<PAGE>
[Graphic Omitted]
THE BERKSHIRE FUNDS
the year:2000
semi-annual report
[Graphic Omitted]
Silicon Valley
BERKSHIRE FOCUS + TECHNOLOGY FUNDS
<PAGE>
[Graphic Omitted]
<PAGE>
*
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FROM OUR PERSPECTIVE WE SEE A WORLD OF UNLIMITED INVESTMENT OPPORTUNITIES.
Right now, at this very moment, the companies we have invested in are working
hard on your behalf to create shareholder value. How do we find such dedicated
companies? You can start with our strategic location in Silicon Valley. You
see, from our vantage point we have a front row seat to the greatest
technological revolution mankind has ever seen. So if there is a company
positioned to benefit from the revolution, you can bet there's a good chance
we already know about them. Striving to find the best investment opportunities
for your money has always been the key to our success.
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*
Cover: The securities listed should not be construed as a recommendation to
purchase or sell a particular security and may not be representative of the
Funds' current or future investments.
<PAGE>
*
-------------------------------
LETTER TO THE SHAREHOLDERS
Dear Shareholder,
The first half of 2000 will surely be remembered as one of the most
volatile periods in the history of U.S. financial markets. We are pleased to
report, however, that our funds continued to deliver outstanding results for
our shareholders despite the extreme market swings that characterized the
period. Moreover, the performance of our funds demonstrates the importance of
staying focused on companies with strong underlying fundamentals during times
of market instability. Amid the market's uncertainty, we remained steadfast in
our goal of identifying companies that can deliver shareholder value in any
economic environment.
The first quarter witnessed the continued ascent of the Nasdaq Composite
Index, as investors embraced technology stocks with unbridled enthusiasm.
Against the backdrop of strong economic growth and rising interest rates,
investors tossed out all valuation concerns and technology stocks soared to
record heights. Conversely, the Dow Jones Industrial Average declined during
this period as investors rotated out of "old economy" stocks and into
faster-growing technology stocks.
The beginning of March marked the peak of the Nasdaq Composite Index.
Investors' euphoria for technology stocks had reached speculative levels.
Market sentiment shifted quickly, however, after a series of economic reports
revealed that the economy's strong growth showed few signs of slowing. The
Federal Reserve, which had already raised interest rates a quarter-point in
February, looked ready to embark on yet another series of tightenings. It was
not long before investor enthusiasm gave way to fear, and technology stocks
began their rapid descent.
<PAGE>
*
-------------------------------------------
5
The market downturn that took hold in the second quarter inflicted heavy
damage on technology stocks. From peak to trough, the Nasdaq Composite Index
lost 37% of its value, making it one of the most precipitous declines in stock
market history. Meanwhile, the Dow Jones Industrial Average managed to recoup
nearly all of its earlier losses, as investors redirected their attention back
to undervalued "old economy" stocks. Throughout this challenging period, the
Federal Reserve continued its resolve to slow the economy by raising interest
rates another quarter-point in March, followed by a half-point increase in
May. By the end of the quarter, the markets had settled into a trading range
and technology stocks managed to finish on a positive note.
Although the markets experienced a setback during the period, we remain
confident that valuations were realigned with prevailing fundamentals. In
addition, we were pleased with our ability to take advantage of the market's
dislocations by adding to our positions at substantial discounts. As we look
ahead, we remain very optimistic about the long-term prospects for the equity
markets. Moreover, we anticipate the economy will continue to grow at a robust
rate with relatively low inflation. Our focus, as always, will be to identify
those companies that are poised to benefit from the powerful trends emerging
from the marketplace. We believe our in-depth research combined with our
strategic location in Silicon Valley will enable us to continue to find the
best investment opportunities for your money.
We appreciate your confidence in our abilities and thank you for your
investment in the Berkshire Funds.
Malcolm R. Fobes III
/s/ Malcolm R. Fobes III
Portfolio Manager
Berkshire Focus Fund
Berkshire Technology Fund
<PAGE>
[Graphic Omitted]
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*
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BERKSHIRE FOCUS FUND
Performance and Portfolio Discussion
6/30/2000
<PAGE>
*
-------------------------------------------
FOCUS FUND'S RELATIVE PERFORMANCE
Growth of a hypothetical $10,000 investment since inception (July 1, 1997)
FOCUS FUND vs. THE S&P 500 INDEX
[GRAPHIC OMITTED]
S&P 500 BERKSHIRE FOCUS
INDEX FUND
MONTH $ AMOUNT $ AMOUNT
------ --------- -------------
JUN-97 $10,000 $ 10,000
JUL-97 10,795 10,000
AUG-97 10,191 9,950
SEP-97 10,748 10,050
OCT-97 10,390 9,500
NOV-97 10,870 9,510
DEC-98 11,057 8,738
JAN-98 11,179 9,699
FEB-98 11,985 10,174
MAR-98 12,598 10,174
APR-98 12,725 10,346
MAY-98 12,506 10,043
JUN-98 13,014 11,539
JUL-98 12,876 11,560
AUG-98 11,017 9,314
SEP-98 11,722 11,287
OCT-98 12,675 11,620
NOV-98 13,443 14,078
DEC-98 14,217 17,822
JAN-99 14,811 20,835
FEB-99 14,351 19,177
MAR-99 14,925 22,776
APR-99 15,503 23,740
MAY-99 15,138 20,976
JUN-99 15,977 23,036
JUL-99 15,479 21,735
AUG-99 15,402 24,001
SEP-99 14,980 24,749
OCT-99 15,928 26,884
NOV-99 16,252 31,405
DEC-99 17,208 43,289
JAN-00 16,344 44,376
FEB-00 16,035 62,228
MAR-00 17,602 60,272
APR-00 17,073 53,253
MAY-00 16,723 45,712
JUN-00 17,135 56,317
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. All relative performance data reflect
reinvested dividends.
*
-------------------------------------------
TOP 10 HOLDINGS
SECURITY SYMBOL PERCENT
---------------------------------------------------
PMC-Sierra, Inc. (PMCS) 7.18%
JDS Uniphase Corp. (JDSU) 7.11%
Applied Micro Circuits Corp. (AMCC) 6.15%
Broadcom Corp. (BRCM) 5.45%
Corning, Inc. (GLW) 5.35%
Cisco Systems, Inc. (CSCO) 4.99%
SDL, Inc. (SDLI) 4.83%
Exodus Communications, Inc. (EXDS) 4.79%
Juniper Networks, Inc. (JNPR) 4.52%
EMC Corp. (EMC) 4.16%
Stated as a percentage of total net assets as of 6/30/00.
The holdings information provided should not be construed as a recommendation
to purchase or sell a particular security and may not be representative of the
Fund's current or future investments.
<PAGE>
*
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FOCUS FUND'S PERFORMANCE SUMMARY
Total returns for period ended 6/30/00
<TABLE>
<S> <C> <C> <C> <C>
Since(A)
Year-to-date 1 Year Inception Cumulative(B)
BERKSHIRE FOCUS FUND 30.10% 144.48% 77.82% 463.17%
------------------------------------------------------------------------------------------
Dow Jones Industrial Average (8.45%) (3.31%) 12.69% 43.13%
S&P 500 Index (0.42%) 7.25% 19.64% 71.35%
NASDAQ Composite Index (2.46%) 47.96% 40.52% 177.74%
------------------------------------------------------------------------------------------
</TABLE>
(A) Average annual total return since inception (July 1, 1997).
(B) From July 1, 1997 to June 30, 2000.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. All returns reflect reinvested
dividends.
This Fund may concentrate its investments in the technology industry. As a
result, the Fund is subject to greater risk than more diversified funds
because of its concentration of investments in fewer companies and certain
segments of a single industry.
This Fund's returns have been positively impacted by purchasing technology
companies in a period favorable for these stocks. Investors should maintain
realistic expectations for future performance. Such performance is not
sustainable.
*
-------------------------------------------
HOLDINGS BY SECTOR
[Graphic Omitted]
Semiconductors 36.4%
Fiber Optics 20.0%
Networking 17.8%
Storage Devices 12.5%
Internet Services 5.8%
Computer 3.4%
Software 2.5%
Net Cash 1.6%
Stated as a percentage of total net assets as of 6/30/00.
The holdings by sector are presented to illustrate examples of the sectors
in which the Fund has bought securities and may not be representative of the
Fund's current or future investments.
<PAGE>
*
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FOCUS FUND'S DISCUSSION
We are pleased to report that the Berkshire Focus Fund enjoyed another
period of exceptional performance. We met our goal of delivering superior
returns to our shareholders by posting a gain of 30.10% for the six months
ended June 30, 2000. In comparison, we substantially outperformed our primary
benchmark, the S&P 500 Index, which declined 0.42% for the period.(1) These
strong results helped make the Fund the top-performing (#1 out of 587)
large-cap growth fund for the first half of 2000, according to Lipper, Inc., a
leading mutual fund rating company.(2)
Once again, our heavy weighting in technology stocks was the most
significant contributor to the Fund's solid results. Despite the market's
extreme volatility, we remained focused on our goal of finding investments
that would deliver shareholder value in any economic environment. We were able
to successfully navigate this turbulent period by concentrating our
investments in four sectors - Semiconductors, Fiber Optics, Networking and
Storage Devices. Nearly all of our investments in these categories posted
strong gains for the first half of the year.
Semiconductors were the Fund's most heavily-weighted sector at the end of
the period, representing 36.4% of net assets. PMC-Sierra (PMCS), the Fund's
largest holding, continued to benefit from the explosive growth in demand for
high-performance chipsets to the networking sector. Leading manufacturers of
networking equipment, including Cisco Systems, Nortel Networks and Lucent
Technologies, depend upon PMC-Sierra's communications chips to improve the
transmission speed and performance of their products.(3) As the acceleration
of broadband equipment deployment continues to grow, we expect PMC-Sierra to
continue to reward us with exceptional results. For the period ended June 30,
the company recorded a gain of 121.7%.
At 20.0% of net assets, the Fiber Optics sector had the Fund's
second-largest weighting. Leading the way was our substantial investment in
one of the Fund's long-time winners, JDS Uniphase (JDSU). The company is the
leading manufacturer of active and passive optical components used to increase
the carrying capacity of fiber optic lines. We believe that we are still in
the early stages of the largest transformation of wireline infrastructure in
history - the shift to fiber and photonics from copper and electronics. With
the tremendous growth in data traffic, driven in part by the Internet, JDS
Uniphase is well-positioned to be the sector's primary beneficiary. We saw our
investment in JDS Uniphase increase in value by 48.6% during the first half of
the year.
The Networking sector had the Fund's third-largest weighting at 17.8% of
net assets. Within this segment we were especially pleased with our continued
investment in Cisco Systems (CSCO), the most dominant franchise in the
networking space. Cisco is the world's leading supplier of high-performance
networking equipment used in building out the infrastructure of the Internet.
The company continues to demonstrate spectacular sales and earnings growth by
offering the industry's broadest line of networking products. Cisco now holds
No. 1 or No. 2 market share in virtually every market segment in which it
participates. Recent acquisitions in the optical networking sector should
<PAGE>
*
-------------------------------------------
11
further enhance Cisco's breadth of product offerings while positioning the
company for strong future growth. During the first six months of 2000, the
company's shares appreciated over 18.6%.
The Storage Devices sector represented 12.5% of the Fund's net assets at
the end of the period. This sector was led by our investment in EMC
Corporation (EMC), the world's largest supplier of enterprise storage systems
for mainframes and network file servers. EMC's primary focus is on the Storage
Area Network segment of the market - a dedicated fiber network with storage
systems that retrieve, protect, and store large amounts of data from all major
computing platforms. The exponential increase in data storage requirements,
driven by the growth of the Internet, should continue to fuel strong demand
for EMC's data storage products in the succeeding years. For this reason, we
remain extremely optimistic about the company's prospects. Since the beginning
of the year, EMC's shares have advanced more than 40.8% for the Fund.
Rounding out the Fund's portfolio were the Computer, Internet Services,
and Software sectors - representing 3.4%, 5.8% and 2.5% of net assets
respectively. The net cash position of the Fund was 1.6% at the end of the
period. **
[Graphic Omitted]
(1) All returns include reinvested dividends.
(2) Lipper, Inc. defines a large-cap growth fund as one that "invests at
least 75% of their equity assets in companies with a market
capitalizations (on a three-year weighted basis) of greater than 300%
of the dollar-weighted median market capitalization of the S&P Mid-Cap 400
Index. Large-cap growth funds normally invest in companies with long-term
earnings expected to grow significantly faster than the earnings of the
stocks represented in a major unmanaged stock index. These funds normally
have an above-average price-to-earnings ratio, price-to-book ratio, and
three-year earnings growth figure, compared to the U.S. diversified large-
cap funds universe average." As of June 30, 2000, Berkshire Focus Fund
ranked 1/587 of large-cap growth funds. The ranking is based on total
return, including reinvestment of dividends and capital gains for the
stated period.
(3) Lucent Technologies was not a holding of the Fund as of June 30, 2000.
See pages 8 and 9 for the total returns of the Fund and its respective
benchmarks, including the Dow Jones Industrial Average, S&P 500 Index and the
NASDAQ Composite Index.
Past performance does not guarantee future results.
<PAGE>
*
-------------------------------------------
BERKSHIRE TECHNOLOGY FUND
Performance and Portfolio Discussion
6/30/2000
<PAGE>
[Graphic Omitted]
<PAGE>
*
-------------------------------------------
TECHNOLOGY FUND'S RELATIVE PERFORMANCE
Growth of a hypothetical $10,000 investment
since inception (December 29, 1999)
TECHNOLOGY FUND vs. THE NASDAQ COMPOSITE INDEX
[GRAPHIC OMITTED]
NASDAQ BERKSHIRE
COMPOSITE TECHNOLOGY
INDEX FUND
MONTH $ AMOUNT $ AMOUNT
------ --------- -------------
DEC-99 $10,000 $ 10,000
JAN-00 9,684 10,390
FED-00 11,544 14,610
MAR-00 11,241 13,590
APR-00 9,492 11,840
MAY-00 8,363 10,080
JUN-00 9,754 12,460
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. All relative performance data reflect
reinvested dividends.
*
-------------------------------------------
TOP 10 HOLDINGS
SECURITY SYMBOL PERCENT
---------------------------------------------------
JDS Uniphase Corp. (JDSU) 7.37%
PMC-Sierra, Inc. (PMCS) 6.82%
Applied Micro Circuits Corp. (AMCC) 6.33%
Broadcom Corp. (BRCM) 5.39%
Corning, Inc. (GLW) 5.29%
SDL, Inc. (SDLI) 5.26%
Cisco Systems, Inc. (CSCO) 4.85%
Exodus Communications, Inc. (EXDS) 4.75%
Juniper Networks, Inc. (JNPR) 4.68%
Network Appliance Inc. (NTAP) 4.58%
Stated as a percentage of total net assets as of 6/30/00.
The holdings information provided should not be construed as a recommendation
to purchase or sell a particular security and may not be representative of the
Fund's current or future investments.
<PAGE>
*
-------------------------------------------
TECHNOLOGY FUND'S PERFORMANCE SUMMARY
Total returns for period ended 6/30/00
Year-to-date Cumulative(A)
BERKSHIRE TECHNOLOGY FUND 24.60% 24.60%
-----------------------------------------------------------
Dow Jones Industrial Average (8.45%) (8.34%)
S&P 500 Index (0.42%) (0.03%)
NASDAQ Composite Index (2.46%) (1.79%)
(A) From the inception date of the Fund (December 29, 1999) to June 30, 2000.
Past performance does not guarantee future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. All returns reflect reinvested
dividends.
This Fund concentrates its investments in the technology industry. As a
result, the Fund is subject to greater risk than more diversified funds
because of its concentration of investments in fewer companies and certain
segments of a single industry.
*
-------------------------------------------
HOLDINGS BY SECTOR
[Graphic Omitted]
Semiconductors 34.4%
Fiber Optics 20.6%
Networking 16.1%
Storage Devices 13.6%
Internet Services 5.8%
Software 4.5%
Computer 3.1%
Net Cash 1.9%
Stated as a percentage of total net assets as of 6/30/00.
The holdings by sector are presented to illustrate examples of the sectors
in which the Fund has bought securities and may not be representative of the
Fund's current or future investments.
<PAGE>
*
-------------------------------
TECHNOLOGY FUND'S DISCUSSION
In our first letter to shareholders since the launching of our Technology
Fund in January, we are pleased report that for the six months ended June 30,
2000, the Fund gained 24.60%. In comparison, we substantially outperformed our
primary benchmark, the Nasdaq Composite Index, which declined 2.46% for the
period.(1) These strong results helped make the Fund one of the top-performing
(#10 out of 276) science and technology funds for the first half of 2000,
according to Lipper, Inc., a leading mutual fund rating company.(2)
During the first quarter, we saw a continuation of the strong rally in
technology stocks which began in late October. This trend continued until the
second quarter, when fears of higher interest rates shook the markets,
triggering a violent sell-off in technology stocks. The Fund showed large
swings in value during this period, but finished the first half of the year on
a positive note. We were able to weather the dramatic increase in the market's
volatility by focusing our investments in companies that enable the tremendous
growth of the Internet. These "enabling" companies were concentrated in four
sectors - Semiconductors, Fiber Optics, Networking and Storage Devices.
At 34.4% of the portfolio, Semiconductors had the Fund's largest sector
weighting. One of the top holdings within this sector was our investment in
Applied Micro Circuits Corporation (AMCC), a leading manufacturer of
high-performance, high-bandwidth chipsets used in optical networking
equipment. As demand for bandwidth explodes with the rapid rise in Internet
usage, there are unprecedented growth opportunities for suppliers to the
optical networking market. Applied Micro Circuits has positioned itself as the
supplier of choice to the world's leading optical equipment manufacturers -
Nortel Networks, Cisco Systems, JDS Uniphase, Juniper Networks and Sycamore
Networks. (3) For this reason, we remain extremely optimistic about the
company's prospects going forward. Since our initial purchase at the beginning
of the year, the company's share price has appreciated over 59.1%.
The Fiber Optics sector had the Fund's second-largest weighting,
representing 20.6% of the portfolio. Within this sector, we were especially
excited about our investment in CIENA Corporation (CIEN). The tremendous
growth of Internet data traffic and the subsequent need to expand the capacity
of fiber optic lines have led to strong demand for CIENA's optical transport
systems. These systems alleviate capacity constraints of existing fiber optic
lines without requiring the installation of new fiber. This is made possible
through Dense Wave Division Multiplexing, a new technology which creates up to
96 optical channels in a single strand of fiber where there used to be only
one. That said, we are very pleased with the company's contribution to the
Fund's overall performance. For the period ending June 30, our investment in
CIENA increased by 144.2%.
The Networking sector had the Fund's third-largest weighting at 16.1% of
the portfolio. Reflecting our enthusiasm for this sector was our investment in
Juniper Networks (JNPR), the emerging leader in next-generation Internet
backbone routers. The company's management has successfully carved out a
dominant position in the IP router space through flawless execution and
<PAGE>
*
-------------------------------------------
17
intense focus on winning its core market. As a result, Juniper increased its
share of the router market from 17.3% to 23.6% during the second quarter -
making it the only company to ever take market share away from Cisco Systems.
Going forward, we believe Juniper will continue to gain market share as it
expands its customer base and becomes the routing vendor of choice for service
providers. With a return of over 165.5%, Juniper was the Fund's most
profitable investment for the first half of the year.
The Storage Devices sector represented 13.6% of the Fund's portfolio at
the end of the period. Leading the way was our investment in Network Appliance
(NTAP), the world's largest manufacturer of Network Attached Storage products.
As the demand for storage capacity doubles each year, companies of every size
are turning to Network Appliance's dedicated servers to store and deliver
files over existing local area networks. The company offers its storage
products at a much lower price point than EMC's Storage Area Network products,
allowing it to capture a larger share of the data storage market. This has
resulted in an acceleration of Network Appliance's revenue and earnings growth
rates. For the first six months of the year, the company's strong financial
performance resulted in a return of over 116.8% for the Fund.
Rounding out the Fund's portfolio were the Computer, Internet Services,
and Software sectors - representing 3.1%, 5.8% and 4.5% of net assets
respectively. The net cash position of the Fund was 1.9% at the end of the
period. **
[Graphic Omitted]
(1) All returns include reinvested dividends.
(2) Lipper, Inc. defines a science and technology fund as one that "invests
65% of its equity portfolio in science and technology stocks." As of
June 30, 2000, Berkshire Technology Fund ranked 10/276 of science and
technology funds. The ranking is based on total return, including
reinvestment of dividends and capital gains for the stated period.
(3) Nortel Networks was not a holding of the Fund as of June 30, 2000.
See pages 14 and 15 for the total returns of the Fund and its respective
benchmarks, including the Dow Jones Industrial Average, S&P 500 Index and the
NASDAQ Composite Index.
Past performance does not guarantee future results.
<PAGE>
[Graphic Omitted]
<PAGE>
*
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FINANCIAL STATEMENTS
6/30/2000
<PAGE>
*
-------------------------------
PORTFOLIO OF INVESTMENTS - BERKSHIRE FOCUS FUND
June 30, 2000 (unaudited)
Shares Common Stocks Value
COMPUTER - 3.4% $ 4,781,130
--------------------------------------------------------------------------
52,576 Sun Microsystems, Inc.* 4,781,130
FIBER OPTICS - 20.0% 28,242,725
--------------------------------------------------------------------------
23,265 CIENA Corp.* 3,877,985
27,933 Corning, Inc. 7,538,418
83,585 JDS Uniphase Corp.* 10,019,752
23,867 SDL, Inc.* 6,806,570
INTERNET SERVICES - 5.8% 8,161,817
--------------------------------------------------------------------------
146,533 Exodus Communications, Inc.* 6,749,676
11,942 Inktomi Corp.* 1,412,141
NETWORKING - 17.8% 25,057,626
--------------------------------------------------------------------------
110,653 Cisco Systems, Inc.* 7,033,381
43,734 Juniper Networks, Inc.* 6,366,030
59,664 Nortel Networks Corp. 4,072,068
29,806 Redback Networks, Inc.* 5,305,468
20,663 Sycamore Networks, Inc.* 2,280,679
SEMICONDUCTORS - 36.4% 51,316,688
--------------------------------------------------------------------------
7,698 Applied Materials, Inc.* 697,631
87,818 Applied Micro Circuits Corp.* 8,672,027
35,089 Broadcom Corp., (Class A)* 7,682,298
10,562 Cree, Inc.* 1,410,027
39,142 Intel Corp. 5,232,796
73,789 LSI Logic Corp.* 3,993,830
56,974 PMC-Sierra, Inc.* 10,123,568
62,860 TranSwitch Corp.* 4,852,006
37,455 TriQuint Semiconductor, Inc.* 3,583,975
68,901 Vitesse Semiconductor Corp.* 5,068,530
SOFTWARE - 2.5% 3,527,670
--------------------------------------------------------------------------
31,214 VERITAS Software Corp.* 3,527,670
STORAGE DEVICES - 12.5% 17,607,629
--------------------------------------------------------------------------
19,636 Brocade Communications Systems, Inc.* 3,602,899
76,290 EMC Corp.* 5,869,562
70,187 Network Appliance, Inc.* 5,650,054
28,140 Silicon Storage Technology, Inc.* 2,485,114
TOTAL COMMON STOCKS - 98.4% $ 138,695,285
==========================================================================
(Cost $108,220,179)
*Non-income producing
(See accompanying notes to financial statements)
<PAGE>
*
-------------------------------
PORTFOLIO OF INVESTMENTS - BERKSHIRE FOCUS FUND
June 30, 2000 (unaudited)
Shares Value
CASH EQUIVALENTS - 2.8% $ 3,967,370
--------------------------------------------------------------------------
3,967,370 Firstar Stellar Treasury Fund 3,967,370
TOTAL INVESTMENT SECURITIES - 101.2% 142,662,655
------------------------------------------------------------
(Cost $112,187,549)
LIABILITIES IN EXCESS OF OTHER ASSETS - (1.2%) (1,669,329)
------------------------------------------------------------
NET ASSETS - 100% $ 140,993,326
============================================================
Equivalent to $51.83 per share
(See accompanying notes to financial statements)
<PAGE>
*
-------------------------------
PORTFOLIO OF INVESTMENTS - BERKSHIRE TECHNOLOGY FUND
June 30, 2000 (unaudited)
Shares Common Stocks Value
COMPUTER - 3.1% $ 409,128
--------------------------------------------------------------------------
4,499 Sun Microsystems, Inc.* 409,128
FIBER OPTICS - 20.6% 2,756,238
--------------------------------------------------------------------------
2,192 CIENA Corp.* 365,379
2,615 Corning, Inc. 705,723
8,205 JDS Uniphase Corp.* 983,575
2,460 SDL, Inc.* 701,561
INTERNET SERVICES - 5.8% 773,730
--------------------------------------------------------------------------
13,763 Exodus Communications, Inc.* 633,958
1,182 Inktomi Corp.* 139,772
NETWORKING - 16.1% 2,152,139
--------------------------------------------------------------------------
10,180 Cisco Systems, Inc.* 647,066
4,294 Juniper Networks, Inc.* 625,045
3,191 Redback Networks, Inc.* 567,998
2,827 Sycamore Networks, Inc.* 312,030
SEMICONDUCTORS - 34.4% 4,587,907
--------------------------------------------------------------------------
722 Applied Materials, Inc.* 65,431
8,560 Applied Micro Circuits Corp.* 845,300
3,282 Broadcom Corp., (Class A)* 718,553
1,126 Cree, Inc.* 150,321
7,155 LSI Logic Corp.* 387,264
5,119 PMC-Sierra, Inc.* 909,582
6,169 TranSwitch Corp.* 476,170
3,306 TriQuint Semiconductor, Inc.* 316,343
6,698 Vitesse Semiconductor Corp.* 492,722
2,740 Xilinx, Inc.* 226,221
SOFTWARE - 4.5% 598,805
--------------------------------------------------------------------------
2,058 Ariba, Inc.* 201,781
3,513 VERITAS Software Corp.* 397,024
STORAGE DEVICES - 13.6% 1,813,908
--------------------------------------------------------------------------
2,219 Brocade Communications Systems, Inc.* 407,152
7,357 EMC Corp.* 566,029
7,586 Network Appliance, Inc.* 610,673
2,605 Silicon Storage Technology, Inc.* 230,054
TOTAL COMMON STOCKS - 98.1% $ 13,091,855
==========================================================================
(Cost $11,709,408)
*Non-income producing
(See accompanying notes to financial statements)
<PAGE>
*
-------------------------------
PORTFOLIO OF INVESTMENTS - BERKSHIRE TECHNOLOGY FUND
June 30, 2000 (unaudited)
Shares Value
CASH EQUIVALENTS - 3.3% $ 441,474
--------------------------------------------------------------------------
441,474 Firstar Stellar Treasury Fund 441,474
TOTAL INVESTMENT SECURITIES - 101.4% 13,533,329
------------------------------------------------------------
(Cost $12,150,882)
LIABILITIES IN EXCESS OF OTHER ASSETS - (1.4%) (189,910)
------------------------------------------------------------
NET ASSETS - 100% $ 13,343,419
============================================================
Equivalent to $12.46 per share
(See accompanying notes to financial statements)
<PAGE>
*
-------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)
<TABLE>
<S> <C> <C>
BERKSHIRE BERKSHIRE
FOCUS FUND TECHNOLOGY FUND
ASSETS
-----------------------------------------------------------------------------------------
Investment securities:
At acquisition cost $ 112,187,549 $ 12,150,882
=================================
At market value $ 142,662,655 $ 13,533,329
Cash in bank 205,803 29,189
Interest receivable 19,509 2,040
Receivable for capital shares sold 112,656 8,500
Receivable for securities sold 6,543,609 714,424
---------------------------------
TOTAL ASSETS 149,544,232 14,287,482
---------------------------------
LIABILITIES
-----------------------------------------------------------------------------------------
Payable for capital shares redeemed 174,531 0
Payable for securities purchased 8,166,326 924,525
Accrued expenses 210,049 19,538
---------------------------------
TOTAL LIABILITIES 8,550,906 944,063
---------------------------------
NET ASSETS $ 140,993,326 $ 13,343,419
=========================================================================================
Net assets consist of:
Paid-in-capital $ 120,545,561 $ 13,734,526
Accumulated net investment loss (836,187) (63,098)
Accumulated net realized losses
from security transactions (9,191,154) (1,710,456)
Net unrealized appreciation on investments 30,475,106 1,382,447
---------------------------------
Net assets $ 140,993,326 $ 13,343,419
=================================
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 2,720,504 1,070,815
=================================
Net asset value, offering price and redemption
price per share $ 51.83 $ 12.46
=================================
</TABLE>
(See accompanying notes to financial statements)
<PAGE>
*
-------------------------------
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2000 (unaudited)
<TABLE>
<S> <C> <C>
BERKSHIRE BERKSHIRE
FOCUS FUND TECHNOLOGY FUND
INVESTMENT INCOME
-----------------------------------------------------------------------------------------
Interest $ 70,062 $ 8,782
Dividends(A) 1,241 12
---------------------------------
TOTAL INVESTMENT INCOME 71,303 8,794
---------------------------------
EXPENSES
-----------------------------------------------------------------------------------------
Investment advisory fees 688,800 53,919
Administrative fees 218,690 17,973
---------------------------------
TOTAL EXPENSES 907,490 71,892
---------------------------------
NET INVESTMENT LOSS (836,187) (63,098)
-----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS
-----------------------------------------------------------------------------------------
Net realized losses from security transactions (8,909,854) (1,710,456)
Net change in unrealized appreciation on investments 17,073,458 1,382,447
--------------------------------
NET REALIZED AND UNREALIZED
GAINS (LOSSES) ON INVESTMENTS 8,163,604 (328,009)
--------------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM OPERATIONS $ 7,327,417 $ (391,107)
=================================
</TABLE>
(A) Net of taxes withheld, $24 and $7 respectively.
(See accompanying notes to financial statements)
<PAGE>
*
-------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended June 30, 2000 and December 31, 1999
<TABLE>
<S> <C> <C> <C>
BERKSHIRE BERKSHIRE BERKSHIRE
FOCUS FOCUS TECHNOLOGY
FUND FUND FUND
Six Months Year Six Months
Ended Ended Ended
6/30/00 12/31/99 6/30/00
(unaudited) (unaudited)
FROM OPERATIONS:
-----------------------------------------------------------------------------------------------------------------------
Net investment loss $ (836,187) $ (173,738) $ (63,098)
Net realized losses from security transactions (8,909,854) (135,467) (1,710,456)
Net change in unrealized appreciation on investments 17,073,458 13,297,088 1,382,447
------------------------------------------------------
Net increase (decrease) in net assets from operations 7,327,417 12,987,883 (391,107)
------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
-----------------------------------------------------------------------------------------------------------------------
From net investment income 0 0 0
From net realized gain on investments 0 (73,435) 0
------------------------------------------------------
Decrease in net assets from distributions to shareholders 0 (73,435) 0
------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS:
-----------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 164,086,950 25,616,280 18,106,782
Net asset value of shares issued in reinvestment
of distributions to shareholders 0 64,311 0
Payments for shares redeemed (64,021,333) (5,347,735) (4,382,256)
------------------------------------------------------
Net increase in net assets from capital share transactions 100,065,617 20,332,856 13,724,526
------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 107,393,034 33,247,304 13,333,419
-----------------------------------------------------------------------------------------------------------------------
NET ASSETS:
-----------------------------------------------------------------------------------------------------------------------
Beginning of period 33,600,292 352,988 10,000
------------------------------------------------------
End of period $ 140,993,326 $ 33,600,292 $ 13,343,419
------------------------------------------------------
CAPITAL SHARE ACTIVITY:
-----------------------------------------------------------------------------------------------------------------------
Shares sold 3,251,453 1,051,819 1,452,379
Shares issued on reinvestment of dividends 0 1,644 0
Shares redeemed (1,374,272) (231,614) (382,564)
------------------------------------------------------
Net increase in shares outstanding 1,877,181 821,849 1,069,815
Shares outstanding, beginning of period 843,323 21,474 1,000
------------------------------------------------------
Shares outstanding, end of period 2,720,504 843,323 1,070,815
======================================================
</TABLE>
(See accompanying notes to financial statements)
<PAGE>
*
-------------------------------
<TABLE>
FINANCIAL HIGHLIGHTS - BERKSHIRE FOCUS FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<S> <C> <C> <C> <C>
Six Months Year Year Period (A)(B)
Ended Ended Ended Ended
6/30/00 12/31/99 12/31/98 12/31/97
(unaudited)
NET ASSET VALUE AT BEGINNING OF PERIOD $ 39.84 $ 16.44 $ 8.64 $ 10.00
--------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
--------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.31) (0.31) 0.03 0.10
Net realized and unrealized
gains (losses) on investments 12.30 23.80 8.97 (1.36)
----------------------------------------------------
Total from investment operations 11.99 23.49 9.00 (1.26)
----------------------------------------------------
LESS DISTRIBUTIONS:
--------------------------------------------------------------------------------------------------------
Dividends from net investment income 0.00 0.00 (0.02) (0.10)
Distributions from net realized gains 0.00 (0.09) (1.18) 0.00
----------------------------------------------------
Total distributions 0.00 (0.09) (1.20) (.10)
----------------------------------------------------
NET ASSET VALUE AT END OF PERIOD $ 51.83 $ 39.84 $ 16.44 $ 8.64
========================================================================================================
TOTAL RETURN 30.10%(B) 142.90% 104.17% (12.60%)
========================================================================================================
SUPPLEMENTAL DATA AND RATIOS:
--------------------------------------------------------------------------------------------------------
Net assets at end of period (thousands) $ 140,993 $ 33,600 $ 353 $ 101
Ratio of expenses to average net assets
Before fee waiver 1.98%(C) 1.89% 1.93% 1.00%
After fee waiver 1.98%(C) 1.89% 0.00% 0.00%
Ratio of net investment income (loss)
to average net assets
Before fee waiver (1.82%)(C) (1.71%) (1.66%) 0.12%
After fee waiver (1.82%)(C) (1.71%) 0.26% 1.12%
Portfolio turnover rate 89.5% 155.5% 136.0% 13.0%
(A) Represents the period from the commencement of operations (July, 1 1997) to December 31, 1997.
(B) Not annualized.
(C) Annualized.
</TABLE>
(See accompanying notes to financial statements)
<PAGE>
<TABLE>
*
-------------------------------
FINANCIAL HIGHLIGHTS - BERKSHIRE TECHNOLOGY FUND
Selected Per Share Data and Ratios for a Share Outstanding Throughout Each Period
<S> <C>
Six Months
Ended
6/30/00
(unaudited)
NET ASSET VALUE AT BEGINNING OF PERIOD $ 10.00
-----------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
-----------------------------------------------------------
Net investment loss (0.06)
Net realized and unrealized
gains on investments(A) 2.52
-----
Total from investment operations 2.46
-----
LESS DISTRIBUTIONS:
-----------------------------------------------------------
Dividends from net investment income 0.00
Distributions from net realized gains 0.00
-----
Total distributions 0.00
-----
NET ASSET VALUE AT END OF PERIOD $ 12.46
===========================================================
TOTAL RETURN 24.60%(B)
===========================================================
SUPPLEMENTAL DATA AND RATIOS:
-----------------------------------------------------------
Net assets at end of period (thousands) $ 13,343
Ratio of expenses to average net assets 2.00%(C)
Ratio of net investment loss
to average net assets (1.76%)(C)
Portfolio turnover rate 56.6%
(A) The amount shown may not correlate with aggregate
gains and losses of portfolio securities due to the
timing of subscriptions and redemptions of Fund shares.
(B) Not annualized.
(C) Annualized.
</TABLE>
(See accompanying notes to financial statements)
<PAGE>
*
------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
6/30/2000
<PAGE>
[Graphic Omitted]
<PAGE>
*
------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)
1. Organization
The Focus Fund and Technology Fund (the "Funds") are each a non-diversified
series of The Berkshire Funds (formerly Berkshire Capital Investment Trust)
(the "Trust"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Trust was
organized as a Delaware business trust on November 25, 1996. The Focus Fund
commenced operations on July 1, 1997. The Technology Fund commenced operations
on December 29, 1999. Each Fund's investment objective is to seek long-term
capital appreciation through investments in equity securities.
2. Significant Accounting Policies
The following is a summary of the Funds' significant accounting policies:
Securities valuation - Each Fund's portfolio securities are valued as of the
close of the regular session of trading on the New York Stock Exchange (the
"NYSE"), normally 4:00 p.m., Eastern time. Securities which are traded on
stock exchanges or are quoted by NASDAQ are valued at the last reported sale
price as of the close of the regular session of trading on the NYSE, or, if
not traded, at the most recent bid price. Securities which are traded in the
over-the-counter market, and which are not quoted by NASDAQ, are valued at the
most recent bid price, as obtained from one or more of the major market makers
for such securities. Securities for which market quotations are not readily
available are valued at their fair value as determined in good faith in
accordance with consistently applied procedures established by and under the
general supervision of the Board of Trustees.
Share valuation - The net asset value per share of each Fund is calculated
daily by dividing the total value of the Fund's assets, less liabilities, by
the number of shares outstanding, rounded to the nearest cent. The offering
and redemption price per share is equal to the net asset value per share.
Investment income - Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned.
Distributions to shareholders - Distributions to shareholders arising from net
investment income and net realized capital gains, if any, are distributed at
least once each year. Dividends from net investment income and capital gain
distributions are determined in accordance with income tax regulations, which
may differ from generally accepted accounting principles.
Security transactions - Security transactions are accounted for on the trade
date. Securities sold are determined on a specific identification basis.
<PAGE>
*
------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)
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 (the "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 and 98% of its
net realized capital gains plus undistributed amounts from prior years.
3. Investment Transactions
Purchases and sales of investment securities (excluding short-term
instruments) for the six months ended June 30, 2000 were as follows:
Focus Fund Technology Fund
Purchases $ 178,655,933 $ 17,357,084
Sales $ 80,794,885 $ 3,937,220
There were no purchases or sales of U.S. Government Securities for the six
months ended June 30, 2000.
Unrealized appreciation (depreciation) at June 30, 2000 based on cost of
securities for Federal tax purposes is as follows:
Focus Fund Technology Fund
Gross unrealized appreciation $ 31,019,548 $ 1,489,027
Gross unrealized depreciation (3,401,467) (496,113)
-------------- ------------
Net unrealized appreciation $ 27,618,081 $ 992,914
Cost of investments $ 115,044,574 $ 12,540,415
<PAGE>
*
------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)
4. Related Party Transactions, Investment Advisory and Administrative Fees
Certain officers and directors of the Trust are also officers and directors of
Berkshire Capital Holdings, Inc. ("Berkshire Capital").
Each Fund has an Investment Advisory Agreement and a separate Administration
Agreement with Berkshire Capital. Under the terms of the Investment Advisory
Agreement, Berkshire Capital will receive a fee accrued each calendar day
(including weekends and holidays) at a rate of 1.5% per annum of the daily net
assets of each Fund. Under the Administration Agreement, Berkshire Capital
receives a fee as compensation for services rendered, facilities furnished and
expenses assumed at the annual rate of 0.50% of each Fund's average daily net
assets up to $50 million, 0.45% of average net assets from $50 million to $200
million, 0.40% of average net assets from $200 million to $500 million, 0.35%
of average net assets from $500 million to $1 billion, and 0.30% of average
net assets in excess of $1 billion. Such fee is computed as a percentage of
each Fund's daily net assets and are accrued each calendar day (including
weekends and holidays). For the six months ended June 30, 2000, Berkshire
Capital was paid an investment advisory fee of $688,800 and an administration
fee of $218,690 from the Focus Fund. The Technology Fund paid an investment
advisory fee of $53,919 and an administration fee of $17,973.
<PAGE>
*
-------------------------------------------
35
<PAGE>
*
-------------------------------------------
36
<PAGE>
*
-------------------------------------------
37
<PAGE>
This report is provided for the general information of the shareholders of the
Berkshire Funds. This report is not intended for distribution to prospective
investors in the Funds, unless preceded or accompanied by an effective
prospectus. For more information regarding the Funds, including charges and
expenses, visit our web site at www.BerkshireFunds.com or call toll-free
1-877-526-0707 for a free prospectus. Please read it carefully before you
invest or send money.
<PAGE>
(BLANK PAGE)
<PAGE>
THE BERKSHIRE FUNDS
475 Milan Drive
Suite #103
San Jose, CA 95134
(Toll-Free) 1-877-526-0707
BOARD OF TRUSTEES
Malcolm R. Fobes III, Chairman
Ronald G. Seger
Leland F. Smith
Andrew W. Broer
INVESTMENT ADVISER
Berkshire Capital Holdings, Inc.
475 Milan Drive
Suite #103
San Jose, CA 95134
COUNSEL
Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower
441 Vine Street
Cincinnati, OH 45202
TRANSFER AGENT
Firstar Mutual Fund Services, LLC
615 E. Michigan Street
Milwaukee, WI 53202
CUSTODIAN
Firstar Bank, N.A
425 Walnut Street
Cincinnati, OH 45202
DISTRUBUTOR
Rafferty Capital Markets, Inc.
1311 Mamaroneck Avenue
White Plains, NY 10605
