WWW INTERNET FUND
SEMI - ANNUAL REPORT
DECEMBER 31, 1996
<PAGE>
<TABLE>
<CAPTION>
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
(Unaudited)
<C> <S> <C>
Shares Value
- ------- ---------
COMMON STOCKS 82.97%
BROADCAST & INFORMATION RESOURCES
Advertising, Content & Distribution 6.53%
300 SGS Thompson ** $ 21,000
500 General Motors Corp., Class H 28,125
500 McGraw Hill Cos. 23,063
500 Mecklermedia Corp. ** 9,875
500 Time Warner Inc. 18,750
-------
100,813
-------
INFORMATION RETRIEVAL 7.30%
1,000 America Online Inc. ** 33,250
300 CUC International ** 7,125
300 Fore Systems Inc. ** 9,863
500 Charles Schwab Corp. 16,000
1,000 Verifone Inc. ** 29,500
1,000 Yahoo Inc. ** 17,000
-------
112,738
-------
DATA PROCESSING SERVICES 1.89%
800 First Data Corp. 29,200
-------
The accompanying notes are an integral part of these financial statements.
<PAGE>
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
(Unaudited)
Shares Value
- ------- ---------
COMMUNICATIONS & TELECOM SERVICES
Browsers & Internet Service Providers 6.82%
800 AT & T Corp. $ 34,800
300 Bellsouth Corp . 12,113
300 Netscape Communication Inc. ** 17,063
700 PSINet ** 7,613
400 SBC Communications Inc. 20,700
500 Worldcom Inc. ** 13,031
--------
105,320
--------
COMPUTERS & COMPUTER PERIPHERALS
Computers & Network Servers 4.67%
300 Compaq Computer Corp. ** 22,275
500 Hewlett Packard Inc. 25,125
50 NCR Corp. 1,681
500 Silicon Graphics Inc. ** 12,750
400 Sun Microsystems Inc. ** 10,275
-------
72,106
-------
Storage Devices .77%
300 Seagate Technology Inc. ** 11,850
-------
The accompanying notes are an integral part of these financial statements.
<PAGE>
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
(Unaudited)
Shares Value
- ------- ---------
COMPUTER SOFTWARE & INTERNET TOOLS
Prepackaged & Customized Software 14.66%
1,000 Accent Software International Ltd. ** $ 6,375
1,000 Broderbund Software Inc. ** 29,750
300 Computer Associates International Inc. 14,925
500 CKS Group ** 13,938
500 HNC Software Inc. ** 15,625
1,000 Hummingbird Comm.** 28,375
500 Informix Corp.** 10,187
1,000 Intuit Inc. ** 31,500
1,000 Macromedia Inc.** 18,000
500 Oracle Corp.** 20,875
1,000 Onewave Inc. ** 7,812
500 Vantive Corp. ** 15,625
200 Electronic Arts Inc. ** 5,988
200 Adobe Systems Inc. 7,475
-------
226,450
-------
Firewall & Internet Security 4.71%
800 Checkpoint Software ** 17,400
1,500 Raptor Systems Inc. ** 30,187
800 Security Dynamics Technologies Inc. ** 25,200
-------
72,787
-------
DATA COMMUNICATIONS & NETWORKING EQUIPMENT
Routers, Hubs & Switches 25.51%
1,000 Ace Communication ** 15,000
1,500 Andrew Corp. ** 79,594
The accompanying notes are an integral part of these financial statements.
<PAGE>
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
(Unaudited)
Shares Value
- ------- ---------
Routers, Hubs & Switches (Continued)
300 Ascend Communication Inc. ** $18,637
700 Cisco Systems Inc. ** 44,537
500 Cascade Comm Corp. ** 27,562
600 Cabletron Systems Inc. ** 19,950
1,500 Cognex Inc. ** 27,750
2,000 Glenayre Technologies ** 43,125
259 Lucent Technologies Inc. 11,979
1,600 PairGain Technology ** 48,700
400 U.S. Robotics Corp.** 28,800
-------
393,884
-------
SEMICONDUCTORS 10.11%
1,000 Integrated Devices Technology Inc. ** 13,625
500 LSI Logic Corp. ** 13,375
800 Motorola Inc. 49,100
1,000 S3 Inc. ** 16,250
1,000 Texas Instuments Inc. 63,750
-------
156,100
-------
TOTAL COMMON STOCKS (COST $1,251,172) 1,281,248
---------
MUTUAL FUNDS 18.98%
293,087 Star Bank Treasury Fund 293,087
(Cost $ 293,087) ---------
The accompanying notes are an integral part of these financial statements.
<PAGE>
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
(Unaudited)
TOTAL INVESTMENTS 101.95% 1,574,335
(Cost $1,544,259)
Other Assets less Liabilities (1.95%) (30,103)
-------- ---------
TOTAL NET ASSETS 100.00% $ 1,544,232
======= ==========
<FN>
**Non-income producing securities.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
WWW INTERNET FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31 , 1996
(Unaudited)
<S> <C>
ASSETS:
Investment in securities at market value
(identified cost--$1,544,259)(Note 6).................. $1,574,335
Due from investment adviser.............................. 8,944
Receivable for fund shares sold.......................... 2,237
Dividends and interest receivable........................ 1,734
---------
TOTAL ASSETS.......................... 1,587,250
---------
LIABILITIES:
Dividends payable........................................ 21,622
Accrued operating expenses............................... 21,396
---------
TOTAL LIABILITIES..................... 43,018
---------
NET ASSETS (equivalent to $11.09 per share based on
139,228 shares of common stock outstanding
--(Note 5)...................................... $1,544,232
=========
NET ASSETS CONSIST OF:
Paid in capital (Note 5)............................... $1,452,630
Undistributed net investment income/(loss)............. (6,650)
Accumulated undistributed net realized gain/(loss)
from security transactions.......................... 68,176
Net unrealized appreciation/(depreciation)
of investments...................................... 30,076
---------
NET ASSETS DECEMBER 31 , 1996 $1,544,232
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
WWW INTERNET FUND
STATEMENT OF OPERATIONS
For the period from August 1, 1996
(Commencement of Operations) through December 31, 1996
(Unaudited)
<S> <C>
INVESTMENT INCOME:
Dividends.................................................. $2,193
Interest................................................... 3,609
--------
TOTAL INVESTMENT INCOME................................. 5,802
--------
OPERATING EXPENSES:
Investment advisory fee (Note 3)........................... 3,736
Administrative fees (Note 3)................................ 6,283
Custodian fees.............................................. 1,933
Transfer agent fees........................................ 3,866
Accounting fees (Note 3)................................... 3,866
Distributor fees (Note 4).................................. 2,490
Other expenses............................................. 2,957
--------
Total expenses............................................. 25,131
Expense reimbursement from adviser......................... (12,679)
--------
NET EXPENSES............................................ 12,452
--------
NET INVESTMENT INCOME/(LOSS)............................ (6,650)
--------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS:
Net realized gain/(loss) on security transactions......... 97,231
Net change in unrealized appreciation/(depreciation)
on investments......................................... 30,076
--------
NET GAIN/(LOSS) ON INVESTMENTS........................... 127,307
--------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.......................................... $120,657
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
WWW INTERNET FUND
STATEMENT OF CHANGES IN NET ASSETS
For the period ended December 31, 1996
(Unaudited)
<S> <C>
INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income/(loss)................................ $(6,650)
Net realized gain/(loss) from securities transactions....... 97,231
Net change in unrealized appreciation/(depreciation)
of investments during the period......................... 30,076
----------
NET INCREASE/(DECREASE) IN NET ASSETS FROM
OPERATIONS............................................... 120,657
----------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income...................................... 0
Realized gain.............................................. (29,055)
----------
(29,055)
----------
FUND SHARE TRANSACTIONS:
Shares sold................................................. 1,368,148
Shares issued in reinvestment of dividends.................. 7,433
Shares redeemed............................................. (22,951)
----------
TOTAL CAPITAL STOCK 1,352,630
----------
NET INCREASE/(DECREASE) IN NET ASSETS 1,444,232
----------
NET ASSETS:
Beginning of period........................................ 100,000
---------
End of period............................................... $ 1,544,232
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
WWW INTERNET FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(Unaudited)
1. ORGANIZATION
The WWW Internet Fund. (the "Fund") was organized as an Ohio business trust
(the "Trust"), on April 23, 1996, and commenced operations on August 1, 1996.
The Trust is registered under the Investment Company Act of 1940, as amended, as
a diversified, open end management investment company. The Trust is authorized
to issue an indefinite number of shares of beneficial interest, par value $.001
per share.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Securities Valuations- Portfolio securities, including covered call options
if written by the Fund, are valued at the last sale price on the securities
exchange or national securities market on which such securities primarily are
traded. Securities not listed on an exchange or national securities market, or
securities in which there were no transactions, are valued at the average of the
most recent bid and asked prices, except in the case of open short positions
where the asked price is used for valuation purposes. Bid price is used when no
asked price is available. Short-term investments are carried at amortized cost,
which approximates value. Any securities or other assets for which recent market
quotations are not readily available are valued at fair value as determined in
good faith by the Trust's Board of Trustees. Expenses and fees, including the
management fee and distribution and service fees, are accrued daily and taken
into account for the purpose of determining the net asset value of the Fund's
shares.
Federal Income Taxes- The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. 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.
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.
<PAGE>
WWW INTERNET FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(Unaudited)
NOTE 3. INVESTMENT ADVISORY & ADMINISTRATION AGREEMENT
The Board of Trustees provides broad supervision over the affairs of the
Fund. Pursuant to a Management Agreement between the Fund and WWW Advisors, Inc.
(the "Manager") and subject to the authority of the Board of Trustees, the
Manager manages the investments of the Fund and is responsible for the overall
management of the business affairs of the Fund.
Under the terms of the Management Agreement, the Fund has agreed to pay the
manager a base monthly management fee at the annual rate of 1.00% of the Fund's
average daily net assets (the "Base Fee") which will be adjusted monthly (the
"Monthly Performance Adjustment") depending on the extent by which the
investment performance of the Fund, after expenses, exceeded or was exceeded by
the percentage change of the S & P 500 Index. Under terms of the Management
Agreement , the monthly performance adjustment may increase or decrease the
total management fee payable to the manager (the " Total Management Fee") by up
to .50% per year of the value of the Fund's average daily net assets.
All expenses incurred in the operation of the Fund will be borne by the
Fund, except to the extent specifically assumed by the manager. The expenses to
be borne by the Fund will include: organizational costs, taxes, interest,
brokerage fees and commissions, fees of board members who are not officers,
directors or employees of the of the Manager or its affiliates, Securities and
Exchange Commission fees, state Blue Sky qualification fees, advisory,
administrative and fund accounting fees, charges of custodians, transfer and
dividend disbursing agents' fees, insurance premiums, industry association fees,
outside auditing and legal expenses, costs of maintaining the Fund's existence,
cost of independent pricing services, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
shareholders' reports and meetings, costs of preparing and printing prospectuses
and statements of additional information, amounts payable under the Fund's
Distribution and Shareholder Servicing Plan (the "Plan") and any extraordinary
expenses.
The Manager has undertaken, until such time as it gives investors 60 days'
notice to the contrary , to waive its Management Fee in the amount, if any, by
which the total expenses of the Fund for any fiscal year, including amortization
of organizational expenses and amounts paid by the Fund under the Plan, exceed
2.50% of average annual net assets of the Fund, except that the amount of such
fee waiver shall not exceed the amount of fees received by the Manager under the
Management Agreement for such fiscal year. The fee waiver, if any, will be on a
monthly basis, subject to year-end adjustment. Interest expenses, taxes,
brokerage fees and commissions, and extraordinary expenses are not included as
expenses for these purposes.
<PAGE>
WWW INTERNET FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(Unaudited)
Note 3. INVESTMENT ADVISORY & ADMINISTRATION AGREEMENT
(CONTINUED)
The Fund will reimburse the Manager for organizational costs incurred on
behalf of the Fund only if and when net assets of the Fund exceed $3,000,000.
The Fund has a Fund Accounting and Administrative Agreement with American
Data Services, Inc. ("ADS). ADS receives a fee, computed daily and payable
monthly , at an annual rate of .08% of average daily net assets, subject to a
monthly minimum.
NOTE 4. DISTRIBUTION AGREEMENT
Under a plan adopted by the Fund's Board of Trustees pursuant to Rule 12b-1
under the 1940 Act ( the "Plan"), the Fund pays the Manager a shareholder
servicing and distribution fee at the annual rate of .50% of the average daily
net assets of the Fund. Such fee will be used in it's entirety by the Manager to
make payments for administration, shareholder services and distribution
assistance, including, but not limiting to (i) compensation to securities
dealers and other organizations (each, a "Service Organization" and
collectively, the "Service Organizations"), for providing distribution
assistance with respect to assets invested in the Fund, (ii) compensation to
Service Organizations for providing administration , accounting and other
shareholder services with respect to Fund shareholders, and (iii) otherwise
promoting the sale of shares of the Fund, including paying for the preparation
of advertising and sales literature and the printing and distribution of such
promotional materials to prospective investors. The fees paid to the Manager
under the Plan are in addition to the fees payable under the Management
Agreement and are payable without regard to actual expenses incurred. The Fund
understands that third parties also may charge fees to their clients who are
beneficial owners of Fund shares in connection with their client accounts. These
fees would be in addition to any amounts which may be received by them from the
Manager under the Plan. For the period ended December 31, 1996, the amount paid
or accrued for such expenses was $ 2,490.
<PAGE>
WWW INTERNET FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
(Unaudited)
NOTE 5. CAPITAL SHARE TRANSACTIONS
As of December 31, 1996 there was an unlimited number of $.001 par value
shares of capital stock authorized for the Fund.
Transactions in capital stock were as follows:
<TABLE>
For the period from
August 1, 1996 (Commencement of
Operations) through December 31, 1996
<S> <C> <C>
Shares Amount
--------- ----------
Shares sold 130,564 $1,368,148
Shares issued in reinvestment
of dividends 667 7,433
Shares redeemed (2,003) (22,951)
----------- ----------
Net increase 129,228 $1,352,630
========== ==========
Total paid in capital $1,452,630
</TABLE>
NOTE 6. INVESTMENTS
For the period from August 1, 1996 (commencement of operations) through
December 31, 1996, purchases and sales of investment securities, other than
short-term investments, aggregated $1,632,997 and $479,056 respectively. The
gross unrealized appreciation for all securities totaled $98,545 and the gross
unrealized depreciation for all securities totaled $68,469 for a net unrealized
appreciation of $30,076. The aggregate cost of securities for federal income tax
purposes at December 31, 1996 was $1,544,259.
<PAGE>
<TABLE>
<CAPTION>
WWW INTERNET FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period from
August 1, 1996 (Commencement of Operations)
through December 31, 1996
(Unaudited)
<S> <C>
Net asset value- beginning of period............................. $10.00
---------
Income from investment operations:
Net investment income/ (loss).................................... (.06)
Net gain / (loss)on investments both realized and unrealized..... 1.36
------
Total from investment operations................................. 1.30
------
Less distributions:
Dividends from net investment income............................. 0
Dividends from capital gains..................................... (.21)
------
Net asset value- end of period................................... $11.09
======
Total Return**................................................... 30.99%
Ratio/supplemental data:
Net assets, end of period (in 000's)............................. 1,544
Ratio of net expenses to average net assets**................... 2.50%
Ratio of total expenses to average net assets **................. 5.00%
Ratio of net investment income/ (loss) to average net assets**.. (1.32%)
Portfolio turnover rate.......................................... 39.75%
Average Commission rate paid..................................... .066629
<FN>
** Annualized
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
LETTER TO SHAREHOLDERS
WWW INTERNET FUND
December 31, 1996
Dear Investors,
The stock market had begun to recover from it's July sell-off when we commenced
operations and accepted our first public dollar for investments on August 1,
1996. At year end on December 31, 1996 the WWW Internet Fund has appreciated
12.99% including a 21 cent per share dividend reinvested. We are pleased with
this five (5) month result and are steadfastly working toward the continued long
term appreciation of fund shares.
A major contribution to this result were several positions that racked up gains
of 70 to 100 percent. Examples of these winning positions were stocks of
companies like C-Cube, CNet, Micro Touch Systems, Seagate and US Robotics. These
positions were either sold out or reduced to book gains.
Because we believe the internet is the highest growth segment of technology, we
continue to believe that investors will be rewarded handsomely over time by
investing in select Internet companies. Our strategy is to strive to capture
these gains by using our proprietary Net Niche Investment model which invests in
a three (3) tier mix of Mature, Midlife and Adolescent companies. This model
further segments the Internet into various sectors of opportunity such as :
Agent Software, Security, Electronic Commerce, Information Processing and
Outsourcing, Network servers, Routers & Hubs, Publishing, Specialty
Semiconductors, etc. By tracking technologies and developments in these sectors
and balancing risk by investing in large and small companies, we hope to provide
a great long term investment fund for those who find investing in individual
Internet stocks both troublesome and fraught with risk.
Looking forward into 1997, we expect Market Analysts to reduce estimates of
earnings' growth and believe the market will be more volatile and prone to near
term downside risk. We will continue to position the portfolio in good companies
that we believe have exceptional upside potential and who dominate the market
segments that they are in. We recommend that investors keep their long term
perspective and suggest adding to their investment in the WWW Internet fund on
near term declines if they have additional investment money available. This
averaging down methodology forces you to buy low and can pay handsome rewards in
the future years.
/s/ Lawrence S. York
Lawrence S. York
President
