WWW
INTERNET
FUND
WWW Trust Annual Report
June 30, 2000
<PAGE>
WATCHING THE MARKETS
WEIGHING THE OPPORTUNITIES
WORKING FOR YOU
<PAGE>
August 22, 2000
FELLOW SHAREHOLDERS:
The WWW Trust completed its fourth consecutive year of operations on June 30,
2000 with outstanding results. The WWW Internet Fund (WWIFX) achieved a return
of 63.56% for the fiscal year despite the severe market correction that occurred
in April. Since inception on August 1, 1996, shareholders have earned an
impressive 46.87% average annual return.
Among the factors contributing to the Fund's performance was the remarkably
strong US economy. During the year US Gross Domestic Product peaked to record
levels due to high productivity and near zero inflation. The Federal Reserve
raised interest rates for a sixth consecutive time ostensibly as a pre-emptive
strike against inflation, but almost certainly to stay ahead of promised
Japanese rate hikes that would end their eighteen month zero interest rate
policy and threaten to push up US Treasury yields. The result of this aggressive
rate hike was a severe and broad market correction, and prolonged uncertainty
among investors.
Given the exceptionally high performance of the Internet sector during 1999, we
anticipated a correction and began selling profitable securities in the fourth
quarter of 1999 and early in the first quarter of 2000. We repositioned our
portfolio in sub-sectors of the Internet economy that we identified as offering
the best prospects for sustained growth in the year ahead. These actions
contributed to the Fund's 63.56% return for the year ended June 30, 2000.
WWW Internet Fund defines the Internet as an "emerging global, communication,
information and distribution system". We believe the greatest profits presently
exist in the expansion of the Internet's infrastructure to deliver high speed,
broadband access; the development of industry standard protocols; and the
increase of online security. Therefore, we have steered away from the consumer
oriented Internet startups, and our holdings are weighted in the
Business-To-Business (B2B) sector. Recent market rebounds indicate that this
sector is leading the recovery of Internet stocks.
Our management discipline and investment strategy remains focused on capturing
the growth of the emerging Internet Industry. We are pleased to have rewarded
shareholders with superior returns to date. We will continue watching the
markets, weighing the opportunities, and working for you.
Sincerely,
/s/ Lawrence York
Lawrence York
Chairman
<PAGE>
PERFORMANCE GRAPH
-----------------
MONTH WWW INTERNET FUND S & P 500 INDEX
----- ----------------- ---------------
Aug-96 10110.00 10188.14
Sep-96 11110.00 10740.06
Oct-96 10700.00 11020.70
Nov-96 11740.00 11829.36
Dec-96 11298.87 11574.97
Jan-97 11859.23 12284.71
Feb-97 10473.61 12357.53
Mar-97 9607.61 11830.92
Apr-97 9821.56 12521.92
May-97 11421.13 13255.41
Jun-97 11196.99 13831.39
Jul-97 12735.43 14911.95
Aug-97 12735.43 14055.32
Sep-97 12969.76 14802.41
Oct-97 12154.69 14292.05
Nov-97 12093.56 14929.29
Dec-97 11347.52 15164.15
Jan-98 11869.25 15318.07
Feb-98 12936.41 16397.22
Mar-98 13268.42 17216.19
Apr-98 13517.43 17372.45
May-98 12509.55 17045.39
Jun-98 12983.84 17717.63
Jul-98 13019.42 17529.49
Aug-98 9983.92 14982.56
Sep-98 11288.24 15917.02
Oct-98 11999.68 17183.53
Nov-98 15414.61 18208.14
Dec-98 19356.15 19230.27
Jan-99 26711.98 20011.09
Feb-99 24146.56 19374.64
Mar-99 26116.22 20124.38
Apr-99 28766.74 20879.60
May-99 25386.71 20371.90
Jun-99 27526.59 21470.90
Jul-99 25714.99 20781.14
Aug-99 27222.63 20660.13
Sep-99 28815.38 20068.04
Oct-99 35101.26 21311.79
Nov-99 43162.18 21730.37
Dec-99 51654.32 22980.87
Jan-00 49082.06 21805.45
Feb-00 62152.56 21378.06
Mar-00 54571.18 23439.50
Apr-00 42189.90 22712.88
May-00 36048.49 22230.08
Jun-00 45082.01 22745.95
<PAGE>
<TABLE>
<CAPTION>
WWW TRUST
WWW INTERNET FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
ASSETS
<S> <C>
Investments in securities, at value (cost $85,506,306) $ 102,837,073
Receivable for fund shares sold 39,468
Receivable for securities sold 5,242,637
Dividends and interest receivable 17,472
Prepaid expenses and other assets 16,374
-------------
Total assets 108,153,024
LIABILITIES
Payable to custodian bank 4,671,176
Payables for fund shares redeemed 74,420
Payables for securities purchased 964,650
Accrued fees payable to investment advisor 87,477
Other accrued expenses 129,687
-------------
Total liabilities 5,927,410
-------------
NET ASSETS $ 102,225,614
=============
NET ASSETS CONSIST OF
Capital shares $ 78,393,580
Accumulated net investment loss (1,897,184)
Accumulated net realized gains from investment transactions 8,398,451
Net unrealized appreciation on investments 17,330,767
-------------
NET ASSETS $ 102,225,614
=============
Net asset value, offering price and redemption price per share $ 36.63
=============
Fund shares outstanding 2,790,716
=============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
WWW TRUST
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
June 30, 2000
COMMON STOCKS: 100.06%
SHARES VALUE
------ -----
<S> <C> <C>
Application/CRM & XML - Software: 7.10%
Art Technology Group* 43,000 $4,340,312
Bluestone Software* 8,000 205,500
E. Piphany Inc.* 5,000 535,938
Microsoft Corp.* 16,000 1,280,000
Prime Response Inc.* 50,000 343,750
Quest Software Inc.* 10,000 553,750
---------
7,259,250
Broadcast & Information Resources: 3.20%
ACTV Inc.* 30,000 448,125
Charter Communications Corp.* 52,000 854,750
Gemstar International Group* 32,000 1,966,500
---------
3,269,375
Communication & Networking Equipment: 12.74%
3Com Corp.* 10,000 576,250
Accelerated Networks Inc.* 11,000 464,062
Advanced Fibre Communications* 15,000 679,687
Airnet Communications Corp.* 30,000 783,750
Efficient Networks Inc.* 10,000 735,625
Extreme Networks Inc.* 20,000 2,110,000
Nortel Networks Corp. 25,000 1,706,250
Redback Networks Inc.* 30,000 5,373,750
Virata Corp.* 10,000 596,250
----------
13,025,624
eCommerce/eBusiness Software: 11.26%
Ariba, Inc.* 30,000 2,941,406
BEA Systems Inc.* 15,000 741,562
BroadVision Inc.* 50,000 2,540,625
Commerce One, Inc.* 25,000 1,134,766
Free Markets Inc.* 11,000 521,813
12 Technologies Inc.* 15,000 1,563,984
Owens Direct LLC(1) 750 75,000
Tibco Software Inc.* 6,500 697,023
Vignette Corp.* 25,000 1,300,391
----------
11,516,570
See accompanying notes to financial statements.
<PAGE>
WWW TRUST
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
June 30, 2000
SHARES VALUE
------ -----
Electronic Measuring Software & Equipment: 3.53%
Agilent Technologies Inc.* 42,000 $3,097,500
Applied Digital Solutions Inc.* 150,060 506,452
----------
3,603,952
Fibre Optic Components & Sub Systems: 10.08%
Bookham Technology* 20,000 1,185,000
Corning Inc. 20,000 5,397,500
Ditech Communication Corp.* 7,000 661,937
Finisar Corp.* 92,000 2,409,250
Standford Microdevices Inc.* 15,000 651,562
----------
10,305,249
Financial Services/Banking & Brokerages: 3.46%
Chase Manhattan Corp. 21,000 967,313
Checkfree Holdings Corp.* 3,000 154,688
Intuit Inc.* 45,000 1,861,875
Wit Soundview Group Inc.* 51,500 552,820
----------
3,536,696
Firewall & Internet Security: 10.76%
Check Point Software Technologies Ltd.* 15,000 3,176,250
Entrust Technologies Inc.* 60,000 4,965,000
ISS Group Inc.* 29,000 2,863,297
----------
11,004,547
Internet Content & Hosting Providers: 9.03%
Akamai Technologies* 2,800 332,456
America Online Inc.* 20,000 1,055,000
Digital Island Inc.* 20,500 996,813
Exodus Communications Inc.* 40,000 1,842,500
F5 Networks* 11,000 600,188
Hongkong.Com Corp.* 250,000 33,034
iHigh.com Inc.*(1) 3,280 1,000,400
Infospace.com Inc.* 30,000 1,657,500
Pacific Century* 400,000 788,000
VerticalNet Inc.* 25,000 923,438
----------
9,229,329
See accompanying notes to financial statements.
<PAGE>
WWW TRUST
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
June 30, 2000
SHARES VALUE
------ -----
Network Printers: 0.53%
Lexmark International Group* 8,000 $ 538,000
Venture Capital: 2.05%
Internet Capital Group Inc.* 14,000 518,219
London Pacific Group Ltd, ADR 92,000 1,196,000
Safeguard Scientific Inc.* 12,000 384,750
----------
2,098,969
Semiconductors: 12.68%
Applied Micro Circuits Corp.* 5,000 493,750
Celeritek Inc.* 14,000 571,375
Intersil Holding Corp.* 70,000 3,784,375
Motorola Inc. 33,000 959,063
Numerical Technologies Inc.* 11,000 534,875
PLX Technology Inc.* 51,000 2,116,500
PMC_Sierra Inc.* 11,000 1,954,562
Triquint Semiconductor Inc.* 8,000 765,500
Texas Instruments Inc. 26,000 1,785,875
----------
12,965,875
Storage Area Networks: 3.64%
Brocade Communications System* 10,000 1,834,844
Crossroads Systems Inc.* 30,000 757,500
Veritas Software* 10,000 1,130,156
----------
3,722,500
Internet Training: 0.02%
Prosoft Training.com* 931 15,652
Pipelines: 1.26%
Enron Corp. 20,000 1,290,000
See accompanying notes to financial statements.
<PAGE>
WWW TRUST
WWW INTERNET FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
June 30, 2000
SHARES VALUE
------ -----
Voice/Telco & Wireless Services: 8.72%
360Networks Inc.* 35,000 $ 533,750
Ericsson Telecommunication ADR 72,000 1,440,000
Internap Network Services* 25,000 1,037,891
Nokia Oyji-Spons ADR 56,000 2,796,500
Nextel Communication Inc.* 12,000 734,250
Research in Motion* 12,000 543,000
Sonera Corp. 39,000 1,794,000
USA Talks.com Inc.*(1) 320,000 30,000
----------
8,909,391
----------
TOTAL COMMON STOCK (COST: $84,817,240) 102,290,979
PREFERRED STOCKS: 0.51%
Ntown Inc.*(1) (Cost $525,000) 275,000 525,000
LONG OPTIONS: 0.02%
Microsoft & Inc.call January 2001 at 120 (Cost $164,066)150 21,094
----------
TOTAL INVESTMENTS IN SECURITIES 100.59% 102,837,073
(Cost $85,506,306)
Liabilities in Excess of Other Assets 0.59% (611,459)
----------
NET ASSETS 100% $ 102,225,614
=============
<FN>
* Non-dividend paying securities.
(1) Restricted/illiquid securities.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
WWW TRUST
WWW INTERNET FUND
STATEMENT OF OPERATIONS
Year Ended June 30, 2000
INVESTMENT INCOME
<S> <C>
Dividends $ 110,049
Interest 190,506
------------
Total Investment Income 300,555
EXPENSES
Investment advisory fees 1,184,737
Administration fees 145,000
Custodian fees 17,000
Professional fees 43,500
Distribution fees 393,780
Registration fees 51,000
Trustee fees 14,000
Service fees 89,932
Printing and other 43,350
------------
Total expenses 1,982,299
Less expense reimbursement (17,367)
------------
Net expenses 1,964,932
------------
NET INVESTMENT LOSS (1,664,377)
NET REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gain from investment transactions 9,115,285
Net change in unrealized appreciation of investments 11,330,526
------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 20,445,811
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 18,781,434
============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
WWW TRUST
WWW INTERNET FUND
STATEMENTS OF CHANGES IN NET ASSETS
Years ended June 30, 2000 and 1999
2000 1999
---- ----
OPERATIONS
<S> <C> <C>
Net investment loss $ (1,664,377) $ (232,807)
Net realized gain from investment transactions 9,115,285 29,950
Net change in unrealized appreciation of investments 11,330,526 5,941,215
------------- ------------
Net increase in net assets from operations 18,781,434 5,738,358
DISTRIBUTIONS TO SHAREHOLDERS
from net capital gains on investments (745,301) (112,653)
CAPITAL SHARE TRANSACTIONS
Net increase from capital share transactions 50,871,194 25,064,257
------------- ------------
NET INCREASE IN NET ASSETS 68,907,327 30,689,962
NET ASSETS
Beginning of year 33,318,287 2,628,325
------------- ------------
End of year $ 102,225,614 $ 33,318,287
============= ============
UNDISTRIBUTED NET INVESTMENT LOSS
AT END OF YEAR $ (1,897,184) $ (232,807)
============= ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
WWW TRUST
WWW INTERNET FUND
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout the years ended June 30, 2000, 1999 and
1998 and for the period from inception (August 1, 1996) through June 30, 1997)
<TABLE>
<CAPTION>
2000 1999 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.64 $ 10.95 $ 10.99 $ 10.00
Income from investment operations
Net investment loss (0.52) (0.37) (0.21) (0.16)
Net realized and unrealized gain on
investments 14.91 12.39 1.70 1.36
----------- ---------- --------- ---------
Total from investment operations 14.39 12.02 1.49 1.20
----------- ---------- --------- ---------
Less distributions from realized gains from
security transactions (0.40) (0.33) (1.53) (0.21)
----------- ---------- --------- ---------
Net asset value, end of period $ 36.63 $ 22.64 $ 10.95 $ 10.99
----------- ---------- --------- ---------
Total return** 63.56% 112.01% 15.96% 13.08%
=========== ========== ========= =========
Ratios/supplemental data
Net assets end of period (in thousands) $ 102,226 $ 33,318 $ 2,628 $ 1,472
Ratio of expenses to average net assets before
expense reimbursement 2.51% 3.65% 5.10% 7.23%*
Ratio of expenses to average net assets after
expense reimbursement 2.49% 2.50% 2.50% 2.50%*
Ratio of net investment (loss) to average net
asset (2.13%) (3.07%) (4.47%) (1.62%)*
Ratio of net investment (loss) to average net
assets net of reimbursement (2.11%) (1.90%) (1.89%) (0.62%)*
Portfolio turnover rate 229.28% 48.03% 70.52% 109.52%
<FN>
* Annualized
** Based on net asset value per share
</FN>
</TABLE>
See accompanying notes to financial statements
<PAGE>
WWW TRUST
WWW INTERNET FUND
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
The WWW Trust (comprising the WWW Internet Fund) (the "Fund") was organized
as an Ohio business trust, on April 23, 1996, and commenced operations on
August 1, 1996. TheTrust is registered under the Investment Company Act of
1940 (1940 Act), asamended, 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. The Trust was formed to
achieve the investment objective of long term growth through capital
appreciation by investing primarily in equity securities of companies that
are designing, developing or manufacturing hardware or software products or
services for the Internet and/or World Wide Web.
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 Board of Trustees.
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.
SHARE VALUATION - The net asset value per share is calculated daily by
dividing the total value of the Fund's investments and other assets, less
liabilities, by the total number of shares outstanding. 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.
<PAGE>
WWW TRUST
WWW INTERNET FUND
NOTES TO FINANCIAL STATEMENTS
INVESTMENTS - 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.
2. INVESTMENT ADVISORY 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 it is 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 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 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.
<PAGE>
WWW TRUST
WWW INTERNET FUND
NOTES TO FINANCIAL STATEMENTS
2. INVESTMENT ADVISORY AGREEMENT (continued)
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 exceed 2.50% of
average annual net assets of the Fund, except that the amount of such fee
waiver shall not normally 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. For the year ended June 30,
2000, the Manager has reimbursed all expenses in excess of 2.49%.
3. 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 its entirety by the
Manager to make payments for administration, shareholder services and
distribution assistance, including, but not limiting to (1) 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, (2) compensation to
Service Organizations for providing administration, accounting and other
shareholder services with respect to Fund shareholders, and (3) 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
that may be received by them from the Manager under the Plan. For the year
ended June 30, 2000, the amount paid or accrued for such expenses was
$393,780.
<PAGE>
WWW TRUST
WWW INTERNET FUND
NOTES TO FINANCIAL STATEMENTS
4. CAPITAL SHARE TRANSACTIONS
As of June 30, 2000 there was an unlimited number of $.001 par value shares
of capital shares authorized for the Fund. Capital share transactions for
2000 and 1999 were as follows:
2000 1999
---- ----
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares Sold 2,760,813 104,000,465 1,920,436 38,668,211
Shares Issued by
Reinvestment of Dividends 21,577 709,683 7,579 98,532
Shares Redeemed
(Net of Redemption Fees) (1,463,204) (53,838,954) (696,500)(13,702,486)
---------- ----------- -------- -----------
Net increase 1,319,186 50,871,194 1,231,515 25,064,257
========= ========== ========= ==========
5. INVESTMENTS
For the year ended June 30, 2000, purchases and sales of investment
securities, other than short-term investments, aggregated $224,061,871 and
$172,861,639 respectively. The gross unrealized appreciation for all
securities totaled $25,752,401 and the gross unrealized depreciation for all
securities totaled $8,421,634 for a net unrealized appreciation of
$17,330,767. The aggregate cost of securities for federal income tax
purposes at June 30, 2000 was $85,506,306.
6. RELATED PARTY TRANSACTIONS
Certain owners of WWW Advisors, Inc. are also Owners and/or Trustees of the
Fund. These individuals may receive benefits from any Management fee paid to
the Advisor.
7. DISTRIBUTIONS
For the year ended June 30, 2000, Distributions of $0.16 aggregating
$299,451 and $0.24 aggregating $445,850 were made from Short Term Capital
Gains and Long Term Capital Gains respectively.
<PAGE>
WWW TRUST
WWW INTERNET FUND
NOTES TO FINANCIAL STATEMENTS
8. RESTRICTED AND OTHER ILLIQUID SECURITIES
Investments in restricted securities and investments where market quotations
are not available, are valued at fair value as determined in good faith by
the Board of Trustees, or a committee composed of members of the Board of
Trustees of the Fund.
The Fund may acquire portfolio securities called restricted securities,
which can be sold only pursuant to an effective registration statement under
the Securities Act of 1933 or an exemption from such registration. In
addition, other securities held by the Fund may be illiquid which means they
cannot be sold or disposed of in the ordinary course of business at
approximately the quoted market value of such securities, or in the absence
of such quoted market value, the price at which the Fund has valued such
securities. The Fund will not invest in restricted and other illiquid
securities if, as a result of such investment, the value of the Fund's
illiquid assets would exceed 15% of the value of the Fund's net assets.
During 1999, the Board of Trustees further limited such investments to 5% of
the value of the Fund's net assets.
Restricted securities eligible for resale under Rule 144A under the
Securities Act of 1933 that have been determined to be liquid by the Fund's
Board of Trustees based upon trading markets for the securities and any
other restricted securities that become registered under the Securities Act
of 1933 or that may be otherwise freely sold without registration thereunder
are not subject to the foregoing limitation, unless they are otherwise
illiquid.
The Fund normally will be able to purchase restricted securities at a
substantial discount from the market value of similar unrestricted
securities, but there are certain risks which the Fund will necessarily
assume in acquiring restricted securities. The principal risk is that the
Fund may have difficulty in disposing of such securities without
registration under the Securities Act of 1933, and the Fund will have to
bear the risk of market conditions prior to such registration. In the
absence of an agreement obtained at the time of purchase of such securities,
there can be no assurance that the issuer will register the restricted
securities. Furthermore, if the Fund disposes of restricted securities
without registration, it may be necessary to sell such shares at a discount
similar to or greater than that at which the Fund purchased the shares.
<PAGE>
INDEPENDENT AUDITORS REPORT
TO THE SHAREHOLDERS AND
BOARD OF TRUSTEES
WWW TRUST
We have audited the accompanying statement of assets and liabilities of the WWW
Trust, an Ohio business trust, (comprising the WWW Internet Fund) including the
schedule of investments in securities, as of June 30, 2000, the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the
financial highlights for each of the three years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the period from inception (August 1, 1996) through June 30, 1997
were audited by other auditors whose report dated July 22, 1997, expressed an
unqualified opinion on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of June 30, 2000, by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
WWW Trust as of June 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 three years in the
period then ended, in conformity with generally accepted accounting principles.
Berge & Company LTD
Cincinnati, Ohio
August 7, 2000
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WWW Trust
WWW INTERNET FUND
Investment Manager
WWW Advisors, Inc.
Lexington, KY
Fund Accountant and Transfer Agent
American Data Services, Inc.
Hauppauge, NY
Fund Custodian
FirStar Bank, N.A.
Cincinnati, OH
Literature Requests, New Accounts
Securities Dealers and Financial Institutions
(888) 263-2204
Existing Accounts and Redemptions Only
(888) 999-8331
www.internetfund.com
