
12/05 15589 15382 17570
4
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005 1
SINCE
1 YEAR INCEPTION
------ ---------
7.67% 11.47%
RETURNS REPRESENT PAST PERFORMANCE AND INCLUDE CHANGE IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE
FUTURE RESULTS. THE CURRENT PERFORMANCE OF THE PORTFOLIO MAY BE LOWER OR HIGHER
THAN THE FIGURES SHOWN. RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION
VALUE MAY BE MORE OR LESS THAN ORIGINAL COST. THE PERFORMANCE RESULTS DO NOT
REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON PORTFOLIO
DISTRIBUTIONS OR THE REDEMPTION OF PORTFOLIO SHARES. PERFORMANCE INCLUDES THE
EFFECT OF DEDUCTING EXPENSES, BUT DOES NOT INCLUDE CHARGES AND EXPENSES
ATTRIBUTABLE TO ANY PARTICULAR VARIABLE CONTRACT OR PLAN. ACCORDINGLY, THE
PROSPECTUS OF THE SPONSORING PARTICIPATING INSURANCE COMPANY SEPARATE ACCOUNT OR
PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS SHOULD
BE CAREFULLY REVIEWED FOR INFORMATION ON RELEVANT CHARGES AND EXPENSES.
EXCLUDING THESE CHARGES AND EXPENSES FROM QUOTATIONS OF PERFORMANCE HAS THE
EFFECT OF INCREASING THE PERFORMANCE QUOTED, AND THE EFFECT OF THESE CHARGES
SHOULD BE CONSIDERED WHEN COMPARING PERFORMANCE TO THAT OF OTHER MUTUAL FUNDS.
PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH-END IS AVAILABLE AT
WWW.CREDIT-SUISSE.COM/US.
________________
1 Fee waivers and/or expense reimbursements may reduce expenses for the
Portfolio, without which performance would be lower. Waivers and/or
reimbursements may be discontinued any time.
2 The Russell 2000(R) Index measures the performance of the 2,000 smallest
companies in the Russell 3000(R) Index, which represent approximately 8%
of the total market capitalization of the Russell 3000(R) Index. It is an
unmanaged index of common stocks that includes reinvestment of dividends
and is compiled by Frank Russell Company. Investors cannot invest directly
in an index.
3 The Russell 2000(R) Value Index measures the performance of those
companies in the Russell 2000(R) Index with lower price-to-book ratios and
lower forecasted growth values. It is an unmanaged index of common stocks
that includes reinvestment of dividends and is compiled by Frank Russell
Company. Investors cannot invest directly in an index.
4 Performance for the benchmark is not available for the period beginning
November 30, 2001 (commencement of operations). For that reason
performance is shown for the period beginning December 1, 2001.
5
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
INFORMATION ABOUT YOUR PORTFOLIO'S EXPENSES
As an investor of the Portfolio, you incur two types of costs: ongoing
expenses and transaction costs. Ongoing expenses include management fees,
distribution and service (12b-1) fees and other Portfolio expenses. Examples of
transaction costs include sales charges (loads), redemption fees and account
maintenance fees, which are not shown in this section and which would result in
higher total expenses. The following table is intended to help you understand
your ongoing expenses of investing in the Portfolio and to help you compare
these expenses with the ongoing expenses of investing in other mutual funds. The
table is based on an investment of $1,000 made at the beginning of the six month
period ended December 31, 2005.
The table illustrates your Portfolio's expenses in two ways:
o ACTUAL PORTFOLIO RETURN. This helps you estimate the actual dollar
amount of ongoing expenses paid on a $1,000 investment in the
Portfolio using the Portfolio's actual return during the period. To
estimate the expenses you paid over the period, simply divide your
account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in
the "Expenses Paid per $1,000" line under the share class you hold.
o HYPOTHETICAL 5% PORTFOLIO RETURN. This helps you to compare your
Portfolio's ongoing expenses with those of other mutual funds using
the Portfolio's actual expense ratio and a hypothetical rate of
return of 5% per year before expenses. Examples using a 5%
hypothetical fund return may be found in the shareholder reports of
other mutual funds. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or
expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight
your ongoing expenses only and do not reflect any transaction costs, such as
sales charges (loads) or redemption fees. If these transaction costs had been
included, your costs would have been higher. The "Expenses Paid per $1,000" line
of the tables is useful in comparing ongoing expenses only and will not help you
determine the relative total expenses of owning different funds.
6
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
EXPENSES AND VALUE OF A $1,000 INVESTMENT
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 2005
- --------------------------------------------------------------------------------
ACTUAL PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,040.80
Expenses Paid per $1,000* $ 6.64
HYPOTHETICAL 5% PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,018.70
Expenses Paid per $1,000* $ 6.56
ANNUALIZED EXPENSE RATIOS* 1.29%
_______________
* EXPENSES ARE EQUAL TO THE PORTFOLIO'S ANNUALIZED EXPENSE RATIO MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF
DAYS IN THE MOST RECENT FISCAL HALF YEAR PERIOD, THEN DIVIDED BY 365.
THE "EXPENSES PAID PER $1,000" AND THE "ANNUALIZED EXPENSE RATIOS" IN THE
TABLES ARE BASED ON ACTUAL EXPENSES PAID BY THE PORTFOLIO DURING THE
PERIOD, NET OF FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IF THOSE FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS HAD NOT BEEN IN EFFECT, THE
PORTFOLIO'S ACTUAL EXPENSES WOULD HAVE BEEN HIGHER. EXPENSES DO NOT
REFLECT ADDITIONAL CHARGES AND EXPENSES THAT ARE, OR MAY BE, IMPOSED UNDER
THE VARIABLE CONTRACTS OR PLANS. SUCH CHARGES AND EXPENSES ARE DESCRIBED
IN THE PROSPECTUS OF THE INSURANCE COMPANY SEPARATE ACCOUNT OR IN THE PLAN
DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS. THE
PORTFOLIO'S EXPENSES SHOULD BE CONSIDERED WITH THESE CHARGES AND EXPENSES
IN EVALUATING THE OVERALL COST OF INVESTING IN THE SEPARATE ACCOUNT.
For more information, please refer to the Portfolio's prospectus.
7
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
SECTOR BREAKDOWN*
[BAR CHART]
Financial Services 21.7%
Consumer Discretionary 18.6%
Materials & Processing 13.5%
Producer Durables 9.3%
Auto & Transportation 6.6%
Other Energy 6.3%
Utilities 5.7%
Health Care 5.3%
Technology 3.6%
Other 3.2%
Consumer Staples 2.4%
Integrated Oils 2.0%
Short-Term Investments 1.8%
_______________
* Expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
8
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCKS (97.0%)
AEROSPACE & DEFENSE (0.6%)
DRS Technologies, Inc. 3,470 $ 178,427
------------
AGRICULTURE (0.9%)
Delta and Pine Land Co. 10,700 246,207
------------
AUTO COMPONENTS (4.7%)
Accuride Corp.* 43,100 555,990
Modine Manufacturing Co. 6,670 217,375
Proliance International, Inc.* 23,536 124,506
Visteon Corp.*ss. 69,800 436,948
------------
1,334,819
------------
BANKS (10.9%)
Alabama National Bancorp. 5,400 349,704
First Niagara Financial Group, Inc. 30,300 438,441
Independent Bank Corp./MA ss. 9,890 282,162
NewAlliance Bancshares, Inc. ss. 24,800 360,592
Partners Trust Financial Group, Inc. 25,500 307,275
Prosperity Bancshares, Inc. ss. 14,400 413,856
Provident Financial Services, Inc. 23,900 442,389
Sun Bancorp, Inc.* 7,300 144,175
Webster Financial Corp. 7,750 363,475
------------
3,102,069
------------
CHEMICALS (2.6%)
Chemtura Corp. 35,100 445,770
H.B. Fuller Co. 9,370 300,496
------------
746,266
------------
COMMERCIAL SERVICES & SUPPLIES (4.7%)
Banta Corp. ss. 12,280 611,544
Viad Corp. 12,500 366,625
Watson Wyatt Worldwide, Inc. Class A 12,530 349,587
------------
1,327,756
------------
CONSTRUCTION & ENGINEERING (2.1%)
EMCOR Group, Inc.* 8,950 604,394
------------
CONTAINERS & PACKAGING (3.8%)
AptarGroup, Inc. 11,180 583,596
Crown Holdings, Inc.* 24,700 482,391
------------
1,065,987
------------
DISTRIBUTION & WHOLESALE (1.8%)
Spectrum Brands, Inc.* ss. 24,500 497,595
------------
See Accompanying Notes to Financial Statements.
9
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCKS
DIVERSIFIED FINANCIALS (4.3%)
Apollo Investment Corp. 18,200 $ 326,326
Assured Guaranty, Ltd. 14,000 355,460
National Financial Partners Corp. 7,500 394,125
Patriot Capital Funding, Inc. 11,900 145,180
------------
1,221,091
------------
DIVERSIFIED TELECOMMUNICATION SERVICES (2.2%)
Eschelon Telecom, Inc.* 5,974 83,935
General Communication, Inc.* 28,800 297,504
Iowa Telecommunications Services, Inc. 15,400 238,546
------------
619,985
------------
ELECTRIC UTILITIES (1.7%)
Empire District Electric Co. 11,100 225,663
OGE Energy Corp. 9,110 244,057
------------
469,720
------------
ELECTRICAL EQUIPMENT (1.7%)
Brady Corp. 13,440 486,259
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (3.6%)
Electro Scientific Industries, Inc.* 11,120 268,548
Roper Industries, Inc. 5,180 204,662
Varian, Inc.* 9,530 379,198
Woodhead Industries, Inc. 11,810 163,805
------------
1,016,213
------------
FOOD & DRUG RETAILING (1.5%)
Ruddick Corp. 19,480 414,534
------------
FOOD PRODUCTS (0.9%)
Sensient Technologies Corp. ss. 14,200 254,180
------------
GAS UTILITIES (1.8%)
National Fuel Gas Co. 7,230 225,504
WGL Holdings, Inc. ss. 9,760 293,385
------------
518,889
------------
HEALTHCARE EQUIPMENT & SUPPLIES (3.3%)
Arrow International, Inc. ss. 19,900 576,901
Invacare Corp. 11,060 348,279
------------
925,180
------------
HEALTHCARE PROVIDERS & SERVICES (3.4%)
Centene Corp.* 12,400 325,996
LifePoint Hospitals, Inc.* ss. 6,700 251,250
Service Corp. International 46,700 382,006
------------
959,252
------------
See Accompanying Notes to Financial Statements.
10
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCKS
HOTELS, RESTAURANTS & LEISURE (2.5%)
Landry's Restaurants, Inc. ss. 15,000 $ 400,650
Marcus Corp.ss 13,160 309,260
------------
709,910
------------
HOUSEHOLD PRODUCTS (0.4%)
Prestige Brands Holdings, Inc.* ss. 8,300 103,750
------------
INDUSTRIAL CONGLOMERATES (3.1%)
Carlisle Companies, Inc. 6,460 446,709
Teleflex, Inc. 6,800 441,864
------------
888,573
------------
INSURANCE (5.0%)
Argonaut Group, Inc. 11,800 386,686
Hanover Insurance Group, Inc. 9,800 409,346
Platinum Underwriters Holdings, Ltd. 15,700 487,799
ProAssurance Corp.* 2,900 141,056
------------
1,424,887
------------
IT CONSULTING & SERVICES (1.6%)
CACI International, Inc. Class A* 8,100 464,778
------------
MACHINERY (7.5%)
Albany International Corp. Class A 8,100 292,896
Briggs & Stratton Corp. 12,300 477,117
ESCO Technologies, Inc.* 6,860 305,202
Flowserve Corp.* 10,920 431,995
NACCO Industries, Inc. Class A 1,400 164,010
The Manitowoc Company, Inc. 9,350 469,557
------------
2,140,777
------------
MEDIA (4.9%)
Harte-Hanks, Inc. 15,540 410,101
Salem Communications Corp. Class A* ss. 22,700 397,023
Source Interlink Companies, Inc.* ss. 53,100 590,472
------------
1,397,596
------------
MULTILINE RETAIL (0.9%)
Bon-Ton Stores, Inc. ss. 14,000 267,820
------------
OIL & GAS (8.2%)
Comstock Resources, Inc.* 13,300 405,783
Denbury Resources, Inc.* 25,300 576,334
Forest Oil Corp.* 8,300 378,231
Houston Exploration Co.* 2,600 137,280
KCS Energy, Inc.* ss. 23,000 557,060
Range Resources Corp. 10,750 283,155
------------
2,337,843
------------
See Accompanying Notes to Financial Statements.
11
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCKS
REAL ESTATE (1.2%)
Affordable Residential Communities ss. 8,100 $ 77,193
Eagle Hospitality Properties Trust, Inc. 34,800 265,524
------------
342,717
------------
ROAD & RAIL (1.8%)
Laidlaw International, Inc. 21,800 506,414
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (0.4%)
Credence Systems Corp.* ss. 18,200 126,672
------------
SPECIALTY RETAIL (1.2%)
Hughes Supply, Inc. 9,400 336,990
------------
TEXTILES & APPAREL (1.8%)
Hartmarx Corp.* ss. 21,900 171,039
Warnaco Group, Inc.* 13,200 352,704
------------
523,743
------------
TOTAL COMMON STOCKS (Cost $22,019,853) 27,561,293
------------
SHORT-TERM INVESTMENTS (23.7%)
State Street Navigator Prime Fund ss. ss. 6,210,525 6,210,525
PAR
(000)
---------
State Street Bank and Trust Co. Euro Time
Deposit, 3.350%, 1/03/06 $ 520 520,000
------------
TOTAL SHORT-TERM INVESTMENTS (Cost $6,730,525) 6,730,525
------------
TOTAL INVESTMENTS AT VALUE (120.7%) (Cost $28,750,378) 34,291,818
LIABILITIES IN EXCESS OF OTHER ASSETS (-20.7%) (5,891,337)
------------
NET ASSETS (100.0%) $ 28,400,481
============
- --------------------------------------------------------------------------------
* Non-income producing security.
ss. Security or portion thereof is out on loan.
ss.ss. Represents security purchased with cash collateral received for
securities on loan.
See Accompanying Notes to Financial Statements.
12
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2005
- --------------------------------------------------------------------------------
ASSETS
Investments at value, including collateral for securities
on loan of $6,210,525 (Cost $28,750,378) (Note 2) $ 34,291,818 1
Cash 1,056
Receivable for investments sold 331,175
Dividend and interest receivable 29,154
Receivable for portfolio shares sold 14,819
------------
Total Assets 34,668,022
------------
LIABILITIES
Advisory fee payable (Note 3) 20,203
Administrative services fee payable (Note 3) 7,393
Payable upon return of securities loaned (Note 2) 6,210,525
Payable for investments purchased 7,632
Other accrued expenses payable 21,788
------------
Total Liabilities 6,267,541
------------
NET ASSETS
Capital stock, $0.001 par value (Note 6) 1,874
Paid-in capital (Note 6) 21,241,563
Undistributed net investment income 22,943
Accumulated net realized gain on investments 1,592,661
Net unrealized appreciation from investments 5,541,440
------------
Net Assets $ 28,400,481
============
Shares outstanding 1,873,874
------------
Net asset value, offering price, and redemption price per
share $ 15.16
============
- --------------------------------------------------------------------------------
1 Including $6,047,486 of securities on loan.
See Accompanying Notes to Financial Statements.
13
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME (Note 2)
Dividends $ 390,189
Interest 24,169
Securities lending 4,751
------------
Total investment income 419,109
------------
EXPENSES
Investment advisory fees (Note 3) 272,947
Administrative services fees (Note 3) 66,676
Legal fees 19,202
Audit and tax fees 17,230
Printing fees (Note 3) 13,135
Custodian fees 11,627
Insurance expense 4,894
Interest expense (Note 4) 3,589
Trustees' fees 2,445
Commitment fees (Note 4) 870
Transfer agent fees 633
Miscellaneous expense 8,590
------------
Total expenses 421,838
Less: fees waived (Note 3) (19,517)
------------
Net expenses 402,321
------------
Net investment income 16,788
------------
NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS
Net realized gain from investments 1,639,527
Net change in unrealized appreciation (depreciation) from
investments 190,748
------------
Net realized and unrealized gain from investments 1,830,275
------------
Net increase in net assets resulting from operations $ 1,847,063
============
See Accompanying Notes to Financial Statements.
14
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2005 2004
------------ ------------
FROM OPERATIONS
Net investment income (loss) $ 16,788 $ (21,014)
Net realized gain from investments 1,639,527 1,080,063
Net change in unrealized appreciation (depreciation) from investments 190,748 2,676,028
------------ ------------
Net increase in net assets resulting from operations 1,847,063 3,735,077
------------ ------------
FROM DISTRIBUTIONS
Distributions from net realized gains (1,011,410) --
------------ ------------
Net decrease in net assets resulting from distributions (1,011,410) --
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS (Note 6)
Proceeds from sale of shares 10,109,700 8,405,200
Reinvestment of dividends 1,011,410 --
Net asset value of shares redeemed (10,184,719) (4,008,700)
------------ ------------
Net increase in net assets from capital share transactions 936,391 4,396,500
------------ ------------
Net increase in net assets 1,772,044 8,131,577
NET ASSETS
Beginning of year 26,628,437 18,496,860
------------ ------------
End of year $ 28,400,481 $ 26,628,437
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME $ 22,943 $ 4,237
============ ============
See Accompanying Notes to Financial Statements.
15
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
2005 2004 2003 2002 2001 1
--------- --------- --------- ---------- ---------
PER SHARE DATA
Net asset value, beginning of period $ 14.47 $ 12.02 $ 9.64 $ 10.60 $ 10.00
--------- --------- --------- ---------- ---------
INVESTMENT OPERATIONS
Net investment income (loss) 0.01 (0.01) (0.01) 0.01 0.00 2
Net gain (loss) on investments
(both realized and unrealized) 1.10 2.46 2.40 (0.97) 0.60
--------- --------- --------- ---------- ---------
Total from investment operations 1.11 2.45 2.39 (0.96) 0.60
--------- --------- --------- ---------- ---------
LESS DIVIDENDS
Dividends from net investment income -- -- (0.01) (0.00) 2 --
Distributions from net realized gains (0.42) -- -- -- --
--------- --------- --------- ---------- ---------
Total dividends and distributions (0.42) -- (0.01) (0.00) 2 --
--------- --------- --------- ---------- ---------
NET ASSET VALUE, END OF PERIOD $ 15.16 $ 14.47 $ 12.02 $ 9.64 $ 10.60
========= ========= ========= ========== =========
Total return 3 7.67% 20.38% 24.76% (9.06)% 6.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000s omitted) $ 28,400 $ 26,628 $ 18,497 $ 9,184 $ 3,430
Ratio of expenses to average net assets 1.29% 1.29% 1.29% 1.29% 1.29% 4
Ratio of net investment income (loss)
to average net assets 0.05% (0.12)% (0.02)% 0.11% 0.03% 4
Decrease reflected in above operating
expense ratios due to waivers/reimbursements 0.06% 0.31% 0.38% 0.84% 7.44% 4
Portfolio turnover rate 72% 45% 28% 14% 1%
- --------------------------------------------------------------------------------
1 For the period November 30, 2001 (commencement of operations) through
December 31, 2001.
2 This amount represents less than $0.01 per share.
3 Total returns are historical and assume changes in share price and
reinvestment of all dividends and distributions. Had certain expenses not
been reduced during the periods shown, total returns would have been
lower. Total returns do not reflect charges and expenses attributable to
any particular variable contract or plan. Total returns for periods less
than one year are not annualized.
4 Annualized
See Accompanying Notes to Financial Statements.
16
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Credit Suisse Trust (the "Trust") is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, and
currently offers eight managed investment portfolios of which one, the Small Cap
Value Portfolio (the "Portfolio"), is included in this report. The Portfolio is
a diversified investment fund that seeks a high level of growth of capital.
Shares of the Portfolio are not available directly to individual investors but
may be offered only through (a) variable annuity contracts and variable life
insurance contracts offered by separate accounts of certain insurance companies
and (b) tax-qualified pension and retirement plans. The Portfolio may not be
available in connection with a particular contract or plan. The Trust was
organized under the laws of The Commonwealth of Massachusetts as a business
trust on March 15, 1995.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A) SECURITY VALUATION -- The net asset value of the Portfolio is
determined daily as of the close of regular trading on the New York Stock
Exchange, Inc. (the "Exchange") on each day the Exchange is open for business.
The Portfolio's equity investments are valued at market value, which is
generally determined using the closing price on the exchange or market on which
the security is primarily traded at the time of valuation (the "Valuation
Time"). If no sales are reported, equity investments are generally valued at the
most recent bid quotation as of the Valuation Time or at the lowest asked
quotation in the case of a short sale of securities. Debt securities with a
remaining maturity greater than 60 days are valued in accordance with the price
supplied by a pricing service, which may use a matrix, formula or other
objective method that takes into consideration market indices, yield curves and
other specific adjustments. Debt obligations that will mature in 60 days or less
are valued on the basis of amortized cost, which approximates market value,
unless it is determined that using this method would not represent fair value.
Investments in mutual funds are valued at the mutual fund's closing net asset
value per share on the day of valuation. Securities and other assets for which
market quotations are not readily available, or whose values have been
materially affected by events occurring before the Portfolio's Valuation Time
but after the close of the securities' primary markets, are valued at fair value
as determined in good faith by, or under the direction of, the Board of Trustees
under procedures established by the Board of Trustees. The Portfolio may utilize
a service provided by an independent
17
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
third party which has been approved by the Board of Trustees to fair value
certain securities. When fair-value pricing is employed, the prices of
securities used by a fund to calculate its net asset value may differ from
quoted or published prices for the same securities.
B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions
are accounted for on a trade date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date. The cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes.
C) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net
investment income and distributions of net realized capital gains, if any, are
declared and paid at least annually. However, to the extent that a net realized
capital gain can be reduced by a capital loss carry- forward, such gain will not
be distributed. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States of America ("GAAP").
D) FEDERAL INCOME TAXES -- No provision is made for federal taxes as it is
the Trust's intention to have the Portfolio continue to qualify for and elect
the tax treatment applicable to regulated investment companies under the
Internal Revenue Code of 1986, as amended, and to make the requisite
distributions to its shareholders, which will be sufficient to relieve it from
federal income and excise taxes.
E) USE OF ESTIMATES -- The preparation of financial statements in
conformity with GAAP 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 revenues and expenses during the reporting period.
Actual results could differ from these estimates.
F) SHORT-TERM INVESTMENTS -- The Portfolio, together with other
funds/portfolios advised by Credit Suisse Asset Management, LLC ("Credit
Suisse"), an indirect, wholly-owned subsidiary of Credit Suisse Group, pools
available cash into either a short-term variable rate time deposit issued by
State Street Bank and Trust Company ("SSB"), the Portfolio's custodian, or a
money
18
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
market fund advised by Credit Suisse. The short-term time deposit issued by SSB
is a variable rate account classified as a short-term investment.
G) SECURITIES LENDING -- Loans of securities are required at all times to
be secured by collateral at least equal to 102% of the market value of domestic
securities on loan (including any accrued interest thereon) and 105% of the
market value of foreign securities on loan (including any accrued interest
thereon). Cash collateral received by the Portfolio in connection with
securities lending activity may be pooled together with cash collateral for
other funds/portfolios advised by Credit Suisse and may be invested in a variety
of investments, including certain Credit Suisse-advised funds, funds advised by
SSB, the Portfolio's securities lending agent, or money market instruments.
However, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings.
SSB has been engaged by the Portfolio to act as the Portfolio's securities
lending agent. The Portfolio's securities lending arrangement provides that the
Portfolio and SSB will share the net income earned from the securities lending
activities. During the year ended December 31, 2005, total earnings from the
Portfolio's investment in cash collateral received in connection with securities
lending arrangements was $144,421, of which $137,661 was rebated to borrowers
(brokers). The Portfolio retained $4,751 in income from the cash collateral
investment, and SSB, as lending agent, was paid $2,009. The Portfolio may also
be entitled to certain minimum amounts of income from its securities lending
activities. Securities lending income is accrued as earned.
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Credit Suisse serves as investment adviser for the Portfolio. For its
investment advisory services, Credit Suisse is entitled to receive a fee,
computed daily and payable monthly, from the Portfolio based on the following
fee schedule:
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ ----------------------------------
First $100 million 0.875% of average daily net assets
Next $100 million 0.750% of average daily net assets
Over $200 million 0.500% of average daily net assets
For the year ended December 31, 2005, investment advisory fees earned and
voluntarily waived for the Portfolio were $272,947 and $19,517, respectively.
Credit Suisse will not recapture from the Portfolio any fees it waived during
the
19
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
fiscal year ended December 31, 2005. Fee waivers and reimbursements are
voluntary and may be discontinued by Credit Suisse at any time.
Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate
of Credit Suisse, and SSB serve as co-administrators to the Portfolio.
For its co-administrative services, CSAMSI currently receives a fee
calculated at an annual rate of 0.10% of the Portfolio's average daily net
assets. For the year ended December 31, 2005, co-administrative services fees
earned by CSAMSI were $31,194.
For its co-administrative services, SSB receives a fee, exclusive of
out-of-pocket expenses, calculated in total for all the Credit Suisse
funds/portfolios co-administered by SSB and allocated based upon relative
average net assets of each fund/portfolio, subject to an annual minimum fee. For
the year ended December 31, 2005, co-administrative services fees earned by SSB
(including out-of-pocket expenses) were $ 35,482.
In addition to serving as the Portfolio's co-administrator, CSAMSI
currently serves as distributor of the Portfolio's shares without compensation.
Merrill Corporation ("Merrill"), an affiliate of Credit Suisse, has been
engaged by the Portfolio to provide certain financial printing and fulfillment
services. For the year ended December 31, 2005, Merrill was paid $3,582 for its
services to the Portfolio.
NOTE 4. LINE OF CREDIT
The Portfolio, together with other funds/portfolios advised by Credit
Suisse (collectively, the "Participating Funds"), participates in a $75 million
committed, unsecured line of credit facility ("Credit Facility") for temporary
or emergency purposes with Deutsche Bank, A.G. as administrative agent and
syndication agent and SSB as operations agent. Under the terms of the Credit
Facility, the Participating Funds pay an aggregate commitment fee at a rate of
0.10% per annum on the average unused amount of the Credit Facility, which is
allocated among the Participating Funds in such manner as is determined by the
governing Boards of the Participating Funds. In addition, the Participating
Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At
December 31, 2005, the Portfolio had no loans outstanding under the Credit
Facility. During the year ended December 31, 2005, the Portfolio had borrowings
under the Credit Facility as follows:
20
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 4. LINE OF CREDIT
AVERAGE DAILY WEIGHTED AVERAGE MAXIMUM DAILY
LOAN BALANCE INTEREST RATE LOAN OUTSTANDING
------------- ---------------- ----------------
$2,654,727 4.424% $2,752,000
NOTE 5. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 2005, purchases and sales of investment
securities (excluding short-term investments) were $21,466,644 and $21,847,162,
respectively.
NOTE 6. CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, $.001 par value per share.
Transactions in capital shares of the Portfolio were as follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
------------------ ------------------
Shares sold 657,349 621,805
Shares reinvested 66,235 --
Shares redeemed (689,979) (320,767)
---------- ----------
Net increase 33,605 301,038
========== ==========
On December 31, 2005, the number of shareholders that held 5% or more of
the outstanding shares of the Portfolio was as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ----------------------
1 100%
Some of the shareholders are omnibus accounts, which hold shares on behalf
of individual shareholders.
NOTE 7. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
21
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 7. FEDERAL INCOME TAXES
The tax characteristics of dividends and distributions paid during the
years ended December 31, 2005 and 2004, respectively, by the Portfolio were as
follows:
ORDINARY INCOME LONG-TERM CAPITAL GAINS
---------------------- -----------------------
2005 2004 2005 2004
-------- -------- -------- --------
$387,358 $ -- $624,052 $ --
The tax basis of components of distributable earnings differ from the
amounts reflected in the Statement of Assets and Liabilities by temporary
book/tax differences. These differences are primarily due to losses deferred on
wash sales and dividends received from Real Estate Investment Trusts.
At December 31, 2005, the components of distributable earnings on a tax
basis for the Portfolio were as follows:
Undistributed net investment income $ 345,453
Accumulated net realized gain 1,415,772
Unrealized appreciation 5,395,819
----------
$7,157,044
==========
At December 31, 2005, the Portfolio had no capital loss carryforwards
available to offset possible future capital gains.
At December 31, 2005, the identified cost for federal income tax purposes,
as well as the gross unrealized appreciation from investments for those
securities having an excess of value over cost, gross unrealized depreciation
from investments for those securities having an excess of cost over value and
the net unrealized appreciation from investments were as follows: $28,895,999,
$5,840,585, $(444,766) and $5,395,819, respectively.
At December 31, 2005, the Portfolio reclassified $1,918 from accumulated
net realized gain on investments to undistributed net investment income, to
adjust for current period permanent book/tax differences which arose principally
from differing book/tax treatments of net operating losses, security litigation
and dividends received from Real Estate Investment Trusts. Net assets were not
affected by these reclassifications.
NOTE 8. CONTINGENCIES
In the normal course of business, the Portfolio may provide general
indemnifications pursuant to certain contracts and organizational documents. The
Portfolio's maximum exposure under these arrangements is dependent on future
claims that may be made against the Portfolio and, therefore, cannot be
estimated; however, based on experience, the risk of loss from such claims is
considered remote.
22
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees of Credit Suisse Trust and Shareholders of
Credit Suisse Trust - Small Cap Value 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 financial highlights present fairly, in all
material respects, the financial position of Small Cap Value Portfolio (the
"Portfolio"), a portfolio of the Credit Suisse Trust, at December 31, 2005, 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 five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolio's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards 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 December 31, 2005 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 6, 2006
23
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
- --------------------------------------------------------------------------------
In approving the Advisory Agreement, the Board of Trustees, including the
Independent Trustees, considered the following factors with respect to the Small
Cap Value Portfolio (the "Portfolio"):
INVESTMENT ADVISORY FEE RATES
The Board reviewed and considered the contractual advisory fee rate of
0.875% of average daily net assets up to $100 million, declining to 0.75% on the
next $100 million and to 0.50% on assets in excess of $200 million, paid by the
Portfolio ("Contractual Advisory Fee"), which is reduced to 0.57% after
voluntary fee waivers and/or expense reimbursements ("Net Advisory Fee"), to
Credit Suisse Asset Management, LLC ("Credit Suisse") in light of the extent and
quality of the advisory services provided by Credit Suisse. The Board
acknowledged that fee waivers and expense reimbursements can be discontinued at
any time.
Additionally, the Board received and considered information comparing the
Portfolio's Contractual Advisory Fee and the Portfolio's overall expenses with
those of funds in both the relevant expense group ("Expense Group") and universe
of funds (the "Expense Universe") provided by Lipper Inc., an independent
provider of investment company data.
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AGREEMENT
The Board received and considered information regarding the nature, extent
and quality of services provided to the Portfolio by Credit Suisse under the
Advisory Agreement. The Board also noted information received at regular
meetings throughout the year related to the services rendered by Credit Suisse.
The Board reviewed background information about Credit Suisse, including its
Form ADV. The Board considered the background and experience of Credit Suisse's
senior management and the expertise of, and the amount of attention given to the
Portfolio by, senior personnel of Credit Suisse. In addition, the Board reviewed
the qualifications, backgrounds and responsibilities of the portfolio management
team primarily responsible for the day-to-day portfolio management of the
Portfolio and the extent of the resources devoted to research and analysis of
actual and potential investments. The Board also received and considered
information about the nature, extent and quality of services and fee rates
offered to other Credit Suisse clients for comparable services.
PORTFOLIO PERFORMANCE
The Board received and considered the one-, two- and three-year
performance of the Portfolio, along with comparisons, for all presented periods,
both to the relevant performance group ("Performance Group") and universe
24
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
of funds ("Performance Universe") for the Portfolio. The Board was provided with
a description of the methodology used to arrive at the data for the funds
included in the Performance Group and the Performance Universe.
The Board reviewed information comparing the performance of various Credit
Suisse Funds to performance benchmarks that the Board had previously established
and progress that had been made in certain instances toward achieving those
benchmarks. The Board also reviewed comparisons between the Portfolio and its
identified benchmark over various time periods.
CREDIT SUISSE PROFITABILITY
The Board received and considered a profitability analysis of Credit
Suisse based on the fees payable under the Advisory Agreement for the Portfolio,
including other relationships between the Portfolio on the one hand and Credit
Suisse affiliates on the other. The Board received profitability information for
the other funds in the Credit Suisse family of funds.
ECONOMIES OF SCALE
The Board considered whether economies of scale in the provision of
services to the Portfolio were being passed along to the shareholders.
Accordingly, the Board considered whether the breakpoints in the Portfolio's
advisory fee structure were appropriate or reasonable taking into consideration
economies of scale or other efficiencies that might accrue from increases in the
Portfolio's asset levels.
OTHER BENEFITS TO CREDIT SUISSE
The Board considered other benefits received by Credit Suisse and its
affiliates as a result of their relationship with the Portfolio. Such benefits
include, among others, research arrangements with brokers who execute
transactions on behalf of the Portfolio, administrative and brokerage
relationships with affiliates of Credit Suisse and benefits potentially derived
from an increase in Credit Suisse's businesses as a result of its relationship
with the Portfolio (such as the ability to market to shareholders other
financial products offered by Credit Suisse and its affiliates).
The Board considered the standards applied in seeking best execution,
whether and to what extent soft dollar credits are sought and how any such
credits are utilized, any benefits that may be achieved by using an affiliated
broker and the existence of quality controls applicable to brokerage allocation
procedures. The Board also reviewed Credit Suisse's method for allocating
portfolio investment opportunities among its advisory clients.
25
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
CONCLUSIONS
In selecting Credit Suisse, and approving the Advisory Agreement and the
investment advisory fee under such agreement, the Board concluded that:
o While the Contractual Advisory Fee was slightly below the median,
the Net Advisory Fee was the lowest in the Portfolio's Expense Group
and was considered reasonable.
o The Portfolio's one-year performance was above the median in the
Performance Group and in the Performance Universe and superior to
the Lipper index of similar funds. The Portfolio's two-year
performance was at the median for the Performance Group and slightly
below the median for the Performance Universe. The three-year
performance was the lowest in the Performance Group and Performance
Universe. The Board had previously identified the need to address
the Portfolio's performance, and noted that Credit Suisse is in the
process of addressing performance issues. The Board would continue
to monitor steps taken by Credit Suisse to improve performance.
o Aside from performance (as described above), the Board was satisfied
with the nature and extent of the investment advisory services
provided to the Portfolio by Credit Suisse and that, based on
dialogue with management and counsel, the services provided by
Credit Suisse under the Advisory Agreement is typical of, and
consistent with, those provided to similar mutual funds by other
investment advisers. The Board understood that Credit Suisse had
addressed or was in the process of addressing any performance
issues.
o In light of the costs of providing investment management and other
services to the Portfolio and Credit Suisse's ongoing commitment to
the Portfolio, the profits and other ancillary benefits that Credit
Suisse and its affiliates received were considered reasonable.
o Credit Suisse's profitability based on fees payable under the
Advisory Agreement was reasonable in light of the nature, extent and
quality of the services provided to the Portfolio thereunder.
o In light of the amount of the Net Advisory Fee, the Portfolio's
current fee structure was considered reasonable.
No single factor reviewed by the Board was identified by the Board as the
principal factor in determining whether to approve the Advisory Agreement. The
Independent Trustees were advised by separate independent legal counsel
throughout the process.
26
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE 1 AND PORTFOLIOS IN
POSITION(S) LENGTH PRINCIPAL FUND COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- --------------------------- ----------- ------------- --------------------------- --------------- ----------------------
INDEPENDENT TRUSTEES
Enrique Arzac Trustee, Since Professor of Finance 47 Director of The
c/o Credit Suisse Asset Nominating 2005 and Economics, Adams Express
Management, LLC Committee Graduate School of (a closed-end
Attn: General Counsel Member and Business, Columbia investment
466 Lexington Avenue Audit University since 1971 company); Director
New York, New York Committee of Petroleum
10017-3140 Chairman and Resources
Corporation
Date of Birth: 10/02/41 (a closed-end
investment
company)
Richard H. Francis Trustee, Since Currently retired 41 None
c/o Credit Suisse Asset Nominating Portfolio
Management, LLC and Audit Inception
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 04/23/32
Jeffrey E. Garten Trustee, Since The Juan Trippe 40 Director of Aetna,
Box 208200 Nominating Portfolio Professor in the Practice Inc. (insurance
New Haven, Connecticut and Audit Inception of International Trade, company); Director
06520-8200 Committee Finance and Business of CarMax Group
Member from July 2005 to present; (used car dealers)
Date of Birth: 10/29/46 Partner and Chairman
of Garten Rothkopf
(consulting firm) from
October 2005 to present;
Dean of Yale School of
Management from
November 1995 to
June 2005
Peter F. Krogh Trustee, Since Dean Emeritus and 40 Director of Carlisle
301 ICC Nominating Portfolio Distinguished Professor Companies
Georgetown University and Audit Inception of International Affairs Incorporated
Washington, DC 20057 Committee at the Edmund A. (diversified
Member Walsh School of manufacturing
Date of Birth: 02/11/37 Foreign Service, company)
Georgetown University
from June 1995
to present
_________________
1 Each Trustee and Officer serves until his or her respective successor has
been duly elected and qualified.
27
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE 1 PORTFOLIOS IN
POSITION(S) AND LENGTH PRINCIPAL FUND COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- --------------------------- ----------- ------------- --------------------------- --------------- ----------------------
INDEPENDENT TRUSTEES
James S. Pasman, Jr. Trustee, Since Currently retired 42 Director of Education
c/o Credit Suisse Asset Nominating Portfolio Management Corp.
Management, LLC and Audit Inception
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 12/20/30
Steven N. Rappaport Chairman of Trustee Partner of Lehigh Court, 46 Director of Presstek,
Lehigh Court, LLC the Board Since LLC and RZ Capital Inc. (digital imaging
40 East 52nd Street of Trustees, Portfolio (private investment firms) technologies
New York, New York Nominating Inception from July 2002 to present; company); Director of
10022 Committee and Transition Adviser to Wood Resources, LLC.
Chairman Chairman SunGard Securities (plywood
Date of Birth: 07/10/48 and Audit since Finance, Inc. from manufacturing
Committee 2005 February 2002 to July company)
Member 2002; President of
SunGard Securities
Finance, Inc. from 2001
to February 2002;
President of Loanet,
Inc. (on-line accounting
service) from 1997 to 2001
INTERESTED DIRECTOR
Michael E. Kenneally 2,3 Trustee Since Chairman and Global 40 None
c/o Credit Suisse Asset 2004 Chief Executive Officer
Management, LLC of Credit Suisse from March
Attn: General Counsel 2003 to July 2005;
466 Lexington Avenue Chairman and Chief
New York, New York Investment Officer of
10017-3140 Banc of America Capital
Management from 1998
Date of Birth: 03/30/54 to March 2003
___________________
2 Mr. Kenneally is a Trustee who is an "interested person" of the Trust as
defined in the 1940 Act, because he was an officer of Credit Suisse within
the last two fiscal years.
3 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
28
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM OF
OFFICE 1 AND
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH TRUST SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- --------------------------- ----------- ------------- --------------------------------------------------------------
OFFICERS
Steven B. Plump 3 Chief Since Managing Director; Associated with Credit Suisse or its
Credit Suisse Asset Executive 2005 predecessor since 1995; Officer of other Credit Suisse Funds
Management, LLC Officer and
466 Lexington Avenue President
New York, New York
10017-3140
Date of Birth: 02/08/59
Michael A. Pignataro Chief Since Director and Director of Fund Administration of Credit Suisse;
Credit Suisse Asset Financial 1999 Associated with Credit Suisse or its predecessors since 1984;
Management, LLC Officer and Officer of other Credit Suisse Funds
466 Lexington Avenue Treasurer
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Since Director and Global Head of Compliance of Credit Suisse;
Credit Suisse Asset Compliance 2004 Associated with Credit Suisse since July 2000; Vice President
Management, LLC Officer and Director of Compliance of Forstmann-Leff
466 Lexington Avenue Associates from 1998 to June 2000; Officer of other
New York, New York Credit Suisse Funds
10017-3140
Date of Birth: 09/21/66
Ajay Mehra Chief Since Director and Head of Legal Americas Traditional Asset
Credit Suisse Asset Legal 2004 Management and Hedge Funds; Associated with Credit Suisse
Management, LLC Officer since September 2004; Senior Associate of Shearman &
466 Lexington Avenue Sterling LLP from September 2000 to September 2004; Senior
New York, New York Counsel of the SEC Division of Investment Management from
10017-3140 June 1997 to September 2000; Officer of other Credit
Suisse Funds
Date of Birth: 08/14/70
J. Kevin Gao Vice Since Director and Legal Counsel of Credit Suisse; Associated with
Credit Suisse Asset President 2004 Credit Suisse since July 2003; Associated with the law firm of
Management, LLC and Willkie Farr & Gallagher LLP from 1998 to 2003; Officer of
466 Lexington Avenue Secretary other Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 10/13/67
Robert Rizza Assistant Since Vice President of Credit Suisse; Associated with Credit Suisse
Credit Suisse Asset Treasurer 2002 since 1998; Officer of other Credit Suisse Funds
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
________________
3 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
The Statement of Additional Information includes additional information
about the Trustees and is available, without charge, upon request, by calling
800-222-8977.
29
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
TAX INFORMATION LETTER
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS
Corporate Shareholders should note for the year ended December 31, 2005,
the percentage of the Fund's investment income (i.e., net investment income plus
short-term capital gains) that qualified for the intercorporate dividends
received deduction is 47.70%.
IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS
During the year ended December 31, 2005, the Portfolio declared $624,052
in dividends that were designated as a 20% long-term capital gain dividends.
30
CREDIT SUISSE TRUST -- SMALL CAP VALUE PORTFOLIO
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION
- --------------------------------------------------------------------------------
Information regarding how the Portfolio voted proxies related to its
portfolio securities during the 12-month period ended June 30 of each year, as
well as the policies and procedures that the Portfolio uses to determine how to
vote proxies relating to its portfolio securities are available:
o By calling 1-800-222-8977
o On the Portfolio's website, www.credit-suisse.com/us
o On the website of the Securities and Exchange Commission,
http://www.sec.gov.
The Portfolio files a complete schedule of its portfolio holdings for the
first and third quarters of its fiscal year with the SEC on Form N-Q. The
Portfolio's Forms N-Q are available on the SEC's website at http://www.sec.gov
and may be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. Information on the operation of the SEC's Public Reference Room may be
obtained by calling 1-800-SEC-0330.
31
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32
CREDIT SUISSE [LOGO]
P.O. BOX 55030, BOSTON, MA 02205-5030
800-222-8977 o www.credit-suisse.com/us
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. TRSCV-AR-1205
CREDIT SUISSE [LOGO]
CREDIT SUISSE FUNDS
Annual Report
December 31, 2005
CREDIT SUISSE TRUST
o EMERGING MARKETS PORTFOLIO
Credit Suisse Trust (the "Trust") shares are not available directly to
individual investors, but may be offered only through certain insurance products
and pension and retirement plans.
The Trust's investment objectives, risks, charges and expenses (which should be
considered carefully before investing), and more complete information about the
Trust, are provided in the Prospectus, which should be read carefully before
investing. You may obtain additional copies by calling 800-222-8977 or by
writing to Credit Suisse Trust, P.O. Box 55030, Boston, MA 02205-5030.
Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466
Lexington Ave., New York, NY 10017-3140. The Trust is advised by Credit Suisse
Asset Management, LLC.
THE VIEWS OF THE PORTFOLIO'S MANAGEMENT ARE AS OF THE DATE OF THE LETTER AND THE
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF DECEMBER 31, 2005; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
PORTFOLIO SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC ("CREDIT SUISSE") OR ANY AFFILIATE, ARE NOT FDIC-INSURED AND ARE
NOT GUARANTEED BY CREDIT SUISSE OR ANY AFFILIATE. PORTFOLIO INVESTMENTS ARE
SUBJECT TO INVESTMENT RISK, INCLUDING LOSS OF YOUR INVESTMENT.
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
January 19, 2006
Dear Shareholder:
For the 12 months ended December 31, 2005, Credit Suisse Trust--Emerging
Markets Portfolio1 (the "Portfolio") had a gain of 27.84%, vs. an increase of
34.54% for the Morgan Stanley Capital International Emerging Markets Index.2
MARKET OVERVIEW: EMERGING MARKETS OUTPERFORM IN GLOBAL RALLY
The period was a positive one for stock markets around the world, aided by
optimism over global economic growth and generally favorable earnings reports.
Emerging markets as a group had overall strong returns in absolute terms and as
compared with developed stock markets, helped in part by high and rising
commodity prices, which for many commodity-exporting emerging economies resulted
in stronger financial profiles.
By region, Latin America outpaced the broad emerging market universe,
reflecting strong returns from Brazil and Mexico. Asia was positive across the
board, but as a region underperformed. The Europe/Middle East/Africa segment
(EMEA) was in the middle of the pack, though certain of its smaller markets
posted large gains for the period.
STRATEGIC REVIEW: ASIAN HOLDINGS UNDERPERFORM WHILE EMEA STOCKS SHINE
The Portfolio participated in the broad rally in emerging markets,
although it underperformed its benchmark, which we attribute in large part to
its positioning in Asia. Most specifically, we were underweighted in Taiwanese
technology-exporting companies, which outperformed the domestic companies we
favored, and had limited exposure to certain South Korean stocks that had strong
showings. Within Latin America, stock selection in Chile detracted from
performance, countering good performance from the Portfolio's holdings in
Mexico. Elsewhere, the Portfolio was aided by good stock selection within EMEA,
in particular with regard to its Russian and South African holdings. This more
than offset the Portfolio's underweighting in smaller EMEA markets, such as
Egypt, that outperformed.
In terms of regional allocation, as of the end of the period we were
modestly overweighted in Latin America, with a focus on Brazil and Mexico, where
we believe earnings growth and interest rate reductions could support equities.
We had an underweighting in EMEA as a whole, primarily due to our
underweightings in the smaller central European markets, lack of exposure to
smaller Middle Eastern markets and our underweighting in South Africa. We
1
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
ended the period overweighted in Russia, which we think could benefit from high
oil prices and a related improvement in domestic liquidity. We remain broadly
neutral in Asia, with an emphasis on China, South Korea and, to a lesser extent,
Thailand. As of the end of the period, Taiwan and India were underweighted
positions in the Portfolio, as were certain smaller southeastern Asian markets.
In the wake of several years of strong absolute and relative performance,
emerging markets could be vulnerable to any negative shocks (such as rising US
short-term rates or unforeseen oil price spikes). Still, against what we expect
to be a fairly benign global scenario this year, we believe that investors will
continue find emerging markets compelling, given the valuation and earnings
differentials with developed markets and the generally favorable domestic
economic conditions prevailing in many developing countries.
The Credit Suisse Emerging Markets Team
Annabel Betz
Neil Gregson
Matthew J.K. Hickman
Elizabeth H. Eaton
Jonathan S. Ong
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING
CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND
DIFFERENCES IN ACCOUNTING METHODS; THESE RISKS ARE GENERALLY HEIGHTENED FOR
EMERGING-MARKET INVESTMENTS. THE PORTFOLIO MAY INVOLVE A GREATER DEGREE OF RISK
THAN OTHER FUNDS THAT SEEK CAPITAL GROWTH BY INVESTING IN LARGER, MORE DEVELOPED
MARKETS.
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS
FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND
FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT
REGULATION AND THEIR POTENTIAL IMPACT ON THE PORTFOLIO'S INVESTMENTS. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS,
DEVELOPMENTS AND REGULATIONS IN THE FUTURE AND THEIR IMPACT ON THE PORTFOLIO
COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE
PORTFOLIO HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
2
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
[LINE CHART]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
CREDIT SUISSE TRUST - EMERGING MARKETS PORTFOLIO1 AND THE
MSCI EMERGING MARKETS FREE INDEX2 FROM INCEPTION (12/31/97).
Credit Suisse Trust -- MSCI Emerging
Emerging Markets Markets
Portfolio 1 Free Index 2,3
---------------------- ---------------
Dec-97 10000 10000
10270 9216
11760 10178
12110 10619
11940 10504
10260 9064
9530 8113
9680 8371
7040 5950
7490 6328
7970 6994
8330 7576
Dec-98 8270 7466
7755 7346
7513 7417
8199 8395
9411 9433
9724 9378
11077 10443
11097 10159
11229 10251
10855 9904
11330 10115
12986 11022
Dec-99 15002 12424
15023 12498
15742 12663
15245 12725
13595 11519
13362 11043
13753 11432
13108 10844
13119 10897
11775 9945
11013 9224
9871 8418
Dec-00 10269 8621
11578 9808
10775 9040
9784 8152
10346 8555
10478 8657
10191 8480
9542 7944
9124 7865
7737 6648
8166 7060
8849 7798
Dec-01 9278 8417
9597 8702
9707 8845
10103 9377
10202 9438
10048 9287
9388 8590
8684 7937
8640 8059
7781 7190
8122 7656
8519 8183
Dec-02 8205 7912
8040 7877
7808 7664
7510 7447
8051 8111
8558 8693
9043 9188
9562 9763
10289 10419
10289 10495
11039 11388
11106 11528
Dec-03 11723 12364
12208 12803
12694 13394
12925 13566
11955 12457
11811 12211
11778 12267
11503 12050
11900 12555
12610 13280
12953 13598
13894 14857
Dec-04 14646 15573
14590 15622
15686 16994
14535 15874
14192 15451
14602 15995
14922 16547
15995 17718
16239 17878
17567 19545
16509 18268
17734 19780
Dec-05 18737 20952
3
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005 1
SINCE
1 YEAR 5 YEARS INCEPTION
------ ------- ---------
27.84% 12.78% 8.16%
RETURNS REPRESENT PAST PERFORMANCE AND INCLUDE CHANGES IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE
FUTURE RESULTS. THE CURRENT PERFORMANCE OF THE PORTFOLIO MAY BE LOWER OR HIGHER
THAN THE FIGURES SHOWN. RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION
VALUE MAY BE MORE OR LESS THAN ORIGINAL COST. THE PERFORMANCE RESULTS DO NOT
REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON PORTFOLIO
DISTRIBUTIONS OR THE REDEMPTION OF PORTFOLIO SHARES. PERFORMANCE INCLUDES THE
EFFECT OF DEDUCTING EXPENSES, BUT DOES NOT INCLUDE CHARGES AND EXPENSES
ATTRIBUTABLE TO ANY PARTICULAR VARIABLE CONTRACT OR PLAN. ACCORDINGLY, THE
PROSPECTUS OF THE SPONSORING PARTICIPATING INSURANCE COMPANY SEPARATE ACCOUNT OR
PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS SHOULD
BE CAREFULLY REVIEWED FOR INFORMATION ON RELEVANT CHARGES AND EXPENSES.
EXCLUDING THESE CHARGES AND EXPENSES FROM QUOTATIONS OF PERFORMANCE HAS THE
EFFECT OF INCREASING THE PERFORMANCE QUOTED, AND THE EFFECT OF THESE CHARGES
SHOULD BE CONSIDERED WHEN COMPARING PERFORMANCE TO THAT OF OTHER MUTUAL FUNDS.
PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH-END IS AVAILABLE AT
WWW.CREDIT-SUISSE.COM/US.
_________________
1 Fee waivers and/or expense reimbursements may reduce expenses for the
Portfolio, without which performance would be lower. Waivers and/or
reimbursements may be discontinued at any time.
2 The Morgan Stanley Capital International Emerging Markets Index is a free
float-adjusted market capitalization index that is designed to measure
equity market performance in the global emerging markets. It is the
exclusive property of Morgan Stanley Capital International Inc. Investors
cannot invest directly in an index.
3 Performance for the index is not available for the period beginning
12/31/97 (commencement of operations). For that reason, performance is
shown for the period beginning 1/1/98.
4
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
INFORMATION ABOUT YOUR PORTFOLIO'S EXPENSES
As an investor of the Portfolio, you incur two types of costs: ongoing
expenses and transaction costs. Ongoing expenses include management fees,
distribution and service (12b-1) fees and other Portfolio expenses. Examples of
transaction costs include sales charges (loads), redemption fees and account
maintenance fees, which are not shown in this section and which would result in
higher total expenses. The following table is intended to help you understand
your ongoing expenses of investing in the Portfolio and to help you compare
these expenses with the ongoing expenses of investing in other mutual funds. The
table is based on an investment of $1,000 made at the beginning of the six month
period ended December 31, 2005.
The table illustrates your Portfolio's expenses in two ways:
o ACTUAL PORTFOLIO RETURN. This helps you estimate the actual dollar
amount of ongoing expenses paid on a $1,000 investment in the
Portfolio using the Portfolio's actual return during the period. To
estimate the expenses you paid over the period, simply divide your
account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in
the "Expenses Paid per $1,000" line under the share class you hold.
o HYPOTHETICAL 5% PORTFOLIO RETURN. This helps you to compare your
Portfolio's ongoing expenses with those of other mutual funds using
the Portfolio's actual expense ratio and a hypothetical rate of
return of 5% per year before expenses. Examples using a 5%
hypothetical fund return may be found in the shareholder reports of
other mutual funds. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or
expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight
your ongoing expenses only and do not reflect any transaction costs, such as
sales charges (loads) or redemption fees. If these transaction costs had been
included, your costs would have been higher. The "Expenses Paid per $1,000" line
of the tables is useful in comparing ongoing expenses only and will not help you
determine the relative total expenses of owning different funds.
5
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
EXPENSES AND VALUE OF A $1,000 INVESTMENT
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 2005
- --------------------------------------------------------------------------------
ACTUAL PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,255.60
Expenses Paid per $1,000* $ 7.96
HYPOTHETICAL 5% PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,018.15
Expenses Paid per $1,000* $ 7.12
ANNUALIZED EXPENSE RATIOS* 1.40%
_________________
* EXPENSES ARE EQUAL TO THE PORTFOLIO'S ANNUALIZED EXPENSE RATIO MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF
DAYS IN THE MOST RECENT FISCAL HALF YEAR PERIOD, THEN DIVIDED BY 365.
THE "EXPENSES PAID PER $1,000" AND THE "ANNUALIZED EXPENSE RATIOS" IN THE
TABLES ARE BASED ON ACTUAL EXPENSES PAID BY THE PORTFOLIO DURING THE
PERIOD, NET OF FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IF THOSE FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS HAD NOT BEEN IN EFFECT, THE
PORTFOLIO'S ACTUAL EXPENSE WOULD HAVE BEEN HIGHER. EXPENSES DO NOT REFLECT
ADDITIONAL CHARGES AND EXPENSES THAT ARE, OR MAY BE, IMPOSED UNDER THE
VARIABLE CONTRACTS OR PLANS. SUCH CHARGES AND EXPENSES ARE DESCRIBED IN
THE PROSPECTUS OF THE INSURANCE COMPANY SEPARATE ACCOUNT OR IN THE PLAN
DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS. THE
PORTFOLIO'S EXPENSES SHOULD BE CONSIDERED WITH THESE CHARGES AND EXPENSES
IN EVALUATING THE OVERALL COST OF INVESTING IN THE SEPARATE ACCOUNT.
For more information, please refer to the Portfolio's prospectus.
6
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
[BAR CHART]
SECTOR BREAKDOWN*
Financials 24.5%
Information Technology 18.2%
Energy 12.2%
Telecom Services 11.2%
Consumer Discretionary 10.0%
Materials 6.5%
Consumer Staples 5.6%
Short-Term Investments 4.7%
Industrials 4.6%
Utilities 1.6%
Health Care 0.9%
________________
* Expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
7
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
---------- -----------
COMMON STOCKS (88.8%)
ARGENTINA (0.4%)
OIL & GAS (0.4%)
Repsol YPF SA ADR ss. 24,500 $ 720,545
-----------
TOTAL ARGENTINA 720,545
-----------
BRAZIL (5.3%)
BANKS (0.9%)
Unibanco - Uniao de Bancos Brasileiros SA GDR 27,300 1,735,461
-----------
BEVERAGES (0.1%)
Companhia de Bebidas das Americas ADR 4,640 151,728
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES (1.2%)
Brasil Telecom Participacoes SA 42,900,000 436,439
Brasil Telecom Participacoes SA ADR ss. 12,600 470,610
Tele Norte Leste Participacoes SA 12,505 285,385
Tele Norte Leste Participacoes SA ADR ss. 56,000 1,003,520
-----------
2,195,954
-----------
ELECTRIC UTILITIES (0.7%)
Obrascon Huarte Lain Brasil SA * 82,600 898,680
Tractebel Energia SA 60,100 387,285
-----------
1,285,965
-----------
FOOD PRODUCTS (0.3%)
Cosan SA Industria e Comercio * 19,700 574,678
-----------
OIL & GAS (2.1%)
Petroleo Brasileiro SA - Petrobras ADR 60,200 3,875,074
-----------
TOTAL BRAZIL 9,818,860
-----------
CANADA (0.6%)
ENERGY EQUIPMENT & SERVICES (0.6%)
Niko Resources, Ltd. 24,900 1,177,056
-----------
TOTAL CANADA 1,177,056
-----------
CHILE (1.6%)
BEVERAGES (0.4%)
Compania Cervecerias Unidas SA ADR ss. 32,300 814,606
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.4%)
Compania de Telecomunicaciones de Chile SA ADR ss. 84,000 739,200
-----------
ELECTRIC UTILITIES (0.5%)
Enersis SA ADR ss. 78,600 863,814
-----------
See Accompanying Notes to Financial Statements.
8
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
---------- -----------
COMMON STOCKS
CHILE
WATER UTILITIES (0.3%)
Inversiones Aguas Metropolitanas SA ADR Rule 144A*++ 30,100 $ 505,680
-----------
TOTAL CHILE 2,923,300
-----------
CHINA (5.7%)
AUTOMOBILES (0.3%)
Dongfeng Motor Corporation, Ltd. Series H* 2,108,700 533,053
-----------
BANKS (1.0%)
China Construction Bank Series H * 5,687,000 1,962,034
-----------
INSURANCE (1.0%)
China Life Insurance Company, Ltd. Series H * 2,051,000 1,808,108
-----------
MACHINERY (0.5%)
Shanghai Electric Group Company, Ltd. Series H * 2,752,000 940,173
-----------
OIL & GAS (0.7%)
China Petroleum & Chemical Corp. Series H 2,764,000 1,368,404
-----------
REAL ESTATE (1.2%)
Agile Property Holdings, Ltd. * 2,367,000 1,144,798
GZI Real Estate Investment Trust * 393,000 176,135
New World China Land, Ltd. 1,990,000 838,104
-----------
2,159,037
-----------
RETAIL (0.4%)
Parkson Retail Group, Ltd. * 440,000 794,475
-----------
TEXTILES & APPAREL (0.6%)
Ports Design, Ltd. 946,500 1,101,100
-----------
TOTAL CHINA 10,666,384
-----------
HONG KONG (3.1%)
AUTOMOBILES (0.4%)
Denway Motors, Ltd. 2,500,000 827,954
-----------
INTERNET SOFTWARE & SERVICES (0.6%)
Tencent Holdings, Ltd. 957,000 1,022,142
-----------
OIL & GAS (0.6%)
CNOOC, Ltd. 1,590,000 1,059,965
-----------
WIRELESS TELECOMMUNICATION SERVICES (1.5%)
China Mobile (Hong Kong), Ltd. 584,500 2,766,410
-----------
TOTAL HONG KONG 5,676,471
-----------
See Accompanying Notes to Financial Statements.
9
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
---------- -----------
COMMON STOCKS
HUNGARY (0.8%)
BANKS (0.5%)
OTP Bank Rt. 29,900 $ 973,937
-----------
OIL & GAS (0.3%)
MOL Magyar Olaj-es Gazipari Rt. 5,000 467,544
-----------
TOTAL HUNGARY 1,441,481
-----------
INDIA (4.7%)
CHEMICALS (0.8%)
Reliance Industries, Ltd. GDR Rule 144A ++ 39,300 1,553,529
-----------
DIVERSIFIED FINANCIALS (0.4%)
ICICI Bank, Ltd. ADR ss. 26,500 763,200
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES (1.0%)
Bharti Tele-Ventures, Ltd. * 240,500 1,847,513
-----------
ELECTRIC UTILITIES (0.5%)
National Thermal Power Corporation, Ltd. 358,400 893,959
-----------
ELECTRICAL EQUIPMENT (0.6%)
Bharat Heavy Electricals, Ltd. 34,300 1,056,965
-----------
GAS UTILITIES (0.3%)
Gail India, Ltd. 114,700 676,202
-----------
IT CONSULTING & SERVICES (1.1%)
Infosys Technologies, Ltd. ADR ss. 14,100 1,140,126
Tata Consultancy Services, Ltd. 22,622 854,277
-----------
1,994,403
-----------
TOTAL INDIA 8,785,771
-----------
ISRAEL (3.1%)
BANKS (0.8%)
Bank Hapoalim, Ltd. 336,500 1,552,801
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.4%)
Orbotech, Ltd. * 30,500 731,085
-----------
INSURANCE (0.4%)
Harel Insurance Investments, Ltd. 16,800 752,459
-----------
INTERNET SOFTWARE & SERVICES (0.6%)
Check Point Software Technologies, Ltd. * 52,100 1,047,210
-----------
PHARMACEUTICALS (0.9%)
Teva Pharmaceutical Industries, Ltd. ADR ss. 39,000 1,677,390
-----------
TOTAL ISRAEL 5,760,945
-----------
See Accompanying Notes to Financial Statements.
10
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
---------- -----------
COMMON STOCKS
MALAYSIA (1.2%)
BANKS (0.4%)
Commerce Asset-Holding Berhad 510,400 $ 769,753
-----------
FOOD PRODUCTS (0.8%)
IOI Corporation Berhad 439,100 1,440,624
-----------
TOTAL MALAYSIA 2,210,377
-----------
MEXICO (7.2%)
BEVERAGES (0.5%)
Fomento Economico Mexicano SA de CV ADR 12,777 926,460
-----------
CONSTRUCTION MATERIALS (0.9%)
Cemex SA de CV ADR 27,981 1,660,113
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.5%)
Telefonos de Mexico SA de CV ADR ss. 39,800 982,264
-----------
FOOD PRODUCTS (1.0%)
Gruma SA Series B 347,900 1,128,308
Grupo Bimbo SA de CV Series A 240,100 835,119
-----------
1,963,427
-----------
HOUSEHOLD DURABLES (0.5%)
Consorcio ARA SA de CV 230,400 1,007,140
-----------
MEDIA (0.6%)
Grupo Televisa SA ADR 13,500 1,086,750
-----------
METALS & MINING (0.5%)
Grupo Mexico SA de CV Series B 391,850 913,536
-----------
MULTILINE RETAIL (0.6%)
Wal-Mart de Mexico SA de CV Series V 193,082 1,070,898
-----------
REAL ESTATE (0.5%)
Urbi Desarrollos Urbanos SA de CV * 131,324 907,373
-----------
WIRELESS TELECOMMUNICATION SERVICES (1.6%)
America Movil SA de CV ADR Series L 83,874 2,454,153
America Telecom SA de CV Class A1 * 101,700 494,272
-----------
2,948,425
-----------
TOTAL MEXICO 13,466,386
-----------
OMAN (0.5%)
BANKS (0.5%)
Bank Muscat SAOG GDR Rule 144A*++ 39,200 908,264
-----------
TOTAL OMAN 908,264
-----------
See Accompanying Notes to Financial Statements.
11
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
---------- -----------
COMMON STOCKS
RUSSIA (6.1%)
BANKS (1.4%)
Sberbank RF 1,950 $ 2,557,208
-----------
OIL & GAS (3.7%)
Gazprom ADR 30,000 2,151,983
Lukoil ADR 82,200 4,849,800
-----------
7,001,783
-----------
WIRELESS TELECOMMUNICATION SERVICES (1.0%)
AO VimpelCom ADR *ss. 40,600 1,795,738
-----------
TOTAL RUSSIA 11,354,729
-----------
SOUTH AFRICA (9.5%)
BANKS (1.9%)
FirstRand, Ltd. 522,082 1,522,516
Standard Bank Group, Ltd. 168,800 2,021,074
-----------
3,543,590
-----------
DIVERSIFIED FINANCIALS (0.7%)
African Bank Investments, Ltd. 359,200 1,389,287
-----------
HOUSEHOLD DURABLES (0.6%)
Steinhoff International Holdings, Ltd. 373,197 1,104,624
-----------
INDUSTRIAL CONGLOMERATES (0.5%)
Bidvest Group, Ltd. 65,400 954,244
-----------
INSURANCE (0.9%)
Sanlam, Ltd. 702,450 1,683,806
-----------
MEDIA (0.8%)
Naspers, Ltd. N Shares 87,900 1,555,201
-----------
METALS & MINING (1.6%)
Impala Platinum Holdings, Ltd. 10,800 1,586,617
Mittal Steel South Africa, Ltd. 141,400 1,366,320
-----------
2,952,937
-----------
OIL & GAS (1.1%)
Sasol 56,700 2,037,210
-----------
SPECIALTY RETAIL (1.4%)
Edgars Consolidated Stores, Ltd. 211,660 1,175,067
JD Group, Ltd. 110,700 1,342,660
-----------
2,517,727
-----------
TOTAL SOUTH AFRICA 17,738,626
-----------
See Accompanying Notes to Financial Statements.
12
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
---------- -----------
COMMON STOCKS
SOUTH KOREA (20.5%)
AUTO COMPONENTS (0.8%)
Hyundai Mobis * 15,570 $ 1,411,508
-----------
AUTOMOBILES (2.3%)
Hyundai Motor Company, Ltd. * 46,110 4,386,538
-----------
BANKS (2.9%)
Kookmin Bank * 53,110 4,002,722
Shinhan Financial Group Company, Ltd. * 36,260 1,458,368
-----------
5,461,090
-----------
CONSTRUCTION & ENGINEERING (0.8%)
GS Engineering & Construction Corp. * 29,500 1,544,392
-----------
DIVERSIFIED FINANCIALS (1.0%)
Hana Financial Group, Inc. 39,895 1,823,365
-----------
HOUSEHOLD DURABLES (1.2%)
LG Electronics, Inc. *ss. 24,930 2,175,899
-----------
INDUSTRIAL CONGLOMERATES (0.5%)
Daewoo Engineering & Construction Company, Ltd. * 76,400 999,673
-----------
INSURANCE (1.1%)
Samsung Fire & Marine Insurance Company, Ltd. 15,920 2,000,702
-----------
METALS & MINING (0.9%)
POSCO ADR ss. 33,400 1,653,634
-----------
MULTILINE RETAIL (1.6%)
Shinsegae Company, Ltd. * 6,710 2,924,301
-----------
OIL & GAS (0.5%)
S-Oil Corp. 13,500 942,263
-----------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (6.3%)
Samsung Electronics Company, Ltd. 18,260 11,747,723
-----------
WIRELESS TELECOMMUNICATION SERVICES (0.6%)
SK Telecom Company, Ltd. 6,600 1,180,985
-----------
TOTAL SOUTH KOREA 38,252,073
-----------
TAIWAN (13.6%)
BANKS (0.2%)
Chinatrust Financial Holding Company, Ltd. 589,000 466,219
-----------
CHEMICALS (0.3%)
Formosa Plastics Corp. 376,050 578,142
-----------
See Accompanying Notes to Financial Statements.
13
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
---------- -----------
COMMON STOCKS
TAIWAN
COMPUTERS & PERIPHERALS (3.3%)
Advantech Company, Ltd. 502,650 $ 1,423,755
Asustek Computer, Inc. 515,000 1,579,476
Chi Mei Optoelectronics Corp. 585,542 863,675
Chi Mei Optoelectronics Corp. GDR Rule 144A ++ 109,941 1,627,124
Quanta Computer, Inc. 523,050 733,800
-----------
6,227,830
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.5%)
Chunghwa Telecom Company, Ltd. 496,000 861,152
-----------
ELECTRICAL EQUIPMENT (0.5%)
Cheng Uei Precision Industry Company, Ltd. 275,000 888,258
-----------
ELECTRONIC EQUIPMENT & INSTRUMENTS (2.1%)
AU Optronics Corp. ADR ss. 107,863 1,619,024
Hon Hai Precision Industry Company, Ltd. 414,747 2,277,776
-----------
3,896,800
-----------
INSURANCE (1.7%)
Cathay Financial Holding Company, Ltd. 1,057,000 1,910,095
Shin Kong Financial Holding Company, Ltd. 1,645,299 1,274,472
-----------
3,184,567
-----------
REAL ESTATE (0.3%)
Cathay Real Estate Development Company, Ltd. * 1,159,000 511,349
-----------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (4.7%)
Advanced Semiconductor Engineering, Inc. 918,678 838,857
MediaTek, Inc. 61,000 713,241
Taiwan Semiconductor Manufacturing Company, Ltd. 3,125,642 5,952,464
United Microelectronics Corp. 2,125,359 1,195,558
-----------
8,700,120
-----------
TOTAL TAIWAN 25,314,437
-----------
THAILAND (2.3%)
BANKS (0.4%)
Siam City Bank Public Company, Ltd. 1,225,000 724,038
-----------
CONSTRUCTION & ENGINEERING (0.5%)
Italian - Thai Development Public Company, Ltd. 4,877,200 981,388
-----------
OIL & GAS (0.6%)
Thai Oil Public Company, Ltd. 670,900 1,039,077
-----------
WIRELESS TELECOMMUNICATION SERVICES (0.8%)
Advanced Info Service Public Company, Ltd. 566,100 1,463,575
-----------
TOTAL THAILAND 4,208,078
-----------
See Accompanying Notes to Financial Statements.
14
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
---------- -----------
COMMON STOCKS
TURKEY (2.1%)
BANKS (1.6%)
Akbank T.A.S. 211,999 $ 1,715,419
Turkiye Garanti Bankasi AS 343,733 1,235,313
-----------
2,950,732
-----------
WIRELESS TELECOMMUNICATION SERVICES (0.5%)
Turkcell Iletisim Hizmetleri AS 165,400 997,087
-----------
TOTAL TURKEY 3,947,819
-----------
UNITED ARAB EMIRATES (0.5%)
WIRELESS TELECOMMUNICATION SERVICES (0.5%)
Investcom LLC GDR* 67,800 952,590
-----------
TOTAL UNITED ARAB EMIRATES 952,590
-----------
TOTAL COMMON STOCKS (Cost $117,069,623) 165,324,192
-----------
PREFERRED STOCKS (6.2%)
BRAZIL (6.2%)
BANKS (0.6%)
Banco Itau Holding Financeira SA 45,800 1,104,063
-----------
BEVERAGES (0.3%)
Companhia de Bebidas das Americas ADR ss. 16,000 608,800
-----------
DIVERSIFIED TELECOMMUNICATION SERVICES (1.1%)
Telemar Norte Leste SA Class A 47,900 1,302,355
Telesp - Telecomunicacoes de Sao Paulo SA 32,400 665,202
-----------
1,967,557
-----------
ELECTRIC UTILITIES (0.3%)
AES Tiete SA 10,700,000 233,196
Braskem SA Class A 38,000 309,142
-----------
542,338
-----------
INDUSTRIAL CONGLOMERATES (0.9%)
Bradespar SA 31,800 807,424
Itausa - Investimentos Itau SA 280,496 888,748
-----------
1,696,172
-----------
INTERNET SOFTWARE & SERVICES (0.1%)
Universo Online SA 22,400 188,945
-----------
METALS & MINING (2.2%)
Companhia Vale do Rio Doce ADR 85,300 3,092,125
Usinas Siderurgicas de Minas Gerais SA Series A 39,200 933,214
-----------
4,025,339
-----------
See Accompanying Notes to Financial Statements.
15
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
---------- ------------
PREFERRED STOCKS
BRAZIL
OIL & GAS (0.7%)
Petroleo Brasileiro SA - Petrobras ADR 19,600 $ 1,396,892
------------
TOTAL PREFERRED STOCKS (Cost $6,977,782) 11,530,106
------------
RIGHTS (0.0%)
THAILAND (0.0%)
DIVERSIFIED TELECOMMUNICATION SERVICES (0.0%)
True Corporation Public Company, Ltd. strike price
$20.60, expires April 2008 ^* (Cost $0) 50,021 0
------------
SHORT-TERM INVESTMENTS (11.6%)
State Street Navigator Prime Fund ss.ss. 12,877,570 12,877,570
PAR
(000)
----------
State Street Bank and Trust Co. Euro Time Deposit,
3.350%, 1/03/06 $ 8,677 8,677,000
------------
TOTAL SHORT-TERM INVESTMENTS (Cost $21,554,570) 21,554,570
------------
TOTAL INVESTMENTS AT VALUE (106.6%) (Cost $145,601,975) 198,408,868
LIABILITIES IN EXCESS OF OTHER ASSETS (-6.6%) (12,218,709)
------------
NET ASSETS (100.0%) $186,190,159
============
INVESTMENT ABBREVIATIONS
ADR = American Depositary Receipt
GDR = Global Depositary Receipt
- --------------------------------------------------------------------------------
* Non-income producing security.
++ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified Institutional buyers. At December 31,
2005, these securities amounted to a value of $4,594,597 or 2.47% of net
assets.
^ Not readily marketable security; security is valued at fair value as
determined in good faith by, or under the direction of, the Board of
Trustees.
ss. Security or portion thereof is out on loan.
ss.ss. Represents security purchased with cash collateral received for
securities on loan.
See Accompanying Notes to Financial Statements.
16
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2005
- --------------------------------------------------------------------------------
ASSETS
Investments at value, including collateral for securities
on loan of $12,877,570 (Cost $145,601,975) (Note 2) $ 198,408,868 1
Cash 956
Foreign currency at value (Cost $711,620) 717,811
Receivable for portfolio shares sold 419,743
Dividend and interest receivable 287,662
Receivable for investments sold 142,896
Prepaid expenses and other assets 7,149
--------------
Total Assets 199,985,085
--------------
LIABILITIES
Advisory fee payable (Note 3) 187,886
Administrative services fee payable (Note 3) 35,313
Payable upon return of securities loaned (Note 2) 12,877,570
Payable for investments purchased 471,419
Deferred foreign tax liability (Note 2) 124,438
Payable for portfolio shares redeemed 19,956
Other accrued expenses payable 78,344
--------------
Total Liabilities 13,794,926
--------------
NET ASSETS
Capital stock, $0.001 par value (Note 6) 11,069
Paid-in capital (Note 6) 130,479,092
Undistributed net investment income 953,171
Accumulated net realized gain on investments and foreign
currency transactions 2,055,855
Net unrealized appreciation from investments and foreign
currency translations 52,690,972
--------------
Net Assets $ 186,190,159
==============
Shares outstanding 11,069,191
--------------
Net asset value, offering price, and redemption price
per share $ 16.82
==============
- --------------------------------------------------------------------------------
1 Including $12,537,618 of securities on loan
See Accompanying Notes to Financial Statements.
17
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME (Note 2)
Dividends $ 3,745,761
Interest 107,085
Securities lending 22,883
Foreign taxes withheld (485,287)
--------------
Total investment income 3,390,442
--------------
EXPENSES
Investment advisory fees (Note 3) 1,686,255
Administrative services fees (Note 3) 241,832
Custodian fees 146,319
Printing fees (Note 3) 67,822
Audit and tax fees 25,293
Legal fees 18,036
Insurance expense 6,503
Transfer agent fees 6,035
Commitment fees (Note 4) 3,444
Registration fees 3,268
Trustees' fees 2,778
Miscellaneous expense 23,122
--------------
Total expenses 2,230,707
Less: fees waived (Note 3) (342,098)
--------------
Net expenses 1,888,609
--------------
Net investment income 1,501,833
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND
FOREIGN CURRENCY RELATED ITEMS
Net realized gain from investments (including Thailand
Capital Gain Tax of $163,166) 8,538,524
Net realized loss from foreign currency transactions (327,729)
Net change in unrealized appreciation (depreciation)
from investments 26,043,901
Net change in unrealized appreciation (depreciation) from
foreign currency translations 105,208
--------------
Net realized and unrealized gain from investments and
foreign currency related items 34,359,904
--------------
Net increase in net assets resulting from operations $ 35,861,737
==============
See Accompanying Notes to Financial Statements.
18
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
FROM OPERATIONS ----------------- -----------------
Net investment income $ 1,501,833 $ 1,061,862
Net realized gain from investments and foreign currency transactions 8,210,795 11,247,576
Net change in unrealized appreciation (depreciation)
from investments and foreign currency translations 26,149,109 8,162,457
----------------- -----------------
Net increase in net assets resulting from operations 35,861,737 20,471,895
----------------- -----------------
FROM DIVIDENDS
Dividends from net investment income (986,165) (257,121)
----------------- -----------------
Net decrease in net assets resulting from dividends (986,165) (257,121)
----------------- -----------------
FROM CAPITAL SHARE TRANSACTIONS (Note 6)
Proceeds from sale of shares 67,779,637 48,651,946
Reinvestment of dividends 986,165 257,121
Net asset value of shares redeemed (32,675,340) (27,681,607)
----------------- -----------------
Net increase in net assets from capital share transactions 36,090,462 21,227,460
----------------- -----------------
Net increase in net assets 70,966,034 41,442,234
NET ASSETS
Beginning of year 115,224,125 73,781,891
----------------- -----------------
End of year $ 186,190,159 $ 115,224,125
================= =================
UNDISTRIBUTED NET INVESTMENT INCOME $ 953,171 $ 626,735
================= =================
See Accompanying Notes to Financial Statements.
19
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------
2005 2004 2003 2002 2001
--------- -------- --------- -------- ---------
PER SHARE DATA
Net asset value, beginning of year $ 13.25 $ 10.63 $ 7.44 $ 8.43 $ 9.33
--------- -------- --------- -------- ---------
INVESTMENT OPERATIONS
Net investment income 0.14 0.12 0.07 0.01 0.06
Net gain (loss) on investments
and foreign currency related items
(both realized and unrealized) 3.53 2.53 3.12 (0.98) (0.96)
--------- -------- --------- -------- ---------
Total from investment operations 3.67 2.65 3.19 (0.97) (0.90)
--------- -------- --------- -------- ---------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income (0.10) (0.03) -- (0.02) --
--------- -------- --------- -------- ---------
NET ASSET VALUE, END OF YEAR $ 16.82 $ 13.25 $ 10.63 $ 7.44 $ 8.43
========= ======== ========= ======== =========
Total return 1 27.84% 25.02% 42.88% (11.56)% (9.65)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (000s omitted) $ 186,190 $115,224 $ 73,782 $ 43,867 $ 38,331
Ratio of expenses to average net assets 1.40% 1.40% 1.40% 1.40% 1.40%
Ratio of net investment income
to average net assets 1.11% 1.21% 0.94% 0.13% 0.63%
Decrease reflected in above operating expense
ratios due to waivers/reimbursements 0.25% 0.29% 0.41% 0.44% 0.49%
Portfolio turnover rate 77% 121% 167% 128% 130%
- --------------------------------------------------------------------------------
1 Total returns are historical and assume changes in share price and
reinvestment of all dividends and distributions. Had certain expenses not
been reduced during the years shown, total returns would have been lower.
Total returns do not reflect charges and expenses attributable to any
particular variable contract or plan.
See Accompanying Notes to Financial Statements.
20
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Credit Suisse Trust (the "Trust") is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, and
currently offers eight managed investment portfolios of which one, the Emerging
Markets Portfolio (the "Portfolio"), is included in this report. The Portfolio
is a diversified investment fund that seeks long-term growth of capital. Shares
of the Portfolio are not available directly to individual investors but may be
offered only through (a) variable annuity contracts and variable life insurance
contracts offered by separate accounts of certain insurance companies and (b)
tax-qualified pension and retirement plans. The Portfolio may not be available
in connection with a particular contract or plan. The Trust was organized under
the laws of The Commonwealth of Massachusetts as a business trust on March 15,
1995.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A) SECURITY VALUATION - The net asset value of the Portfolio is determined
daily as of the close of regular trading on the New York Stock Exchange, Inc.
(the "Exchange") on each day the Exchange is open for business. The Portfolio's
equity investments are valued at market value, which is generally determined
using the closing price on the exchange or market on which the security is
primarily traded at the time of valuation (the "Valuation Time"). If no sales
are reported, equity investments are generally valued at the most recent bid
quotation as of the Valuation Time or at the lowest asked quotation in the case
of a short sale of securities. Debt securities with a remaining maturity greater
than 60 days are valued in accordance with the price supplied by a pricing
service, which may use a matrix, formula or other objective method that takes
into consideration market indices, yield curves and other specific adjustments.
Debt obligations that will mature in 60 days or less are valued on the basis of
amortized cost, which approximates market value, unless it is determined that
using this method would not represent fair value. Investments in mutual funds
are valued at the mutual fund's closing net asset value per share on the day of
valuation. Securities and other assets for which market quotations are not
readily available, or whose values have been materially affected by events
occurring before the Portfolio's Valuation Time but after the close of the
securities' primary markets, are valued at fair value as determined in good
faith by, or under the direction of, the Board of Trustees under procedures
established by the Board of Trustees. The Portfolio may utilize a service
provided by an independent third party which has been approved by
21
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
the Board of Trustees to fair value certain securities. When fair-value pricing
is employed, the prices of securities used by a fund to calculate its net asset
value may differ from quoted or published prices for the same securities.
B) FOREIGN CURRENCY TRANSACTIONS - The books and records of the Portfolio
are maintained in U.S. dollars. Transactions denominated in foreign currencies
are recorded at the current prevailing exchange rates. All assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at the current exchange rate at the end of the period. Translation gains
or losses resulting from changes in the exchange rate during the reporting
period and realized gains and losses on the settlement of foreign currency
transactions are reported in the results of operations for the current period.
The Portfolio does not isolate that portion of realized gains and losses on
investments in EQUITY securities which is due to changes in the foreign exchange
rate from that which is due to changes in market prices of equity securities.
The Portfolio isolates that portion of realized gains and losses on investments
in DEBT securities which is due to changes in the foreign exchange rate from
that which is due to changes in market prices of debt securities.
C) SECURITY TRANSACTIONS AND INVESTMENT INCOME - Security transactions are
accounted for on a trade date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date. The cost of investments
sold is determined by use of the specific identification method for both
financial reporting and income tax purposes.
D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net
investment income and distributions of net realized capital gains, if any, are
declared and paid at least annually. However, to the extent that a net realized
capital gain can be reduced by a capital loss carryforward, such gain will not
be distributed. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States of America ("GAAP").
E) FEDERAL INCOME TAXES - No provision is made for federal taxes as it is
the Trust's intention to have the Portfolio continue to qualify for and elect
the tax treatment applicable to regulated investment companies under the
Internal Revenue Code of 1986, as amended, and to make the requisite
distributions to
22
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
its shareholders, which will be sufficient to relieve it from federal income and
excise taxes.
F) USE OF ESTIMATES - The preparation of financial statements in
conformity with GAAP 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 revenues and expenses during the reporting period.
Actual results could differ from these estimates.
G) SHORT-TERM INVESTMENTS - The Portfolio, together with other
funds/portfolios advised by Credit Suisse Asset Management, LLC ("Credit
Suisse"), an indirect, wholly-owned subsidiary of Credit Suisse Group, pools
available cash into either a short-term variable rate time deposit issued by
State Street Bank and Trust Company ("SSB"), the Portfolio's custodian, or a
money market fund advised by Credit Suisse. The short-term time deposit issued
by SSB is a variable rate account classified as a short-term investment.
H) FORWARD FOREIGN CURRENCY CONTRACTS - The Portfolio may enter into
forward foreign currency contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the value
of a foreign currency. The Portfolio will enter into forward foreign currency
contracts primarily for hedging purposes. Forward foreign currency contracts are
adjusted by the daily forward exchange rate of the underlying currency, and any
gains or losses are recorded for financial statement purposes as unrealized
until the contract settlement date or an offsetting position is entered into. At
December 31, 2005, the Portfolio had no open forward foreign currency contracts.
I) SECURITIES LENDING - Loans of securities are required at all times to
be secured by collateral at least equal to 102% of the market value of domestic
securities on loan (including any accrued interest thereon) and 105% of the
market value of foreign securities on loan (including any accrued interest
thereon). Cash collateral received by the Portfolio in connection with
securities lending activity may be pooled together with cash collateral for
other funds/portfolios advised by Credit Suisse and may be invested in a variety
of investments, including certain Credit Suisse-advised funds, funds advised by
23
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
SSB, the Portfolio's securities lending agent, or money market instruments.
However, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings.
SSB has been engaged by the Portfolio to act as the Portfolio's securities
lending agent. The Portfolio's securities lending arrangement provides that the
Portfolio and SSB will share the net income earned from the securities lending
activities. During the year ended December 31, 2005, total earnings from the
Portfolio's investment in cash collateral received in connection with securities
lending arrangements was $296,288, of which $263,518 was rebated to borrowers
(brokers). The Portfolio retained $22,883 in income from the cash collateral
investment and SSB, as lending agent, was paid $9,887. The Portfolio may also be
entitled to certain minimum amounts of income from its securities lending
activities. Securities lending income is accrued as earned.
J) OTHER - The Portfolio may invest in securities of foreign countries and
governments which involve certain risks in addition to those inherent in
domestic investments. Such risks generally include, among others, currency risk
(fluctuations in currency exchange rates), information risk (key information may
be inaccurate or unavailable) and political risk (expropriation, nationalization
or the imposition of capital or currency controls or punitive taxes). Other
risks of investing in foreign securities include liquidity and valuation risks.
The Portfolio's investments in securities of issuers located in less
developed countries considered to be "emerging markets" involve risks in
addition to those generally applicable to foreign securities. Focusing on
emerging (less developed) markets involves higher levels of risk, including
increased currency, information, liquidity, market, political and valuation
risks. Deficiencies in regulatory oversight, market infrastructure, shareholder
protections and company laws could expose the Portfolio to operational and other
risks as well. Some countries may have restrictions that could limit the
Portfolio's access to attractive investment opportunities. Additionally,
emerging markets often face serious economic problems (such as high external
debt, inflation and unemployment) that could subject the Portfolio to increased
volatility or substantial declines in value.
24
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The Portfolio may be subject to taxes imposed by countries in which it
invests with respect to its investments in issuers existing or operating in such
countries. Such taxes are generally based on income earned or repatriated and
capital gains realized on the sale of such investments. The Portfolio accrues
such taxes when the related income or capital gains are earned.
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Credit Suisse serves as investment adviser for the Portfolio. For its
investment advisory services, Credit Suisse is entitled to receive a fee from
the Portfolio at an annual rate of 1.25% of the Portfolio's average daily net
assets. For the year ended December 31, 2005, investment advisory fees earned
and voluntarily waived were $1,686,255 and $342,098, respectively. Credit Suisse
will not recapture from the Portfolio any fees it waived during the fiscal year
ended December 31, 2005. Fee waivers and reimbursements are voluntary and may be
discontinued by Credit Suisse at any time.
Credit Suisse Asset Management Limited (U.K.) ("Credit Suisse U.K.") and
Credit Suisse Asset Management Limited (Australia) ("Credit Suisse Australia"),
affiliates of Credit Suisse, are sub-investment advisers to the Portfolio (the
"Sub-Advisers"). Credit Suisse U.K's and Credit Suisse Australia's
sub-investment advisory fees are paid by Credit Suisse out of Credit Suisse's
net investment advisory fee and are not paid by the Portfolio.
Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate
of Credit Suisse, and SSB serve as co-administrators to the Portfolio.
For its co-administrative services, CSAMSI currently receives a fee
calculated at an annual rate of 0.10% of the Portfolio's average daily net
assets. For the year ended December 31, 2005, co-administrative services fees
earned by CSAMSI were $134,900.
For its co-administrative services, SSB receives a fee, exclusive of
out-of-pocket expenses calculated in total for all the Credit Suisse
funds/portfolios co-administered by SSB and allocated based upon relative
average net assets of each fund/portfolio, subject to an annual minimum fee. For
the year ended December 31, 2005, co-administrative services fees earned by SSB
(including out-of-pocket expenses) were $106,932.
In addition to serving as the Portfolio's co-administrator, CSAMSI
currently serves as distributor of the Portfolio's shares without compensation.
25
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Merrill Corporation ("Merrill"), an affiliate of Credit Suisse, has been
engaged by the Portfolio to provide certain financial printing and fulfillment
services. For the year ended December 31, 2005, Merrill was paid $8,048 for its
services to the Portfolio.
NOTE 4. LINE OF CREDIT
The Portfolio, together with other funds/portfolios advised by Credit
Suisse (collectively, the "Participating Funds"), participates in a $75 million
committed, unsecured line of credit facility ("Credit Facility") for temporary
or emergency purposes with Deutsche Bank, A.G. as administrative agent and
syndication agent and SSB as operations agent. Under the terms of the Credit
Facility, the Participating Funds pay an aggregate commitment fee at a rate of
0.10% per annum on the average unused amount of the Credit Facility, which is
allocated among the Participating Funds in such manner as is determined by the
governing Boards of the Participating Funds. In addition, the Participating
Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At
December 31, 2005 and during the year ended December 31, 2005, the Portfolio had
no borrowings under the Credit Facility.
NOTE 5. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 2005, purchases and sales of investment
securities (excluding short-term investments) were $133,149,699 and
$100,785,041, respectively.
NOTE 6. CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, $.001 par value per share.
Transactions in capital shares of the Portfolio were as follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
------------------ ------------------
Shares sold 4,677,861 4,217,158
Shares issued in reinvestment
of dividends 66,097 23,459
Shares redeemed (2,371,979) (2,483,712)
----------- -----------
Net increase 2,371,979 1,756,905
=========== ===========
26
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 6. CAPITAL SHARE TRANSACTIONS
On December 31, 2005, the number of shareholders that held 5% or more of
the outstanding shares was as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ----------------------
6 95%
Some of the shareholders are omnibus accounts, which hold shares on behalf
of individual shareholders.
NOTE 7. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
The tax characteristics of dividends paid during the years ended December
31, 2005, and 2004, respectively, by the Portfolio were as follows:
ORDINARY INCOME
---------------
2005 2004
-------- --------
$986,165 $257,121
The tax basis of components of distributable earnings differ from the
amounts reflected in the Statement of Assets and Liabilities by temporary
book/tax differences. These differences are primarily due to mark-to-market of
foreign currency transactions, losses deferred due to wash sales, post-October
losses and the mark-to-market income from Passive Foreign Investment Companies.
At December 31, 2005, the components of distributable earnings on a tax
basis for the Portfolio was as follows:
Undistributed net investment income $ 1,930,527
Accumulated net realized gain 2,149,933
Unrealized appreciation 51,697,471
Deferral of post-October currency losses (77,933)
-----------
$55,699,998
===========
During the tax year ended December 31, 2005, the Portfolio utilized
$5,569,803 of the capital loss carryforward.
27
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 7. FEDERAL INCOME TAXES
Under current tax law, certain capital losses realized after October 31
within a taxable year may be deferred and treated as occurring on the first day
of the following tax year. For the tax period ended December 31, 2005, the
Portfolio elected to defer net losses arising between November 1, 2005 and
December 31, 2005 as follows:
CURRENCY
--------
$77,933
As of December 31, 2005, the identified cost for federal income tax
purposes, as well as the gross unrealized appreciation from investments for
those securities having an excess of value over cost, gross unrealized
depreciation from investments for those securities having an excess of cost over
value and the net unrealized appreciation from investments were as follows:
$146,595,662 $53,837,534, $(2,024,328) and $51,813,206, respectively.
At December 31, 2005, the Portfolio reclassified $189,232 from
undistributed net investment income to accumulated net realized loss from
investments, to adjust for current year permanent book/tax differences which
arose principally from differing book/tax treatments of foreign currency
transactions, realized capital gains tax and security litigation, and the sale
of Passive Foreign Investment Companies. Net assets were not affected by these
reclassifications.
NOTE 8. CONTINGENCIES
In the normal course of business, the Portfolio may provide general
indemnifications pursuant to certain contracts and organizational documents. The
Portfolio's maximum exposure under these arrangements is dependent on future
claims that may be made against the Portfolio and, therefore, cannot be
estimated; however, based on experience, the risk of loss from such claims is
considered remote.
28
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees of Credit Suisse Trust and Shareholders of Credit
Suisse Trust - Emerging Markets 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 financial highlights present fairly, in all
material respects, the financial position of Emerging Markets Portfolio (the
"Portfolio"), a portfolio of the Credit Suisse Trust, at December 31, 2005, 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 five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolio's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards 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 December 31, 2005 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 6, 2006
29
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
- --------------------------------------------------------------------------------
In approving the Advisory and Sub-Advisory Agreements, the Board of
Trustees, including the Independent Trustees, considered the following factors
with respect to the Emerging Markets Portfolio (the "Portfolio"):
INVESTMENT ADVISORY FEE RATES
The Board reviewed and considered the contractual advisory fee rate of
1.25% for the Portfolio ("Contractual Advisory Fee") in light of the extent and
quality of the advisory services provided by Credit Suisse Asset Management, LLC
("Credit Suisse") or Credit Suisse Asset Management Limited U.K. ("Credit Suisse
U.K.") and Credit Suisse Asset Management Limited Australia ("Credit Suisse
Australia"). The Board also reviewed and considered the fee waivers and/or
expense reimbursement arrangements currently in place for the Portfolio and
considered the actual fee rates of 0.96% paid by the Portfolio after taking
waivers and reimbursements into account ("Net Advisory Fee"). The Board
acknowledged that the fee waivers and reimbursements could be discontinued at
any time. In addition, the Board noted that the compensation paid to Credit
Suisse U.K. and Credit Suisse Australia (collectively, the "Sub-Advisers") does
not increase the fees or expenses otherwise incurred by the Portfolio's
shareholders.
Additionally, the Board received and considered information comparing the
Portfolio's Contractual Advisory Fee and Net Advisory Fee and the Portfolio's
overall expenses with those of funds in both the relevant expense group ("Peer
Group") and universe of funds (the "Universe") provided by Lipper Inc., an
independent provider of investment company data.
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AND
SUB-ADVISORY AGREEMENTS
The Board received and considered information regarding the nature, extent
and quality of services provided to the Portfolio by Credit Suisse under the
Advisory Agreement and by the Sub-Advisers under the Sub-Advisory Agreements.
The Board also noted information received at regular meetings throughout the
year related to the services rendered by Credit Suisse and the Sub-Advisers. The
Board reviewed background information about Credit Suisse and the Sub-Advisers,
including their respective Form ADV. The Board considered the background and
experience of both Credit Suisse's and the Sub-Advisers' senior management and
the expertise of, and the amount of attention given to the Portfolio by, senior
personnel of Credit Suisse and the Sub-Advisers. With respect to the
Sub-Advisers, the Board also considered their expertise in managing the types of
global investments that the Portfolio utilizes in its investment strategy. In
addition, the Board reviewed the qualifications, backgrounds and
responsibilities of the portfolio management team primarily responsible for the
day-to-day portfolio management of the Portfolio and the extent of the resources
devoted to research and analysis of actual and potential investments. The Board
also received and considered information about the nature, extent and quality of
services and fee rates offered to other Credit Suisse clients for comparable
services.
In approving the Sub-Advisory Agreements, the Board also considered the
benefits of retaining Credit Suisse's United Kingdom and Australian affiliates
given the increased complexity of the domestic and international securities
markets,
30
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
specifically that retention of Credit Suisse U.K. and Credit Suisse Australia
expands the universe of companies and countries from which investment
opportunities could be sought and enhances the ability of the Portfolio to
obtain the best price and execution on trades in international markets.
PORTFOLIO PERFORMANCE
The Board received and considered the one-, two-, three-, four- and
five-year performance of the Portfolio, along with comparisons, for all
presented periods, both to the relevant performance group ("Performance Group")
and universe of funds ("Performance Universe") for the Portfolio. The Board was
provided with a description of the methodology used to arrive at the funds
included in the Performance Group and the Performance Universe.
The Board reviewed information comparing the performance of various Credit
Suisse Funds to performance benchmarks that the Board had previously established
and progress that had been made in certain instances toward achieving those
benchmarks. The Board also reviewed comparisons between the Portfolio and its
identified benchmark over various time periods.
CREDIT SUISSE PROFITABILITY
The Board received and considered a profitability analysis of Credit
Suisse based on the fees payable under the Advisory Agreement for the Portfolio,
including any fee waivers or fee caps, as well as other relationships between
the Portfolio on the one hand and Credit Suisse affiliates on the other. The
Board received profitability information for the other funds in the Credit
Suisse family of funds.
ECONOMIES OF SCALE
The Board considered whether economies of scale in the provision of
services to the Portfolio were being passed along to the shareholders.
Accordingly, the Board considered whether alternative fee structures (such as
breakpoint fee structures) would be more appropriate or reasonable taking into
consideration economies of scale or other efficiencies that might accrue from
increases in the Portfolio's asset levels.
OTHER BENEFITS TO CREDIT SUISSE
The Board considered other benefits received by Credit Suisse, the
Sub-Advisers and their affiliates as a result of their relationship with the
Portfolio. Such benefits include, among others, research arrangements with
brokers who execute transactions on behalf of the Portfolio, administrative and
brokerage relationships with affiliates of Credit Suisse and the Sub-Advisers
and benefits potentially derived from an increase in Credit Suisse's and the
Sub-Advisers' businesses as a result of their relationship with the Portfolio
(such as the ability to market to shareholders other financial products offered
by Credit Suisse, the Sub-Advisers and their affiliates).
The Board considered the standards applied in seeking best execution,
whether and to what extent soft dollar credits are sought and how any such
credits are utilized, any benefits that may be achieved by using an affiliated
broker and the existence of quality controls applicable to brokerage allocation
procedures. The Board also reviewed Credit Suisse's and the Sub-Advisers' method
for allocating portfolio investment opportunities among their advisory clients.
31
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
CONCLUSIONS
In selecting Credit Suisse and the Sub-Advisers, and approving the
Advisory Agreement and the investment advisory fee under such agreement and the
Sub-Advisory Agreements, the Board concluded that:
o Although the Contractual Advisory Fee was greater than the median of
the Portfolio's Peer Group, the Net Advisory Fee was lower than the
median of the Portfolio's Peer Group. In addition, the Board
recognized that Credit Suisse has historically evidenced a
willingness to waive fees. The Board considered that the Net
Advisory Fee would decrease to 0.91% when the additional voluntary
fee waiver (described below) is taken into account. The Board
considered the Net Advisory Fee to be reasonable.
o The Portfolio's one-, two-, three-, four- and five-year performance
lagged that of the Portfolio's Performance Group and Performance
Universe. The Board had previously identified the need to address
the Portfolio's performance, and noted that Credit Suisse was in the
process of addressing performance issues. After discussion with the
Board, Credit Suisse had agreed to an additional one-year voluntary
fee reduction of five basis points. The Board would continue to
monitor steps undertaken by Credit Suisse to improve performance.
o Aside from performance (as described above), the Board was satisfied
with the nature, extent and quality of the investment advisory
services provided to the Portfolio by Credit Suisse and the
Sub-Advisers and that, based on dialogue with management and
counsel, the services provided by Credit Suisse under the Advisory
Agreement and by the Sub-Advisers under the Sub-Advisory Agreements
are typical of, and consistent with, those provided to mutual funds
by other investment advisers. The Board understood that Credit
Suisse was in the process of addressing performance issues.
o In light of the costs of providing investment management and other
services to the Portfolio and Credit Suisse's ongoing commitment to
the Portfolio and willingness to cap fees and expenses, the profits
and other ancillary benefits that Credit Suisse and its affiliates
received were considered reasonable.
o Credit Suisse's profitability based on fees payable under the
Advisory Agreement was reasonable in light of the nature, extent and
quality of the services provided to the Portfolio thereunder.
o In light of the relatively small size of the Portfolio, the amount
of the Net Advisory Fee and the additional voluntary fee reduction,
the Portfolio's current fee structure (without breakpoints) was
considered reasonable.
No single factor reviewed by the Board was identified by the Board as the
principal factor in determining whether to approve the Advisory Agreement and
the Sub-Advisory Agreements. The Independent Trustees were advised by separate
independent legal counsel throughout the process.
32
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS IN
AND FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------- ----------- ------------ -------------------------- ------------- -----------------------
INDEPENDENT TRUSTEES
Enrique Arzac Trustee, Since Professor of Finance 47 Director of The
c/o Credit Suisse Asset Nominating 2005 and Economics, Adams Express
Management, LLC Committee Graduate School of (a closed-end
Attn: General Counsel Member and Business, Columbia investment
466 Lexington Avenue Audit University since 1971 company); Director
New York, New York Committee of Petroleum
10017-3140 Chairman and Resources
Corporation
Date of Birth: 10/02/41 (a closed-end
investment
company)
Richard H. Francis Trustee, Since Currently retired 41 None
c/o Credit Suisse Asset Nominating 1999
Management, LLC and Audit
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 04/23/32
Jeffrey E. Garten Trustee, Since The Juan Trippe 40 Director of Aetna,
Box 208200 Nominating 1998 2 Professor in the Practice Inc. (insurance
New Haven, Connecticut and Audit of International Trade, company); Director
06520-8200 Committee Finance and Business of CarMax Group
Member from July 2005 to present; (used car dealers)
Date of Birth: 10/29/46 Partner and Chairman
of Garten Rothkopf
(consulting firm) from
October 2005 to present;
Dean of Yale School of
Management from
November 1995 to
June 2005
Peter F. Krogh Trustee, Since Dean Emeritus and 40 Director of Carlisle
301 ICC Nominating 2001 Distinguished Professor Companies
Georgetown University and Audit of International Affairs Incorporated
Washington, DC 20057 Committee at the Edmund A. (diversified
Member Walsh School of manufacturing
Date of Birth: 02/11/37 Foreign Service, company)
Georgetown University
from June 1995
to present
___________________
1 Each Trustee and Officer serves until his or her respective successor has
been duly elected and qualified.
2 Mr. Garten was initially appointed as a Trustee of the Trust on February
6, 1998. He resigned as Trustee on February 3, 2000, and was subsequently
re-appointed on December 21, 2000.
33
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS IN
AND FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- ------------------------- ----------- ------------ -------------------------- ------------- -----------------------
INDEPENDENT TRUSTEES
James S. Pasman, Jr. Trustee, Since Currently retired 42 Director of Education
c/o Credit Suisse Asset Nominating 1999 Management Corp.
Management, LLC and Audit
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 12/20/30
Steven N. Rappaport Chairman of Trustee Partner of Lehigh Court, 46 Director of Presstek,
Lehigh Court, LLC the Board Since LLC and RZ Capital Inc. (digital imaging
40 East 52nd Street of Trustees, 1999 (private investment firms) technologies
New York, New York Nominating and from July 2002 to present; company); Director of
10022 Committee Chairman Transition Adviser to Wood Resources, LLC.
Chairman since SunGard Securities (plywood
Date of Birth: 07/10/48 and Audit 2005 Finance, Inc. from manufacturing
Committee February 2002 to July company)
Member 2002; President of
SunGard Securities
Finance, Inc. from 2001
to February 2002;
President of Loanet,
Inc. (on-line accounting
service) from 1997 to 2001
INTERESTED TRUSTEE
Michael E. Kenneally 3,4 Trustee Since Chairman and Global 40 None
c/o Credit Suisse Asset 2004 Chief Executive Officer
Management, LLC of Credit Suisse from
Attn: General Counsel March 2003 to July 2005;
466 Lexington Avenue Chairman and Chief
New York, New York Investment Officer of
10017-3140 Banc of America Capital
Management from 1998
Date of Birth: 03/30/54 to March 2003
__________________
3 Mr. Kenneally is a Trustee who is an "interested person" of the Trust as
defined in the 1940 Act, because he was an officer of Credit Suisse within
the last two fiscal years.
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
34
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM OF
OFFICE 1 AND
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------------------- ----------- ------------ -------------------------------------------------------------
OFFICERS
Steven B. Plump 4 Chief Since Managing Director; Associated with Credit Suisse or its
Credit Suisse Asset Executive 2005 predecessor since 1995; Officer of other Credit Suisse Funds
Management, LLC Officer and
466 Lexington Avenue President
New York, New York
10017-3140
Date of Birth: 02/08/59
Michael A. Pignataro Chief Since Director and Director of Fund Administration of Credit Suisse;
Credit Suisse Asset Financial 1999 Associated with Credit Suisse or its predecessors since 1984;
Management, LLC Officer and Officer of other Credit Suisse Funds
466 Lexington Avenue Treasurer
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Since Director and Global Head of Compliance of Credit Suisse;
Credit Suisse Asset Compliance 2004 Associated with Credit Suisse since July 2000; Vice President
Management, LLC Officer and Director of Compliance of Forstmann-Leff
466 Lexington Avenue Associates from 1998 to June 2000; Officer of other
New York, New York Credit Suisse Funds
10017-3140
Date of Birth: 09/21/66
Ajay Mehra Chief Since Director and Head of Legal Americas Traditional Asset
Credit Suisse Asset Legal 2004 Management and Hedge Funds; Associated with Credit Suisse
Management, LLC Officer since September 2004; Senior Associate of Shearman & Sterling
466 Lexington Avenue LLP from September 2000 to September 2004; Senior Counsel
New York, New York of the SEC Division of Investment Management from June
10017-3140 1997 to September 2000; Officer of other Credit Suisse Funds
Date of Birth: 08/14/70
J. Kevin Gao Vice Since Director and Legal Counsel of Credit Suisse; Associated with
Credit Suisse Asset President 2004 Credit Suisse since July 2003; Associated with the law firm of
Management, LLC and Willkie Farr & Gallagher LLP from 1998 to 2003; Officer of other
466 Lexington Avenue Secretary Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 10/13/67
Robert Rizza Assistant Since Vice President of Credit Suisse; Associated with Credit Suisse
Credit Suisse Asset Treasurer 2002 since 1998; Officer of other Credit Suisse Funds
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
___________________
4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
The Statement of Additional Information includes additional information
about the Trustees and is available, without charge, upon request, by calling
800-222-8977.
35
CREDIT SUISSE TRUST--EMERGING MARKETS PORTFOLIO
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION
- --------------------------------------------------------------------------------
Information regarding how the Portfolio voted proxies related to its
portfolio securities during the 12-month period ended June 30 of each year, as
well as the policies and procedures that the Portfolio uses to determine how to
vote proxies relating to its portfolio securities are available:
o By calling 1-800-222-8977
o On the Portfolio's website, www.credit-suisse.com/us
o On the website of the Securities and Exchange Commission,
http://www.sec.gov.
The Portfolio files a complete schedule of its portfolio holdings for the
first and third quarters of its fiscal year with the SEC on Form N-Q. The
Portfolio's Forms N-Q are available on the SEC's website at http://www.sec.gov
and may be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. Information on the operation of the SEC's Public Reference Room may be
obtained by calling 1-800-SEC-0330.
36
CREDIT SUISSE [LOGO]
P.O. BOX 55030, BOSTON, MA 02205-5030
800-222-8977 o www.credit-suisse.com/us
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. TREMK-AR-1205
CREDIT SUISSE [LOGO]
CREDIT SUISSE FUNDS
Annual Report
December 31, 2005
CREDIT SUISSE TRUST
o BLUE CHIP PORTFOLIO
Credit Suisse Trust (the "Trust") shares are not available directly to
individual investors, but may be offered only through certain insurance products
and pension and retirement plans.
The Trust's investment objectives, risks, charges and expenses (which should be
considered carefully before investing), and more complete information about the
Trust, are provided in the PROSPECTUS, which should be read carefully before
investing. You may obtain additional copies by calling 800-222-8977 or by
writing to Credit Suisse Trust, P.O. Box 55030, Boston, MA 02205-5030.
Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466
Lexington Ave., New York, NY 10017-3140. The Trust is advised by Credit Suisse
Asset Management, LLC.
THE VIEWS OF THE PORTFOLIO'S MANAGEMENT ARE AS OF THE DATE OF THE LETTER AND THE
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF DECEMBER 31, 2005; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
PORTFOLIO SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC ("CREDIT SUISSE") OR ANY AFFILIATE, ARE NOT FDIC-INSURED AND ARE
NOT GUARANTEED BY CREDIT SUISSE OR ANY AFFILIATE. PORTFOLIO INVESTMENTS ARE
SUBJECT TO INVESTMENT RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
January 26, 2006
Dear Shareholder:
For the 12 months ended December 31, 2005, Credit Suisse Trust -- Blue
Chip Portfolio 1 (the "Portfolio") had a gain of 5.78%, vs. an increase of 4.91%
for the S&P 500 Index. 2
THE MARKET: POSITIVE DESPITE RISING ENERGY COSTS, INTEREST RATES
The period was an overall positive one for equities. Stocks initially
struggled, but rallied into the summer, aided by benign inflation data and good
earnings reports from a number of visible companies. To be sure, headwinds were
ever-present, notably in the form of hurricane activity, surging energy prices
and a Federal Reserve that continued to raise short-term interest rates in small
but steady increments. In the face of all this, the economy nonetheless appeared
resilient, at least as of late 2005: Third-quarter GDP growth was reported at an
annualized rate of 4.1%, the tenth consecutive quarter of 3% or greater growth.
The earnings backdrop remained generally supportive late in the year.
In the market, high energy prices helped drive the outperformance of
energy related stocks, which, despite some late-period weakness, outpaced all
other economic sectors in the period. This was reflected in the outperformance
of value stocks over growth stocks, as energy companies comprise a relatively
large portion of the value universe. Mid-capitalization stocks generally
outperformed both large- and small-cap stocks for the period.
STRATEGIC REVIEW: CONSUMER STOCKS AID PERFORMANCE
The Portfolio outperformed its benchmark in the period, aided by good
stock selection in the consumer area, in particular retail companies. The
Portfolio energy holdings also supported performance, in both absolute and
relative terms. On the negative side, relatively speaking, the Portfolio's
industrials and technology stocks modestly detracted from its performance.
As a reminder, effective June 1, 2005, the Credit Suisse Quantitative
Resources Group manages the Portfolio. We employ quantitative portfolio
techniques to select portfolio securities. Our quantitative models are designed
to (1) forecast the expected relative returns of stocks by analyzing a number of
fundamental factors, (2) to identify stocks that might likely suffer price
declines if market conditions deteriorate and limit the Portfolio's exposure to
such low
1
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
quality stocks and (3) to help determine the Portfolio's relative exposure to
different industry sectors.
The Credit Suisse Quantitative Resources Group
Joseph Cherian
William Weng
Todd Jablonski
THE VALUE OF INVESTMENTS GENERALLY WILL FLUCTUATE IN RESPONSE TO MARKET
MOVEMENTS.
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS
FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND
FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT
REGULATION AND THEIR POTENTIAL IMPACT ON THE PORTFOLIO'S INVESTMENTS. THESE
STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS,
DEVELOPMENTS AND REGULATIONS IN THE FUTURE AND THEIR IMPACT ON THE PORTFOLIO
COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE
PORTFOLIO HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
2
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
CREDIT SUISSE TRUST--BLUE CHIP PORTFOLIO 1 AND THE
S&P 500 INDEX 2,3 FROM INCEPTION (11/30/01).
CREDIT SUISSE
TRUST--BLUE S&P 500
DATE CHIP PORTFOLIO 1 INDEX 2,3
----- ---------------- ---------
11/01 10000 10000
12/01 10020 10088
9800 9940
9520 9749
9880 10115
9140 9502
9000 9432
8290 8760
7670 8077
7710 8130
6850 7247
7430 7885
7870 8349
12/02 7351 7858
7171 7652
7041 7538
7141 7611
7711 8238
8041 8672
8141 8783
8321 8937
8461 9112
8369 9015
8811 9525
8801 9609
12/03 9182 10113
9353 10298
9453 10442
9303 10284
9162 10123
9293 10262
9393 10461
9082 10115
9032 10156
9131 10266
9242 10423
9647 10844
12/04 10021 11213
9798 10940
9940 11170
9788 10972
9647 10764
9859 11107
9940 11123
10304 11536
10233 11431
10386 11524
10152 11331
10539 11760
12/05 10600 11764
3
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 2005 1
SINCE
1 YEAR INCEPTION
------ ---------
5.78% 1.44%
RETURNS REPRESENT PAST PERFORMANCE AND INCLUDE CHANGE IN SHARE PRICE AND
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE
FUTURE RESULTS. THE CURRENT PERFORMANCE OF THE PORTFOLIO MAY BE LOWER OR HIGHER
THAN THE FIGURES SHOWN. RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION
VALUE MAY BE MORE OR LESS THAN ORIGINAL COST. THE PERFORMANCE RESULTS DO NOT
REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON PORTFOLIO
DISTRIBUTIONS OR THE REDEMPTION OF PORTFOLIO SHARES. PERFORMANCE INCLUDES THE
EFFECT OF DEDUCTING EXPENSES, BUT DOES NOT INCLUDE CHARGES AND EXPENSES
ATTRIBUTABLE TO ANY PARTICULAR VARIABLE CONTRACT OR PLAN. ACCORDINGLY, THE
PROSPECTUS OF THE SPONSORING PARTICIPATING INSURANCE COMPANY SEPARATE ACCOUNT OR
PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS SHOULD
BE CAREFULLY REVIEWED FOR INFORMATION ON RELEVANT CHARGES AND EXPENSES.
EXCLUDING THESE CHARGES AND EXPENSES FROM QUOTATIONS OF PERFORMANCE HAS THE
EFFECT OF INCREASING THE PERFORMANCE QUOTED, AND THE EFFECT OF THESE CHARGES
SHOULD BE CONSIDERED WHEN COMPARING PERFORMANCE TO THAT OF OTHER MUTUAL FUNDS.
PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH-END IS AVAILABLE AT
WWW.CREDIT-SUISSE.COM/US.
_____________
1 Fee waivers and/or expense reimbursements may reduce expenses for the
Portfolio, without which performance would be lower. Waivers and/or
reimbursements may be discontinued any time.
2 The Standard & Poor's 500 Index is an unmanaged index (with no defined
investment objective) of common stocks. It includes reinvestment of
dividends, and is a registered trademark of McGraw-Hill Co., Inc.
Investors cannot invest directly in an index.
3 Performance for the benchmark is not available for the period beginning
November 30, 2001 (commencement of operations). For that reason,
performance is shown for the period beginning December 1, 2001.
4
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
INFORMATION ABOUT YOUR PORTFOLIO'S EXPENSES
As an investor of the Portfolio, you incur two types of costs: ongoing
expenses and transaction costs. Ongoing expenses include management fees,
distribution and service (12b-1) fees and other Portfolio expenses. Examples of
transaction costs include sales charges (loads), redemption fees and account
maintenance fees, which are not shown in this section and which would result in
higher total expenses. The following table is intended to help you understand
your ongoing expenses of investing in the Portfolio and to help you compare
these expenses with the ongoing expenses of investing in other mutual funds. The
table is based on an investment of $1,000 made at the beginning of the six month
period ended December 31, 2005.
The table illustrates your Portfolio's expenses in two ways:
o ACTUAL PORTFOLIO RETURN. This helps you estimate the actual dollar
amount of ongoing expenses paid on a $1,000 investment in the
Portfolio using the Portfolio's actual return during the period. To
estimate the expenses you paid over the period, simply divide your
account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in
the "Expenses Paid per $1,000" line under the share class you hold.
o HYPOTHETICAL 5% PORTFOLIO RETURN. This helps you to compare your
Portfolio's ongoing expenses with those of other mutual funds using
the Portfolio's actual expense ratio and a hypothetical rate of
return of 5% per year before expenses. Examples using a 5%
hypothetical fund return may be found in the shareholder reports of
other mutual funds. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or
expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight
your ongoing expenses only and do not reflect any transaction costs, such as
sales charges (loads) or redemption fees. If these transaction costs had been
included, your costs would have been higher. The "Expenses Paid per $1,000" line
of the tables is useful in comparing ongoing expenses only and will not help you
determine the relative total expenses of owning different funds.
5
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
EXPENSES AND VALUE OF A $1,000 INVESTMENT
FOR THE SIX MONTH PERIOD ENDED DECEMBER 31, 2005
- --------------------------------------------------------------------------------
ACTUAL PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,066.40
Expenses Paid per $1,000* $ 4.95
HYPOTHETICAL 5% PORTFOLIO RETURN
Beginning Account Value 7/1/05 $1,000.00
Ending Account Value 12/31/05 $1,020.42
Expenses Paid per $1,000* $ 4.84
ANNUALIZED EXPENSE RATIOS* 0.95%
______________
* EXPENSES ARE EQUAL TO THE PORTFOLIO'S ANNUALIZED EXPENSE RATIO MULTIPLIED
BY THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY THE NUMBER OF
DAYS IN THE MOST RECENT FISCAL HALF YEAR PERIOD, THEN DIVIDED BY 365.
THE "EXPENSES PAID PER $1,000" AND THE "ANNUALIZED EXPENSE RATIOS" IN THE
TABLES ARE BASED ON ACTUAL EXPENSES PAID BY THE PORTFOLIO DURING THE
PERIOD, NET OF FEE WAIVERS AND/OR EXPENSE REIMBURSEMENTS. IF THOSE FEE
WAIVERS AND/OR EXPENSE REIMBURSEMENTS HAD NOT BEEN IN EFFECT, THE
PORTFOLIO'S ACTUAL EXPENSES WOULD HAVE BEEN HIGHER. EXPENSES DO NOT
REFLECT ADDITIONAL CHARGES AND EXPENSES THAT ARE, OR MAY BE, IMPOSED UNDER
THE VARIABLE CONTRACTS OR PLANS. SUCH CHARGES AND EXPENSES ARE DESCRIBED
IN THE PROSPECTUS OF THE INSURANCE COMPANY SEPARATE ACCOUNT OR IN THE PLAN
DOCUMENTS OR OTHER INFORMATIONAL MATERIALS SUPPLIED BY PLAN SPONSORS. THE
PORTFOLIO'S EXPENSES SHOULD BE CONSIDERED WITH THESE CHARGES AND EXPENSES
IN EVALUATING THE OVERALL COST OF INVESTING IN THE SEPARATE ACCOUNT.
For more information, please refer to the Portfolio's prospectus.
6
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED)
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
SECTOR BREAKDOWN*
Financials 20.8%
Health Care 14.8%
Information Technology 14.0%
Industrials 13.0%
Energy 11.0%
Consumer Discretionary 8.0%
Consumer Staples 8.0%
Telecommunication Services 3.4%
Materials 3.1%
Short-Term Investments 2.0%
Utilities 1.9%
________________
* Expressed as a percentage of total investments (excluding security lending
collateral) and may vary over time.
7
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCKS (97.9%)
AEROSPACE & DEFENSE (3.3%)
Boeing Co. 500 $ 35,120
L-3 Communications Holdings, Inc. 900 66,915
Lockheed Martin Corp. 1,200 76,356
Northrop Grumman Corp. 1,300 78,143
Rockwell Collins, Inc. 1,200 55,764
United Technologies Corp. 1,000 55,910
------------
368,208
------------
AIR FREIGHT & COURIERS (0.8%)
FedEx Corp. 600 62,034
United Parcel Service, Inc. Class B 300 22,545
------------
84,579
------------
AIRLINES (0.3%)
Southwest Airlines Co. 1,700 27,931
------------
AUTO COMPONENTS (0.9%)
Goodyear Tire & Rubber Co.* 2,300 39,974
Johnson Controls, Inc. 800 58,328
------------
98,302
------------
BANKS (5.6%)
Bank of America Corp. 2,700 124,605
Bank of New York Company, Inc. 1,900 60,515
Northern Trust Corp. 800 41,456
Synovus Financial Corp. 1,600 43,216
U.S. Bancorp 3,600 107,604
Wachovia Corp. 1,500 79,290
Washington Mutual, Inc. 1,241 53,983
Wells Fargo & Co. 800 50,264
Zions Bancorp 800 60,448
------------
621,381
------------
BEVERAGES (1.8%)
Coca-Cola Co. 2,700 108,837
PepsiCo, Inc. 1,600 94,528
------------
203,365
------------
BIOTECHNOLOGY (1.2%)
Amgen, Inc.* 1,300 102,518
Gilead Sciences, Inc.* 500 26,315
------------
128,833
------------
BUILDING PRODUCTS (0.3%)
USG Corp.* 500 32,500
------------
See Accompanying Notes to Financial Statements.
8
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCKS
CHEMICALS (2.1%)
Dow Chemical Co. 2,200 $ 96,404
FMC Corp.* 600 31,902
International Flavors & Fragrances, Inc. 1,100 36,850
PPG Industries, Inc. 1,100 63,690
------------
228,846
------------
COMMERCIAL SERVICES & SUPPLIES (1.0%)
Cendant Corp. 3,200 55,200
Fiserv, Inc.* 1,300 56,251
------------
111,451
------------
COMMUNICATIONS EQUIPMENT (2.2%)
Cisco Systems, Inc.* 9,400 160,928
Motorola, Inc. 2,500 56,475
QUALCOMM, Inc. 600 25,848
------------
243,251
------------
COMPUTERS & PERIPHERALS (4.2%)
Apple Computer, Inc.* 1,100 79,079
Dell, Inc.* 3,300 98,967
EMC Corp.* 2,000 27,240
Hewlett-Packard Co. 1,200 34,356
International Business Machines Corp. 1,800 147,960
NVIDIA Corp.* 1,000 36,560
Seagate Technology 2,300 45,977
------------
470,139
------------
DIVERSIFIED FINANCIALS (8.5%)
American Express Co. 600 30,876
Capital One Financial Corp. 900 77,760
Charles Schwab Corp. 4,600 67,482
CIT Group, Inc. 1,000 51,780
Citigroup, Inc. 5,900 286,327
Countrywide Financial Corp. 1,900 64,961
Goldman Sachs Group, Inc. 200 25,542
JPMorgan Chase & Co. 3,700 146,853
Lehman Brothers Holdings, Inc. 700 89,719
Merrill Lynch & Company, Inc. 400 27,092
Morgan Stanley 1,400 79,436
------------
947,828
------------
DIVERSIFIED TELECOMMUNICATION SERVICES (3.4%)
AT&T, Inc. 5,200 127,348
Sprint Nextel Corp. 5,000 116,800
Verizon Communications, Inc. 4,300 129,516
------------
373,664
------------
See Accompanying Notes to Financial Statements.
9
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCKS
ELECTRIC UTILITIES (1.9%)
Constellation Energy Group, Inc. 1,200 $ 69,120
Edison International 1,500 65,415
FirstEnergy Corp. 1,500 73,485
------------
208,020
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.9%)
Broadcom Corp. Class A* 600 28,290
Jabil Circuit, Inc.* 1,100 40,799
PerkinElmer, Inc. 1,300 30,628
------------
99,717
------------
ENERGY EQUIPMENT & SERVICES (1.2%)
Schlumberger, Ltd. 800 77,720
Transocean, Inc.* 800 55,752
------------
133,472
------------
FOOD & DRUG RETAILING (0.3%)
Kroger Co.* 1,700 32,096
------------
FOOD PRODUCTS (1.4%)
Kellogg Co. 1,500 64,830
Pilgrim's Pride Corp. 1,700 56,372
Tyson Foods, Inc. Class A 1,900 32,490
------------
153,692
------------
HEALTHCARE EQUIPMENT & SUPPLIES (2.0%)
Bausch & Lomb, Inc. 700 47,530
Baxter International, Inc. 900 33,885
Becton, Dickinson and Co. 800 48,064
Medtronic, Inc. 500 28,785
St. Jude Medical, Inc.* 1,300 65,260
------------
223,524
------------
HEALTHCARE PROVIDERS & SERVICES (4.1%)
Aetna, Inc. 800 75,448
Express Scripts, Inc.* 800 67,040
Humana, Inc.* 1,300 70,629
McKesson Corp. 1,400 72,226
UnitedHealth Group, Inc. 1,140 70,840
WellPoint, Inc.* 1,300 103,727
------------
459,910
------------
HOTELS, RESTAURANTS & LEISURE (0.4%)
Darden Restaurants, Inc. 1,200 46,656
------------
HOUSEHOLD DURABLES (1.5%)
Black & Decker Corp. 700 60,872
KB HOME 600 43,596
Lennar Corp. Class A 1,000 61,020
------------
165,488
------------
See Accompanying Notes to Financial Statements.
10
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCKS
HOUSEHOLD PRODUCTS (1.8%)
Kimberly-Clark Corp. 1,000 $ 59,650
Procter & Gamble Co. 2,400 138,912
------------
198,562
------------
INDUSTRIAL CONGLOMERATES (4.2%)
3M Co. 300 23,250
General Electric Co. 8,800 308,440
Reynolds American, Inc. 600 57,198
Tyco International, Ltd. 2,800 80,808
------------
469,696
------------
INSURANCE (6.7%)
ACE, Ltd. 900 48,096
Allstate Corp. 1,700 91,919
American International Group, Inc. 1,700 115,991
CNA Financial Corp.* 900 29,457
Hartford Financial Services Group, Inc. 900 77,301
Loews Corp. 700 66,395
Metlife, Inc. 1,800 88,200
Prudential Financial, Inc. 1,200 87,828
Reinsurance Group of America, Inc. 1,100 52,536
St. Paul Travelers Companies, Inc. 700 31,269
XL Capital, Ltd. Class A 900 60,642
------------
749,634
------------
IT CONSULTING & SERVICES (0.4%)
Computer Sciences Corp.* 900 45,576
------------
LEISURE EQUIPMENT & PRODUCTS (1.0%)
Brunswick Corp. 1,400 56,924
Hasbro, Inc. 2,900 58,522
------------
115,446
------------
MACHINERY (2.6%)
Cummins, Inc. 600 53,838
Dover Corp. 1,300 52,637
Eaton Corp. 1,000 67,090
Navistar International Corp.* 2,000 57,240
Parker Hannifin Corp. 900 59,364
------------
290,169
------------
MEDIA (1.5%)
Comcast Corp. Class A* 2,700 70,092
Time Warner, Inc. 2,200 38,368
Walt Disney Co. 2,200 52,734
------------
161,194
------------
See Accompanying Notes to Financial Statements.
11
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCKS
METALS & MINING (1.0%)
Nucor Corp. 800 $ 53,376
Phelps Dodge Corp. 400 57,548
------------
110,924
------------
MULTILINE RETAIL (1.1%)
Federated Department Stores, Inc. 600 39,798
Sears Holdings Corp.* 200 23,106
Wal-Mart Stores, Inc. 1,300 60,840
------------
123,744
------------
OIL & GAS (9.8%)
Amerada Hess Corp. 500 63,410
Anadarko Petroleum Corp. 500 47,375
Burlington Resources, Inc. 1,100 94,820
Chevron Corp. 2,100 119,217
ConocoPhillips 1,200 69,816
Devon Energy Corp. 1,300 81,302
Exxon Mobil Corp. 5,300 297,701
Marathon Oil Corp. 1,300 79,261
Murphy Oil Corp. 1,200 64,788
Occidental Petroleum Corp. 1,100 87,868
Valero Energy Corp. 1,600 82,560
------------
1,088,118
------------
PHARMACEUTICALS (7.2%)
Abbott Laboratories 800 31,544
Eli Lilly & Co. 600 33,954
Johnson & Johnson 3,800 228,380
King Pharmaceuticals, Inc.* 2,100 35,532
Merck & Company, Inc. 4,000 127,240
Pfizer, Inc. 9,600 223,872
Wyeth 2,600 119,782
------------
800,304
------------
ROAD & RAIL (1.6%)
Burlington Northern Santa Fe Corp. 500 35,410
CSX Corp. 1,300 66,001
Union Pacific Corp. 900 72,459
------------
173,870
------------
SEMICONDUCTOR EQUIPMENT & PRODUCTS (3.2%)
Intel Corp. 8,000 199,680
Micron Technology, Inc.* 2,100 27,951
National Semiconductor Corp. 1,000 25,980
Texas Instruments, Inc. 3,300 105,831
------------
359,442
------------
See Accompanying Notes to Financial Statements.
12
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCKS
SOFTWARE (2.8%)
Autodesk, Inc. 700 $ 30,065
Microsoft Corp. 7,300 190,895
Parametric Technology Corp.* 9,700 59,170
Symantec Corp.* 2,000 35,000
------------
315,130
------------
SPECIALTY RETAIL (2.1%)
Home Depot, Inc. 3,000 121,440
Lowe's Companies, Inc. 800 53,328
The Gap, Inc. 3,600 63,504
------------
238,272
------------
TOBACCO (1.6%)
Altria Group, Inc. 1,600 119,552
Loews Corp. - Carolina Group 1,300 57,187
------------
176,739
------------
TOTAL COMMON STOCKS (Cost $9,978,477) 10,879,673
------------
PAR
(000)
---------
SHORT-TERM INVESTMENT (2.0%)
State Street Bank and Trust Co. Euro Time
Deposit, 3.350%, 1/03/06
(Cost $218,000) $ 218 218,000
------------
TOTAL INVESTMENTS AT VALUE (99.9%) (Cost $10,196,477) 11,097,673
OTHER ASSETS IN EXCESS OF LIABILITIES (0.1%) 10,036
------------
NET ASSETS (100.0%) $ 11,107,709
============
- --------------------------------------------------------------------------------
* Non-income producing security.
See Accompanying Notes to Financial Statements.
13
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2005
- --------------------------------------------------------------------------------
ASSETS
Investments at value (Cost $10,196,477) (Note 2) $ 11,097,673
Cash 994
Receivable from investment adviser (Note 3) 2,564
Dividend receivable 17,499
Receivable for portfolio shares sold 10,732
Prepaid expenses 4,825
------------
Total Assets 11,134,287
------------
LIABILITIES
Administrative services fee payable (Note 3) 4,187
Other accrued expenses payable 22,391
------------
Total Liabilities 26,578
------------
NET ASSETS
Capital stock, $0.001 par value (Note 6) 1,067
Paid-in capital (Note 6) 12,755,855
Undistributed net investment income 96,044
Accumulated net realized loss on investments (2,646,453)
Net unrealized appreciation from investments 901,196
------------
Net Assets $ 11,107,709
============
Shares outstanding 1,066,809
------------
Net asset value, offering price, and redemption price per share $ 10.41
============
See Accompanying Notes to Financial Statements.
14
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2005
- --------------------------------------------------------------------------------
INVESTMENT INCOME (Note 2)
Dividends $ 227,939
Interest 3,349
------------
Total investment income 231,288
------------
EXPENSES
Investment advisory fees (Note 3) 78,822
Administrative services fees (Note 3) 37,532
Legal fees 20,793
Audit and tax fees 16,326
Printing fees (Note 3) 12,825
Custodian fees 7,439
Insurance expense 4,704
Registration fees 4,683
Trustees' fees 2,445
Interest Expense (Note 4) 1,535
Transfer agent fees 872
Commitment fees (Note 4) 351
Miscellaneous expense 8,090
------------
Total expenses 196,417
Less: fees waived (Note 3) (61,177)
------------
Net expenses 135,240
------------
Net investment income 96,048
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain from investments 1,387,516
Net change in unrealized appreciation (depreciation) from investments (886,348)
------------
Net realized and unrealized gain from investments 501,168
------------
Net increase in net assets resulting from operations $ 597,216
============
See Accompanying Notes to Financial Statements.
15
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------
FROM OPERATIONS
Net investment income $ 96,048 $ 96,775
Net realized gain on investments 1,387,516 483,243
Net change in unrealized appreciation (depreciation) from investments (886,348) 603,705
----------------- -----------------
Net increase in net assets resulting from operations 597,216 1,183,723
----------------- -----------------
FROM DIVIDENDS
Dividends from net investment income (96,779) (96,797)
----------------- -----------------
Net decrease in net assets resulting from dividends (96,779) (96,797)
----------------- -----------------
FROM CAPITAL SHARE TRANSACTIONS (Note 6)
Proceeds from sale of shares 1,299,717 1,248,912
Reinvestment of dividends 96,779 96,797
Net asset value of shares redeemed (4,225,760) (4,772,001)
----------------- -----------------
Net decrease in net assets from capital share transactions (2,829,264) (3,426,292)
----------------- -----------------
Net decrease in net assets (2,328,827) (2,339,366)
NET ASSETS
Beginning of year 13,436,536 15,775,902
----------------- -----------------
End of year $ 11,107,709 $ 13,436,536
================= =================
UNDISTRIBUTED NET INVESTMENT INCOME $ 96,044 $ 96,775
================= =================
See Accompanying Notes to Financial Statements.
16
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
2005 2004 2003 2002 2001 1
----------- ----------- ----------- ----------- -----------
PER SHARE DATA
Net asset value, beginning of period $ 9.91 $ 9.15 $ 7.35 $ 10.02 $ 10.00
----------- ----------- ----------- ----------- -----------
INVESTMENT OPERATIONS
Net investment income 0.09 0.08 0.07 0.02 0.00 2
Net gain (loss) on investments
(both realized and unrealized) 0.48 0.75 1.76 (2.69) 0.02
----------- ----------- ----------- ----------- -----------
Total from investment operations 0.57 0.83 1.83 (2.67) 0.02
----------- ----------- ----------- ----------- -----------
LESS DIVIDENDS
Dividends from net investment income (0.07) (0.07) (0.03) (0.00) 2 --
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 10.41 $ 9.91 $ 9.15 $ 7.35 $ 10.02
=========== =========== =========== =========== ===========
Total return 3 5.78% 9.13% 24.92% (26.64)% 0.20%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000s omitted) $ 11,108 $ 13,437 $ 15,776 $ 20,290 $ 5,122
Ratio of expenses to average net assets 1.04% 1.16% 1.16% 1.16% 1.16% 4
Ratio of net investment income
to average net assets 0.74% 0.69% 0.58% 0.25% 0.35% 4
Decrease reflected in above operating expense
ratios due to waivers/reimbursements 0.47% 0.50% 0.33% 0.23% 4.86% 4
Portfolio turnover rate 114% 47% 40% 31% 2%
- --------------------------------------------------------------------------------
1 For the period November 30, 2001 (commencement of operations) through
December 31, 2001.
2 This amount represents less than $0.01 per share.
3 Total returns are historical and assume changes in share price and
reinvestment of all dividends and distributions. Had certain expenses not
been reduced during the periods shown, total returns would have been
lower. Total returns do not reflect charges and expenses attributable to
any particular variable contract or plan. Total returns for periods less
than one year are not annualized.
4 Annualized.
See Accompanying Notes to Financial Statements.
17
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Credit Suisse Trust (the "Trust") is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, and
currently offers eight managed investment portfolios of which one, the Blue Chip
Portfolio (the "Portfolio"), is included in this report. The Portfolio is a
diversified investment fund that seeks long-term capital appreciation. Shares of
the Portfolio are not available directly to individual investors but may be
offered only through (a) variable annuity contracts and variable life insurance
contracts offered by separate accounts of certain insurance companies and (b)
tax-qualified pension and retirement plans. The Portfolio may not be available
in connection with a particular contract or plan. The Trust was organized under
the laws of The Commonwealth of Massachusetts as a business trust on March 15,
1995.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A) SECURITY VALUATION -- The net asset value of the Portfolio is
determined daily as of the close of regular trading on the New York Stock
Exchange, Inc. (the "Exchange") on each day the Exchange is open for business.
The Portfolio's equity investments are valued at market value, which is
generally determined using the closing price on the exchange or market on which
the security is primarily traded at the time of valuation (the "Valuation
Time"). If no sales are reported, equity investments are generally valued at the
most recent bid quotation as of the Valuation Time or at the lowest asked
quotation in the case of a short sale of securities. Debt securities with a
remaining maturity greater than 60 days are valued in accordance with the price
supplied by a pricing service, which may use a matrix, formula or other
objective method that takes into consideration market indices, yield curves and
other specific adjustments. Debt obligations that will mature in 60 days or less
are valued on the basis of amortized cost, which approximates market value,
unless it is determined that using this method would not represent fair value.
Investments in mutual funds are valued at the mutual fund's closing net asset
value per share on the day of valuation. Securities and other assets for which
market quotations are not readily available, or whose values have been
materially affected by events occurring before the Portfolio's Valuation Time
but after the close of the securities' primary markets, are valued at fair value
as determined in good faith by, or under the direction of, the Board of Trustees
under procedures established by the Board of Trustees. The Portfolio may utilize
a service provided by an independent
18
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
third party which has been approved by the Board of Trustees to fair value
certain securities. When fair-value pricing is employed, the prices of
securities used by a fund to calculate its net asset value may differ from
quoted or published prices for the same securities.
B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions
are accounted for on a trade date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date. The cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes.
C) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net
investment income and distributions of net realized capital gains, if any, are
declared and paid at least annually. However, to the extent that a net realized
capital gain can be reduced by a capital loss carry- forward, such gain will not
be distributed. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States of America ("GAAP").
D) FEDERAL INCOME TAXES -- No provision is made for federal taxes as it is
the Trust's intention to have the Portfolio continue to qualify for and elect
the tax treatment applicable to regulated investment companies under the
Internal Revenue Code of 1986, as amended, and to make the requisite
distributions to its shareholders, which will be sufficient to relieve it from
federal income and excise taxes.
E) USE OF ESTIMATES -- The preparation of financial statements in
conformity with GAAP 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 revenues and expenses during the reporting period.
Actual results could differ from these estimates.
F) SHORT-TERM INVESTMENTS -- The Portfolio, together with other
funds/portfolios advised by Credit Suisse Asset Management, LLC ("Credit
Suisse"), an indirect, wholly-owned subsidiary of Credit Suisse Group, pools
available cash into either a short-term variable rate time deposit issued by
State Street Bank and Trust Company ("SSB"), the Portfolio's custodian, or a
money
19
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
market fund advised by Credit Suisse. The short-term time deposit issued by SSB
is a variable rate account classified as a short-term investment.
G) SECURITIES LENDING -- Loans of securities are required at all times to
be secured by collateral at least equal to 102% of the market value of domestic
securities on loan (including any accrued interest thereon) and 105% of the
market value of foreign securities on loan (including any accrued interest
thereon). Cash collateral received by the Portfolio in connection with
securities lending activity may be pooled together with cash collateral for
other funds/portfolios advised by Credit Suisse and may be invested in a variety
of investments, including certain Credit Suisse-advised funds, funds advised by
SSB, the Portfolio's securities lending agent, or money market instruments.
However, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings. The Portfolio had no securities out on loan at December 31,
2005.
SSB has been engaged by the Portfolio to act as the Portfolio's securities
lending agent. The Portfolio's securities lending arrangement provides that the
Portfolio and SSB will share the net income earned from the securities lending
activities. The Portfolio may also be entitled to certain minimum amounts of
income from its securities lending activities. Securities lending income is
accrued as earned.
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Credit Suisse serves as investment adviser for the Portfolio. For its
investment advisory services, Credit Suisse is entitled to receive a fee from
the Portfolio at an annual rate of 0.50% of the Portfolio's average daily net
assets. Prior to June 1, 2005, Credit Suisse was entitled to receive a fee,
based on the following fee schedule:
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $100 million 0.75% of average daily net assets
Over $100 million 0.50% of average daily net assets
For the year ended December 31, 2005, investment advisory fees earned and
voluntarily waived were $78,822 and $61,177 respectively. Credit Suisse will not
recapture from the Portfolio any fees it waived during the fiscal year ended
December 31, 2005. Fee waivers and reimbursements are voluntary and may be
discontinued by Credit Suisse at any time.
20
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate
of Credit Suisse, and SSB serve as co-administrators to the Portfolio.
For its co-administrative services, CSAMSI currently receives a fee
calculated at an annual rate of 0.10% of the Portfolio's average daily net
assets. For the year ended December 31, 2005, co-administrative services fees
earned by CSAMSI were $13,024.
For its co-administrative services, SSB receives a fee, exclusive of
out-of-pocket expenses, calculated in total for all the Credit Suisse
funds/portfolios co-administered by SSB and allocated based upon relative
average net assets of each fund/portfolio, subject to an annual minimum fee. For
the year ended December 31, 2005, co-administrative services fees earned by SSB
(including out-of-pocket expenses) were $24,508.
In addition to serving as the Portfolio's co-administrator, CSAMSI
currently serves as distributor of the Portfolio's shares without compensation.
Merrill Corporation ("Merrill"), an affiliate of Credit Suisse, has been
engaged by the Portfolio to provide certain financial printing and fulfillment
services. For the year ended December 31, 2005, Merrill was paid $3,426 for its
services to the Portfolio.
NOTE 4. LINE OF CREDIT
The Portfolio, together with other funds/portfolios advised by Credit
Suisse (collectively, the "Participating Funds"), participates in a $75 million
committed, unsecured line of credit facility ("Credit Facility") for temporary
or emergency purposes with Deutsche Bank, A.G. as administrative agent and
syndication agent and SSB as operations agent. Under the terms of the Credit
Facility, the Participating Funds pay an aggregate commitment fee at a rate of
0.10% per annum on the average unused amount of the Credit Facility, which is
allocated among the Participating Funds in such manner as is determined by the
governing Boards of the Participating Funds. In addition, the Participating
Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At
December 31, 2005, there were no loans outstanding for the Portfolio under the
Credit Facility. During the year ended December 31, 2005, the Portfolio had
borrowings under the Credit Facility as follows:
AVERAGE DAILY WEIGHTED AVERAGE MAXIMUM DAILY
LOAN BALANCE INTEREST RATE % LOAN OUTSTANDING
------------ --------------- ----------------
$2,600,000 4.250% $2,600,000
21
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 5. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 2005, purchases and sales of investment
securities (excluding short-term investments) were $14,602,570 and $17,607,101,
respectively.
NOTE 6. CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, $0.001 par value per share.
Transactions in capital shares of the Portfolio were as follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------
Shares sold 131,957 133,910
Shares issued in reinvestment of
dividends 9,640 10,697
Shares redeemed (430,888) (512,656)
----------- ----------
Net decrease (289,291) (368,049)
=========== ==========
On December 31, 2005, the number of shareholders that held 5% or more of
the outstanding shares of the Portfolio was as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ---------------------
2 100%
Some of the shareholders are omnibus accounts, which hold shares on behalf
of individual shareholders.
NOTE 7. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP.
The tax characteristics of dividends paid during the years ended December
31, 2005, and December 31, 2004, respectively, by the Portfolio were as follows:
ORDINARY INCOME
---------------------
2005 2004
-------- --------
$ 96,779 $ 96,797
22
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 2005
- --------------------------------------------------------------------------------
NOTE 7. FEDERAL INCOME TAXES
The tax basis of components of distributable earnings differ from the
amounts reflected in the Statement of Assets and Liabilities by temporary
book/tax differences. These differences are primarily due to differing
treatments of losses deferred on wash sales.
At December 31, 2005, the components of distributable earnings on a tax
basis for the Portfolio were as follows:
Undistributed net investment income $ 96,044
Accumulated net realized loss (2,545,588)
Unrealized appreciation 800,331
------------
$ (1,649,213)
============
At December 31, 2005, the Portfolio had capital loss carryforwards
available to offset possible future capital gains as follows:
EXPIRES DECEMBER 31,
--------------------
2011
----------
$2,545,588
It is uncertain that the Portfolio will realize the full benefit of these
losses prior to expiration.
During the tax year ended December 31, 2005, the Portfolio utilized
$1,355,607 of the capital loss carryforward.
At December 31, 2005, the identified cost for federal income tax purposes,
as well as the gross unrealized appreciation from investments for those
securities having an excess of value over cost, gross unrealized depreciation
from investments for those securities having an excess of cost over value and
the net unrealized appreciation from investments were $10,297,342, $1,089,876,
$(289,545) and $800,331, respectively.
NOTE 8. CONTINGENCIES
In the normal course of business, the Portfolio may provide general
indemnifications pursuant to certain contracts and organizational documents. The
Portfolio's maximum exposure under these arrangements is dependent on future
claims that may be made against the Portfolio and, therefore, cannot be
estimated; however, based on experience, the risk of loss from such claims is
considered remote.
23
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Trustees of Credit Suisse Trust and Shareholders of
Credit Suisse Trust - Blue Chip 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 financial highlights present fairly, in all
material respects, the financial position of Blue Chip Portfolio (the
"Portfolio"), a portfolio of the Credit Suisse Trust, at December 31, 2005, 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 five years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolio's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards 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 December 31, 2005 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 6, 2006
24
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED)
- --------------------------------------------------------------------------------
In approving the Advisory Agreement, the Board of Trustees, including the
Independent Trustees, considered the following factors with respect to the Blue
Chip Portfolio (the "Portfolio"):
INVESTMENT ADVISORY FEE RATES
The Board reviewed and considered the contractual advisory fee rate of
0.75% on the first $100 million of average daily net assets, declining to 0.50%
on assets in excess of $100 million, for the Portfolio ("Contractual Advisory
Fee"), which was reduced to 0.25% after voluntary fee waivers and/or expense
reimbursements ("Net Advisory Fee"), paid to Credit Suisse Asset Management, LLC
("Credit Suisse") in light of the extent and quality of the advisory services
provided by Credit Suisse. The Board acknowledged that fee waivers and expense
reimbursements could be discontinued at any time. The Board further acknowledged
that effective June 1, 2005, in connection with a change in the Portfolio's
investment strategies to adopt a quantitative approach, the Fund's Contractual
Advisory Fee had been reduced to 0.50% and, as a result of fee waivers and/or
expense reimbursements, the Portfolio's Net Advisory Fee had been reduced to
0.04%. The new fees were not reflected in the information presented to the
Board.
Additionally, the Board received and considered information comparing the
Portfolio's Contractual Advisory Fee and the Portfolio's overall expenses with
those of funds in both the relevant expense group ("Expense Group") and universe
of funds (the "Expense Universe") provided by Lipper Inc., an independent
provider of investment company data.
NATURE, EXTENT AND QUALITY OF THE SERVICES UNDER THE ADVISORY AGREEMENT
The Board received and considered information regarding the nature, extent
and quality of services provided to the Portfolio by Credit Suisse under the
Advisory Agreement. The Board also noted information received at regular
meetings throughout the year related to the services rendered by Credit Suisse.
The Board reviewed background information about Credit Suisse, including its
Form ADV. The Board considered the background and experience of Credit Suisse's
senior management and the expertise of, and the amount of attention given to the
Portfolio by, senior personnel of Credit Suisse. In addition, the Board reviewed
the qualifications, backgrounds and responsibilities of the portfolio management
team primarily responsible for the day-to-day portfolio management of the
Portfolio and the extent of the resources devoted to research and analysis of
actual and potential investments. The Board also received and
25
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
considered information about the nature, extent and quality of services and fee
rates offered to other Credit Suisse clients for comparable services.
PORTFOLIO PERFORMANCE
The Board received and considered the one-, two- and three-year
performance of the Portfolio, along with comparisons, for all presented periods,
both to the relevant performance group ("Performance Group") and universe of
funds ("Performance Universe") for the Portfolio. The Board was provided with a
description of the methodology used to arrive at the data for the funds included
in the Performance Group and the Performance Universe.
The Board reviewed information comparing the performance of various Credit
Suisse Funds to performance benchmarks that the Board had previously established
and progress that had been made in certain instances toward achieving those
benchmarks. The Board also reviewed comparisons between the Portfolio and its
identified benchmark over various time periods.
CREDIT SUISSE PROFITABILITY
The Board received and considered a profitability analysis of Credit
Suisse based on the fees payable under the Advisory Agreement for the Portfolio,
including other relationships between the Portfolio on the one hand and Credit
Suisse affiliates on the other. The Board received profitability information for
the other funds in the Credit Suisse family of funds.
ECONOMIES OF SCALE
The Board considered whether economies of scale in the provision of
services to the Portfolio were being passed along to the shareholders.
Accordingly, the Board considered whether the breakpoints in the Portfolio's fee
structure were appropriate or reasonable taking into consideration economies of
scale or other efficiencies that might accrue from increases in the Portfolio's
asset levels.
OTHER BENEFITS TO CREDIT SUISSE
The Board considered other benefits received by Credit Suisse and its
affiliates as a result of their relationship with the Portfolio. Such benefits
include, among others, research arrangements with brokers who execute
transactions on behalf of the Portfolio, administrative and brokerage
relationships with affiliates of Credit Suisse and benefits potentially derived
from an increase in Credit Suisse's businesses as a result of its relationship
with the Portfolio (such as the ability to market to shareholders other
financial products offered by Credit Suisse and its affiliates).
26
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
The Board considered the standards applied in seeking best execution,
whether and to what extent soft dollar credits are sought and how any such
credits are utilized, any benefits that may be achieved by using an affiliated
broker and the existence of quality controls applicable to brokerage allocation
procedures. The Board also reviewed Credit Suisse's method for allocating
portfolio investment opportunities among its advisory clients.
CONCLUSIONS
In selecting Credit Suisse, and approving the Advisory Agreement and the
investment advisory fee under such agreement, the Board concluded that:
o As the Contractual Advisory Fee of 0.50% was the second lowest in
the Expense Group and its Net Advisory Fee of 0.04% was the lowest
in the Expense Group, the Portfolio's fees were considered
reasonable.
o The Portfolio's one-year and two-year performance was above the
median in the Portfolio's Performance Group and higher than the
Lipper index of comparable funds. In the Performance Universe, the
Portfolio's one-year performance was above the median and its
two-year performance was within a reasonable range (within one
standard deviation) below the median. The Portfolio's three-year
performance was in a reasonable range (within one standard
deviation) in both the Performance Group and Performance Universe
and was higher than the Lipper index of comparable funds. The Board
noted that it had previously identified the need to address the
Portfolio's performance, and that Credit Suisse had adopted a
quantitative approach for the Portfolio and changed portfolio
managers effective June 1, 2005. The Board noted that the results of
this change were not fully reflected in the Portfolio's performance
and that Credit Suisse was in the process of addressing performance
issues. The Board noted that it would continue to monitor steps
taken to improve performance.
o Aside from performance (as described above), the Board was satisfied
with the nature and extent of the investment advisory services
provided to the Portfolio by Credit Suisse and that, based on
dialogue with management and counsel, the services provided by
Credit Suisse under the Advisory Agreement is typical of, and
consistent with, those provided to similar mutual funds by other
investment advisers. The Board understood that Credit Suisse had or
was in the process of addressing any performance issues.
27
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
BOARD APPROVAL OF ADVISORY AGREEMENT (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
o In light of the costs of providing investment management and other
services to the Portfolio and Credit Suisse's ongoing commitment to
the Portfolio, the profits and other ancillary benefits that Credit
Suisse and its affiliates received were considered reasonable.
o Credit Suisse's profitability based on fees payable under the
Advisory Agreement was reasonable in light of the nature, extent and
quality of the services provided to the Portfolio thereunder.
o In light of the amount of the Net Advisory Fee, the Portfolio's
current fee structure was considered reasonable.
No single factor reviewed by the Board was identified by the Board as the
principal factor in determining whether to approve the Advisory Agreement. The
Independent Trustees were advised by separate independent legal counsel
throughout the process.
28
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS IN
AND FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- --------------------------- ------------ ------------ --------------------------- ------------- ---------------------
INDEPENDENT TRUSTEES
Enrique Arzac Trustee, Since Professor of Finance 47 Director of The
c/o Credit Suisse Asset Nominating 2005 and Economics, Adams Express
Management, LLC Committee Graduate School of (a closed-end
Attn: General Counsel Member and Business, Columbia investment
466 Lexington Avenue Audit University since 1971 company); Director
New York, New York Committee of Petroleum
10017-3140 Chairman and Resources
Corporation
Date of Birth: 10/02/41 (a closed-end
investment
company)
Richard H. Francis Trustee, Since Currently retired 41 None
c/o Credit Suisse Asset Nominating Portfolio
Management, LLC and Audit Inception
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 04/23/32
Jeffrey E. Garten Trustee, Since The Juan Trippe 40 Director of Aetna,
Box 208200 Nominating Portfolio Professor in the Practice Inc. (insurance
New Haven, Connecticut and Audit Inception of International Trade, company); Director
06520-8200 Committee Finance and Business of CarMax Group
Member from July 2005 to present; (used car dealers)
Date of Birth: 10/29/46 Partner and Chairman
of Garten Rothkopf
(consulting firm) from
October 2005 to present;
Dean of Yale School of
Management from
November 1995 to
June 2005
Peter F. Krogh Trustee, Since Dean Emeritus and 40 Director of Carlisle
301 ICC Nominating Portfolio Distinguished Professor Companies
Georgetown University and Audit Inception of International Affairs Incorporated
Washington, DC 20057 Committee at the Edmund A. (diversified
Member Walsh School of manufacturing
Date of Birth: 02/11/37 Foreign Service, company)
Georgetown University
from June 1995
to present
_____________
1 Each Trustee and Officer serves until his or her respective successor has
been duly elected and qualified.
29
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM NUMBER OF
OF OFFICE 1 PORTFOLIOS IN
AND FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH TRUST SERVED PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
- --------------------------- ------------ ------------ --------------------------- ------------- ---------------------
INDEPENDENT TRUSTEES
James S. Pasman, Jr. Trustee, Since Currently retired 42 Director of Education
c/o Credit Suisse Asset Nominating Portfolio Management Corp.
Management, LLC and Audit Inception
Attn: General Counsel Committee
466 Lexington Avenue Member
New York, New York
10017-3140
Date of Birth: 12/20/30
Steven N. Rappaport Chairman of Trustee Partner of Lehigh Court, 46 Director of Presstek,
Lehigh Court, LLC the Board Since LLC and RZ Capital Inc. (digital imaging
40 East 52nd Street of Trustees, Portfolio (private investment firms) technologies
New York, New York Nominating Inception from July 2002 to present; company); Director of
10022 Committee and Transition Adviser to Wood Resources, LLC.
Chairman Chairman SunGard Securities (plywood
Date of Birth: 07/10/48 and Audit since Finance, Inc. from manufacturing
Committee 2005 February 2002 to July company)
Member 2002; President of
SunGard Securities
Finance, Inc. from 2001
to February 2002;
President of Loanet,
Inc. (on-line accounting
service) from 1997 to 2001
INTERESTED TRUSTEE
Michael E. Kenneally 2,3 Trustee Since Chairman and Global 40 None
c/o Credit Suisse Asset 2004 Chief Executive Officer
Management, LLC of Credit Suisse from
Attn: General Counsel March 2003 to July 2005;
466 Lexington Avenue Chairman and Chief
New York, New York Investment Officer of
10017-3140 Banc of America Capital
Management from 1998
Date of Birth: 03/30/54 to March 2003
______________
2 Mr. Kenneally is a Trustee who is an "interested person" of the Trust as
defined in the 1940 Act, because he was an officer of Credit Suisse within
the last two fiscal years.
3 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
30
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
TERM OF
OFFICE 1 AND
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- --------------------------- ------------ ------------ ----------------------------------------------------------------
OFFICERS
Steven B. Plump 3 Chief Since Managing Director; Associated with Credit Suisse or its
Credit Suisse Asset Executive 2005 predecessor since 1995; Officer of other Credit Suisse Funds
Management, LLC Officer and
466 Lexington Avenue President
New York, New York
10017-3140
Date of Birth: 02/08/59
Michael A. Pignataro Chief Since Director and Director of Fund Administration of Credit Suisse;
Credit Suisse Asset Financial 1999 Associated with Credit Suisse or its predecessors since 1984;
Management, LLC Officer and Officer of other Credit Suisse Funds
466 Lexington Avenue Treasurer
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Since Director and Global Head of Compliance of Credit Suisse;
Credit Suisse Asset Compliance 2004 Associated with Credit Suisse since July 2000; Vice President
Management, LLC Officer and Director of Compliance of Forstmann-Leff
466 Lexington Avenue Associates from 1998 to June 2000; Officer of other
New York, New York Credit Suisse Funds
10017-3140
Date of Birth: 09/21/66
Ajay Mehra Chief Since Director and Head of Legal Americas Traditional Asset
Credit Suisse Asset Legal 2004 Management and Hedge Funds; Associated with Credit Suisse
Management, LLC Officer since September 2004; Senior Associate of Shearman & Sterling
466 Lexington Avenue LLP from September 2000 to September 2004; Senior Counsel
New York, New York of the SEC Division of Investment Management from June
10017-3140 1997 to September 2000; Officer of other Credit Suisse Funds
Date of Birth: 08/14/70
J. Kevin Gao Vice Since Director and Legal Counsel of Credit Suisse; Associated with
Credit Suisse Asset President 2004 Credit Suisse since July 2003; Associated with the law firm of
Management, LLC and Willkie Farr & Gallagher LLP from 1998 to 2003; Officer of other
466 Lexington Avenue Secretary Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 10/13/67
Robert Rizza Assistant Since Vice President of Credit Suisse; Associated with CSAM since
Credit Suisse Asset Treasurer 2002 1998; Officer of other Credit Suisse Funds
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
_________________
3 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Trust. Mr. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
The Statement of Additional Information includes additional information
about the Trustees and is available, without charge, upon request, by calling
800-222-8977.
31
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
TAX INFORMATION LETTER
December 31, 2005 (unaudited)
- --------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS
Corporate Shareholders should note for the year ended December 31, 2005,
the percentage of the Fund's investment income (i.e., net investment income plus
short-term capital gains) that qualified for the intercorporate dividends
received deduction is 100%.
32
CREDIT SUISSE TRUST -- BLUE CHIP PORTFOLIO
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION
- --------------------------------------------------------------------------------
Information regarding how the Portfolio voted proxies related to its
portfolio securities during the 12-month period ended June 30 of each year, as
well as the policies and procedures that the Portfolio uses to determine how to
vote proxies relating to its portfolio securities are available:
o By calling 1-800-222-8977
o On the Portfolio's website, www.credit-suisse.com/us
o On the website of the Securities and Exchange Commission,
http://www.sec.gov.
The Portfolio files a complete schedule of its portfolio holdings for the
first and third quarters of its fiscal year with the SEC on Form N-Q. The
Portfolio's Forms N-Q are available on the SEC's website at http://www.sec.gov
and may be reviewed and copied at the SEC's Public Reference Room in Washington,
DC. Information on the operation of the SEC's Public Reference Room may be
obtained by calling 1-800-SEC-0330.
33
CREDIT SUISSE [LOGO]
P.O. BOX 55030, BOSTON, MA 02205-5030
800-222-8977 o www.credit-suisse.com/us
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. TRBLC-AR-1205
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics applicable to its Chief Executive
Officer, President, Chief Financial Officer and Chief Accounting Officer, or
persons performing similar functions. A copy of the code is filed as Exhibit
12(a)(1) to this Form. There were no amendments to the code during the fiscal
year ended December 31, 2005. There were no waivers or implicit waivers from the
code granted by the registrant during the fiscal year ended December 31, 2005.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's governing board has determined that it has three audit
committee financial experts serving on its audit committee: Enrique R. Arzac,
Richard H. Francis and Steven N. Rappaport. Each audit committee financial
expert is "independent" for purposes of this item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) through (d). The information in the table below is provided for services
rendered to the registrant by its independent registered public accounting firm,
PricewaterhouseCoopers LLP ("PwC"), for its fiscal years ended December 31, 2004
and December 31, 2005.
- ---------------------------------------- -------------------------------------- --------------------------------------
2004 2005
- ---------------------------------------- -------------------------------------- --------------------------------------
Audit Fees $113,206 $162,775
- ---------------------------------------- -------------------------------------- --------------------------------------
Audit-Related Fees(1) $36,000 $25,200
- ---------------------------------------- -------------------------------------- --------------------------------------
Tax Fees(2) $18,609 $19,544
- ---------------------------------------- -------------------------------------- --------------------------------------
All Other Fees -- --
- ---------------------------------------- -------------------------------------- --------------------------------------
Total $167,815 $207,519
- ---------------------------------------- -------------------------------------- --------------------------------------
(1) Services include agreed-upon procedures in connection with the
registrant's third quarter 2004 Form N-Q filing ($12,000) and the
registrant's semi-annual financial statements ($24,000 for 2004 and
$25,200 for 2005).
(2) Tax services in connection with the registrant's excise tax
calculations and review of the registrant's applicable tax returns.
The information in the table below is provided with respect to non-audit
services that directly relate to the registrant's operations and financial
reporting and that were rendered by PwC to the registrant's investment adviser,
Credit Suisse Asset Management, LLC ("Credit Suisse"), and any service provider
to the registrant controlling, controlled by or under common control with CSAM
that provided ongoing services to the registrant ("Covered Services Provider"),
for the registrant's fiscal years ended December 31, 2004 and December 31, 2005.
- ---------------------------------------- -------------------------------------- --------------------------------------
2004 2005
- ---------------------------------------- -------------------------------------- --------------------------------------
Audit-Related Fees N/A N/A
- ---------------------------------------- -------------------------------------- --------------------------------------
Tax Fees N/A N/A
- ---------------------------------------- -------------------------------------- --------------------------------------
All Other Fees N/A $2,444,000
- ---------------------------------------- -------------------------------------- --------------------------------------
Total N/A $2,444,000
- ---------------------------------------- -------------------------------------- --------------------------------------
(e)(1) Pre-Approval Policies and Procedures. The Audit Committee ("Committee")
of the registrant is responsible for pre-approving (i) all audit and permissible
non-audit services to be provided by the independent registered public
accounting firm to the registrant and (ii) all permissible non-audit services to
be provided by the independent registered public accounting firm to Credit
Suisse and any Covered Services Provider if the engagement relates directly to
the operations and financial reporting of the registrant. The Committee may
delegate its responsibility to pre-approve any such audit and permissible
non-audit services to the Chairperson of the Committee, and the Chairperson
shall report to the Committee, at its next regularly scheduled meeting after the
Chairperson's pre-approval of such services, his or her decision(s). The
Committee may also establish detailed pre-approval policies and procedures for
pre-approval of such services in accordance with applicable laws, including the
delegation of some or all of the Committee's pre-approval responsibilities to
other persons (other than Credit Suisse or the registrant's officers).
Pre-approval by the Committee of any permissible non-audit services shall not be
required so long as: (i) the aggregate amount of all such permissible non-audit
services provided to the registrant, Credit Suisse and any Covered Services
Provider constitutes not more than 5% of the total amount of revenues paid by
the registrant to its independent registered public accounting firm during the
fiscal year in which the permissible non-audit services are provided; (ii) the
permissible non-audit services were not recognized by the registrant at the time
of the engagement to be non-audit services; and (iii) such services are promptly
brought to the attention of the Committee and approved by the Committee (or its
delegate(s)) prior to the completion of the audit.
(e)(2) The information in the table below sets forth the percentages of fees for
services (other than audit, review or attest services) rendered by PwC to the
registrant for which the pre-approval requirement was waived pursuant to Rule
2-01(c)(7)(i)(C) of Regulation S-X:
- ---------------------------------------- -------------------------------------- --------------------------------------
2004 2005
- ---------------------------------------- -------------------------------------- --------------------------------------
Audit-Related Fees N/A N/A
- ---------------------------------------- -------------------------------------- --------------------------------------
Tax Fees N/A N/A
- ---------------------------------------- -------------------------------------- --------------------------------------
All Other Fees N/A N/A
- ---------------------------------------- -------------------------------------- --------------------------------------
Total N/A N/A
- ---------------------------------------- -------------------------------------- --------------------------------------
The information in the table below sets forth the percentages of fees for
services (other than audit, review or attest services) rendered by PwC to Credit
Suisse and any Covered Services Provider required to be approved pursuant to
Rule 2-01(c)(7)(ii)of Regulation S-X, for the registrant's fiscal years ended
December 31, 2004 and December 31, 2005:
- ---------------------------------------- -------------------------------------- --------------------------------------
2004 2005
- ---------------------------------------- -------------------------------------- --------------------------------------
Audit-Related Fees N/A N/A
- ---------------------------------------- -------------------------------------- --------------------------------------
Tax Fees N/A N/A
- ---------------------------------------- -------------------------------------- --------------------------------------
All Other Fees N/A N/A
- ---------------------------------------- -------------------------------------- --------------------------------------
Total N/A N/A
- ---------------------------------------- -------------------------------------- --------------------------------------
(f) Not Applicable.
(g) The aggregate fees billed by PwC for non-audit services rendered to the
registrant, Credit Suisse and Covered Service Providers for the fiscal years
ended December 31, 2004 and December 31, 2005 were $54,609 and $44,744,
respectively.
(h) Not Applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Form N-CSR disclosure requirement is not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Included as part of the report to shareholders filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Form N-CSR disclosure requirement is not applicable to the registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Form N-CSR disclosure requirement is not applicable to the registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Form N-CSR disclosure requirement is not applicable to the registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 11. CONTROLS AND PROCEDURES.
(a) As of a date within 90 days from the filing date of this report, the
principal executive officer and principal financial officer concluded that the
registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act")) were effective based on
their evaluation of the disclosure controls and procedures required by Rule
30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934.
(b) There were no changes in registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the
second fiscal quarter of the period covered by this report that have materially
affected, or are reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Registrant's Code of Ethics is an exhibit to this report.
(a)(2) The certifications of the registrant as required by Rule 30a-2(a) under
the Act are exhibits to this report.
(a)(3) Not applicable.
(b) The certifications of the registrant as required by Rule 30a-2(b) under the
Act are an exhibit to this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934 and the Investment Company Act of 1940, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
CREDIT SUISSE TRUST
/s/ Steven B. Plump
-------------------
Name: Steven B. Plump
Title: Chief Executive Officer
Date: March 8, 2006
Pursuant to the requirements of the Securities Exchange Act of
1934 and the Investment Company Act of 1940, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
/s/ Steven B. Plump
----------------------
Name: Steven B. Plump
Title: Chief Executive Officer
Date: March 8, 2006
/s/ Michael A. Pignataro
------------------------
Name: Michael A. Pignataro
Title: Chief Financial Officer
Date: March 8, 2006