<PAGE>
August 18, 1997
Dear Shareholder,
I am pleased to present the annual report of the OMEGA South Africa Fund for the
financial year ended June 30, 1997.
As I have brought to the attention of shareholders in my previous reports, the
OMEGA South Africa Fund has a unique fund structure which is designed to create
an efficient vehicle for institutional investors to gain immediate exposure to
the South African equity market in a cost effective way. The key features of
this structure are summarized overleaf.
Following a period of weakness for the South African stock market during the
first six months under review, when the JSE Actuaries All Share Index (the
benchmark for the Fund) fell by 3.2%, the second six-month period realized an
11.4% gain to record a 7.9% gain for the full year. However, this
7.9% gain was in South African rand terms; in U.S. dollar terms the gain was
3.0%, reflecting the 4.5% decline in the rand/dollar exchange rate over the
financial year.
During the financial year, the total return (including dividends distributed) in
U.S. dollar terms from the OMEGA Fund was 9.2% which compares with a U.S. dollar
total return of 5.6% for the benchmark Index. I believe this puts into
perspective the value added by the performance of the OMEGA Fund over the
financial year. Dividends paid by the Fund during the year totalled U.S.$4.54
per share.
In my last report to shareholders, I commented that calendar 1996's 22%
decline of the rand against the U.S. dollar "was clearly the major feature of
the South African investment markets". While the rand has been relatively
more stable during the first six months of calendar 1997, indeed a modest
3.2% appreciation was recorded against the U.S. dollar during this period,
some long-term depreciation is to be expected while South African inflation
rates remain above U.S. levels. Within this longer term trend, the current
process of dismantling South Africa's exchange control regime, while
undoubtedly beneficial for the economy in the longer term, can be expected to
add to currency uncertainty in the short term.
Our investment objective continues to be to seek a long-term total return in
excess of the Index and I remain optimistic that this will be achieved. Thank
you for the confidence you have shown us by your investment in the OMEGA South
Africa Fund.
M.J. LEVETT
PRESIDENT
<PAGE>
OMEGA
SOUTH AFRICA FUND
THE OMEGA SOUTH AFRICA FUND HAS A UNIQUE FUND STRUCTURE OFFERING INSTITUTIONAL
INVESTORS INSTANT ACCESS TO THE SOUTH AFRICAN SHARE MARKET. WITH
AN UNDERLYING PORTFOLIO OF APPROXIMATELY U.S.$ ONE BILLION AT JUNE 30, 1997, THE
FUND COMBINES THE LIQUIDITY OF AN OPEN-END FUND WITH THE PORTFOLIO
STABILITY AND REDUCED TRADING COSTS ASSOCIATED WITH A CLOSED-END FUND.
FUND OBJECTIVE
The OMEGA South Africa Fund (the "OMEGA Fund") is a Massachusetts business trust
that seeks long-term total return in excess of the Johannesburg Stock Exchange
Actuaries All Share Index (the "Index") from investment in equity securities of
South African issuers.
The OMEGA Fund seeks to realize this objective through a policy of investing in
those securities which the Adviser believes will show above average growth in
the longer term. Less weight is accorded to short term and cyclical factors.
FUND ORGANIZATION
Rather than directly acquire and manage its own portfolio of securities, the
OMEGA Fund invests all of its investable assets in Old Mutual South Africa
Equity Trust (the "Master Trust"), a Massachusetts trust that has the same
investment objective as the OMEGA Fund.
The Master Trust was established in November, 1995 with a fully invested
portfolio of South African equities. Subscribers to the OMEGA Fund gain their
exposure to the Master Trust at net asset value, avoiding the bid ask spread,
South African stamp duty of 0.25% and potential market impact costs on the
underlying South African securities. Additionally, while the OMEGA Fund does
not hedge the rand exposure of the underlying portfolio, it does offer the
benefits of dealing in U.S. dollars.
INVESTMENT ADVISER
Old Mutual Asset Managers (Bermuda) Limited (the "Adviser") is the investment
adviser to the Master Trust. The Adviser is a wholly owned subsidiary of Old
Mutual, the largest insurer in South Africa with over U.S.$45 billion of assets
under management.
The Adviser receives a management fee of 0.60% per annum of daily net assets.
1
<PAGE>
SUBSCRIPTION
Shares are priced daily and are offered on a continuous basis at net asset
value, plus brokerage commission of up to 0.35%.
The size of the Master Trust, approximately U.S.$ one billion at June 30, 1997,
combined with the ability of investors in the OMEGA Fund to acquire substantial
shareholdings at the next business day's net asset value, enables investors in
the OMEGA Fund to gain exposure to the South African equity market speedily and
in volume, as well as cost effectively.
REDEMPTION
Redemptions from the OMEGA Fund may be requested on any business day in any
amount at the next business day's net asset value, subject to a redemption fee
of 0.65%.
The liquidity for redemptions is provided by a portfolio of marketable
international securities held by Old Mutual Global Assets Fund Limited (the
"Global Fund"). Using realizations from the Global Fund rather than from the
Master Trust securities enables the Master Trust to avoid the cost of realizing
the underlying South African securities to fund redemptions.
INVESTMENT PORTFOLIO
Under normal circumstances at least 95% of the Master Trust's total assets will
be invested in listed South African equities.
At June 30, 1997 there were 70 shareholdings in the portfolio of which the top
10 comprised 47.4% by value. The historical price earnings ratio was 20.2 and
the dividend yield was 2.1%; this compares with a price earnings ratio
and dividend yield of 14.9 and 2.3%, respectively, for the benchmark Index.
In order to illustrate the stock specific weighting of the OMEGA Fund portfolio,
the table below compares the weighting in the portfolio and the Index of the
portfolio's top ten holdings as at June 30, 1997:
WEIGHT IN WEIGHT IN
OMEGA ALL SHARE
FUND INDEX
Nedcor 7.7% 2.0%
De Beers 6.0% 5.7%
Sasol 5.8% 3.2%
Anglo American 5.0% 5.6%
Standard Bank 4.7% 2.3%
Rembrandt 4.1% 2.2%
SA Breweries 3.8% 4.0%
Gencor 3.7% 2.8%
Barlow 3.4% 0.9%
CG Smith 3.2% 1.1%
TOTAL 47.4% 29.8%
2
<PAGE>
THE SOUTH AFRICAN ECONOMY
Now in its sixteenth quarter, South Africa's current economic upturn is the
country's longest since the gold boom of the late 1970s. The recession which
started late in 1989 ended in mid-1993. Since then GDP growth has averaged about
3% per annum.
RB6006D Gross Domestic Product at Market Prices
(Percentage Change From Previous Period) (SARB Quarterly Bul
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
1990 -0.0275
-0.5415
-0.7049
0.0062
1991 -0.8687
-1.0107
-0.9658
-1.2279
1992 -1.1092
-1.5205
-2.7083
-3.4387
1993 -2.1378
-0.2672
2.7284
4.9515
1994 3.5072
2.8466
2.1559
2.512
1995 3.8021
3.7865
3.4256
2.4762
1996 2.7762
3.1049
3.2033
3.3795
1997 2.3281
1.6
1.2
1
1998 2
2.5
However, GDP growth has slowed recently, from the 3.1% recorded for 1996 to 2.3%
(year-on-year) for the first quarter of 1997. While some of the slowdown can be
attributed to a more normal agricultural season (1996 was an exceptionally good
year), other factors include a decline in mining production and poor performance
from the consumer sectors. Real interest rates, which have been high for some
time now, have finally started to restrain debt-laden consumers.
We believe the slowdown will be moderate. With support from exports, GDP growth
should not slow much below 2% this year with the prospect of 3% plus growth in
1998.
On the inflation front there has been a progressive decline from the 16% level
of 1991 to an average of 7% for 1996. Much of the decline has been a result of
the South African
Reserve Bank's commitment to lower inflation, as shown by its persistence in
keeping short-term interest rates high. Domestic deregulation, trade
liberalisation and the discipline of low world inflation have also helped curb
domestic inflation.
Last year's currency weakness pushed inflation higher in the first half of 1997,
but we believe inflation has now peaked and will fall to below 8% by year-end.
We expect an average of around 9% for 1997 with a resumption of the declining
trend in 1998.
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
int180 SHORT TERM INTEREST RATES - RESERVE BANK DISCOUNT RATE INFLATION - CPI
- - ALL ITEMS-FOR F/CAST PURPOSES
1990 18 15.1589
18 14.9091
18 14.8987
18 14.6054
18 13.905
18 13.5321
18 13.2955
18 13.565
18 14.3333
18 14.0969
18 15.2505
18 14.6394
1991 18 14.3312
18 14.9789
17 14.1079
17 14.594
17 15.1577
17 15.1515
17 15.8475
17 15.5972
17 15.3547
17 16.7954
17 15.5009
17 16.2441
1992 17 16.156
17 15.7798
16 15.7273
16 15.6054
16 14.7527
15 15.0877
15 14.632
15 14.2613
15 13.4794
15 11.7355
14 11.0475
14 9.6123
1993 14 9.6723
13 9.0333
13 9.6622
13 11.0163
13 10.6236
13 9.9848
13 9.8943
13 9.2676
13 9.0572
12 9.3935
12 9.2115
12 9.5063
1994 12 9.9125
12 9.8837
12 9.0258
12 7.058
12 7.2373
12 7.4844
12 8.2474
12 9.3707
13 10.143
13 9.8039
13 9.8516
13 9.8923
1995 13 9.6154
14 9.8545
14 10.2497
14 11.0313
14 10.7722
15 9.9936
15 8.9524
15 7.5047
15 6.3659
15 6.3424
15 6.3882
15 6.8585
1996 15 6.8966
15 6.5021
15 6.317
16 5.5262
16 5.8582
16 6.8581
16 7.1096
16 7.5044
16 8.4253
16 9.0909
17 9.1801
17 9.3983
1997 17 9.3887
17 9.8436
17 9.5895
17 9.8683
17 9.5163
17 9.1166
17 9.4328
17 9.2098
17 8.7049
17 8.1191
17 8.17
16 7.6862
For the present, we expect interest rates to remain high. We believe that, only
once the evidence of lower inflation is clear, will the Reserve Bank reduce
rates. We expect one Bank rate cut towards the end of 1997 and further cuts in
1998.
A slowdown in growth in 1997 combined with the maintenance of a disciplined
fiscal and monetary stance will, we believe, place the economy in better shape
to resume higher growth in 1998 and 1999.
3
<PAGE>
THE SOUTH AFRICAN INVESTMENT MARKET
The weakness of the rand, which was such a dominant feature in 1996, reversed
during the first six months of 1997 translating an 11.4% increase in the JSE
Actuaries All Share Index in rand terms into a 14.9% increase in U.S. dollar
terms for the six-month period.
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
JSE All Share Indexed to 100 (R) JSE All Share (U.S. $)
1989/52 100.000 1989/52 100.000
1990/01 103.831 1990/01 103.724
1990/02 108.333 1990/02 108.11
1990/03 105.208 1990/03 104.884
1990/04 106.788 1990/04 106.349
1990/05 110.215 1990/05 109.65
1990/06 112.265 1990/06 111.689
1990/07 105.477 1990/07 104.936
1990/08 104.368 1990/08 103.833
1990/09 103.226 1990/09 102.696
1990/10 106.586 1990/10 106.586
1990/11 112.265 1990/11 112.846
1990/12 110.517 1990/12 111.669
1990/13 109.442 1990/13 111.161
1990/14 105.141 1990/14 107.129
1990/15 104.872 1990/15 107.193
1990/16 103.931 1990/16 106.568
1990/17 102.419 1990/17 105.352
1990/18 104.536 1990/18 107.873
1990/19 106.888 1990/19 110.3
1990/20 107.594 1990/20 111.028
1990/21 106.384 1990/21 109.78
1990/22 106.485 1990/22 109.884
1990/23 104.671 1990/23 108.155
1990/24 100.067 1990/24 103.536
1990/25 98.6559 1990/25 102.212
1990/26 103.394 1990/26 107.264
1990/27 103.999 1990/27 107.604
1990/28 102.923 1990/28 106.208
1990/29 102.319 1990/29 105.304
1990/30 105.41 1990/30 108.199
1990/31 107.863 1990/31 110.424
1990/32 105.242 1990/32 107.176
1990/33 106.855 1990/33 108.25
1990/34 97.7487 1990/34 98.5103
1990/35 100.571 1990/35 100.831
1990/36 98.8911 1990/36 99.0827
1990/37 96.371 1990/37 96.4953
1990/38 91.297 1990/38 91.3559
1990/39 92.2043 1990/39 92.2043
1990/40 90.0202 1990/40 89.8349
1990/41 88.7769 1990/41 88.4123
1990/42 86.7608 1990/42 86.2274
1990/43 89.953 1990/43 89.2171
1990/44 88.5417 1990/44 87.6382
1990/45 88.3401 1990/45 87.3272
1990/46 86.1559 1990/46 85.0598
1990/47 86.4919 1990/47 85.283
1990/48 87.3992 1990/48 86.0682
1990/49 90.5242 1990/49 89.3725
1990/50 89.9866 1990/50 89.0683
1990/51 91.0282 1990/51 90.3298
1990/52 91.3978 1990/52 90.9291
1991/01 91.0618 1991/01 90.5948
1991/02 89.6505 1991/02 89.1908
1991/03 86.8952 1991/03 86.4495
1991/04 85.6183 1991/04 85.1792
1991/05 86.1895 1991/05 85.7475
1991/06 89.7513 1991/06 89.1768
1991/07 92.0363 1991/07 91.3301
1991/08 92.4395 1991/08 91.6131
1991/09 94.1196 1991/09 93.1592
1991/10 96.6062 1991/10 96.6062
1991/11 97.9503 1991/11 98.9706
1991/12 98.4207 1991/12 100.493
1991/13 96.6734 1991/13 99.7587
1991/14 98.7567 1991/14 102.563
1991/15 100.235 1991/15 104.772
1991/16 100.638 1991/16 105.878
1991/17 102.05 1991/17 108.066
1991/18 101.68 1991/18 108.384
1991/19 100.336 1991/19 107.542
1991/20 101.983 1991/20 109.915
1991/21 104.167 1991/21 112.896
1991/22 104.671 1991/22 114.079
1991/23 107.829 1991/23 118.353
1991/24 110.417 1991/24 122.056
1991/25 113.81 1991/25 126.71
1991/26 111.089 1991/26 124.573
1991/27 114.919 1991/27 128.944
1991/28 114.55 1991/28 128.603
1991/29 118.985 1991/29 133.66
1991/30 114.617 1991/30 128.828
1991/31 116.163 1991/31 130.641
1991/32 117.272 1991/32 131.792
1991/33 116.767 1991/33 131.131
1991/34 113.273 1991/34 127.115
1991/35 112.534 1991/35 126.194
1991/36 115.155 1991/36 128.668
1991/37 114.382 1991/37 127.346
1991/38 114.483 1991/38 127.003
1991/39 110.148 1991/39 121.759
1991/40 113.878 1991/40 125.81
1991/41 113.004 1991/41 124.774
1991/42 114.315 1991/42 126.149
1991/43 116.364 1991/43 128.338
1991/44 117.977 1991/44 130.043
1991/45 118.246 1991/45 130.062
1991/46 118.784 1991/46 130.376
1991/47 118.448 1991/47 129.732
1991/48 119.019 1991/48 130.083
1991/49 117.44 1991/49 127.816
1991/50 116.23 1991/50 125.97
1991/51 114.583 1991/51 123.667
1991/52 114.919 1991/52 123.514
1992/01 115.39 1992/01 124.365
1992/02 122.446 1992/02 132.337
1992/03 124.362 1992/03 134.783
1992/04 121.841 1992/04 132.421
1992/05 121.136 1992/05 132.024
1992/06 123.454 1992/06 135.121
1992/07 123.421 1992/07 135.658
1992/08 118.481 1992/08 130.784
1992/09 120.867 1992/09 133.99
1992/10 119.019 1992/10 132.414
1992/11 118.716 1992/11 132.552
1992/12 119.187 1992/12 133.558
1992/13 119.456 1992/13 134.344
1992/14 117.137 1992/14 131.66
1992/15 114.147 1992/15 128.225
1992/16 112.634 1992/16 126.453
1992/17 113.273 1992/17 127.096
1992/18 116.062 1992/18 130.15
1992/19 121.102 1992/19 135.509
1992/20 123.824 1992/20 138.255
1992/21 123.757 1992/21 137.883
1992/22 125.403 1992/22 139.417
1992/23 125.605 1992/23 139.043
1992/24 124.664 1992/24 137.414
1992/25 123.69 1992/25 135.761
1992/26 122.749 1992/26 134.159
1992/27 122.681 1992/27 133.634
1992/28 117.036 1992/28 127.057
1992/29 117.608 1992/29 127.25
1992/30 113.474 1992/30 122.368
1992/31 115.289 1992/31 123.912
1992/32 113.239 1992/32 121.793
1992/33 105.511 1992/33 113.559
1992/34 106.821 1992/34 115.05
1992/35 105.41 1992/35 113.608
1992/36 106.888 1992/36 115.603
1992/37 102.991 1992/37 111.777
1992/38 106.418 1992/38 115.902
1992/39 107.829 1992/39 117.853
1992/40 106.855 1992/40 117.45
1992/41 103.461 1992/41 114.367
1992/42 98.5215 1992/42 109.531
1992/43 102.016 1992/43 114.07
1992/44 101.378 1992/44 114.013
1992/45 101.915 1992/45 115.623
1992/46 102.218 1992/46 116.993
1992/47 102.419 1992/47 118.27
1992/48 105.309 1992/48 122.703
1992/49 108.602 1992/49 126.635
1992/50 108.837 1992/50 127.004
1992/51 107.964 1992/51 126.08
1992/52 109.106 1992/52 127.51
1993/01 109.509 1993/01 128.601
1993/02 113.642 1993/02 134.104
1993/03 114.751 1993/03 136.074
1993/04 114.382 1993/04 136.303
1993/05 115.356 1993/05 138.143
1993/06 116.7 1993/06 140.293
1993/07 117.339 1993/07 141.609
1993/08 117.204 1993/08 141.999
1993/09 114.852 1993/09 139.695
1993/10 113.743 1993/10 138.89
1993/11 115.927 1993/11 142.116
1993/12 118.548 1993/12 145.906
1993/13 119.491 1993/13 147.651
1993/14 119.996 1993/14 148.276
1993/15 120.596 1993/15 149.017
1993/16 119.732 1993/16 147.95
1993/17 121.299 1993/17 149.885
1993/18 125.436 1993/18 154.998
1993/19 126.714 1993/19 156.576
1993/20 131.173 1993/20 162.086
1993/21 133.932 1993/21 165.496
1993/22 134.156 1993/22 165.773
1993/23 133.005 1993/23 165.271
1993/24 132.703 1993/24 165.825
1993/25 133.808 1993/25 168.154
1993/26 136.318 1993/26 172.284
1993/27 139.341 1993/27 177.26
1993/28 138.353 1993/28 177.165
1993/29 137.978 1993/29 177.858
1993/30 134.366 1993/30 174.362
1993/31 140.345 1993/31 183.346
1993/32 134.732 1993/32 176.162
1993/33 133.088 1993/33 174.158
1993/34 135.88 1993/34 177.963
1993/35 134.975 1993/35 176.926
1993/36 132.885 1993/36 174.777
1993/37 129.25 1993/37 170.574
1993/38 129.317 1993/38 171.246
1993/39 125.333 1993/39 166.538
1993/40 126.447 1993/40 167.903
1993/41 130.049 1993/41 172.569
1993/42 131.541 1993/42 174.428
1993/43 130.091 1993/43 172.388
1993/44 131.594 1993/44 174.261
1993/45 134.552 1993/45 177.723
1993/46 138.07 1993/46 181.906
1993/47 142.429 1993/47 187.172
1993/48 141.248 1993/48 185.149
1993/49 143.217 1993/49 187.889
1993/50 150.115 1993/50 197.105
1993/51 154.909 1993/51 203.573
1993/52 158.616 1993/52 208.62
1994/01 164.415 1994/01 216.983
1994/02 170.75 1994/02 226.113
1994/03 163.344 1994/03 217.046
1994/04 160.762 1994/04 214.349
1994/05 158.774 1994/05 212.429
1994/06 168.731 1994/06 226.335
1994/07 160.518 1994/07 215.878
1994/08 163.039 1994/08 219.841
1994/09 161.23 1994/09 217.969
1994/10 168.349 1994/10 227.198
1994/11 172.175 1994/11 231.958
1994/12 175.861 1994/12 236.513
1994/13 173.741 1994/13 233.257
1994/14 165.964 1994/14 224.37
1994/15 166.429 1994/15 226.577
1994/16 166.945 1994/16 228.886
1994/17 169.369 1994/17 233.862
1994/18 180.078 1994/18 250.431
1994/19 178.395 1994/19 249.432
1994/20 185.949 1994/20 261.407
1994/21 183.952 1994/21 260.012
1994/22 180.84 1994/22 257.017
1994/23 184.8 1994/23 261.449
1994/24 189.634 1994/24 267.071
1994/25 194.372 1994/25 272.508
1994/26 187.913 1994/26 262.267
1994/27 181.5 1994/27 254.598
1994/28 181.63 1994/28 256.077
1994/29 187.384 1994/29 265.541
1994/30 186.44 1994/30 265.561
1994/31 189.916 1994/31 271.909
1994/32 192.475 1994/32 274.056
1994/33 195.286 1994/33 276.536
1994/34 194.855 1994/34 274.423
1994/35 196.889 1994/35 275.787
1994/36 198.763 1994/36 277.911
1994/37 200.094 1994/37 279.268
1994/38 195.945 1994/38 272.986
1994/39 193.397 1994/39 268.954
1994/40 190.73 1994/40 264.864
1994/41 188.096 1994/41 260.833
1994/42 189.092 1994/42 261.841
1994/43 194.043 1994/43 268.313
1994/44 193.222 1994/44 266.798
1994/45 196.99 1994/45 271.759
1994/46 197.113 1994/46 271.686
1994/47 199.066 1994/47 274.136
1994/48 195.949 1994/48 269.603
1994/49 192.211 1994/49 264.931
1994/50 191.346 1994/50 264.207
1994/51 190.438 1994/51 263.422
1994/52 194.984 1994/52 270.192
1995/01 193.817 1995/01 268.191
1995/02 190.51 1995/02 263.241
1995/03 181.803 1995/03 250.851
1995/04 173.488 1995/04 239.039
1995/05 179.438 1995/05 246.886
1995/06 175.878 1995/06 242.418
1995/07 171.951 1995/07 237.428
1995/08 173.891 1995/08 240.534
1995/09 175.78 1995/09 243.58
1995/10 175.538 1995/10 243.899
1995/11 178.119 1995/11 248.152
1995/12 175.78 1995/12 245.554
1995/13 177.482 1995/13 248.603
1995/14 183.033 1995/14 256.564
1995/15 180.171 1995/15 252.735
1995/16 181.951 1995/16 255.416
1995/17 184.108 1995/17 258.632
1995/18 188.146 1995/18 264.496
1995/19 187.383 1995/19 264.381
1995/20 184.642 1995/20 261.464
1995/21 185.022 1995/21 262.961
1995/22 185.712 1995/22 264.913
1995/23 183.042 1995/23 261.105
1995/24 182.634 1995/24 260.522
1995/25 184.562 1995/25 263.273
1995/26 182.146 1995/26 259.826
1995/27 182.891 1995/27 260.506
1995/28 183.135 1995/28 260.471
1995/29 182.785 1995/29 259.593
1995/30 181.961 1995/30 258.045
1995/31 185.701 1995/31 262.963
1995/32 186.936 1995/32 264.712
1995/33 187.691 1995/33 265.782
1995/34 187.028 1995/34 264.842
1995/35 186.376 1995/35 263.92
1995/36 188.121 1995/36 266.634
1995/37 190.66 1995/37 270.48
1995/38 190.312 1995/38 270.232
1995/39 190.096 1995/39 270.173
1995/40 192.604 1995/40 273.738
1995/41 194.848 1995/41 276.927
1995/42 195.789 1995/42 278.264
1995/43 193.739 1995/43 275.35
1995/44 196.52 1995/44 279.304
1995/45 202.307 1995/45 287.003
1995/46 202.321 1995/46 286.499
1995/47 201.156 1995/47 284.33
1995/48 200.597 1995/48 283.024
1995/49 208.689 1995/49 294.977
1995/50 208.791 1995/50 295.66
1995/51 210.262 1995/51 298.287
1995/52 209.288 1995/52 297.45
1996/01 219.247 1996/01 311.148
1996/02 225.922 1996/02 320.153
1996/03 229.186 1996/03 324.303
1996/04 233.932 1996/04 330.538
1996/05 234.998 1996/05 331.56
1996/06 230.971 1996/06 328.868
1996/07 229.92 1996/07 330.403
1996/08 227.401 1996/08 329.838
1996/09 225.553 1996/09 330.243
1996/10 225.034 1996/10 333.256
1996/11 225.258 1996/11 337.452
1996/12 224.817 1996/12 340.738
1996/13 226.767 1996/13 347.77
1996/14 225.154 1996/14 349.999
1996/15 224.112 1996/15 353.19
1996/16 234.298 1996/16 374.414
1996/17 236.795 1996/17 383.778
1996/18 232.768 1996/18 382.687
1996/19 226.659 1996/19 376.229
1996/20 226.531 1996/20 379.673
1996/21 224.743 1996/21 380.373
1996/22 229.116 1996/22 391.616
1996/23 228.993 1996/23 390.547
1996/24 229.161 1996/24 389.976
1996/25 230.353 1996/25 391.146
1996/26 231.14 1996/26 391.626
1996/27 232.025 1996/27 394.158
1996/28 228.59 1996/28 389.345
1996/29 228.128 1996/29 389.584
1996/30 222.955 1996/30 381.759
1996/31 224.902 1996/31 386.115
1996/32 223.988 1996/32 387.115
1996/33 219.335 1996/33 381.624
1996/34 220.571 1996/34 386.373
1996/35 224.777 1996/35 396.425
1996/36 228.026 1996/36 401.698
1996/37 230.859 1996/37 406.228
1996/38 233.039 1996/38 409.601
1996/39 232.971 1996/39 409.017
1996/40 235.906 1996/40 415.297
1996/41 237.045 1996/41 418.442
1996/42 235.342 1996/42 416.572
1996/43 234.716 1996/43 416.606
1996/44 234.254 1996/44 416.928
1996/45 228.277 1996/45 408.163
1996/46 229.926 1996/46 413.015
1996/47 226.031 1996/47 407.907
1996/48 225.602 1996/48 409.036
1996/49 221.816 1996/49 402.641
1996/50 217.827 1996/50 395.863
1996/51 219.772 1996/51 399.866
1996/52 221.206 1996/52 402.948
1997/01 221.689 1997/01 403.071
1997/02 224.28 1997/02 407.018
1997/03 227.919 1997/03 412.85
1997/04 224.617 1997/04 406.112
1997/05 224.33 1997/05 404.837
1997/06 231.171 1997/06 413.338
1997/07 235.911 1997/07 417.961
1997/08 239.386 1997/08 420.279
1997/09 240.093 1997/09 417.741
1997/10 237.296 1997/10 411.95
1997/11 239.484 1997/11 414.821
1997/12 238.526 1997/12 412.241
1997/13 238.399 1997/13 411.106
1997/14 235.746 1997/14 406.892
1997/15 235.955 1997/15 407.616
1997/16 235.962 1997/16 407.991
1997/17 237.634 1997/17 411.25
1997/18 240.223 1997/18 416.1
1997/19 241.244 1997/19 418.335
1997/20 240.014 1997/20 416.668
1997/21 237.625 1997/21 412.983
1997/22 235.945 1997/22 410.523
1997/23 244.025 1997/23 425.535
1997/24 244.339 1997/24 427.044
1997/25 243.082 1997/25 425.805
1997/26 249.027 1997/26 437.205
1997/27 247.581 1997/27 436.643
1997/28 246.908 1997/28 437.445
1997/29 249.491 1997/29 444.048
1997/30 250.134 1997/30 447.244
1997/31 250.564 1997/31 450.088
1997/32 255.349 1997/32 --
1997/33 249.995 1997/33 --
1997/34 246.906 1997/34 --
1997/35 -- 1997/35 --
1997/36 -- 1997/36 --
1997/37 -- 1997/37 --
1997/38 -- 1997/38 --
1997/39 -- 1997/39 --
1997/40 -- 1997/40 --
1997/41 -- 1997/41 --
1997/42 -- 1997/42 --
1997/43 -- 1997/43 --
1997/44 -- 1997/44 --
1997/45 -- 1997/45 --
1997/46 -- 1997/46 --
1997/47 -- 1997/47 --
1997/48 -- 1997/48 --
1997/49 -- 1997/49 --
1997/50 -- 1997/50 --
1997/51 -- 1997/51 --
1997/52 -- 1997/52 --
The current uptrend in the Index has been in place since late 1992 and while
this was initially driven primarily by rising price earnings ratios, since 1995
corporate earnings growth has provided the stimulus with p/e ratios actually
declining.
However, in recent months there has been a slowdown in earnings growth,
reflecting the lower rate of GDP growth. Additional pressures currently
affecting the corporate sector include increased foreign competition, as tariffs
are progressively lowered, and interest rates at historically high levels.
Market sentiment is likely to remain cautiously optimistic in the short term as
investors wait for evidence of higher earnings growth figures and a clear
indication that interest rates are set to fall. Additionally, the ongoing
unwinding of exchange controls, while positive over the longer term, adds to
near term uncertainty.
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC] -
Historic Rating of South African Market P/E Ratio and Earnings Growth
1985 7.8
21% 7.8
21% 8.6
21% 8.8
21% 9.3
21% 9.2
21% 8.6
21% 9.2
21% 9.3
21% 9.3
21% 9.9
9.9
1986 10.4
19% 10.3
19% 10.2
19% 9.4
19% 9.7
19% 10.0
19% 10.6
19% 11.8
19% 12.0
19% 11.8
19% 12.0
11.9
1987 12.8
12% 12.3
12% 12.7
12% 13.5
12% 13.3
12% 13.0
12% 14.5
12% 14.7
12% 14.5
12% 11.2
12% 10.3
9.6
1988 8.4
30% 8.0
30% 8.8
30% 8.4
30% 8.5
30% 8.7
30% 9.0
30% 8.1
30% 8.7
30% 9.1
30% 8.9
8.8
1989 9.5
17% 9.8
17% 10.4
17% 10.5
17% 9.5
17% 10.1
17% 10.2
17% 10.0
17% 9.9
17% 9.8
17% 9.9
10.3
1990 11.0
-10% 10.4
-10% 10.9
-10% 10.0
-10% 10.5
-10% 10.0
-10% 10.4
-10% 10.0
-10% 9.2
-10% 9.0
-10% 8.9
9.3
1991 8.8
-2% 9.7
-2% 10.3
-2% 11.1
-2% 11.4
-2% 12.0
-2% 12.8
-2% 12.3
-2% 12.0
-2% 13.2
-2% 13.0
12.5
1992 13.2
-5% 13.2
-5% 13.2
-5% 12.8
-5% 13.9
-5% 13.5
-5% 12.7
-5% 12.0
-5% 12.3
-5% 11.6
-5% 12.3
12.7
1993 13.3
12% 13.3
12% 14.0
12% 14.7
12% 15.6
12% 16.0
12% 16.3
12% 15.5
12% 14.3
12% 14.6
12% 15.3
18.3
1994 17.9
16% 17.6
16% 18.0
16% 19.1
16% 19.1
16% 18.9
16% 19.7
16% 19.7
16% 19.1
16% 19.1
16% 18.6
18.9
1995 16.5
22% 16.3
22% 16.5
22% 17.2
22% 16.5
22% 16.4
22% 16.4
22% 15.9
22% 16.0
22% 16.5
22% 16.4
16.6
1996 18.6
21% 17.4
21% 16.9
21% 17.8
21% 17.2
21% 17.0
21% 16.1
21% 15.7
21% 15.9
21% 15.8
21% 14.7
14.6
1997 14.6
23% 15.4
23% 15.2
23% 15.3
23% 14.7
23% 14.8
23% 15.0
23% 15.4
However, it is our expectation that company earnings will return to 20% plus
annual growth rates over the next two years. This is based upon our view of 3%
per annum plus economic growth, falling inflation, and a significant decline in
interest rates.
This would reduce the p/e ratio of the Index to 11 on an 18-month forward basis,
which places the South African equity market in the lower half of valuations
when compared with comparable stock markets in the I/B/E/S* universe of both
developed and emerging markets.
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
FORWARD PRICE / EARNINGS RATIO
For the 18 months ending 30 November 1998
DEVELOPED PE
- --------- --
JAPAN 34
GERMANY 20
FRANCE 17
NETHERLANDS 17
UNITED STATES 17
SWITZERLAND 17
SINGAPORE 16
SPAIN 16
ITALY 16
SWEDEN 15
BELGIUM 15
CANADA 15
UNITED KINGDOM 14
AUSTRALIA 14
HONG KONG 11
SOUTH AFRICA 11
EMERGING PE
- -------- --
TAIWAN 27
PORTUGAL 17
CHINA 16
ARGENTINA 14
MALAYSIA 14
CHILE 14
INDONESIA 13
KOREA 13
GREECE 12
BRAZIL 12
SOUTH AFRICA 11
MEXICO 11
PHILIPPINES 11
THAILAND 10
POLAND 9
TURKEY 5
* International Broker Estimate System (Global Aggregates)
OLD MUTUAL ASSET MANAGERS (BERMUDA) LIMITED
4
<PAGE>
OMEGA SOUTH AFRICA FUND
INVESTMENT SUMMARY AS AT JUNE 30, 1997
- --------------------------------------------------------------------------------
Historical Information TOTAL RETURN (%)
NET ASSET VALUE (1) INDEX (2) (3)
CUMULATIVE AVERAGE CUMULATIVE AVERAGE
ANNUAL ANNUAL
One Year 9.18 9.18 5.60 5.60
Since Inception (5) 4.68 2.82 3.61 2.18
- --------------------------------------------------------------------------------
Comparative Returns (2) (4)
[EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC]
JSE ALL SHARE INDEX RETURNS IN US$ IVJR DATE 6/30/97 INCEPTION 11/09/95
<TABLE>
<CAPTION>
Total return: Indexed
Total return Cumulative Ann Avg OMEGA JSE ALSI
<S> <C> <C> <C> <C> <C>
09/11/95 11/09/95 100.00 100.00
199511 11/30/95 99.18 99.41
199512 12/31/95 104.26 104.37
199601 01/31/69 113.03 115.22
199602 02/29/96 103.61 106.48
199603 03/31/96 101.68 104.10
199604 04/30/96 95.74 99.38
199605 05/31/96 93.90 96.30
199606 06/30/96 95.88 98.12
199607 07/31/96 88.00 90.75
199608 08/31/96 89.33 92.46
199609 09/30/96 91.86 94.22
199610 10/31/96 90.38 92.32
199611 11/30/96 90.92 91.01
199612 12/31/96 87.90 88.90
199701 1/31/97 90.19 91.58
199702 2/28/97 97.96 100.17
199703 3/31/97 100.73 100.92
199704 4/30/97 101.89 100.95
199705 5/31/97 98.98 99.17
199706 6/30/97 104.68 103.61
Fiscal yr to date 5.60 5.60 9.18 5.60
One Yr 5.60 5.60 5.60 9.18 5.60
Since inception 3.61 3.61 2.18 4.68 3.61
Days since inception 599
</TABLE>
YEAR ENDED JUNE 30, 1997 PERIOD FROM INCEPTION
TO JUNE 30, 1996 (5)
Net Asset Value Per Share 98.95 95.61
Income Dividends 3.24 0.29
Capital Gains
Distributions 1.30 -
Fund Total Return (1) 9.18% (4.12)%
Index Total Return (2) (3) 5.60% (2.75)%
(1) Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of OMEGA South Africa Fund during
the period, and assumes dividends and capital gain distributions, if any, were
reinvested at the net asset value on the ex-dividend date.
(2) Assumes dividends and capital gain distributions, if any, were reinvested.
(3) The benchmark for investment performance is the JSE Actuaries All Share
Index.
(4) OMEGA South Africa Fund net asset value and JSE Actuaries All Share Index
rebased to November 10, 1995 = 100, the launch date of the Fund.
(5) The Fund commenced operations on November 10, 1995.
5
<PAGE>
OMEGA SOUTH AFRICA FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
- --------------------------------------------------------------------------------
ASSETS
Investment in Trust, at value (Note B) $ 8,708,057
Receivable from investment adviser (Note C) 19,847
-----------
TOTAL ASSETS 8,727,904
-----------
LIABILITIES
Payable for Fund expenses 49,534
-----------
TOTAL LIABILITIES 49,534
-----------
NET ASSETS $ 8,678,370
-----------
-----------
NET ASSETS consist of:
Paid in capital $10,770,607
Distributions in excess of net investment income (33,956)
Accumulated net realized gain on investment 39,605
Net unrealized depreciation of investment (2,097,886)
-----------
NET ASSETS $ 8,678,370
-----------
-----------
SHARES OUTSTANDING 87,706
-----------
-----------
NET ASSET VALUE PER SHARE $ 98.95
-----------
-----------
MAXIMUM OFFERING PRICE PER SHARE $ 99.30
-----------
-----------
See Notes to Financial Statements.
6
<PAGE>
OMEGA SOUTH AFRICA FUND
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1997
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Investment income allocated from Trust $ 197,019
Expenses allocated from Trust (58,976)
-----------
NET INVESTMENT INCOME FROM TRUST 138,043
-----------
EXPENSES
Administrative fee (Note C) 40,000
Printing expense 35,000
Auditing fees 28,000
Trustees' fees and expenses (Note C) 25,000
Shareholder servicing agent fee 19,951
12b-1 fees (Note C) 3,824
Miscellaneous expenses 752
-----------
Total expenses 152,527
-----------
Deduct: Expenses reimbursed by investment adviser (Note C) (135,019)
-----------
NET EXPENSES 17,508
-----------
NET INVESTMENT INCOME 120,535
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) allocated from Trust on:
Investments 56,612
Foreign currency transactions (10,137)
-----------
Net realized gain allocated from Trust 46,475
Net change in unrealized depreciation of investments
allocated from Trust (230,634)
-----------
NET REALIZED AND UNREALIZED LOSS ALLOCATED FROM TRUST (184,159)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (63,624)
-----------
-----------
See Notes to Financial Statements.
7
<PAGE>
OMEGA SOUTH AFRICA FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1997 June 30, 1996 (1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income $ 120,535 $ 86,561
Net realized gain allocated from Trust 46,475 63,467
Net change in unrealized depreciation
of investments allocated from Trust (230,634) (1,867,252)
---------- -----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (63,624) (1,717,224)
---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (225,561) (12,000)
Realized capital gains (73,828) --
---------- -----------
TOTAL DISTRIBUTIONS (299,389) (12,000)
---------- -----------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST:
Proceeds from shares sold
(net of placement fee of $0 and $250, respectively) 2,940,269 14,002,451
Payments for shares redeemed (6,249,747) --
Distributions reinvested 77,634 --
---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM FUND
SHARE TRANSACTIONS (3,231,844) 14,002,451
---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (3,594,857) 12,273,227
NET ASSETS
Beginning of period 12,273,227 --
---------- -----------
End of period $8,678,370 $12,273,227
---------- -----------
---------- -----------
NUMBER OF SHARES OF BENEFICIAL INTEREST
Sold 30,000 128,373
Redeemed (71,602) --
Distributions reinvested 935 --
---------- -----------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (40,667) 128,373
---------- -----------
---------- -----------
</TABLE>
(1) For the period November 10, 1995 (commencement of operations) to June 30,
1996.
See Notes to Financial Statements.
8
<PAGE>
OMEGA SOUTH AFRICA FUND
FINANCIAL HIGHLIGHTS
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the financial
statements. The per share amounts and ratios which are shown reflect income and
expenses including OMEGA South Africa Fund's proportionate share of the Trust's
income and expenses. It should be read in conjunction with the Trust's
Financial Statements and Notes thereto.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Period Ended
June 30, 1997 June 30,1996(1)
------------- ---------------
<S> <C> <C>
PER SHARE DATA:
Net Asset Value, Beginning of Period $95.61 $100.00
Income From Investment Operations
Net Investment Income 2.27 0.88
Net Realized and Unrealized Gains and
Losses Allocated from Trust 5.61 (4.98)
------ -------
Total From Investment Operations 7.88 (4.10)
------ -------
Less Distributions From:
Net Investment Income (3.24) (0.29)
Realized Capital Gains (1.30) -
------ -------
Total From Distributions (4.54) (0.29)
------ -------
Net Asset Value, End of Period $98.95 $95.61
------ -------
------ -------
TOTAL RETURN(4) 9.18% (4.12)%
------ -------
------ -------
RATIOS/SUPPLEMENTAL DATA:
Ratio of Expenses to Average Net Assets 1.00%(3) 1.00%(2)(3)
------ -------
------ -------
Ratio of Net Investment Income to Average Net Assets 1.58%(3) 1.46%(2)(3)
------ -------
------ -------
Net Assets, End of Period (in thousands) $8,678 $12,273
------ -------
------ -------
</TABLE>
NOTES:
(1) For the period November 10, 1995 (commencement of operations) to June 30,
1996.
(2) Annualized
(3) After reduction of expenses by the Adviser as described in Note C of Notes
to Financial Statements. Had the Adviser not undertaken such action, the
annualized ratios of expenses and net investment income to average daily
net assets would have been as follows: for the year ended June 30, 1997,
2.77% and (0.19)%, respectively; and for the period from November 10, 1995
(Commencement of Operations) to June 30, 1996, 2.42% and 0.03%,
respectively.
(4) Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of OMEGA South Africa Fund
during the period, and assumes dividends and capital gain distributions, if
any, were reinvested. Periods less than one year are not annualized.
See Notes to Financial Statements.
9
<PAGE>
OMEGA SOUTH AFRICA FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
NOTE A -- ORGANIZATION
Old Mutual Equity Growth Assets South Africa Equity Fund ("OMEGA South Africa
Fund") is a trust organized under the laws of the Commonwealth of Massachusetts
pursuant to a Declaration of Trust dated as of September 1, 1995. The OMEGA
South Africa Fund is registered as a non-diversified open-end management
investment company under the Investment Company Act of 1940, as amended (the
"Act"). OMEGA South Africa Fund offers shares of beneficial interest to United
States investors. The OMEGA South Africa Fund seeks to achieve its investment
objective by investing all of its net investable assets in Old Mutual South
Africa Equity Trust (the "Trust"), a non-diversified open-end management
investment company having the same investment objective and policies as the
OMEGA South Africa Fund. The performance of the OMEGA South Africa Fund is
directly affected by the performance of the Trust. The financial statements of
the Trust, including the schedule of investments, are included elsewhere in this
report and should be read in conjunction with the OMEGA South Africa Fund's
financial statements.
The maximum sales load imposed on purchases of OMEGA South Africa Fund Shares
(as a percentage of offering price) is 0.35%. A maximum redemption fee of 0.65%
on redemption proceeds is charged by OMEGA South Africa Fund.
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements are prepared in accordance with generally
accepted accounting principles. The following is a summary of significant
accounting policies followed by OMEGA South Africa Fund in the preparation of
its financial statements.
TRUST VALUATION: The value of OMEGA South Africa Fund's investment in the Trust
reflects OMEGA South Africa Fund's proportionate interest in the net assets of
the Trust (0.81% at June 30, 1997).
INVESTMENT VALUATION: Investments in the Trust are valued by the Trust as
indicated in Note B of the Trust's financial statements.
FEDERAL INCOME TAXES: OMEGA South Africa Fund intends to qualify each year and
elect to be taxed as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended. By so qualifying, OMEGA South Africa
Fund will not be subject to federal income taxes to the extent that, among other
things, they distribute substantially all of their taxable income, including
realized capital gains, for the fiscal year. In addition, by distributing
during each calendar year substantially all of their net investment income,
capital gains and certain other amounts, if any, OMEGA South Africa Fund will
not be subject to a federal excise tax.
ALLOCATIONS: All net investment income and realized and unrealized capital
gains and losses of the Trust are allocated pro rata among the OMEGA South
Africa Fund and other investors in the Trust on a daily basis.
10
<PAGE>
OMEGA SOUTH AFRICA FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
-CONTINUED-
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: OMEGA South Africa Fund declares
and distributes dividends from net investment income, if any, semi-annually on
or about the last day of December and June. OMEGA South Africa Fund's realized
capital gains, if any, will be distributed at least annually. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for foreign currency
transactions, the "mark to market" of certain passive foreign investment
companies and differences in the timing of recognition of certain capital losses
for financial reporting and tax purposes. Income dividends and capital gain
distributions to shareholders are recorded on the ex-dividend date.
USE OF ESTIMATES: The preparation of financial statements in conformity with
United States generally accepted accounting principles requires management to
make estimates and assumptions in determining 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 amounts could differ
from these estimates.
NOTE C -- ADMINISTRATION AND DISTRIBUTION FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
Old Mutual Asset Managers (Bermuda) Limited (the "Adviser"), a wholly-owned
subsidiary of South African Mutual Life Assurance Society ("Old Mutual") will
reduce or rebate a portion of its advisory fee charged to the Trust as necessary
so that ordinary operating expenses of OMEGA South Africa Fund, including the
advisory fee allocated from the Trust, will not exceed 1.00%, per annum of
OMEGA South Africa Fund's average daily net assets. This limitation does not
apply to extraordinary expenses.
State Street Bank and Trust Company ("State Street") will either directly or
through an affiliated entity provide certain administrative and accounting
services to OMEGA South Africa Fund pursuant to an Administration Agreement
dated as of October 23, 1995. Under the Administration Agreement, OMEGA South
Africa Fund pays compensation to State Street at the annual rate of $40,000.
OMEGA South Africa Fund has adopted a Shareholder Servicing and Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended. OMEGA South Africa Fund will reimburse the Adviser for
distribution costs at an annual rate not to exceed 0.05% of the average daily
net assets of OMEGA South Africa Fund.
Trustees receive an annual fee of $5,000. OMEGA South Africa Fund pays no
compensation to their Trustees who are directors or employees of Old Mutual or
any wholly-owned subsidiaries of Old Mutual.
NOTE D -- INVESTMENT TRANSACTIONS
Contributions and withdrawals in OMEGA South Africa Fund's investment in the
Trust for the year ended June 30, 1997 amounted to $3,068,649 and $6,628,305,
respectively.
11
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders of
Old Mutual Equity Growth Assets South Africa Fund
We have audited the accompanying statement of assets and liabilities of the
Old Mutual Equity Growth Assets South Africa Fund ("OMEGA South Africa Fund") as
of June 30, 1997 and, the related statement of operations for the year then
ended, the statements of changes in net assets and financial highlights for the
year then ended and for the period from November 10, 1995 (commencement of
operations) to June 30, 1996. These financial statements and financial
highlights are the responsibility of OMEGA South Africa Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Old
Mutual Equity Growth Assets South Africa Fund as of June 30, 1997, the results
of its operations for the year then ended and the changes in its net assets and
financial highlights for the year then ended and for the period from November
10, 1995 to June 30, 1996, in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK LLP
Boston, Massachusetts
July 25, 1997
12
<PAGE>
OLD MUTUAL SOUTH AFRICA EQUITY TRUST
("THE TRUST")
FINANCIAL STATEMENTS
JUNE 30, 1997
13
<PAGE>
OLD MUTUAL SOUTH AFRICA EQUITY TRUST
SCHEDULE OF INVESTMENTS
JUNE 30, 1997
- --------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS--97.2%
BANKS & FINANCIAL SERVICES--20.5%
739,746 Amalgamated Banks of SA Ltd $ 5,315,980
500,000 Baobab Solid Growth Ltd * 4,790,816
1,005,000 Coronation Holdings Ltd 19,580,804
1,236,025 Genbel Securities Ltd 19,442,936
685,000 Investec Group Ltd 27,448,394
300,000 Investec Holdings Ltd 11,656,916
635,000 Mustek Ltd * 1,990,727
3,644,300 Nedcor Ltd 80,859,289
1,000,000 Standard Bank Investment
Corp. Ltd 49,232,807
-------------
220,318,669
-------------
BEVERAGES, HOTELS & LEISURE--5.2%
1,221,211 Johnnies Industrial Corporation Ltd 15,839,750
1,300,000 The South African Breweries Ltd 39,965,780
-------------
55,805,530
-------------
BUILDING, CONSTRUCTION, ALLIED--3.8%
180,000 Anglo Alpha Ltd 3,109,615
3,300,000 Barlow Ltd 35,954,300
1,200,000 Group Five Holdings Ltd 1,642,565
-------------
40,706,480
-------------
CHEMICALS, OILS & PLASTICS--7.3%
880,000 AECI Ltd 5,245,612
1,452,300 Engen Ltd 7,262,301
4,580,038 Sasol Ltd 60,163,873
3,044,394 Sentrachem Ltd 5,377,007
-------------
78,048,793
-------------
COAL--1.8%
175,701 Anglo American Coal Corp Ltd 10,822,515
1,312,000 Ingwe Coal Corporation Ltd 8,400,044
-------------
19,222,559
-------------
DIAMONDS--5.8%
16,000 Anglo American Investment
Trust Ltd 604,040
1,684,000 De Beers Consolidated Mines Ltd 62,273,982
-------------
62,878,022
-------------
ELECTRONICS & ELECTRICAL--2.6%
2,320,000 Allied Electronics Corporation Ltd 4,558,560
2,500,000 Grintek Ltd 1,848,990
1,000,000 Persetel Holdings Ltd 7,042,720
3,373,746 Reunert Ltd 11,582,239
598,500 Siltek Ltd 2,510,542
-------------
27,543,051
-------------
ENGINEERING--1.7%
3,666,260 African Oxygen Ltd $ 12,060,332
1,274,700 Hudaco Industries Ltd 6,191,279
-------------
18,251,611
-------------
FOOD--1.0%
354,200 CG Smith Foods Ltd 6,725,069
5,976,100 Irvin & Johnson Ltd 4,024,088
-------------
10,749,157
-------------
FURNITURE & HOUSEHOLD--0.9%
1,532,303 JD Group Ltd 9,472,234
-------------
GOLD--0.6%
314,500 Driefontein Consolidated Ltd 2,117,728
111,000 Southvaal Holdings Ltd 2,230,048
44,000 Vaal Reefs Exploration and
Mining Co Ltd 2,127,387
-------------
6,475,163
-------------
INDUSTRIAL HOLDING--15.9%
4,835,000 Anglovaal Industries Ltd 17,719,616
80,270 Bidvest Group Ltd (ords) 620,256
1,693,203 Bidvest Group Ltd 12,971,442
6,000,000 CG Smith Ltd 33,579,865
1,108,030 Imperial Holdings Ltd 15,778,328
3,950,000 Murray & Roberts Holdings Ltd 9,287,449
190,500 Plate Glass & Shatterprufe
Industries Ltd 5,425,433
4,050,000 Rembrandt Group Ltd 43,276,300
13,274,900 Safmarine & Rennies Holdings Ltd 32,531,491
-------------
171,190,180
-------------
INSURANCE--2.5%
290,668 Liberty Life Association of
Africa Ltd 7,893,181
1,500,000 Mutual & Federal Insurance
Co Ltd 8,146,594
5,734,000 Norwich Holdings SA Ltd 11,140,126
-------------
27,179,901
-------------
MANGANESE--0.5%
490,000 Samancor Ltd 4,922,177
-------------
MINING HOLDING--0.7%
44,000 Associated Ore & Metal Corp Ltd 3,011,370
1,300,000 Avmin Ltd 4,620,819
-------------
7,632,189
-------------
See Notes to Financial Statements
14
<PAGE>
OLD MUTUAL SOUTH AFRICA EQUITY TRUST
SCHEDULE OF INVESTMENTS
JUNE 30, 1997
-CONTINUED-
- --------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS--Continued
MINING HOUSES--14.3%
1,700,152 Angelo American Platinum
Corporation Ltd $ 14,075,659
870,000 Anglo American Corporation of
of SA Ltd 52,484,270
1,057,200 Anglovaal Ltd 28,241,793
8,400,000 Gencor Ltd 38,759,245
880,000 Gold Fields of SA Ltd 20,788,166
-------------
154,349,133
-------------
PAPER & PACKAGING--1.2%
870,000 Nampak Ltd 3,783,861
1,046,386 Sappi Ltd 9,471,647
-------------
13,255,508
-------------
PLATINUM--2.6%
330,000 Impala Platinum Holdings Ltd 3,697,428
893,347 Potgietersrust Platinums Ltd 6,755,080
978,113 Rustenburg Platinum Holdings Ltd 17,923,254
-------------
28,375,762
-------------
PRINTING & PUBLISHING--1.6%
522,000 Independent Newspapers
Holdings Ltd 2,869,588
500,000 Nasionale Pers Bpk 5,740,148
563,400 Omni Media Corp Ltd 8,893,498
-------------
17,503,234
-------------
STEEL & ALLIED--1.2%
18,863,380 Iscor Ltd 12,493,684
-------------
STORES--4.2%
2,317,896 Foschini Ltd $ 7,266,613
6,826,025 Metro Cash and Carry Ltd 6,028,061
4,565,834 Speciality Stores 'N' Ltd 3,780,081
335,252 Speciality Stores Ltd 292,360
5,168,493 Wooltru Ltd 28,070,411
-------------
45,437,526
-------------
TRANSPORTATION--1.3%
3,386,438 Trencor Ltd 14,205,171
-------------
Total Common Stocks
(Cost $1,012,602,343) 1,046,015,734
-------------
- --------------------------------------------------------------------------------
MATURITY AMORTIZED
AMOUNT VALUE
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--0.3%
3,704,598 State Street Bank and Trust
Company, 5.00%, dated
6/25/97, due 7/2/97
(collateralized by a U.S.
Treasury Bond, 7.875%,
11/15/07) (Cost $3,701,000) 3,701,000
Total Investments--97.5%
(Cost $1,016,303,343) $1,049,716,734
Net Other Assets--2.5% 26,989,348
-------------
Total Net Assets--100% $1,076,706,082
-------------
-------------
NOTE TO SCHEDULE OF INVESTMENTS
* Non-income producing security.
See Notes to Financial Statements
15
<PAGE>
OLD MUTUAL SOUTH AFRICA EQUITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
- --------------------------------------------------------------------------------
ASSETS
Investments in securities, at value (Note B)
(Cost of investments - $1,016,303,343) $ 1,049,716,734
Cash (including foreign currency, at value) 21,100,114
Receivable for investments sold 3,369,587
Deferred organization costs (Note B) 985,640
Dividends and interest receivable 3,780,962
Other assets 24,997
----------------
Total Assets 1,078,978,034
----------------
LIABILITIES
Payable for investments purchased 1,565,697
Payable to adviser (Note C) 517,325
Accrued expenses 188,930
----------------
Total Liabilities 2,271,952
----------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL INTERESTS $ 1,076,706,082
----------------
----------------
See Notes to Financial Statements
16
<PAGE>
OLD MUTUAL SOUTH AFRICA EQUITY TRUST
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1997
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Dividend income $ 22,603,287
Interest income 2,419,235
Investment lending income 17,886
----------------
TOTAL INCOME 25,040,408
----------------
EXPENSES
Investment advisory fee (Note C) 5,803,304
Administration fee (Note C) 374,991
Legal fees 325,000
Amortization of deferred organization expenses (Note B) 304,564
Custodian fees 294,585
Trustees fees and expenses (Note C) 175,002
Auditing fees 52,000
Miscellaneous expenses 86,075
----------------
TOTAL EXPENSES 7,415,521
----------------
NET INVESTMENT INCOME 17,624,887
----------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments 2,198,475
Foreign currency transactions (550,137)
----------------
Net realized gain 1,648,338
----------------
Net change in unrealized appreciation (depreciation) of:
Investments 73,208,275
Foreign currency translations (352,460)
----------------
Net change in unrealized appreciation (depreciation) 72,855,815
----------------
Net realized and unrealized gain 74,504,153
----------------
Net increase in net assets resulting from operations $ 92,129,040
----------------
----------------
See Notes to Financial Statements
17
<PAGE>
<TABLE>
<CAPTION>
OLD MUTUAL SOUTH AFRICA EQUITY TRUST
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED PERIOD ENDED
JUNE 30, 1997 JUNE 30, 1996 (1))
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income $ 17,624,887 $ 9,277,319
Net realized gain on investments and
foreign currency transactions 1,648,338 6,446,468
Net change in unrealized appreciation (depreciation)
of investments and foreign currency translations 72,855,815 (39,777,485)
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS 92,129,040 (24,053,698)
---------------- ----------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS:
Contributions 63,862,347 1,122,724,906
Withdrawals (68,137,648) (109,818,865)
---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS (4,275,301) 1,012,906,041
---------------- ----------------
NET INCREASE IN NET ASSETS 87,853,739 988,852,343
NET ASSETS
Beginning of period 988,852,343 --
---------------- ----------------
End of period $ 1,076,706,082 $ 988,852,343
---------------- ----------------
---------------- ----------------
FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1997 JUNE 30, 1996 (1)
---------------- -----------------
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.77% 0.82%(2)
-------- --------
-------- --------
Net investment income 1.82% 1.34%(2)
-------- --------
-------- --------
Portfolio turnover rate 9.88% 4.43%(3)
-------- --------
-------- --------
Average commission rate per share $ 0.01 $ 0.02
-------- --------
-------- --------
</TABLE>
NOTES:
(1) For the period November 3, 1995 (commencement of operations) to June 30,
1996.
(2) Annualized
(3) Not Annualized
See Notes to Financial Statements
18
<PAGE>
OLD MUTUAL SOUTH AFRICA EQUITY TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
NOTE A -- ORGANIZATION
Old Mutual South Africa Equity Trust (the "Trust") is a trust organized under
the laws of the Commonwealth of Massachusetts pursuant to a Declaration of Trust
dated as of September 1, 1995 and has its principal place of business in
Bermuda. The Trust is registered as a non-diversified open-end management
investment company under the United States Investment Company Act of 1940, as
amended (the "Act").
The investment objective of the Trust is to seek long-term total return in
excess of the Johannesburg Stock Exchange ("JSE") Actuaries All Share Index from
investment in equity securities of South African issuers.
Beneficial interest in the Trust is issued to Old Mutual Equity Growth Assets
South Africa Fund ("OMEGA South Africa Fund") and Old Mutual South Africa Growth
Assets Fund Limited ("Old Mutual SAGA Fund"). OMEGA South Africa Fund is a
Massachusetts business trust organized pursuant to a Declaration of Trust dated
as of September 1, 1995. OMEGA South Africa Fund offers shares of beneficial
interest to United States investors. Old Mutual SAGA Fund was incorporated as a
company under the laws of Bermuda as of September 7, 1995. Old Mutual SAGA Fund
offers shares of beneficial interest to non-United States investors. The shares
are listed on the Official List of the Irish Stock Exchange.
Old Mutual Fund Holdings (Bermuda) Limited, a wholly-owned subsidiary of South
African Mutual Life Assurance Society ("Old Mutual"), holds 92.70% of the
beneficial interest in the Trust as of June 30, 1997. It is expected that all
of the investable assets of OMEGA South Africa Fund and Old Mutual SAGA Fund
will be invested in the Trust. The Trust will apply amounts so invested to
redeem a portion of the beneficial interest of Old Mutual Fund Holdings
(Bermuda) Limited in the Trust.
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements are prepared in accordance with United
States generally accepted accounting principles. The following is a summary of
significant accounting policies followed by the Trust in the preparation of its
financial statements.
VALUATION: Securities are valued each day on which the New York Stock Exchange
is open for trading (a "Business Day") as of 10:00 a.m. Eastern Standard Time
which is after the close of business for the Johannesburg Stock Exchange ("JSE")
for that day. JSE listed securities will generally be valued based on the
current JSE ruling price which is generally the last sale price. If the
securities did not trade on the JSE on the date of valuation, they may be valued
on a different basis believed by the trustees of the Trust to reflect their fair
value.
19
<PAGE>
REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Trust's custodian takes possession of the underlying collateral
securities, the value of which at least equals the principal amount, including
interest, of the repurchase transaction. 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 ensure the adequacy of the collateral. In
the event of default of the obligation to repurchase, the Trust has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral, may be subject to legal proceedings.
INVESTMENT TRANSACTIONS: Investment security transactions are recorded on trade
date. Dividend income on foreign securities is recorded on the ex-dividend date
or when the Trust becomes aware of its declaration. Interest income is recorded
on the accrual basis. Realized gains and losses from security transactions are
determined on the basis of identified cost.
FOREIGN CURRENCY TRANSLATIONS: Securities and other assets and liabilities
denominated in foreign currencies, mainly South African Rand, are translated
into U.S. dollars using the exchange rate prevailing as of the time of
valuation. Purchases and sales of securities and income and expenses are
translated into U.S. dollar amounts on the respective dates of such
transactions. Net realized gain (loss) on foreign currency transactions
includes net realized currency gains and losses recognized between accrual and
payment dates. The Trust does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments from
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
FEDERAL INCOME TAXES: The Trust intends to comply with the requirements of the
Internal Revenue Code of 1986, as amended. The Trust intends to conduct its
operations so that the OMEGA South Africa Fund can qualify as a regulated
investment company under Subchapter M of the United States Internal Revenue Code
of 1986, as amended. The Trust will be treated as a partnership for federal
income tax purposes and is therefore not subject to federal income tax.
ORGANIZATION EXPENSES: Expenses incurred by the Trust in connection with its
organization are being amortized on a straight-line basis over a period of five
years. The trustees consider U.S. $100,000 of the $4,750,100 in cash invested
as of November 3, 1995 to be the minimum required capital under the Act (the
"Initial Investment"). The amount paid by the Trust on any redemption of
beneficial interests from the Initial Investment will be reduced by the pro rata
portion of any unamortized organizational expenses of the Trust. Such pro rata
portion is to be determined by multiplying the unamortized expenses with the
ratio of the amount redeemed divided by the amount of the book capital account
of the beneficial interest attributable to the Initial Investment at the time of
redemption.
20
<PAGE>
LOANS OF INVESTMENT SECURITIES: The Trust may lend its investment securities
while it continues to earn dividends on such investments loaned. In connection
with the lending of investment securities, the Trust receives U.S. Treasury
Securities as collateral in an amount at least equal to 105 percent of the
market value of the investments loaned. Additional collateral is requested from
the borrower if the value falls below 105 percent. For the year ended June 30,
1997, the market value of investments loaned and the amount of collateral
received with respect to such transactions was $23,470,202 and $24,723,247,
respectively.
USE OF ESTIMATES: The preparation of financial statements in conformity with
United States generally accepted accounting principles requires management to
make estimates and assumptions in determining 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 amounts could differ
from these estimates.
NOTE C -- ADVISORY AND ADMINISTRATION FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
The Trust has entered into an investment advisory agreement dated as of October
23, 1995 with Old Mutual Asset Managers (Bermuda) Limited (the "Adviser"), a
wholly-owned subsidiary of Old Mutual to provide investment management services.
The Adviser receives for its services monthly compensation at the rate of 0.60%
of average daily net assets of the Trust.
The Adviser will reduce or rebate a portion of its advisory fee as necessary so
that ordinary operating expenses of each of the OMEGA South Africa Fund and Old
Mutual SAGA Fund, including the advisory fee, will not exceed 1.00%, per annum
of each Fund's average daily net assets. This limitation does not apply to
extraordinary expenses, placement fees and brokerage expenses.
State Street Cayman Trust Company, Ltd. ("State Street"), will either directly
or through an affiliated entity provide certain administrative and accounting
services to the Trust pursuant to an Administration Agreement dated as of
October 23, 1995. Under the Administration Agreement, the Trust pays
compensation to State Street at the annual rate of 0.05% of the first $500
million of the Trust's average daily net assets, 0.025% of the next $500
million of the Trust's average daily net assets and 0.01% of the Trust's average
daily net assets in excess of $1 billion.
Trustees not resident in Bermuda receive an annual fee of $20,000. Trustees
resident in Bermuda receive an annual fee of $10,000. The Audit Committee
chairman receives an additional annual fee of $5,000. The Trust pays no
compensation to their Trustees who are directors or employees of Old Mutual or
any wholly-owned subsidiaries of Old Mutual.
21
<PAGE>
During the year ended June 30, 1997, the Trust purchased 685,000 shares of
Investec Group Ltd. for US$13,925,769 from Old Mutual Global Assets Fund
Limited, which is also managed by the Adviser. The transaction did not include
commissions. On the date of purchase the Trust's investment in Investec Group
Ltd. was valued at US$20,911,335.
NOTE D -- INVESTMENT TRANSACTIONS
For the year ended June 30, 1997, there were purchase and sale transactions
(excluding short-term securities) of $97,817,776 and $92,829,079, respectively.
The aggregate cost of Trust investments was substantially the same for book and
Federal income tax purposes at June 30, 1997. Gross unrealized appreciation of
investments was $167,744,193 and gross unrealized depreciation of investments
was $134,330,802, resulting in net unrealized appreciation of investments of
$33,413,391.
22
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and the Owners of Beneficial Interest of Old Mutual
South Africa Equity Trust
We have audited the accompanying statement of assets and liabilities including
the schedule of investments of the Old Mutual South Africa Equity Trust ("the
Trust") as of June 30, 1997, and the related statement of operations for the
year then ended, the statements of changes in net assets and financial
highlights for the year then ended and for the period from November 3, 1995
(commencement of operations) to June 30, 1996. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with United States generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of the
securities owned as of June 30, 1997, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Old
Mutual South Africa Equity Trust as of June 30, 1997, the results of its
operations for the year then ended and the changes in its net assets and
financial highlights for the year then ended and for the period from November 3,
1995 to June 30, 1996, in conformity with United States generally accepted
accounting principles.
KPMG PEAT MARWICK
Hamilton, Bermuda
July 25, 1997
23
<PAGE>
TRUSTEES
Michael John Levett
PRESIDENT
William Langley
TREASURER
William Lester Boyan
Thomas Haskins Davis
Michel John Drew
Kenneth Rigby Williams
INVESTMENT MANAGER
Old Mutual Asset Managers (Bermuda) Limited
61 Front Street, Hamilton HM11, Bermuda
ADMINISTRATOR
FOR THE OMEGA SOUTH AFRICA FUND:
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
FOR THE MASTER TRUST:
State Street Cayman Trust Company, Ltd.
P.O. Box 2508
Elizabeth Square, George Town
Grand Cayman, British West Indies
TRANSFER AGENT
FOR THE OMEGA SOUTH AFRICA FUND:
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110
AUDITORS
FOR THE OMEGA SOUTH AFRICA FUND:
KPMG Peat Marwick LLP
99 High Street, Boston, MA 02110
FOR THE MASTER TRUST:
KPMG Peat Marwick
Vallis Building, Hamilton HM11, Bermuda
LEGAL COUNSEL
IN THE UNITED KINGDOM:
Norton Rose
Kempson House, Camomile Street, London EC3A 7AN
IN THE UNITED STATES:
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110
IN BERMUDA:
Conyers Dill & Pearman
Clarendon House, Church Street, Hamilton, Bermuda
24
<PAGE>
OMEGA
SOUTH AFRICA
OLD MUTUAL
EQUITY GROWTH
ASSET SOUTH
AFRICA FUND
[LOGO]
ANNUAL REPORT
JUNE 30, 1997
