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DEAN INVESTMENT ASSOCIATES
Dean Family of Funds
Large Cap Value Fund
Small Cap Value Fund
Balanced Fund
International Value Fund
Semi-Annual Report
September 30, 1999
(Unaudited)
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CHAIRMAN AND PRESIDENT'S LETTER
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TO INVESTORS IN THE DEAN FAMILY OF FUNDS:
In all but a few sectors, primarily technology and communications, stocks have
fared poorly throughout 1999. Thus, while the S&P 500 Stock Index had risen 5.4%
by the end of September, the average stock in the index declined 22.5% from its
high during the same period. Ironically, most of the companies behind those
"average" stocks have turned in solid earnings and continue to enjoy a strong
economy. Their fundamentals are sound. Their price-to-earnings, price-to-book
and other ratios now make many of them very attractive values.
But few investors are impressed at this point in time.
The mega-cap firms, particularly those in technology, continue to dazzle
investors. Price and, ultimately, risk seem to present no obstacles. John Neff,
the widely respected former head of Vanguard's Windsor Fund, recently referred
to today's market behavior as "the silly season." It is certainly disturbing
that the prices of companies trading at 6X book value keep rising, while those
at or below 3X book value keep declining. It is a time when any disappointment
in a company's short-term performance often triggers brutal declines in its
stock price.
This kind of market behavior has led to negative results in our Large Cap Value
and Balanced Funds and only a small gain for the Small Cap Value Fund for the
six months ended September 30, 1999. By contrast, the International Value Fund -
Class A turned in a 9.2% gain for the same six months. Overseas financial
markets are recovering strongly and, in their case, time-tested measures of
value have governed to a much greater extent than in the U.S.
Tensions about interest rates certainly added to the downward volatility that
affected most stocks during the period of this report. Twice the Federal Reserve
raised interest rates. It would be hard to argue with the Fed's success in its
efforts to nip inflationary pressures in the bud; however, this success has
created some concerns as to whether U.S. companies will have affordable access
to the funds they need to continue operating well. Such concerns are likely to
help keep the market's volatility at a high level during the months ahead.
Worries about higher interest rates have created a great deal of downward
pressure on bonds. Currently, the United States is experiencing the second worst
bear market for bonds in a decade. That poor performance has hurt the Balanced
Fund, which holds bonds as well as equities. It has also been a negative for
financial stocks, which are held by each of our three domestic funds.
Whether the financial markets behave rationally or not in the short-term,
periods of negative performance are difficult for clients and investment
managers alike. In today's high-priced, high-risk market environment, it is
vital that we not turn away from the disciplines that have served us well over
the years. We will continue to search for companies with solid past performance,
strong market position and long-term financial strength. Buying stocks of such
companies - not at any price but at fair valuations - provides the best and
safest way to reward our investors over the long term.
Sincerely,
/s/ /s/
Chauncey H. Dean Robert D. Dean
Chairman of the Board and President and Chief Investment Officer
Chief Executive Officer C.H. Dean & Associates, Inc.
C.H. Dean & Associates, Inc.
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LARGE CAP VALUE FUND
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A MARKET THAT IGNORES VALUE
Two interest rate hikes by the Federal Reserve and worries about the possibility
of more hasn't dulled investors' appetites for exorbitantly-priced technology
stocks this year. Meanwhile, the stock market has continued to ignore the
larger, better-valued companies.
For the most part, those larger, high-quality companies in which the Large Cap
Value Fund invests have continued to grow revenues and profits. However, their
share prices have declined in the wake of the "technology rush." For the moment,
value appears to have little appeal to most investors.
PERFORMANCE FACTORS
Because its emphasis is on value, your Fund has not invested heavily in the
technology sector. (An exception is Intel, purchased when the price declined to
within the targeted valuation range in late spring). Consequently, the Fund's
returns reflect the experience of the large universe of stocks that have lost
ground in 1999. The average stock on the New York Stock Exchange was 24% below
its highest close for the year, as of September 30, 1999.
During the six months ended September 30, 1999, the Large Cap Value Fund - Class
A showed a negative return of 4.6%. The benchmark Russell 1000 Index had a 0.4%
return for the same period.
PROFITS UP, SHARE PRICES DOWN
The financial sector, which represented approximately 30% of the Fund's assets
on September 30, was punished by the market's reaction to rising interest rates
and the sharp declines in bond prices. Again, while the companies in this sector
of the Fund's portfolio had good operating results, investor psychology brought
diminished share values. Profits rose in all but one of the companies in the
Fund's financial sector, while the share prices of all but two declined.
There have been signs of a recovery in the financial sector. The S&P Financial
Index, which was down approximately 7% for the first nine months of 1999, showed
a year-to-date gain of 9% by the end of October.
EMPHASIS ON QUALITY AND VALUE CONTINUES
Fundamental reasons for confidence in the Fund's investments have not changed.
The economy continues to grow, inflation is being held in check, U.S.
productivity is growing and the companies in which we have invested are
operating well in this environment.
The Fund continues to invest in large, market-leading companies whose share
prices fall within a range where they represent solid opportunities with
relatively little risk over the long term. For a short period this summer, the
market's passion for mega-cap stocks seemed to cool. An appreciation of value
fundamentals seemed to be returning, but it soon subsided.
The important question is not whether but when realistic valuations of
well-researched stocks will once again be widely recognized as the most rational
basis for assessing risk and making investment decisions. At Dean, that
realization has always been at the heart of our approach. We remain confident
that this approach will serve our clients best over the long term.
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SMALL CAP VALUE FUND
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SMALL GAIN FOR THE SMALL CAP FUND
The Small Cap Value Fund - Class A produced a 3.1% return for the six months
ended September 30, 1999. The benchmark Russell 2000 Value Index gained 7.4%
during that time.
The returns reflect some modest improvement in the
market for small cap stocks during the six months covered by this report. A
review of the 12-month period ended September 30 shows the Small Cap Value Fund
with a negative return of 1.2%, the Russell 2000 Value Index, a 5.8% return.
Value stocks, regardless of capitalization, have found little favor with
investors for the past year. A relatively few ultra-large cap, growth stocks
have dominated the news and the stock indices for several years. Yet, compelling
valuations continue to be present in a broad range of small cap value stocks.
SOLID OPERATING RESULTS
The companies behind these small cap value stocks are operating very well,
benefiting from the same robust economic conditions that have given the nation
one of its longest-ever expansions. Publicly held home-building firms provide a
prime example. Their profits have flourished in light of the past year's record
pace of housing starts. Yet, their share prices have slumped badly. Stellar
operating performance apparently had no influence on investor interest.
INTEREST RATE WORRIES HURT SHARE PRICES
Two interest rate increases by the Federal Reserve this year have hurt share
prices of small cap stocks. Investors worry that rising interest costs may
impede both profits and growth of smaller companies, though that fear has not
been reflected in operating performance thus far.
The steady decline in investor interest in value stocks in general, especially
small cap stocks, is certainly perplexing, not to mention frustrating, given the
sales and income growth and the strong balance sheets of so many of the
companies in this category.
PATIENCE SEEMS THE PRUDENT COURSE
A review of the Small Cap Value Fund's top ten holdings reveals that their
median price/earnings (P/E) ratio was 7.3 as of September 30 this year. Contrast
that with the S&P 500's median P/E of 31 on that same day. On that basis, an
investment in a diverse portfolio of small cap stocks today entails
substantially less risk than a comparable portfolio of stocks from the S&P 500.
Based on Ibbotson data, small cap stocks, over the long run, have historically
outperformed large cap issues, therefore patience seems the prudent course. For
value investors, opportunities often are born in times when share prices are
depressed.
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BALANCED FUND
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BEARS ON THE LOOSE IN STOCKS AND BONDS
Historically, the bond market tends to rise as the stock market declines and
vice versa. During the six months ended September 30, 1999, however, the prices
of both bonds and most stocks declined significantly. The Lehman Brothers
Intermediate Government/Corporate Bond Index shows the effects of the
significant decline in bond prices. The calculation of that index's total return
includes bond yields of 5%-6%, yet the return was only 0.33% for 1999, as of the
end of September.
While the S&P 500 Stock Index showed a 5.4% advance for the year at that point,
the average stock in the index was 22.5% below its high for the year. That the
S&P 500 made any gain is largely a tribute to the strength in technology and
communication shares. As was true in 1998, most stocks have lost ground in 1999.
DOUBLE TROUBLE BROUGHT NEGATIVE RETURNS
This rare, coincident decline in both stocks and bonds resulted in a negative
5.5% return for the Balanced Fund - Class A during the six-month period ended
September 30, 1999. Its impact was such that, despite positive returns in the
preceding six months, the Fund's 12-month return was a negative 1.2%. The Fund's
benchmark (comprised 60% of the Russell 1000 Value Index and 40% of the Lehman
Brothers Intermediate Government/Corporate Bond Index) showed a return of 0.8%
for the recent six-month period ended September 30 and 11.8% for the trailing 12
months.
Among our equity holdings, financial stocks suffered the most significant
declines. Two Federal Reserve interest rate hikes during the latest six-month
period created a great deal of worry about the effects on companies in the
financial sector. In fact, all but one of the financial stocks owned by the
Balanced Fund have reported improved results. While that solid operating
performance tends to verify our appraisal of these firms, it is small
consolation given the declines in their market values.
BUILDING STRENGTH FOR THE LONG HAUL
For the Balanced Fund, there is an important upside to the current slide being
experienced by the majority of stocks. As long-term value investors, we know
that temporary market downturns create opportunities to buy shares in strong,
well-managed companies at lower cost and, thus, lower risk. As managers of the
Balanced Fund, we have been able to capitalize on these opportunities. Despite
returns that are currently depressed, the Fund's portfolio added strength and
quality during the past six-month period.
<PAGE>
INTERNATIONAL VALUE FUND
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INTERNATIONAL STOCK MARKETS CLIMBING
International stock markets have recovered smartly over the past year. The
International Fund - Class A produced a 9.2% return for the six months ended
September 30, 1999. Its 12-month return climbed to 30.9%. The Fund's benchmark,
the Morgan Stanley EAFE Index, rose 7.0% for the six-month period, 31% for the
trailing 12 months.
JAPAN LEADS THE WAY
Increased participation in the Japanese stock market has benefited the Fund
significantly. Japan's painful bear market began in 1989 and was followed by
nearly 10 years of relatively poor economic growth. Finally, last year, the
Japanese government's attempts to stimulate its economy began to take hold.
Meanwhile, Japanese corporations began managing with profit-focused approaches
more in line with the interests of shareholders. Now, the effects of Japan's
economic recovery are spreading throughout much of Asia.
As the recovery began to take shape in mid-1998, the Fund began moving funds to
Asia, principally to Japan. By the end of this past September, with its economic
recovery in high gear, Japan's Nikkei Stock Average was up 32% for the year.
EUROPEAN ECONOMIES, MARKETS IMPROVE
The economic recovery in Europe is also progressing well. While the Central
banks in both Western Europe and Japan have recently raised interest rates,
there appears promise of sustained economic expansion in both areas.
This year has seen a sharp increase in mergers and acquisitions, particularly in
Europe. Mergers and acquisitions in most industries tend to have a positive
effect on the prices of other companies in that sector.
One of the factors contributing to the decline in the U.S. bond market is the
fact that funds are flowing out of bonds and into foreign stocks.
MARKETS GAINING STRENGTH AND BREADTH
The breadth, as well as the strength, of the stock market recoveries in both
Japan and Europe is especially encouraging. These recoveries appear to be
founded on solid ground - i.e. the conditions that favor continued economic
growth in Europe and Asia in the years ahead.
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FUNDFACTS
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LARGE CAP VALUE FUND
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TOP HOLDINGS
Texaco Inc. Hewlett-Packard Co.
Tidewater, Inc. AlliedSignal Inc.
MGIC Investment Corp. News Corp. Ltd. (The) (ADR)
Diamond Offshore Drilling, Inc. AT&T Corp.
Vulcan Materials Co. Intel Corp.
Number of Positions....................................... 50
Median Price/Earnings Ratio .............................. 17.4
Portfolio Turnover (3/1/99 - 9/30/99 annualized).......... 54%
SMALL CAP VALUE FUND
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TOP HOLDINGS
America West Holdings Corp. - Class B M/I Schottenstein Homes, Inc.
Sunstone Hotel Investors, Inc. Beazer Homes USA, Inc.
Arkansas Best Corp. Ameron International Corp.
Winston Hotels, Inc. Prison Realty Corp.
Trenwick Group, Inc. Gehl Co.
Number of Positions....................................... 122
Median Price/Earnings Ratio............................... 7.3
Portfolio Turnover (3/1/99 - 9/30/99 annualized).......... 69%
<PAGE>
FUND FACTS
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BALANCED FUND
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TOP EQUITY HOLDINGS
Philip Morris Cos., Inc. Texaco Inc.
Bell Atlantic Corp. Allstate Corp. (The)
AT&T Corp. Tricon Global Restaurants, Inc.
MGIC Investment Corp. Intel Corp.
Exxon Corp. Diamond Offshore Drilling, Inc.
Number of Positions................................ 34
Median Price/Earnings Ratio........................ 17.0
Portfolio Turnover (3/1/99 - 9/30/99 annualized)... 99%
INTERNATIONAL VALUE FUND
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TOP HOLDINGS
Novartis Fortis (NL) NV
Fujitsu Ltd. Telefonica SA
Shell Transport & Trading Co. Softbank Corp.
Philipp Holzmann AG Carrefour SA
Glaxo Wellcome Plc Total SA - Class B
Number of Positions................................... 84
Median Price/Earnings Ratio........................... 32.3
Portfolio Turnover (3/1/99 - 9/30/99 annualized)...... 142%
<PAGE>
LARGE CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
September 30, 1999 (Unaudited)
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Shares COMMON STOCKS - 97.1% Value
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AEROSPACE - 2.6%
4,500 AlliedSignal Inc......................... $ 269,719
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AIRLINES - 1.0%
6,000 COMAIR Holdings, Inc..................... 100,125
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AUTOMOTIVE - 4.0%
5,000 Ford Motor Co............................ 250,937
3,000 PACCAR Inc............................... 152,625
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403,562
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AUTOMOTIVE PARTS - 0.1%
698 Delphi Automotive Systems Corp........... 11,212
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BANKING - 3.9%
7,000 Bank One Corp............................ 243,688
4,000 Fleet Financial Group, Inc............... 146,500
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390,188
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BUILDING PRODUCTS - 2.7%
7,500 Vulcan Materials Co..................... 274,688
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CAPITAL GOODS - 2.2%
4,000 Caterpillar, Inc........................ 219,250
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CHEMICALS - 2.1%
1,700 E.I. duPont de Nemours & Co............. 103,487
2,000 Potash Corp. of Saskatchewan Inc. (ADR). 103,250
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206,737
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ELECTRONICS - 1.5%
63 Raytheon Co. - Class A.................. 3,056
3,000 Raytheon Co. - Class B.................. 148,875
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151,931
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ENERGY - 12.5%
9,000 Diamond Offshore Drilling, Inc.......... 300,375
3,000 Exxon Corp.............................. 227,812
6,000 Texaco Inc.............................. 378,750
14,000 Tidewater, Inc.......................... 357,000
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1,263,937
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FINANCIAL SERVICES - 4.6%
5,000 Ambac Financial Group, Inc.............. 236,875
3,000 Chase Manhattan Corp.................... 226,125
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463,000
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GOVERNMENT SPONSORED ENTERPRISES - 2.5%
4,000 Fannie Mae.............................. 250,750
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<PAGE>
LARGE CAP VALUE FUND (continued)
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Shares COMMON STOCKS - 97.1% (continued) Value
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HEALTH CARE - 5.9%
10,000 Columbia/HCA Healthcare Corp............ $ 211,875
30,000 HEALTHSOUTH Corp.(a).................... 181,875
421 LifePoint Hospitals, Inc.(a)............ 3,657
3,000 Merck & Co., Inc........................ 194,437
421 Triad Hospitals, Inc.(a)................ 4,263
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596,107
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HOUSING - 1.7%
20,000 Clayton Homes, Inc...................... 173,750
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INSURANCE - 10.0%
430 Aegon N.V. (ADR)........................ 37,195
5,000 AFLAC, Inc.............................. 209,375
7,000 Allstate Corp. (The).................... 174,562
2,000 American National Insurance Co.......... 134,000
126 Berkshire Hathaway, Inc. - Class B...... 233,856
11,415 Conseco, Inc............................ 220,452
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1,009,440
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MEDIA - 2.7%
10,000 News Corp. Ltd. (The) (ADR)............. 266,875
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MISCELLANEOUS - 4.4%
10,000 Convergys Corp.......................... 198,125
2,500 Minnesota Mining and Manufacturing Co. (3M) 240,156
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438,281
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MORTGAGE SERVICES - 5.1%
7,000 MGIC Investment Corp.................... 334,250
4,500 PMI Group, Inc. (The)................... 183,937
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518,187
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REAL ESTATE - 1.3%
6,000 Simon Property Group, Inc............... 134,625
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RESTAURANTS - 1.6%
4,000 Tricon Global Restaurants, Inc.(a)...... 163,750
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RETAIL - 2.0%
5,000 Albertson's, Inc........................ 197,813
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SEMI-CONDUCTORS - 2.6%
3,500 Intel Corp.............................. 260,094
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TECHNOLOGY -3.8%
3,000 Hewlett-Packard Co...................... 276,000
900 International Business Machines Corp. (IBM) 109,238
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385,238
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<PAGE>
LARGE CAP VALUE FUND (continued)
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Shares COMMON STOCKS - 97.1% (continued) Value
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TELECOMMUNICATIONS - 12.1%
3,000 Alltel Corp............................. $ 211,125
6,000 AT&T Corp............................... 261,000
3,000 Bell Atlantic Corp...................... 201,938
4,000 ECI Telecom Ltd. (ADR).................. 98,750
7,000 NCR Corp................................ 231,438
4,000 Sprint Corp............................. 217,000
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1,221,251
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TOBACCO - 2.4%
7,000 Philip Morris Cos., Inc................. 239,312
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UTILITIES - 1.8%
7,000 Southern Co............................. 180,250
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TOTAL COMMON STOCKS (Cost $10,242,686) $9,790,072
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Shares/
Face Amount MONEY MARKET AND CASH EQUIVALENTS - 3.6% Value
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$ 65,602 Firstar Stellar Treasury Fund........... $ 65,602
300,000 Steamboat Funding CP, 10/06/99.......... 299,368
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TOTAL MONEY MARKET AND
CASH EQUIVALENTS (Cost $364,970)........ $ 364,970
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TOTAL INVESTMENTS AT VALUE - 100.7%
(Cost $10,607,656)......................$10,155,042
LIABILITIES IN EXCESS OF
OTHER ASSETS -(0.7)%.................... (69,663)
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NET ASSETS - 100.0%.....................$10,085,379
==========
(a) Non-income producing security.
ADR - American Depository Receipt
CP - Commercial Paper
See accompanying notes to financial statements.
<PAGE>
SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
September 30,1999 (Unaudited)
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Shares COMMON STOCKS - 93.9% Value
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AIRLINES - 1.3%
15,000 American West Holdings Corp. - Class B(a) $ 259,688
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AUTOMOTIVE - 1.1%
30,000 TBC Corp.(a)............................ 207,656
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AUTOMOTIVE PARTS - 0.2%
1,000 Federal Screw Works..................... 45,250
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BUILDING PRODUCTS - 5.2%
6,000 Ameron International Corp............... 281,625
17,000 Building Materials Holding Corp.(a)..... 170,000
23,000 Cameron Ashley Building Products(a)..... 207,000
8,000 Dayton Superior Corp.(a)................ 136,000
16,000 Patrick Industries, Inc................. 203,000
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997,625
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BUILDING SUPPLIES - 1.0%
15,000 Wolohan Lumber Co....................... 195,000
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CAPITAL GOODS - 5.6%
14,000 Amcast Industrial Corp.................. 186,375
45,000 Baldwin Technology Co., Inc. - Class A(a) 106,875
20,000 Exponent, Inc........................... 100,000
14,000 Foster Wheeler Corp..................... 168,875
13,000 Gehl Co.(a)............................. 230,750
11,000 Hardinge, Inc........................... 176,000
35,000 Perini Corp.(a)......................... 122,500
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1,091,375
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ELECTRONICS - 1.9%
15,000 Cherry Corp. - Class A(a)............... 189,375
30,000 CHS Electronics, Inc.(a................. 43,125
12,000 ESCO Electronics Corp.(a)............... 133,500
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366,000
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ENERGY - 1.6%
14,000 Castle Energy Corp.(a).................. 238,000
8,000 Trico Marine Services, Inc.(a).......... 66,500
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304,500
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FINANCIAL SERVICES - 2.9%
25,000 Delta Financial Corp.(a)................ 125,000
40,000 EZCORP, Inc. - Class A(a)............... 210,000
10,000 London Pacific Group Ltd................ 218,750
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553,750
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<PAGE>
SMALL CAP VALUE FUND (continued)
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Shares COMMON STOCKS - 93.9% (continued) Value
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FOOD - 1.8%
3,000 Fleming Cos., Inc....................... $ 29,437
20,000 M&F Worldwide Corp.(a).................. 160,000
15,000 Nash-Finch Co........................... 105,000
5,000 Todhunter International, Inc.(a)........ 45,625
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340,062
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FURNITURE - 0.8%
12,000 Flexsteel Industries, Inc............... 162,000
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HEALTH CARE - 2.5%
11,000 Bergen Brunswig Corp.................... 114,125
45,000 Beverley Enterprises, Inc.(a)........... 191,250
40,000 PhyCor, Inc.(a)......................... 175,000
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480,375
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HOUSING - 7.3%
11,000 Beazer Homes USA, Inc.(a)............... 204,187
18,000 Engle Homes, Inc........................ 185,625
30,000 Hovnanian Enterprises Inc. - Class A(a). 232,500
15,000 M/I Schottenstein Homes, Inc.(a)........ 247,500
10,000 Oakwood Homes Corp...................... 45,000
6,000 Ryland Group, Inc. (The)................ 136,500
40,000 Southern Energy Homes, Inc.(a).......... 105,000
10,000 Standard Pacific Corp................... 102,500
7,000 Webb (Del E.) Corp...................... 154,000
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1,412,812
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HUMAN RESOURCES - 1.5%
22,000 Personnel Group of America, Inc.(a)..... 137,500
25,000 SOS Staffing Services, Inc.(a).......... 145,313
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282,813
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INSURANCE - 3.7%
12,000 Chartwell Re Corp....................... 173,250
9,000 LandAmerica Financial Group, Inc........ 177,750
8,000 MMI Companies, Inc...................... 87,500
12,000 Stewart Information Services Corp....... 219,750
3,000 Trenwick Group, Inc..................... 49,687
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707,937
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METALS - 4.7%
20,000 Ampco-Pittsburgh Corp................... 270,000
15,000 Atchison Casting Corp.(a)............... 137,813
44,000 Bayou Steel Corp.(a).................... 148,500
3,500 Cleveland-Cliffs, Inc................... 108,938
6,000 Commercial Metals Co.................... 172,500
3,000 Pitt-Des Moines, Inc.................... 65,812
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903,563
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<PAGE>
SMALL CAP VALUE FUND (continued)
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Shares COMMON STOCKS - 93.9% (continued) Value
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MISCELLANEOUS - 8.2%
15,000 Boykin Lodging Co....................... $ 198,750
10,000 Central Garden & Pet Co.(a)............. 76,250
25,000 Children's Comprehensive Services, Inc.(a) 181,250
22,000 Franklin Covey Co.(a)................... 169,125
40,000 Heilig - Meyers Co...................... 190,000
25,000 Industrial Distribution Group, Inc.(a).. 82,812
20,000 K2, Inc................................. 176,250
3,000 Katy Industries, Inc.................... 36,000
2,250 Lakes Gaming, Inc.(a)................... 21,656
10,000 Pride International, Inc.(a)............ 141,875
5,000 Stolt-Nielsen SA........................ 74,687
40,000 York Group, Inc. (The).................. 150,000
12,000 Zindart Ltd.(a)......................... 84,750
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1,583,405
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POLLUTION - 0.6%
25,000 Kaneb Services, Inc.(a)................. 118,750
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PUBLISHING - 0.4%
12,000 PrimeSource Corp........................ 69,750
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REAL ESTATE - 16.5%
11,000 Brandywine Realty Trust................. 178,750
5,000 Commercial Net Lease Realty............. 53,125
8,000 Crown American Realty Trust............. 51,500
7,000 EastGroup Properties, Inc............... 126,875
25,000 Equity Inns, Inc........................ 212,500
2,000 First Washington Realty Trust, Inc...... 42,000
8,000 Glenborough Realty Trust Inc............ 132,000
5,000 Health Care REIT, Inc................... 100,000
3,407 Healthcare Realty Trust, Inc............ 63,668
25,000 Jameson Inns, Inc....................... 215,625
7,000 Kranzco Realty Trust.................... 70,875
5,000 Mid-America Apartment Communities, Inc.. 107,500
2,400 New Plan Excel Realty Trust............. 42,750
7,000 Pacific Gulf Properties, Inc............ 139,563
3,970 Prime Retail, Inc....................... 29,279
22,000 Prison Realty Corp...................... 236,500
14,000 Ramco-Gershenson Properties Trust....... 209,125
20,000 RFS Hotel Investors, Inc................ 230,000
3,000 Sovran Self Storage, Inc................ 68,250
30,000 Sunstone Hotel Investors, Inc........... 262,500
21,000 Thornburg Mortgage Asset Corp........... 185,063
5,000 TriNet Corporate Realty Trust, Inc...... 119,062
35,000 Winston Hotels, Inc..................... 310,625
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3,187,135
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<PAGE>
SMALL CAP VALUE FUND (continued)
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Shares COMMON STOCKS - 93.9% (continued) Value
- --------------------------------------------------------------------------------
RESTAURANTS - 1.3%
33,000 Cooker Restaurant Corp.................. $ 129,937
15,000 Landry's Seafood Restaurants, Inc.(a)... 120,000
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249,937
-------
RETAIL - 9.6%
12,000 Blair Corp.............................. 211,500
30,000 Bon-Ton Stores, Inc. (The)(a)........... 119,063
14,000 Burlington Industries, Inc.(a).......... 62,125
20,000 Duckwall-ALCO Stores, Inc.(a)........... 165,000
30,000 Elder-Beerman Stores Corp. (The)(a)..... 191,250
30,000 Friedman's, Inc. - Class A(a)........... 264,375
5,000 HomeBase, Inc.(a)....................... 19,688
17,900 Jan Bell Marketing, Inc.(a)............. 54,819
10,000 Marsh Supermarkets, Inc. - Class B...... 123,750
40,000 Movie Gallery, Inc.(a).................. 221,250
15,000 Perry Ellis International, Inc.(a)...... 163,125
2,000 Sportman's Guide, Inc. (The)(a)......... 8,000
19,000 Syms Corp.(a)........................... 141,313
35,000 Tandycrafts, Inc.(a).................... 111,563
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1,856,821
---------
TECHNOLOGY - 3.8%
45,000 Kentek Information Systems, Inc......... 362,813
7,000 Miami Computer Supply Corp.(a).......... 125,562
8,000 Nam Tai Electronics, Inc. (ADR)......... 108,000
12,000 Vertex Communications Corp.(a).......... 134,250
-------
730,625
-------
TOBACCO - 0.7%
35,000 Standard Commercial Corp................ 140,000
-------
TRANSPORTATION - 6.4%
15,000 Consolidated Freightways Corp.(a)....... 148,125
17,000 Genesee & Wyoming Inc.(a)............... 193,375
20,000 Greenbrier Companies, Inc. (The)........ 221,250
15,000 Halter Marine Group, Inc.(a)............ 81,562
5,000 Maritrans Inc........................... 25,625
15,000 Offshore Logistics, Inc.(a)............. 154,688
11,000 Pittston BAX Group...................... 88,687
10,000 RailTex, Inc.(a)........................ 165,000
25,000 Rural/Metro Corp.(a).................... 165,625
-------
1,243,937
---------
TRUCKING - 2.7%
21,000 Arkansas Best Corp.(a).................. 259,875
18,000 Old Dominion Freight Line, Inc.(a)...... 265,500
-------
525,375
-------
UTILITIES - 0.6%
12,000 Atlantic Tele-Network, Inc.............. 117,000
-------
TOTAL COMMON STOCKS (Cost $21,341,183).. $18,133,141
-----------
<PAGE>
SMALL CAP VALUE FUND (continued)
- --------------------------------------------------------------------------------
Shares PREFERRED STOCKS - 0.6% Value
- --------------------------------------------------------------------------------
4,200 Bradley Real Estate, Inc., 8.400%....... $ 95,812
2,000 Prime Retail, Inc., 8.500%.............. 27,875
------
TOTAL PREFERRED STOCKS (Cost $147,512).. $ 123,687
-------
- --------------------------------------------------------------------------------
Shares/
Face Amount MONEY MARKET & CASH EQUIVALENTS - 5.8% Value
- --------------------------------------------------------------------------------
$ 521,877 Firstar Stellar Treasury Fund $ 521,877
300,000 Steamboat Funding CP, 10/06/99 299,368
300,000 Superior Funding CP, 10/18/99 299,129
-------
TOTAL MONEY MARKET AND
CASH EQUIVALENTS (Cost $1,120,374)...... $1,120,374
----------
TOTAL INVESTMENTS AT VALUE - 100.3%
(Cost $22,609,069)...................... $19,377,202
LIABILITIES IN EXCESS OF
OTHER ASSETS - (0.3)%................... (51,737)
-----------
NET ASSETS - 100.0%..................... $19,325,465
===========
(a) Non-income producing security.
ADR - American Depository Receipt
CP - Commercial Paper
See accompanying notes to financial statements.
<PAGE>
BALANCED FUND
PORTFOLIO OF INVESTMENTS
September 30,1999 (Unaudited)
- --------------------------------------------------------------------------------
Shares COMMON STOCKS - 49.1% Value
- --------------------------------------------------------------------------------
AUTOMOTIVE - 1.0%
2,400 Ford Motor Co........................... $ 120,450
-------
BANKING - 2.5%
4,000 Bank One Corp........................... 139,250
4,000 Fleet Financial Group, Inc.............. 146,500
-------
285,750
-------
CAPITAL GOODS - 1.4%
3,000 Caterpillar, Inc........................ 164,437
-------
CHEMICALS - 2.4%
2,000 E.I. du Pont de Nemours & Co............ 121,750
3,000 Potash Corp. of Saskatchewan Inc. (ADR). 154,875
-------
276,625
-------
ELECTRONICS - 1.5%
3,550 Raytheon Co. - Class B.................. 176,168
-------
ENERGY - 7.2%
6,000 Diamond Offshore Drilling, Inc.......... 200,250
3,000 Exxon Corp.............................. 227,813
3,500 Texaco Inc.............................. 220,938
7,000 Tidewater, Inc.......................... 178,500
-------
827,501
-------
FINANCIAL SERVICES - 2.9%
4,000 Ambac Financial Group, Inc.............. 189,500
2,000 Chase Manhattan Corp.................... 150,750
-------
340,250
-------
GOVERNMENT SPONSORED ENTERPRISES - 1.6%
3,000 Fannie Mae.............................. 188,063
-------
HEALTH CARE - 2.3%
7,000 Columbia/HCA Healthcare Corp............ 148,312
1,800 Merck & Co., Inc........................ 116,663
-------
264,975
-------
INSURANCE - 4.0%
4,000 AFLAC, Inc.............................. 167,500
8,500 Allstate Corp. (The).................... 211,968
4,382 Conseco, Inc............................ 84,627
-------
464,095
-------
MEDIA -1.1%
5,000 News Corp. Ltd. (The) (ADR)............. 133,438
-------
<PAGE>
BALANCED FUND (continued)
- --------------------------------------------------------------------------------
Shares COMMON STOCKS - 49.1% (continued) Value
- --------------------------------------------------------------------------------
MISCELLANEOUS - 2.9%
10,000 Convergys Corp.......................... $ 198,125
1,500 Minnesota Mining & Manufacturing Co. (3M) 144,094
-------
342,219
-------
MORTGAGE SERVICES - 2.0%
5,000 MGIC Investment Corp.................... 238,750
-------
REAL ESTATE - 2.5%
6,000 Duke-Weeks Realty Corp.................. 117,000
12,000 Host Marriott Corp...................... 114,000
2,500 Simon Property Group, Inc............... 56,094
-------
287,094
-------
RESTAURANTS - 1.6%
5,000 Tricon Global Restaurants, Inc.(a)...... 204,688
-------
RETAIL - 1.4%
4,000 Albertson's, Inc........................ 158,250
-------
SEMI-CONDUCTORS - 1.7%
2,700 Intel Corp.............................. 200,644
-------
TELECOMMUNICATIONS - 4.2%
5,500 AT&T Corp............................... 239,250
3,700 Bell Atlantic Corp...................... 249,056
488,306
-------
TOBACCO - 2.2%
7,500 Philip Morris Cos., Inc................. 256,406
-------
UTILITIES - 2.7%
7,000 DPL Inc................................. 123,375
7,500 Southern Co............................. 193,125
316,500
-------
TOTAL COMMON STOCKS (Cost $5,933,247) $5,734,609
---------
<PAGE>
BALANCED FUND (continued)
- --------------------------------------------------------------------------------
Par Value FIXED INCOME OBLIGATIONS - 39.8% Value
- --------------------------------------------------------------------------------
$ 500,000 U.S. Treasury Note, 5.250%, 5/31/01................ $ 497,032
300,000 PHH Corp., 7.020%, 11/09/01........................ 303,035
150,000 Federal National Mortgage Association, 5.250%, 1/15/03 145,507
300,000 Morgan Stanley Dean Witter, 5.625%, 1/20/04........ 286,287
300,000 Federal Home Loan Bank, 5.620%, 2/25/04............ 289,565
300,000 Federal Home Loan Bank, 6.100%, 4/29/04............ 293,253
300,000 Household Finance Co., 6.000%, 5/01/04............. 288,316
150,000 Cox Radio Inc., 6.375%, 5/15/05.................... 143,060
250,000 Tennessee Valley Authority, 6.375%, 6/15/05........ 247,719
300,000 U.S. Treasury Note, 6.500%, 8/15/05................ 306,938
300,000 Federal National Mortgage Association, 6.970%, 9/04/07 295,094
300,000 Washington Water Power, 5.990%, 12/10/07........... 277,131
300,000 New Plan Excel, 7.400%, 9/15/09.................... 296,932
250,000 Bear Stearns Co., 6.450%, 6/01/15.................. 247,386
150,000 Commercial Credit Co., 6.250%, 6/01/15............. 150,275
300,000 Xerox Corp., 6.250%, 11/15/26...................... 292,315
300,000 First Union, 6.180%, 2/15/36....................... 282,718
--------
TOTAL FIXED INCOME OBLIGATIONS (Cost $4,733,601)... $4,642,563
----------
- --------------------------------------------------------------------------------
Shares/
Face Amount MONEY MARKET AND CASH EQUIVALENTS - 10.7% Value
- --------------------------------------------------------------------------------
$ 549,678 Firstar Stellar Treasury Fund................... $ 549,678
700,000 Long Lane Master CP, 10/05/99................... 698,630
--------
TOTAL MONEY MARKET AND
CASH EQUIVALENTS (Cost $1,248,308).............. $1,248,308
----------
TOTAL INVESTMENTS AT VALUE - 99.6%
(Cost $11,915,156).............................. $11,625,480
OTHER ASSETS IN EXCESS OF
LIABILITIES - 0.4%.............................. 43,997
-----------
NET ASSETS - 100.0%............................. $11,669,477
===========
(a) Non-income producing security.
ADR - American Depository Receipt
CP - Commercial Paper
See accompanying notes to financial statements.
<PAGE>
INTERNATIONAL VALUE FUND
PORTFOLIO OF INVESTMENTS
September 30,1999 (Unaudited)
- --------------------------------------------------------------------------------
Shares COMMON STOCKS - 81.0% Value
- --------------------------------------------------------------------------------
AUSTRALIA - 2.3%
2,700 Brambles Industries Ltd................. $ 78,181
63,000 Cable & Wireless Optus Ltd.(a).......... 135,675
73,000 Pasminco Ltd............................ 80,988
-------
294,844
-------
BRAZIL - 4.2%
66,600,000 Tele Celular Sul Participacoes SA-Pfd... 126,609
84,105,000 Tele Nordeste Celular Participacoes SA-Pfd 101,189
3,200,000 Tele Norte Leste Participacoes SA-Pfd... 51,167
2,790,200 Telesp Celular Participacoes SA......... 100,273
5,900,000 Telesp Participacoes SA-Pfd............. 92,188
16,800,000 Tele Sudeste Celular Participacoes SA-Pfd 73,587
-------
545,013
-------
CANADA - 5.5%
15,700 Abitibi Consolidated Inc................ 188,571
4,130 BCE, Inc................................ 205,165
17,000 Fletcher Challenge Canada Ltd........... 171,215
3,000 Nortel Nortwork Corp.................... 153,113
-------
718,064
-------
FINLAND - 0.6%
950 Nokia Oyj............................... 85,088
--------
FRANCE - 9.7%
1,240 Axa..................................... 156,887
633 Bouygues SA............................. 200,760
1,328 Carrefour SA............................ 212,572
315 Castorama Dubois........................ 88,633
670 Equant(a)............................... 54,515
1,500 STMicroelectronics...................... 116,937
1,680 Total SA - Class B...................... 211,126
3,800 Transiciel SA(a)........................ 233,310
---------
1,274,740
---------
GERMANY - 7.7%
5,550 Bayerische Motoren Werke (BMW) AG....... 157,521
3,000 GFK AG(a)............................... 75,562
3,700 Global TeleSystems Group, Inc.(a)....... 72,899
3,300 Hoechst AG.............................. 143,743
620 Mannesmann AG........................... 99,045
1,500 Philipp Holzmann AG(a).................. 252,405
460 SAP AG.................................. 203,309
---------
1,004,484
---------
HONG KONG - 0.6%
8,000 Hutchison Whampoa Ltd................... 74,410
---------
ITALY - 2.6%
41,200 Banca Nazionale del Lavoro(a)........... 147,430
22,900 Telecom Italia SPA...................... 199,010
---------
346,440
---------
<PAGE>
INTERNATIONAL VALUE FUND (continued)
- --------------------------------------------------------------------------------
Shares COMMON STOCKS - 81.0% (continued) Value
- --------------------------------------------------------------------------------
JAPAN - 15.7%
2,000 Canon, Inc.............................. $ 58,232
3,000 Credit Saison Co., Ltd.................. 69,879
7,000 Daiwa Securities Group Inc.............. 63,774
22 DDI Corp................................ 165,305
1,400 Fuji Soft ABC........................... 119,264
9,000 Fujitsu Ltd............................. 280,642
1,000 Matsushita Communication Industrial Co., Ltd.111,299
7,000 NEC Corp................................ 141,026
12,000 Nissan Motor Co., Ltd.(a)............... 72,697
10,000 NSK Ltd................................. 72,509
28,000 Sakura Bank, Ltd. (The) ................ 210,388
8,000 Sanwa Bank, Ltd. (The) ................. 107,072
5,000 Sharp Corp.............................. 80,116
600 Softbank Corp........................... 228,233
1,200 Sony Corp............................... 179,318
2,000 Yamanouchi Pharmaceutical Co., Ltd...... 93,735
---------
2,053,489
---------
MEXICO - 0.6%
20,600 Telefonos De Mexico SA ................. 73,725
---------
NETHERLANDS - 2.8%
7,400 Fortis (NL) NV.......................... 239,188
2,320 ING Groep NV............................ 126,011
---------
365,199
---------
NEW ZEALAND - 0.5%
28,000 Fletcher Challenge Energy............... 70,127
---------
PORTUGAL - 0.9%
2,700 Portugal Telecom SA..................... 112,375
---------
SINGAPORE - 0.5%
7,000 Singapore Airlines Ltd.................. 68,333
---------
SOUTH KOREA - 1.6%
1,800 Korea Electric Power Corp............... 59,186
159 SK Telecom Co. Ltd...................... 147,041
---------
206,227
---------
SPAIN - 3.6%
2,800 Acciona SA.............................. 128,852
10,900 Banco Santander Central Hispano, SA..... 112,719
14,400 Telefonica SA........................... 230,500
---------
472,071
---------
SWEDEN - 2.6%
15,000 Investment AB Bure...................... 85,997
4,450 Skandia Forsakrings AB.................. 92,821
5,200 Telefonaktiebolaget LM Ericsson......... 161,112
---------
339,930
---------
<PAGE>
INTERNATIONAL VALUE FUND (continued)
- --------------------------------------------------------------------------------
Shares COMMON STOCKS - 81.0% (continued) Value
- --------------------------------------------------------------------------------
SWITZERLAND - 2.2%
196 Novartis................................ $ 290,748
--------
TAIWAN - 1.0%
6,400 Siliconware Precision Industries Co.(a). 66,720
3,600 Winbond Electronics Corp.(a)............ 66,060
--------
132,780
--------
THAILAND - 0.2%
103,000 Industrial Finance Corp. of Thailand.... 32,089
--------
UNITED KINGDOM - 15.1%
7,300 ARM Holdings Plc(a)..................... 113,912
8,100 Bank of Scotland........................ 95,714
7,500 BP Amoco Plc............................ 136,487
11,200 British Airways Plc..................... 62,898
4,800 British Telecommunications Plc.......... 72,095
4,800 Dixons Group Plc........................ 86,008
2,900 Energis Plc............................. 68,727
22,000 Freeserve Plc(a)........................ 53,170
4,000 GKN Plc................................. 63,735
9,600 Glaxo Wellcome Plc...................... 252,489
6,800 HSBC Holdings Plc....................... 77,833
21,800 National Grid Group Plc................. 150,610
3,900 Royal Bank of Scotland Group Plc........ 83,754
34,500 Shell Transport & Trading Co............ 257,954
6,500 SmithKline Beecham Plc.................. 75,523
16,100 Unilever Plc............................ 152,329
7,200 Vodafone Group Plc(a)................... 170,395
---------
1,973,633
---------
CLOSED-END FOREIGN FUNDS - 0.5%
890 Societe Generale Baltic Republics Fund(a) 66,750
---------
TOTAL COMMON STOCKS (Cost $9,592,111) $10,600,559
-----------
- --------------------------------------------------------------------------------
Shares MONEY MARKET - 0.8% Value
- --------------------------------------------------------------------------------
103,319 Dreyfus Cash Management Fund (Cost $103,319)........ $ 103,319
---------
TOTAL INVESTMENTS AT VALUE - 81.8% (Cost $9,695,430) $10,703,878
OTHER ASSETS IN EXCESS OF LIABILITIES - 18.2%....... 2,379,738
---------
NET ASSETS - 100.0%................................. $13,083,616
===========
(a) Non-income producing security.
Pfd - Preferred
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
September 30,1999 (Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Large Cap Small Cap Balanced International
Value Fund Value Fund Fund Value Fund
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At amortized cost............. $10,607,656 $22,609,069 $11,915,156 $ 9,695,430
=========== =========== =========== ===========
At value (Note 2)............. $10,155,042 $19,377,202 $11,625,480 $10,703,878
Cash denominated in foreign currencies
(at cost $274,746)............ - - - 278,089
Dividends and interest receivable..... 15,811 57,565 94,038 26,070
Receivable for securities sold........ 69,378 49,723 - 145,365
Receivable for capital shares sold.... - 55,925 - 2,000,050
Organization expenses, net (Note 2)... 8,149 8,149 8,149 -
Other assets.......................... 14,103 25,130 13,771 31,416
------ ------ ------ ------
TOTAL ASSETS.................. 10,262,483 19,573,694 11,741,438 13,184,868
---------- ---------- ---------- ----------
LIABILITIES
Dividends payable..................... - - 3,289 -
Payable for securities purchased...... 169,012 175,218 51,060 -
Payable for capital shares redeemed... - 45,238 1,800 10,265
Payable to affiliates (Note 4)........ 6,732 23,884 8,544 6,585
Net unrealized depreciation on forward
foreign currency exchange
contracts (Note 6)............ - - - 77,932
Other liabilities..................... 1,360 3,889 7,268 6,470
----- ----- ----- -----
TOTAL LIABILITIES............. 177,104 248,229 71,961 101,252
------- ------- ------ -------
NET ASSETS $10,085,379 $19,325,465 $11,669,477 $13,083,616
=========== =========== =========== ===========
Net assets consist of:
Paid-in capital....................... $10,707,731 $22,231,299 $12,343,484 $11,813,041
Undistributed net investment
income (loss...................... (4,976) 176,076 3 (14,516)
Accumulated net realized gains (losses)
from security and foreign
currency transactions............. (164,762) 149,957 (384,334) 352,227
Net unrealized appreciation
(depreciation) on investments..... (452,614) (3,231,867) (289,676) 1,008,448
Net unrealized depreciation on
translation of assets and
liabilities in foreign currencies. - - - (75,584)
----------- ----------- ----------- -----------
Net assets............................ $10,085,379 $19,325,465 $11,669,477 $13,083,616
=========== =========== =========== ===========
</TABLE>
<PAGE>
DEAN FAMILY OF FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (continued)
September 30,1999 (Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Large Cap Small Cap Balanced International
Value Fund Value Fund Fund Value Fund
- -------------------------------------------------------------------------------------------------------------------------------
PRICING OF CLASS A SHARES
Net assets applicable to Class
A shares.......................$ 9,391,215 $16,031,254 $10,024,054 $11,724,768
=========== =========== =========== ===========
Shares of beneficial interest outstanding
(unlimited number of shares
authorized, no par value)...... 924,770 1,700,619 996,566 865,304
======= ========= ======= =======
Net asset value and redemption price
per share (Note 2).............$ 10.16 $ 9.43 $ 10.06 $ 13.55
=========== =========== =========== ===========
Maximum offering price per share
(Note 2).......................$ 10.72 $ 9.95 $ 10.62 $ 14.30
=========== =========== =========== ===========
PRICING OF CLASS C SHARES
Net assets applicable to Class
C shares.......................$ 694,164 $ 3,294,211 $ 1,645,423 $ 1,358,848
=========== =========== =========== ===========
Shares of beneficial interest outstanding
(unlimited number of shares
authorized, no par value)..... 69,145 354,432 163,979 101,711
====== ======= ======= =======
Net asset value, offering price and
redemption price per share
(Note 2)......................$ 10.04 $ 9.29 $ 10.03 $ 13.36
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended September 30,1999 (Unaudited
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Large Cap Small Cap Balanced International
Value Fund Value Fund Fund Value Fund
- -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign withholding
taxes of $7,227 for the International
Value Fund)........................$ 99,414 $ 326,468 $ 76,872 $ 79,237
Interest............................ 2,000 6,482 159,347 2,613
----- ----- ------- -----
TOTAL INVESTMENT INCOME........... 101,414 332,950 236,219 81,850
------- ------- ------- ------
EXPENSES
Investment advisory fees (Note 4)... 56,063 105,291 63,101 53,120
Accounting services fees (Note 4)... 18,000 18,000 18,000 18,000
Shareholder services and transfer
agent fees
Class A (Note 4)................... 7,200 7,200 7,200 7,200
Class C (Note 4)................... 7,200 7,200 7,200 7,200
Custodian fees...................... 5,930 14,108 7,228 20,639
Registration fees - Common 2,183 2,171 2,186 2,510
Registration fees - Class A......... 3,669 3,549 3,614 3,617
Registration fees - Class C......... 3,603 3,852 3,589 3,807
Administration fees (Note 4)........ 6,000 10,505 6,293 6,000
Professional fees................... 6,672 6,672 6,672 8,600
Postage and supplies................ 4,526 12,443 4,791 4,088
Reports to shareholders............. 3,659 9,792 3,682 4,207
Trustees' fees and expenses......... 2,370 2,370 2,370 2,370
Amortization of organization
expenses (Note 2).................. 1,577 1,577 1,577 -
Insurance expense................... 849 1,412 961 618
Distribution expenses - Class A
(Note 4)........................... 309 278 75 -
Other expenses...................... 564 1,754 1,443 6,197
--- ----- ----- -----
TOTAL EXPENSES................... 130,374 208,174 139,982 148,173
Fees waived by Adviser (Note 4)..... (16,438) (1,100) (14,436) (50,511)
Class C expenses reimbursed by Adviser
(Note 4)......................... (7,546) - (1,834) (1,296)
------ ------- ------ ------
NET EXPENSES..................... 106,390 207,074 123,712 96,366
------- ------- ------- ------
NET INVESTMENT INCOME (LOSS).......... (4,976) 125,876 112,507 (14,516)
REALIZED AND UNREALIZED GAINS (LOSSES)
Net realized gains (losses) from:
Security transactions............. 5,757 668,772 (176,870) 514,159
Foreign currency transactions
(Note 5)......................... - - - (43,298)
Net change in unrealized appreciation/
depreciation on:
Investments....................... (566,488) (349,386) (625,915) 299,686
Foreign currency translation
(Note 5)......................... - - - (78,957)
--------- --------- ---------- --------
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS AND
FOREIGN CURRENCIES............ (560,731) 319,386 (802,785) 691,590
-------- ------- -------- -------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS...............$ (565,707) $ 445,262 $ (690,278) $ 677,074
========== =========== ========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Large Cap Value Fund Small Cap Value Fund
--------------------------------------------------------------------------------------------
Six Months Six Months
Ended Year Ended Year
Sept. 30, Ended Sept. 30, Ended
1999 March 31, 1999 March 31,
(Unaudited) 1999 (Unaudited) 1999
- -------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss).......$ (4,976) $ 40,594 $ 125,876 $ 152,914
Net realized gains (losses) from
security transactions............. 5,757 (170,647) 668,772 (32,334)
Net change in unrealized appreciation/
depreciation on investments....... (566,488) (964,977) (349,386) (5,568,898)
-------- -------- -------- ----------
Net increase (decrease) in net assets
from operations.................... (565,707) (1,095,030) 445,262 (5,448,318)
-------- ---------- ------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A - (40,478) - (105,005)
From net investment income, Class C - (116) - (11,617)
From net realized gains, Class A... - (101,336) - (1,122,796)
From net realized gains, Class C... - (4,193) - (154,410)
-------- ---------- ------- ----------
Decrease in net assets from distributions
to shareholders............... - (146,123) - (1,393,828)
-------- ----------- ------- ----------
FROM CAPITAL SHARE TRANSACTIONS
Class A
Proceeds from shares sold.......... 1,141,809 3,174,933 1,839,154 3,036,967
Net asset value of shares issued in
reinvestment of distributions to
shareholders................... - 129,680 - 1,100,297
Payments for shares redeemed....... (558,543) (447,120) (1,737,812) (2,030,441)
-------- -------- ---------- ----------
Net increase in net assets from Class A
share transactions............ 583,266 2,857,493 101,342 2,106,823
------- --------- ------- ---------
Class C
Proceeds from shares sold.......... 324,606 422,413 1,157,369 1,994,365
Net asset value of shares issued in
reinvestment of distributions to
shareholders................... - 4,298 - 157,601
Payments for shares redeemed....... (103,768) (2,112) (418,181) (206,560)
-------- ------ -------- --------
Net increase in net assets from Class C
share transactions............ 220,837 424,599 739,188 1,945,406
------- ------- ------- ---------
Net increase in net assets from capital
share transactions................. 804,103 3,282,092 840,530 4,052,229
------- --------- ------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS 238,396 2,040,939 1,285,792 (2,789,917)
NET ASSETS
Beginning of period........... 9,846,983 7,806,044 18,039,673 20,829,590
--------- --------- ---------- ----------
End of period................. $10,085,379 $ 9,846,983 $19,325,465 $ 18,039,673
=========== ============ =========== ============
UNDISTRIBUTED NET INVESTMENT
INCOME (LOSS)................. $ (4,976) $ - $ 176,076 $ 50,200
============ ============ ========== ===========
</TABLE>
<PAGE>
DEAN FAMILY OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (continued)
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Large Cap Value Fund Small Cap Value Fund
--------------------------------------------------------------------------------------------
Six Months Six Months
Ended Year Ended Year
Sept. 30, Ended Sept. 30, Ended
1999 March 31, 1999 March 31,
(Unaudited) 1999 (Unaudited) 1999
- -------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE ACTIVITY
Class A
Shares sold................... 99,408 276,753 177,570 270,810
Shares issued in reinvestment
of distributions
to shareholders.............. - 11,659 - 110,385
Shares redeemed............... (49,123) (42,215) (169,081) (203,409)
------- ------- -------- --------
Net increase in shares
outstanding................. 50,285 246,197 8,489 177,786
Shares outstanding,
beginning of period......... 874,485 628,288 1,692,130 1,514,344
------- ------- --------- ---------
Shares outstanding,
end of period............... 924,770 874,485 ,700,619 1,692,130
======= ======= ======== =========
Class C
Shares sold................... 28,089 38,912 112,958 178,737
Shares issued in reinvestment
of distributions
to shareholders.............. - 388 - 15,961
Shares redeemed............... (9,256) (193) (41,382) (20,715)
------ ---- ------- -------
Net increase in shares
outstanding................. 18,833 39,107 71,576 173,983
Shares outstanding,
beginning of period........ 50,312 11,205 282,856 108,873
------ ------ ------- -------
Shares outstanding,
end of period.............. 69,145 50,312 354,432 282,856
====== ====== ======= =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Balanced Fund International Value Fund
-------------------------------------------------------------------------------------------
Six Months Six Months
Ended Year Ended Year
Sept. 30, Ended Sept. 30, Ended
1999 March 31, 1999 March 31,
(Unaudited) 1999 (Unaudited) 1999
- -------------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss).........$ 112,507 $ 195,055 $ (14,516) $ (43,198)
Net realized gains (losses) from:
Security transactions.............. (176,870) (127,866) 514,159 (115,075)
Foreign currency transactions
(Note 5).......................... - - (43,298) (124,824)
Net change in unrealized appreciation/
depreciation on:
Investments...................... (625,915) (350,073) 299,686 562,790
Foreign currency translation
(Note 5).................... - - (78,957) (3,203)
---------- ---------- --------- ---------
Net increase (decrease) in net assets
from operations................... (690,278) (282,884) 677,074 276,490
-------- -------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income, Class A.. (101,891) (176,745) - -
From net investment income, Class C.. (10,613) (18,310) - -
From net realized gains, Class A..... - (243,853) - (15,554)
From net realized gains, Class C..... - (43,568) - (3,492)
--------- ------- --------- --------
Decrease in net assets from
distributions
to shareholders..................... (112,504) (482,476) - (19,046)
-------- -------- --------- -------
FROM CAPITAL SHARE TRANSACTIONS
Class A
Proceeds from shares sold........... 614,270 4,763,587 5,596,886 4,672,561
Net asset value of shares issued in
reinvestment of distributions
to shareholders................... 94,473 391,315 - 14,769
Payments for shares redeemed........ (375,569) (1,361,306) (406,234) (223,152)
-------- ---------- -------- --------
Net increase in net assets from Class A
share transactions............ 333,174 3,793,596 5,190,652 4,464,178
------- --------- --------- ---------
Class C
Proceeds from shares sold........... 569,711 1,087,900 44,862 1,334,040
Net asset value of shares issued in
reinvestment of distributions
to shareholders................... 9,926 56,830 - 3,359
Payments for shares redeemed ....... (717,510) (242,568) (264,440) (6,698)
-------- -------- -------- ------
Net increase (decrease) in net assets from
Class C share transactions.......... (137,873) 902,162 (219,578) 1,330,701
-------- ------- -------- ---------
Net increase in net assets from capital
share transactions................. 195,301 4,695,758 4,971,074 5,794,879
------- --------- --------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS (607,481) 3,930,398 5,648,148 6,052,323
NET ASSETS
Beginning of period................ 12,276,958 8,346,560 7,435,468 1,383,145
---------- --------- --------- ---------
End of period......................$11,669,477 $12,276,958 $13,083,616 $7,435,468
=========== =========== =========== ==========
UNDISTRIBUTION NET INVESTMENT
INCOME (LOSS).................$ 3 $ - $ (57,814) $ -
=========== ============ ============ ===========
</TABLE>
<PAGE>
DEAN FAMILY OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (continued)
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
Balanced Fund International Value Fund
-------------------------------------------------------------------------------------------
Six Months Six Months
Ended Year Ended Year
Sept. 30, Ended Sept. 30, Ended
1999 March 31, 1999 March 31,
(Unaudited) 1999 (Unaudited) 1999
- -------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE ACTIVITY
Class A
Shares sold.......................... 56,050 425,764 413,666 389,709
Shares issued in reinvestment
of distributions
to shareholders.................... 9,003 35,797 - 1,216
Shares redeemed...................... (34,730) (124,361) (30,391) (19,119)
------- -------- ------- -------
Net increase in shares
outstanding........................ 30,323 337,200 383,275 371,806
Shares outstanding,
beginning of period................ 966,243 629,043 482,029 110,223
------- ------- ------- -------
Shares outstanding,
end of period...................... 996,566 966,243 865,304 482,029
======= ======= ======= =======
Class C
Shares sold.......................... 52,805 98,933 3,353 111,186
Shares issued in reinvestment
of distributions
to shareholders................... 946 5,214 - 279
Shares redeemed...................... (65,548) (22,450) (19,989) (561)
------- ------- ------- ----
Net increase (decrease) in shares
outstanding........................ (11,797) 81,697 (16,636) 110,904
Shares outstanding,
beginning of period................ 175,776 94,079 118,347 7,443
------- ------ ------- -----
Shares outstanding,
end of period...................... 163,979 175,776 101,711 118,347
======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
LARGE CAP VALUE FUND - CLASS A
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
September 30, Ended Ended
1999 March 31, March 31,
(Unaudited) 1999 1998(A)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 10.65 $ 12.21 $ 10.00
--------- ------- --------
Income (loss) from investment operations:
Net investment income (loss) (0.00) 0.05 0.03
Net realized and unrealized gains (losses)
on investments (0.49) (1.44) 2.36
----- ----- ----
Total from investment operations (0.49) (1.39) 2.39
----- ----- ----
Less distributions:
From net investment income - (0.05) (0.03)
----- ------- ------
From net realized gains - (0.12) (0.15)
----- ------- ------
Total distributions - (0.17) (0.18)
----- ------- ------
Net asset value at end of period $ 10.16 $ 10.65 $ 12.21
=========== ======= ========
Total return(B) (4.60)% (11.48)% 24.11%
===== ====== =====
Net assets at end of period $ 9,391,215 $ 9,315,112 $7,669,807
============ =========== ==========
Ratio of expenses to average net assets:
Before fee waivers and/or expense reimbursements
by Adviser 2.14%(C) 2.29% 2.72%(C)
After fee waivers and/or expense reimbursements
by Adviser 1.85%(C) 1.85% 1.84%(C)
Ratio of net investment income (loss)
to average net assets (0.04)%(C) 0.46% 0.30%(C)
Portfolio turnover rate 54%(C) 55% 54%(C)
(A) Represents the period from the initial public offering of shares (May 28, 1997) through March 31, 1998.
(B) Total returns shown exclude the effect of applicable sales loads and are not annualized.
(C) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
LARGE CAP VALUE FUND - CLASS C
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
September 30, Ended Ended
1999 March 31, March 31,
(Unaudited) 1999 1998(A)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 10.57 $ 12.16 $ 10.76
---------- -------- --------
Income (loss) from investment operations:
Net investment loss (0.04) (0.02) (0.01)
Net realized and unrealized gains (losses)
on investments (0.49) (1.45) 1.56
----- ----- ----
Total from investment operations (0.53) (1.47) 1.55
----- ----- ----
Less distributions:
From net investment income - - -
From net realized gains - (0.12) (0.15)
----- ------ ------
Total distributions - (0.12) (0.15)
----- ------ ------
Net asset value at end of period $ 10.04 $ 10.57 $ 12.16
========== ======== ========
Total return(B) (5.01)% (12.12)% 14.63%
===== ====== =====
Net assets at end of period $ 694,164 $531,871 $136,237
========== ======== ========
Ratio of expenses to average net assets:
Before fee waivers and/or expense reimbursements
by Adviser 5.00%(C) 8.53% 52.73%(C)
After fee waivers and/or expense reimbursements
by Adviser 2.60%(C) 2.60% 2.59%(C)
Ratio of net investment loss to average net assets (0.78)%(C) (0.31)% (0.55)%(C)
Portfolio turnover rate 54%(C) 55% 54%(C)
(A) Represents the period from the initial public offering of shares (August 19, 1997) through March 31, 1998.
(B) Total returns shown exclude the effect of applicable sales loads and are not annualized.
(C) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
SMALL CAP VALUE FUND - CLASS A
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
September 30, Ended Ended
1999 March 31, March 31,
(Unaudited) 1999 1998(A)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 9.15 $ 12.84 $ 10.00
---------- -------- --------
Income (loss) from investment operations:
Net investment income 0.07 0.08 0.03
Net realized and unrealized gains (losses)
on investments 0.21 (3.03) 3.30
---- ----- ----
Total from investment operations 0.28 (2.95) 3.33
---- ----- ----
Less distributions:
From net investment income - (0.06) (0.02)
From net realized gains - (0.68) (0.47)
----- ------ ------
Total distributions - (0.74) (0.49)
----- ------ ------
Net asset value at end of period $ 9.43 $ 9.15 $ 12.84
============ ======= =======
Total return(B) 3.06% (23.39)% 33.86%
==== ====== =====
Net assets at end of period $ 16,031,254 $ 15,479,055 $ 19,437,554
============= ============= ===============
Ratio of expenses to average net assets:
Before fee waivers and/or expense reimbursements
by Adviser 1.86%(C) 1.89% 1.98%(C)
After fee waivers and/or expense reimbursements
by Adviser 1.85%(C) 1.85% 1.84%(C)
Ratio of net investment income
to average net assets 1.31%(C) 0.83% 0.35%(C)
Portfolio turnover rate 69%(C) 79% 62%(C)
(A) Represents the period from the initial public offering of shares (May 28, 1997) through March 31, 1998.
(B) Total returns shown exclude the effect of applicable sales loads and are not annualized.
(C) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
SMALL CAP VALUE FUND - CLASS C
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
September 30, Ended Ended
1999 March 31, March 31,
(Unaudited) 1999 1998(A)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 9.05 $ 12.79 $ 10.95
-------- ------- --------
Income (loss) from investment operations:
Net investment income (loss) 0.03 0.01 (0.02)
Net realized and unrealized gains (losses)
on investments 0.21 (3.03) 2.33
---- ----- ----
Total from investment operations 0.24 (3.02) 2.31
---- ----- ----
Less distributions:
From net investment income - (0.04) (0.00)
---- ------ -----
From net realized gains - (0.68) (0.47)
---- ------ -----
Total distributions - (0.72) (0.47)
---- ------ -----
Net asset value at end of period $ 9.29 $9.05 $ 12.79
========= ===== =======
Total return(B) 2.65% (24.00)% 21.63%
==== ====== =====
Net assets at end of period $ 3,294,211 $ 2,560,618 $ 1,392,036
============== =========== ============
Ratio of expenses to average net assets:
Before fee waivers and/or expense reimbursements
by Adviser 2.61%(C) 2.70% 6.41%(C)
After fee waivers and/or expense reimbursements
by Adviser 2.60%(C) 2.60% 2.59%(C)
Ratio of net investment income (loss)
to average net assets 0.59%(C) 0.17% (0.42)%(C)
Portfolio turnover rate 69%(C) 79% 62%(C)
(A) Represents the period from the initial public offering of shares (August 1, 1997) through March 31, 1998.
(B) Total returns shown exclude the effect of applicable sales loads and are not annualized.
(C) Annualized.
</TABLE>
See accompanying notes to financial statements.
DEAN FAMILY OF FUNDS
BALANCED FUND - CLASS A
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
September 30, Ended Ended
1999 March 31, March 31,
(Unaudited) 1999 1998(A)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 10.75 $ 11.55 $ 10.00
----------- ------- -------
Income (loss) from investment operations:
Net investment income 0.10 0.19 0.17
Net realized and unrealized gains (losses)
on investments (0.69) (0.56) 1.62
----- ----- ----
Total from investment operations (0.59) (0.37) 1.79
----- ----- ----
Less distributions:
From net investment income (0.10) (0.19) (0.16)
From net realized gains - (0.24) (0.08)
------ ------ ------
Total distributions (0.10) (0.43) (0.24)
----- ----- -----
Net asset value at end of period $ 10.06 $ 10.75 $ 11.55
========== ======= =======
Total return(B) (5.50%) (3.22)% 18.07%
===== ===== =====
Net assets at end of period $ 10,024,054 $ 10,391,582 $ 7,262,670
============== ============ ===========
Ratio of expenses to average net assets:
Before fee waivers and/or expense reimbursements
by Adviser 2.08%(C) 2.09% 2.60%(C)
After fee waivers and/or expense reimbursements
by Adviser 1.85%(C) 1.85% 1.84%(C)
Ratio of net investment income
to average net assets 1.89%(C) 1.79% 1.85%(C)
Portfolio turnover rate 99%(C) 60% 64%(C)
(A) Represents the period from the initial public offering of shares (May 28, 1997) through March 31, 1998.
(B) Total returns shown exclude the effect of applicable sales loads and are not annualized.
(C) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
BALANCED FUND - CLASS C
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
September 30, Ended Ended
1999 March 31, March 31,
(Unaudited) 1999 1998(A)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 10.73 $11.52 $10.71
-------- ------ ------
Income (loss) from investment operations:
Net investment income 0.06 0.11 0.07
Net realized and unrealized gains (losses)
on investments (0.70) (0.55) 0.92
----- ----- ----
Total from investment operations (0.64) (0.44) 0.99
----- ----- ----
Less distributions:
From net investment income (0.06) (0.11) (0.10)
From net realized gains - (0.24) (0.08)
------ ------ ------
Total distributions (0.06) (0.35) (0.18)
----- ----- -----
Net asset value at end of period $ 10.03 $10.73 $11.52
======= ====== ======
Total return(B) (5.99)% (3.81)% 9.37%
===== ===== ====
Net assets at end of period $1,645,423 $1,885,376 $1,083,890
========== ========== ==========
Ratio of expenses to average net assets:
Before fee waivers and/or expense reimbursements
by Adviser 3.05%(C) 3.14% 7.39%(C)
After fee waivers and/or expense reimbursements
by Adviser 2.60%(C) 2.60% 2.59%(C)
Ratio of net investment income
to average net assets 1.15%(C) 1.04% 0.99%(C)
Portfolio turnover rate 99%(C) 60% 64%(C)
(A) Represents the period from the initial public offering of shares (August 1, 1997) through March 31, 1998.
(B) Total returns shown exclude the effect of applicable sales loads and are not annualized.
(C) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
INTERNATIONAL VALUE FUND - CLASS A
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
September 30, Ended Ended
1999 March 31, March 31,
(Unaudited) 1999 1998(A)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 12.41 $ 11.76 $10.00
------- ------- ------
Income from investment operations:
Net investment loss (0.01) (0.01) (0.05)
Net realized and unrealized gains
on investments and foreign currency 1.15 0.69 1.81
---- ---- ----
Total from investment operations 1.14 0.68 1.76
---- ---- ----
Less distributions:
From net realized gains - (0.03) -
------- ------ ------
Net asset value at end of period $ 13.55 $ 12.41 $ 11.76
======= ======= =======
Total return(B) 9.19% 5.82% 17.60%
==== ==== =====
Net assets at end of period $ 11,724,768 $ 5,981,899 $ 1,295,896
============= =========== ===========
Ratio of expenses to average net assets:
Before fee waivers and/or expense reimbursements
by Adviser 3.27%(C) 4.25% 16.66%(C)
After fee waivers and/or expense reimbursements
by Adviser 2.10%(C) 2.09% 2.04%(C)
Ratio of net investment loss
to average net assets (0.22)%(C) (0.70 )% (1.30)%(C)
Portfolio turnover rate 142%(C) 100% 109%(C)
(A) Represents the period from the initial public offering of shares (October 13, 1997) through March 31 1998.
(B) Total returns shown exclude the effect of applicable sales loads and are not annualized.
(C) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
INTERNATIONAL VALUE FUND - CLASS C
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
September 30, Ended Ended
1999 March 31, March 31,
(Unaudited) 1999 1998(A)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value at beginning of period $ 12.28 $ 11.72 $ 9.89
------- -------- ------
Income from investment operations:
Net investment loss (0.07) (0.10) (0.04)
Net realized and unrealized gains
on investments and foreign currency 1.15 0.69 1.87
---- ---- ----
Total from investment operations 1.08 0.59 1.83
---- ---- ----
Less distributions:
From net realized gains - (0.03) -
---- ---- ----
Net asset value at end of period $ 13.36 $12.28 $11.72
======= ====== ======
Total return(B) 8.79% 5.07% 18.50%
==== ==== =====
Net assets at end of period $ 1,358,848 $ 1,453,569 $ 87,249
=========== =========== =========
Ratio of expenses to average net assets:
Before fee waivers and/or expense reimbursements
by Adviser 4.18%(C) 5.91% 58.89%(C)
After fee waivers and/or expense reimbursements
by Adviser 2.84%(C) 2.84% 2.82%(C)
Ratio of net investment loss
to average net assets (0.90)%(C) (1.23 )% (1.94)%(C)
Portfolio turnover rate 142%(C) 100% 109%(C)
(A) Represents the period from the initial public offering of shares (November 6, 1997) through March 31, 1998.
(B) Total returns shown exclude the effect of applicable sales loads and are not annualized.
(C) Annualized.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
DEAN FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS
September 30,1999 (Unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Dean Family of Funds (the Trust) is registered under the Investment Company
Act of 1940, as an open-end management investment company. The Trust was
organized as an Ohio business trust under a Declaration of Trust dated December
18, 1996. The Trust has established four fund series: the Large Cap Value Fund,
the Small Cap Value Fund, the Balanced Fund, and the International Value Fund
(the Funds). The Trust was capitalized on March 17, 1997, when the initial
shares of each Fund (except for the International Value Fund) were purchased at
$10.00 per share. The initial public offering of shares of the International
Value Fund commenced on October 13, 1997. The Trust had no operations prior to
the public offering of shares except for the initial issuance of shares.
The Large Cap Value Fund seeks to provide capital appreciation and dividend
income over the long-term by investing primarily in the common stocks of large
companies.
The Small Cap Value Fund seeks to provide capital appreciation by investing
primarily in the common stocks of small companies.
The Balanced Fund seeks to preserve capital while producing a high total return
by allocating its assets among equity securities, fixed-income securities and
money market instruments.
The International Value Fund seeks to provide long-term capital growth by
investing primarily in the common stocks of foreign companies.
The Funds each offer two classes of shares: Class A shares (sold subject to a
maximum front-end sales load of 5.25% and a distribution fee of up to 0.25% of
the average daily net assets) and Class C shares (sold subject to a maximum
contingent deferred sales load of 1% if redeemed within a one-year period from
purchase and a distribution fee of up to 1% of average daily net assets). Each
Class A and Class C share of a Fund represents identical interests in the Fund's
investment portfolio and has the same rights, except that (i) Class C shares
bear the expenses of higher distribution fees, which is expected to cause Class
C shares to have a higher expense ratio and to pay lower dividends than Class A
shares; (ii) certain other class specific expenses will be borne solely by the
class to which such expenses are attributable; and (iii) each class has
exclusive voting rights with respect to matters relating to its own distribution
arrangements.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Trust's significant accounting policies:
Security valuation - The Funds' portfolio securities are valued as of the close
of business of the regular session of trading on the New York Stock Exchange
(normally 4:00 p.m., Eastern time). Securities traded on a national stock
exchange or quoted by NASDAQ are valued based upon the closing price on the
principal exchange where the security is traded, or, if not traded on a
particular day, at the closing bid price. U.S. Government obligations are valued
at their most recent bid prices as obtained from one or more of the major market
makers for such securities. With respect to the International Value Fund, the
U.S. dollar value of foreign securities and forward foreign currency exchange
contracts is determined using spot and forward currency exchange rates,
respectively, supplied by a quotation service.
Share valuation - The net asset value per share of each class of shares of each
Fund is calculated daily by dividing the total value of a Fund's assets
attributable to that class, less liabilities attributable to that class, by the
number of shares of that class outstanding. The maximum offering price of Class
A shares of each Fund is equal to the net asset value per share plus a sales
load equal to 5.54% of the net asset value (or 5.25% of the offering price). The
offering price of Class C shares of each Fund is equal to the net asset value
per share.
The redemption price per share of Class A shares and Class C shares of each Fund
is equal to net asset value per share. However, Class C shares of each Fund are
subject to a contingent deferred sales load of 1% of the original purchase price
if redeemed within a one-year period from the date of purchase.
Investment income - Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned. Discounts and premiums on securities
purchased are amortized in accordance with income tax regulations which
approximate generally accepted accounting principles.
Distributions to shareholders - The Large Cap Value Fund, the Balanced Fund and
the International Value Fund each expects to distribute substantially all of its
net investment income, if any, on a quarterly basis. The Small Cap Value Fund
expects to distribute substantially all of its net investment income, if any, on
an annual basis. Each Fund expects to distribute any net realized long-term
capital gains at least once each year. Management will determine the timing and
frequency of the distributions of any net realized short-term capital gains.
Allocations between classes - Investment income earned, realized capital gains
and losses, and unrealized appreciation and depreciation for the Funds are
allocated daily to each class of shares based upon its proportionate share of
total net assets of the Fund. Class specific expenses are charged directly to
the class incurring the expense. Common expenses which are not attributable to a
specific class are allocated daily to each class of shares based upon its
proportionate share of total net assets of the Fund.
Organization expenses - Expenses of organization have been capitalized and are
being amortized on a straight-line basis over five years. In the event any of
the initial shares of a Fund are redeemed during the amortization period, the
redemption proceeds will be reduced by a pro rata portion of any unamortized
organization expenses in the same proportion as the number of initial shares
being redeemed bears to the number of initial shares of the Fund outstanding at
the time of the redemption.
Security transactions - Security transactions are accounted for on the trade
date. Securities sold are determined on a specific identification basis.
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 at the
date of the financial statements and the reported amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Federal income tax - It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code available to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The following information is based upon the federal income tax cost of portfolio
investments as of September 30, 1999:
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Large Cap Small Cap Balanced International
Value Fund Value Fund Fund Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Gross unrealized appreciation............. $ 866,327 $ 1,059,764 $ 481,295 $ 1,258,898
Gross unrealized depreciation............. (1,318,941) (4,291,631) (770,971) (263,287)
---------- ---------- -------- --------
Net unrealized appreciation (depreciation) $ (452,614) $ (3,231,867) $ (289,676) $ 995,611
============= ============= ============= ==============
Federal income tax cost................... $ 10,607,656 $ 22,609,069 $ 11,915,156 $ 9,708,267
============= ============= ============= ==============
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The difference between the federal income tax cost of portfolio investments and
financial statement cost for the International Value Fund is due to certain
timing differences in the recognition of capital losses under income tax
regulations and generally accepted accounting principles.
As of March 31, 1999, the Large Cap Value Fund, the Small Cap Value Fund and the
International Value Fund had capital loss carryforwards for federal income tax
purposes of $39,697, $1,127 and $31,792, respectively, which expire through the
year 2007. In addition, the Large Cap Value Fund, the Small Cap Value Fund, the
Balanced Fund and the International Value Fund had net realized capital losses
of $130,822, $517,688, $207,464 and $81,205, respectively, during the period
from November 1, 1998 through March 31, 1999, which are treated for federal
income tax purposes as arising during the Fund's tax year ending March 31, 2000.
These capital loss carryforwards and "post-October" losses may be utilized in
the current and future years to offset net realized capital gains prior to
distributing such gains to shareholders.
3. INVESTMENT TRANSACTIONS
Investment transactions, other than short-term investments, were as follows for
the six months ended September 30, 1999:
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Large Cap Small Cap Balanced International
Value Fund Value Fund Fund Value Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Purchases of portfolio securities.......................... $3,632,149 $7,208,089 $6,076,671 $8,426,460
========== ========== ========== ==========
Proceeds from sales and maturities of portfolio securities. $2,813,652 $6,861,115 $5,400,908 $5,969,307
========== ========== ========== ==========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4. TRANSACTIONS WITH AFFILIATES
Certain trustees and officers of the Trust are also officers of C.H. Dean &
Associates, Inc. (the Adviser) or of Countrywide Fund Services, Inc. (CFS), the
administrative services agent, shareholder servicing and transfer agent, and
accounting services agent for the Trust.
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENT
The Funds' investments are managed by the Adviser pursuant to the terms of an
Advisory Agreement. Each Fund pays the Adviser an investment management fee,
computed and accrued daily and paid monthly, at an annual rate of 1.00% of the
average daily net assets for the Large Cap Value Fund, the Small Cap Value Fund
and the Balanced Fund and 1.25% of the average daily net assets for the
International Value Fund.
Newton Capital Management Ltd. (Newton Capital) has been retained by the Adviser
to manage the investments of the International Value Fund. The Adviser (not the
Fund) pays Newton Capital a fee for its services equal to the rate of 0.50% of
the Fund's average daily net assets.
In order to voluntarily reduce operating expenses during the six months ended
September 30, 1999, the Adviser waived $16,438 of its advisory fees and
reimbursed $7,546 of Class C expenses for the Large Cap Value Fund; waived
$1,100 of its advisory fees for the Small Cap Value Fund; waived $14,436 of its
advisory fees and reimbursed $1,834 of Class C expenses for the Balanced Fund;
and waived $50,511 of its advisory fees and reimbursed $1,296 of Class C
expenses for the International Value Fund.
ADMINISTRATION AGREEMENT Under the terms of an Administration Agreement, CFS
supplies non-investment related administrative and compliance services for the
Funds. CFS supervises the preparation of tax returns, reports to shareholders,
reports to and filings with the Securities and Exchange Commission and state
securities commissions, and materials for meetings of the Board of Trustees. For
these services, CFS receives a monthly fee from each Fund at an annual rate of
0.10% on its average daily net assets up to $100 million; 0.075% on the next
$100 million of such net assets; and 0.05% on such net assets in excess of $200
million, subject to a $1,000 minimum monthly fee.
TRANSFER AGENT AND SHAREHOLDER SERVICING AGREEMENT Under the terms of a
Transfer, Dividend, Shareholder Service and Plan Agency Agreement, CFS maintains
the records of each shareholder's account, answers shareholders' inquiries
concerning their accounts, processes purchases and redemptions of the Funds'
shares, acts as dividend and distribution disbursing agent and performs other
shareholder service functions. For these services, CFS receives a monthly fee
based on the number of shareholder accounts in each class of each Fund, subject
to a $1,200 minimum monthly fee for each class of shares of a Fund. In addition,
each Fund pays CFS out-of-pocket expenses including, but not limited to, postage
and supplies.
ACCOUNTING SERVICES AGREEMENT Under the terms of an Accounting Services
Agreement, CFS calculates the daily net asset value per share and maintains the
financial books and records of the Funds. For these services, CFS receives a
monthly fee of $3,000 from each Fund. In addition, each Fund pays CFS certain
out-of-pocket expenses incurred by CFS in obtaining valuations of such Fund's
portfolio securities.
UNDERWRITING AGREEMENT 2480 Securities LLC (the Underwriter), an affiliate of
the Adviser, serves as principal underwriter for the Funds and, as such, is the
exclusive agent for the distribution of shares of the Funds. Under the terms of
the Underwriting Agreement between the Trust and the Underwriter, the
Underwriter earned $329, $425, $256 and $871 from underwriting and broker
commissions on the sale of shares of the Large Cap Value Fund, the Small Cap
Value Fund, the Balanced Fund, and the International Value Fund, respectively,
during the six months ended September 30, 1999.
PLANS OF DISTRIBUTION The Trust has a Plan of Distribution (Class A Plan) under
which Class A shares may directly incur or reimburse the Adviser for expenses
related to the distribution and promotion of shares. The annual limitation for
payment of such expenses under the Class A Plan is 0.25% of average daily net
assets attributable to such shares.
The Trust also has a Plan of Distribution (Class C Plan) which provides for two
categories of payments. First, the Class C Plan provides for the payment to the
Underwriter of an account maintenance fee, in an amount equal to an annual rate
of 0.25% of a Fund's average daily net assets attributable to Class C shares. In
addition, the Class C shares may directly incur or reimburse the Underwriter in
an amount not to exceed 0.75% per annum of a Fund's average daily net assets
attributable to Class C shares for certain distribution-related expenses
incurred in the distribution and promotion of the Fund's Class C shares.
5. FOREIGN CURRENCY TRANSLATION
With respect to the International Value Fund, amounts denominated in or expected
to settle in foreign currencies are translated into U.S. dollars based on
exchange rates on the following basis:
A. The market values of investment securities and other assets and liabilities
are translated at the closing rate of exchange each day.
B. Purchases and sales of investment securities and income and expenses are
translated at the rate of exchange prevailing on the respective dates of
such transactions.
C. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from those
resulting from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gains or
losses from investments. Reported net realized foreign exchange gains or
losses arise from 1) sales of foreign currencies, 2) currency gains or
losses realized between the trade and settlement dates on securities
transactions, and 3) the difference between the amounts of dividends,
interest, and foreign withholding taxes recorded on the Fund's books, and
the U.S. dollar equivalent of the amounts actually received or paid.
Reported net unrealized foreign exchange gains or losses arise from changes
in the value of assets and liabilities, other than investments, resulting
from changes in exchange rates.
6. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The International Value Fund enters into foreign currency exchange contracts as
a way of managing foreign exchange rate risk. The Fund may enter into these
contracts for the purchase or sale of a specific foreign currency at a fixed
price on a future date as a hedge or cross-hedge against either specific
transactions or portfolio positions. The objective of the Fund's foreign
currency hedging transactions is to reduce the risk that the U.S. dollar value
of the Fund's securities denominated in foreign currency will decline in value
due to changes in foreign currency exchange rates. All foreign currency exchange
contracts are "marked-to-market" daily at the applicable translation rates
resulting in unrealized gains or losses. Realized and unrealized gains or losses
are included in the Fund's Statement of Assets and Liabilities and Statement of
Operations. Risks may arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of their contracts and
from unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
As of September 30, 1999, the International Value Fund had forward foreign
currency exchange contracts outstanding as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Net Unrealized
Settlement To Receive Initial Market Appreciation
Date (To Deliver) Value Value (Depreciation)
- ----------------------------------------------------------------------------------------------------------------
Contracts To Sell
10/01/99...................... (1,244)EUR $ ( 1,308) $ (1,325) $ (17)
10/01/99...................... (3,808)MXP (407) (407) -
10/01/99...................... (1,099)SGD (640) (646) (6)
10/04/99...................... (553)GBP (909) (911) (2)
10/04/99...................... (187,507)SGD (110,348) (110,304) 44
12/15/99...................... (32,107,000)JPY (273,276) (305,443) (32,167)
12/15/99...................... (15,528,000)JPY 130,948) (147,723) (16,775)
12/15/99...................... (52,616,000)JPY (445,181) (500,552) (55,371)
12/15/99...................... (17,500,000)JPY (170,124) (166,483) 3,641
12/15/99...................... (17,500,000)JPY (170,782) (166,483) 4,299
02/15/00...................... (1,132,000)HKD (144,705) (145,398) (693)
-------- -------- ----
Total sell contracts.................. (1,448,628) (1,545,675) (97,047)
---------- ---------- -------
Contracts To Buy
10/04/99...................... 103,583 EUR $ 110,348 $ 110,348 $ -
12/15/99...................... 252,891 EUR 273,276 270,943 (2,333)
12/15/99...................... 121,721 EUR 130,947 130,410 (537)
12/15/99...................... 105,884 GBP 170,782 174,397 3,615
12/15/99...................... 23,300,000 JPY 206,799 221,660 14,861
12/15/99...................... 14,016,000 JPY 129,862 133,338 3,476
02/15/00...................... 474,000 HKD 60,839 60,882 43
02/15/00...................... 256,000 HKD 32,892 32,882 (10)
--------- --------- --------
Total buy contracts................... 1,115,745 1,134,860 19,115
--------- --------- ------
Net Contracts......................... $ (332,883) $(410,815) $ (77,932)
========== ========= =========
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
EUR - Euro
GBP - British Pound Sterling
HKD - Hong Kong Dollar
JPY - Japanese Yen
MXP - Mexican Peso
SGD - Singapore Dollar
<PAGE>
DEAN Family of Funds
2480 Kettering Tower
Dayton, Ohio 45423
BOARD OF TRUSTEES
Chauncey H. Dean
Dr. Robert D. Dean
Dr. Sam B. Gould
Frank J. Perez
Dr. David H. Ponitz
Frank H. Scott
Gilbert P. Williamson
INVESTMENT ADVISER
C.H. DEAN & ASSOCIATES, INC.
2480 Kettering Tower
Dayton, Ohio 45423
UNDERWRITER
2480 SECURITIES LLC
2480 Kettering Tower
Dayton, Ohio 45423
TRANSFER AGENT
UNIFIED FUND SERVICES, INC.
P.O. Box 6110
Indianapolis, Indiana 46206-6110
SHAREHOLDER SERVICE
Nationwide: (Toll-Free) 888-899-8343
Table of Contents
- ------------------------------------
Chairman and President's Letter 1
Discussions of Performance:
Large Cap Value Fund 2
Small Cap Value Fund 3
Balanced Fund 4
International Value Fund 5
Fund Facts 6
Portfolios of Investments:
Large Cap Value Fund 8
Small Cap Value Fund 11
Balanced Fund 16
International Value Fund 19
Financial Statements 22
Notes to Financial Statements 37
