The CLS AdvisorOne Funds
1999 Annual Report
April 30, 1999
[LOGO]
<PAGE>
2 The CLS AdvisorOne Funds
Contents of the Report
3 Fund Objectives
4 Letter to the Shareholders
7 Economic Overview
10 Performance Review
14 Portfolio of Investments: Amerigo
16 Portfolio of Investments: Clermont
19 Statements of Assets & Liabilities
20 Statements of Operations
21 Statements of Changes in Net Assets
22 Financial Highlights
23 Notes to Financial Statements
26 Independent Auditors' Report
<PAGE>
Annual Report April 30, 1999 3
FUND OBJECTIVES
THE AMERIGO FUND'S INVESTMENT OBJECTIVE IS CAPITAL APPRECIATION AND LONG -TERM
GROWTH OF CAPITAL WITHOUT REGARD TO CURRENT INCOME.
THE CLERMONT FUND'S INVESTMENT OBJECTIVE IS GROWTH OF CAPITAL AND A REASONABLE
LEVEL OF CURRENT INCOME.
The CLS AdvisorOne Funds are funds of funds that monitor the vast universe of
mutual funds, seeking effective managers and determining which funds are
currently earning the best returns considering the amount of risk. Then, The CLS
AdvisorOne Funds attempt to build a portfolio of some of the very best funds
available, and put it all together so you only have to make one choice. You no
longer have to limit yourself to one or two mutual fund families. You can build
a disciplined, diversified portfolio with one investment decision. CLS
AdvisorOne Funds provide a simple solution to a challenging investment world.
<PAGE>
4 The CLS AdvisorOne Funds
LETTER FROM THE PRESIDENT
Dear Fellow Shareholder,
As we approach completion of the CLS AdvisorOne Funds' second full year, I am
extremely pleased to report to you the activity of our funds of funds investment
vehicles for the period of May 1, 1998 through April 30, 1999.
I am very encouraged by the amount of growth we have experienced since the
inception of our funds back in 1997. As I write this letter, The Amerigo Fund
stands at $19,533,954, while The Clermont Fund is at $7,820,083. Together, the
CLS AdvisorOne Funds represent more than $27 million; and that number continues
to grow.
Assets within the CLS AdvisorOne Funds have been a major contributor to the
overall growth of the investment advisor to the Funds, Clarke Lanzen Skalla
Investment Firm, Inc. (CLS). At the end of 1998, our firm had achieved a major
goal by accumulating more than $800 million dollars under management. As of
April 30, 1999 assets under management surpassed $850 million.
I attribute our growth over the past decade to extraordinarily hard work on the
part of our dedicated employees, developing strong relationships with investment
representatives like yours, and the trust you have placed in our funds with your
[GRAPH] The following information was presented as a graph:
A Decade of CLS Growth in Millions of Dollars
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
$17 $19 $45 $61 $114 $186 $350 $560 $670 $800
<PAGE>
[PHOTO] W. Patrick Clarke, President
<PAGE>
6 The CLS AdvisorOne Funds
investment dollars. The combination of these factors has allowed our firm to
focus on helping you reach your financial goals through a disciplined investment
strategy and sound analytical principles.
Beginning in 1989, Clarke Lanzen Skalla offered professional asset allocation to
clients' portfolios for an asset-based advisory fee. As consumer needs evolved,
so did the menu of products & services we provided to individual investors. In
1997, The CLS AdvisorOne Funds pioneered the way to giving investors a
simplified choice in a complicated investment environment. Our design is
intended to provide investors access to our research, disciplined
diversification and flexibility with a single investment decision. Your
portfolio is diversified among different asset classes, investment styles, and
funds across thousands of individual security positions. After a brief analysis
of the market environment and events over the past twelve months, you'll read
more about the funds' performance, investment style and strategy from our
manager and Chief Investment Officer, Randy Skalla. Finally in this report,
you'll find a portfolio break-out of The Amerigo Fund and The Clermont Fund
followed by subsequent financial data.
I'd like to thank you again for your investment in the CLS AdvisorOne Funds. If
you have any questions about this report, please call (800) 635-3427.
/s/ W. Patrick Clarke
W. Patrick Clarke
President, CLS AdvisorOne Funds
<PAGE>
Annual Report April 30, 1999 7
ECONOMIC OVERVIEW
THE STOCK MARKET CONTINUED ITS unpredictable roller coaster ride, testing the
convictions of investors through the last 12 months. The period was filled with
several unprecedented events, including the birth of the Euro, the most narrow
market in history, the dramatic rise of internet stocks, one of the largest-ever
variances between value and growth stocks, the record-breaking 1st quarter 1999
upside earnings surprises, the all-time high valuations of the overall market,
and the Dow Jones Industrial Average breaking through the magical 10,000 mark.
It was a period in the market that will not soon be forgotten.
STRONG FUNDAMENTALS
Domestic economic fundamentals were extremely solid throughout the period, with
the economy continuing its 9-year expansion. Gross Domestic Product grew at a
solid 3.9% for 1998, while the 1st quarter of 1999 measured a preliminary 4.5%
annualized rate. Inflation remained at very low levels for the 12-month period
through the end of April 1999 as the Consumer Price Index measured a relatively
small 2.3% increase. Extremely low commodity prices, increasing levels of
productivity, and importing low-cost goods from Asia, have all contributed to
keeping inflation at low levels. In addition to these positive fundamentals, the
unemployment rate remained between 4.3% and 4.5% for the entire period, tying a
29-year low for this figure. (SOURCE: FIRST CALL)
INFLUENCE FROM THE FED
Short-term interest rates were also a significant positive for the market during
the last 12 months. The Federal Funds rate was lowered three times by the
Federal Open Market Committee from September 29, 1998 through November 17, 1998.
<PAGE>
8 The CLS AdvisorOne Funds
One of the rate decreases came on October 15, 1998, which was especially
significant since this was between regular FOMC meetings - a historically
uncommon event. This combination of an expanding economy with low inflation, low
interest rates, and low unemployment proved to be the recipe for achieving
all-time highs in the market, including the breaking of the psychologically
significant "Dow 10,000" on March 29, 1999.
[GRAPH] The following information was presented as a graph:
Dow Jones Industrial Average
5/1/98 - 04/30/99
DATE DJIA DATE DJIA
---- ---- ---- ----
5/01/98 9147.07 11/30/98 9116.55
5/29/98 8899.95 12/31/98 9181.43
6/30/98 8952.02 1/29/99 9358.83
7/31/98 8883.29 2/26/99 9306.58
8/31/98 7539.07 3/31/99 9786.16
9/30/98 7842.62 4/30/99 10789.04
10/30/98 8592.10
POSITIVE EARNINGS REPORTED
Earnings have also been one of the primary driving forces behind the rise in
equity markets. Earnings for the 1st quarter of 1999 were especially impressive.
Through the end of April, 79% of S&P 500 companies had reported, and 66%
reported better-than-expected earnings, vs. an average of 55% in the past five
years; 21% of companies came in on target, vs. 19% normally; and only 13% were
below, vs. an average of 26%. The average amount by which companies beat their
estimates was 4.8%, vs. 2.5% for the last five years. This was the highest level
in almost ten years. These results helped push the Dow Jones Industrial Average
up to nearly 11,000 by the end of April, only one month after breaking through
10,000.
<PAGE>
Annual Report April 30, 1999 9
THE GLOBAL RECOVERY
Another positive for the market has been the improvement in the global
environment. One year ago, investors were highly concerned about the possible
effects of the Asian currency crisis, the Russian debt default, and Latin
America's financial woes. These concerns caused a flight of capital from these
struggling markets into U.S. markets. This further depressed international
markets, as well as their respective currencies relative to the dollar. However,
since the first of the year, emerging markets have rebounded sharply from their
oversold levels. In fact, many international markets, such as; Hong Kong,
Singapore, and Latin America have risen significantly since their lows last
fall. Overall, the global outlook has improved. The U.S. economy is strong, the
developing world is improving, Europe is stimulating monetary policy, and Japan
is coming out of its recession.
DISCIPLINE THROUGH A VOLATILE MARKET
In review, the previous 12 months could be summed up with one word - VOLATILE.
Indeed, investors were taken on one of the most erratic stock market rides in
history. The convictions of investors were severely tested, and those who
remained focused on a disciplined, long-term approach of "staying the course"
reaped respectable returns.
DATA SOURCE: FIRST CALL
<PAGE>
10 The CLS AdvisorOne Funds
PERFORMANCE REVIEW
The market environment over the past 12 months ending April 30, 1999 took on the
characteristics of two very different markets. The stock market traded in a
sideways-to slightly upward pattern from April 30, 1998 until July 17, 1998.
From this date until October 8, 1998, the market went into a severe intermediate
term correction with the major averages declining close to 20% and the mid and
small cap averages showing declines of around 30%. This intermediate term
correction in the stock market was caused by several factors impacting the
markets at roughly the same time. In August of 1998 the market was dealing with
the issues of a possible impeachment of the President of the United States, the
bombing of a U.S. embassy, continued currency crises in Asia and Latin America,
the collapse of the Russian Ruble and Russia's default on their debt payments,
the continued Japanese banking crises, and the near collapse of hedge fund
manager, Long Term Capital. All of these issues took what would have otherwise
been an ordinary correction in an on-going bull market and turned it into a much
deeper correction. Since bottoming out on October 8, 1998, the market has staged
a tremendous rebound, erasing all of the declines of the correction. The rebound
was triggered by the Federal Reserve stepping in to lower interest rates, as
well as the realization that the U.S. economy was still very strong, presenting
no threat of a pending recession. However, not all stocks have participated in
the recovery. It has been primarily the largest growth stocks that have
VALUE BLEND GROWTH
9.06% 15.34% 26.16% LARGE
-1.99% 1.34% 11.31% MID
-17.20% -12.64% -4.85% SMALL
Source: Morningstar
<PAGE>
Annual Report April 30, 1999 11
generated most of the gains. Most Value-type stocks and smaller companies have
negative one-year returns (SEE TABLE ABOVE). In fact, most companies have posted
negative returns over the past 12 months. For example, as noted in the NO-LOAD
FUND ANALYST newsletter, "By mid-April 1999, the average stock was down over 20%
over 12 months, and more than 70% of all stocks were underwater from year-ago
levels."
Diversification into international markets was of no help over the past 12
months as the average International mutual fund, as tracked by Morningstar,
gained 1.95%. Bonds also offered little help during the past 12 months as the
average General Bond fund returned 4.82%, and the average Multi-Sector Bond fund
returned .88%, while the average High Yield Bond fund lost .20%.
AMERIGO FUND REVIEW
The total return for the Amerigo Fund during the past twelve months ending April
30, 1999 was 13.28%. During this same time period the S&P 500 Composite Stock
Price Index* gained 21.83% and the average Multi-Asset Global mutual fund
monitored by Morningstar, Inc.**
performance numbers reflect the sharp market sell-off during the 3rd quarter of
1998 and also the subsequent rebound. The Amerigo Fund hit its low price point
for the year on October 8, 1998. From then until the end of the fund's fiscal
year on April 30, 1999, the fund gained 46.86%. As you can see, the rebound from
the market lows in October has been notable.
The Amerigo Fund has significant exposure to the largest domestic growth
companies which have been the market leaders. At the same time, the fund also
had exposure to small company and international stocks. Amerigo is an asset
allocation fund designed to diversify its assets across many different asset
classes. Over the last twelve months, the fund has been steadily increasing its
weightings of funds owning the largest capitalization stocks. For example, on
April 30, 1998 Amerigo had approximately 29% exposure in large cap funds.***
This weighting increased to approximately 56% by April 30, 1999.*** Small cap
weightings declined from around 20% to just over 9%, and international
weightings declined from 18% to 11%.***
<PAGE>
12 The CLS AdvisorOne Funds
[GRAPH] The following information was presented as a graph:
TOTAL RETURNS FOR CLS ADVISORONE FUNDS SINCE MAY 1, 1998 THROUGH APRIL 30, 1999
The Amerigo Fund 13.28%
The Clermont Fund 5.31%
S&P 500* 21.83%
Multi-Asset Global** 3.36%
CLERMONT FUND REVIEW
The total return for the Clermont Fund during the past twelve months ending
April 30, 1999 was 5.31%. During this same time period the S&P500 Composite
Stock Price Index* gained 21.83% and the average Multi-Asset Global mutual fund
monitored by Morningstar, Inc.** gained 3.36%.
Since inception on July 14, 1997, the Clermont Fund has held an average
weighting of 65% equities and 35% bonds.*** The bond weightings have both helped
and hurt the fund during the past twelve months. While the market was heading to
all time highs during May, June and July, our bond positions were a hindrance on
performance as they were mostly going sideways. However, during the 3rd quarter
sell-off in the equity markets, our bond positions added a great amount of
stability to the portfolio as most bond funds increased in price while equity
- --------------------------------------------------------------------------------
*STANDARD & POOR'S 500: is an unmanaged group of securities considered to be
representative of the stock market in general. An investment cannot be made
directly in an index. (Beta comparisons are used for Equities). This index is
widely used by professional traders as a performance benchmark and is considered
more representative of the US stock market than the DJIA.
**MULTI ASSET GLOBAL: Funds that seek total returns by investing in varying
combinations of equities, fixed income securities, and other asset classes.
These funds may invest a significant portion of assets in securities of foreign
issuers.
***COMPOSITION % is based on holdings of underlying funds within Amerigo &
Clermont.
<PAGE>
Annual Report April 30, 1999 13
funds declined. But as the market recovered after hitting bottom on October 8,
1998 the bond weighting once again became a hindrance to performance.
The bond weighting in the Clermont Fund is by design and we will always have a
portion of the portfolio in bonds in order to reduce the risk level and
day-to-day volatility of the fund. This is a plus when the markets are moving
down or sideways, but it may be a drag on performance when the markets are
moving steadily higher.
The Clermont Fund, being a more conservative fund than the Amerigo Fund, has had
a heavy weighting in mutual funds that invest in value stocks. These are stocks
that have lower price-to-earnings ratios and higher dividends. Historically,
these types of funds have performed much better when the markets go through
corrections. Unfortunately, this was not the case over the past twelve months as
value stocks significantly underperformed growth stocks. As a result, we have
been steadily increasing our exposure to growth mutual funds while reducing our
exposure to value funds.
Large cap exposure in Clermont has risen over the past twelve months from 28% to
more than 41%.**** Small and Mid cap exposure has decreased from 20% to 14% and
International exposure has decreased from 18% to 10%.****
Since hitting its low for the past twelve months on October, 8, 1998, the
Clermont Fund has risen 24.87%.
RISK REDUCTION
One of the key features of both the Amerigo Fund and the Clermont Fund is the
attention to risk that is given in managing the funds. Both funds are designed
to provide a very respectable return while taking only a moderate amount of
risk. The Amerigo Fund is designed to take more risk than the Clermont Fund, so
its returns during up markets should be expected to outperform those of the
Clermont Fund. Conversely, in a down market, the Clermont Fund will retain more
of its value than the Amerigo Fund. This was clearly illustrated during the
market correction last fall as the Clermont Fund declined less than the Amerigo
Fund.
****Composition % is based on holdings of underlying funds within Clermont.
<PAGE>
CLS AdvisorOne Funds
PPORTFOLIO OF INVESTMENTS
April 30, 1999
THE AMERIGO FUND
<TABLE>
<CAPTION>
% OF NET
REGISTERED INVESTMENT COMPANIES SHARES ASSETS VALUE
<S> <C> <C> <C>
LARGE CAP VALUE
Fidelity Advisor Growth Opportunities I Fund 19,145 5.06% $ 988,862
Masters Select Equity Fund 61,598 4.89% 955,388
LARGE CAP GROWTH
Rydex OTC Fund # 48,119 11.87% 2,317,417
Nations Marsico Focused Equities Fund - Advisor Class # 40,514 3.62% 706,977
Warburg Pincus Health Sciences Fund # 46,366 3.41% 666,738
Janus Growth and Income Fund 15,787 2.68% 522,405
Janus Mercury Fund # 15,555 2.50% 488,582
Rydex Series Trust Arktos Fund 59,724 2.40% 468,837
LARGE CAP BLEND
S&P Depositary Receipts * 28,900 19.71% 3,850,925
SSgA Growth and Income Fund 51,091 6.05% 1,180,727
Strong Growth and Income Fund 10,088 1.22% 239,080
MID CAP VALUE
Oakmark Select Fund 56,461 6.77% 1,321,750
SMALL CAP BLEND
Weitz Series Hickory Fund 27,724 5.23% 1,021,618
SMALL CAP GROWTH
TIP Funds Turner Small Cap Equity Fund # 19,526 2.98% 582,259
Baron Asset Fund 8,678 2.65% 517,390
O'Shaughnessy Cornerstone Growth Fund # 28,977 1.72% 336,711
Undiscovered Manager's Behavioral Growth Fund # 15,385 1.38% 270,000
INTERNATIONAL EQUITY
Janus Overseas Fund 48,601 5.32% 1,039,570
Federated International Small Company Fund - Class A # 39,080 4.36% 851,163
Warburg Pincus Japan Growth Fund # 14,959 1.03% 201,496
Templeton Developing Markets Trust Fund 6,766 0.46% 89,781
Total Registered Investment Companies
(Cost $15,177,596) 95.31% 18,617,676
Money Market Mutual Funds
Flex-funds Money Market Fund 885,383 4.53% 885,383
Alliance Prime Portfolio 12,134 0.06% 12,134
Total Money Market Mutual Funds (Cost $897,517) 4.59% 897,517
Total Investments (Cost $16,073,113) 99.90% 19,515,193
Other Assets in Excess of Liabilities 0.10% 18,761
Total Net Assets 100% $19,533,954
<FN>
# Represents non-income producing security
* Standard & Poor's Depositary Receipts are securities that represent ownership
in a long-term unit investment trust that holds a portfolio of common stocks
designed to track the performance of the S&P 500 Index.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
<PAGE>
Annual Report April 30, 1999 15
[GRAPH] The following information was presented as a pie chart:
COMPOSITION %
International Equity - 11.18%
Cash - 4.59%
U.S. Stocks - 84.23%
Composition % based on holdings of underlying funds within Amerigo as of April
30, 1999.
THE AMERIGO FUND'S INVESTMENT STYLE %
IN U.S. STOCK FUNDS April 30, 1999
VALUE BLEND GROWTH
9.95% 26.98% 26.48% LARGE
6.77% MID
5.23% 8.73% SMALL
<PAGE>
CLS AdvisorOne Funds
PPORTFOLIO OF INVESTMENTS
April 30, 1999
THE CLERMONT FUND
% OF NET
REGISTERED INVESTMENT COMPANIES SHARES ASSETS VALUE
LARGE CAP VALUE
Invesco Financial Strategies Utilities Fund 20,236 4.44% $ 347,244
LARGE CAP GROWTH
Invesco Blue Chip Growth Fund 162,707 14.38% 1,124,304
Rydex OTC Fund # 2,565 1.58% 123,555
LARGE CAP BLEND
S&P Depositary Receipts * 12,200 20.79% 1,625,650
Strong Growth and Income Fund 4,340 1.32% 102,865
MID CAP VALUE
Weitz Series Fund Value Portfolio 14,528 6.17% 482,192
Oakmark Select Fund 13,422 4.02% 314,200
Oakmark Equity and Income Fund 8,148 1.65% 128,826
SMALL CAP VALUE
Third Avenue Value Fund 3,457 1.39% 109,022
SMALL CAP GROWTH
Baron Growth & Income Fund 6,164 2.34% 182,627
BONDS
Strong Corporate Bond Fund 69,306 9.86% 771,381
Invesco High-Yield Bond Fund 105,370 9.16% 716,513
Fidelity Advisor Intermediate Bond Fund 37,202 5.06% 395,461
Strong Short-Term High-Yield Bond Fund 9,683 1.30% 101,384
Barr Rosenberg Market Neutral Fund 6,576 0.70% 54,584
INTERNATIONAL EQUITY
Tweedy Browne Global Value Fund 30,533 7.71% 603,325
Oakmark International Small Cap Fund 19,951 3.19% 249,785
Montgomery Global Long-Short Fund # 12,873 2.96% 231,578
Total Registered Investment Companies
(Cost $6,912,068) 98.02% 7,664,496
Money Market Mutual Funds
Rydex Money Market Fund 117,284 1.50% 117,284
Alliance Prime Portfolio 10,290 0.13% 10,290
Flex-funds Money Market Fund 285 0.00% 285
Total Money Market Mutual Funds (Cost $127,859) 1.63% 127,859
Total Investments (Cost $7,039,927) 99.65% 7,792,355
Other Assets in Excess of Liabilities 0.35% 27,728
Total Net Assets 100% $7,820,083
# Represents non-income producing security
* Standard & Poor's Depositary Receipts are securities that represent ownership
in a long-term unit investment trust that holds a portfolio of common stocks
designed to track the performance of the S&P 500 Index.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
Annual Report April 30, 1999 17
[GRAPH] The following information was presented as a pie chart:
COMPOSITION %
International Equity - 13.91%
Cash - 1.64%
Bonds - 26.17%
U.S. Stocks - 58.28%
Composition % based on holdings of underlying funds within Clermont as of April
30, 1999.
THE CLERMONT FUND'S INVESTMENT STYLE %
IN U.S. STOCK FUNDS April 30, 1999
VALUE BLEND GROWTH
4.44% 22.11% 15.96% LARGE
11.84% MID
1.39% 2.34% SMALL
<PAGE>
18 The CLS AdvisorOne Funds
CLS AdvisorOne Funds THE AMERIGO FUND
THE CLERMONT FUND
14747 California Street
Omaha, NE 68154-1979
800-635-3427
402-493-3313
CURRENT NAV FOR
AMERIGO AND CLERMONT (800) 808-3829
TICKER SYMBOL FOR AMERIGO CLSAX
INVESTMENT ADVISOR Clarke Lanzen Skalla Investment Firm, Inc.
CUSTODIAN Firstar Bank, N.A.
Firstar Tower
425 Walnut Street
Cincinnati, OH 45202
TRANSFER AGENT & DIVIDEND Mutual Funds Service Co.
DISBURSING AGENT 6000 Memorial Drive
Dublin, OH 43017
800-808-3829
614-760-2108 (in Central Ohio)
LEGAL COUNSEL Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20030
AUDITORS KPMG LLP
Two Nationwide Plaza
Columbus, OH 43215
<PAGE>
CLS ADVISORONE FUNDS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
Assets: The Amerigo Fund The Clermont Fund
Investments, at market value
(cost $16,075,113 and
$7,039,927, respectively) $ 19,515,193 $ 7,792,355
Interest and dividends receivable 3,611 1,227
Receivable from advisor -- 4,661
Unamortized organization costs 33,231 33,231
Prepaid expenses and other assets 20,650 15,524
Total Assets 19,572,685 7,846,998
Liabilities:
Management fees payable 3,155 --
Other accrued liabilities 35,576 26,915
Total Liabilities 38,731 26,915
Net Assets $ 19,533,954 $ 7,820,083
Components of Net Assets:
Capital $ 15,946,217 $ 6,982,036
Accumulated undistributed net
investment income (loss) (52) 13,574
Accumulated undistributed net
realized gains 147,709 72,045
Net unrealized appreciation
of investments 3,440,080 752,428
Total Net Assets $ 19,533,954 $ 7,820,083
Capital Stock Outstanding 1,516,114 696,202
Net Asset Value - Offering and
Redemption Price Per Share $ 12.88 $ 11.23
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 CLS AdvisorOne Funds Annual Report April 30, 1999
<PAGE>
CLS ADVISORONE FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1999
Investment Income: The Amerigo Fund The Clermont Fund
Dividends $ 86,740 $ 177,665
Total Investment Income 86,740 177,665
Fund Expenses:
Investment advisory fees 135,471 68,606
Administrative fees 30,171 30,171
Transfer agent fees 27,921 21,623
Fund accounting fees 20,104 20,151
Printing and postage expense 23,630 16,173
Registration 18,105 17,643
Legal expense 12,734 10,286
Amortization of organization expense 10,478 10,478
Insurance expense 9,037 7,581
Trustee fees 7,807 7,439
Audit fees 7,674 8,189
Custodian fees 4,081 5,389
Miscellaneous expenses 1,677 1,677
Total expenses before reimbursements 308,890 225,406
Reimbursement of expenses by advisor (153,527) (146,749)
Net Expenses 155,363 78,657
Net Investment Income (Loss) (68,623) 99,008
Realized and Unrealized Gains (Losses)
from Investments
Net realized losses from
investment transactions (45,184) (160,668)
Net realized gains from distributions
of realized gains by other
investment companies 142,526 232,722
Net increase in unrealized
appreciation of investments 2,728,302 485,096
Net realized and unrealized gains
from investments 2,825,644 557,150
Net Increase in Net Assets
Resulting from Operations $ 2,757,021 $ 656,158
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 CLS AdvisorOne Funds
<PAGE>
CLS ADVISORONE FUNDS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
THE AMERIGO FUND THE CLERMONT FUND
For the Year For the Period For the Year For the Period
Ended April from Ended April from
30, 1999 July 14, 1997* 30, 1999 July 14, 1997*
Increase in Net Assets through April through April
30, 1998 30, 1998
Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) $ (68,623) $ 4,879 $ 99,008 $ 54,868
Net realized gains (losses) from
investment transactions 97,342 62,781 72,054 11,812
Net increase in unrealized
appreciation of investments 2,728,302 711,778 485,096 267,332
Net Increase in Net Assets
Resulting from Operations 2,757,021 779,438 656,158 334,012
Dividends and Distributions
to Shareholders:
From net investment income -- (4,879) (99,008) (53,621)
In excess of net investment income -- (12,682) (1,046) --
Net Decrease in Net Assets Resulting
from Dividends and Distributions
to Shareholders -- (17,561) (100,054) (53,621)
Capital Transactions:
Proceeds from shares subscribed 13,030,874 7,093,071 5,587,792 4,416,816
Reinvestment of dividends -- 17,561 99,556 53,621
Cost of shares redeemed (3,811,473) (364,977) (2,863,923) (360,274)
Net Increase in Net Assets Resulting
from Capital Transactions 9,219,401 6,745,655 2,823,425 4,110,163
Total Increase in Net Assets 11,976,422 7,507,532 3,379,529 4,390,554
Net Assets - Beginning of Period 7,557,532 50,000 4,440,554 50,000
Net Assets - End of Period $19,533,954 $7,557,532 $ 7,820,083 $ 4,440,554
Share Transactions:
Subscribed 1,181,402 692,016 546,210 435,133
Reinvested -- 1,735 9,453 5,288
Redeemed (329,748) (34,291) (270,426) (34,456)
Net Increase in Shares Outstanding 851,654 659,460 285,237 405,965
<FN>
* DATE OF COMMENCEMENT OF OPERATIONS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
<PAGE>
CLS ADVISORONE FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
THE AMERIGO FUND THE CLERMONT FUND
For the Year For the Period For the Year For the Period
Ended April from Ended April from
30, 1999 July 14, 1997* 30, 1999 July 14, 1997*
through April through April
30, 1998 30, 1998
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 11.37 $ 10.00 $ 10.81 $ 10.00
Investment Operations:
Net investment income (loss) (0.05) 0.02 0.14 0.17
Net realized and unrealized gains
from investments 1.56 1.39 0.42 0.80
Total 1.51 1.41 0.56 0.97
Distributions
From net investment income -- (0.02) (0.14) (0.16)
In excess of net investment income -- (0.02) -- --
Total -- (0.04) (0.14) (0.16)
Net Asset Value, End of Period $ 12.88 $ 11.37 $ 11.23 $ 10.81
Total Return 13.28% 14.11%(1) 5.31% 9.84% (1)
Ratios/ Supplemental Data:
Net assets, end of period $19,533,954 $ 7,557,532 $ 7,820,083 $ 4,440,554
Ratio of expense to average
net assets (3) 1.15% 1.15% (2) 1.15% 1.15% (2)
Ratio of net investment
income (loss) to average
net assets (0.51%) 0.15% (2) 1.46% 2.53% (2)
Ratio of expense to average net
assets, before voluntary fee
reductions and reimbursements (3) 2.29% 4.45% (2) 3.31% 5.95% (2)
Ratio of net investment income
(loss) to average net assets
before voluntary fee reductions
and reimbursements (1.65%) (3.15%) (2) (0.70%) (2.27% )(2)
Portfolio turnover rate 37.56% 14.36% (1) 64.67% 22.24% (1)
<FN>
(1) Not annualized.
(2) Annualized.
(3) These ratios exclude the expenses of the mutual funds in which the Funds
invest.
* DATE OF COMMENCEMENT OF OPERATIONS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
</TABLE>
<PAGE>
CLS ADVISORONE FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999
The CLS AdvisorOne Funds (the "Trust") was organized as a Massachusetts business
trust on March 3, 1997 and is registered under the Investment Company Act of
1940, as amended (the "Act"), as an open-end management investment company. The
Trust consists of The Amerigo Fund and The Clermont Fund (individually, a
"Fund"; collectively, the "Funds") which are two separate diversified, no-load
series. Each Fund commenced operations July 14, 1997. Prior to the commencement
of operations, the Trust had no operations other than incurring organizational
expenses and the sale of initial shares of beneficial interest. The Amerigo
Fund's investment objective is capital appreciation and long-term growth of
capital without regard to current income. The Clermont Fund's investment
objective is growth of capital and a reasonable level of current income.
1. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant
accounting policies followed by the Trust in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles. Preparation of the financial statements 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 for the period. Actual results could differ from these
estimates.
SECURITY VALUATION: Each Fund seeks to achieve its investment objective by
investing in a portfolio of open-end or closed-end investment companies (the
"underlying funds"). Underlying funds are valued at their respective net asset
values as reported by such investment companies under the Act. The underlying
funds value securities in their portfolios for which market quotations are
readily available at their current market values (generally the last reported
sale price) and all other securities and assets at fair value pursuant to
methods established by the board of directors of the underlying funds. Other
assets of each Fund are valued at their current market value if quotations are
readily available. Otherwise, they are valued at fair value pursuant to methods
established in good faith by the Board of Trustees. The shares of many
closed-end investment companies, after their initial public offering, frequently
trade at a price per share which is different than the net asset value per
share. The difference represents a market premium or market discount of such
shares. There can be no assurance that the market discount on shares of any
closed-end investment company purchased by a Fund will decrease. Similarly,
there can be no assurance that the market premium on shares of any closed-end
investment company purchased by a Fund will not decrease.
FOREIGN SECURITIES: An underlying fund may invest its assets in securities of
foreign issuers. Investments in securities of foreign issuers carry certain
risks
The CLS AdvisorOne Funds 23
<PAGE>
not ordinarily associated with investments in securities of domestic issuers.
Such risks include political and economic developments, including the possible
expropriation of assets, confiscatory taxation, imposition of exchange controls
or other foreign governmental laws and restrictions. In addition, there may be
less publicly available information about foreign issuers than is available
about domestic issuers, and the value of the underlying funds' foreign
securities may be adversely affected by fluctuations in exchange rates between
foreign currencies and the U.S. dollar. Interest and dividend income from
foreign sources received by an underlying fund may be subject to foreign taxes.
LOANS OF PORTFOLIO SECURITIES: A Fund or an underlying fund may lend its
portfolio securities provided: (1) the loan is secured continuously by
collateral consisting of U.S. Government securities or cash or cash equivalents
maintained on a daily mark-to-market basis in an amount at least equal to the
current market value of the loaned securities; (2) the Fund may at any time call
the loan and obtain the return of the securities loaned; (3) the Fund will
receive any interest or dividends paid on the loaned securities; and (4) the
aggregate market value of securities loaned will not at any time exceed
one-third of the total assets of the Fund. Loans of securities involve a risk
that the borrower may fail to return the securities or may fail to provide
additional collateral. As of April 30, 1999, the Funds had no outstanding loans
of securities.
REPURCHASE AGREEMENTS: Repurchase agreements are transactions in which the Funds
purchase securities from a bank or recognized securities dealer and
simultaneously commit to resell the securities to the bank or dealer at an
agreed-upon date and price reflecting a market rate of interest unrelated to the
coupon rate or maturity of the purchased securities. The Funds may invest in
repurchase agreements with institutions believed by Clarke Lanzen Skalla
Investment Firm, Inc. to present minimum credit risk. Each repurchase agreement
is recorded at cost. The Funds require that the securities purchased in a
repurchase agreement be transferred to the custodian in a manner sufficient to
enable the Funds to obtain those securities in the event of a counterparty
default. The seller, under the repurchase agreement, is required to maintain the
value of the securities at least equal to the repurchase price, including
accrued interest.
SECURITY TRANSACTIONS: The Funds record purchases and sales of investments on
the trade date. The Funds calculate realized gains and losses from sales of
investments on the first-in first-out basis. The Funds recognize interest income
on the accrual basis and record dividend income on the ex-dividend date.
DISTRIBUTIONS TO SHAREHOLDERS: The Funds record distributions to shareholders on
the ex-dividend date. On a quarterly basis, the Funds declare and pay dividends
from net investment income, if any. On an annual basis, the Funds declare and
pay net capital gain dividends, if any. Dividends from net investment income and
net capital gain dividends are determined in accordance with federal income tax
24 CLS AdvisorOne Funds Annual Report April 30, 1999
<PAGE>
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to expiring capital losses carried forward
and deferrals of certain losses. Permanent book and tax basis differences have
been reclassified among the components of net assets.
FEDERAL INCOME TAXES: Each Fund intends to qualify as a regulated investment
company by complying with provisions of the Internal Revenue Code available to
investment companies. Each Fund will distribute its taxable income to its
shareholders sufficient to relieve it from all Federal income taxes and excise
taxes. Therefore, neither Fund recognized a provision for Federal income taxes
or excise taxes for the period ended April 30, 1999.
OTHER: Expenses directly attributable to a Fund are charged to the Fund, while
expenses which are attributable to more than one series of the Trust are
allocated among the respective series based upon relative net assets or another
appropriate basis.
2. RELATED PARTY TRANSACTIONS: Each Fund has retained Clarke Lanzen Skalla
Investment Firm, Inc. (the "Manager") as investment advisor pursuant to an
Investment Advisory Contract under the terms of which it has agreed to provide
an investment program within the limitations of the Fund's investment policies
and restrictions. Certain officers and directors of the Funds are also officers
and directors of the Manager. The Manager earns an annual fee from each Fund at
the rate of 1.00% of each Fund's average daily net assets. The Manager presently
intends to waive management fees or reimburse each Fund through an expense
reimbursement to the extent necessary to keep total expenses of each Fund at or
below 1.15% of average daily net assets. The Manager may change this policy at
any time without notice to shareholders. Pursuant to such intentions, the
Manager reimbursed The Amerigo Fund and The Clermont Fund $153,527 and $146,749,
respectively, for the year ended April 30, 1999. To the extent the Funds do not
increase net assets, the Funds are reliant on the ability of the Manager to
continue to provide fee waivers and reimbursements. The Manager is dependent
upon achieving its own financial goals, including targeted increases in the
Funds' net assets through net sales of fund shares, in order to provide such
support to the Funds.
3. INVESTMENT TRANSACTIONS: For the year ended April 30, 1999, purchases and
sales of portfolio securities (excluding short-term securities) were as follows:
The Amerigo Fund The Clermont Fund
Purchases $13,419,912 $7,189,970
Sales $4,878,149 $4,209,097
Cost of investments for financial reporting purposes may differ from cost basis
for Federal income tax purposes by the amount of losses recognized for financial
reporting purposes in excess of the amount of losses recognized for Federal
income tax reporting purposes. As of April 30, 1999, the gross unrealized
appreciation and depreciation of investments and the aggregate cost basis of
investments for Federal income tax purposes were as follows:
The CLS AdvisorOne Funds 25
<PAGE>
The Amerigo Fund The Clermont Fund
Gross unrealized appreciation $3,519,852 $784,534
Gross unrealized depreciation (84,838) (32,189)
-------- --------
Net unrealized appreciation $3,435,014 $752,345
---------- --------
Aggregate cost basis $16,080,179 $7,040,010
4. SHARES OF BENEFICIAL INTEREST: The Trust's Declaration of Trust permits the
Trust to offer and sell an unlimited number of full and fractional shares of
beneficial interest ("shares") in each of the Trust's existing Funds and to
create additional Funds. Each Fund issues its own series of shares. All shares
have a par value of $0.10 per share, are fully-paid, non-assessable and
fully-transferable when issued. All shares are issued as full or fractional
shares. A fraction of a share has the same rights and privileges as a full
share. Each full or fractional share has a proportionate vote. On issues
affecting the Trust as a whole, all shares of the Trust vote together as one
series. On issues affecting a particular Fund, only its shares vote.
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
of The CLS AdvisorOne Funds:
We have audited the accompanying statements of assets and liabilities of The CLS
AdvisorOne Funds - The Amerigo Fund and The Clermont Fund (the Funds), including
the portfolios of investments, as of April 30, 1999, and the related statements
of operations, statements of changes in net assets and the financial highlights
for each of the periods indicated herein. These financial statements and the
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of April
30, 1999, by confirmation with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds comprising The CLS AdvisorOne Funds at April 30,
1999, the results of their operations, the changes in their net assets and the
financial highlights for each of the periods indicated herein, in conformity
with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
May 26, 1999
26 The CLS AdvisorOne Funds
<PAGE>
Annual Report April 30, 1999
CLS ADVISORONE FUNDS
THE AMERIGO FUND
THE CLERMONT FUND
(800) 635-3427
For current net asset value prices of the
CLS AdvisorOne Funds, call 1-800-808-3829.
[LOGO] Compass
<PAGE>
The CLS AdvisorOne Funds ANNUAL REPORT, APRIL 30, 1999
This report is authorized for use when preceded or accompanied by a prospectus
for the CLS AdvisorOne Funds. Read the prospectus carefully before investing.
Past performance is not a guarantee of future results. Share price and returns
will fluctuate, and investors may have a gain or loss when they redeem shares.
Statements and other information in this report are dated and subject to change.
CLS AdvisorOne Funds, Omaha, NE 68154.
Clarke Lanzen Skalla Investment Firm, Inc.
------------------------------------------
14747 California Street
Omaha, NE 68154
1-800-635-3427
