AMERINDO
TECHNOLOGY FUND
Semi-Annual Report
June 30, 1998
<PAGE>
TABLE OF CONTENTS
SHAREHOLDER LETTER 1
ECONOMIC OUTLOOK 3
SCHEDULE OF INVESTMENTS 7
STATEMENT OF ASSETS AND LIABILITIES 8
STATEMENT OF OPERATIONS 9
STATEMENT OF CHANGES IN NET ASSETS 10
NOTES TO FINANCIAL STATEMENTS 11
FINANCIAL HIGHLIGHTS 15
<PAGE>
August, 1998
Dear Shareholder:
We are pleased to report to our shareholders that the Amerindo
Technology Fund posted a total return of 28.49% for the six months ended June
30, 1998. The Fund achieved positive performance of 16.42% and 10.37% for the
quarters ended March 31, and June 30, 1998, respectively.
We made some minor adjustments over the last six months to increase our
weightings in Internet, software and networking companies, which we believe
represent better opportunities for our shareholders going forward. Changes in
valuations created an opportunity to reduce slightly the weightings in several
biotechnology companies. Demand for Internet related services continues to
experience exponential growth, which has contributed to the strong returns the
Fund achieved in the last six months.
We were not that surprised at the correction the broad market sustained
after the second quarter closed, since it had long been apparent that large cap
stocks were being extremely highly valued on a p/e to growth basis, at a time
when corporate earnings were slowing down rather sharply. This however, is not
the case with emerging technology companies, which are showing strong relative
earnings gains in the face of historically cheap valuations.
The Fund has a good representation in companies that we believe have
excellent prospects of outperforming the broad market in an overall lackluster
environment where S&P 500 earnings growth is being hampered by a very mature
economic cycle and serious international problems. The exceptionally strong
earnings gains of emerging technology growth stocks is due to the rapid
unfolding of the next generation of computing that is centered around the
Internet. This will mark the third generation of computing in 40 plus years
following mainframes in the 1960s, and PCs in the early 1980s.
Overall, the past six months have proved to be a strong period for
emerging technology stocks which had been out of synch with the broad bull
market for the prior two years. As discussed in our previous letters, we believe
shareholders will be handsomely rewarded in the months and years ahead.
Because we believe our stocks are at a historic level of undervaluation
relative to the strong business fundamentals of the portfolio companies, the
Fund recently opened the Class A shares to investors. Notwithstanding the
various positives that led to this decision, it bears repeating that the
Amerindo Technology Fund is designed for long term investors who can accept
above average levels of price fluctuations, and who understand that volatility
is inherent to high performance growth stock investing. Emerging technology
stocks can be subject to rapidly shifting sentiment accompanied by price
dislocations during short term market upheavals.
AMERINDO TECHNOLOGY FUND
/s/ ALBERTO W. VILAR /s/ GARY A. TANAKA
- -------------------- ------------------
Alberto W. Vilar Gary A. Tanaka
-1-
<PAGE>
ECONOMIC OUTLOOK
A series of global shocks from Indonesia, Russia and Japan, plus
continued currency turmoil in Asia, once again disrupted world equity markets.
The US economy slowed sharply in the second quarter as a result of weakness in
net exports, a moderate pace of inventory building and the General Motors
strike. With GM, IBM, Boeing and Hewlett Packard sending out distress signals,
it is rather obvious that some key parts of the American economy are under
pressure. Fortunately, by early July, fears of a financial crisis overseas
started to abate as a result of US-led global crisis management and constructive
domestic political developments in Japan and Russia. Because of the recessions
in Asia, monetary policy around the world has been accommodative. The current
impact of Asia on the US economy is frankly mixed; in the US 12% of GDP is
export-related, which has suffered, while 25% is interest sensitive, which has
benefited from lower interest rates. At this stage, it is not very likely that
policy makers have seen the last of crisis manipulation exercises.
Interest rates and liquidity generally seem to be of more concern to
the market than earnings. Long term interest rates have fallen substantially
over the past year. Significant flows of public and private money into the
financial system have been the major force behind the bull market. A narrow band
of stocks has continued to lead the major indices to new highs; the top quintile
was up 28% and accounted for 18.5 percentage points of the index's 23%
appreciation through mid-July. The second quintile was also a factor,
appreciating 18.6% and accounting for 3.1 percentage points of the total. This
means that more funds are becoming de facto index funds. The current infatuation
with quasi-indexing should ultimately derail over slowing profits, rising levels
of competition and tight labor markets for large cap stocks, as well as the
relative cheapness and superior earnings gains of small capitalization stocks. A
tug-of-war could develop in the second half of this year between the hope of
economic improvement in 1999 and the reality that the South East Asia situation
is not getting any better. Notwithstanding all the headline press Asia has
generated, there is reason to believe that after more than 20 years of
stagnation, a far more important economic variable, real wages, should start to
rise. This should not be inflationary because technological improvements and
cost-cutting permit firms to raise wages without seeing their profit margins
squeezed. Two additional positives have also emerged lately: big fiscal
surpluses at the Federal, State, and local levels could lead to tax cuts, while
strong stock and housing prices should continue to encourage robust consumer
spending.
Two seminal events took place in the second quarter in technology,
notwithstanding the sizable correction small cap stocks underwent in April. AT&T
announced a $47 billion merger with TCI, a large cable company, and the
consumer-oriented Internet stocks attracted a lot of market focus. In our mind,
these two disparate, but not totally unrelated, events provided major validation
of our long-standing thesis that computing and telecommunications will converge
around the Internet something we have been intimating for the past several
years.
The digital revolution is really only just beginning. Growth should
accelerate in the coming years not only in the IT (Information Technology)
sector itself, but across all sectors of the economy, as the number of people
connected to the Internet multiplies and its commercial use grows exponentially.
This growth will be driven by four types of economic activity:
-2-
<PAGE>
* BUILDING OUT THE INTERNET. 100 million people in 1998 around the world
use the Internet. Some experts believe that one billion people may be
connected to the Internet by early next century.
* ELECTRONIC COMMERCE (E-COMMERCE) AMONG BUSINESSES. Businesses began
significant use of the Internet for commercial transactions with their
business partners about two years ago. Early users already report appreciable
productivity improvements from using electronic networks to create, buy,
distribute, sell, and service products and services. We stated three years
ago that the Internet might be used for more than $300 billion worth of
commerce between businesses in the next few years.
* DIGITAL DELIVERY OF GOODS AND SERVICES. Software programs, newspapers,
and music CDs no longer need to be packaged and delivered to stores, homes or
kiosks. They can be delivered electronically over the Internet. Airline
ticket and securities transactions over the Internet already occur in large
numbers. Other industries such as consulting services, entertainment, banking
and insurance, education and health care are promoting the use of the
Internet to change dramatically their business approach. Over time, the sale
and transmission of goods and services electronically is likely to be the
largest and most visible driver of the new digital economy.
* RETAIL SALE OF TANGIBLE GOODS. The Internet can also be used to order
tangible goods and services that are traditionally produced, stored and
physically delivered. Though Internet sales are less than one percent of
total retail sales today, sales of certain products such as computers,
software, cars, books and flowers are growing rapidly.
It should not be understated that AT&T spent $47 billion to provide
Internet access to consumer homes through cable, which is far more suited to
Internet access than is the traditional copper telephone line. The merger was a
strong endorsement of the broadband cable network as a critical strategic
communications industry asset. It is also a powerful specific acceptance of the
viability of IP based cable telephony. This implies that AT&T will likely
undertake to provide telephone services over cable wires because they need
high-bandwidth, IP connectivity to the home. What America Online and the
so-called pre-eminent "portal" companies like Yahoo! have demonstrated is that
there is a huge market in developing and increasing the scope of consumer
relationships. There is tremendous potential to make incremental revenue from
the consumer by being the destination by which customers get their e-mail, host
their personal web sites and organize their content. US companies spend some
$300 billion per year in advertising and direct marketing; less than one-third
of one percent of that money is spent on the Internet today. The mechanism by
which an Internet portal company could substantially increase its revenue is by
owning the communications relationship with the customer and in effect becoming
the gateway for immediate delivery that allows them to participate in
advertising, direct marketing and e-commerce. By owning the high-bandwidth pipe
to the home, through their cable company, AT&T can compete for customers with
America Online, Yahoo!, and others.
-3-
<PAGE>
The same day that AT&T announced its intention to acquire TCI, the new
Chairman of the FCC, William Kennard, indicated a 180 degree shift in policy,
which will have a major impact on the development of broadband services by the
telcos. Kennard suggested that there should be no price regulation for
residential high-speed data services. This is a reversal of the Deregulation Act
that called for the unbundling of network elements for resale to competitors
such as CLECs (Competitive Local Exchange Carriers). This is an extremely
significant change. Under the current regulated environment, RBOCs (Regional
Bell Operating Companies) would undertake the expense of deploying tens of
millions of high-speed lines only to have the FCC force them to resell these
lines to competitors at a 20% to 30% discount to the tariffed rates that the FCC
and states determine. In other words, under the existing regulatory environment,
they were being asked to spend tens of billions of dollars up front for an
uncertain payout. This explains why the RBOCs have been dragging their feet in
the face of huge, pent-up demand for high-speed services. Furthermore, Kennard
suggested that in order to encourage the RBOCs to invest, they should be free
from regulation in data services. In return, the RBOCs have to give unrestricted
access to copper loops and co-location space in their central offices to other
competitors.
It was not that long ago that Amerindo first ventured that by the year
2000 several hundred million people worldwide would be on the Internet. We also
suggested that e-commerce could become a $300 billion industry. Recent
developments hint that while these early estimates initially appeared to be way
off the mark, they will ultimately not be that far off. The principle factor
inhibiting Internet growth has been the speed of transmission, or bandwidth. A
number of new technologies are going to make rapid access to the Internet soon
become a reality. These technologies include cable; digital set top boxes and
DSL (digital subscriber line) for the RBOCs.
The above developments are key tenets of a major investment theme that
we have held for some time. This explains why we are very constructive on
emerging technology over the next several years. We believe that the world of
computing is entering its "Third Generation", or "Paradigm", in some 40 years.
The First Generation took place between 1960-1985 and was entirely host-based,
which meant mainframe computers largely dominated by IBM. The Second Generation
took place between 1985-1995. This was known as client/server computing, and is
still the dominant form of computing today. During this extended period, almost
one trillion dollars in new market technology capitalizations was created. By
our reckoning, 1997 could well be the start of the Third Generation, which we
are calling Distributed Object Computing. For all intents and purposes, this is
effectively Internet-centric computing, where everything is web-enabled, through
very high-speed telecom. We think there is sufficient likelihood that this Third
Generation will generate a further trillion dollars in market technology
capitalization, except that in this instance it will be in far less than 13
years. It could literally happen in half that time.
In summary, the forthcoming explosion in Internet-related technology is
coincident to a period when emerging stocks are selling at historically cheap
valuations, both on an absolute and relative basis to large capitalization
stocks. The earnings of emerging growth companies are expected to grow this and
next year at vastly superior rates of earnings growth to large cap stocks, which
are being impacted by the age of the advanced business cycle and the slowdown
induced by the South East Asian economic turmo il. The key valuation metric for
all growth stock investors is the ratio of the p-e (price to earnings ratio) to
the growth rate of the company's earnings. Today, the broad market sells at an
astounding ratio of over 3.0 times its growth, versus a ratio of about .75 for
small cap tech stocks. We believe this unprecedented disparity in valuation is
unsustainable and will narrow in favor of the emerging growth stocks which are
poised for extended rapid earnings growth.
-4-
<PAGE>
AMERINDO TECHNOLOGY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(UNAUDITED)
COMMON STOCKS - 86.16%
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<C> <S> <C>
50,000+ Arbor Software Corporation $1,571,875
49,000+ Artisan Components, Inc. 661,500
45,000+ Avant! Corporation 1,113,750
32,500+ CIENA Corporation 2,262,812
112,500+ Cygnus, Inc. 1,174,219
40,000+ Ergo Science Corporation 142,500
25,000+ GelTex Pharmaceuticals, Inc. 465,625
27,500+ IDEC Pharmaceuticals Corporation 647,969
80,000+ MMC Networks, Inc. 2,550,000
100,001+ Objective Systems Integrators, Inc. 737,507
180,000+ PeopleSoft, Inc. 8,460,000
95,000+ Seibel Systems, Inc. 3,063,750
110,000+ The Vantive Corporation 2,255,000
120,000+ Xylan Corporation 3,577,500
75,000+ Yahoo! Inc. 11,812,500
----------
TOTAL INVESTMENTS
(Cost $26,170,625) 86.16% 40,496,507
OTHER INVESTMENTS LESS
LIABILITIES 13.84% 6,502,882
-----------
TOTAL NET ASSETS 100.00% $46,999,389
===========
<FN>
(1) Federal Tax Information: At June 30, 1998 the net unrealized appreciation
based on cost for Federal Income tax purposes of $26,170,625 was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an
excess of value over cost $17,527,694
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of cost over value (3,201,812)
-----------
Net unrealized appreciation $14,325,882
===========
+Non-income producing security
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
AMERINDO TECHNOLOGY FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $26,170,625) (Note 2) $ 40,496,507
Receivable for fund shares sold 58,317
Receivable for securities sold 6,847,117
Deferred organization expenses
(Note 2 ) 176,256
Other assets 59,333
------------
Total Assets 47,637,530
LIABILITIES:
Due to custodian bank 369,345
Payables:
Fund shares redeemed $ 127,589
Advisory fees, net (Note 4) 115,149
Distribution fees (Note 5) 6,329
Other payables and accrued expenses 19,729 268,796
------------
Total Liabilities 638,141
------------
Net Assets $ 46,999,389
============
NET ASSETS CONSIST OF:
Capital stock, $.001 par value;
unlimited shares authorized;
4,966,542 shares outstanding $ 4,966
Additional paid in capital 45,927,182
Accumulated net investment loss (1,473,210)
Accumulated net realized loss from
investment transactions (11,785,431)
Net unrealized appreciation on investments 14,325,882
-----------
Net Assets $ 46,999,389
============
Net asset value, redemption and offering price per share
($46,999,389/4,966,542 shares of capital stock
outstanding) (Note 6) $ 9.46
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
AMERINDO TECHNOLOGY FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income $ 1,322
Expenses:
Investment advisory fees (Note 4) $310,898
Distribution fees (Note 5) 51,816
Interest expense 41,824
Administration and accounting fees 32,814
Registration fees 29,753
Amortization of organization
expenses (Note 2 ) 27,769
Directors' fees and expenses 27,273
Professional fees 24,415
Printing expense 23,222
Transfer agent fees 7,472
Custodian fees 7,187
Miscellaneous 8,213
-----------
Total expenses 592,656
-----------
Less:
Reimbursed expenses (Note 4) (126,290)
-----------
Net expenses 466,366
-----------
Net investment loss (465,044)
-----------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS:
(Note 2)
Net realized gain from investment transactions 236,764
Net change in unrealized appreciation of investments 11,001,990
-----------
Net realized and unrealized gain on investments 11,238,754
-----------
Net increase in net assets resulting from operations $10,773,710
===========
</TABLE>
-7-
The accompanying notes are an integral part of these financial statements.
<PAGE>
AMERINDO TECHNOLOGY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED FOR THE
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
----------- -----------------
<S> <C> <C>
Net investment loss $ (465,044) $ (913,952)
Net realized gain (loss) from investment transactions 236,764 (12,022,195)
Net change in unrealized appreciation of investments 11,001,990 6,906,137
------------ ------------
Net increase (decrease) in net assets resulting
from operations 10,773,710 (6,030,010)
Net capital share transactions (Note 6 ) (3,965,477) 12,011,486
Net increase in net assets 6,808,233 5,981,476
NET ASSETS:
Beginning of period 40,191,156 34,209,680
------------ ------------
End of period $ 46,999,389 $ 40,191,156
============ ============
</TABLE>
-8-
The accompanying notes are an integral part of these financial statements.
<PAGE>
AMERINDO TECHNOLOGY FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
NOTE 1. ORGANIZATION
The Amerindo Technology Fund (the "Fund") is a series of the Amerindo
Funds Inc., a Maryland Corporation incorporated on February 6, 1996. The Fund is
an open-end, non-diversified management investment company under the Investment
Company Act of 1940, authorized to issue an unlimited number of shares of
capital stock in separate series, with each series representing interests in a
separate portfolio of securities and other assets, each with its own investment
objectives and policies.
The Fund offers two classes of shares to investors, Class A and Class D
shares. Class A shares are sold subject to an initial sales load of up to 4.00%
with a minimum investment of $10,000. Class D shares are sold without an initial
sales load with a minimum investment of $150,000.
The Fund is the only current series of the Amerindo Funds Inc.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles for
investment companies. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that effect the reported amount of assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the period. Actual results could differ from these estimates.
SECURITY VALUATION Securities which are traded on any exchange or on
the NASDAQ over-the-counter market are valued at the last quoted sale price.
Lacking a last sale price, a security is valued at its closing bid price on such
exchanges, or at the quoted bid price in the over-the-counter market. Securities
for which market quotations are not readily available are valued in accordance
with procedures established by the Fund's Board of Directors (the "Board"),
including use of an independent pricing service or services whi ch use prices
based upon yields or prices of comparable securities, indications as to values
from dealers, and general market conditions.
SHORT TERM Investments in fixed income securities with maturities of
less than 60 days when acquired, or which subsequently are within 60 days of
maturity, are valued by using the amortized cost method of valuation, which the
Board has determined will represent fair value.
FEDERAL INCOME TAXES The Fund intends to qualify as a "regulated
investment company" under the IRC. By so qualifying, the Fund will not be
subject to federal income taxes to the extent that it distributes substantially
all of its net investment income and any realized capital gains.
DIVIDENDS AND DISTRIBUTIONS The Fund intends to distribute
substantially all of its net investment income as dividends to its shareholders
on an annual basis. The Fund intends to distribute its net long term capital
gains and its net short term capital gains at least once a year.
-9-
<PAGE>
ORGANIZATION EXPENSES During its organization and initial registration
with the Securities and Exchange Commission ( the "SEC"), the Fund incurred
organization expenses of $279,807. The Fund has elected to defer these expenses
and amortize them on a straight-line basis over a 60 month period beginning with
the Funds' commencement of operations. During the six months ended June 30,
1998, $27,769 was amortized.
OTHER The Fund follows industry practice and records security
transactions on the trade date. The specific identification method is used for
determining gains or losses for financial statements and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis.
NOTE 3. PURCHASES AND SALES OF SECURITIES
The cost of purchases and sales of investment securities (other than
short-term investments), for the six months ended June 30, 1998, aggregated
$8,418,967 and $ 20,285,597, respectively.
NOTE 4. INVESTMENT ADVISORY AGREEMENT
The Fund has an agreement with Amerindo Investment Advisors Inc. (the
"Advisor"), with whom certain officers and directors of the Fund are affiliated
to serve as investment advisor and manager. Under the terms of the agreement, a
monthly fee is paid to the investment advisor based on 1/12th of 1.50% (1.50% on
an annual basis) of the average daily net asset value. This advisory agreement
is subject to an annual review by the Board.
The Advisor has agreed to a reduction in the amounts payable to it and
to reimburse the Fund for any expenses (including the advisory fee, but
excluding taxes, interest and brokerage fees and extraordinary expenses incurred
in connection with any matter not in the ordinary course of business of the
Fund) over 2.25% of the average daily net asset value of the Class D shares of
the Fund.
For the six months ended June 30, 1998, the Advisor earned advisory
fees of $310,898 and reimbursed the Fund $126,290 in expenses.
The Fund has agreements with American Data Services, Inc. (the
"Administrator") to provide shareholder servicing, fund accounting, and
administrative services to the Fund. The services to be provided under the
agreements include day-to-day administration of matters related to the corporate
existence of the Fund (other than rendering investment advice), maintenance of
its records, preparation of reports, supervision of the Fund's arrangement with
its custodian and assistance in the preparation of the Fund's registration
statement under federal and state laws. Costs incurred totaled $40,286 for the
six months ended June 30, 1998.
NOTE 5. DISTRIBUTION FEES
The Board of Directors has adopted a distribution plan applicable to
the Fund under Section 12(b) of the Investment Company Act of 1940 and Rule
12b-1 thereunder. Pursuant to the Plan, registered broker-dealers and qualified
recipients will be reimbursed by the Fund for distribution expenditures up to a
limit of 0.50% of 1% and 0.25% of 1% on Class A Shares and Class D Shares,
respectively.
-10-
<PAGE>
NOTE 6. FUND SHARE TRANSACTIONS
At June 30, 1998 there was an unlimited number of shares of $0.001 par
value capital stock authorized. Transactions in capital stock during the six
months ended June 30, 1998 and for the year ended December 31, 1997 were as
follows:
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
------------- -----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 178,976 $ 1,431,449 3,158,607 $ 22,631,789
Shares issued for reinvestment
dividends and distribution
from realized gains 0 0 0 0
Shares redeemed (net of redemption
fees retained of $11,529 and
$145,946, respectively) (667,938) (5,396,926) (1,501,986) (10,620,303)
-------- ----------- --------- ------------
Net increase (decrease) (488,962) ($ 3,965,477) 1,656,621 $ 12,011,486
======== =========== ========= ============
</TABLE>
-11-
<PAGE>
AMERINDO TECHNOLOGY FUND
FINANCIAL HIGHLIGHTS
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE OCTOBER 29, 1996
SIX MONTHS ENDED FOR THE (COMMENCEMENT OF
JUNE 30, 1998 YEAR ENDED OPERATIONS) THROUGH
(UNAUDITED) DECEMBER 31, 1997 DECEMBER 31, 1996
----------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 7.37 $ 9.00 $ 10.00
------- -------- ----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss (0.09) (0.16) (0.04)
Net realized and unrealized gain (loss) on
investments 2.18 (1.47) (0.96)
------- -------- ----------
Total from investment operations 2.09 (1.63) (1.00)
------- -------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment income 0.00 0.00 0.00
Distributions from realized gains from
security transactions 0.00 0.00 0.00
------- -------- ----------
Total distributions 0.00 0.00 0.00
------- -------- ----------
Net asset value, end of period $ 9.46 $ 7.37 $ 9.00
======= ======== ==========
Total return** 65.44%* (18.11%) (45.69%)*
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (in 000's) 46,999 40,191 33,854
Ratio of expenses to average net assets 2.86%* 2.83% 3.82%*
Ratio of expenses to average net assts, net
of reimbursement 2.25%* 2.25% 2.25%*
Ratio of net investment income (loss) to
average net assets (2.85%)* (2.83%) (3.82%)*
Portfolio turnover rate 20.06% 355.21% 0.00%
<FN>
* Annualized
** Based on net asset value per share
</FN>
</TABLE>
-12-
The accompanying notes are an integral part of these financial statements
<PAGE>
Investment Advisor
Amerindo Investment Advisors Inc.
San Francisco, California/New York, New York
Administrator and
Transfer and Dividend Agent
American Data Services, Inc.
Hauppauge, New York
Distributor
ADS Distributors, Inc.
Hauppauge, New York
Custodian
The Northern Trust Company
Chicago, Illinois
Legal Counsel
Battle Fowler LLP
New York, New York
Independent Auditors
Morrison, Brown, Argiz & Company
Miami, Florida
1-888-TECH FUND
www.amerindo.com
