LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
------------------------------------------------------------
Dear Shareholder:
LETTER TO For the first half of 2000, the Lou Holland Growth Fund
SHAREHOLDERS returned +2.54% outperforming the S&P 500 index return of
AUGUST, 2000 -.42%, and trailing the performance of the Russell 1000
Growth Stock index return of +4.23%. Over the last year the
Fund returned +6.94% compared to +7.24% for the S&P 500 and
+25.67% for the Russell 1000 Growth index.
After an unprecedented 5 consecutive years of 20%+ returns
for the S&P 500 index, with average annual rates of return
of +28.6%, we believe that common stocks will return to
their historical norm of 9-10% annual returns..
Over the last several years the 25 largest capitalization
weighted stocks in the S&P 500, representing 44% of the
entire index weight, and the 10 largest capitalization
weighted stocks in the almost 4700 stock NASDAQ index,
representing almost 43% of the entire index weight,
accounted for over 100% of their respective indexes returns.
The superior performance of technology stocks over the past
several years has caused dramatic changes in the sector
weightings within the major stock market indexes. Technology
now represents 30% of the weight of the S&P 500 index and
52% of the weight of the Russell 1000 Growth index, versus
11% and 19% for the indexes, respectively in 1994. Many new
small capitalization technology stocks have migrated into
the large capitalization indexes but have little or no
earnings and or revenues.
Our philosophy is to buy mid to large capitalization
companies whose earnings are growing faster than the general
market, that we can buy at a reasonable price. Should
technology stocks continue to perform well, it will be very
difficult for investors to outperform the major mid and
large capitalization indexes if a significant portion of
their portfolios are not invested in technology stocks. In
the case of the Russell 1000 Growth index, good relative
performance would require more than half of your portfolio
to be invested in technology issues. The last time we
experienced such large sector concentrations was in 1980
when energy represented 30% of the S&P 500. Energy currently
represents 6% of the S&P 500 and 2% of the Russell 1000
Growth index.
2000 Stock Market Review & Outlook
----------------------------------
Technology stocks continued to lead the market during the
first quarter with the NASDAQ composite returning over +12%.
However, due to concerns regarding historically high
technology stock valuations and rising interest rates, the
technology-laden NASDAQ declined -37% from its all-time high
of 5049 achieved in early March. And while the index was
down -13% during the second quarter (versus -3% for the S&P
500 index) technology stocks rallied late in the quarter and
the NASDAQ returned over +16% in June, the 5th best month in
the history of the index. Although the strong June
performance indicated continued investor enthusiasm for
technology stocks, it appears that investors became more
focused on higher quality technology companies with niche
products and that actually have rapidly growing revenue and
earnings. We believe that technology issues will be volatile
for the remainder of the year because of concerns with
regard to valuation levels and the possibility of a slow
down in economic activity as a result of six interest rate
increases over the last year by the Federal Reserve Board.
It is safe to say that these stocks are priced to
perfection. While technology has gotten all the publicity
over the last several years, after two years of poor
performance old economy stocks and small capitalization
value and non-technology growth stocks are beginning to
outperform. In early February only 21% of all New York Stock
Exchange stocks were above their 200 day moving price
average. Now over 60% are over their 200 day moving average.
During 2000 (thru July 31st), the best performing market
sectors have been energy, healthcare, and financial
services, while the worst performing market sectors have
been materials & processing, consumer discretionary, and
utilities. Our overweighting in financial services as well
as our underweighting in materials & processing and consumer
discretionary have had a positive impact on portfolio
performance. We are market weighted in energy and healthcare
and exposure to these sectors has had a positive effect on
portfolio performance.
1
<PAGE>
LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
With the S&P 500 index up over 20%+ for the fifth
consecutive year during 1999, it appears to us that the
stock market has caught up with the First Call consensus
earnings growth forecast of +13% for the year 2000 for the
S&P 500 index. With the economy slowing as a result of
rising commodity prices and interest rates, and First Call
consensus earnings estimates for 2001 declining to 9%, it
appears to us that stock market performance will return to
long term historical norms.
As we move through the remainder of 2000 and look ahead to
2001 we continue to believe that our investment philosophy
of purchasing high quality reasonably priced mid-to-large
growth companies, with a leadership position in their
industry, will provide superior results for long term
investors.
Thank you for your continued interest in the Lou Holland
Growth Fund.
Sincerely,
/s/Louis A. Holland
Louis A. Holland
President
--------------------------------------------------------------------------------
LINE CHART:
GROWTH RUSSELL 1000 RUSSELL MID-CAP
FUND S&P 500 GROWTH GROWTH
4/29/96 10000 10000 10000 10000
6/30/96 10520 10297 10363 9896
12/31/96 11462 11500 11385 10528
6/30/97 13355 13870 13611 11637
12/31/97 14663 15337 14857 12901
6/30/98 17290 18054 17885 14432
12/31/98 19905 19720 20609 15206
6/30/99 20807 22162 22763 17365
12/31/99 21701 23871 27448 23005
6/30/00 22252 23788 28606 25799
THIS CHART ASSUMES AN INITIAL GROSS INVESTMENT OF $10,000 MADE ON 4/29/96
(COMMENCEMENT OF OPERATIONS). RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL
DIVIDENDS. IN THE ABSENCE OF FEE WAIVERS AND REIMBURSEMENTS, TOTAL RETURN
WOULD BE REDUCED. 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.
RUSSELL 1000 GROWTH INDEX - An unmanaged index which measures the
performance of a subset of approximately 538 of those Russell 1000
companies (that is, the 1,000 largest U.S. companies in terms of market
capitalization) with higher price-to-book ratios and higher forecasted
earnings growth rates.
RUSSELL MID-CAP GROWTH INDEX - An unmanaged index which measures the
performance of a subset of approximately 411 of those Russell Mid-Cap
companies with higher price-to-book ratios and higher forecasted earnings
growth rates. These stocks are also members of the Russell 1000 Growth
Index.
S&P 500 INDEX - An unmanaged capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through
changes in the aggregate market value of the 500 stocks which represent all
major industries.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Average Annual Rate of Return for the Periods Ended June 30, 2000
Year-to-Date* 1 Year Since Inception 4/29/96
------------- ----------- ------------------------
<S> <C> <C> <C>
Lou Holland Growth Fund 2.54% 6.94% 21.13%
S&P 500 (0.42)% 7.25% 23.06%
Russell 1000 Growth Index 4.23% 25.67% 28.65%
Russell Mid-Cap Growth Index 12.15% 48.59% 25.50%
* Not Annualized
</TABLE>
2
<PAGE>
LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
(UNAUDITED)
ASSETS:
Investments, at value $11,397,416
(cost $7,386,027)
Deferred organization costs 6,631
Dividends receivable 4,516
Interest receivable 2,843
Receivable from
Investment Manager 1,866
Other assets 9,490
-----------
Total Assets 11,422,762
-----------
LIABILITIES:
Payable for securities purchased 39,845
Accrued expenses and
other liabilities 47,802
-----------
Total Liabilities 87,647
-----------
NET ASSETS $11,335,115
===========
NET ASSETS CONSIST OF:
Capital stock $ 6,748,962
Undistributed net realized
gain on investments 597,420
Undistributed net
investment loss (22,656)
Net unrealized appreciation
on investments 4,011,389
-----------
Total Net Assets $11,335,115
===========
Shares outstanding (no par,
unlimited shares authorized) 529,715
Net Asset Value, Redemption
Price and Offering Price
Per Share $ 21.40
===========
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
INVESTMENT INCOME:
Dividend income (net of
withholding tax $592) $ 42,910
Interest income 8,890
----------
Total Investment Income 51,800
----------
EXPENSES:
Investment management fee 46,880
Shareholder servicing and
accounting costs 32,998
Administration fee 14,826
Professional fees 10,636
Reports to shareholders 5,456
Federal and state registration 5,267
Custody fees 5,104
Amortization of deferred
organization charges 3,999
Director fees 3,427
Other 4,735
----------
Total expenses before
reimbursement 133,328
Less: Reimbursement from
Investment Manager (58,872)
----------
Net Expenses 74,456
----------
NET INVESTMENT LOSS (22,656)
----------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain on investments 504,380
Change in unrealized appreciation/
(depreciation) on investments (209,696)
----------
Net realized and unrealized gain
on investments 294,684
----------
NET INCREASE IN
NET ASSETS RESULTING
FROM OPERATIONS $272,028
==========
See Notes to the Financial Statements.
3
<PAGE>
LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
JUNE 30, 2000
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
------------------ ------------------
(UNAUDITED)
<S> <C> <C>
OPERATIONS:
Net investment (loss) $ (22,656) $ (16,574)
Net realized gain on investments 504,380 90,771
Change in unrealized appreciation/
(depreciation) on investments (209,696) 864,957
----------- -----------
Net increase in net assets from operations 272,028 939,154
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -- --
From net realized gains -- (37,974)
----------- -----------
-- (37,974)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 850,304 3,137,338
Shares issued to holders in reinvestment
of dividends -- 37,859
Cost of shares redeemed (958,877) (2,039,620)
----------- -----------
Net increase/(decrease) in net assets
from capital share transactions (108,573) 1,135,577
----------- -----------
TOTAL INCREASE IN NET ASSETS 163,455 2,036,757
----------- -----------
NET ASSETS:
Beginning of period 11,171,660 9,134,903
----------- -----------
End of period (including undistributed net
investment income/(loss) of ($22,656)
and $0, respectively) $11,335,115 $11,171,660
=========== ===========
CHANGES IN SHARES OUTSTANDING:
Shares sold 41,406 161,143
Shares issued to holders in reinvestment
of dividends -- 1,822
Shares redeemed (46,936) (103,224)
----------- -----------
Net increase/(decrease) (5,530) 59,741
=========== ===========
See Notes to the Financial Statements.
4
</TABLE>
<PAGE>
LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SIX MONTHS YEAR YEAR YEAR APRIL 29, 1996 (1)
ENDED ENDED ENDED ENDED THROUGH
JUNE 30, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
2000 1999 1998 1997 1996
---------- ----------- ----------- ----------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Per Share Data:
Net asset value, beginning
of period $20.87 $19.21 $14.18 $11.28 $10.00
------ ------ ------ ------ ------
Income from
investment operations:
Net investment
income (loss) (0.04)(2) (0.03)(2) (0.02)(2) 0.00(2) 0.00(2)
Net realized and
unrealized gains on
investments 0.57 1.76 5.09 3.14 1.46
------ ------ ------ ------ ------
Total from investment
operations 0.53 1.73 5.07 3.14 1.46
------ ------ ------ ------ ------
Less distributions:
Dividends from net
investment income -- -- (0.01) (0.03) (0.05)
Dividends from
capital gains -- (0.07) (0.03) (0.21) (0.13)
------ ------ ------ ------ ------
Total distributions -- (0.07) (0.04) (0.24) (0.18)
------ ------ ------ ------ ------
Net asset value,
end of period $21.40 $20.87 $19.21 $14.18 $11.28
====== ====== ====== ====== ======
Total return 2.54%(3) 9.01% 35.75% 27.92% 14.62%(3)
Supplemental data and ratios:
Net assets,
end of period $11,335,115 $11,171,660 $9,134,903 $5,299,916 $2,860,671
Ratios of expenses to
average net assets
Before expense
reimbursement 2.42%(4) 2.48% 2.84% 4.19% 6.50%(4)
After expense
reimbursement 1.35%(4) 1.35% 1.35% 1.35% 1.35%(4)
Ratio of net investment
income/(loss) to average
net assets
Before expense
reimbursement (1.48)%(4) (0.97)% (1.60)% (2.83)% (5.11)%(4)
After expense
reimbursement (0.41)%(4) 0.16% (0.11)% 0.02% 0.04%(4)
Portfolio turnover rate 13.22% 24.13% 32.84% 34.29% 30.48%
(1) Commencement of operations.
(2) Net investment income per share is calculated using the ending balance of
undistributed net investment income prior to consideration of adjustments
for permanent book and tax differences.
(3) Not annualized.
(4) Annualized.
</TABLE>
See Notes to the Financial Statements.
5
<PAGE>
LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 2000
(UNAUDITED)
NUMBER OF MARKET
SHARES VALUE
--------- --------
COMMON STOCKS - 95.2%
CONSUMER DISCRETIONARY - 5.9%
4,750 Carnival Corporation $ 92,625
3,800 Costco Wholesale
Corporation 125,400
2,662 Home Depot, Inc. 132,934
1,625 Lowe's Companies 66,727
4,400 Wal-mart Stores, Inc. 253,550
----------
671,236
----------
CONSUMER STAPLES - 9.9%
1,650 Clorox Company 73,941
2,450 Coca-Cola Company 140,722
2,150 Colgate-Palmolive Company 128,731
2,425 CVS Corporation 97,000
2,350 Gillette Company 82,103
3,900 PepsiCo, Inc. 173,306
1,650 The Procter & Gamble
Company 94,463
3,775 Safeway, Inc. * 170,347
4,950 Walgreen Company 159,328
----------
1,119,941
----------
ENERGY - OIL - 4.4%
1,754 BP Amoco Corporation - ADR 99,211
1,122 Exxon Mobil Corporation 88,077
1,500 Royal Dutch Petroleum
Company - ADR 92,344
2,950 Schlumberger LTD F 220,144
----------
499,776
----------
FINANCIALS - 9.2%
1,600 Bank One Corporation 42,500
4,650 Citigroup, Inc. 280,162
1,600 Fannie Mae 83,500
5,100 Federal Home Loan
Mortgage Corporation 206,550
4,300 Mellon Financial
Corporation 156,681
NUMBER OF MARKET
SHARES VALUE
--------- --------
FINANCIALS - 9.2% (CONTINUED)
3,625 Washington Mutual, Inc. $ 104,672
4,350 Wells Fargo Company 168,563
----------
1,042,628
----------
FINANCIALS - INSURANCE - 3.6%
2,677 American International
Group, Inc. 314,548
2,000 MBIA, Inc. 96,375
----------
410,923
----------
HEALTH CARE - MEDICAL DEVICES - 1.7%
1,300 Guidant Corporation 64,350
2,550 Medtronic, Inc. 127,022
----------
191,372
----------
HEALTH CARE -
PHARMACEUTICALS - 7.8%
3,500 Elan Corporation PLC - ADR * 169,531
1,075 Johnson & Johnson Company 109,516
125 Eli Lilly & Company 12,484
2,200 Merck & Co., Inc. 168,575
6,350 Pfizer, Inc. 304,800
1,100 Pharmacia & Upjohn, Inc. 56,856
1,300 Schering-Plough Corporation 65,650
----------
887,412
----------
MATERIALS, PROCESSING AND
DURABLES - 3.7%
2,275 Grainger (W.W.), Inc. 70,098
5,500 Jacobs Engineering
Group, Inc. * 179,781
2,750 Magna International, Inc. F 129,937
1,050 Valspar Corporation 35,438
----------
415,254
----------
OTHER/CONGLOMERATE - 5.1%
9,600 General Electric Company 508,800
2,025 Honeywell International Inc. 68,217
----------
577,017
----------
See Notes to the Financial Statements.
6
<PAGE>
LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
NUMBER OF MARKET
SHARES VALUE
--------- --------
TECHNOLOGY - IMAGING - 3.3%
2,000 Hewlett-Packard Company $ 249,750
1,800 Lexmark Intl Group Inc - Cl A 121,050
----------
370,800
----------
TECHNOLOGY - HARDWARE - 9.2%
5,100 EMC Corporation * 392,381
2,950 Intel Corporation 394,378
3,150 Linear Technology Corporation 201,403
650 Sun Microsystems 59,109
----------
1,047,271
----------
TECHNOLOGY - SERVICES - 5.1%
2,300 Affiliated Computer
Services - A* 76,044
762 Agilent Technologies Inc. 56,197
1,625 American Management
Systems, Inc. * 53,346
4,350 Automatic Data
Processing, Inc. 232,997
6,155 Concord EFS, Inc. * 160,030
----------
578,614
----------
TECHNOLOGY - SOFTWARE - 8.1%
6,150 Microsoft Corporation * 492,000
4,575 Oracle Systems 384,586
700 Symantec Corporation 37,756
----------
914,342
----------
TELECOMMUNICATION
EQUIPMENT - 8.0%
7,473 Cisco Systems, Inc. * 475,003
4,400 Lucent Technologies, Inc. 260,700
3,525 Nokia Corp-Adr A 176,030
----------
911,733
----------
NUMBER OF MARKET
SHARES VALUE
--------- --------
TELECOMMUNICATION SERVICES - 6.7%
2,700 American Telephone &
Telegraph Company $ 85,387
6,200 Centurytel Inc. 178,250
3,250 SBC Communications, Inc 140,563
7,650 Worldcom Inc. * 350,944
------------
755,144
------------
UTILITIES - 3.5%
5,500 AES Corporation* 250,937
2,250 Enron Corporation 145,125
------------
396,062
------------
Total common stocks
(cost $6,778,136) $10,789,525
============
PRINCIPAL
AMOUNT VALUE
--------- --------
SHORT-TERM
INVESTMENTS - 5.4%
VARIABLE RATE
DEMAND NOTES - 5.4%
172,492 American Family
Demand Note - 6.31% $ 172,492
377,931 General Mills
Demand Notes - 6.28% 377,931
57,468 Wis Corp. Cent Cr Union
Demand Notes - 6.34% 57,468
------------
Total variable rate demand
notes (cost $607,891) 607,891
------------
Total investments - 100.6%
(cost $7,386,027) 11,397,416
Other assets in excess of
liabilities - (0.6%) (62,301)
------------
TOTAL NET ASSETS -
100.0% $11,335,115
============
* Non-income producing security.
F Foreign Security
See Notes to the Financial Statements.
7
<PAGE>
LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION The Lou Holland Trust (the "Trust") was organized on
AND SIGNIFICANT December 20, 1995, as a Delaware business trust and
ACCOUNTING is registered as a no-load, open-end diversified
POLICIES management investment company under the Investment
Company Act of 1940 (the "1940 Act"). The Trust is
organized as a series company and currently
consists of one series, the Growth Fund (the "Fund").
The principal investment objective of the Fund is to
seek long-term growth of capital by investing
primarily in common stocks of growth companies, with
the receipt of dividend income as a secondary
consideration. The Fund commenced operations on April
29, 1996.
The costs incurred in connection with the
organization, initial registration and public
offering of shares, aggregating $76,688. These costs
are being amortized over the period of benefit, but
not to exceed sixty months from the Fund's
commencement of operations. The proceeds of any
redemption of the initial shares (seed money) by the
original stockholder or any transferee will be
reduced by a pro-rata portion of any then unamortized
organizational expenses at the time of such
redemption.
The following is a summary of significant accounting
policies consistently followed by the Fund.
a) Investment Valuation - Common stocks and other
equity-type securities that are listed on a
securities exchange are valued at the last quoted
sales price on the day the valuation is made. Price
information on listed stocks is taken from the
exchange where the security is primarily traded.
Securities which are listed on an exchange but which
are not traded on the valuation date are valued at
the most recent bid prices. Unlisted securities for
which market quotations are readily available are
valued at the latest quoted bid price. Debt
securities are valued at the latest bid prices
furnished by independent pricing services. Other
assets and securities for which no quotations are
readily available are valued at fair value as
determined in good faith by the Holland Capital
Management, L.P. (the "Investment Manager") under the
supervision of the Board of Trustees. Short-term
instruments (those with remaining maturities of 60
days or less) are valued at amortized cost, which
approximates market.
8
<PAGE>
LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
b) Federal Income Taxes - Provision for federal
income taxes or excise taxes has not 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. Therefore, no federal income
tax provision is required.
c) Distributions to Shareholders - Dividends from net
investment income and distributions of net realized
capital gains, if any, will be declared and paid at
least annually.
d) 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.
e) Foreign Securities - Investing in securities of
foreign companies and foreign governments involves
special risks and considerations not typically
associated with investing in U.S. companies and the
U.S. government. These risks include revaluation of
currencies and future adverse political and
economic developments. Moreover, securities of many
foreign companies and foreign governments and their
markets may be less liquid and their prices more
volatile than those of securities of comparable U.S.
companies and the U.S. government.
f) Foreign Currency Translations - The books and
records of the Fund are maintained in U.S. dollars.
Foreign currency transactions are translated into
U.S. dollars on the following basis: (i) market value
of investment securities, assets and liabilities at
the daily rates of exchange, and (ii) purchases and
sales of investment securities, dividend and interest
income and certain expenses at the rates of exchange
prevailing on the respective dates of such
transactions. For financial reporting purposes, the
Fund does not isolate changes in the exchange rate of
investment securities from the fluctuations arising
from changes in the market prices of securities.
However, for federal income tax purposes the Fund
does isolate and treat as ordinary income the effect
of changes in foreign exchange rates on realized gain
or loss from the sale of investment securities and
payables and receivables arising from trade date and
settlement date differences.
9
<PAGE>
LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
g) Other - Investment and shareholder transactions
are recorded on the trade date. The Fund determines
the gain or loss realized from the investment
transactions by comparing the original cost of the
security lot sold with the net sales proceeds.
Dividend income is recognized on the ex-divided date
or as soon as information is available to the Fund
and interest income is recognized on an accrual
basis. Generally accepted accounting principles
require that permanent financial reporting and tax
differences be reclassified to capital stock.
2. INVESTMENT The aggregate purchases and sales of securities,
TRANSACTIONS excluding short-term investments, by the Fund for the
six months ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------- -------------
<S> <C> <C>
U.S. Government $ -- $ --
Other $ 1,412,785 $ 1,986,840
</TABLE>
At June 30, 2000, gross unrealized appreciation and
depreciation of investments for tax purposes were as
follows:
Appreciation $4,501,848
(Depreciation) (490,459)
----------
Net appreciation on investments $4,011,389
==========
At the close of business on May 2, 1996, the partners
of the Holland Fund, L.P., transferred their assets
to the Fund. As a result of the tax-free transfer the
Fund acquired $243,721 of unrealized appreciation for
tax purposes. As of June 30, 2000, the Fund has
realized $78,828 of the appreciation.
At June 30, 2000, the cost of investments for federal
income tax purposes was $7,386,027.
10
<PAGE>
LOU HOLLAND
--------------------------------------------------------------------------------
GROWTH FUND
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
3. AGREEMENTS The Fund has entered into an Investment Management
and Administration Agreement with Holland Capital
Management, L.P. Pursuant to its management agreement
with the Fund, the Investment Manager is entitled to
receive a fee, calculated daily and payable monthly,
at the annual rate of 0.85% as applied to the Fund's
daily net assets up to $500 million. The fee declines
at specified breakpoints as assets increase.
The Investment Manager voluntarily agrees to
reimburse its management fee and other 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) exceed the annual rate of 1.35% of the net
assets of the Fund, computed on a daily basis. This
voluntary reimbursement may be terminated under the
approval of the Board of Trustees. Accordingly, for
the six months ended June 30, 2000, the Adviser has
waived and reimbursed the Fund $58,872.
HCM Investments, Inc. serves as principal underwriter
and the Distributor of the shares of the Fund
pursuant to a Distribution Agreement between the
Distributor and the Trust. The Distributor is an
affiliate of the Investment Manager. The Fund's
shares are sold on a no-load basis and, therefore,
the Distributor receives no sales commission or
sales load for providing services to the Fund. The
Fund has not currently entered into any plan or
agreement for the payment of fees pursuant to
Rule 12b-1 under the 1940 Act.
Firstar Mutual Fund Services, LLC, serves as transfer
agent, administrator and accounting services agent
for the Fund. Firstar Bank, N.A. serves as custodian
for the Fund.
11
<PAGE>
--------------------------------------------------------------------------------
TRUSTEES AND OFFICERS
LOUIS A. HOLLAND, President, Trustee, and
Chairman of the Board of Trustees
Managing Partner and Chief Investment Officer, Holland
Capital Management, L.P. and President, Treasurer, and
Director, HCM Investments, Inc.
MONICA L. WALKER, Secretary and Trustee
Portfolio Manager, Holland Capital Management, L.P.
Vice President, HCM Investments, Inc.
LAURA J. JANUS, Treasurer
Portfolio Manager, Holland Capital Management, L.P.
Vice President, HCM Investments, Inc.
LESTER H. MCKEEVER, JR., Trustee
Managing Partner, Washington, Pittman & McKeever
Certified Public Accountants & Management Consultants
KENNETH R. MEYER, Trustee
President and Managing Partner
Lincoln Capital Management Company
JOHN D. MABIE, Trustee
President, Mid-Continent Capital
MANAGER
Holland Capital Management, L.P.
35 West Wacker Drive, Suite 3260
Chicago, IL 60601
Telephone (312) 553-1000
CUSTODIAN AND TRANSFER AGENT
Firstar Bank Milwaukee, N.A.
Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Telephone (800) 295-9779
INDEPENDENT AUDITOR
KPMG LLP
Chicago, IL
LEGAL COUNSEL
Jorden Burt Boros Cicchetti Berenson & Johnson
Washington, D.C.
LOGO:
LOU HOLLAND GROWTH FUND
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SEMI-ANNUAL REPORT
June 30, 2000
