--------------------------------------------------------------------------------
ANNUAL REPORT
===============================================================================
THE KENWOOD FUNDS
===============================================================================
The Kenwood Growth & Income Fund
APRIL 30, 2000
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TABLE OF CONTENTS
PAGE
Shareholder Letter...................................................... 1
Performance Summary..................................................... 2
Statement of Assets and Liabilities......................................3
Statement of Operations................................................. 4
Statements of Changes in Net Assets..................................... 5
Financial Highlights.................................................... 6
Schedule of Investments..................................................7-8
Notes to the Financial Statements........................................9-10
Report of Independent Accountants....................................... 11
NOTICE TO INVESTORS
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, nor are they insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board or any other agency.
An investment in the Fund involves risk, including possible loss of
principal, due to fluctuation in the Fund's net asset value.
--------------------------------------------------------------------------------
May 31, 2000
Dear Fellow Shareholders:
For the 12 months ending April 30, 2000 investors saw the market swing back and
forth with such volatility that diversification has again become the watchword
of the industry. Growth and value returns began to converge as growth stocks
took a turn for the worse beginning on March 10th, and value stock performance
climbed for the first time in almost a year.
Winning stocks this fiscal year were Avnet, Sterling Software and Symantec, as
well as CommScope, and The PMI Group, Inc. The first three are technology stocks
that we bought when they were undervalued and they have since turned around.
CommScope is a manufacturer of coaxial and computer cable that was spun off from
General Instrument, a stock we once owned. The PMI Group, Inc. is a mortgage
insurance company whose profits have increased steadily due to the strong
housing market and lowered expenses. Underperforming stocks included Bergen
Brunswig, Pactiv, Mattel and Sovereign Bancorp. Bergen Brunswig, Mattel and
Sovereign Bancorp were unable to efficiently integrate new acquisitions during
the period. Pactiv was a spinoff which is struggling to reduce costs and pass on
higher plastic resin prices. We review underperforming companies to determine if
you position should be eliminated or if the company remains attractive enough
that we should take advantage of this opportunity to acquire more shares at
lower costs.
Investor confidence continues to be tempered by interest rate worries, causing
episodic fluctuations in overall market performance. Long term debt maturities
are selling at yields below shorter term maturities, signaling that rates are
likely to peak within 6 to 9 months. We believe that the Federal Reserve will
raise rates again at the June Meeting and then hold once the summer political
convention season begins. Flat or declining interest rates have historically
been advantageous to value funds because they hold more securities that carry
interest rate exposure.
The reports of the death of the "old economy" and of value style investing
appear to be highly exaggerated. No one knows when a sustained value rally will
occur; but the style pendulum has historically swung both ways. As long as we
find good companies with sound management selling for lower valuations, we will
consider them for our diversified portfolio. We strongly feel that our value
style approach will bear fruit for those who have the patience and persistence.
We appreciate the confidence expressed by our shareholders.
Sincerely,
/s/ Barbara L. Bowles
Barbara L Bowles, CFA
President
================================================================================
THE KENWOOD GROWTH & INCOME FUND
================================================================================
PERFORMANCE SUMMARY
================================================================================
Total Returns
Kenwood Growth S&P MidCap Russell Mid Cap
& Income Fund 400 Index Value Index
Apr-96 10,000 10,000 10,000
May-96 10,330 10,135 10,095
Jun-96 10,390 9,983 10,106
Jul-96 9,600 9,307 9,625
Aug-96 9,850 9,844 10,028
Sep-96 10,400 10,273 10,396
Oct-96 10,290 10,303 10,670
Nov-96 10,890 10,883 11,340
Dec-96 10,815 10,895 11,292
Jan-97 11,220 11,304 11,647
Feb-97 11,372 11,211 11,844
Mar-97 11,302 10,733 11,484
Apr-97 11,352 11,013 11,773
May-97 12,335 11,974 12,468
Jun-97 12,660 12,310 12,930
Jul-97 13,237 13,529 13,890
Aug-97 13,308 13,513 13,727
Sep-97 13,866 14,290 14,578
Oct-97 13,450 13,668 14,135
Nov-97 13,613 13,870 14,611
Dec-97 14,086 14,409 15,171
Jan-98 13,391 14,135 14,877
Feb-98 14,672 15,305 15,870
Mar-98 15,259 15,996 16,688
Apr-98 15,400 16,288 16,594
May-98 15,052 15,555 16,206
Jun-98 15,357 15,653 16,258
Jul-98 14,423 15,046 15,434
Aug-98 11,990 12,246 13,264
Sep-98 11,990 13,388 14,037
Oct-98 12,946 14,585 14,946
Nov-98 13,738 15,313 15,471
Dec-98 13,856 17,163 15,941
Jan-99 13,379 16,495 15,570
Feb-99 12,948 15,631 15,227
Mar-99 13,111 16,067 15,445
Apr-99 14,717 17,335 16,908
May-99 15,263 17,409 16,979
Jun-99 15,624 18,341 17,172
Jul-99 15,484 17,952 16,743
Aug-99 14,821 17,336 16,164
Sep-99 14,018 16,800 15,346
Oct-99 13,786 17,657 15,799
Nov-99 13,704 18,584 15,509
Dec-99 14,276 19,688 15,925
Jan-00 13,011 19,133 14,973
Feb-00 12,589 20,472 14,347
Mar-00 13,893 22,186 16,086
Apr-00 13,791 21,412 16,150
<TABLE>
<CAPTION>
ANNUALIZED ANNUALIZED CUMULATIVE
1 YEAR ENDED 3 YEARS ENDED SINCE INCEPTION SINCE INCEPTION
TOTAL RETURN APRIL 30, 2000 APRIL 30, 2000 MAY 1, 1996 MAY 1, 1996
==========================================================================================================================
<S> <C> <C> <C> <C>
The Kenwood Growth & Income Fund -6.29% 6.69% 8.36% 37.91%
Russell Midcap Value Index * -4.49% 11.11% 12.74% 61.53%
S&P MidCap 400 Stock Index * 23.52% 24.82% 20.97% 114.15%
==========================================================================================================================
</TABLE>
* The Standard & Poor's MidCap 400 Index (S&P MidCap) is a
capital-weighted index, representing the aggregate market value of
the common equity of 400 stocks chosen by Standard & Poor's with a
weighted average market value of $4.7 billion as of April 30, 2000.
The Russell Midcap Value Index measures the performance of small and
mid-sized companies with lower price-to-book ratios and lower
price-to-earnings ratios. This chart assumes an initial investment
of $10,000 made on May 1, 1996 (commencement of operations). Returns shown
include the reinvestment of all dividends. Past performance is not predictive
of future performance. Investment return and principal value will fluctuate,
so that your shares, when redeemed, may be worth more or less than the
original cost.
================================================================================
THE KENWOOD GROWTH & INCOME FUND
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000
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ASSETS:
Investments, at value
(Cost of $3,219,061) $3,060,289
Income receivable 3,836
Receivable for securities sold 3,458
Prepaid expenses 6,625
Receivable from Adviser 8,596
----------------
Total assets 3,082,804
----------------
LIABILITIES:
Payable for securities purchased 12,944
Accrued expenses and other liabilities 50,699
----------------
Total liabilities 63,643
----------------
NET ASSETS $3,019,161
================
NET ASSETS CONSIST OF:
Capital stock $3,364,510
Undistributed net investment income 25,444
Accumulated net realized loss on investments (212,021)
Net unrealized depreciation on investments (158,772)
----------------
Total net assets $3,019,161
================
Shares outstanding
(unlimited amount of shares authorized) 279,853
Net asset value and redemption price per share $10.79
================
SEE NOTES TO THE FINANCIAL STATEMENTS
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================================================================================
THE KENWOOD GROWTH & INCOME FUND
================================================================================
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Dividend income $66,607
Interest income 13,035
--------------
Total investment income 79,642
--------------
EXPENSES:
Shareholder servicing fees 27,673
Professional fees 25,071
Administration fees 25,067
Investment advisory fees 24,876
Fund accounting fees 22,070
Federal and state registration fees 16,521
Custody fees 9,026
Distribution fees 8,292
Trustees' fees and expenses 7,521
Reports to shareholders 2,507
Other 1,208
--------------
Total expenses before voluntary waiver and reimbursement 169,832
Less: Voluntary waiver of expenses and reimbursement
from Adviser (136,664)
--------------
Net expenses 33,168
--------------
NET INVESTMENT INCOME 46,474
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 87,175
Change in unrealized appreciation (depreciation) on investments (364,507)
--------------
Net realized and unrealized loss on investments (277,332)
--------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS ($230,858)
==============
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS
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================================================================================
THE KENWOOD GROWTH & INCOME FUND
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
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<TABLE>
<CAPTION>
-------------- --------------
Year Year
ended ended
April 30, 2000 April 30, 1999
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $46,474 $36,731
Net realized gain on investments 87,175 68,811
Change in unrealized appreciation
(depreciation) on investments (364,507) (173,465)
-------------- --------------
Net decrease in net assets from operations (230,858) (67,923)
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income (34,426) (29,079)
Distributions from net realized gains (265,395) (183,501)
-------------- --------------
Total distributions (299,821) (212,580)
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 646,837 964,678
Proceeds from shares issued to shareholders in
reinvestment of dividends 299,460 211,962
Cost of shares redeemed (1,088,851) (309,490)
-------------- --------------
Net increase (decrease) in net assets resulting
from capital share transactions (142,554) 867,150
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (673,233) 586,647
NET ASSETS:
Beginning of year 3,692,394 3,105,747
-------------- --------------
End of year (including undistributed net investment
income of $25,444 and $13,396, respectively) $3,019,161 $3,692,394
============== ==============
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS
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================================================================================
THE KENWOOD GROWTH & INCOME FUND
================================================================================
FINANCIAL HIGHLIGHTS
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<TABLE>
<CAPTION>
-------------- ------------- -------------- -------------
Year Year Year Year
ended ended ended ended
April 30, 2000 April 30, 1999 April 30, 1998 April 30, 1997
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
SELECTED PER SHARE DATA1:
NET ASSET VALUE, BEGINNING OF YEAR $12.65 $14.18 $11.20 $10.00
-------------- ------------- -------------- -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.17 0.14 0.09 0.14
Net realized and unrealized gain
(loss) on investments (0.93) (0.82) 3.82 1.21
-------------- ------------- -------------- -------------
Total from investment operations (0.76) (0.68) 3.91 1.35
-------------- ------------- -------------- -------------
LESS DISTRIBUTIONS:
Distributions from net investment income (0.13) (0.12) (0.10) (0.10)
Distributions from net realized gains (0.97) (0.73) (0.83) (0.05)
-------------- ------------- -------------- -------------
Total distributions (1.10) (0.85) (0.93) (0.15)
-------------- ------------- -------------- -------------
NET ASSET VALUE, END OF YEAR $10.79 $12.65 $14.18 $11.20
============== ============= ============== =============
TOTAL RETURN (6.29%) (4.44%) 35.66% 13.52%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of year $3,019,161 $3,692,394 $3,105,747 $1,270,602
Ratio of net expenses to average net assets2 1.00% 1.00% 0.99% 0.92%
Ratio of net investment income to average net assets2 1.41% 1.21% 0.97% 1.85%
Portfolio turnover rate 88.73% 70.66% 73.27% 31.21%
</TABLE>
1 INFORMATION PRESENTED RELATES TO A SHARE OF CAPITAL STOCK OF THE FUND
OUTSTANDING FOR THE ENTIRE PERIOD.
2 WITHOUT VOLUNTARY EXPENSE REIMBURSEMENTS AND WAIVERS OF $136,664, $129,137,
$127,451 AND $113,568, THE RATIO OF EXPENSES TO AVERAGE NET ASSETS WOULD HAVE
BEEN 5.13%, 5.26%, 7.06% AND 26.06%, AND THE RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS WOULD HAVE BEEN (2.72)%, (3.05)%, (5.10)% AND (23.29)%,
RESPECTIVELY, FOR THE YEARS ENDED APRIL 30, 2000, APRIL 30, 1999,
APRIL 30, 1998 AND APRIL 30, 1997.
SEE NOTES TO THE FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
================================================================================
THE KENWOOD GROWTH & INCOME FUND
================================================================================
SCHEDULE OF INVESTMENTS - APRIL 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------------
COMMON STOCKS - 98.9%
--------------------------------------------------------------------
AUTOS & TRANSPORTATION - 2.5%
1,090 AMR Corporation $ 37,128
1,020 FedEx Corporation * 38,441
------------------
75,569
------------------
BANKING/SAVINGS & LOANS - 9.6%
2,001 Bank One Corporation 61,030
7,200 Colonial BancGroup, Inc. 67,500
2,484 FleetBoston Financial Corporation 88,027
10,520 Sovereign Bancorp, Inc. 72,325
------------------
288,882
------------------
BUSINESS SERVICES - 1.7%
6,900 Modis Professional Services, Inc. * 52,181
------------------
CONSUMER DISCRETIONARY - 2.9%
4,805 American Greetings Corporation - Class A 87,090
------------------
FINANCIAL SERVICES - 10.0%
1,500 Concord EFS, Inc. * 33,562
2,000 Equifax, Inc. 48,875
2,175 The PMI Group, Inc. 105,352
6,400 United Asset Management Corporation 115,200
------------------
302,989
------------------
FOOD & BEVERAGES - 3.3%
4,400 Wendy's International, Inc. 98,450
------------------
HEALTHCARE - 6.9%
1,800 ALZA Corporation * 79,313
3,300 Mallinckrodt, Inc. 88,687
1,400 Ocular Sciences, Inc. * 23,188
1,000 VISX, Inc. * 15,813
------------------
207,001
------------------
INTEGRATED OILS - 7.7%
3,570 Occidental Petroleum Corporation 76,532
2,770 Ultramar Diamond Shamrock Corporation 68,558
2,700 Unocal Corporation 87,244
------------------
232,334
------------------
LEISURE & ENTERTAINMENT - 7.3%
5,900 Brunswick Corporation 113,205
2,500 Hasbro, Inc. 39,844
5,500 Mattel, Inc. 67,375
------------------
220,424
------------------
MATERIALS & PROCESSING - 7.3%
500 CommScope, Inc. * 23,750
3,050 Fluor Corporation 102,366
11,600 Pactiv Corporation * 94,975
------------------
221,091
------------------
PRINTING - 1.6%
3,100 John H. Harland Company 47,662
------------------
PUBLISHING - 3.3%
1,100 Knight-Ridder, Inc. 53,969
1,700 Meredith Corporation 47,281
------------------
101,250
------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) - 2.9%
4,000 Arden Realty, Inc. 89,000
------------------
RETAIL - 5.4%
3,900 Borders Group, Inc.* 61,913
9,200 KMart Corporation * 74,750
600 The Limited, Inc. 27,113
------------------
163,776
------------------
SECURITY SERVICES - 3.1%
5,700 Pittston Brink's Group 93,338
------------------
TECHNOLOGY - 13.2%
1,800 Adaptec, Inc. * 48,600
1,200 Avnet, Inc. 94,350
1,747 Computer Associates International, Inc. 97,479
1,200 Diebold, Inc. 34,650
2,200 Network Associates, Inc. * 55,962
1,305 Novell, Inc. * 25,611
800 Seagate Technology, Inc. * 40,650
------------------
397,302
------------------
TRAVEL SERVICES - 1.9%
1,659 Sabre Holdings Corporation * 57,961
------------------
UTILITIES - 8.3%
3,310 Alliant Energy Corporation 99,300
500 CenturyTel, Inc. 12,944
1,900 DTE Energy Company 61,987
3,500 Northern States Power Company 76,344
------------------
250,575
------------------
TOTAL COMMON STOCKS (COST OF $3,145,647) 2,986,875
Principal
AMOUNT
--------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 2.4%
--------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 2.4%
$62,339 Warner-Lambert Company, 5.76% 62,339
11,075 Wisconsin Corporate Central Credit Union, 5.83% 11,075
------------------
73,414
------------------
TOTAL SHORT-TERM INVESTMENTS (COST OF $73,414) 73,414
------------------
TOTAL INVESTMENTS - 101.3% (COST OF $3,219,061) 3,060,289
Liabilities, less Other Assets - (1.3%) (41,128)
------------------
TOTAL NET ASSETS - 100.0% $3,019,161
==================
</TABLE>
* NON-INCOME PRODUCING SECURITY.
SEE NOTES TO THE FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
================================================================================
THE KENWOOD GROWTH & INCOME FUND
================================================================================
NOTES TO THE FINANCIAL STATEMENTS
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1. ORGANIZATION
The Kenwood Growth & Income Fund (the "Fund") is a mutual fund created by
The Kenwood Funds (the "Trust") which was organized as a business trust under
the laws of Delaware on January 9, 1996. The Fund is the sole series issued by
the Trust, which is an open-end management investment company registered under
the Investment Company Act of 1940 ("1940 Act"), as amended. The Fund commenced
operations on May 1, 1996. The objective of the Fund is capital appreciation and
current income.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. These policies are in
conformity with generally accepted accounting principles.
a) Investment Valuation - Securities which are traded on a securities exchange
(including options on indexes so traded) or securities listed on the NASDAQ
National Market are valued at the last sale price on the exchange or market
where primarily traded or listed or, if there is no recent sale price available,
at the last current bid quotation. Securities not so traded or listed are valued
at the last current bid quotation if market quotations are available. Debt
securities maturing in 60 days or less are normally valued at amortized cost.
Debt securities having maturities over 60 days or for which amortized cost is
not deemed to reflect fair value, may be priced by independent pricing services
that use prices provided by market makers or estimates of market values obtained
from yield data relating to instruments or securities with similar
characteristics. Other securities, including restricted securities, and other
assets are valued at fair value as determined in good faith by the Board of
Trustees.
b) Federal Income Taxes - No provision for federal income taxes or excise taxes
has been made since the Fund has elected to be taxed as a "regulated investment
company" and intends to distribute substantially all taxable income to its
shareholders and otherwise comply with the provisions of the Internal Revenue
Code applicable to regulated investment companies.
c) Expenses - The Fund is charged for those expenses that are directly
attributable to the portfolio, such as advisory, administration and certain
shareholder service fees.
d) Distributions to Shareholders - Dividends from net investment income are
declared and paid at least annually. Distributions of net realized capital
gains, if any, will be declared at least annually.
e) Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
f) Other - Investment and shareholder transactions are accounted for on the
trade date. The Fund determines the gain or loss realized from investment
transactions by comparing the original cost of the security lot sold with the
net sales proceeds. Dividend income is recognized on the ex-dividend date and
interest income is recognized on an accrual basis.
3. CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
Transactions in shares of the Fund were as follows:
<S> <C> <C>
Year Year
ended ended
April 30, 2000 April 30, 1999
--------------- ---------------
Shares sold 50,840 78,586
Shares issued to owners in
reinvestment of dividends 26,954 17,797
--------------- ---------------
77,794 96,383
Shares redeemed (89,903) (23,486)
--------------- ---------------
Net increase (decrease) (12,109) 72,897
</TABLE>
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding
short-term investments, for the Fund for the year ended April 30, 2000, were as
follows:
Purchases Sales
------------------------------
U. S. Government -- --
Other $2,734,604 $2,949,756
At April 30, 2000, gross unrealized appreciation and depreciation of
investments for federal income tax purposes was as follows:
Appreciation $253,395
(Depreciation) (479,545)
---------
Net unrealized appreciation
on investments ($226,150)
----------
At April 30, 2000, the cost of investments for federal income tax
purposes was $3,286,439.
The tax cost basis of the Fund's securities differs from the book
cost primarily as a result of the deferral of losses relating to wash sale
transactions and return of capital distributions from real estate investment
trusts.
5. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Trust has entered into an investment advisory agreement with The
Kenwood Group, Inc. (the "Adviser"). Pursuant to its Advisory Agreement with the
Fund, the Adviser is entitled to receive a fee, calculated daily and payable
monthly, at the annual rate of 0.75% on the first $500 million of average net
assets, 0.70% on the next $500 million of average daily net assets, and 0.65% on
the average daily net assets over $1 billion. The Adviser has voluntarily waived
and reimbursed certain expenses to the extent that total operating expenses
(exclusive of interest, taxes, brokerage commissions and other costs incurred in
connection with the purchase or sale of portfolio securities and extraordinary
items) exceeded the annual rate of 1.00% of the average net assets of the Fund,
computed on a daily basis. The total amount of fees waived and reimbursed by the
Adviser for the year ended April 30, 2000 was $136,664.
The Trust has entered into a distribution agreement with AmeriPrime
Financial Securities, Inc. (the "Distributor"). Pursuant to the Distribution
Plan adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act, the Fund is
authorized to expend up to 0.25% annually of the Fund's average daily net assets
to pay distribution fees and to cover certain expenses incurred in connection
with the distribution of the Fund's shares. Rule 12b-1 permits an investment
company to finance, directly or indirectly, any activity which is primarily
intended to result in the sale of its shares only if it does so in accordance
with the provisions of the Rule.
6. RELATED PARTIES
Officers and Trustees of the Trust held 87,273 shares or 31.2% of
the outstanding shares of the Fund as of April 30, 2000.
THE KENWOOD GROWTH & INCOME FUND
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
The Kenwood Funds - The Kenwood Growth & Income Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Kenwood Funds - The Kenwood
Growth & Income Fund (the "Fund") at April 30, 2000, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the four years in the period then ended, in conformity with accounting
principles generally accepted in the United States. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at April 30,
2000 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where broker confirmations were not received,
provide a reasonable basis for the opinion expressed above.
Milwaukee, Wisconsin
May 19, 2000
