THE LIPPER(TM)FUNDS, INC.
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Lipper(TM) High Income Bond Fund
SEMI-Annual REPORT
June 30, 2000
<PAGE>
TABLE OF CONTENTS
Shareholder's Letter ........................... 1
Portfolio of Investments ....................... 3
Statement of Assets and Liabilities ............ 8
Statement of Operations ........................ 9
Statement of Changes in Net Assets ............. 10
Financial Highlights ........................... 11
Notes to Financial Statements .................. 14
<PAGE>
THE LIPPER(TM) FUNDS, INC. SEMI-ANNUAL REPORT
LIPPER(TM) HIGH INCOME BOND FUND JUNE 30, 2000
Dear Shareholder:
We are pleased to present the Semi-Annual Report for the Lipper High Income
Bond Fund for the six month period ended June 30, 2000. The Lipper High Income
Bond Fund is one of three investment portfolios, together with the Lipper U.S.
Equity Fund and the Lipper Prime Europe Equity Fund, which comprise The Lipper
Funds, Inc. This report presents the financial statements and performance review
of the Lipper High Income Bond Fund (the "Fund") for the six-month period ended
June 30, 2000.
The Lipper High Income Bond Fund seeks to achieve high total returns while
preserving capital by investing in a diversified portfolio of quality, high
yield, intermediate-term bonds rated BBB+ to B-. The Fund focuses exclusively on
the U.S. high yield bond market. As of June 30, 2000, the portfolio consisted of
98 securities representing 32 industries. The average credit quality of the
portfolio was BB. The Fund maintained an average maturity of 5.9 years and an
effective duration of 3.8.
The Fund seeks to manage credit risk and minimize interest rate risk
through in-depth credit analysis, portfolio diversification and by investing in
securities with short-to-intermediate term maturities. The Fund seeks to reduce
default risk by investing in cash-pay bonds issued by companies with proven
track records of established cash flow. Further, the Fund favors bonds that are
senior in the capital structure. Due in part to this discipline, the Fund has
never experienced a default with respect to any bond holding.
During the month of June, the high yield bond market rallied, and the
Lipper High Income Bond Fund generated a net return of 2.30%, outperforming most
fixed income asset classes and its benchmark index. With interest rate concerns
abating and a benign new issue calendar, the secondary market for high yield
bonds improved dramatically. After two years of a bear market, it appears that
the tide is finally beginning to turn for high yield bonds.
Since June 1999, the Federal Reserve has raised interest rates six times,
increasing the benchmark Federal funds rate 1.75% to 6.5%. In the aftermath of
such rate increases, retail and auto sales fell in May and June, manufacturing
activity declined for the fourth consecutive month in June, the Conference
Board's index of leading economic indicators fell in May and U.S. businesses
added fewer jobs than expected in June. With mounting evidence of an economic
slowdown, the Federal Reserve decided to leave the Federal funds rate unchanged
at 6.5% at the Federal Open Market Committee meeting on June 27-28. Although an
additional increase in the overnight lending rate is possible at the Fed's
August 22nd meeting, it appears that the U.S. economy is on track to achieve the
"soft landing" desired by Federal Reserve policy-makers.
With interest rate concerns abating and high yield bonds yielding in excess
of 13%, demand for high yield bonds began to improve towards the end of the
quarter, boosting both prices and total return. Not only are lower tier bonds
trading at high yields, but BB-rated bonds are yielding in excess of 10%.
Further, high yield bond spreads are unusually wide. On average, high yield
bonds are trading at a spread of approximately 7.0% over Treasuries and BB-rated
bonds are trading at a spread of approximately 4.3% over Treasuries. These
spreads are the widest they have been since the fall of 1998 when Russia
defaulted on its sovereign debt and financial markets around the world
plummeted. Prior to 1998, spreads had not been this wide since 1990, when Drexel
Burnham fell apart, leaving a temporary void in the high yield market place.
With a majority of high yield bonds trading below par value, double digit
yields and unusually wide spreads, demand for high yield bonds is increasing. So
is this the time to invest in high yield bonds? We believe so. First, indicators
continue to report evidence of an economic slowdown, reducing the likelihood of
significant rate increases prior to the upcoming U.S. presidential election in
November. Second, high current yields and wide spreads, combined with the
prospect of more subdued equity returns, make high yield bonds extremely
attractive. Third, once the Fed ceases increasing rates, demand should increase
from both the CBO (collateralized bond obligation) market, which currently
represents over 15% of the high yield market, and investors sitting on the
sidelines with excess cash.
1
<PAGE>
As of June 30, 2000, the Lipper High Income Bond Fund had a yield to
maturity of 10.3%. Considering that the Fund continues to collect the coupon on
its underlying bonds, the investment adviser has never experienced a default
with respect to any holding and the adviser expects bond prices to improve as
the market strengthens, or, alternatively, as bonds approach maturity, the
current situation creates enormous upside potential for investors. Further, the
recent cooling off in the equity markets, if it continues, should be a positive
for the high yield bond market. As market participants experience more subdued
returns in the equity markets, we expect funds to flow back into fixed income
products, benefiting high yield bonds in general and the Lipper High Income Bond
Fund in particular.
During the remainder of 2000, the Fund will continue to pursue its
investment strategy of adding value by investing and trading issues which, based
upon internal analysis, offer attractive yields compared to their official
credit rating or market perceptions. Particularly, the portfolio manager will
continue to focus on higher quality bonds that generate sufficient cash flow to
cover interest expense and capital expenditures and maintain reasonable debt to
cash flow ratios. We expect to maintain the Fund's stated average maturity and
duration on the shorter end of the maturity spectrum, which currently offers
greater relative value than longer dated paper.
We hope you find the enclosed report informative. We appreciate your
participation in the Lipper High Income Bond Fund.
Sincerely,
/S/ KENNETH LIPPER
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KENNETH LIPPER
President and Chairman of the Board
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
----------- ------------
<S> <C> <C>
CORPORATE BONDS (81.5%)
ADVERTISING & BROADCASTING (4.9%)
The Ackerley Group, Inc. Series B 9.00%, 01/15/09 .................... $ 750,000 $ 682,500
Lamar Media Corp. 9.625%, 12/01/06 ................................... 1,000,000 1,007,500
Outdoor Systems, Inc. 9.375%, 10/15/06 ............................... 1,000,000 1,020,000
Salem Communications Corporation Series B 9.50%, 10/01/07 ............ 750,000 708,750
XM Satellite Radio Holdings Inc. 14.00%, 03/15/10 .................... 625,000 553,125
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$ 3,971,875
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AEROSPACE/DEFENSE (1.4%)
BE Aerospace Series B 8.00%, 03/01/08 ................................ 625,000 $ 531,250
Sequa Corporation 9.00%, 08/01/09 .................................... 625,000 603,125
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$ 1,134,375
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AUTO MANUFACTURING & RELATED (2.8%)
Federal - Mogul Corporation 7.375%, 01/15/06 ......................... 1,000,000 $ 725,000
Lear Corporation Series B 7.96%, 05/15/05 ............................ 625,000 587,137
Lear Seating Corporation 8.25%, 02/01/02 ............................. 500,000 495,000
Navistar International Corporation 8.00%, 02/01/08 ................... 500,000 462,500
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$ 2,269,637
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BEVERAGES & BOTTLING (1.2%)
Canandaigua Wine Company, Inc. 8.75%, 12/15/03 ....................... 1,000,000 $ 965,000
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CABLE/DISTRIBUTED ENTERTAINMENT (5.6%)
Adelphia Communications Corporation 7.50%, 01/15/04 .................. 1,000,000 $ 920,000
Charter Communications Holdings, LLC 8.25%, 04/01/07 ................. 625,000 556,250
CSC Holdings, Inc. 9.25%, 11/01/05 ................................... 1,000,000 1,005,000
Fox/Liberty Networks, LLC 8.875%, 08/15/07 ........................... 1,000,000 992,500
Fundy Cable Ltd./Lee 11.00%, 11/15/05 ................................ 1,000,000 1,066,250
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$ 4,540,000
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CAPITAL GOODS, EQUIPMENT & OTHER MANUFACTURING (1.9%)
American Standard Inc. 7.125%, 02/15/03 .............................. 875,000 $ 837,813
IDEX Corporation 6.875%, 02/15/08 .................................... 800,000 718,720
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$ 1,556,533
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CHEMICALS (3.2%)
Georgia Gulf Corporation 7.625%, 11/15/05 ............................ 1,000,000 $ 935,440
Huntsman ICI Chemicals LLC 10.125%, 07/01/09 ......................... 625,000 631,250
Lyondell Chemical Company 9.625%, 05/01/07 ........................... 500,000 497,500
Lyondell Chemical Company (Arco Chemical Co.) 9.90%, 11/01/00 ........ 500,000 502,500
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$ 2,566,690
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COMMERCIAL SERVICES (1.1%)
Iron Mountain Incorporated 8.75%, 09/30/09 ........................... 1,000,000 $ 917,500
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</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
PORTFOLIO OF INVESTMENTS--(CONTINUED)
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
----------- ------------
<S> <C> <C>
CONSUMER PRODUCTS (2.8%)
*Jostens, Inc. 12.75%, 05/01/10 ...................................... $ 500,000 $ 497,500
The Selmer Company, Inc. 11.00%, 05/15/05 ........................... 775,000 802,125
*The Scotts Company 8.625%, 01/15/09 ................................. 1,000,000 955,000
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$ 2,254,625
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ELECTRIC UTILITIES & POWER (4.0%)
The AES Corporation 8.375%, 08/15/07 ................................. 625,000 $ 573,438
Calpine Corporation 7.625%, 04/15/06 ................................. 1,000,000 955,000
CMS Energy Corporation 6.75%, 01/15/04 ............................... 750,000 700,732
Congentrix Energy, Inc. 8.10%, 03/15/04 .............................. 1,000,000 969,470
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$ 3,198,640
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ELECTRICAL EQUIPMENT (2.0%)
Ametek, Inc. 7.20%, 07/15/08 ......................................... 1,000,000 $ 909,770
Amphenol Corporation 9.875%, 05/15/07 ................................ 670,000 680,050
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$ 1,589,820
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ENERGY (6.3%)
Ferrellgas Partners, L.P. Series B 9.375%, 06/15/06 .................. 875,000 $ 848,750
Gulf Canada Resources Limited 9.25%, 01/15/04 ........................ 1,000,000 1,014,170
Nuevo Energy Company Series B 9.50%, 06/01/08 ........................ 500,000 495,000
Pioneer Natural Resources Company 9.625%, 04/01/10 ................... 750,000 780,000
Seagull Energy Corporation 8.625%, 08/01/05 .......................... 950,000 926,250
Vintage Petroleum, Inc. 9.00%, 12/15/05 .............................. 1,000,000 1,000,000
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$ 5,064,170
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ENTERTAINMENT (1.2%)
Premier Parks Inc. 9.25%, 04/01/06 ................................... 500,000 $ 476,250
Six Flags Entertainment Corporation 8.875%, 04/01/06 ................. 500,000 480,000
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$ 956,250
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ENVIRONMENTAL SERVICES (1.0%)
Allied Waste North America, Inc. Series B 7.375%, 01/01/04 ........... 500,000 $ 445,000
Allied Waste North America, Inc. Series B 7.625%, 01/01/06 ........... 375,000 328,125
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$ 773,125
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FINANCIAL INSTITUTIONS (1.1%)
Navistar Financial Corporation Series B 9.00%, 06/01/02 .............. 375,000 $ 375,000
RBF Finance Co. 11.375%, 03/15/09 .................................... 500,000 542,500
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$ 917,500
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FOOD & FOOD SERVICES (2.1%)
Keebler Corporation 10.75%, 07/01/06 ................................. 1,030,000 $ 1,086,650
SC International Services, Inc. Series B 9.25%, 09/01/07 ............. 625,000 578,125
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$ 1,664,775
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</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
PORTFOLIO OF INVESTMENTS--(CONTINUED)
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
----------- ------------
<S> <C> <C>
HEALTHCARE SERVICES & RELATED (3.3%)
Columbia / HCA Healthcare Corporation 6.91%, 06/15/05 ................ $ 750,000 $ 685,905
Quorum Health Group, Inc. 8.75%, 11/01/05 ............................ 1,000,000 955,000
Tenet Healthcare Corporation 8.625%, 01/15/07 ........................ 1,000,000 962,500
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$ 2,603,405
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HOMEBUILDING & BUILDING MATERIALS (3.9%)
D.R. Horton, Inc. 8.375%, 06/15/04 ................................... 575,000 $ 543,375
Dayton Superior Corporation 13.00%, 06/15/09 ......................... 500,000 496,250
Kaufman and Broad Home Corporation 9.375%, 05/01/03 .................. 750,000 746,250
Nortek, Inc. 9.875%, 03/01/04 ........................................ 675,000 646,312
NVR, Inc. 8.00%, 06/01/05 ............................................ 750,000 693,750
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$ 3,125,937
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HOTELS (0.9%)
HMH Properties Inc. Series A 7.875%, 08/01/05 ........................ 750,000 $ 693,750
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METALS (2.5%)
AK Steel Corporation 9.125%, 12/15/06 ................................ 1,000,000 $ 965,000
Ryerson Tull, Inc 9.125%, 07/15/06 ................................... 500,000 527,277
Ryerson Tull, Inc. 8.50%, 07/15/01 ................................... 500,000 497,940
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$ 1,990,217
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OILFIELD SERVICES (3.0%)
Pride Petroleum Services, Inc. 9.375%, 05/01/07 ...................... 1,000,000 $ 1,005,000
Tuboscope Inc. 7.50%, 02/15/08 ....................................... 750,000 682,042
Veritas DGC Inc. 9.75%, 10/15/03 ..................................... 750,000 763,125
-----------
$ 2,450,167
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PACKAGING (1.6%)
Ball Corporation 7.75%, 08/01/06 ..................................... 750,000 $ 705,000
Owens-Illinois, Inc. 7.85%, 05/15/04 ................................ 625,000 595,931
-----------
$ 1,300,931
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PAPER & FOREST PRODUCTS (5.8%)
Boise Cascade Corporation 9.85%, 06/15/02 ............................ 1,000,000 $ 1,028,590
Buckeye Cellulose Corporation 8.50%, 12/15/05 ........................ 875,000 844,375
Container Corporation of America Series A 11.25%, 05/01/04 ........... 1,000,000 1,020,000
Packaging Corp. of America 9.625%, 04/01/09 .......................... 750,000 750,938
Tembec Finance Corporation 9.875%, 09/30/05 .......................... 1,000,000 1,013,750
-----------
$ 4,657,653
-----------
PRINTING (0.6%)
World Color Press, Inc. 7.75%, 02/15/09 ............................. 500,000 $ 469,175
-----------
PUBLISHING (1.8%)
Hollinger International Inc. 9.25%, 02/01/06 ......................... 1,000,000 $ 975,000
K-III Communications Corporation 10.25%, 06/01/04 .................... 500,000 507,500
-----------
$ 1,482,500
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
PORTFOLIO OF INVESTMENTS--(CONTINUED)
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
----------- ------------
<S> <C> <C>
RETAILERS (1.3%)
The Southland Corp. 5.00%, 12/15/03 .................................. $ 750,000 $ 645,938
The Southland Corp. Series A 4.50%, 06/15/04 ......................... 500,000 403,125
-----------
$ 1,049,063
-----------
TELECOMMUNICATIONS (8.6%)
Hermes Europe Railtel B.V. 10.375%, 01/15/09 ......................... 750,000 $ 626,250
Intermedia Communications Inc. Series B 8.875%, 11/01/07 ............. 1,000,000 942,500
Level 3 Communications, Inc. 9.125%, 05/01/08 ........................ 750,000 676,875
McLeod USA Incorporated 8.125%, 02/15/09 ............................. 750,000 678,750
Metromedia Fiber Network, Inc. 10.00%, 12/15/09 ...................... 1,000,000 985,000
PSINet Inc. Series B 10.00%, 02/15/05 ................................ 775,000 720,750
Qwest Communications International Inc. 7.25%, 11/01/08 .............. 625,000 596,094
Williams Communication Group, Inc. 10.70%, 10/01/07 .................. 750,000 746,250
*Winstar Communications, Inc. 12.50%, 04/15/08 ........................ 1,000,000 980,000
-----------
$ 6,952,469
-----------
TELECOMMUNICATIONS (WIRELESS) (3.0%)
Crown Castle International Corp. 10.75%, 08/01/11 .................... 500,000 $ 510,000
Nextel Communications, Inc. 9.375%, 11/15/09 ......................... 675,000 651,375
Rogers Cantel Inc. 8.80%, 10/01/07 ................................... 750,000 750,000
Voicestream Wireless Corporation 10.375%, 11/15/09 ................... 500,000 522,500
-----------
$ 2,433,875
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TEXTILE/APPAREL MANUFACTURING (1.6%)
Interface, Inc. 7.30%, 04/01/08 ...................................... 875,000 $ 686,875
Levi Strauss & Co. 6.80%, 11/01/03 ................................... 625,000 603,437
-----------
$ 1,290,312
-----------
TRANSPORTATION (1.0%)
Sea Containers Ltd. Series A 12.50%, 12/01/04 ........................ 1,000,000 $ 825,000
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TOTAL CORPORATE BONDS (COST $67,868,635) $65,664,969
-----------
CONVERTIBLE BONDS (7.7%)
AUTO MANUFACTURING & RELATED (1.0%)
Mascotech, Inc. 4.50%, 12/15/03 ...................................... 1,000,000 $ 760,000
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CAPITAL GOODS, EQUIPMENT & OTHER MANUFACTURING (1.2%)
*Thermo Electron Corporation 4.25%, 01/01/03 .......................... 1,000,000 $ 923,700
-----------
HEALTHCARE SERVICES & RELATED (2.7%)
HEALTHSOUTH Corporation 3.25%, 04/01/03 .............................. 1,000,000 $ 801,250
Omnicare, Inc. 5.00%, 12/01/07 ....................................... 1,000,000 680,780
Sunrise Assisted Living, Inc. 5.50%, 06/15/02 ........................ 875,000 755,729
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$ 2,237,759
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
PORTFOLIO OF INVESTMENTS--(CONTINUED)
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
----------- ------------
<S> <C> <C>
HOTELS (1.0%)
Hilton Hotels Corporation 5.00%, 05/15/06 ............................ $1,000,000 $ 800,000
-----------
METALS (0.8%)
Magna International Incoporated 4.875%, 02/15/05 ..................... 750,000 $ 682,395
-----------
PRINTING (1.0%)
Mail-Well Inc. 5.00%, 11/01/02 ....................................... 1,000,000 $ 833,000
-----------
TOTAL CONVERTIBLE BONDS (COST $6,467,645) $ 6,236,854
-----------
SHORT-TERM INVESTMENTS (9.0%)
REPURCHASE AGREEMENTS (9.0%)
Chase Securities, Inc., 6.15%, dated 06/30/00, due 07/3/00,
to be repurchased at $7,213,695, collateralized by $5,690,000,
U.S. Treasury Notes, 8.75%, due 5/15/00 (Cost $7,210,000) .......... 7,210,000 $ 7,210,000
-----------
TOTAL INVESTMENTS (98.2%) (COST $81,546,280) .............................. $79,111,823
-----------
OTHER ASSETS AND LIABILITIES (1.8%) ....................................... 1,489,716
TOTAL NET ASSETS (100%) ................................................... $80,601,539
===========
</TABLE>
-----------
*Rule 144A security. Certain conditions for public sale may exist.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (Cost $81,546,280) .......................................... $ 79,111,823
Cash .............................................................................. 528,865
Receivable for Investments Sold ................................................... 1,511,250
Interest Receivable ............................................................... 1,482,524
Receivable for Fund Shares Sold ................................................... 216,422
Deferred Organization Costs ....................................................... 15,480
Prepaid Assets .................................................................... 303
------------
TOTAL ASSETS ................................................................ $ 82,866,667
------------
LIABILITIES:
Payable for Investments Purchased ................................................. $ 2,018,750
Investment Advisory Fees Payable .................................................. 68,536
Payable for Fund Shares Redeemed .................................................. 65,673
Administrative Fees Payable ....................................................... 42,557
Distribution Fees Payable--Retail Shares .......................................... 11,480
Shareholder Servicing Fees Payable--Group Retirement Plan Shares .................. 5,473
Directors' Fees Payable ........................................................... 3,435
Other Liabilities ................................................................. 49,224
------------
TOTAL LIABILITIES ........................................................... $ 2,265,128
------------
NET ASSETS ........................................................................ $ 80,601,539
============
NET ASSETS CONSIST OF:
Paid in Capital ................................................................... $ 86,707,392
Undistributed Net Investment Income ............................................... 568,982
Accumulated Net Realized Loss ..................................................... (4,240,378)
Unrealized Depreciation on Investments ............................................ (2,434,457)
------------
$ 80,601,539
============
PREMIER SHARES:
Net Assets $ 71,262,386
Shares Issued and Outstanding ($.001 par value) (Authorized 3,333,333,333) ........ 7,814,237
Net Asset Value, Offering and Redemption Price Per Share .......................... $9.12
============
RETAIL SHARES:
Net Assets ........................................................................ $ 5,912,871
Shares Issued and Outstanding ($.001 par value) (Authorized 3,333,333,333) ........ 647,112
Net Asset Value, Offering and Redemption Price Per Share .......................... $9.14
============
GROUP RETIREMENT PLAN SHARES:
Net Assets ........................................................................ $ 3,426,282
Shares Issued and Outstanding ($.001 par value) (Authorized 3,333,333,333) ........ 375,971
Net Asset Value, Offering and Redemption Price Per Share .......................... $9.11
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME
Interest ..................................................................... $ 3,494,791
-----------
EXPENSES
Investment Advisory Fees
Basic Fee .................................................................. $280,870
Less: Fee Waived ........................................................... (74,874) $ 205,996
--------
Administrative Fees .......................................................... 99,002
Registration and Filing Fees ................................................. 15,614
Professional Fees ............................................................ 14,134
Distribution Fees--Retail Shares ............................................. 12,809
Amortization of Organization Costs ........................................... 8,747
Custodian Fees ............................................................... 6,869
Directors' Fees .............................................................. 6,412
Shareholder Servicing Fees--Group Retirement Plan Shares ..................... 4,455
Other Expenses ............................................................... 24,867
-----------
Total Expenses ............................................................. $ 398,905
-----------
NET INVESTMENT INCOME .................................................. $ 3,095,886
-----------
NET REALIZED LOSS FROM:
Investments sold ............................................................. $(1,146,903)
-----------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION:
Investments .................................................................. $ (176,128)
-----------
TOTAL NET REALIZED LOSS AND NET CHANGE IN
UNREALIZED APPRECIATION/DEPRECIATION ......................................... $(1,323,031)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................... $ 1,772,855
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED
JUNE 30, 2000 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1999
------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:
Net Investment Income .................................................... $ 3,095,886 $ 6,795,032
Net Realized Loss ........................................................ (1,146,903) (1,020,788)
Net Change in Unrealized Appreciation/Depreciation ....................... (176,128) (2,113,011)
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 1,772,855 $ 3,661,233
------------ ------------
DISTRIBUTIONS:
PREMIER SHARES:
From net investment income ............................................... $ (2,238,070) $ (5,890,520)
RETAIL SHARES:
From net investment income ............................................... (181,076) (518,850)
GROUP RETIREMENT PLAN SHARES:
From net investment income ............................................... (113,535) (398,342)
------------ ------------
TOTAL DISTRIBUTIONS ................................................. $ (2,532,681) $ (6,807,712)
------------ ------------
CAPITAL SHARE TRANSACTIONS (NOTES G AND H):
PREMIER SHARES:
Issued--Regular .......................................................... $ 13,630,210 $ 10,414,241
--Distributions Reinvested ......................................... 1,709,720 4,727,285
Redeemed ................................................................. (9,582,899) (31,982,397)
------------ ------------
Net Increase (Decrease) in Premier Shares Transactions ...... $ 5,757,031 $(16,840,871)
------------ ------------
RETAIL SHARES:
Issued--Regular .......................................................... $ 689,931 $ 4,256,820
--Distributions Reinvested ......................................... 171,494 491,383
Redeemed ................................................................. (1,073,418) (4,232,591)
------------ ------------
Net Increase (Decrease) in Retail Shares Transactions ....... $ (211,993) $ 515,612
------------ ------------
GROUP RETIREMENT PLAN SHARES:
Issued--Regular .......................................................... $ 465,538 $ 1,273,417
--Distributions Reinvested ......................................... 114,326 388,408
Redeemed ................................................................. (658,915) (2,421,558)
------------ ------------
Net Decrease in Group Retirement Plan Shares Transaction ... $ (79,051) $ (759,733)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS ......................................................... $ 5,465,987 $(17,084,992)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS .................................... $ 4,706,161 $(20,231,471)
------------ ------------
NET ASSETS:
Beginning of Period ...................................................... $ 75,895,378 $ 96,126,849
------------ ------------
End of Period (A) ........................................................ $ 80,601,539 $ 75,895,378
============ ============
-------------
(A) Includes undistributed net investment income ........................... $ 568,982 $ 5,777
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
FINANCIAL HIGHLIGHTS
PREMIER SHARES
SELECTED PER SHARE DATA & RATIOS (3)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED APRIL 1, 1996**
JUNE 30, 2000 YEAR ENDED YEAR ENDED YEAR ENDED TO
(UNAUDITED) DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .... $ 9.22 $ 9.57 $10.11 $10.18 $10.00
------ ------ ------ ------ ------
Income From Investment Operations:
Net Investment Income (1) ............. 0.43 0.74 0.84 0.91 0.68
Net Realized and Unrealized
Gain/(Loss) on Investments .......... (0.16) (0.35) (0.48) 0.19 0.21
------ ------ ------ ------ ------
Total From Investment Operations .. 0.27 0.39 0.36 1.10 0.89
------ ------ ------ ------ ------
Distributions:
Net Investment Income ................. (0.37) (0.74) (0.86) (0.91) (0.68)
In Excess of Net Investment Income .... -- -- --+ -- --
Net Realized Gain ..................... -- -- (0.04) (0.26) (0.03)
------ ------ ------ ------ ------
Total Distributions ............... (0.37) (0.74) (0.90) (1.17) (0.71)
------ ------ ------ ------ ------
Net Asset Value, End of Period .......... $ 9.12 $ 9.22 $ 9.57 $10.11 $10.18
====== ====== ====== ====== ======
Total Return (2) ........................ 2.26% 4.20% 3.61% 11.22% 9.23%
====== ====== ====== ====== ======
Ratios and Supplemental Data:
Net Assets, End of Period (000's) ....... $71,262 $66,163 $85,662 $85,151 $102,945
Ratios After Expense Waiver and/or
Reimbursement:
Expenses to Average Net Assets ...... 1.00%* 1.00% 1.00% 1.00% 1.00%*
Net Investment Income
to Average Net Assets ............. 8.05%* 7.72% 8.50% 8.58% 9.01%*
Ratios Before Expense Waiver and/or
Reimbursement:
Expenses to Average Net Assets ...... 1.18%* 1.15% 1.15% 1.16% 1.27%*
Net Investment Income
to Average Net Assets ............. 7.87%* 7.56% 8.35% 8.42% 8.74%*
Portfolio Turnover Rate ................. 87% 103% 110% 105% 74%
</TABLE>
-----------
* Annualized.
** Commencement of Fund operations.
+ Amount represents less than $0.01 per share.
(1) Voluntarily waived fees and reimbursed expenses affected the net investment
income per share as follows:
WAIVER/REIMBURSEMENT
PERIOD (PER SHARE)
------ --------------------
Six Month Period Ended June 30, 2000 (Unaudited) .... $0.01
Year Ended December 31, 1999 ........................ $0.02
Year Ended December 31, 1998 ........................ $0.01
Year Ended December 31, 1997 ........................ $0.02
Period Ended December 31, 1996 ...................... $0.02
(2) Total return would have been lower had the Adviser not waived or reimbursed
certain expenses during the periods shown. Total returns for periods of
less than one year are not annualized.
(3) The per share data shown does not reflect adjustments to undistributed net
investment income due to book/tax differences.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
FINANCIAL HIGHLIGHTS
RETAIL SHARES
SELECTED PER SHARE DATA & RATIOS (3)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED APRIL 11, 1996**
JUNE 30, 2000 YEAR ENDED YEAR ENDED YEAR ENDED TO
(UNAUDITED) DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.21 $ 9.57 $10.11 $10.18 $ 9.91
------ ------ ------ ------ ------
Income From Investment Operations:
Net Investment Income (1) 0.42 0.73 0.82 0.84 0.62
Net Realized and Unrealized Gain/
(Loss) on Investments (0.14) (0.37) (0.49) 0.23 0.34
------ ------ ------ ------ ------
Total From Investment Operations 0.28 0.36 0.33 1.07 0.96
------ ------ ------ ------ ------
Distributions:
Net Investment Income (0.35) (0.72) (0.83) (0.88) (0.66)
In Excess of Net Investment Income -- -- --+ -- --
Net Realized Gain -- -- (0.04) (0.26) (0.03)
------ ------ ------ ------ ------
Total Distributions (0.35) (0.72) (0.87) (1.14) (0.69)
------ ------ ------ ------ ------
Net Asset Value, End of Period $ 9.14 $ 9.21 $ 9.57 $10.11 $10.18
====== ====== ====== ====== ======
Total Return (2) 2.48% 3.84% 3.36% 10.97% 10.04%
====== ====== ====== ====== ======
Ratios and Supplemental Data:
Net Assets, End of Period (000's) $5,913 $6,187 $5,950 $4,697 $845
Ratios After Expense Waiver and/or
Reimbursement:
Expenses to Average Net Assets 1.25%* 1.25% 1.25% 1.25% 1.25%*
Net Investment Income
to Average Net Assets 7.77%* 7.48% 8.12% 8.31% 8.95%*
Ratios Before Expense Waiver and/or
Reimbursement:
Expenses to Average Net Assets 1.60%* 1.40% 1.40% 1.41% 1.59%*
Net Investment Income
to Average Net Assets 7.43%* 7.32% 7.97% 8.15% 8.61%*
Portfolio Turnover Rate 87% 103% 110% 105% 74%
</TABLE>
-----------
* Annualized.
** Initial offering of shares by the Fund.
+ Amount represents less than $0.01 per share.
(1) Voluntarily waived fees and reimbursed expenses affected the net investment
income per share as follows:
WAIVER/REIMBURSEMENT
PERIOD (PER SHARE)
------ --------------------
Six Month Period Ended June 30, 2000 (Unaudited) ...... $0.01
Year Ended December 31, 1999 .......................... $0.02
Year Ended December 31, 1998 .......................... $0.01
Year Ended December 31, 1997 .......................... $0.02
Period Ended December 31, 1996 ........................ $0.02
(2) Total return would have been lower had the Adviser not waived or reimbursed
certain expenses during the periods shown. Total returns for periods of
less than one year are not annualized.
(3) The per share data shown does not reflect adjustments to undistributed net
investment income due to book/tax differences.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
FINANCIAL HIGHLIGHTS
GROUP RETIREMENT SHARES
SELECTED PER SHARE DATA & RATIOS (3)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED APRIL 12, 1996**
JUNE 30, 2000 YEAR ENDED YEAR ENDED YEAR ENDED TO
(UNAUDITED) DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.21 $ 9.57 $10.11 $10.18 $ 9.93
------ ------ ------ ------ ------
Income From Investment Operations:
Net Investment Income (1) 0.42 0.72 0.80 0.85 0.62
Net Realized and Unrealized Gain/
(Loss) on Investments (0.17) (0.36) (0.47) 0.22 0.32
------ ------ ------ ------ ------
Total From Investment Operations 0.25 0.36 0.33 1.07 0.94
------ ------ ------ ------ ------
Distributions:
Net Investment Income (0.35) (0.72) (0.83) (0.88) (0.66)
In Excess of Net Investment Income -- -- --+ -- --
Net Realized Gain -- -- (0.04) (0.26) (0.03)
------ ------ ------ ------ ------
Total Distributions (0.35) (0.72) (0.87) (1.14) (0.69)
------ ------ ------ ------ ------
Net Asset Value, End of Period $ 9.11 $ 9.21 $ 9.57 $10.11 $10.18
====== ====== ====== ====== ======
Total Return (2) 0.00% 3.84% 3.37% 10.96% 9.78%
====== ====== ====== ====== ======
Ratios and Supplemental Data:
Net Assets, End of Period (000's) $3,426 $3,545 $4,515 $3,518 $2,198
Ratios After Expense Waiver and/or
Reimbursement:
Expenses to Average Net Assets 1.25%* 1.25% 1.25% 1.25% 1.25%*
Net Investment Income
to Average Net Assets 7.82%* 7.49% 8.13% 8.32% 8.91%*
Ratios Before Expense Waiver and/or
Reimbursement:
Expenses to Average Net Assets 1.45%* 1.40% 1.40% 1.41% 1.55%*
Net Investment Income
to Average Net Assets 7.63%* 7.33% 7.98% 8.16% 8.61%*
Portfolio Turnover Rate 87% 103% 110% 105% 74%
</TABLE>
---------------
* Annualized.
** Initial offering of shares by the Fund.
+ Amount represents less than $0.01 per share.
(1) Voluntarily waived fees and reimbursed expenses affected the net investment
income per share as follows:
WAIVER/REIMBURSEMENT
PERIOD (PER SHARE)
------ --------------------
Six Month Period Ended June 30, 2000 (Unaudited) ..... $0.01
Year Ended December 31, 1999 ......................... $0.02
Year Ended December 31, 1998 ......................... $0.01
Year Ended December 31, 1997 ......................... $0.02
Period Ended December 31, 1996 ....................... $0.02
(2) Total return would have been lower had the Adviser not waived or reimbursed
certain expenses during the periods shown. Total returns for periods of
less than one year are not annualized.
(3) The per share data shown does not reflect adjustments to undistributed net
investment income due to book/tax differences.
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
The Lipper Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940 as an open-end management investment company and was
incorporated on August 22, 1995. As of June 30, 2000, the Company was comprised
of three diversified portfolios: the Lipper High Income Bond Fund, the Lipper
U.S. Equity Fund, and the Lipper Prime Europe Equity Fund. These financial
statements pertain to the Lipper High Income Bond Fund only. The financial
statements of the remaining Funds are presented separately. The Company offers
the shares of each Fund in three classes: Premier Shares, Retail Shares and
Group Retirement Plan Shares. The Lipper High Income Bond Fund (the "Fund") was
funded as a registered investment company on April 1, 1996 with a contribution
of securities from a corresponding limited partnership (see Note G).
The Lipper High Income Bond Fund seeks high total returns consistent with
capital preservation by investing primarily in high yield securities with
maturities of 10 years or less.
A. SIGNIFICANT ACCOUNTING POLICIES. The following significant accounting
policies are in conformity with generally accepted accounting principles for
investment companies. Such policies are consistently followed by the Fund in the
preparation of its financial statements. Generally accepted accounting
principles may require management to make estimates and assumptions that affect
the reported amounts and disclosures in the financial statements. Actual results
may differ from those estimates.
1. SECURITY VALUATION: Fixed income securities are stated on the basis of
valuations provided by brokers and/or a pricing service which uses information
with respect to transactions in fixed income securities, quotations from
dealers, market transactions in comparable securities and various relationships
between securities in determining value. Short-term investments that have
remaining maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value. The value of securities for
which no quotations are readily available is determined in good faith at fair
value using methods determined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is the Fund's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code and
to distribute all of its taxable income. Accordingly, no provision for Federal
income taxes is required in the financial statements. Net capital losses
incurred after October 31 and within the taxable year are deemed to arise on the
first business day of the Fund's next taxable year.
At June 30, 2000 the cost of investments and unrealized appreciation
(depreciation) of investments for Federal income tax purposes were:
NET
COST APPRECIATION (DEPRECIATION) APPRECIATION
----------- ------------ -------------- ------------
$81,546,280 $455,207 $(2,889,664) $(2,434,457)
3. REPURCHASE AGREEMENTS: The Fund may enter into repurchase agreements
under which it lends excess cash and takes possession of securities with an
agreement that the counterparty will repurchase such securities. In connection
with transactions in repurchase agreements, a bank as custodian for the Fund
takes possession of the underlying securities which are held as collateral, with
a market value at least equal to the amount of the repurchase transaction,
including principal and accrued interest. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to determine the adequacy of the collateral.
In the event of default on the obligation to repurchase, the Fund has the right
to liquidate the collateral and apply the proceeds in satisfaction of the
obligation. In the event of default or bankruptcy by the counterparty to the
agreement, realization and/or retention of the collateral or proceeds may be
subject to legal proceedings.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Fund intends to distribute
substantially all of its net investment income monthly. Net realized capital
gains, if any, will be distributed at least annually by the Fund. All
distributions are recorded on the ex-dividend date.
Income and capital gains distributions are determined in accordance with
U.S. Federal income tax regulations which may differ from generally accepted
accounting principles. Those differences are primarily due to differing book and
tax treatments for deferred organization costs, post-October losses and losses
due to wash sales transactions.
14
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
NOTES TO FINANCIAL STATEMENTS--(Continued)
(UNAUDITED)
Permanent book and tax differences between U.S. federal income tax
regulations and generally accepted accounting principles may result in
reclassifications to undistributed or distributions in excess of net investment
income (loss), undistributed realized net gain (loss) and paid in capital. Such
adjustments are not included for the purpose of calculating the financial
highlights.
5. ORGANIZATION COSTS: Costs incurred by the Fund in connection with its
organization have been deferred and are being amortized on a straight-line basis
over a five-year period.
6. OTHER: Securities transactions are accounted for on the date the
securities are purchased or sold. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Interest income is recognized on the accrual basis.
Discounts and premiums on securities purchased are amortized according to the
effective yield method over their respective lives. Expenses of the Company,
which are not directly attributable to a Fund, are allocated among the Funds
based on their relative net assets. Income, expenses (other than class specific
expenses) and realized and unrealized gains or losses are allocated to each
class of shares based upon their relative net assets.
B. ADVISORY SERVICES: Lipper & Company, L.L.C. (the "Adviser") serves as the
investment adviser to the Fund. Under the terms of the Investment Advisory
Agreement (the "Agreement"), the Adviser provides investment advisory services
for a fee calculated at an annual rate of 0.75% of the Fund's average daily net
assets. From time to time, the Adviser may voluntarily waive, for a period of
time, all or a portion of the fee to which it is entitled under its Agreement
with the Fund. Until further notice, the Adviser has agreed to voluntarily waive
fees and reimburse expenses to the extent necessary to maintain an annual
operating expense ratio to net assets of not more thanthe following:
GROUP RETIREMENT
PREMIER SHARES RETAIL SHARES PLAN SHARES
-------------- ------------- ----------------
1.00% 1.25% 1.25%
C. ADMINISTRATIVE SERVICES: Chase Global Funds Services Company, a wholly owned
subsidiary of The Chase Manhattan Bank ("Chase"), serves as the Company's
administrator (the "Administrator") pursuant to an Administrative Agreement.
Under the Administrative Agreement, the Administrator provides administrative,
fund accounting, dividend disbursing and transfer agent services to the Company.
As compensation for its services, the Company pays the Administrator a monthly
fee at the annual rate of 0.20% of the Company's average daily net assets up to
and including $200 million; 0.10% of the Company's average daily net assets in
excess of $200 million up to and including $400 million and 0.05% of the
Company's average daily net assets in excess of $400 million. The Fund is
subject to a minimum annual fee of $70,000 per year. Under a separate agreement,
Chase also serves as the Company's custodian for the Fund's assets.
D. DISTRIBUTION SERVICES: Lipper & Company, L.P., an affiliate of the Adviser,
serves as the Company's distributor (the "Distributor"). The Distributor is
entitled to receive an annual distribution fee payable from the net assets of
the Fund's Retail Shares of up to 0.25% of the average daily net assets of such
Fund's Retail Shares. The Company has entered into shareholder servicing
agreements with respect to the Fund's Group Retirement Plan Shares. Under such
servicing agreements, each servicing agent will be entitled to receive from the
net assets of the Fund's Group Retirement Plan Shares, an annual servicing fee
of up to 0.25% of the average daily net assets of such Fund's Group Retirement
Plan Shares for certain support services which supplement the services provided
by the Company's administrator and transfer agent.
E. DIRECTORS' FEES: The Company pays each Director who is not a director,
officer or employee of the Adviser or any of its affiliates, a fee of $8,000 per
annum plus $500 per quarterly meeting attended and reimbursements for expenses
incurred in attending Board meetings.
15
<PAGE>
LIPPER(TM) HIGH INCOME BOND FUND
NOTES TO FINANCIAL STATEMENTS--(Continued)
(UNAUDITED)
F. PURCHASES AND SALES: For the six months ended June 30, 2000, the cost of
purchases and proceeds of sales for investment securities other than long-term
U.S. Government and short-term securities were:
PURCHASES SALES
----------- -----------
$30,395,942 $30,413,665
There were no long-term purchases or sales of U.S. Government securities.
G. LIMITED PARTNERSHIP TRANSFER: The Fund was formed as a successor investment
vehicle for a limited partnership (a "Partnership") for which Lipper & Company,
L.P., an affiliate of the Adviser acted as general partner and investment
adviser since inception. On April 1, 1996, the Fund exchanged Premier Shares for
portfolio securities of the Partnership (the "Transfer"). Premier Shares issued
by the Fund in the Transfer were issued at the net asset value of Premier Shares
prior to the Transfer. Premier Shares received in the Transfer have been
distributed to the Partnership's limited partners who elected to participate in
the Transfer. Securities valued at $74,518,234 at the date of Transfer with
unrealized appreciation of $337,368 were contributed to the Fund on a tax-free
basis. To the extent that the Fund acquired securities in the Transfer that had
appreciated in value from the date originally acquired by its corresponding
Partnership, the Transfer may have adverse tax consequences to investors who
subsequently acquire shares of the Fund.
H. CAPITAL STOCK: Capital share transactions for the Fund, by class of shares,
were as follows:
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED
JUNE 30, 2000 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1999
------------- -----------------
<S> <C> <C>
PREMIER SHARES:
Issued--Regular .................................. 1,499,431 1,093,926
Distributions Reinvested ................. 189,362 499,280
Redeemed ......................................... (1,053,876) (3,360,531)
---------- ----------
Net Increase (Decrease) ...................... 634,917 (1,767,325)
---------- ----------
RETAIL SHARES:
Issued--Regular .................................. 74,634 444,466
Distributions Reinvested ................. 18,985 51,985
Redeemed ......................................... (118,183) (446,644)
---------- ----------
Net Increase (Decrease) ...................... (24,564) 49,807
---------- ----------
GROUP RETIREMENT PLAN SHARES:
Issued--Regular .................................. 50,943 134,102
Distributions Reinvested ................. 12,669 41,101
Redeemed ......................................... (72,591) (262,245)
---------- ----------
Net Decrease ................................. (8,979) (87,042)
---------- ----------
</TABLE>
I. OTHER: At June 30, 2000, the percentage of total shares outstanding held by
record shareholders owning 10% or greater of the aggregate total shares for the
Fund was as follows:
NO. OF %
SHAREHOLDERS OWNERSHIP
------------ ---------
Premier Shares ................ 1 10.1%
Group Retirement Shares ....... 3 87.7%
Transactions by shareholders having a significant ownership percentage of
the Fund could have an impact on other shareholders of the Fund.
The Fund currently invests in high yield lower grade debt. The market
values of these higher yielding debt securities tend to be more sensitive to
economic conditions and individual corporate developments than do higher rated
securities.
The Company has a $20 million line of credit with Chase which is available
to meet temporary cash needs of the the Company. The Company pays a commitment
fee for this line of credit.
16
<PAGE>
INVESTMENT ADVISER: LIPPER & COMPANY, L.L.C.
ADMINISTRATOR AND CHASE GLOBAL FUNDS
TRANSFER AGENT: SERVICES COMPANY
DISTRIBUTOR: LIPPER & COMPANY, L.P.
CUSTODIAN: THE CHASE MANHATTAN BANK
LEGAL COUNSEL: SIMPSON THACHER & BARTLETT
INDEPENDENT ACCOUNTANTS: PRICEWATERHOUSECOOPERS LLP
BOARD OF DIRECTORS: KENNETH LIPPER
-----------------------------------
Chairman of the Board and President
The Lipper Funds, Inc.
Chairman of the Board and President
Lipper & Company
ABRAHAM BIDERMAN
-----------------------------------
Executive Vice President
Secretary and Treasurer
The Lipper Funds, Inc.
Executive Vice President
Lipper & Company
STANLEY BREZENOFF
-----------------------------------
Chief Executive Officer
Maimonides Medical Center
MARTIN MALTZ
-----------------------------------
Principal Scientist
Xerox Corporation
IRWIN RUSSELL
-----------------------------------
Attorney
Law Offices of Irwin E. Russell
Director
The Walt Disney Company
TICKER SYMBOLS:
Premier Shares: LHIBX
Retail Shares: LHIRX
Group Retirement Plan Shares: LHIGX
For more complete information concerning The Lipper Funds, Inc.,
including a prospectus, please call 1-800-LIPPER9, visit The Lipper
Funds, Inc.'s internet site at www.lipper.com, or send an electronic
request to the following e-mail address: [email protected].
The Lipper High Income Bond Fund invests primarily in high yield
bonds, which entail greater risks than investment grade bonds, such as
reduced liquidity and the possibility of default. Please read the
prospectus carefully before investing.
Lipper & Company. L.P., Distributor.
The Lipper Funds, Inc. is not affiliated with Lipper Inc.
