<PAGE>
[REPRESENTATION OF GRAPHIC IMAGE]
NAVELLIER
PERFORMANCE FUNDS
AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
SEMIANNUAL REPORT
JUNE 30, 2000
<PAGE>
SEMIANNUAL REPORT, June 30, 2000
NAVELLIER PERFORMANCE FUNDS
1 East Liberty, Third Floor
Reno, NV 89501
(800) 887-8671
--------------------------------------------------------------------------------
Dear Shareholder:
The first six months of the year 2000 have quite frankly been one of the
most volatile periods in the history of the U.S. stock market. We saw a
correction at the end of the first quarter of the year and at the beginning of
April, especially in the NASDAQ market. Then after the tail end of the last
quarterly earnings announcement season in May, the stock market went into a low
volume meltdown that saw stock prices erode by up to 30% in about three weeks.
Such meltdowns are always a possibility, because the stock market is more
volatile than ever before. We have to admit that we have been surprised by the
degree of NASDAQ volatility that now exists.
Due to the recent volatility, the stock market is now obsessed with
fundamentals. Stocks without earnings, such as Amazon.com, have been severely
punished. Not only is the stock market demanding strong earnings growth from
stocks, but the stock market is also seeking out those stocks that will have
consistent, predictable growth in the upcoming months. This is the perfect
environment for the stocks in our fund. It appears that institutional investors
are gravitating toward the fundamentally superior stocks that we favor, and the
analyst community continues to upgrade their earnings estimates for many of our
stocks. As a result, we remain confident that our favorite stocks will continue
to appreciate after their third and fourth quarter earnings results are
released.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
<TABLE>
<CAPTION>
AGGRESSIVE SMALL CAP EQUITY RUSSELL 2000 RUSSELL 2000 GROWTH
<S> <C> <C> <C>
4/1/1994 $10,000 $10,000 $10,000
4/28/1994 $10,229 $10,059 $10,015
5/31/1994 $9,750 $9,946 $9,792
6/30/1994 $9,521 $9,608 $9,370
7/31/1994 $9,719 $9,766 $9,504
8/31/1994 $9,906 $10,310 $10,202
9/30/1994 $10,427 $10,276 $10,246
10/31/1994 $10,770 $10,236 $10,357
11/30/1994 $10,957 $9,822 $9,937
12/31/1994 $11,426 $10,086 $10,173
1/31/1995 $10,614 $9,959 $9,966
2/28/1995 $11,124 $10,374 $10,426
3/31/1995 $11,655 $10,552 $10,731
4/30/1995 $12,258 $10,786 $10,893
5/31/1995 $12,341 $10,972 $11,036
6/30/1995 $14,048 $11,541 $11,796
7/31/1995 $16,306 $12,206 $12,715
8/31/1995 $15,682 $12,459 $12,872
9/30/1995 $16,514 $12,682 $13,137
10/31/1995 $15,619 $12,115 $12,490
11/30/1995 $16,348 $12,624 $13,041
12/31/1995 $16,429 $12,957 $13,331
1/31/1996 $15,481 $12,943 $13,220
2/29/1996 $16,760 $13,346 $13,823
3/31/1996 $18,007 $13,619 $14,097
4/30/1996 $20,939 $14,347 $15,179
5/31/1996 $22,816 $14,912 $15,958
6/30/1996 $20,971 $14,300 $14,921
7/31/1996 $17,656 $13,051 $13,099
8/31/1996 $18,839 $13,810 $14,068
9/30/1996 $20,321 $14,349 $14,793
10/31/1996 $19,308 $14,128 $14,155
11/30/1996 $19,287 $14,711 $14,549
12/31/1996 $18,967 $15,096 $14,832
1/31/1997 $18,935 $15,398 $15,203
2/28/1997 $17,165 $15,025 $14,285
3/31/1997 $16,014 $14,316 $13,276
4/30/1997 $16,024 $14,356 $13,122
5/31/1997 $18,114 $15,953 $15,095
6/30/1997 $19,255 $16,637 $15,606
7/31/1997 $20,428 $17,411 $16,405
8/31/1997 $20,726 $17,809 $16,898
9/30/1997 $22,027 $19,113 $18,246
10/31/1997 $21,536 $18,274 $17,149
11/30/1997 $21,579 $18,155 $16,741
12/31/1997 $21,099 $18,473 $16,751
1/31/1998 $20,097 $18,181 $16,529
2/28/1998 $21,231 $19,524 $17,988
3/31/1998 $21,798 $20,329 $18,743
4/30/1998 $22,035 $20,441 $18,858
5/31/1998 $21,389 $19,339 $17,487
6/30/1998 $21,890 $19,380 $17,665
7/31/1998 $20,822 $17,810 $16,190
8/31/1998 $16,312 $14,351 $12,453
9/30/1998 $17,222 $15,475 $13,716
10/31/1998 $17,394 $16,106 $14,432
11/30/1998 $18,673 $16,950 $15,552
12/31/1998 $21,086 $17,999 $16,960
1/31/1999 $20,980 $18,239 $17,723
2/28/1999 $18,646 $16,761 $16,101
3/31/1999 $19,345 $17,023 $16,675
4/30/1999 $20,730 $18,548 $18,147
5/31/1999 $21,705 $18,819 $18,176
6/30/1999 $23,682 $19,670 $19,134
7/31/1999 $22,867 $19,131 $18,543
8/31/1999 $22,400 $18,423 $17,849
9/30/1999 $20,450 $18,427 $18,194
10/31/1999 $21,572 $18,501 $18,660
11/30/1999 $23,228 $19,606 $20,633
12/31/1999 $27,062 $21,825 $24,270
1/31/2000 $26,407 $21,475 $24,044
2/29/2000 $31,523 $25,021 $29,638
3/31/2000 $29,479 $23,371 $26,522
4/30/2000 $27,930 $21,965 $23,844
5/31/2000 $22,988 $20,685 $21,757
6/30/2000 $27,529 $22,488 $24,567
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
RUSSELL 2000
TOTAL RETURNS FOR PERIODS ENDED JUNE 30, 2000 FUND RUSSELL 2000 GROWTH
------------------------------------------------------------ -------- ------------ ------------
<S> <C> <C> <C>
Six Months 1.73% 3.04% 1.23%
Annualized Five Year 14.40% 14.27% 15.80%
Annualized Since Inception* 17.58% 13.84% 15.46%
Value of a $10,000 investment over Life of Fund* $27,529 $22,488 $24,567
*Inception April 1, 1994
</TABLE>
The Aggressive Small Cap Equity posted a return of 1.73% for the six months
ended June 30, 2000, as compared to the Russell 2000 Growth Index which posted a
gain of 1.23% for the same period. The Fund was most negatively impacted during
this period by its holdings in PHARMACOPEIA and CURAGEN,
<PAGE>
stocks in the Health Services and Biotech industries, respectively. On the
positive side, the Fund made gains through its investment in the following
technology and telecommunications stocks: TOLLGRADE COMMUNICATIONS, SILICON
STORAGE TECHNOLOGY and THREE-FIVE SYSTEMS.
Many investors believe that the recent volatility in the stock market is
tied to the uncertainty surrounding the Federal Reserve Board, the direction of
interest rates, and the slowdown of the U.S. economy. This is partially correct.
However, the truth of the matter is that the majority of the volatility on Wall
Street can be traced directly to the NASDAQ reforms that were imposed by the
Justice Department back at the beginning of 1997. Prior to those NASDAQ reforms,
the NASDAQ market rarely exceeded more than 1% daily volatility, since then,
daily volatility of over 10% is not uncommon.
Semiconductor companies have been hit hard recently on concerns that the
chip boom has peaked and will start to drop off. In an attention-grabbing
report, Salomon Smith Barney analyst Jonathan J. Joseph warned that hard-to-find
chips were becoming easier and cheaper to buy, while chipmakers continued to
ramp up capacity. The report sent semiconductor stocks such as National
Semiconductor and Texas Instruments spiraling downward. However, there is some
good news for semiconductor stocks long-term. The analyst community states that
sales will likely pick up next year as global demand for personal computers
increases. A rebound in wireless cell-phone sales should also help the
semiconductor sector late this year and early next year. We plan to continue
holding specialty semiconductor companies, especially those with healthy
operating margins, that should continue to post record earnings in the upcoming
quarters.
During the past few years, 90% of the money pouring into the stock market
chased less than 10% of the stocks. However, it now appears that the breadth and
power of the overall stock market is expanding. Fortunately, the previous narrow
stock market environment benefited many stocks in our fund. Now that the breadth
and power of the overall stock market is expanding and is now encompassing many
interest-sensitive value stocks, it is possible that some money that would
normally flow into the growth stocks might wander over to selected value stocks.
The fact that the breadth and power of the stock market is all of a sudden
expanding is now painting a very bullish outlook for the overall stock market.
Our forecast for the upcoming period is as follows: we expect the current
stock market rally to have at least four major waves of buying pressure. The
first wave of buying pressure started in August, after long-term bond yields
fell and it became very clear that inflationary pressures were diminishing and
the Federal Reserve Board would not need to raise key interest rates further.
The second wave of buying pressure will start after Labor Day when trading
volume traditionally surges after senior traders return from their summer
hiatus. The third wave of buying pressure will commence in mid-to-late September
when earnings pre-announcement season arrives and the analyst community revises
their earnings estimates higher for many stocks in our fund. The final wave of
buying pressure will arrive in mid-October and continue into early November as
the third quarter earnings are announced. By the time the Presidential elections
arrive in early November, the stock market may be overbought and ripe for
consolidation. However, we expect that the stock market will have its
traditional year-end rally starting around Thanksgiving, so we are expecting
smooth sailing for the remainder of the year. The high-flying growth stocks are
now facing increasing competition from value stocks, so although the stock
market's breadth and power is expanding, it may actually divert some of the
money that has been flowing into growth stocks. Although value stocks will
likely perform well during the first two waves of the four-stage rally that we
foresee, we suspect that when investors turn their attention towards earnings,
growth stocks will lead the third and fourth stages of the rally which will be
earnings driven. This is truly a wonderful time to be invested in the stock
market. Everything has fallen into place to launch a powerful stock market
rally. Interest rates have peaked, corporate earnings remain extremely strong,
trading volume is about to surge and the Presidential election cycle is now in
full force. In other words, this is as good as it gets!
2
<PAGE>
Always feel free to contact us if you have any questions or if we can help
you in any way. You may call us at 1.800.887.8671 or visit our web site at
www.navellier.com, where we invite you to take advantage of our complimentary
weekly market commentary service, "Fund Mail".
Sincerely,
<TABLE>
<S> <C>
/s/ LOUIS G. NAVELLIER /s/ ALAN ALPERS
LOUIS G. NAVELLIER ALAN ALPERS
</TABLE>
THIS MATERIAL HAS BEEN PRECEDED BY A NAVELLIER PERFORMANCE FUNDS PROSPECTUS.
THE PRECEDING CHARTS AND PERFORMANCE NUMBERS ASSUME REINVESTMENT OF ALL
DISTRIBUTIONS.
PLEASE BE AWARE THAT PAST PERFORMANCE IS NO INDICATION OF FUTURE PERFORMANCE.
THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO
THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
The Russell 2000 Index is an unmanaged index consisting of the smallest 2000
stocks in the Russell 3000 Index, which represents approximately 11% of the
total market capitalization of the Russell 3000 Index.
The Russell 2000 Growth Index contains those Russell 2000 securities with a
greater-than-average growth orientation.
The Russell 3000 Index measures the performance of the 3,000 largest U.S.
companies based on total market capitalization, which represents approximately
98% of the investable U.S. equity market.
THESE INDICES ARE CONSIDERED REPRESENTATIVE OF PERTINENT MARKET SECTORS IN
GENERAL. NONE ARE INVESTMENT PRODUCTS AVAILABLE FOR SALE.
3
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
-----------------------------------------------------------------
STATEMENT OF NET ASSETS
JUNE 30, 2000
(UNAUDITED)
AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
<TABLE>
<CAPTION>
-----------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
-----------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 89.6%
BIOTECHNOLOGY AND DRUGS -- 1.4%
16,000 CuraGen Corp.* $ 609,000
-----------
BUSINESS SERVICES -- 4.1%
40,800 Avert, Inc. 933,300
14,200 Learning Tree International* 869,750
-----------
1,803,050
-----------
COMPUTER EQUIPMENT -- 1.7%
8,700 Silicon Storage Technology* 768,319
-----------
COMPUTER SOFTWARE AND SERVICES -- 8.3%
12,200 BARRA, Inc.* 604,662
28,800 MapInfo Corp.* 1,170,000
14,300 Netegrity, Inc.* 1,076,969
15,800 Rainbow Technologies* 768,275
-----------
3,619,906
-----------
CONSUMER ELECTRONICS -- 2.5%
17,700 Harman International Ind. 1,079,700
-----------
ELECTRONIC COMPONENTS/EQUIPMENT -- 14.9%
20,200 Audiovox Corp.* 445,663
26,900 DSP Group, Inc.* 1,506,400
38,600 KEMET Corp.* 967,412
27,500 LTX Corp.* 960,781
31,900 Merix Corp.* 1,499,300
10,050 Power-One, Inc.* 1,145,072
-----------
6,524,628
-----------
INDUSTRIAL MACHINERY -- 5.3%
23,100 Asyst Technologies, Inc.* 791,175
33,600 Lone Star Technologies* 1,554,000
-----------
2,345,175
-----------
INSTRUMENTS -- 11.3%
28,400 Nanometrics, Inc.* 1,169,725
19,500 Newport Corp. 2,093,812
36,700 Varian, Inc.* 1,692,787
-----------
4,956,324
-----------
MANUFACTURING -- 5.7%
22,500 Applied Films Corp.* 824,063
50,400 Concord Camera Corp.* 1,052,100
21,200 Maverick Tube Corp.* 617,450
-----------
2,493,613
-----------
MEDICAL EQUIPMENT AND SUPPLIES -- 4.8%
18,500 Coherent, Inc.* 1,551,688
11,100 Zoll Medical Corp.* 543,900
-----------
2,095,588
-----------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
-----------------------------------------------------------------
<C> <S> <C>
OIL & GAS SERVICES -- 5.4%
35,600 Patterson Energy, Inc.* $ 1,014,600
25,000 Prima Energy Corp. 1,337,500
-----------
2,352,100
-----------
SEMICONDUCTORS AND RELATED -- 16.0%
22,000 Elantec Semiconductor* 1,531,750
14,400 Kopin Corp.* 997,200
18,100 Mattson Technology, Inc.* 588,250
34,800 Oak Technology, Inc.* 750,375
12,800 Pericom Semiconductor* 870,400
16,350 Three Five Systems, Inc.* 964,650
20,800 Varian Semiconductor Equip.* 1,306,500
-----------
7,009,125
-----------
TELECOMMUNICATION EQUIPMENT -- 6.9%
13,600 Natural MicroSystems Corp.* 1,529,150
11,200 Tollgrade Communications* 1,484,000
-----------
3,013,150
-----------
TRANSPORTATION -- 1.3%
17,600 Teekay Shipping Corp. 578,600
-----------
TOTAL COMMON STOCKS
(COST $32,864,459) 39,248,278
-----------
MONEY MARKET FUNDS -- 10.1%
4,448,454 Fund for Government Investors
(Cost $4,448,454) 4,448,454
-----------
TOTAL INVESTMENTS -- 99.7%
(COST $37,312,913) $43,696,732
Other Assets Less Liabilities -- 0.3% 118,591
-----------
NET ASSETS -- 100.0% $43,815,323
===========
NET ASSETS CONSIST OF:
Paid-in-Capital $30,495,487
Net Investment Loss (224,342)
Accumulated Net Relaized Gain on Investments
7,160,359
Net Unrealized Appreciation of Investments
6,383,819
-----------
NET ASSETS $43,815,323
===========
NET ASSET VALUE PER SHARE
(Based on 2,125,541 Shares Outstanding)
$ 20.61
===========
</TABLE>
--------------------------
* NON-INCOME PRODUCING
4
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
-----------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
AGGRESSIVE SMALL
CAP EQUITY
PORTFOLIO
----------------
<S> <C>
INVESTMENT INCOME
Interest (Note 1)......................................... $ 73,132
Dividends (Note 1)........................................ 10,512
-----------
Total Investment Income................................. 83,644
-----------
EXPENSES
Investment Advisory Fee (Note 2).......................... 173,546
Administrative Fee (Note 2)............................... 51,640
Distribution Plan Fees (Note 4)........................... 51,853
Transfer Agent and Custodian Fee (Note 3)................. 49,950
Shareholder Reports and Notices........................... 17,756
Registration Fees......................................... 17,357
Audit Fees................................................ 10,000
Trustees' Fees and Expenses (Note 2)...................... 1,406
Other Expenses............................................ 8,134
-----------
Total Expenses.......................................... 381,642
Less Expenses Reimbursed by Investment Adviser
(Note 2)............................................... (73,656)
-----------
Net Expenses.......................................... 307,986
-----------
NET INVESTMENT LOSS......................................... (224,342)
-----------
Net Realized Gain on Investment Transactions................ 4,194,105
Change in Net Unrealized Appreciation of Investments........ (3,950,581)
-----------
NET GAIN ON INVESTMENTS..................................... 243,524
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 19,182
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
-----------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGGRESSIVE SMALL CAP EQUITY
PORTFOLIO
--------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 2000 ENDED
(UNAUDITED) DECEMBER 31, 1999
------------- -----------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Loss................... $ (224,342) $ (458,755)
Net Realized Gain on Investment
Transactions........................ 4,194,105 7,084,090
Change in Net Unrealized Appreciation
of Investments...................... (3,950,581) 1,710,135
------------ ------------
Net Increase in Net Assets Resulting
from Operations................... 19,182 8,335,470
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Realized Gain................ -- (461,494)
------------ ------------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares..... 36,827,872 51,183,189
Reinvestment of Distributions......... -- 446,173
Cost of Shares Redeemed............... (31,657,371) (68,137,080)
------------ ------------
Net Increase (Decrease) in Net
Assets Resulting from Share
Transactions...................... 5,170,501 (16,507,718)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS............................ 5,189,683 (8,633,742)
NET ASSETS -- Beginning of Period....... 38,625,640 47,259,382
------------ ------------
NET ASSETS -- End of Period............. $ 43,815,323 $ 38,625,640
============ ============
SHARES
Sold.................................. 1,709,000 3,131,803
Issued in Reinvestment of
Distributions....................... -- 28,748
Redeemed.............................. (1,489,716) (4,209,380)
------------ ------------
Net Increase (Decrease) in Shares... 219,284 (1,048,829)
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
-----------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
AGGRESSIVE SMALL CAP EQUITY
PORTFOLIO*
-------------------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2000 --------------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
--------------- --------------- --------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value -- Beginning of
Period........................ $20.26 $15.99 $16.00 $17.79 $15.41 $10.98
------- ------- ------- ------- -------- --------
Income from Investment Operations:
Net Investment Loss........... (0.11) (0.24) (0.15) (0.30) (0.23) (0.16)
Net Realized and Unrealized Gain
on Investments.............. 0.46 4.71 0.14 2.30(A) 2.61 4.97
------- ------- ------- ------- -------- --------
Total from Investment
Operations................ 0.35 4.47 (0.01) 2.00 2.38 4.81
------- ------- ------- ------- -------- --------
Distributions to Shareholders:
From Net Realized Gain........ -- (0.20) -- (3.79) -- (0.38)
------- ------- ------- ------- -------- --------
Net Increase in Net Asset Value.. 0.35 4.27 (0.01) (1.79) 2.38 4.43
------- ------- ------- ------- -------- --------
Net Asset Value -- End of
Period........................ $20.61 $20.26 $15.99 $16.00 $17.79 $15.41
======= ======= ======= ======= ======== ========
TOTAL INVESTMENT RETURN........... 1.73%(B) 28.34% (0.06)% 11.24% 15.44% 43.80%
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement
(Note 2)..................... 1.49%(C) 1.49% 1.63% 2.33% 1.75% 1.75%
Expenses Before Reimbursement
(Note 2)..................... 1.83%(C) 1.85% 1.98% 2.62% 1.86% 2.10%
Net Investment Loss After
Reimbursement (Note 2)....... (1.08)%(C) (1.21)% (0.79)% (1.37)% (1.33)% (1.15)%
Net Investment Loss Before
Reimbursement (Note 2)....... (1.42)%(C) (1.57)% (1.13)% (1.64)% (1.44)% (1.50)%
SUPPLEMENTARY DATA:
Portfolio Turnover Rate......... 158% 240% 145% 184% 137% 170%
Net Assets at End of Period (in
thousands).................... $43,815 $38,626 $47,259 $72,879 $190,035 $105,299
Number of Shares Outstanding at
End of Period (in thousands)... 2,126 1,906 2,955 4,555 10,683 6,831
</TABLE>
* Financial Highlights include the performance of the Navellier Aggressive
Small Cap Equity Portfolio, a series of the Navellier Series Fund, which
reorganized on July 24, 1998, as a series of the Navellier Performance Funds.
(A) The per share amount does not coincide with the net realized and unrealized
loss for the year because of the timing of sales and redemptions of Fund
shares and the amount of per share realized and unrealized gain and loss at
such time.
(B) Total returns for periods less than one year are not annualized.
(C) Annualized
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
-----------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
1. Significant Accounting Policies
The Navellier Performance Funds (the "Fund") is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended, (the "Act") as an open-end investment company which offers its shares
in a series of no-load non-diversified and diversified portfolios. The Fund's
objective is to achieve long-term capital growth. The Fund is authorized to
issue an unlimited number of shares of capital stock with no stated par value.
The Fund currently consists of eight separate portfolios each with its own
investment objectives and policies. These financial statements report on one of
the eight portfolios: the Aggressive Small Cap Equity Portfolio (the
"Portfolio"), a diversified open-end management company portfolio. The financial
statements have been prepared in conformity with generally accepted accounting
principles which permit management to make certain estimates and assumptions at
the date of the financial statements. The following is a summary of significant
accounting policies which the Fund follows:
(a) Listed securities are valued at the last sales price of the New York
Stock Exchange and other major exchanges. Over-the-Counter securities are
valued at the last sales price. If market quotations are not readily
available, the Board of Trustees will value the Portfolio's securities in good
faith. The Trustees will periodically review this method of valuation and
recommend changes which may be necessary to assure that the Portfolio's
instruments are valued at fair value.
(b) Security transactions are recorded on the trade date (the date the
order to buy or sell is executed). Interest income is accrued on a daily
basis. Dividend income is recorded on the ex-dividend date. Realized gain and
loss from securities transactions are computed on an identified cost basis.
(c) Dividends from net investment income, if any, are declared and paid
annually. Dividends are reinvested in additional shares unless shareholders
request payment in cash. Net capital gains, if any, are distributed annually.
(d) The Portfolio intends to comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies and will distribute
all net investment income and capital gains to its shareholders. Therefore, no
Federal income tax provision is required.
2. Investment Advisory Fees and Other Transactions with Affiliates
Investment advisory services are provided by Navellier Management, Inc. (the
"Adviser"). Effective May 1, 1998, under an agreement with the Adviser, the
Portfolio pays a fee at the annual rate of 0.84% of its daily net assets. The
Adviser receives an annual fee equal to 0.25% of the Portfolio's average daily
net assets in connection with the rendering of services under the administrative
services agreement and is reimbursed by the Portfolio for operating expenses
incurred on behalf of the Portfolio. An officer and trustee of the Portfolio is
also an officer and director of the Adviser.
Under an agreement between the Portfolio and the Adviser related to payment
of operating expenses, the Adviser has reserved the right to seek reimbursement
for the past, present and future operating expenses of the Portfolio paid by the
Adviser, at any time upon notice to the Portfolio. At December 31, 1999, the
Adviser voluntarily agreed not to seek future reimbursement of all unreimbursed
past expense incurred on behalf of the Portfolio. During the six months ended
June 30, 2000, the Adviser paid operating expenses of $104,603 for the
Aggressive Small Cap Portfolio. Under the operating expense agreement, the
Adviser requested, and the Portfolio, reimbursed $30,947 of such expenses.
Effective May 1, 1998, the Adviser agreed to limit the total normal expenses of
the Portfolio to 1.49% of average annual net assets.
8
<PAGE>
THE NAVELLIER PERFORMANCE FUNDS
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Navellier Securities Corp. (the "Distributor") acts as the Portfolio's
Distributor and is registered as a broker-dealer under the Securities and
Exchange Act of 1934. The Distributor, which is the principal underwriter of the
Portfolio's shares, renders its services to the Portfolio pursuant to a
distribution agreement. An officer and trustee of the Portfolio is also an
officer and director of the Distributor.
The Portfolio pays each of its Trustees not affiliated with the Adviser $938
annually. For the six months ended June 30, 2000, Trustees' fees and expenses
for the Portfolio totaled $1,406.
3. Transfer Agent and Custodian
Rushmore Trust and Savings, FSB ("Rushmore Trust"), provides transfer
agency, dividend disbursing and other shareholder services to the Portfolio. In
addition, Rushmore Trust serves as custodian of the Portfolio's assets. Fees
paid to Rushmore Trust are based upon a fee schedule approved by the Board of
Trustees.
4. Distribution Plan
The Fund has adopted a Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the Act, whereby it reimburses the Distributor or others in an
amount not to exceed 0.25% per annum of the average daily net assets of the
Portfolio for expenses incurred in the promotion and distribution of shares of
the Portfolio. These expenses include, but are not limited to, the printing of
prospectuses, statements of additional information, and reports used for sales
purposes, expenses of preparation of sales literature and related expenses
(including Distributor personnel), advertisements and other distribution-related
expenses, including a prorated portion of the Distributor's overhead expenses
attributable to the distribution of shares. Such payments are made monthly. The
12b-1 fee includes, in addition to promotional activities, the amount the
Portfolio may pay to the Distributor or others as a service fee to reimburse
such parties for personal services provided to shareholders of the Portfolio
and/or the maintenance of shareholder accounts. Such Rule 12b-1 fees are made
pursuant to the Plan and distribution agreements entered into between such
service providers and the Distributor or the Portfolio directly.
5. Income Tax and Other Information
At June 30, 2000, the cost of the investment securities for Federal income
tax purposes was $37,312,913. Net unrealized appreciation was $6,383,819 of
which $9,517,552 related to appreciated investment securities and $3,133,733
related to depreciated investment securities.
For the six months ended June 30, 2000, purchases and sales (including
maturities) of securities (excluding short- term securities) were $63,174,021
and $61,478,613, respectively.
6. Litigation
The former Trustees of the Navellier Series Fund, which was merged into the
Aggressive Small Cap Equity Portfolio ("Portfolio") on July 24, 1998 have made a
demand to be indemnified for their attorneys fees and costs which they claim to
be approximately $4 million, in connection with a class action lawsuit filed
against them by shareholders of the Portfolio. The current Trustees of the
Navellier Performance Funds (the "Fund") and the legal counsel to the Fund do
not believe the former Trustees have a valid claim. However, if such claim is
determined by a court to be valid, only the assets of the Portfolio would be
subject to such claim and not the assets of any other Portfolio to the Fund.
However, even then, Navellier Management, Inc. ("NMI") has agreed that, if any
such claim were determined to be valid, NMI, not the Portfolio, would pay such
claim.
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NAVELLIER OFFICES:
ONE EAST LIBERTY THIRD FLOOR
RENO, NEVADA 89501
800-887-8671 P.S.T.
CUSTODIAN & TRANSFER AGENT:
RUSHMORE TRUST AND SAVINGS, FSB
4922 FAIRMONT AVENUE
BETHESDA, MD 20814
800-622-1386 E.S.T.
