<PAGE>
[LOGO]
Distributed by Funds Distributor, Inc.
ANNUAL REPORT | OCTOBER 31, 1999
[LOGO]
ORBITEX-REGISTERED TRADEMARK-
GROUP OF FUNDS
ORBITEX FOCUS 30 FUND
<PAGE>
PERFORMANCE HIGHLIGHTS | ORBITEX FOCUS 30 FUND
- --------------------------------------------------------------------------------
TOTAL RETURNS AS OF OCTOBER 31, 1999
<TABLE>
<CAPTION>
1 Year 5 years Since Inception Inception date
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ORBITEX Class A Shares* NA NA -9.06% 7/12/99
FOCUS 30 (incl. max. 5.75%
FUND sales charge)
Class B Shares* NA NA -8.42% 7/12/99
Class D Shares** 24.08% 21.89% 13.60% 3/4/91
</TABLE>
* Cumulative total return
** Annualized total return
Total return is calculated assuming reinvestment of all dividends. Total returns
would have been lower had the Adviser (Orbitex Management, Inc.) and the
Administrator (American Data Services, Inc.) not waived or reimbursed a portion
of their fees. The performance of each class may vary based on differences in
loads or fees paid by the shareholders investing in each class. Results
represent past performance and do not indicate future returns. The value of an
investment in the Fund and the return on investment will fluctuate, and
redemption proceeds may be higher or lower than an investor's original cost.
Before the close of business on July 9, 1999, the Fund operated as a separate
fund called the ASM Index 30 Fund ("ASM Fund"). On July 12, 1999, the Fund was
reorganized as a new Fund of the Orbitex Group of Funds and existing
shareholders of the ASM Fund received Class D Shares in exchange for their ASM
Fund Shares. Upon the effectiveness of the reorganization, the investment policy
of the Fund changed from the "passive" investment in an equal number of shares
of each of the companies in the Dow Jones Industrial Average to the "active"
investment in some or all of those companies based on the Adviser's assessment
of the prospects for those companies. Additionally, the ASM Fund was subject to
a different level of fees than will be applied to the Fund.
Past performance does not necessarily indicate how the Fund will perform in the
future. Furthermore, because of the change in investment policy and different
fee level, the performance shown above, which reflects the Fund's previous
"passive" investment policy, should not be considered indicative of the
performance of the Fund as an actively managed Fund.
Class A Shares are subject to the current, maximum 5.75% initial sales charge.
Class B Shares are subject to no initial sales charge, but are subject to a
contingent deferred sales charge (CDSC) declining from 5% to 0% over six years.
These shares have higher fees and expenses than Class A Shares.
Class D Shares are subject to neither an initial sales charge nor a CDSC.
GROWTH OF A $10,000 INVESTMENT
This chart illustrates a comparison of a hypothetical investment of $10,000 in
the Orbitex Focus 30 Fund Class D (assuming reinvestment of all dividends and
distributions) and the Fund's benchmark index.
[CHART]
<TABLE>
<CAPTION>
3/4/91 4/91 10/91 4/92 10/92 4/93 10/93 4/94 10/94
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dow Jones Industrial Average 10000 10051 10844 12051 11745 12661 13788 13981 15052
(with dividend reinvestment)
Lipp Large Cap Value Funds Index 10000 10239 10983 11732 11985 13068 14278 14034 14728
Orbitex Focus 30 Fund (Class D) 10000 7790 8790 9733 9385 9986 10763 10692 11210
<CAPTION>
4/95 10/95 4/96 10/96 4/97 10/97 4/98 10/98 4/99 10/99
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dow Jones Industrial Average 16878 18811 22289 24399 28638 30659 37668 36033 45623 45741
(with dividend reinvestment)
Lipp Large Cap Value Funds Index 15988 18068 20458 22014 24670 28523 33552 32273 38183 37730
Orbitex Focus 30 Fund (Class D) 12272 13261 15359 16576 19331 20754 25406 24309 30370 30164
</TABLE>
FOCUS 30 FUND
The Dow Jones Industrial Average is an unmanaged index. Index returns assume
reinvestment of dividends; unlike the Fund's returns, however, they do not
reflect any fees or expenses.
The Lipper Large Cap Value Funds Index is an equal-weighted performance index,
adjusted for capital-gain distributions and income dividends, of the largest
qualifying funds having this investment objective, and is compiled by Lipper,
Inc.
"Dow Jones Industrial Average" is the property of Dow Jones & Company. The
Orbitex Focus 30 Fund is neither affiliated with, nor endorsed by, Dow Jones &
Company.
<PAGE>
LETTER FROM THE MANAGEMENT OF THE ORBITEX GROUP OF FUNDS 1
- -------------------------------------------------------------------------------
DEAR FOCUS 30 FUND SHAREHOLDER:
WE ARE PLEASED TO PRESENT THE FIRST ANNUAL REPORT FOR THE ORBITEX FOCUS 30 FUND
("THE FUND"), COVERING THE 12 MONTHS ENDED OCTOBER 31, 1999.
While shareholders have experienced many changes over the past year, we believe
the Fund is now positioned to provide superior investment performance to its
shareholders over the long term. We appreciate your ongoing support during this
difficult administrative period and look forward to your continuing commitment
to the Fund.
As you are aware, the predecessor fund's ("ASM Index 30 Fund") board
of directors voted to terminate the Vector Index Advisors, Inc. contract as
of February 28, 1999, and appointed Orbitex Management, Inc. ("OMI")
to serve as interim adviser. On July 2, 1999, shareholders of the ASM Index
30 Fund approved the merger of the ASM Index 30 Fund into the Focus 30 Fund, as
well as OMI's continuing role as investment adviser. Shareholders also approved
a modification to the Fund's investment philosophy from passive management to
active stock selection by OMI. As of July 12, 1999, OMI has actively managed the
portfolio to achieve its stated investment objectives.
During this period of change, the performance of the Fund tracked the
performance of the Dow Jones Industrial Average quite well. After operating
expenses, but with the benefit of various expense limitation commitments, the
total return of the Fund's Class D Shares was 24.08 percent compared with 24.88
percent for the Dow Jones Industrial Average for the 12 months ended October 31,
1999. We are very pleased that the Fund has been substantially successful in
tracking this widely followed market indicator.
THE ORBITEX FUNDS -- A DIVERSE GROUP OF SPECIALTY INVESTMENTS
Today, the Fund is a prominent member of the Orbitex Group of Funds, one of the
nation's leading collections of sector and specialty mutual funds. The Orbitex
Group of Funds provides investors with unique investment opportunities in some
of today's most important industry sectors, including four other specialty
mutual funds:
ORBITEX GROWTH FUND
ORBITEX INFO-TECH & COMMUNICATIONS FUND
ORBITEX STRATEGIC NATURAL RESOURCES FUND
ORBITEX HEALTH & BIOTECHNOLOGY FUND
Additional information concerning these Funds is available by calling your
investment professional or the Fund at 888-ORBITEX (888-672-4839), or by
visiting our website at www.orbitexusa.com.
On behalf of all of us at ORBITEX, I'd like to thank you for your investment in
the Orbitex Group of Funds. We hope that you are as optimistic as we are about
the future of America's largest and most powerful companies -- the stocks that
form the vibrant heart of the Orbitex Focus 30 Fund.
As the New Year and a new century approach, we look forward to serving your
ongoing investment needs.
Sincerely,
/s/ Richard Stierwalt
RICHARD STIERWALT
PRESIDENT
ORBITEX MANAGEMENT, INC.
<PAGE>
LETTER FROM FUND MANAGEMENT | ORBITEX FOCUS 30 FUND
- --------------------------------------------------------------------------------
DEAR SHAREHOLDER:
The ORBITEX FOCUS 30 FUND, drawing on proprietary ORBITEX industry research,
focuses on identifying the most dynamic, growth-oriented companies in promising
sectors. For the period November 1, 1998, through October 31, 1999, total return
of the Fund's Class D Shares was 24.08 percent compared with 24.88 percent for
the Dow Jones Industrial Average. We are very pleased that the Fund has been
substantially successful in tracking this widely followed market indicator.
INVESTMENT ENVIRONMENT
Revolutionary changes to the composition of the Dow occurred shortly after the
period ended. In recognition of how integral technology and communications have
become to our society, the Dow added Microsoft, Intel, SBC Communications and
Home Depot to the index, and removed Chevron, Union Carbide, Sears and Goodyear.
Technology and communications companies now comprise approximately 18 percent of
the Dow. This move mirrors the secular change that has occurred in our economy
during the last 20 years, as we have moved from a manufacturing-based model to a
service-based model.
TOP 10 PORTFOLIO HOLDINGS*
<TABLE>
<S> <C>
American Express Co. 6.86%
General Electric Co. 6.38%
Procter & Gamble Co. 4.93%
J.P. Morgan & Co. 4.75%
International Business Machines Corp. 4.70%
Johnson & Johnson 4.44%
Minnesota Mining & Manufacturing Co. 4.35%
Merck & Co., Inc. 3.74%
Exxon Corp. 3.48%
Microsoft Corp. 3.47%
</TABLE>
"Dow Jones Industrial Average" is the property of Dow Jones & Company. The
Orbitex Focus 30 Fund is neither affiliated with, nor endorsed by, Dow Jones &
Company.
All holdings as of 10/31/99. Portfolio holdings subject to change and should not
be considered a recommendation to buy individual securities.
* Based on total investment value of the Fund as of 10/31/99.
<PAGE>
3
- --------------------------------------------------------------------------------
PORTFOLIO POSITIONING The Fund uses a combination of top-down and bottom-up
fundamental research to identify investment opportunities that stand to benefit
from exciting long-term secular trends. As traditional large cap value stocks
have been out of favor during the period, we continue to overweight the
portfolio with those large branded names that, in our opinion, have the most
potential for growth in earnings over the next three years. We overweighted the
technology, pharmaceutical and biotech sectors, and underweighted energy. Good
overall profit growth from large cap multinationals has helped to bolster the
Fund's performance.
INVESTMENT OUTLOOK We remain extremely bullish for U.S. equities for the coming
period. As valuations continue to be stretched, less expensive growth-oriented
stocks, such as financials and consumer staples, may present attractive
investment opportunities during the next year.
Sincerely,
RICHARD A. BEGUN
PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION*
[CHART]
<TABLE>
<S> <C>
BASIC MATERIALS 11.80%
CAPITAL GOODS 20.50%
COMMUNICATION SERVICES 1.57%
CONSUMER STAPLES 11.00%
CONSUMER CYCLICALS 9.22%
ENERGY 3.41%
FINANCIAL 14.01%
HEALTH CARE 11.25%
OTHER 4.72%
TECHNOLOGY 12.52%
</TABLE>
* Based on total net assets of the Fund as of 10/31/99.
<PAGE>
ORBITEX FOCUS 30 FUND 4
- --------------------------------------------------------------------------------
Schedule of Investments
October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
- ----------------------------------------------------------------
COMMON STOCKS--95.28%
BASIC MATERIALS--11.80%
Alcoa Inc. 8,025 $ 487,519
DuPont (E.I.) de Nemours and Co. 9,600 618,600
International Paper Co. 10,425 548,616
Union Carbide Corp. 8,650 527,650
-----------
2,182,385
-----------
CAPITAL GOODS--20.50%
AlliedSignal Inc. 7,875 448,383
Boeing Co. 9,550 439,897
Caterpillar Inc. 7,500 414,375
General Electric Co. 8,525 1,155,670
Minnesota Mining & Manufacturing Co. 8,300 789,019
United Technologies Corp. 9,000 544,500
-----------
3,791,844
-----------
COMMUNICATION SERVICES--1.57%
AT&T Corp. 6,200 289,874
-----------
CONSUMER CYCLICALS--9.22%
Eastman Kodak Co. 7,700 530,819
General Motors Corp. 8,125 570,781
Wal-Mart Stores Inc. 10,575 604,097
-----------
1,705,697
-----------
CONSUMER STAPLES--11.00%
Coca-Cola Co. 7,225 426,275
Disney (Walt) Co. 13,750 362,656
McDonald's Corp. 8,525 351,656
Procter & Gamble Co. 8,525 894,059
-----------
2,034,646
-----------
ENERGY--3.41%
Exxon Corp. 8,525 631,383
-----------
FINANCIAL--14.01%
American Express Co. 8,075 1,243,550
Citigroup Inc. 9,000 487,125
J.P. Morgan & Co. 6,575 860,503
-----------
2,591,178
-----------
HEALTH CARE--11.25%
Amgen Inc. (a) 7,525 600,119
Johnson & Johnson 7,675 803,956
Merck & Co., Inc. 8,525 678,270
-----------
2,082,345
-----------
TECHNOLOGY--12.52%
America Online, Inc. 3,000 389,062
Hewlett-Packard Co. 6,025 446,226
International Business Machines Corp. 8,650 850,944
Microsoft Corp. (a) 6,800 629,425
-----------
2,315,657
- ----------------------------------------------------------------
TOTAL COMMON STOCKS--(cost $12,573,451) 17,625,009
- ----------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
ORBITEX FOCUS 30 FUND 5
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----
SHORT TERM INVESTMENTS (cost $497,000)--2.68%
<S> <C> <C>
TIME DEPOSIT--2.68%
State Street Bank and Trust Co., 4.875%,
due 11/1/1999 $497,000 $ 497,000
- ----------------------------------------------------------------
TOTAL INVESTMENTS (cost $13,070,451)--97.96% 18,122,009
- ----------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES--2.04% 376,598
- ----------------------------------------------------------------
NET ASSETS--100.00% $18,498,607
- ----------------------------------------------------------------
</TABLE>
(a) Denotes non-income producing security
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
ORBITEX FOCUS 30 FUND 6
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (Note 2).................... $17,625,009
Short term investments (Note 2)................................. 497,000
- -------------------------------------------------------------------------------
Total investments............................................... 18,122,009
- -------------------------------------------------------------------------------
Cash............................................................ 283
Receivable for securities sold.................................. 914,411
Interest and dividends receivable............................... 9,758
Receivable for fund shares sold................................. 2,600
Receivable due from adviser (Note 3)............................ 55,738
Prepaid expenses and other assets............................... 45,892
- -------------------------------------------------------------------------------
TOTAL ASSETS.................................................... 19,150,691
- -------------------------------------------------------------------------------
LIABILITIES
Payable for securities purchased................................ 422,448
Payable for fund shares redeemed................................ 9,711
Payable for trustee fees (Note 3)............................... 848
Accrued reserve liability....................................... 144,280
Accrued expenses and other liabilities.......................... 74,797
- -------------------------------------------------------------------------------
TOTAL LIABILITIES............................................... 652,084
- -------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (NOTE 8)..........................
- -------------------------------------------------------------------------------
NET ASSETS...................................................... $18,498,607
- -------------------------------------------------------------------------------
NET ASSETS
Paid-in capital................................................. $11,366,464
Accumulated net realized gain on investments.................... 2,080,585
Net unrealized appreciation on investments...................... 5,051,558
- -------------------------------------------------------------------------------
NET ASSETS...................................................... $18,498,607
- -------------------------------------------------------------------------------
CLASS A SHARES:
Net assets...................................................... $ 60,079
Net asset value per share (based on shares of beneficial
interest outstanding, no par value per share)................. $ 21.96
Maximum sales charge (Note 1)................................... 5.75%
- -------------------------------------------------------------------------------
Offering price per share........................................ $ 23.30
- -------------------------------------------------------------------------------
Total shares outstanding at end of period....................... 2,736
- -------------------------------------------------------------------------------
CLASS B SHARES:
Net assets...................................................... $ 9,875
Net asset value and offering price per share (based on shares of
beneficial interest outstanding,
no par value per share)....................................... $ 21.94
- -------------------------------------------------------------------------------
Total shares outstanding at end of period....................... 450
- -------------------------------------------------------------------------------
CLASS D SHARES:
Net assets...................................................... $18,428,653
Net asset value and offering price per share (based on shares of
beneficial interest outstanding,
no par value per share)....................................... $ 21.97
- -------------------------------------------------------------------------------
Total shares outstanding at end of period....................... 838,663
- -------------------------------------------------------------------------------
INVESTMENTS, AT COST............................................ $13,070,451
- -------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
7
ORBITEX FOCUS 30 FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the Year Ended October 31, 1999 (a)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividend income.................................................. $ 379,099
Interest income.................................................. 10,114
- -------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME.......................................... 389,213
- -------------------------------------------------------------------------------
EXPENSES
Reserve expense (Notes 2 and 3).................................. 474,938
Professional fees................................................ 197,387
General operating expense (Note 3)............................... 81,875
Investment adviser fee (Note 3).................................. 53,750
Transfer agent fee (Note 3)...................................... 40,559
Custodian fee.................................................... 36,791
Printing expense................................................. 34,454
Registration fees................................................ 28,454
Trustees' fee (Note 3)........................................... 24,848
Administration fee (Note 3)...................................... 23,958
Distribution fees (Note 3):
Class A Shares................................................. 34
Class B Shares................................................. 16
Miscellaneous expense............................................ 10,151
- -------------------------------------------------------------------------------
Total expenses before waivers and reimbursements................. 1,007,215
Expenses waived and reimbursed (Note 3).......................... (295,957)
- -------------------------------------------------------------------------------
NET EXPENSES..................................................... 711,258
- -------------------------------------------------------------------------------
NET INVESTMENT LOSS.............................................. (322,045)
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments................................. 3,402,567
Net change in unrealized appreciation on investment
transactions................................................... 2,685,880
- -------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN................................. 6,088,447
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. $5,766,402
- -------------------------------------------------------------------------------
</TABLE>
(a) This information prior to July 12, 1999 reflects the operations of the ASM
Index 30 Fund, Inc.
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
8
ORBITEX FOCUS 30 FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended October 31,
-------------------------
1999 (a) 1998 (a)
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss)............ $ (322,045) $ 527,096
Net realized gain on investments........ 3,402,567 3,568,516
Net change in unrealized appreciation
(depreciation) on investment
transactions.......................... 2,685,880 592,550
- -------------------------------------------------------------------
Net increase in net assets resulting
from operations....................... 5,766,402 4,688,162
- -------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO CLASS D
SHAREHOLDERS FROM:
Net investment income................... -- (453,542)
Net realized gains...................... (1,720,263) (1,846,825)
- -------------------------------------------------------------------
Total dividends and distributions to
shareholders.......................... (1,720,263) (2,300,367)
- -------------------------------------------------------------------
Fund Share Transactions (Note 6)........ (15,082,593) 6,020,444
- -------------------------------------------------------------------
Total Increase (Decrease) in Net
Assets................................ (11,036,454) 8,408,239
- -------------------------------------------------------------------
NET ASSETS:
Beginning of year....................... 29,535,061 21,126,822
- -------------------------------------------------------------------
End of year............................. $ 18,498,607 $29,535,061
- -------------------------------------------------------------------
Undistributed net investment income
(loss) at end of year................. $ -- $ 73,554
- -------------------------------------------------------------------
</TABLE>
(a) This information prior to July 12, 1999 reflects the operations of the ASM
Index 30 Fund, Inc.
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
ORBITEX FOCUS 30 FUND 9
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data based on a share outstanding throughout each period indicated
<TABLE>
<CAPTION>
Class A Shares Class B Shares
----------------------- -----------------------
For the Period For the Period
Ended Ended
October 31, 1999 (a) October 31, 1999 (a)
----------------------- -----------------------
<S> <C> <C>
Net asset value, beginning of period.... $22.76 $22.76
------ ------
Loss from investment operations:
Net investment loss................... (0.08) (0.10)
Net realized and unrealized loss on
investments......................... (0.72) (0.72)
------ ------
Total loss from investment
operations.......................... (0.80) (0.82)
------ ------
Less distributions from net investment
income................................ -- --
Less distributions in excess of net
income................................ -- --
Less distributions from net realized
gains................................. -- --
------ ------
Total distributions from net
investment income and net realized
gains............................... -- --
------ ------
Net asset value, end of period.......... $21.96 $21.94
====== ======
Total Return(b)......................... (3.51)% (3.60)%
Ratios and Supplemental Data:
Net assets, end of period
(in 000's).......................... $ 60 $ 10
Ratio of expenses to average net
assets(c)(d)........................ 3.58% 4.58%
Ratio of total expenses to average net
assets before waivers and
reimbursements(c)................... 6.22% 7.28%
Ratio of net investment loss to
average net assets(c)............... (2.60)% (3.53)%
Portfolio turnover rate............... 61% 61%
</TABLE>
- ---------------
(a) The commencement of investment operations was July 12, 1999 for Class A and
B shares.
(b) Total returns are historical and assume changes in share price,
reinvestment of dividends and capital gains distributions, and assume no
sales charge. Had the Adviser and Administrator not absorbed a portion of
the expenses, total returns would have been lower. Total returns for
periods less than one year are not annualized.
(c) Annualized.
(d) Ratio includes amounts relating to the general reserve expense recognized
in the period (see Notes 2 and 3). If such expenses had not been incurred,
the ratios of expenses to average net assets for Classes A and B would be
1.00% and 1.60%, respectively.
- --------------------------------------------------------------------------------
<PAGE>
10
ORBITEX FOCUS 30 FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data based on a share outstanding throughout each period indicated
<TABLE>
<CAPTION>
Class D Shares (a)
-----------------------------------------------
Year Ended October 31
-----------------------------------------------
1999 1998 1997 1996 1995 (e)
-------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 19.02 $ 17.21 $ 14.13 $11.37 $ 9.78
------- ------- ------- ------ ------
Income (Loss) from
investment operations:
Net investment income
(loss)............... (0.27) 0.32 0.18 0.08 --
Net realized and
unrealized gain on
investments.......... 4.62 2.54 3.34 2.76 1.77
------- ------- ------- ------ ------
Total income from
investment
operations........... 4.35 2.86 3.52 2.84 1.77
------- ------- ------- ------ ------
Less distributions from
net investment
income................. -- (0.27) (0.18) (0.07) (0.05)
Less distributions in
excess of net income... -- -- (0.11) (0.01) (0.13)
Less distributions from
net realized gains..... (1.40) (0.78) (0.15) -- --
------- ------- ------- ------ ------
Total distributions
from net investment
income and net
realized gains....... (1.40) (1.05) (0.44) (0.08) (0.18)
------- ------- ------- ------ ------
Net asset value, end of
period................. $ 21.97 $ 19.02 $ 17.21 $14.13 $11.37
======= ======= ======= ====== ======
Total Return(b).......... 24.08% 17.13% 25.18% 25.01% 18.10%
Ratios and Supplemental
Data:
Net assets, end of
period (in 000's).... $18,429 $29,535 $21,127 $9,315 $9,704
Ratio of expenses to
average net
assets(c)............ 3.11% 0.18% 0.42% 1.86% 3.01%(d)
Ratio of total expenses
to average net assets
before waivers and
reimbursements(c).... 4.41% 0.91% 1.05% 2.59% 5.77%
Ratio of net investment
income (loss) to
average net assets... (1.41)% 1.60% 1.51% 0.53% 0.04%
Portfolio turnover
rate................. 61% 196% 265% 391% 340%
</TABLE>
- ---------------
(a) This information prior to July 12, 1999 reflects the operations of the ASM
Index 30 Fund, Inc., which was reorganized into Class D shares of the
Orbitex Focus 30 Fund.
(b) Total returns are historical and assume changes in share price,
reinvestment of dividends and capital gains distributions, and assume no
sales charge. Had the Adviser and Administrator not absorbed a portion of
the expenses, total returns would have been lower.
(c) Ratio includes amounts relating to the general operating expense and
general reserve expense recognized as a result of the termination of the
investment advisory agreement with the former Adviser (see Note 3). If such
expenses had not been incurred, the ratio of expense to average net assets
would be 1.97% before waivers and reimbursements and 1.03% after waivers
and reimbursements.
(d) Includes $50,460 of interest expense not subject to expense reimbursement
agreement.
(e) Audited by predecessor auditor.
- --------------------------------------------------------------------------------
<PAGE>
ORBITEX FOCUS 30 FUND 11
- --------------------------------------------------------------------------------
Notes to Financial Statements
October 31, 1999
- ----------------------------------------
- ----------------------------------------
1. ORGANIZATION
Orbitex Group of Funds (the "Trust") was incorporated in Delaware in December
1996 and is registered under the Investment Company Act of 1940 (the "1940
Act"), as amended, as an open-end management investment company. The Trust is
comprised of six funds including the Focus 30 Fund (the "Fund"). The Financial
Statements for the remaining five portfolios are presented separately. The Fund
operates as a diversified investment company. The objective of the Fund is
long-term growth of capital and current income through focused investment in the
securities of some or all of the 30 companies listed on the New York Stock
Exchange that make up the Dow Jones Industrial Average. The Fund is not an index
fund.
Prior to the close of business on July 9, 1999, the Fund operated as a separate
fund called the ASM Index 30 Fund ("ASM"). On July 9, 1999, ASM was reorganized
as a new portfolio of the Trust and existing shareholders of ASM received
Class D shares of the Fund in exchange for their shares of ASM.
The Fund currently offers Class A, Class B and Class D Shares. Class A Shares
are offered at net asset value plus a maximum sales load of 5.75%. Class B
Shares are offered subject to a contingent deferred sales charge and will
automatically convert to Class A Shares after six years. Class D Shares are only
available to shareholders who previously were shareholders of ASM at the time of
the reorganization as of the close of business on July 9, 1999 (see Note 9) and
certain institutional investors. Class D Shares are offered at net asset value.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements:
SECURITY VALUATION AND TRANSACTIONS
Equity securities are valued at the last sale price on the exchange or in the
over-the-counter market in which such securities are primarily traded, as of the
close of business on the day the securities are being valued, or lacking any
sales, the last available bid price. Short-term debt investments with maturities
less than 60 days are valued at amortized cost or original cost plus accrued
interest, each of which approximates fair value.
Securities for which current market quotations are not readily available or for
which quotations are not deemed by Orbitex Management, Inc. (the "Adviser") to
be representative of market values are valued at fair value as determined in
good faith by or under the direction of the Trustees.
Investment security transactions are accounted for as of the trade date. Cost is
determined and gains and losses are based upon the specific identification
method for both financial statement and federal income tax purposes.
INCOME TAXES'
It is the Fund's policy to comply with all sections of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
taxable income and gains to its shareholders and therefore, no provision for
federal income tax has been made.
INVESTMENT INCOME
Corporate actions (including cash dividends) are recorded on the ex-dividend
date. Interest income is recorded on the accrual basis. The value of additional
securities received as interest or dividend payments is recorded as income and
as the cost basis of such securities.
EXPENSES
Expenses of the Trust, which are directly identifiable to a specific fund, are
charged to that fund. Expenses, which are not readily identifiable to a specific
fund, are allocated in such a manner as
<PAGE>
ORBITEX FOCUS 30 FUND 12
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
October 31, 1999
- ----------------------------------------
- ----------------------------------------
deemed equitable, taking into consideration the nature and type of expense and
the relative sizes of the funds. The Fund's income, expenses (other than the
class specific distribution fees) and realized and unrealized gains and losses
are allocated proportionally each day between the classes based upon the
relative net assets of each class.
RESERVE EXPENSE
On December 23, 1998, at a meeting of the independent members of the ASM Board,
the Directors voted to notify Vector Index Advisors, Inc. ("Vector"), the prior
adviser, of the termination of its advisory agreement which became effective on
February 28, 1999. During this interim period, the Directors solicited proposals
from other funds and advisers and considered alternative arrangements for the
Fund. Such alternatives included the approval of a new advisory relationship
with another adviser, the reorganization of the Fund with another fund or, in
the absence of such options, the termination of the Fund and distribution of its
assets to the shareholders. The Directors established a reserve for the expenses
of implementing such alternatives and for fee waivers by Vector under the then
current advisory agreement, which were doubtful as to their collection (see
Note 3). Prior to the Fund's reorganization as of the close of business on
July 9, 1999, certain legal proceedings were initiated against the Fund (see
Note 8) which caused the Directors to re-evaluate and increase the reserve
expense for the ongoing legal fees associated with defending the claims.
Included in the reserve expense account for the year ended October 31, 1999 are
legal expenses related to the Fund's defense in these suits.
DISTRIBUTIONS TO SHAREHOLDERS
Income will normally be declared and distributed quarterly for the Fund. The
Fund declares and pays net realized capital gain distributions annually. The
character of income and gains to be distributed is determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to the timing of the recording
of certain expenses and realized losses.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. In a repurchase agreement, the
Fund buys a security and the seller simultaneously agrees to repurchase the
security on a specified future date at an agreed-upon price. The repurchase
price reflects an agreed-upon interest rate during the time the Fund's money is
invested in the security. Because the security constitutes collateral for the
repurchase obligation, a repurchase agreement can be considered a collateralized
loan. The Fund's risk is the ability of the seller to pay the agreed-upon price
on the maturity date. If the seller is unable to make a timely repurchase, the
Fund could experience delays in the receipt of expected proceeds, suffer a loss
in principal or current interest, or incur costs in liquidating the collateral.
The Trustees have established criteria to evaluate the creditworthiness of
parties with which the Fund may enter into repurchase agreements.
3. FEES AND COMPENSATION PAID TO AFFILIATES AND OTHER PARTIES
ADVISORY FEES
On March 1, 1999, the Fund entered into an Investment Advisory Agreement with
Orbitex Management, Inc. (the "Adviser"). As compensation for services rendered,
facilities furnished and expenses incurred, the Fund paid the Adviser a fee
accrued daily and payable monthly at an annualized rate of .08% of the Fund's
average daily net assets for the period March 1, 1999 to July 12, 1999.
Effective July 12,1999, the advisory fee rate was increased to an annualized
rate of .75%. Prior to March 1, 1999, the Fund had an Investment Advisory
Agreement with Vector under which it paid Vector a fee at an annualized rate of
.08% of the Fund's average daily net assets.
Commencing July 12, 1999, the Adviser has contractually agreed to waive or
reimburse the Fund's operating expenses to the extent necessary to limit
expenses, excluding extraordinary or non-recurring expenses and distribution
fees, to .60% of the Fund's average daily net assets through January 1, 2000 and
.75% until July 1, 2000. Under the prior Investment Advisory Agreement in effect
through
<PAGE>
ORBITEX FOCUS 30 FUND 13
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
October 31, 1999
- ----------------------------------------
- ----------------------------------------
February 28, 1999, Vector voluntarily agreed to limit expenses of the Fund to
.18% of the Fund's average daily net assets.
For the period July 12, 1999 through October 31, 1999, the Adviser waived fees
and reimbursed expenses of approximately $129,000. For the period November 1,
1999 through February 28, 1999, Vector waived fees and expenses of approximately
$155,000 which were determined to be uncollectible from Vector and were written
off, net of management fees due Vector, through the reserve expense.
Due to Vector's inability to meet its financial commitments, the Fund incurred
operating expenses of $81,875 for salaries, rent and other administrative
expenses, normally payable by Vector, to continue the management of the Fund
prior to the commencement of the Advisory Agreement with the Adviser.
ADMINISTRATION, FUND ACCOUNTING AND TRANSFER AGENT FEES
Effective July 12, 1999, American Data Services, Inc. ("ADS"), an affiliate of
the Adviser, serves as the administrator, fund accounting agent and transfer
agent to the Fund. For providing administrative services, the Fund pays ADS a
fee at the annualized rate of .10% of the Fund's average daily net assets up to
$100 million and at reduced percentages thereafter; a minimum fee applies. For
providing fund accounting services, the Fund pays ADS a fixed monthly fee for
average net assets less than $25 million plus out-of-pocket expenses. For
providing transfer agent services, the Fund pays ADS a minimum monthly or per
account fee plus certain transaction fees.
ADS has agreed to waive certain of its service fees up to $44,000 annually and
at reduced amounts for Fund assets between $20 and $50 million for a period up
to three years. For the period July 12, 1999 through October 31, 1999, the Fund
incurred fees to ADS of approximately $29,000 of which ADS waived $11,000. Prior
to July 12, 1999, Mutual Funds Service Company served as the Fund's
Administrator.
DISTRIBUTION FEES
The Fund has adopted Distribution Plans and Agreements pursuant to Rule 12b-l
under the 1940 Act. The Plans and Agreements provide for the payment of a
distribution fee to the distributor at an annualized rate of .40% and .75% of
the average daily net assets attributable to the shares of Class A and Class B,
respectively. The Plan and Agreement for Class B also provides for the payment
of a shareholder service fee at an annualized rate of .25% of the average daily
net assets attributable to the shares of Class B. Class D shares do not pay any
12b-1 distribution or shareholder service fee.
TRUSTEES FEES
The Fund pays no compensation to its Trustees who are employees of the Adviser.
Trustees who are not Adviser employees receive a fee of $1,250 for each regular
and special meeting of the Board that the Trustee attends. The Fund also
reimburses each such Trustee for travel and other expenses incurred in attending
meetings of the Board.
4. AGGREGATE UNREALIZED APPRECIATION AND DEPRECIATION
The identified cost of investments in securities owned by the Fund for federal
income tax purposes, and their respective gross unrealized appreciation and
depreciation at October 31, 1999, were as follows:
<TABLE>
<CAPTION>
GROSS GROSS NET
IDENTIFIED UNREALIZED UNREALIZED UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
- ----------- ------------ ------------ ------------
<S> <C> <C> <C>
$13,329,049.. $4,911,243 $(118,283) $4,792,960
</TABLE>
5. INVESTMENT TRANSACTIONS
The cost of purchases and the proceeds from sales of investments, other than
U.S. Government obligations and short-term securities, for the year ended
October 31, 1999, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- ----------- -----------
<S> <C>
$14,124,886.. $31,580,249
</TABLE>
There were no purchases and sales of U.S. Government obligations.
<PAGE>
ORBITEX FOCUS 30 FUND 14
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
October 31, 1999
- ----------------------------------------
- ----------------------------------------
6. SHAREHOLDER'S TRANSACTIONS
Following is a summary of shareholder transactions for the Fund:
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31, 1999*
--------------------------
SHARES DOLLARS
---------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares sold.............. 2,818 $ 63,428
Shares issued to
shareholders in
reinvestment........... -- --
Shares redeemed.......... (82) (1,802)
---------- ------------
Net increase........... 2,736 $ 61,626
========== ============
<CAPTION>
PERIOD ENDED
OCTOBER 31, 1999*
--------------------------
SHARES DOLLARS
---------- ------------
<S> <C> <C> <C> <C>
CLASS B SHARES:
Shares sold.............. 450 $ 10,023
Shares issued to
shareholders in
reinvestment........... -- --
Shares redeemed.......... -- --
---------- ------------
Net increase........... 450 $ 10,023
========== ============
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
-------------------------- ------------------------
SHARES DOLLARS SHARES DOLLARS
---------- ------------ --------- -----------
<S> <C> <C> <C> <C>
CLASS D SHARES:
Shares sold.............. 551,613 $ 11,302,402 4,211,829 $79,003,347
Shares issued to
shareholders in
reinvestment........... 89,132 1,682,128 99,745 1,766,644
Shares redeemed.......... (1,354,990) (28,138,772) (3,986,563) (74,749,547)
---------- ------------ --------- -----------
Net increase
(decrease)........... (714,245) $(15,154,242) 325,011 $ 6,020,444
========== ============ ========= ===========
</TABLE>
* The commencement of operations was July 12, 1999 for Class A and B Shares.
7. BENEFICIAL INTEREST
At October 31, 1999, one shareholder owned approximately 17% of the Fund's net
assets. There were no affiliated shareholders as of October 31, 1999.
8. COMMITMENTS AND CONTINGENCIES -- LEGAL PROCEEDINGS
On February 8, 1999 and on June 2, 1999, suits were filed in the Thirteenth
Judicial Circuit Court, Hillsborough County, Florida, against Steven H. Adler, a
former director and officer of ASM, Vector, the ASM Index 30 Fund, and, in the
case of the latter suit, Mutual Funds Service Co., the former administrator,
fund accountant, and transfer agent, alleging that Mr. Adler wrongfully diverted
monies intended for or previously invested in the ASM Index 30 Fund. The relief
sought is the recovery of the investment amounts and interest thereon,
additional general, consequential and incidental damages, legal costs and
disbursements, and declaratory and injunctive relief to preclude the Fund
dissipation of its assets. The Fund succeeded to the obligations of ASM with
respect to these suits, including obligations of ASM to indemnify its officers
and directors for which no officers and directors' insurance policy was in
effect. At the present time, the liability of the Fund, if any, is not readily
determinable.
<PAGE>
ORBITEX FOCUS 30 FUND 15
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
October 31, 1999
- ----------------------------------------
- ----------------------------------------
9. REORGANIZATION
As of the close of business on July 9, 1999, the Fund, a newly created
portfolio, acquired all the net assets of ASM pursuant to a plan of
reorganization approved by the shareholders of ASM on July 2, 1999. The
acquisition was accomplished by a tax-free exchange, the details of which are
outlined in the following schedule:
<TABLE>
<CAPTION>
AT CLOSE OF BUSINESS JULY 9, 1999
---------------------------------------
ASM FOCUS 30 -- CLASS D SHARES MERGED ASSETS -- CLASS D SHARES
----------- -------------------------- -------------------------------
<S> <C> <C> <C>
Net Assets............ $19,898,870 -0- $19,898,870
Shares Outstanding.... 874,960 -0- 874,960
Net Asset Value Per
Share............... $ 22.74 -0- $ 22.74
</TABLE>
<PAGE>
ORBITEX FOCUS 30 FUND 16
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of Orbitex Focus 30 Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Orbitex Focus 30 Fund (the
"Fund"), successor to the ASM Index 30 Fund, Inc., at October 31, 1999, and the
results of its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
As disclosed in Note 8 to the financial statements, on February 8, 1999 and
June 2, 1999, suits were filed alleging that a former officer and director of
the ASM Index 30 Fund, Inc. wrongfully diverted monies intended for or
previously invested in the Fund. The relief sought is recovery of the investment
amounts and interest thereon, additional general, consequential and incidental
damages, legal costs and disbursements, and declaratory and injunctive relief to
preclude the Fund dissipation of its assets. At the present time, the liability
of the Fund, if any, is not readily determinable nor is it readily determinable
whether other individuals may file additional suits or make additional claims
alleging similar improprieties. Accordingly, no provision for any liability that
may result upon adjudication has been recorded in the accompanying financial
statements.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 27, 1999
<PAGE>
ORBITEX FOCUS 30 FUND 17
- --------------------------------------------------------------------------------
Meeting of Shareholders
Orbitex Group of Funds (unaudited)
- --------------------------------------------------------------------------------
A special meeting of the shareholders of ASM was held on July 2, 1999 for the
principal purpose of voting to merge the assets and liabilities of the Fund into
the Focus 30 Fund in a tax-free reorganization. The resulting votes are
presented below:
<TABLE>
<CAPTION>
# OF SHARES VOTED % OF SHARES VOTED
----------------------------------------------------------- -----------------
<S> <C> <C>
Affirmative............................. 573,998 51.960%
Withheld................................ 68,237 6.180
Against................................. 38,225 3.450
------- ------
Total................................... 680,460 61.590%
======= ======
</TABLE>
