SEMI-ANNUAL REPORT
(VAN WAGONER FUNDS LOGO)
JUNE 30, 1997
August 1, 1997
DEAR FELLOW SHAREHOLDERS:
The first half of 1997 was challenging for the Van Wagoner Funds. Although the
major market indices continued to reach new highs, several sectors of the stock
market had a difficult first six months. Unfortunately, smaller-cap growth
stocks experienced the most difficulty.
For the first four months of the year there was a continuing shift of assets
from smaller, lesser-known companies to bigger, more liquid companies. This
activity was prevalent among professional investors as well as individuals.
Money flows turned negative for the small-cap sector over this time period and
affected performance dramatically. The most glaring example of this occurred
during April, right in the middle of first quarter earnings reports. Although
the majority of our investments had strong first quarter results and good
prospects for the second quarter, some share prices fell as much as 25% during
the month. This sell-off was the result of investors, both portfolio managers as
well as individuals, shifting their portfolios to emphasize large, more liquid
stocks. Although our cash flow did not impact our portfolio management, the fact
that money left the small-cap sector dramatically affected the Funds'
performance.
There was some good news during the month of April. As mentioned before, our
companies had very strong fundamental performance and the April decline allowed
us to redirect the portfolios into our strongest stocks and get ready for what
was likely to occur - a small-cap rebound. The wait was not long, as May
provided one of our best months. Buyers, recognizing the value that had been
created, reemerged in small-cap growth stocks and lifted the valuations,
allowing the Funds to recover considerably. The month of June saw a
consolidation of the rapid gains in May and by the end of the month, stocks
started rising again in anticipation of earnings reports for the second quarter.
The sector weightings of the portfolios have not changed dramatically since the
beginning of the year. We have made some subtle shifts within industries but
continue to emphasize technology, health care and energy services. As always our
knowledge of the companies in which we invest is superb and this in-depth
research again will be reflected in the Funds' performance.
The technology sector continues to have a significant weighting in software
stocks but data communications has been lowered in favor of heavier weightings
in semiconductors and semiconductor capital equipment. Our emphasis in this new
area is in leading-edge companies that provide new products for advanced semi-
conductor manufacturing techniques. As we move into 1998 and beyond,
semiconductor complexity is demanding new manufacturing techniques, driving a
capital-spending program from which the companies in our portfolios will draw
direct benefit.
Health care investments continue to emphasize both products and services,
although the focus is on leading-edge companies that contribute to the delivery
of high quality medical care with an eye on cost reduction.
Our investments in the energy area emphasize the increase in drilling activity
in the Gulf of Mexico and in the lower 48 states. New drilling techniques have
caused oil companies to increase their drilling activities and our investments
are direct beneficiaries of this trend.
Everyone at Van Wagoner Capital Management, Inc. is a shareholder of the Funds.
Although the performance of the Funds during the first half of the year was
below our expectations, the last two months have seen a strong revival for
small-cap growth stocks. I believe this trend will continue and I look forward
to reporting better results. Thank you for your patience.
Sincerely,
/s/Garrett R. Van Wagoner
Garrett R. Van Wagoner
President
VAN WAGONER EMERGING GROWTH FUND
Schedule of Investments
June 30, 1997
(Unaudited)
NUMBER
OF SHARES VALUE
- - --------- -----
COMMON STOCKS 88.71%
CHEMICALS - SPECIALTY 0.05%
12,000 NuCo2, Inc.* $ 207,000
------------
COMMERCIAL SERVICES - MISCELLANEOUS 2.77%
20,000 Abacus Direct Corp.* 650,000
115,000 LHS Group, Inc.* 5,038,438
24,000 MedQuist, Inc.* 729,000
135,000 Pediatrix Medical Group, Inc.* 6,184,687
------------
12,602,125
------------
COMMERCIAL SERVICES - SECURITY/SAFETY 1.03%
199,750 Check Point Software Technologies Ltd.* 4,669,156
------------
COMPUTERS - INTEGRATED SYSTEMS 3.34%
448,500 Peerless Systems Corp.*+ 6,166,875
140,000 Wind River Systems, Inc.* 5,355,000
250,600 Xionics Document Technologies, Inc.* 3,696,350
------------
15,218,225
------------
COMPUTERS - LOCAL NETWORKS 5.48%
168,250 3COM Corp.* 7,571,250
396,200 Citrix Systems, Inc.* 17,383,275
------------
24,954,525
------------
COMPUTERS - MEMORY DEVICES 1.06%
95,500 Veritas Software Corp.* 4,798,875
------------
COMPUTERS - MINI/MICRO 4.44%
120,000 Micron Electronics, Inc.* 2,137,500
1,074,000 Rational Software Corp.* 18,056,625
------------
20,194,125
------------
COMPUTERS - RETAIL/WHOLESALE 0.84%
144,500 CHS Electronics, Inc.* 3,829,250
------------
COMPUTERS - SERVICES 3.73%
334,500 Viasoft, Inc.* 16,975,875
------------
COMPUTERS - SOFTWARE 21.08%
1,200,000 Avant! Corp.*+ 38,775,000
5,000 Mercury Interactive Corp.* 74,375
157,143 NetDynamics Inc.*++ 1,100,001
VAN WAGONER EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
NUMBER
OF SHARES VALUE
- - --------- -----
COMPUTERS - SOFTWARE 21.08% (CONT'D.)
240,000 Netscape Communications Corp.* $ 7,695,000
2,006,520 Pure Atria Corp.*+ 28,342,095
200,000 Remedy Corp.* 8,000,000
42,000 Saville Systems Ireland PLC ADR* 2,184,000
273,000 Technology Modeling Associates, Inc.*+ 3,719,625
369,100 XcelleNet, Inc.*+ 6,044,012
------------
95,934,108
------------
ELECTRONICS - LASER SYSTEMS/COMPONENTS 2.62%
244,900 Cymer, Inc.* 11,938,875
------------
ELECTRONICS - MISCELLANEOUS COMPONENTS 0.33%
45,000 Sawtek, Inc.* 1,518,750
------------
ELECTRONICS - SEMICONDUCTOR EQUIPMENT 5.62%
150,000 Applied Materials., Inc.* 10,621,875
150,000 ASM Lithography Holding N.V.* 8,775,000
127,000 KLA - Tencor Corp.* 6,191,250
------------
25,588,125
------------
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 3.22%
125,000 Altera Corp.* 6,312,500
260,500 LSI Logic Corp.* 8,336,000
------------
14,648,500
------------
ENERGY - COMMERCIAL SERVICES 1.61%
481,600 Simulation Sciences, Inc.*+ 7,344,400
------------
ENERGY - SERVICES 1.97%
158,400 ENSCO International, Inc.* 8,355,600
25,000 Nabors Industries, Inc.* 625,000
------------
8,980,600
------------
MEDICAL - BIOMEDICAL/GENETICS 0.53%
303,500 Cardiovascular Dynamics, Inc.*+ 2,390,063
------------
MEDICAL - ETHICAL DRUGS 1.75%
200,000 Dura Pharmaceuticals, Inc.* 7,975,000
------------
MEDICAL - INFORMATION SERVICES 2.30%
150,000 HBO & Co. 10,331,250
VAN WAGONER EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
NUMBER
OF SHARES VALUE
- - --------- -----
MEDICAL - INFORMATION SERVICES 2.30% (CONT'D.)
5,900 HPR, Inc.* $ 109,150
------------
10,440,400
------------
MEDICAL - OUTPATIENT/HOME 1.58%
128,500 American HomePatient, Inc.* 3,212,500
148,300 Renal Treatment Centers, Inc.* 3,985,562
------------
7,198,062
------------
MEDICAL - PRODUCTS 0.96%
199,000 Pharmaceutical Product Development, Inc.* 4,378,000
------------
MEDICAL - WHOLESALE/DRUG 2.53%
379,500 NCS HealthCare, Inc.*+ 11,527,313
------------
MEDICAL/DENTAL - SUPPLIES 0.99%
120,000 Steris Corp.* 4,485,000
------------
OIL & GAS 6.79%
190,000 Baker Hughes, Inc. 7,350,625
700,000 Comstock Resources, Inc.* 7,306,250
75,000 Falcon Drilling Co., Inc.* 4,321,875
205,000 Noble Drilling Corp.* 4,625,313
120,000 Smith International, Inc.* 7,290,000
------------
30,894,063
------------
POLLUTION CONTROL - SERVICES 1.59%
213,700 Newpark Resources, Inc.* 7,212,375
------------
RETAIL 3.98%
272,800 Claire's Stores, Inc. 4,774,000
246,900 Family Dollar Stores, Inc. 6,728,025
250,000 TJX Companies, Inc. 6,593,750
------------
18,095,775
------------
TELECOMMUNICATIONS - EQUIPMENT 6.24%
142,000 ADC Telecommunications, Inc.* 4,739,250
140,000 Advanced Fibre Communications, Inc.* 8,452,500
428,571 Netro Corp.*++ 2,999,997
200,000 P-COM, Inc.* 6,600,000
VAN WAGONER EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
NUMBER
OF SHARES VALUE
- - --------- -----
TELECOMMUNICATIONS - EQUIPMENT 6.24% (CONT'D.)
100,000 Tellabs, Inc.* $ 5,587,500
------------
28,379,247
------------
TELECOMMUNICATIONS - SERVICES 0.24%
40,000 Genesys Telecommunications Laboratories, Inc.* 1,110,000
------------
TEXTILES 0.04%
7,000 Polo Ralph Lauren Corp.* 191,625
------------
Total Common Stocks
(cost $335,771,086) 403,679,437
------------
PRINCIPAL
AMOUNT
- - ---------
REPURCHASE AGREEMENTS 12.69%
$57,767,000 UMB Bank, n.a., 5.30%, dated 6/30/97,
repurchase price $57,775,388, maturing
7/1/97 (collateralized
by U.S. Treasury Notes) 57,767,000
------------
Total Repurchase Agreements
(cost $57,767,000) 57,767,000
------------
SHORT-TERM INVESTMENTS 0.03%
137,033 UMB Bank, n.a., Money Market Fiduciary 137,033
------------
Total Short-Term Investments
(cost $137,033) 137,033
------------
Total Investments 101.43%
(cost $393,675,119) 461,583,470
Other Liabilities
less Assets (1.43)% (6,508,657)
------------
NET ASSETS 100.00% $455,074,813
============
* Non-income producing
+ Affiliated company - see Note 6
++ Purchased in a private placement transaction; resale to the public may
require registration or sale only to qualified institutional buyers.
Security is valued under procedures established by the Board of Directors.
See notes to financial statements.
VAN WAGONER MICRO-CAP FUND
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
NUMBER
OF SHARES VALUE
- - --------- -----
COMMON STOCKS 100.92%
CHEMICALS - SPECIALTY 1.32%
81,000 NuCo2, Inc.* $ 1,397,250
------------
COMMERCIAL SERVICES - MISCELLANEOUS 4.91%
25,000 Abacus Direct Corp.* 812,500
65,500 LHS Group, Inc.* 2,869,719
50,000 MedQuist, Inc.* 1,518,750
------------
5,200,969
------------
COMPUTERS - INTEGRATED SYSTEMS 5.80%
201,200 Peerless Systems Corp.*+ 2,766,500
126,500 Western Micro Technology, Inc.* 1,525,906
125,000 Xionics Document Technologies, Inc.* 1,843,750
------------
6,136,156
------------
COMPUTERS - RETAIL/WHOLESALE 1.50%
60,000 CHS Electronics, Inc.* 1,590,000
------------
COMPUTERS - SOFTWARE 23.45%
58,000 ANSYS, Inc.* 456,750
228,700 Avant! Corp.*+ 7,389,869
50,000 JDA Software Group, Inc.* 1,706,250
193,000 Mechanical Dynamics, Inc.* 1,399,250
75,000 Mercury Interactive Corp.* 1,115,625
35,714 NetDynamics Inc.*++ 249,998
350,000 Pure Atria Corp.*+ 4,943,750
186,000 Rogue Wave Software, Inc.* 2,325,000
197,500 Technology Modeling Associates, Inc.*+ 2,690,938
3,000 Wall Data, Inc.* 79,125
150,000 XcelleNet, Inc.*+ 2,456,250
------------
24,812,805
------------
ELECTRONICS - MISCELLANEOUS COMPONENTS 0.36%
20,000 RF Micro Devices, Inc.* 382,500
------------
ELECTRONICS - SEMICONDUCTOR EQUIPMENT 3.45%
50,000 Integrated Process Equipment Corp.* 1,265,625
5,000 Rambus, Inc.* 232,500
60,000 SpeedFam International, Inc.* 2,152,500
------------
3,650,625
------------
VAN WAGONER MICRO-CAP FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
NUMBER
OF SHARES VALUE
- - --------- -----
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 5.67%
115,900 3Dfx Interactive, Inc.* $ 1,550,162
150,000 Microsemi Corp.* 1,912,500
70,000 Sipex Corp.* 2,537,500
------------
6,000,162
------------
ENERGY - COMMERCIAL SERVICES 3.46%
240,000 Simulation Sciences, Inc.*+ 3,660,000
------------
MEDICAL - BIOMEDICAL/GENETICS 5.97%
250,000 Cardiac Pathways Corp.*+ 2,250,000
516,000 Cardiovascular Dynamics, Inc.*+ 4,063,500
------------
6,313,500
------------
MEDICAL - INFORMATION SERVICES 6.18%
50,369 HBO & Co. 3,469,165
25,000 HCIA, Inc.* 837,500
70,000 HPR, Inc.* 1,295,000
38,000 PHAMIS, Inc.* 940,500
------------
6,542,165
------------
MEDICAL - INSTRUMENTS 4.19%
301,500 IRIDEX Corp.*+ 2,751,188
232,000 Photoelectron Corp.* 1,682,000
------------
4,433,188
------------
MEDICAL - OUTPATIENT/HOME 1.68%
60,000 American HomePatient, Inc.* 1,500,000
13,600 Pediatric Services of America, Inc.* 273,700
------------
1,773,700
------------
MEDICAL - PRODUCTS 15.62%
455,000 Aksys, Ltd.* 2,673,125
932,800 Angeion Corp.* 4,022,700
277,300 ATS Medical, Inc.* 1,386,500
260,100 CardioGenesis Corp.* 2,601,000
75,000 Cytyc Corp.* 2,034,375
240,000 EndoSonics Corp.* 2,610,000
54,500 Pharmaceutical Product Development, Inc.* 1,199,000
------------
16,526,700
------------
VAN WAGONER MICRO-CAP FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
NUMBER
OF SHARES VALUE
- - --------- -----
MEDICAL - WHOLESALE/DRUG 3.37%
117,500 NCS HealthCare, Inc.*+ $ 3,569,063
------------
OIL & GAS 2.36%
10,000 Atwood Oceanics, Inc.* 670,000
175,000 Comstock Resources, Inc.* 1,826,562
------------
2,496,562
------------
POLLUTION CONTROL - SERVICES 0.85%
51,000 Waste Industries, Inc.* 898,875
------------
RETAIL 1.59%
321,800 Charming Shoppes, Inc.* 1,679,378
------------
TELECOMMUNICATIONS - EQUIPMENT 4.78%
246,500 Galileo Corp.* 1,571,437
107,143 Netro Corp.*++ 750,001
20,000 Powerwave Technologies, Inc.* 450,000
97,350 REMEC, Inc.* 2,287,725
------------
5,059,163
------------
TELECOMMUNICATIONS - SERVICES 4.41%
378,200 CTC Communications Corp.* 3,592,900
38,850 Genesys Telecommunications Laboratories, Inc.* 1,078,087
------------
4,670,987
------------
Total Common Stocks
(cost $96,047,560) 106,793,748
------------
VAN WAGONER MICRO-CAP FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
NUMBER
OF SHARES VALUE
- - --------- -----
TOTAL INVESTMENTS 100.92%
(cost $96,047,560) $106,793,748
Other Liabilities
less Assets (0.92)% (970,347)
------------
NET ASSETS 100.00% $105,823,401
============
SECURITIES SOLD SHORT
35,000 LHS Group, Inc. $ 1,533,438
------------
Total Securities Sold Short
(proceeds $1,141,837) $ 1,533,438
============
* Non-income producing
+ Affiliated company - see Note 6
++ Purchased in a private placement transaction; resale to the public may
require registration or sale only to qualified institutional buyers.
Security is valued under procedures established by the Board of Directors.
See notes to financial statements.
VAN WAGONER MID-CAP FUND
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
NUMBER
OF SHARES VALUE
- - --------- -----
COMMON STOCKS 84.21%
COMMERCIAL SERVICES - MISCELLANEOUS 1.40%
30,000 Pediatrix Medical Group, Inc.* $ 1,374,375
------------
COMMERCIAL SERVICES - SECURITY/SAFETY 1.78%
75,000 Check Point Software Technologies Ltd.* 1,753,125
------------
COMPUTERS - INTEGRATED SYSTEMS 2.13%
45,000 Cerner Corp.* 945,000
30,000 Wind River Systems, Inc.* 1,147,500
------------
2,092,500
------------
COMPUTERS - LOCAL NETWORKS 5.18%
40,000 3COM Corp.* 1,800,000
75,000 Citrix Systems, Inc.* 3,290,625
------------
5,090,625
------------
COMPUTERS - MEMORY DEVICES 1.02%
20,000 Veritas Software Corp.* 1,005,000
------------
COMPUTERS - MINI/MICRO 4.43%
55,500 Micron Electronics, Inc.* 988,594
200,000 Rational Software Corp.* 3,362,500
------------
4,351,094
------------
COMPUTERS - SERVICES 3.36%
65,000 Viasoft, Inc.* 3,298,750
------------
COMPUTERS - SOFTWARE 19.55%
6,000 Aspen Technologies, Inc.* 225,750
248,800 Avant! Corp.*+ 8,039,350
50,000 Netscape Communications Corp.* 1,603,125
450,000 Pure Atria Corp.*+ 6,356,250
35,000 Remedy Corp.* 1,400,000
30,500 Saville Systems Ireland PLC ADR* 1,586,000
------------
19,210,475
------------
ELECTRONICS - LASER SYSTEMS/COMPONENTS 2.23%
45,000 Cymer, Inc.* 2,193,750
------------
VAN WAGONER MID-CAP FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
NUMBER
OF SHARES VALUE
- - --------- -----
ELECTRONICS - SEMICONDUCTOR EQUIPMENT 6.23%
30,000 Applied Materials, Inc.* $2,124,375
35,000 ASM Lithography Holding N.V.* 2,047,500
40,000 KLA - Tencor Corp.* 1,950,000
------------
6,121,875
------------
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 2.59%
25,000 Altera Corp.* 1,262,500
40,000 LSI Logic Corp.* 1,280,000
------------
2,542,500
------------
ENERGY - SERVICES 3.59%
55,000 ENSCO International, Inc.* 2,901,250
25,000 Nabors Industries, Inc.* 625,000
------------
3,526,250
------------
MEDICAL - ETHICAL DRUGS 1.82%
45,000 Dura Pharmaceuticals, Inc.* 1,794,375
------------
MEDICAL - INFORMATION SERVICES 3.74%
30,000 HBO & Co. 2,066,250
65,000 PHAMIS, Inc.* 1,608,750
------------
3,675,000
------------
MEDICAL - OUTPATIENT/HOME 3.76%
50,000 Renal Care Group, Inc.* 2,084,375
60,000 Renal Treatment Centers, Inc.* 1,612,500
------------
3,696,875
------------
MEDICAL/DENTAL - SUPPLIES 1.14%
30,000 Steris Corp.* 1,121,250
------------
OIL & GAS 6.34%
55,000 Baker Hughes, Inc. 2,127,813
20,000 Falcon Drilling Co., Inc.* 1,152,500
50,000 Noble Drilling Corp.* 1,128,125
30,000 Smith International, Inc.* 1,822,500
------------
6,230,938
------------
VAN WAGONER MID-CAP FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
NUMBER
OF SHARES VALUE
- - --------- -----
POLLUTION CONTROL - SERVICES 2.75%
80,000 Newpark Resources, Inc.* $ 2,700,000
------------
RETAIL 3.79%
60,000 Claire's Stores, Inc. 1,050,000
50,000 Family Dollar Stores, Inc. 1,362,500
50,000 TJX Companies, Inc. 1,318,750
------------
3,731,250
------------
TELECOMMUNICATIONS - EQUIPMENT 7.31%
37,500 ADC Telecommunications, Inc.* 1,251,562
50,000 Advanced Fibre Communications, Inc.* 3,018,750
46,000 P-COM, Inc.* 1,518,000
25,000 Tellabs, Inc.* 1,396,875
------------
7,185,187
------------
TEXTILES 0.07%
2,600 Polo Ralph Lauren Corp.* 71,175
------------
Total Common Stocks
(cost $68,844,497) 82,766,369
------------
WARRANTS 1.55%
15,000 Intel Corp. -
expires 3/14/98 1,522,500
------------
Total Warrants
(cost $1,627,500) 1,522,500
------------
VAN WAGONER MID-CAP FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
PRINCIPAL
AMOUNT VALUE
- - --------- -----
REPURCHASE AGREEMENTS 14.51%
$14,257,000 UMB Bank, n.a., 5.30%, dated 6/30/97,
repurchase price $14,259,070, maturing
7/1/97 (collateralized
by U.S. Treasury Notes) $14,257,000
------------
Total Repurchase Agreements
(cost $14,257,000) 14,257,000
------------
SHORT-TERM INVESTMENTS 0.00%
381 UMB Bank, n.a., Money Market Fiduciary 381
------------
Total Short-Term Investments
(cost $381) 381
------------
Total Investments 100.27%
(cost $84,729,378) 98,546,250
Other Liabilities
less Assets (0.27)% (265,995)
------------
NET ASSETS 100.00% $98,280,255
============
* Non-income producing
+ Affiliated company - see Note 6
See notes to financial statements.
VAN WAGONER POST-VENTURE FUND
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
NUMBER
OF SHARES VALUE
- - --------- -----
COMMON STOCKS 93.24%
CHEMICALS - SPECIALTY 1.32%
20,000 NuCo2, Inc.* $ 345,000
------------
COMMERCIAL SERVICES - MISCELLANEOUS 4.61%
20,500 LHS Group, Inc.* 898,156
2,500 MedQuist, Inc.* 75,937
5,000 Pediatrix Medical Group, Inc.* 229,063
------------
1,203,156
------------
COMMERCIAL SERVICES - SECURITY/SAFETY 1.57%
17,500 Check Point Software Technologies Ltd.* 409,063
------------
COMPUTERS - INTEGRATED SYSTEMS 4.01%
30,000 Peerless Systems Corp.*+ 412,500
5,000 Wind River Systems, Inc.* 191,250
30,000 Xionics Document Technologies, Inc.* 442,500
------------
1,046,250
------------
COMPUTERS - LOCAL NETWORKS 2.94%
17,500 Citrix Systems, Inc.* 767,813
------------
COMPUTERS - MEMORY DEVICES 0.67%
3,460 Veritas Software Corp.* 173,865
------------
COMPUTERS - MINI/MICRO 2.58%
40,000 Rational Software Corp.* 672,500
------------
COMPUTERS - RETAIL/WHOLESALE 1.52%
15,000 CHS Electronics, Inc.* 397,500
------------
COMPUTERS - SERVICES 2.72%
14,000 Viasoft, Inc.* 710,500
------------
COMPUTERS - SOFTWARE 20.88%
42,500 Avant! Corp.*+ 1,373,281
10,000 Great Plains Software, Inc.* 270,000
5,000 Mechanical Dynamics, Inc.* 36,250
20,000 Mercury Interactive Corp.* 297,500
7,143 NetDynamics Inc.*++ 50,001
13,000 Netscape Communications Corp.* 416,812
80,000 Pure Atria Corp.*+ 1,130,000
5,000 Remedy Corp.* 200,000
30,000 Rogue Wave Software, Inc.* 375,000
VAN WAGONER POST-VENTURE FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
NUMBER
OF SHARES VALUE
- - --------- -----
COMPUTERS - SOFTWARE 20.88% (CONT'D.)
10,000 Saville Systems Ireland PLC ADR* $ 520,000
33,000 Technology Modeling Associates, Inc.*+ 449,625
20,000 XcelleNet, Inc.*+ 327,500
------------
5,445,969
------------
ELECTRONICS - LASER SYSTEMS/COMPONENTS 2.80%
15,000 Cymer, Inc.* 731,250
------------
ELECTRONICS - MISCELLANEOUS COMPONENTS 1.83%
25,000 RF Micro Devices, Inc.* 478,125
------------
ELECTRONICS - SEMICONDUCTOR EQUIPMENT 6.00%
8,000 ASM Lithography Holding N.V.* 468,000
10,000 KLA - Tencor Corp.* 487,500
5,400 Rambus, Inc.* 251,100
10,000 SpeedFam International, Inc.* 358,750
------------
1,565,350
------------
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 4.19%
47,900 3Dfx Interactive, Inc.* 640,663
12,500 Sipex Corp.* 453,125
------------
1,093,788
------------
ENERGY - COMMERCIAL SERVICES 2.34%
40,000 Simulation Sciences, Inc.*+ 610,000
------------
MEDICAL - BIOMEDICAL/GENETICS 3.66%
50,000 Cardiac Pathways Corp.*+ 450,000
64,000 Cardiovascular Dynamics, Inc.*+ 504,000
------------
954,000
------------
MEDICAL - ETHICAL DRUGS 1.53%
10,000 Dura Pharmaceuticals, Inc.* 398,750
------------
MEDICAL - INFORMATION SERVICES 5.42%
11,448 HBO & Co. 788,447
20,000 HPR, Inc.* 370,000
10,300 PHAMIS, Inc.* 254,925
------------
1,413,372
------------
VAN WAGONER POST-VENTURE FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
NUMBER
OF SHARES VALUE
- - --------- -----
MEDICAL - INSTRUMENTS 5.00%
100,000 IRIDEX Corp.*+ $ 912,500
53,900 Photoelectron Corp.* 390,775
------------
1,303,275
------------
MEDICAL - OUTPATIENT/HOME 1.60%
10,000 Renal Care Group, Inc.* 416,875
------------
MEDICAL - PRODUCTS 3.25%
29,000 Aksys, Ltd.* 170,375
35,000 CardioGenesis Corp.* 350,000
30,000 EndoSonics Corp.* 326,250
------------
846,625
------------
MEDICAL - WHOLESALE/DRUG 1.75%
15,000 NCS HealthCare, Inc.*+ 455,625
------------
OIL & GAS 1.00%
25,000 Comstock Resources, Inc.* 260,937
------------
POLLUTION CONTROL - SERVICES 1.35%
20,000 Waste Industries, Inc.* 352,500
------------
TELECOMMUNICATIONS - EQUIPMENT 5.76%
10,000 Advanced Fibre Communications, Inc.* 603,750
35,714 Netro Corp.*++ 249,998
9,000 P-COM, Inc.* 297,000
15,000 REMEC, Inc.* 352,500
------------
1,503,248
------------
TELECOMMUNICATIONS - SERVICES 1.90%
17,850 Genesys Telecommunications Laboratories, Inc.* 495,337
------------
TRANSPORTATION 1.04%
10,000 Ryanair Holdings PLC ADR* 271,250
------------
Total Common Stocks
(cost $19,713,883) 24,321,923
------------
VAN WAGONER POST-VENTURE FUND
SCHEDULE OF INVESTMENTS (CONT'D.)
PRINCIPAL
AMOUNT VALUE
- - --------- -----
REPURCHASE AGREEMENTS 8.34%
$2,176,000 UMB Bank, n.a., 5.30%, dated 6/30/97,
repurchase price $2,176,316, maturing
7/1/97 (collateralized
by U.S. Treasury Notes) $ 2,176,000
------------
Total Repurchase Agreements
(cost $2,176,000) 2,176,000
------------
Total Investments 101.58%
(cost $21,889,883) 26,497,923
Other Liabilities
less Assets (1.58)% (411,494)
------------
NET ASSETS 100.00% $ 26,086,429
============
SECURITIES SOLD SHORT
NUMBER
OF SHARES
- - ---------
15,000 LHS Group, Inc. $ 657,187
------------
Total Securities Sold Short
(proceeds $489,359) $ 657,187
============
* Non-income producing
+ Affiliated company - see Note 6
++ Purchased in a private placement transaction; resale to the public may
require registration or sale only to qualified institutional buyers.
Security is valued under procedures established by the Board of Directors.
See notes to financial statements.
<TABLE>
VAN WAGONER FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1997
(Unaudited)
<CAPTION>
EMERGING MICRO-CAP MID-CAP POST-VENTURE
GROWTH FUND FUND FUND FUND
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value:
Nonaffiliated issuers (cost $239,455,567, $64,547,862,
$56,858,353 and $14,139,521, respectively) $299,507,087 $ 70,252,690 $ 69,893,650 $ 17,696,892
Affiliated issuers (cost $96,452,552, $31,499,698,
$13,614,025 and $5,574,362, respectively) 104,309,383 36,541,058 14,395,600 6,625,031
Repurchase agreements, at value (cost $57,767,000, $0,
$14,257,000 and $2,176,000, respectively) 57,767,000 - 14,257,000 2,176,000
Cash - - - 587,483
Receivable for investments sold 5,488,060 2,441,824 523,733 235,680
Interest and dividends receivable 62,998 86 14,420 2,091
Receivable from investment adviser - 41,674 - 14,248
Deposit at broker for short sales - 1,141,837 - 489,359
Organizational expenses, net of accumulated amortization 25,718 25,718 25,718 -
Prepaid expenses and other assets 66,751 23,988 23,569 29,481
------------ ------------ ------------ ------------
Total Assets 467,226,997 110,468,875 99,133,690 27,856,265
------------ ------------ ------------ ------------
LIABILITIES:
Securities sold short, at value (proceeds
$0, $1,141,837, $0 and $489,359, respectively) - 1,533,438 - 657,187
Payable for investments purchased 6,732,176 2,442,643 586,553 985,739
Payable to custodian 4,257,450 333,242 5,961 -
Accrued investment advisory fee 462,318 130,035 80,208 31,192
Accrued distribution fee 327,128 77,564 75,145 12,629
Payable for shares redeemed 15,746 - - -
Accrued expenses and other liabilities 357,366 128,552 105,568 83,089
------------ ------------ ------------ ------------
Total Liabilities 12,152,184 4,645,474 853,435 1,769,836
------------ ------------ ------------ ------------
NET ASSETS $455,074,813 $105,823,401 $ 98,280,255 $ 26,086,429
============ ============ ============ ============
NET ASSETS CONSIST OF:
Capital stock $ 3,962 $ 931 $ 864 $ 270
Paid-in-capital 591,211,278 125,337,353 116,582,537 27,664,046
Accumulated net realized loss on investments (204,048,778) (29,869,470) (32,120,018) (6,018,099)
Net unrealized appreciation on investments 67,908,351 10,354,587 13,816,872 4,440,212
------------ ------------ ------------ ------------
Net Assets $455,074,813 $105,823,401 $ 98,280,255 $ 26,086,429
============ ============ ============ ============
CAPITAL STOCK, $0.0001 PAR VALUE
Authorized 200,000,000 100,000,000 100,000,000 100,000,000
Issued and outstanding 39,621,797 9,307,360 8,635,560 2,698,654
NET ASSET VALUE, REDEMPTION PRICE, AND
OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING) $11.49 $11.37 $11.38 $9.67
====== ====== ====== ======
See notes to financial statements.
</TABLE>
<TABLE>
VAN WAGONER FUNDS
STATEMENTS OF OPERATIONS
Six Months Ended June 30, 1997
(Unaudited)
<CAPTION>
EMERGING MICRO-CAP MID-CAP POST-VENTURE
GROWTH FUND FUND FUND FUND
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 505,555 $ 117,147 $ 240,407 $ 107,247
Dividends 168,042 16,140 42,357 500
------------ ------------ ------------ ------------
Total Investment Income 673,597 133,287 282,764 107,747
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fees 2,953,245 854,471 542,740 171,378
Transfer agent fees and expenses 772,122 247,485 224,163 97,615
Distribution fees 590,649 142,412 135,685 28,563
Fund accounting and administration fees 145,261 74,721 73,238 30,580
Printing and postage expenses 116,607 25,726 25,986 12,011
Custody fees 54,161 16,599 13,838 7,375
Federal and state registration fees 30,686 20,145 20,036 18,291
Professional fees 8,018 8,018 8,018 10,994
Amortization of organization costs 3,642 3,642 3,642 -
Directors' fees and expenses 1,518 1,518 1,513 1,381
Miscellaneous 9,647 3,022 2,725 1,409
------------ ------------ ------------ ------------
Total expenses before waiver 4,685,556 1,397,759 1,051,584 379,597
Less: Waiver of expenses (78,712) (286,947) - (156,805)
------------ ------------ ------------ ------------
Net Expenses 4,606,844 1,110,812 1,051,584 222,792
------------ ------------ ------------ ------------
NET INVESTMENT LOSS (3,933,247) (977,525) (768,820) (115,045)
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on investments (85,221,891) (9,577,717) (17,412,006) (6,018,099)
Change in unrealized appreciation on investments 29,856,570 (2,420,390) 6,413,015 4,440,212
------------ ------------ ------------ ------------
Net Loss on Investments (55,365,321) (11,998,107) (10,998,991) (1,577,887)
------------ ------------ ------------ ------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(59,298,568) $(12,975,632) $(11,767,811) $(1,692,932)
============ ============ ============ ============
See notes to financial statements.
</TABLE>
<TABLE>
VAN WAGONER FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
<CAPTION>
EMERGING GROWTH MICRO-CAP MID-CAP POST-VENTURE
FUND FUND FUND FUND
------------------------ ------------------------ ---------------------- ------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30,
1997 1996 1997 1996 1997 1996 1997
------------------------ ------------------------ ---------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment loss $ (3,933,247) $ (7,754,290) $ (977,525) $ (972,487) $ (768,820) $ (971,113) $ (115,045)
Net realized loss on
investments (85,221,891) (118,833,259) (9,577,717) (20,296,388) (17,412,006) (14,710,318) (6,018,099)
Change in unrealized
appreciation on
investments 29,856,570 38,051,781 (2,420,390) 12,774,977 6,413,015 7,403,857 4,440,212
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net decrease in net
assets resulting
from operations (59,298,568) (88,535,768) (12,975,632) (8,493,898) (11,767,811) (8,277,574) (1,692,932)
------------ ------------ ------------ ------------ ------------ ------------ ------------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale
of shares 142,179,070 1,363,297,233 52,097,412 245,071,240 46,980,482 244,490,946 42,369,365
Redemption of shares (265,965,165) (636,635,323) (73,996,833) (95,912,221) (74,672,898) (98,506,223) (14,590,004)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
from share transactions (123,786,095) 726,661,910 (21,899,421) 149,159,019 (27,692,416) 145,984,723 27,779,361
------------ ------------ ------------ ------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS (183,084,663) 638,126,142 (34,875,053) 140,665,121 (39,460,227) 137,707,149 26,086,429
NET ASSETS:
Beginning of period 638,159,476 33,334 140,698,454 33,333 137,740,482 33,333 -
------------ ------------ ------------ ------------ ------------ ------------ ------------
End of period $455,074,813 $638,159,476 $105,823,401 $140,698,454 $ 98,280,255 $137,740,482 $26,086,429
============ ============ ============ ============ ============ ============ ============
TRANSACTIONS IN SHARES
Shares sold 12,469,689 96,673,050 4,442,938 18,977,746 3,954,182 18,740,673 4,305,494
Shares redeemed (23,123,152) (46,401,123) (6,438,828) (7,677,829) (6,433,572) (7,629,056) (1,606,840)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (10,653,463) 50,271,927 (1,995,890) 11,299,917 (2,479,390) 11,111,617 2,698,654
============ ============ ============ ============ ============ ============ ============
See notes to financial statements.
</TABLE>
<TABLE>
VAN WAGONER FUNDS
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period (Unaudited)
<CAPTION>
EMERGING GROWTH MICRO-CAP MID-CAP POST-VENTURE<F1>
FUND FUND FUND FUND
------------------------ ------------------------ ---------------------- ------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30,
1997 1996 1997 1996 1997 1996 1997
------------------------ ------------------------ ---------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $12.69 $10.00 $12.45 $10.00 $12.39 $10.00 $10.00
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment loss (0.10) (0.15) (0.11) (0.09) (0.09) (0.09) (0.04)
Net realized and unrealized
gains (losses) on
investments (1.10) 2.84<F2> (0.97) 2.54<F2> (0.92) 2.48<F2> (0.29)
------- ------- ------- ------- ------- ------- -------
Total from investment
operations (1.20) 2.69 (1.08) 2.45 (1.01) 2.39 (0.33)
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End
of Period $11.49 $12.69 $11.37 $12.45 $11.38 $12.39 $9.67
====== ====== ====== ====== ====== ====== ======
Total Return<F3> (9.46)% 26.90% (8.67)% 24.50% (8.15)% 23.90% (3.30)%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of
period (000s) $455,075 $638,159 $105,823 $140,698 $98,280 $137,740 $26,086
Ratio of expenses to
average net assets - net
of waivers
and reimbursements<F4> 1.95% 1.95% 1.95% 1.95% 1.94% 1.95% 1.95%
Ratio of net investment
loss to average net
assets - net of
waivers and
reimbursements<F4> (1.66)% (1.49)% (1.72)% (1.04)% (1.42)% (1.16)% (1.01)%
Ratio of expenses to
average net assets -
before waivers
and reimbursements<F4> 1.98% 1.98% 2.45% 2.55% 1.94% 2.05% 3.32%
Ratio of net investment
loss to average net
assets - before
waivers and
reimbursements<F4> (1.69)% (1.52)% (2.22)% (1.64)% (1.42)% (1.26)% (2.38)%
Portfolio turnover rate<F3> 148% 159% 91% 153% 150% 173% 165%
Average commission rate
paid on portfolio
investment transactions $0.0451 $0.0531 $0.0344 $0.0474 $0.0465 $0.0516 $0.0388
<FN>
<F1> Commenced operations after the close of business on December 31, 1996
<F2> The amount shown may not correlate with the aggregate gains and losses of portfolio securities due to the timing of sales and
redemptions of Fund shares.
<F3> Not annualized
<F4> Annualized for periods less than a full year
See notes to financial statements.
</TABLE>
VAN WAGONER FUNDS
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
1. ORGANIZATION
Van Wagoner Funds, Inc. (the "Company") was organized on October 18, 1995
as a Maryland corporation and is registered under the Investment Company Act
of 1940 (the "1940 Act") as an open-end management investment company. The
Emerging Growth Fund, Micro-Cap Fund, Mid-Cap Fund and Post-Venture Fund
(collectively "the Funds") are separate, diversified investment portfolios
of Van Wagoner Funds, Inc.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") which permit management to make
certain estimates and assumptions at the date of the financial statements.
(a) INVESTMENT VALUATION - A security traded on a recognized stock exchange
is valued at the last sale price. If no sale is reported, the most
current bid price will be used. All other securities for which over-
the-counter market quotations are readily available are valued at the
most current closing price. Debt securities which will mature in more
than 60 days are valued at prices furnished by a pricing service.
Securities which will mature in 60 days or less are valued at amortized
cost, which approximates market value. Any securities for which market
quotations are not readily available are valued at their fair value as
determined in good faith by the Funds' investment adviser under the
supervision of the Board of Directors.
(b) REPURCHASE AGREEMENTS - During the term of a repurchase agreement, the
market value of the underlying collateral, including accrued interest,
is required to equal or exceed the market value of the repurchase
agreement. The underlying collateral for all repurchase agreements is
held by the Funds' custodian.
NOTES TO FINANCIAL STATEMENTS (cont'd.)
(c) ORGANIZATION COSTS - Costs incurred by the Emerging Growth, Micro-Cap
and Mid-Cap Funds in connection with their organization, registration
and the initial public offering of shares have been deferred and will
be amortized over the period of benefit, but not to exceed five years.
If any of the original shares of a Fund are redeemed by any holder
thereof prior to the end of the amortization period, the redemption
proceeds will be reduced by the pro rata share of the unamortized
expenses as of the date of redemption. The pro rata share by which the
proceeds are reduced will be derived by dividing the number of original
shares of the Funds being redeemed by the total number of original
shares outstanding at the time of redemption.
(d) EXPENSES - The Funds are charged for those expenses that are directly
attributable to each portfolio, such as advisory and custodian fees.
Expenses that are not directly attributable to a portfolio are
typically allocated among the portfolios in proportion to their
respective net assets.
(e) FEDERAL INCOME TAXES - Each Fund intends to comply with the
requirements of the Internal Revenue Code necessary to qualify as a
regulated investment company and to make the requisite distributions of
income to its shareholders which will be sufficient to relieve it from
all or substantially all federal income taxes.
As of December 31, 1996, the Emerging Growth, Micro-Cap and Mid-Cap
Funds had federal income tax capital loss carryforwards of $80,675,019,
$11,452,503 and $10,849,236, respectively. The entire federal income
tax loss carryforward for each Fund expires in 2004.
(f) DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income
and net realized capital gains, if any, will be declared and paid at
least annually. Distributions to shareholders are recorded on the ex-
dividend date. The Fund may periodically make reclassifications among
certain of its capital accounts as a result of the timing and
characterization of certain income and capital gains or losses
determined in accordance with federal tax regulations, which may differ
from GAAP.
(g) OTHER - Investment transactions are accounted for on a trade date
basis. Each Fund determines the gain or loss realized from the
NOTES TO FINANCIAL STATEMENTS (cont'd.)
investment transactions by comparing the original cost of the security
lot sold with the net sale proceeds. Dividend income is recognized on
the ex-dividend date and interest income is recognized on an accrual
basis.
3. INVESTMENT ADVISORY AGREEMENT
Each Fund has an agreement with Van Wagoner Capital Management, Inc. (the
"Adviser") to furnish investment advisory services to the Funds. Under the
terms of each agreement, the Adviser is compensated at the following
percentage of average daily net assets for each Fund: 1.25% for the Emerging
Growth Fund, 1.50% for the Micro-Cap Fund, 1.00% for the Mid-Cap Fund and
1.50% for the Post-Venture Fund. The Adviser has agreed to voluntarily
reduce fees for expenses (exclusive of brokerage, interest, taxes and
extraordinary expenses) that exceed 1.95% for each Fund until January 1,
1998. Expenses of $78,712, $286,947 and $156,805 were waived in the Emerging
Growth, Micro-Cap and Post-Venture Funds, respectively.
4. SERVICE AND DISTRIBUTION PLAN
The Funds have adopted a Service and Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the 1940 Act. The Plan authorizes payments by
the Funds in connection with the distribution of their shares at an annual
rate, as determined from time to time by the Board of Directors, of up to
0.25% of a Fund's average daily net assets.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the period ended June 30, 1997 were as
follows:
EMERGING MICRO-CAP MID-CAP POST-VENTURE
GROWTH FUND FUND FUND FUND
------------ --------- ------- ------------
Purchases $664,916,617 $ 99,574,842 $144,048,632 $52,909,482
Sales 875,858,842 120,101,954 188,863,632 28,104,977
For the period ended June 30, 1997, there were no purchases or sales of
long-term U.S. government securities.
NOTES TO FINANCIAL STATEMENTS (cont'd.)
The cost of securities on a tax basis for the Emerging Growth Fund, Micro-
Cap Fund, Mid-Cap Fund and Post-Venture Fund is $409,932,311, $97,257,029,
$89,182,137 and $22,499,570, respectively. At June 30, 1997, gross
unrealized appreciation and depreciation on investments for federal income
tax purposes were as follows:
EMERGING MICRO-CAP MID-CAP POST-VENTURE
GROWTH FUND FUND FUND FUND
------------ --------- ------- ------------
Unrealized
appreciation $73,932,750 $18,050,475 $13,859,026 $5,070,843
(Unrealized
depreciation) (22,281,591) (8,513,756) (4,494,913) (1,072,490)
------------ ----------- ----------- -----------
Net unrealized
appreciation
on investments $51,651,159 $ 9,536,719 $ 9,364,113 $3,998,353
6. TRANSACTIONS WITH AFFILIATED COMPANIES
An affiliated company is a company in which one or more Funds has ownership
of at least 5% of the voting securities. Companies which are affiliates of
each Fund are as follows:
<TABLE>
<CAPTION>
AMOUNT OF
AMOUNT OF GAIN (LOSS)
SHARE ACTIVITY DIVIDENDS REALIZED
----------------------------------------------------- CREDITED ON SALE
BALANCE PURCHASES/ SALES/ BALANCE TO INCOME OF SHARES
SECURITY NAME 12/31/96 ADDITIONS REDUCTIONS 6/30/97 IN 1997 IN 1997
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EMERGING GROWTH FUND
Avant! Corp.* 950,000 250,000 - 1,200,000 - -
Cardiac Pathways
Corp.* 250,000 - 250,000 - - $ (663,004)
Cardiovascular
Dynamics, Inc.* - 303,500 - 303,500 - -
NCS HealthCare,
Inc.* 425,000 47,000 92,500 379,500 - 144,590
Patterson Energy,
Inc.* - 300,000 300,000 - - 1,920,979
Peerless Systems
Corp.* - 448,500 - 448,500 - -
</TABLE>
<TABLE>
<CAPTION>
NOTES TO FINANCIAL STATEMENTS (cont'd.)
AMOUNT OF
AMOUNT OF GAIN (LOSS)
SHARE ACTIVITY DIVIDENDS REALIZED
----------------------------------------------------- CREDITED ON SALE
BALANCE PURCHASES/ SALES/ BALANCE TO INCOME OF SHARES
SECURITY NAME 12/31/96 ADDITIONS REDUCTIONS 6/30/97 IN 1997 IN 1997
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EMERGING GROWTH FUND (cont'd.)
Pure Atria Corp.* 450,000 1,561,520 5,000 2,006,520 - $ (23,546)
Simulation
Sciences, Inc.* - 481,600 - 481,600 - -
Technology
Modeling
Associates, Inc.* 250,000 65,500 42,500 273,000 - (55,014)
XcelleNet, Inc.* - 369,200 100 369,100 - (103)
----- -----------
- $1,323,902
===== ===========
MICRO-CAP FUND
Avant! Corp.* - 228,700 - 228,700 - -
Cardiac Pathways
Corp.* 400,000 153,600 303,600 250,000 - $165,942
Cardiovascular
Dynamics, Inc.* 250,000 276,000 10,000 516,000 - (35,003)
IRIDEX Corp.* 300,000 1,500 - 301,500 - -
NCS HealthCare, Inc.* 100,000 17,500 - 117,500 - -
Patterson Energy, Inc.* 15,000 85,000 100,000 - - 494,540
Peerless Systems
Corp.* 225,000 83,000 106,800 201,200 - 611,112
Pure Atria Corp.* - 350,000 - 350,000 - -
Simulation
Sciences, Inc.* 100,000 156,900 16,900 240,000 - (74,631)
Technology
Modeling
Associates, Inc.* 287,500 - 90,000 197,500 - (112,538)
Template
Software, Inc.* - 86,000 86,000 - - (127,965)
XcelleNet, Inc.* 275,000 - 125,000 150,000 - (43,068)
----- -----------
- $878,389
===== ===========
</TABLE>
<TABLE>
<CAPTION>
NOTES TO FINANCIAL STATEMENTS (cont'd.)
AMOUNT OF
AMOUNT OF GAIN (LOSS)
SHARE ACTIVITY DIVIDENDS REALIZED
----------------------------------------------------- CREDITED ON SALE
BALANCE PURCHASES/ SALES/ BALANCE TO INCOME OF SHARES
SECURITY NAME 12/31/96 ADDITIONS REDUCTIONS 6/30/97 IN 1997 IN 1997
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MID-CAP FUND
Avant! Corp.* 200,000 48,800 - 248,800 - -
Pure Atria Corp.* 100,000 355,000 5,000 450,000 - $(22,218)
----- -----------
- $(22,218)
===== ===========
POST-VENTURE FUND
Avant! Corp.* - 57,500 15,000 42,500 - $(125,369)
Cardiac Pathways
Corp.* - 50,000 - 50,000 - -
Cardiovascular
Dynamics, Inc.* - 67,500 3,500 64,000 - (14,001)
IRIDEX Corp.* - 100,000 - 100,000 - -
NCS HealthCare,
Inc.* - 20,000 5,000 15,000 - (25,005)
Patterson Energy,
Inc.* - 20,000 20,000 - - 74,216
Peerless Systems
Corp.* - 45,000 15,000 30,000 - (35,308)
Pure Atria Corp.* - 100,000 20,000 80,000 - (196,409)
Simulation
Sciences, Inc.* - 45,000 5,000 40,000 - 8,231
Technology
Modeling
Associates, Inc.* - 33,000 - 33,000 - -
Template
Software, Inc.* - 30,000 30,000 - - (43,188)
XcelleNet, Inc.* - 20,000 - 20,000 - -
----- -----------
- $(356,833)
===== ===========
* Non-income producing
</TABLE>
FOR FUND INFORMATION
AND SHAREHOLDER SERVICES
CALL 1-800-228-2121.
This report is submitted for the general information of shareholders of Van
Wagoner Funds. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for the Funds. The
prospectus gives details about charges, investment objectives, risks and
operating policies of the Funds. Read the prospectus carefully.
Van Wagoner Funds
P.O. Box 1628
Milwaukee, WI 53201-1628
