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VAN WAGONER CAPITAL APPRECIATION FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(UNAUDITED)
Number
of Shares Value
----------- ---------
COMMON STOCKS 59.92%
COMMERCIAL SERVICES - BUSINESS 3.39%
2,000 Dental Care Alliance, Inc.<F1> $ 23,000
---------
COMMERCIAL SERVICES - SCHOOLS 1.83%
500 Computer Learning Centers, Inc.<F1> 12,438
---------
COMMERCIAL SERVICES - SECURITY/SAFETY 3.83%
2,000 Rural/Metro Corp.<F1> 26,000
---------
COMPUTERS - LOCAL NETWORKS 2.36%
100 Cisco Systems, Inc.<F1> 9,206
100 Citrix Systems, Inc.<F1> 6,838
---------
16,044
---------
COMPUTERS - MEMORY DEVICES 0.99%
150 EMC Corp.<F1> 6,722
---------
COMPUTERS - MINI/MICRO 2.21%
200 Apple Computer, Inc.<F1> 5,738
100 Dell Computer Corp. <F1> 9,281
---------
15,019
---------
COMPUTERS - RETAIL/WHOLESALE 3.95%
1,500 CHS Electronics, Inc.<F1> 26,812
---------
COMPUTERS - SOFTWARE 4.06%
500 Avant! Corp. <F1> 12,375
100 BMC Software, Inc.<F1> 5,194
100 Compuware Corp.<F1> 5,112
150 Siebel Systems, Inc.<F1> 4,838
---------
27,519
---------
COMPUTER SOFTWARE - MEDICAL 1.08%
1,000 OnHealth Network Co.<F1> 7,312
---------
ELECTRONICS - MEASURING INSTRUMENTS 0.74%
250 Mettler-Toledo International, Inc.<F1> 5,016
---------
VAN WAGONER CAPITAL APPRECIATION FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(UNAUDITED)
Number
of Shares Value
----------- ---------
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 1.70%
250 SIPEX Corp.<F1> $ 5,375
200 Vitesse Semiconductor Corp. <F1> 6,175
---------
11,550
---------
FINANCE - CONSUMER LOANS 1.10%
150 Household International, Inc. 7,462
---------
LEISURE - SERVICES 4.44%
200 Carnival Corp. 7,925
100 Royal Caribbean Cruises Ltd. 7,950
200 Steiner Leisure Ltd.<F1> 6,050
250 Travel Services International, Inc.<F1> 8,219
---------
30,144
---------
MEDIA 0.73%
100 Chancellor Media Corp.<F1> 4,966
---------
MEDICAL/DENTAL SUPPLIES 1.34%
250 The Cooper Companies, Inc.<F1> 9,109
---------
MEDICAL - DRUGS 1.87%
50 Bristol-Myers Squibb Co. 5,747
100 Warner-Lambert Co. 6,937
---------
12,684
---------
MEDICAL - INFORMATION SERVICES 1.04%
200 HBO & Co. 7,050
---------
MEDICAL - INSTRUMENTS 1.18%
1,000 IRIDEX Corp.<F1> 8,000
---------
MEDICAL - PRODUCTS 0.65%
200 Pharmaceutical Product Development, Inc.<F1> 4,400
---------
MULTI INDUSTRY 1.11%
150 Veritas DGC Inc. <F1> 7,491
---------
MULTIMEDIA 0.86%
100 Viacom Inc.<F1> 5,850
---------
VAN WAGONER CAPITAL APPRECIATION FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(UNAUDITED)
Number
of Shares Value
----------- ---------
OIL & GAS 1.63%
250 Global Industries Ltd.<F1> $ 4,219
500 OMNI Energy Services Corp.<F1> 6,812
---------
11,031
---------
OIL & GAS - EXPLORATION 1.44%
250 Brigham Exploration Co.<F1> 2,219
250 Callon Petroleum Co.<F1> 3,578
250 Swift Energy Co.<F1> 3,984
---------
9,781
---------
OIL & GAS - FIELD SERVICES 2.22%
2,500 TransCoastal Marine Services, Inc.<F1> 15,078
---------
OIL & GAS - MACHINERY & EQUIPMENT 1.44%
100 Cooper Cameron Corp.<F1> 5,100
250 Gulf Island Fabrication, Inc.<F1> 4,688
---------
9,788
---------
POLLUTION CONTROL - EQUIPMENT 1.08%
1,500 Flanders Corp.<F1> 7,312
---------
POLLUTION CONTROL - SERVICES 0.77%
250 Newpark Resources, Inc.<F1> 2,781
100 Tetra Tech, Inc.<F1> 2,425
---------
5,206
---------
RESTAURANTS 3.34%
1,000 Famous Dave's of America, Inc.<F1> 5,000
250 Morton's Restaurant Group, Inc.<F1> 6,016
100 Starbucks Corp.<F1> 5,344
1,000 Taco Cabana, Inc.<F1> 6,312
---------
22,672
---------
RETAIL - MAIL ORDER/DIRECT 0.78%
150 Pacific Sunwear of California, Inc.<F1> 5,250
---------
TELECOMMUNICATIONS - EQUIPMENT 0.75%
200 Scientific-Atlanta, Inc. 5,075
---------
VAN WAGONER CAPITAL APPRECIATION FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(UNAUDITED)
Number
of Shares Value
----------- ---------
TELECOMMUNICATIONS - SERVICES 6.01%
500 Com21, Inc.<F1> $ 10,625
200 Intermedia Communications Inc.<F1> 8,388
100 Level 3 Communications, Inc.<F1> 7,400
200 MetroNet Communications Corp.<F1> 5,650
250 Qwest Communications International Inc.<F1> 8,719
---------
40,782
---------
TOTAL COMMON STOCKS (COST $399,470) 406,563
---------
Principal
Amount
----------
U.S. TREASURY BILLS 44.10%
$314,000 U.S. Treasury Bills, 5/27/99 299,263
---------
TOTAL U.S. TREASURY BILLS (COST $299,263) 299,263
---------
REPURCHASE AGREEMENTS 12.97%
88,000 UMB Bank, n.a., 5.05%, dated 06/30/98,
repurchase price $88,012, maturing 07/01/98
(collateralized by U.S. Treasury Notes,
5.75%, 9/30/99) 88,000
---------
TOTAL REPURCHASE AGREEMENTS (COST $88,000) 88,000
---------
SHORT-TERM INVESTMENTS 0.12%
849 UMB Bank, n.a., Money Market Fiduciary 849
---------
TOTAL SHORT-TERM INVESTMENTS (COST $849) 849
---------
TOTAL INVESTMENTS (COST $787,582) 117.11% 794,675
Other Liabilities less Assets (17.11)% (116,119)
---------
NET ASSETS 100.00% $ 678,556
=========
<F1> Non-income producing
See notes to financial statements.
VAN WAGONER GROWTH FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(UNAUDITED)
Number
of Shares Value
----------- ---------
COMMON STOCKS 72.96%
COMMERCIAL SERVICES - BUSINESS 3.31%
2,000 Dental Care Alliance, Inc.<F1> $23,000
---------
COMPUTERS - LOCAL NETWORKS 4.30%
250 Cisco Systems, Inc. <F1> 23,016
100 Citrix Systems, Inc. <F1> 6,837
---------
29,853
---------
COMPUTERS - MEMORY DEVICES 0.97%
150 EMC Corp.<F1> 6,722
---------
COMPUTERS - MINI/MICRO 2.16%
200 Apple Computer, Inc.<F1> 5,737
100 Dell Computer Corp. <F1> 9,281
---------
15,018
---------
COMPUTERS - RETAIL/WHOLESALE 3.86%
1,500 CHS Electronics, Inc.<F1> 26,812
---------
COMPUTERS - SOFTWARE 5.05%
100 BMC Software, Inc.<F1> 5,194
100 Compuware Corp.<F1> 5,113
100 J.D. Edwards & Co. <F1> 4,294
100 Microsoft Corp.<F1> 10,837
150 Siebel Systems, Inc.<F1> 4,837
100 Sterling Commerce, Inc.<F1> 4,850
---------
35,125
---------
CONSUMER PRODUCTS - MISCELLANEOUS 0.69%
50 The Clorox Co. 4,769
---------
COSMETICS/PERSONAL CARE 0.66%
50 Procter & Gamble Co. 4,553
---------
ELECTRONIC COMPONENTS - MISCELLANEOUS 0.92%
75 Philips Electronics N.V. 6,375
---------
ELECTRONICS - SEMICONDUCTOR MANUFACTURING 0.89%
200 Vitesse Semiconductor Corp. <F1> 6,175
---------
FINANCE - CONSUMER LOANS 1.07%
150 Household International, Inc. 7,462
---------
Number
of Shares Value
----------- ---------
FINANCE - REGIONAL BANKS 3.09%
100 Chase Manhattan Corp. $ 7,550
200 Mellon Bank Corp. 13,925
---------
21,475
---------
FINANCIAL SERVICES 2.51%
100 American Express Co. 11,400
100 The Bank of New York Co., Inc. 6,069
---------
17,469
---------
INVESTMENT MANAGEMENT/ADVISORY SERVICES 1.08%
200 T. Rowe Price Associates, Inc. 7,513
---------
LEISURE - SERVICES 4.34%
200 Carnival Corp. 7,925
100 Royal Caribbean Cruises Ltd. 7,950
200 Steiner Leisure Ltd.<F1> 6,050
250 Travel Services International, Inc.<F1> 8,219
---------
30,144
---------
MEDIA 1.07%
150 Chancellor Media Corp.<F1> 7,448
---------
MEDICAL/DENTAL SUPPLIES 1.31%
250 The Cooper Companies, Inc.<F1> 9,109
---------
MEDICAL - DRUGS 3.26%
50 Bristol-Myers Squibb Co. 5,747
50 Pfizer Inc. 5,434
50 Schering-Plough Corp. 4,581
100 Warner-Lambert Co. 6,937
---------
22,699
---------
MEDICAL - INFORMATION SERVICES 1.01%
200 HBO & Co. 7,050
---------
MEDICAL - INSTRUMENTS 1.02%
100 Guidant Corp. 7,131
---------
MULTI INDUSTRY 1.08%
150 Veritas DGC Inc. 7,491
---------
Number
of Shares Value
----------- ---------
MULTIMEDIA 2.74%
100 Meredith Corp. $ 4,694
100 Time Warner Inc. 8,544
100 Viacom Inc.<F1> 5,850
---------
19,088
---------
OIL & GAS 0.61%
250 Global Industries Ltd.<F1> 4,219
---------
OIL & GAS - FIELD SERVICES 0.74%
850 TransCoastal Marine Services, Inc.<F1> 5,127
---------
OIL & GAS - MACHINERY & EQUIPMENT 1.71%
100 Cooper Cameron Corp.<F1> 5,100
200 The Williams Companies, Inc. 6,750
---------
11,850
---------
POLLUTION CONTROL - SERVICES 0.86%
250 Allied Waste Industries, Inc.<F1> 6,000
---------
RESTAURANTS 1.76%
100 McDonald's Corp. 6,900
100 Starbucks Corp.<F1> 5,344
---------
12,244
---------
RETAIL - BUILDING PRODUCTS 0.90%
75 The Home Depot, Inc. 6,230
---------
RETAIL - DEPARTMENT STORES 1.57%
100 Dayton Hudson Corp. 4,850
150 Proffitt's, Inc.<F1> 6,056
---------
10,906
---------
RETAIL - DISCOUNT/VARIETY 3.33%
400 Family Dollar Stores, Inc. 7,400
400 TJX Companies, Inc. 9,650
100 Wal-Mart Stores, Inc. 6,075
---------
23,125
---------
RETAIL - MAIL ORDER/DIRECT 0.76%
150 Pacific Sunwear of California, Inc.<F1> 5,250
---------
Number
of Shares Value
----------- ---------
TELECOMMUNICATIONS - EQUIPMENT 8.54%
100 AirTouch Communications, Inc.<F1> $ 5,844
150 Alcatel Alsthom ADR<F1> 6,103
300 Ericsson LM ADR 8,587
100 Lucent Technologies Inc. 8,319
100 Nokia Ab ADR 7,256
200 Scientific-Atlanta, Inc. 5,075
200 SkyTel Communications, Inc.<F1> 4,681
100 Tellabs, Inc.<F1> 7,163
50 Vodafone Group PLC ADR 6,303
---------
59,331
---------
TELECOMMUNICATIONS - SERVICES 4.18%
200 Intermedia Communications Inc.<F1> 8,388
100 Level 3 Communications, Inc.<F1> 7,400
100 MediaOne Group, Inc.<F1> 4,394
250 Qwest Communications International Inc.<F1> 8,719
3 US West, Inc. 128
---------
29,029
---------
TELEVISION 1.61%
50 Clear Channel Communications, Inc.<F1> 5,456
150 Tele-Communications, Inc.<F1> 5,766
---------
11,222
---------
TOTAL COMMON STOCKS (COST $496,094) 507,014
---------
Principal
Amount
---------
U.S. TREASURY BILLS 50.34%
$ 367,000 U.S. Treasury Bills, 5/27/99 349,775
---------
Total U.S. Treasury Bills (cost $349,775) 349,775
---------
REPURCHASE AGREEMENTS 11.66%
81,000 UMB Bank, n.a., 5.05%, dated 6/30/98,
repurchase price $81,011, maturing
7/1/98 (collateralized by U.S.
Treasury Notes, 5.75%, 9/30/99) 81,000
---------
TOTAL REPURCHASE AGREEMENTS (COST $81,000) 81,000
---------
Number
of Shares Value
----------- ---------
SHORT-TERM INVESTMENTS 0.10%
$ 720 UMB Bank, n.a., Money Market Fiduciary $ 720
---------
TOTAL SHORT-TERM INVESTMENTS (COST $720) 720
---------
TOTAL INVESTMENTS (COST $927,589) 135.06% 938,509
Other Liabilities less Assets (35.06)% (243,622)
---------
NET ASSETS 100.00% $ 694,887
=========
<F1> Non-income producing
See notes to financial statements.
VAN WAGONER FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
Capital
Appreciation Growth
Fund Fund
-------------- -------
ASSETS:
Investments, at value
(cost $699,582 and
$846,589, respectively) $ 706,675 $ 857,509
Repurchase agreements, at value
(cost $88,000 and
$81,000, respectively) 88,000 81,000
Receivable from investment adviser 9,837 9,779
Interest and dividends receivable 89 150
Prepaid expenses and other assets 29 31
--------- ---------
Total Assets 804,630 948,469
--------- ---------
LIABILITIES:
Payable for investments purchased 108,469 235,943
Accrued investment advisory fee 697 565
Accrued expenses and other liabilities 16,908 17,074
--------- ---------
Total Liabilities 126,074 253,582
--------- ---------
NET ASSETS $ 678,556 $ 694,887
========= =========
NET ASSETS CONSIST OF:
Capital stock $ 6 $ 6
Paid-in-capital 676,904 630,982
Accumulated net realized
gain (loss) on investments (6,529) 51,510
Undistributed net investment income 1,082 1,469
Net unrealized appreciation on investments 7,093 10,920
--------- ---------
Net Assets $ 678,556 $ 694,887
========= =========
CAPITAL STOCK, $0.0001 PAR VALUE
Authorized 100,000,000 100,000,000
Issued and outstanding 57,859 56,759
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE (NET
ASSETS/SHARES OUTSTANDING) $ 11.73 $ 12.24
========= =========
See notes to financial statements.
VAN WAGONER FUNDS, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
Capital
Appreciation Growth
Fund Fund
-------------- -------
INVESTMENT INCOME:
Interest $ 8,148 $ 8,465
Dividends 208 412
--------- ---------
Total Investment Income 8,356 8,877
--------- ---------
EXPENSES:
Fund accounting and administration fees 30,580 30,580
Professional fees 9,517 9,518
State registration fees 7,972 7,973
Custody fees 5,470 5,685
Investment advisory fees 4,663 3,799
Directors' fees and expenses 1,689 1,689
Printing and postage expenses 1,144 1,142
Miscellaneous 999 950
--------- ---------
Total expenses before waivers
and reimbursements 62,034 61,336
Less: Waivers and reimbursements
of expenses (54,760) (53,928)
--------- ---------
Net Expenses 7,274 7,408
--------- ---------
NET INVESTMENT INCOME 1,082 1,469
--------- ---------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 230,988 243,484
Change in unrealized appreciation
on investments (56,716) (71,656)
--------- ---------
Net Gain on Investments 174,272 171,828
--------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 175,354 $ 173,297
========= =========
See notes to financial statements.
<TABLE>
<CAPTION>
VAN WAGONER FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Capital Appreciation Fund Growth Fund
------------------------------------- ----------------------------------
Six Months Ended Six Months Ended
June 30, 1998 Year Ended June 30, 1998 Year Ended
(Unaudited) Dec. 31, 1997 (Unaudited) Dec. 31, 1997
-------------- ---------------- ------------------ ----------------
<C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 1,082 $ (15,549) $ 1,469 $ (15,885)
Net realized gain (loss) on investments 230,988 (53,771) 243,484 (53,971)
Change in unrealized appreciation on investments (56,716) 63,809 (71,656) 82,576
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 175,354 (5,511) 173,297 12,720
----------- ----------- ----------- -----------
DISTRIBUTIONS:
In excess of net realized gains - (168,197) - (122,118)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 25,000 1,309,860 25,000 1,309,860
Proceeds from reinvestment of dividends - 168,197 - 122,118
Redemption of shares (826,147) - (825,990) -
- ----------- ----------- ---------- -----------
Net increase (decrease) from share transactions (801,147) 1,478,057 (800,990) 1,431,978
----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS (625,793) 1,304,349 (627,693) 1,322,580
NET ASSETS:
Beginning of period 1,304,349 - 1,322,580 -
----------- ----------- ----------- -----------
End of period $ 678,556 $ 1,304,349 $ 694,887 $1,322,580
=========== =========== =========== ===========
TRANSACTIONS IN SHARES:
Shares sold 2,249 124,722 2,152 125,094
Shares issued in reinvestment of dividends - 18,899 - 12,977
Shares redeemed (88,011) - (83,464) -
----------- ----------- ----------- -----------
Net increase (decrease) (85,762) 143,621 (81,312) 138,071
=========== =========== =========== ===========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
VAN WAGONER FUNDS, INC.
FINANCIAL HIGHLIGHTS
For a Fund share outstanding throughout the period.
Capital Appreciation Fund<F1> Growth Fund<F1>
------------------------------------- ----------------------------------
Six Months Ended Six Months Ended
June 30, 1998 Year Ended June 30, 1998 Year Ended
(Unaudited) Dec. 31, 1997 (Unaudited) Dec. 31, 1997
-------------- ---------------- ------------------ ----------------
<C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.08 $ 10.00 $ 9.58 $ 10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.02 (0.11) 0.03 (0.12)
Net realized and unrealized gains on investments 2.63 0.54 2.63 0.68
--------- --------- --------- ---------
Total from investment operations 2.65 0.43 2.66 0.56
--------- --------- --------- ---------
DISTRIBUTIONS:
In excess of net realized gains - (1.35) - (0.98)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 11.73 $ 9.08 $ 12.24 $ 9.58
========= ========= ========= =========
TOTAL RETURN<F2> 29.19% 4.56% 27.77% 5.74%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000s) $ 679 $ 1,304 $ 695 $ 1,323
Ratio of expenses to average net assets, net of
waivers and reimbursements<F3> 1.95% 1.95% 1.95% 1.95%
Ratio of net investment income (loss)
to average net assets,
net of waivers and reimbursements<F3> 0.29% (1.36)% 0.39% (1.40)%
Ratio of expenses to average net assets, before
waivers and reimbursements<F3> 16.63% 11.78% 16.15% 11.60%
Ratio of net investment loss to average net assets,
before waivers and reimbursements<F3> (14.39)% (11.19)% (13.81)% (11.05)%
Portfolio turnover rate<F2> 930% 625% 937% 593%
<F1> Commenced operations after the close of business on December 31, 1996
<F2> Not annualized
<F3> Annualized
See notes to financial statements.
</TABLE>
VAN WAGONER FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(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 Capital Appreciation Fund and the Growth Fund (collectively, the
"Funds") are separate, diversified investment portfolios of Van Wagoner
Funds, Inc. The majority shareholder of the Funds is an affiliate of the
investment adviser.
(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.
These policies are in conformity with generally accepted accounting
principles ("GAAP"). The presentation of financial statements in
conformity with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
(a) Investment Valuation - A security traded on a recognized stock
exchange is valued at the last sale price prior to the time when
assets are valued on the principal exchange on which the security is
traded. If no sale is reported on the valuation date, 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 pursuant to guidelines established by 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.
VAN WAGONER FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1998
(UNAUDITED)
(c) 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.
(d) 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.
(e) 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. Each 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 distributions
determined in accordance with federal tax regulations, which may
differ from GAAP.
(f) Other - Investment transactions are accounted for on the trade date
basis. Each Fund determines the gain or loss realized from the
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
The Funds have an agreement with Van Wagoner Capital Management, Inc. (the
"Adviser") to furnish investment advisory services to the Funds. Under the
terms of this agreement, the Adviser is compensated at the rate of 1.25%
and 1.00% of the average daily net assets of the Capital Appreciation Fund
and Growth Fund, respectively. The Adviser has agreed to voluntarily
reduce fees for expenses (exclusive of brokerage, interest, taxes and
extraordinary expenses) that exceed the expense limitation of 1.95% for
each Fund until January 1, 1999. Expenses of $54,760 and $53,928 were
waived in the Capital Appreciation and Growth Funds, respectively.
VAN WAGONER FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1998
(UNAUDITED)
(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 six months ended June 30, 1998 were as
follows:
Capital
Appreciation Growth
Fund Fund
-------- --------
Purchases $4,785,203 $4,937,900
Sales 5,742,448 5,789,500
For the six months ended June 30, 1998, there were no purchases or sales of
long-term U.S. government securities.
The cost of securities on a tax basis for the Capital Appreciation Fund and
Growth Fund is $791,920 and $928,233, respectively. At June 30, 1998,
gross unrealized appreciation and depreciation on investments for federal
income tax purposes were as follows:
Capital
Appreciation Growth
Fund Fund
-------- --------
Unrealized appreciation $26,398 $27,147
(Unrealized depreciation) (23,643) (16,871)
-------- --------
Net unrealized appreciation
on investments $2,755 $10,276
======== ========
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