Fund Facts
For 1998, shareholders designated the
following charities:
AIDS Services of Austin
Alzheimer's Association
American Cancer Society
American Heart Association
Animal Trustees of Austin
Arthritis Foundation
Austin Sunshine Camp
Austin YMBL Sunshine Camps
Boy Scouts of America
Brenham Christian Academy
The Columban Fathers
Compassion International
Cross Pointe Church
Cystic Fibrosis Foundation
Family Violence Project
Faith Home for Babies with AIDS
Forgotten Children's Fund
Habitat for Humanity
Harvard Law School Fund
Hilo Salvation Army
The Home Care Program/MSKCC
Make-A-Wish Foundation
MD Anderson Children's Art Project
Medical Institute for
Sexual Health
Methodist Children's Home
National Cancer Institute
National Kidney Cancer Association
Nature Conservancy of Tennessee
Nevada SPCA
Northwest Hills United Methodist
People's Community Clinic
Rapheal Free Clinic
Red Cloud Indian School
Salvation Army
San Diego Historical Society
SOVA Food Pantry
St. Michael's Academy
Texas Baptist Children's Home
Union Station
United Way of the Flint Hills
Wesleyan Homes Alzheimer's Care
Women Helping Women
Have questions about your account?
Call the Transfer
Agent at 1-888-839-7424.
The Bear 500 (GRRR.X) was launched October
1st.
The fund is designed to move inversely with
the S&P 500.
Thus, if the S&P 500 goes down, the fund
should move up a
comparable amount. If you have a need to
hedge a portfolio,
including IRA's, or just want to bet that
large cap stocks
are overvalued, you should call for a
prospectus.
1.888.839.7424.
<PAGE>
Fellow Shareholders,
The Net Asset Value of the Value & Growth
Portfolio (V&G)
for the period ending September 30th , 1999
was $12.85.
Since our last report on March 31st, we have
continued to
live through the underperformance of the small
value market.
It won't last forever, and when small cap value
comes back
into favor, the returns can be explosive.
<TABLE>
<CAPTION>
Smaller Companies
Period V&G1<F1> Russell 2000
<S> <C> <C>
Last Quarter (13.9)% (6.3)%
Last 12 Months (4.5)% 19.1%
1998<F2> (3.0)% (2.5)%
1997<F2> 45.6% 22.4%
1996<F2> 26.3% 16.5%
since Inception (annualized
if longer than 1 year)
9.2% 10.7%
<FN>
<F1>
After the minimum sales charge of 4.5%, the
returns for the
last quarter,12 months, 1998, 1997, 1996, and
since inception
(11/06/99) would be: (17.8)%, (8.8)%, (7.4)%
39.0%, 20.6%,
and 7.9%, respectively.
<F2>
Calender years.
</FN>
</TABLE>
Of course, you know the old caveat,
"past performance
may not be indicative of future results."
Given the last few quarters, we sure hope so.
We have also launched October 1st a new
fund called
the Bear 500 that is designed to move inversely
with the
S&P500. Thus, if the S&P 500 goes down, the
Bear 500 should
go up by approximately the same amount.
Investors who have a
need to hedge taxable portfolios until the new
year, or have a
need to hedge IRA's, which generally cannot be
hedged, should
call for a prospectus.
2
<PAGE>
And if you think large stocks are
substantially overvalued, as do we, the Bear
500 is an easy
way to sell high, and buy low.
Commentary
For everything there is a season. Our strategy
for investing
in small value stocks has been out of favor
since March 1998.
It's been a difficult winter, but spring will
come.
It is easy to get focused on short-run
losses and
forget long-run returns. Over the almost four
year period
of the Value & Growth Portfolio, the return has
been 9.2%.
That's lower than we would like, but nearly
even with our
benchmark, the Russell 2000 Index. We think
that the tremendous
ups and downs of recent history are atypical
and are probably
driven by the speculative frenzy in the markets
today. The
initial gains of your fund, the recent losses,
nor even the
9.2% over the entire period are indicative of
long-term returns
in your portfolio. So what is?
3
<PAGE>
The best research on asset class returns
was put together
by the Nobel Prize winners Eugene Fama and
Kenneth French using the
Center for Research of Security Prices (CRSP)
at the University of
Chicago. Going back to 1964 through 1997,
small value returned
18.85% per year, while small growth returned
10.79% per year.
To say it differently, $1 in small value
grew to $335,
while $1 in small growth grew to $32. (There's
no misprint here;
there is a ten-fold difference between small value
and small growth.)
Fama and French found that small value was the
best performing
equity class among large growth (in season today),
large value, and
small growth.
Your portfolio is clearly in the small
value camp.
Comparing your valuations to other small value
funds, we are
typically in the lowest decile of valuations.
For instance,
in the most recent Morningstar (10/31/99), your
portfolio would
have had the fourth lowest price-to-earnings ratio
out of 232 small
value mutual funds.
Given the fund's extraordinarily low valuations, it
shouldn't be too
surprising that your portfolio performs like a
leveraged bet on the
small-value index. That has been the bad news over
the last 20 months,
as small value has done poorly, and we have done
worse. It's also
good news for the next five to seven years' prospects.
History shows that when small value
underperforms its polar
opposite style to this degree, small value has
always outperformed
large growth in the next one, three, five and
seven years and has
done so by substantial amounts.
4
<PAGE>
Small value's relative underperformance
is the largest it's been over the last 35 years,
so we expect an
exceptional period going forward.
We don't know precisely when the season will
change for small value.
We do know that:
We are much closer to the bottom than the top.
The valuation differential between small value
and other groups is
substantial and is starting to receive attention.
You should also
know that statistically, value has experienced
the equivalent of the
200-year flood. Value relative to growth has
only done this badly less
than one-half of one percent of the time over
a five year period.
That's been the bad news yesterday, but it's
also the good news for
tomorrow.
The total market value of small stocks is one-
tenth the market value
of large stocks, and thus, even a modest shift
to small stocks should
produce robust returns. Did you know that
the combined market cap of
just Microsoft, General Electric, and Intel
exceed the entire market
cap of the Russell 2000 Index?
While the last 20 months have been difficult
for all of us, our highly
structured, tested strategy has produced
exceptional results. We're
confident we will again produce outstanding
returns.
Warren Buffett once said, "If all you had to
do was look at recent
returns to invest, all librarians would be
rich." It wasn't too
long ago that emerging markets had been
pronounced dead, only to
come roaring back to life. Your recent returns
are not indicative
of your long-run returns. In the next five
to seven years, we expect
to do well, better than the returns of the
Russell 2000 and Russell
2000 Value indices, which should also do well.
Spring will come-it
always does.
Respectfully submitted,
Mark A. Coffelt, CFA
<TABLE>
<CAPTION>
S T O C K P R I C E S R E L A T I V E TO
Earnings Cash flow Book value
<S> <C> <C> <C>
Value & Growth Portfolio 11.2x 13.1x 2.0x
Avg Small Value Fund 17.6x 12.3x 2.3x
Avg Small Growth Fund 33.9x 26.0x 7.6x
<FN>
<F1>
All Ratios from Morningstar Principia October, 1999
</FN>
</TABLE>
5
<PAGE>
<TABLE>
VALUE & GROWTH
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
<CAPTION>
Industry Shares Company
Market Value %
<S> <C> <C>
<C> <C>
AIR FREIGHT 33,900 SEA CONTAINERS LTD. CL.'A'
949,200 3.05%
BEVERAGES-SOFT DRINK 20,300 WHITMAN CORP.
289,275 0.93%
COMPUTER HARDWARE 74,500 MICRON ELECTRONICS*
782,250 2.51%
COMPUTER SOFTW/SVCS 45,400 TRANSACTION SYSTEMS ARCHIT.*
1,222,963 3.93%
COMPUTERS-NETWORKING 25,100 DIGI INT'L*
274,531 0.88%
CONSUMER(JEWEL/GIFT) 31,000 ACTION PERFORMANCE COS., INC.*
652,938 2.10%
CONTAINER (METL/GLASS) 14,600 GREIF BROTHERS CORP. 'A'
412,450 1.33%
ELECTRIC COMPANIES 41,800 WISCONSIN ENERGY CORP
979,688 3.15%
ELECTRONICS-INSTRMT 32,700 X-RITE INC.
212,550 0.68%
ENGINEERING & CONSTR 30,900 JACOBS ENGINEERING GROUP*
1,004,250 3.23%
FOODS 29,500 IBP INC.
728,281 2.34%
GOLD&PREC METAL MINE 37,000 ASHANTI GOLDFIELDS CO.
291,375 0.94%
190,300 ECHO BAY MINES LTD.
368,706 1.19%
256,900 TVX GOLD*
321,125 1.03%
981,206 3.15%
6
<PAGE>
HC-MANAGED CARE 14,400 US ONCOLOGY INC.*
130,500 0.42%
HC-MED PROD & SUPPLY 20,300 ARROW INT'L
518,919 1.67%
HC-SPECIALIZED SERV 80,800 ORTHODONTIC CENTERS OF AMERICA*
1,414,000 4.55%
55,200 PEDIATRIX MEDICAL GRP*
765,900 2.46%
79,800 PHARMACEUTICAL PROD DVLP*
1,082,288 3.48%
3,262,188 10.49%
HEALTHCARE-DIVERSE 87,200 REXALL SUNDOWN INC.*
1,073,650 3.45%
HOMEBUILDING 48,600 CLAYTON HOMES
422,213 1.36%
IRON & STEEL 20,900 GRUPO IMSA SA
331,788 1.07%
LEISURE TIME (PROD) 30,700 COACHMEN INDUSTRIES
472,013 1.52%
MANUFACTURE-SPECIAL 114,000 PAXAR CORP*
1,097,250 3.53%
REITS EQ HEALTHCARE 24,900 HEALTH CARE PROPERTY INV.
653,625 2.10%
39,600 NATIONWIDE HEALTH PPTYS
658,350 2.12%
1,311,975 4.22%
REITS EQ IND/OFFICE 24,400 MACK CALI REALTY TR
654,225 2.10%
REITS EQ RESIDENTIAL 27,100 BRE PROPERTIES
648,706 2.09%
REITS EQ RETAIL 18,500 KIMCO REALTY*
661,375 2.13%
REITS MORTGAGE BACK 28,700 AMRESCO CAPITAL TR
251,125 0.81%
7
<PAGE>
31,000 RESOURCE ASSET INVS
344,875 1.11%
596,000 1.92%
RESTAURANTS 55,080 BUFFETS INC,*
640,305 2.06%
105,800 RYANS FMLY STEAK HOUSE*
952,200 3.06%
1,592,505 5.12%
RETAIL-APPAREL 30,600 BUCKLE (THE)*
527,850 1.70%
68,200 GOODY'S FAMILY CLTHG*
549,863 1.77%
24,000 MEN'S WEARHOUSE*
516,000 1.66%
30,200 NORTH FACE*
179,313 0.58%
1,773,026 5.70%
RETAIL-COMP & ELEC 54,200 POMEROY COMPUTER RSCS*
599,588 1.93%
RETAIL-DISC 10,200 MICRO WAREHOUSE*
123,038 0.40%
RETAIL-FOOD CHAINS 33,900 SMART & FINAL INC.
339,000 1.09%
RETAIL-SPECIALTY 95,600 TRANS WORLD ENTERTAINMENT*
1,212,925 3.90%
SAVINGS & LOAN 22,000 FIRSTFED FINANCIAL*
382,250 1.23%
SERVICES- 37,000 ITT EDUCATIONAL SVCS*
721,500 2.32%
COMMER & CONST 26,100 MANPOWER, INC.
760,163 2.44%
15,900 PRE-PAID LEGAL SVCS*
626,063 2.01%
2,107,726 6.78%
SERVICES-COMPUTERSYS 71,700 CIBER INC.*
1,097,906 3.53%
38,800 COMPUTER TASK GROUP
572,300 1.84%
46,000 SUNGARD DATA SYSTEMS*
1,210,375 3.89%
2,880,581 9.26%
8
<PAGE>
TEXTILES-APPAREL 16,700 WARNACO GROUP
304,775 0.98%
TRUCKERS 60,700 HEARTLAND EXPRESS*
857,388 2.76%
WASTE MANAGEMENT 22,000 WORLD FUEL SERVICES
214,500 0.69%
TOTAL COMMON STOCKS
(cost $34,136,029)
32,057,680 103.07%
*Non-income producing
SHORT-TERM INVESTMENTS 860,717
WISCONSIN ELECTRIC DEMAND NOTE
860,717 2.77%
139,607
WARNER LAMBERT DEMAND NOTE
139,607 0.45%
582,752
AMERICAN FAMILY DEMAND NOTE
582,752 1.87%
102,900
WISCONSIN CORP CENT CR UNION D NOTE
102,900 0.33%
TOTAL SHORT-TERM INVESTMENTS
(cost $1,685,976)
1,685,976 5.42%
TOTAL INVESTMENTS
(cost $35,822,005)
33,743,656 108.49%
OTHER ASSETS AND LIABILITIES
(2,639,858) (8.49)%
TOTAL NET ASSETS
31,103,798 100.00%
</TABLE>
<TABLE>
<CAPTION>
At September 30, 1999, the net unrealized
depreciation
based on the cost of investments for income
tax purposes
of $36,385,961 was as follows:
<S> <C>
Gross unrealized appreciation $992,689
Gross unrealized depreciation ($3,634,994)
Net unrealized depreciation ($2,642,305)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITES
SEPTEMBER 30, 1999
Value &
Growth
<S>
<C>
ASSETS
Investments at Market Value,
(Identified Cost $35,822,005)
(Note 1-A)
$ 33,743,656
Receivable for Fund Shares Sold
10,001
Interest Receivable
18,190
Dividends Receivable
6,131
Other Assets
- -
Total Assets
33,777,978
LIABILITIES
Cash Overdraft
408
Payable for Investment Securities Purchased
1,674,962
Payable for Fund Shares Redeemed
934,845
Advisory Fee Payable <NOTE 2>
26,548
Administration Fees Payable <NOTE 2>
13,369
Distribution Fees Payable <NOTE 2>
19,547
Accrued Expenses
4,501
Total Liabilities
2,647,180
NET ASSETS
$31,103,798
(Applicable to 2,420,817 shares outstanding,
.0001 par value, 25 million shares authorized
each fund).
NAV AND REPURCHASE PRICE PER SHARE
$12.85
($31,103,798/ 2,420,817 shares)
MAXIMUM OFFERING PRICE PER SHARE
$13.46
(100/95.5 of net asset value)
NET ASSETS
At September 30, 1999, net assets consisted of:
Paid - In Capital
$48,400,676
Undistributed Net Investment Income
- -
Accumulated Net Realized Loss on Investments
(15,218,529)
Net Unrealized Depreciation
(2,078,349)
$31,103,798
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
SEPTEMBER 30, 1998
<CAPTION>
Value & Growth
<S>
<C>
INVESTMENT INCOME
Dividends
$339,464
Interest
63,117
TOTAL INVESTMENT INCOME
402,581
EXPENSES
Administrative Fee (Note 2)
219,898
Management Fee (Note 2)
513,922
12B-1 Fees (Note 2)
128,480
Interest Expense (Note 4)
9,825
TOTAL EXPENSES
880,165
NET INVESTMENT INCOME
(477,584)
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
Net Realized Loss from Security Transactions
(9,513,769)
Change in Unrealized Depreciation of Investments
10,500,074
NET GAIN ON INVESTMENTS
986,305
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS
$508,721
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
Sept. 30, 1999 Sept. 30, 1998
<S>
<C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net Investment Loss
$(477,584) $(490,592)
Net Realized Gain/(Loss) on Investments
(9,513,769) (4,922,612)
Increase in Unrealized Appreciation on Investments
10,500,074 (15,016,540)
INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS
508,721 3,225,671
(20,429,744)
DISTRIBUTIONS TO SHAREHOLDERS:
($0 and $.88 per share, respectively)
- - (1,334,802)
CAPITAL SHARE TRANSACTIONS: (a)
Shares Sold
37,663,246 98,363,911
Shares Redeemed
(59,529,425) (53,224,319)
Distributions Reinvested
- - 1,286,949
INCREASE/ (DECREASE) FROM CAPITAL SHARE TRANSACTIONS
(21,866,179) 46,426,541
46,426,541
TOTAL INCREASE/ (DECREASE) IN NET ASSETS
(21,357,457) 24,661,995
NET ASSETS
Beginning of Period
52,461,255 27,799,260
End of Period
$31,103,798 $52,461,255
(a) CAPITAL SHARE TRANSACTIONS
Shares Sold
2,632,890 5,119,433
Shares Redeemed
(4,112,886) (2,871,499)
Distributions Reinvested
- - 78,857
TOTAL INCREASE IN SHARES
(1,479,997) 2,326,791
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
<TABLE>
VALUE & GROWTH PORTFOLIO
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<CAPTION>
FY 1999 FY 1998 FY 1997
11/06/95* to 09/30/96
<C> <C>
<C> <C>
PER SHARE OPERATING PERFORMANCE
NAV, BEGINNING OF PERIOD $13.45 17.66
11.13 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) (.20) (.13)
(.03) (.03)
Net Realized and Unrealized
Gains/ (Losses) (.40) (3.20)
7.03 1.17
TOTAL FROM INVESTMENT OPERATIONS:
(.60) (3.33)
7.00 1.14
LESS DISTRIBUTIONS:
Net Capital Gains - (.88)
(.47) (.01)
NAV, END OF PERIOD $ 12.85 13.45
17.66 11.13
TOTAL RETURN FOR FISCAL YEAR (8.8)% (19.7)%
64.9% 11.4%
RATIOS/SUPPLEMENTAL DATA
Net Assets-End of Period ($000) $31,104 52,461
27,799 1,252
RATIOS TO AVERAGE NET ASSETS
Expenses 1.72% 1.72%
1.83% 2.20%**
Net Investment Income (Loss) (.93)% (.93)%
(.86)% (0.51)%**
Portfolio Turnover Rate 247.9% 223.6%
103.3% 148.0%
Avg. Debt Per Share $ .06 .12
- - -
Avg. amount of debt outstanding
($000) $ 226 345
- - -
Avg. number of shares outstanding
(000) 3,723 2,815
- - -
*Inception of Value & Growth Portfolio
**Annualized
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
To the Shareholders and Board of Directors
Texas Capital Value Funds, Inc.
We have audited the accompanying statement of assets
and liabilities of the Value & Growth Portfolio (the
"Fund"), a series of shares of the Texas Capital Value
Funds, Inc., including the portfolio of investments,
as of September 30, 1999, and the related statement
of operations, changes in net assets, and the financial
highlights for the periods indicated thereon. These
financial statements are the responsibility of the
Fund's management. Our responsibility is to express
an opinion on these financial statements and financial
highlights based on our audit.
We conducted our audit in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and
financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of September 30, 1999, by
correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of the Texas
Capital Value & Growth Portfolio as of September 30,
1999, the results of its operations, the changes in its
net assets and the financial highlights for each of the
periods indicated thereon, in conformity with generally
accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
November 19, 1999
14
<PAGE>
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Texas Capital Value Funds, Inc. was incorporated on June
26, 1995 as a Maryland Corporation and is registered under
the Investment Company Act of 1940 as a non-diversified,
open-end management investment company. The Value & Growth
Portfolio (the "V&G") is a series of the Texas Capital Value
Funds, Inc (the "Fund"). V&G began investment operations on
November 6, 1995. V&G's investment objective is capital
appreciation. The following is a summary of significant
accounting policies followed by the Fund in the preparation
of the financial statements. The policies are in conformity
with generally accepted accounting principles.
A. Security Valuation - Portfolio securities that are
listed on national securities exchanges or the NASDAQ National
Market System are valued as of the close of business of the
exchange on each business day which that exchange is open
(presently 4:00pm Eastern time). Unlisted securities that
are not included in such System are valued at the mean of
the quoted bid and asked prices in the over-the-counter-
market. Securities and other assets for which market
quotations are not readily available are valued at fair
value as determined in good faith by the Advisor under
procedures established by and under the general supervision
and responsibility of the Fund's Board of Directors. Short-
term investments are valued at amortized cost, if their
original maturity was 60 days or less, or by amortizing
the values as of the 61st day prior to maturity, if their
original term to maturity exceeded 60 days.
B. Federal Income Taxes - It is the Fund's policy to
meet the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of
its taxable net income to its shareholders. In addition,
the Fund intends to pay distributions as required to avoid
imposition of excise tax. Therefore, no federal income tax
provision is required.
C. Securities Transactions, Investment Income and Other
- Securities transactions are recorded on the next business
date after trade date. Realized gains and losses on sales
of investments are calculated on the identified cost basis.
Dividend income is recorded on the ex-dividend date and
interest income is recorded on the accrual basis.
D. Distributions to Shareholders. Distributions from
investment income and realized gains, if any, are recorded
on the ex-dividend date. Income distributions and capital
gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due
to net operating losses and post-October capital losses.
E. Accounting Estimates - The preparation of financial
statements in accordance with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the
amounts of income and expense during the reporting period.
Actual results could differ from those estimates.
15
<PAGE>
2. TRANSACTIONS WITH AFFILIATES
Investment Advisory and Administrative Agreements
The Fund has an investment advisory agreement with the Advisor,
First Austin Capital Management, Inc., pursuant to which the
Advisor receives a fee, computed daily, at an annual rate of
1.0% of the average daily net assets.
The Advisor provides continuous supervision of the investment
portfolio and pays the cost of compensation of the officers
of the Fund, occupancy and certain clerical and administrative
costs involved in the day to day operations of the Fund. The
Advisor bears most of the operating expenses of the Fund
including legal, audit, printing, and insurance.
In addition, the Advisor is acting as the administrator to
the Fund. For these services, the Advisor receives a fee,
computed daily based on the average daily net assets at an
annual rate of .70% on the 1st $5 million, .50% on the next
$25 million, .28% on the next $70 million, .25% on the next
$100 million, and .20% for over $200 million of each series.
Transactions with the Distributor
Rafferty Capital Markets, the Company's Distributor, was paid
$0 in commissions for executing portfolio transactions for
the Value & Growth Portfolio.
Distribution Agreement and Plan
The Fund has adopted a Distribution Plan pursuant to Rule
12b-1 under the 1940 Act under which the Fund contracts
with registered broker-dealers and their agents to distribute
shares of the Fund. The Distributor received a fee, computed
daily at an annual rate of .25% of the average daily net assets.
For the period ending September 30, 1999, the amount paid to
the Distributor was $128,480, plus charges for sales of the
Fund's shares in the amount $68,597.
3. PURCHASES AND SALES OF SECURITIES--For the period
ended September 30, 1999 the cost of purchases and the
proceeds from sales of securities, excluding short-term
securities, were $124,235,494 and $145,925,107, respectively,
for the Value & Growth Portfolio.
4. LINE OF CREDIT-The Fund has a $9 million secured
line of credit with Firstar Bank. Borrowings under this
arrangement bear interest at the bank's prime rate. At
September 30, 1999, the Fund had no borrowings outstanding.
Based upon balances outstanding during the year, the weighted
average interest rate was 7.75% and the weighted average
amount outstanding was $225,726 for the Value & Growth Portfolio.
16
<PAGE>
