THE CLS ADVISORONE FUNDS
Annual Report
April 30, 2000
Clarke Lanzen Skalla Investment Firm, Inc.
<PAGE>
2 The CLS AdvisorOne Funds
CLS ADVISORONE FUNDS The Amerigo Fund
The Clermont Fund
14747 California Street
Omaha, NE 68154-1979
(888) 455-4244
(402) 493-3313
CURRENT NAV (800) 808-3829
TICKER SYMBOL FOR AMERIGO CLSAX
TICKER SYMBOL FOR CLERMONT CLERX
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 (AS OF 4/30/00) Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20030
AUDITORS KPMG LLP
Two Nationwide Plaza
Columbus, OH 43215
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 each operate as a FUND OF FUNDS which monitor the
universe of mutual funds, seeks effective managers to determine which mutual
funds earn the greatest returns considering the amount of risk. The objective of
the CLS AdvisorOne Funds is to identify the best funds available, and put them
together into one investment portfolio so you only have to make one choice. You
no longer have to limit yourself to any particular mutual fund family. You can
build a disciplined, diversified portfolio with one investment decision. The CLS
AdvisorOne Funds provide a simple solution in a challenging investment world.
<PAGE>
Annual Report APRIL 30, 2000 3
A MESSAGE FROM THE PRESIDENT
Dear Shareholder,
AT THE TIME OF OUR LAST report in October of 1999, we spoke to you about the
condition of our two funds, and described some of the unique issues experienced
by a "fund of funds" manager in a decade where one asset class dominated the
market.
At that time, we were pleased to report to you that Amerigo had posted 40.00%
total return since its inception, and 18.32% to date (As of October 31, 1999).
Clermont, our more conservative portfolio had 19.09% total return since
inception, and 9.49% to date (As of October 31, 1999). We were proud of our
funds then, and we are pleased to bring you news of our latest achievements.
As of this report, Amerigo has posted 66.08% return since inception, and
Clermont, again, our more conservative portfolio, has posted 28.53% since
inception.
We are proud to report that, as of the date of this letter, Amerigo has grown to
more than $36 million in assets, while Clermont has grown to $10 million in
assets.
The fund of funds investment strategy has provided you, our investors, with a
diversified portfolio of actively managed funds designed to achieve enhanced
returns, and attention to risk reduction.
As we enter into our fourth year of operation, the true harvest of our hard work
and dedication begins. On June 5, 2000, Amerigo and Clermont joined the Orbitex
Group of Funds, a global mutual fund family with funds ranging from Info-Tech &
Communications, to Energy & Basic Materials, Health & Biotechnology, Financial
Services, and many more. Our funds were introduced to the Orbitex Group of Funds
as THE ORBITEX ADVISORONE ASSET ALLOCATION COLLECTION. The funds' manager will
remain the same.
By combining our investment expertise with the worldwide resources of Orbitex,
we have the ability to provide access to global investment management, research,
economists, and a new sector rotation product which is currently in the early
stages of development.
We look forward to new opportunities with Orbitex's increased financial strength
and access to different facets of the investment world.
It gives us great pleasure that you have chosen to take part in the CLS
AdvisorOne Funds,
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4 The CLS AdvisorOne Funds
and we hope you remain with us as we move into the next phase of our fund
family's development. Of course, one of the most important components of the CLS
AdvisorOne Funds is the expertise of our Portfolio Manager, Randy Skalla. In the
next section of this report, he will discuss fund performance along with some
market perspective over the past 12 months. Please take a moment to read the
Fund Performance Review.
This report also contains a detailed breakdown of our funds' holdings, the
financial statements, fund highlights, and accompanying notes.
I would like to thank you once again for your investment in the CLS AdvisorOne
Funds. If you have any questions about this report, please call us at (888)
455-4244.
/s/ W. Patrick Clarke
W. Patrick Clarke
President, CLS AdvisorOne Funds
President's Message 3 Patrick Clarke on the CLS AdvisorOne Funds
Fund Performance 5 The manager's review of fund performance,
Review strategy & outlook
Portfolio of 8 A complete list of Amerigo's investments
Investments with their market values
(Amerigo)
Portfolio of 10 A complete list of Clermont's investments
Investments with their market values
(Clermont)
Financial Statements 12 Statements of assets and liabilities, operations,
and changes in net assets, as well as financial
highlights
Notes 18 Footnotes to the Financial Statements
<PAGE>
Annual Report APRIL 30, 2000 5
PERFORMANCE REVIEW
by Randal D. Skalla
IN THE twelve month period ending April 30, 2000, investors finally received an
answer to the question, WILL THE TECHNOLOGY SECTOR EVER SLOW DOWN?
The answer was, YES.
The NASDAQ index (which includes a heavy representation of technology and
internet stocks) rose sharply in November and December of `99. Recovering from
any Y2K related setbacks by February of 2000, the technology stocks appeared to
be invincible to any market condition or economic environment. Meanwhile, the
majority of the Federal Reserve Board's 1999 policy was geared toward cooling
down the economy's overheated growth, but the NASDAQ hardly broke stride. Into
Spring, 2000, technology and internet were the talk of the town, or at least the
word on the STREET.
The AdvisorOne Funds were able to take advantage of the growth in technology
stocks in 1999 and early 2000. In January and February, however, these valuation
levels approached a point that we felt would not be sustainable. We were already
heavily weighted in technology, and felt the risk was too high to add new money
there. In fact, AdvisorOne did not make any more purchases for that period. As a
result, we ended the period with a larger than normal cash position in the funds
(23% in Amerigo, and 15% in Clermont). It is important to note that we did not
sell any positions to increase our weightings in cash. We simply allowed new
money to build up to await a more opportune moment to purchase funds.
That strategy was very beneficial, as new money into the funds was placed in a
money market position during the steep sell-off in March. The result was a more
stable portfolio. Our funds were able to withstand the volatility in the first
quarter, and are now positioned to buy at more favorable prices in the future.
All in all, the strong volatility following a very attractive technology and
internet investing environment proved to be a very effective test of our Asset
Allocation strategy once again.
The result was a more balanced investment portfolio able to provide stability in
an uncertain market environment.
Said differently, LESS RISK. However, our true goal is to lower risk without
sacrificing performance.
For the period of this report, that goal was accomplished. Amerigo and Clermont
outperformed the S&P 500 and the Dow Jones Industrial Average on an absolute and
on a "risk adjusted" basis.**** Clermont did so with a 20% position in bonds and
15% in cash. I will go into more detail in the RISK REDUCTION section of this
review.
While maintaining a diverse asset allocation, the funds will be subject to
drawbacks in performance by asset classes that are currently
<PAGE>
6 The CLS AdvisorOne Funds
underperforming. For instance, bonds hurt Clermont's performance as the rising
interest rate environment of 1999 pushed bond valuations lower.
Before I get into the specific analysis of Amerigo and Clermont, I will point
out that we have held most of our funds' positions with little need to make
major trades in either portfolio. As you turn to the portfolio of investments
later in this report, you will notice very low fund turnover in both funds.
AMERIGO FUND REVIEW
The total return for the Amerigo Fund during the past twelve months ending April
30, 2000 was 28.48%. During the same time period the S&P 500 Composite Stock
Price Index* gained 10.09%, and the Dow Jones Industrial Average ** gained
1.01%. As was true in the last report, Amerigo benefitted from strong growth in
international funds, as well as small caps. The two best performing positions in
Amerigo were Janus Overseas, which was up 80.22% for the period of this report,
and Montgomery Global Long Short #, up 81.79% for the period. We continue to
watch for future opportunities in small cap and international markets.
CLERMONT FUND REVIEW
The total return for the Clermont Fund during the past twelve months ending
April 30, 2000 was 11.12%. During the same time period the S&P 500 Composite
Stock Price Index* gained 10.09%, and the Dow Jones Industrial Average ** gained
1.01%.
Like Amerigo, part of Clermont's strength over this twelve month period comes
from its international positions. It also benefited from positions in small cap
funds. Clermont used such positions to stay competitive, and actually beat the
S&P 500 despite a large position in bonds and cash. The top performing funds in
Clermont were the Montgomery Global Long Short fund, up 81.79% for the period,
and Rydex OTC, up 74.43%.
RISK REDUCTION
One of the key features of both the
[GRAPH] The following information was presented as a bar graph:
Total Returns
for The CLS Amerigo - 28.48%
AdvisorOne Clermont - 11.12%
Funds Since S&P 500* - 10.09%
May 1, 1999 Dow Jones Industrial Average** - 1.01%
through April EAFE*** - 18.20%
30, 2000.
* STANDARD & POOR'S 500 INDEX is an unmanaged group of mid to large u.s.
capitalization securities considered to be representative of the stock market in
general and does not contain bond and international positions that may effect an
accurate comparison. An investment cannot be made directly in an index.
** DOW JONES INDUSTRIAL AVERAGE is a price -weighted average of 30 actively
traded Blue Chip, primarily industrial stocks.
*** EAFE IL is the EUROPE & AUSTRALASIA, FAR EAST EQUITY index for international
stock portfolios listed in local currency.
# Montgomery Global Long Short fund was purchased on May 20, 1999. For the
period it was held by Amerigo, it gained 76.02%.
<PAGE>
Annual Report APRIL 30, 2000 7
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. Taking less risk than Amerigo by
design, the Clermont Fund should retain more of its value in a down market than
the Amerigo Fund. Conversely, 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.
FOR THE PERIOD OF THIS REPORT, NOT ONLY DID THE FUNDS OUTPERFORM THE S&P 500
INDEX ON A RISK ADJUSTED BASIS, BUT ALSO ON A TOTAL RETURN BASIS.****
TOTAL RETURNS
1 Year Since Inception
------ ---------------
Amerigo 28.48% 66.08%
Clermont 11.12% 28.53%
S&P 500* 10.09% 58.15%
OUTLOOK
My outlook for the funds is that both Amerigo and Clermont are well positioned
to move forward through the summer, and the rest of 2000. I will be keeping an
eye on the managers who have been a part of AdvisorOne's success, keeping them
as a large part of our portfolios. I feel confident in the areas we are
overweighted and I will also pay close attention to the asset classes I have
chosen to underweight, looking for a turning point in their performance.
[GRAPH] The following information was presented as a line graph:
GROWTH OF $ 10,000
AMERIGO CLERMONT S&P 500
------- -------- -------
July 14, 1997 $ 10,000 $ 10,000 $ 10,000
July 31, 1997 $10,550.00 $10,350.00 $10,458.20
October 31, 1997 $10,156.00 $10,172.00 $10,566.76
January 31, 1998 $11,321.00 $10,994.00 $11,986.32
April 30, 1998 $11,361.00 $10,790.00 $12,483.07
July 31, 1998 $9,785.00 $9,538.00 $10,740.54
October 31, 1998 $11,863.00 $10,866.00 $13,384.76
January 31, 1999 $12,475.00 $11,144.00 $14,006.95
April 30, 1999 $13,448.00 $11,762.00 $14,947.08
July 31, 1999 $13,237.00 $11,400.00 $13,967.09
October 31, 1999 $16,709.00 $12,838.00 $15,998.28
January 31, 2000 $17,775.00 $13,318.00 $16,317.65
April 30, 2000 $16,608.00 $12,853.00 $15,815.13
Past performance is no guarantee of comparable future results. Market volatility
can significantly affect short-term performance.
**** Amerigo and Clermont may contain international securities that which may
provide the opportunity for greater return but also have special risks
associated with foreign investing including fluctuations in currency, government
regulation and differences in liquidity. Both funds may contain bond positions
which may effect the overall performance when compared to an index containing
all equity securities, such as the S&P 500 Index.
<PAGE>
8 The CLS AdvisorOne Funds
CLS AdvisorOne Funds
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PORTFOLIO OF INVESTMENTS The Amerigo Fund
April 30, 2000
<TABLE>
<CAPTION>
% of
Shares Net Assets Value
------ ---------- -----
Registered Investment Companies
<S> <C> <C> <C>
Large Cap Value
Masters Select Equity Fund 73,508 3.13% $1,120,227
Large Cap Growth
Rydex OTC Fund # 145,456 11.29% 4,042,226
Nations Marsico Focused Equities Fund -- Advisor Class # 41,047 2.38% 854,189
Janus Mercury Fund 16,798 2.11% 757,244
Janus Growth and Income Fund 16,322 1.96% 698,584
Warburg Pincus Capital Appreciation Fund # 21,274 1.82% 652,273
Warburg Pincus Health Sciences Fund # 32,714 1.59% 568,892
Janus Global Technology Fund 320 0.03% 10,349
Large Cap Blend
S&P Depositary Receipts * 28,900 11.70% 4,193,209
SSgA Growth and Income Fund 58,455 4.06% 1,454,356
Strong Growth and Income Fund # 21,363 1.75% 627,231
Mid Cap Value
Oakmark Select Fund 80,974 4.52% 1,618,674
Small Cap Value
Weitz Series Hickory Fund 29,605 2.74% 983,491
Small Cap Growth
TIP Funds Turner Small Cap Equity Fund # 29,966 3.63% 1,301,718
Undiscovered Managers Behavioral Growth Fund # 21,622 1.88% 674,811
Baron Asset Fund # 8,678 1.44% 516,869
O'Shaughnessy Cornerstone Growth Fund # 28,977 1.42% 510,573
Fidelity Advisor Small Cap Fund # 24,204 1.36% 487,460
Bonds
Rydex U.S. Government Bond Fund 92,274 2.36% 845,231
International Equity
Janus Overseas Fund # 48,814 5.23% 1,873,471
Montgomery Global Long-Short Fund # 53,584 4.56% 1,634,862
Federated International Small Company Fund -- Class A # 43,211 4.06% 1,456,214
Fidelity Advisor International Capital Fund 28,718 1.48% 528,702
Templeton Developing Markets Trust Fund 6,807 0.25% 89,926
Total Registered Investment Companies
(Cost $19,194,871) 76.75% 27,500,782
Money Market Mutual Funds
Flex-funds Money Market Fund 8,232,299 22.97% 8,232,299
Alliance Prime Portfolio 55,199 0.15% 55,199
Total Money Market Mutual Funds
(Cost $8,287,498) 23.12% 8,287,498
Total Investments
(Cost $27,482,369) 99.87% 35,788,280
Other Assets in Excess of Liabilities 0.13% 52,473
Total Net Assets 100% $35,840,753
<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.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Annual Report APRIL 30, 2000 9
[CHART] The following information was presented as a pie chart:
AMERIGO'S COMPOSITION %
U.S. Stocks - 58.81%
Bonds & Cash - 25.48%
International - 15.58%
Composition % based on holdings of underlying funds as a % of net assets within
Amerigo as of April 30, 2000.
THE AMERIGO FUND'S
INVESTMENT STYLE % IN U.S.
STOCK FUNDS
AS A % OF NET ASSETS
APRIL 30, 2000
M C
A A
R P VALUE BLEND GROWTH
K I ----- ----- ------
E T
T A 3.13% 17.51% 21.18% LARGE
L
I
Z 4.52% MID
A
T
I 2.74% 9.73% SMALL
O
N S T Y L E
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10 The CLS AdvisorOne Funds
CLS AdvisorOne Funds
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PORTFOLIO OF INVESTMENTS The Clermont Fund
April 30, 2000
<TABLE>
<CAPTION>
% of
Shares Net Assets Value
------ ---------- -----
Registered Investment Companies
<S> <C> <C> <C>
Large Cap Value
Invesco Financial Strategic Utilities Fund 21,829 4.03% $414,963
Gateway Fund 4,216 1.01% 103,513
Large Cap Growth
Invesco Blue Chip Growth Fund 151,357 11.64% 1,198,747
Rydex OTC Fund # 7,755 2.09% 215,515
Large Cap Blend
S&P Depositary Receipts * 12,200 17.19% 1,770,144
Mid Cap Value
Oakmark Select Fund 28,886 5.61% 577,434
Weitz Series Fund Value Portfolio 15,444 4.79% 493,275
Small Cap Value
Third Avenue Value Fund # 3,499 1.44% 148,111
Small Cap Growth
Baron Growth & Income Fund # 6,586 2.03% 208,657
Bonds
Strong Corporate Bond Fund 72,079 7.21% 742,417
Invesco High-Yield Bond Fund 115,391 6.79% 699,271
Fidelity Advisor Intermediate Bond Fund 39,463 3.88% 399,760
Rydex U.S. Government Bond Fund 13,182 1.17% 120,751
Strong Short-Term High-Yield Bond Fund 10,480 1.01% 103,958
International Equity
Tweedy Browne Global Value Fund 39,457 8.12% 836,488
Montgomery Global Long-Short Fund # 20,394 6.04% 622,211
Total Registered Investment Companies
(Cost $7,431,700) 84.05% 8,655,215
Money Market Mutual Funds
Flex-funds Money Market Fund 1,547,128 15.02% 1,547,128
Alliance Prime Portfolio 28,681 0.28% 28,681
Total Money Market Mutual Funds
(Cost $1,575,809) 15.30% 1,575,809
Total Investments
(Cost $9,007,509) 99.35% 10,231,024
Other Assets in Excess of Liabilities 0.65% 67,006
Total Net Assets 100% $10,298,030
<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.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Annual Report APRIL 30, 2000 11
[CHART] The following information was presented as a pie chart:
CLERMONT'S COMPOSITION %
U.S. Stocks - 49.83%
Bonds & Cash - 35.36%
International - 14.16%
Composition % based on holdings of underlying funds as a % of net assets within
Amerigo as of April 30, 2000.
THE CLERMONT FUND'S
INVESTMENT STYLE % IN U.S.
STOCK FUNDS
AS A % OF NET ASSETS
APRIL 30, 2000
M C
A A
R P VALUE BLEND GROWTH
K I ----- ----- ------
E T
T A 5.04% 17.19% 13.73% LARGE
L
I
Z 10.40% MID
A
T
I 1.44% 2.03% SMALL
O
N S T Y L E
<PAGE>
CLS AdvisorOne Funds
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STATEMENTS OF ASSETS AND LIABILITIES
April 30, 2000
The Amerigo The Clermont
Fund Fund
---- ----
Assets:
Investments, at market value (cost $27,482,369 $ 35,788,280 $ 10,231,024
and $9,007,509, respectively)
Interest and dividends receivable 35,625 6,414
Receivable from advisor --- 30,892
Unamortized organization costs 22,839 22,839
Prepaid expense and other assets 41,427 32,749
Total Assets 35,888,171 10,323,918
Liabilities:
Management fees payable 17,571 ---
Other accrued liabilities 29,847 25,888
Total Liabilities 47,418 25,888
Net Assets $ 35,840,753 $ 10,298,030
Components of Net Assets:
Capital $ 26,333,073 $ 8,774,778
Accumulated distributions in excess of net 435,876 84,956
investment income
Accumulated undistributed net realized gains 765,893 214,781
Net unrealized appreciation of investments 8,305,911 1,223,515
Total Net Assets $ 35,840,753 $ 10,298,030
Capital Stock Outstanding 2,190,520 846,512
Net Asset Value -- Offering and Redemption Price $ 16.36 $ 12.17
Per Share
See accompanying notes to financial statements.
12 The CLS AdvisorOne Funds
<PAGE>
CLS AdvisorOne Funds
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STATEMENTS OF OPERATIONS
For the Year Ended April 30, 2000
The Amerigo The Clermont
Fund Fund
---- ----
Investment Income:
Dividends $ 241,699 $ 230,828
Total Investment Income 241,699 230,828
Fund Expenses:
Investment advisory fees 258,710 86,251
Legal expense 35,524 31,912
Administrative fees 29,939 29,939
Transfer agent fees 28,692 20,124
Registration 24,989 23,275
Fund accounting fees 19,947 20,002
Printing and postage expense 17,264 5,172
Insurance expense 16,674 8,498
Trustee fees 11,713 11,713
Audit fees 11,648 11,648
Amortization of organization expense 10,392 10,392
Custodian fees 8,736 6,456
Miscellaneous expenses 1,418 1,798
Total expenses before reimbursements 475,646 267,180
Expenses waived by advisor (176,969) (86,251)
Reimbursement of expenses by advisor --- (81,348)
Net Expenses 298,677 99,581
Net Investment Income (Loss) (56,978) 131,247
Realized and Unrealized Gains from Investments:
Net realized gains from investment transactions 357,070 1,971
Net realized gains from distributions of realized 1,061,919 301,239
gains by other investment companies
Net increase in unrealized appreciation of investments 4,865,831 471,087
Net realized and unrealized gains from investments 6,284,820 774,297
Net Increase in Net Assets Resulting from Operations $6,227,842 $ 905,544
See accompanying notes to financial statements.
Annual Report APRIL 30, 2000 13
<PAGE>
CLS AdvisorOne Funds
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STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
The Amerigo Fund The Clermont Fund
Increase In Net Assets: For the Year Ended For the Year Ended For the Year Ended For the Year Ended
April 30, 2000 April 30, 1999 April 30, 2000 April 30, 1999
Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) $ (56,978) $ (68,623) $ 131,247 $ 99,008
Net realized gains from investment transactions 1,418,989 97,342 303,210 72,054
and distributions of realized gains by other
investment companies
Net increase in unrealized appreciation of investments 4,865,831 2,728,302 471,087 485,096
Net Increase in Net Assets Resulting from Operations 6,227,842 2,757,021 905,544 656,158
Dividends and Distributions to Class N Shareholders:
From net investment income --- --- (130,062) (99,008)
In excess of net investment income --- --- --- (1,046)
From net realized gains (307,899) --- (90,277) ---
Net Decrease in Net Assets Resulting from Dividends (307,899) --- (220,339) (100,054)
and Distributions to Shareholders
Capital Transactions:
Proceeds from shares subscribed 15,631,548 13,030,874 4,437,088 5,587,792
Reinvestment of dividends 303,361 --- 219,933 99,556
Cost of shares redeemed (5,548,053) (3,811,473) (2,864,279) (2,863,923)
Net Increase in Net Assets Resulting from Capital 10,386,856 9,219,401 1,792,742 2,823,425
Transactions
Total Increase In Net Assets 16,306,799 11,976,422 2,477,947 3,379,529
Net Assets - Beginning of Period 19,533,954 7,557,532 7,820,083 4,440,554
Net Assets - End of Period $ 35,840,753 $ 19,533,954 $ 10,298,030 $ 7,820,083
Share Transactions:
Subscribed 1,020,039 1,181,402 377,897 546,210
Reinvested 20,037 --- 18,713 9,453
Redeemed (365,670) (329,748) (246,300) (270,426)
Net Increase in Shares Outstanding 674,406 851,654 150,310 285,237
</TABLE>
See accompanying notes to financial statements.
14 The CLS AdvisorOne Funds Annual Report APRIL 30, 2000 15
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CLS AdvisorOne Funds
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FINANCIAL HIGHLIGHTS
The Amerigo Fund
<TABLE>
<CAPTION>
For the Period
For the Year Ended For the Year Ended from July 14, 1997*
April 30, 2000 April 30, 1999 through April 30, 1998
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.88 $ 11.37 $ 10.00
Investment Operations:
Net investment income (loss) (0.03) (0.05) 0.02
Net realized and unrealized gains from investments 3.68 1.56 1.39
Total 3.65 1.51 1.41
Distributions:
From net investment income --- --- (0.02)
In excess of net investment income --- --- (0.02)
From net realized gains (0.17) --- ---
Total (0.17) --- (0.04)
Net Asset Value, End of Period $ 16.36 $ 12.88 $ 11.37
Total Return 28.48% 13.28% 14.11%(1)
Ratios/Supplemental Data:
Net assets, end of period $ 35,840,753 $ 19,533,954 $ 7,557,532
Ratio of expenses to average net assets (3) 1.15% 1.15% 1.15%(2)
Ratio of net investment income (loss) to average (0.22%) (0.51%) 0.15%(2)
net assets
Ratio of expenses to average net assets, before 1.83% 2.29% 4.45%(2)
voluntary fee reductions and reimbursements (3)
Ratio of net investment income (loss) to average (0.90%) (1.65%) (3.15%)(2)
net assets before voluntary fee reductions
and reimbursements
Portfolio turnover rate 9.93% 37.56% 14.36%(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
</FN>
</TABLE>
See accompanying notes to financial statements.
16 The CLS AdvisorOne Funds
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CLS AdvisorOne Funds
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FINANCIAL HIGHLIGHTS
The Clermont Fund
<TABLE>
<CAPTION>
For the Period
For the Year Ended For the Year Ended from July 14, 1997*
April 30, 2000 April 30, 1999 through April 30, 1998
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.23 $ 10.81 $ 10.00
Investment Operations:
Net investment income 0.18 0.14 0.17
Net realized and unrealized gains from investments 1.06 0.42 0.80
Total 1.24 0.56 0.97
Distributions:
From net investment income (0.18) (0.14) (0.16)
From net realized gains (0.12) --- ---
Total (0.30) (0.14) (0.16)
Net Asset Value, End of Period $ 12.17 $ 11.23 $ 10.81
Total Return 11.12% 5.31% 9.84%(1)
Ratios/Supplemental Data:
Net assets, end of period $ 10,298,030 $ 7,820,083 $ 4,440,554
Ratio of expenses to average net assets (3) 1.15% 1.15% 1.15%(2)
Ratio of net investment income to average net 1.51% 1.46% 2.53%(2)
assets
Ratio of expenses to average net assets, before 3.08% 3.31% 5.95%(2)
voluntary fee reductions and reimbursements (3)
Ratio of net investment income (loss) to average (0.42%) (0.70%) (2.27%)(2)
net assets before voluntary fee reductions and
reimbursements
Portfolio turnover rate 18.27% 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
</FN>
</TABLE>
See accompanying notes to financial statements.
Annual Report APRIL 30, 2000 17
<PAGE>
CLS AdvisorOne Funds
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NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000
1. ORGANIZATION
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 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.
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 Funds are the only current series of the Trust and each Fund
has issued two classes of shares. The Class N shares are no-load while certain
redemptions of Class C shares made within the first year of purchase are subject
to contingent deferred sales charges, in accordance with the Funds prospectus.
Each class of shares for each Fund has identical rights and privileges except
with respect to distribution (12b-1) fees, voting rights on matters affecting a
single class of shares and the exchange privileges of each class of shares.
Although two classes of shares were issued during the year, new purchases
into Class C shares were no longer accepted after December 1999 due to a planned
merger, which will transfer the net assets of each Fund to a newly-created
corresponding portfolio of the Orbitex Group of Funds in exchange for shares of
the corresponding Orbitex Fund subsequent to April 30, 2000 (see note 6). As of
December 29, 1999, there were no shareholders in either fund's Class C shares.
Amounts and financial highlights pertaining to Class C shares have not been
separately identified, as such amounts are not material to the financial
statements.
2. 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
18 The CLS AdvisorOne Funds
<PAGE>
CLS AdvisorOne Funds
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
April 30, 2000
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. As
of April 30, 2000, the Funds did not hold any shares of closed-end investment
companies.
FOREIGN SECURITIES: An underlying fund may invest its assets in securities of
foreign issuers. Investments in securities of foreign issuers carry certain
risks 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.
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 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
Annual Report APRIL 30, 2000 19
<PAGE>
CLS AdvisorOne Funds
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
April 30, 2000
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, 2000.
INVESTMENT INCOME & EXPENSES: Income and realized and unrealized gains and
losses are recorded as earned. Expenses of the Funds are recorded as incurred.
3. 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
$176,969 and $167,599, respectively, for the year ended April 30, 2000. 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.
4. INVESTMENT TRANSACTIONS: For the year ended April 30, 2000, purchases and
sales of portfolio securities (excluding short-term securities) were as follows:
The Amerigo Fund The Clermont Fund
Purchases $5,961,575 $1,982,849
Sales $2,301,371 $1,465,196
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, 2000, the gross unrealized
appreciation and depreciation of investments and the aggregate cost basis of
investments for Federal income tax purposes were as follows:
20 The CLS AdvisorOne Funds
<PAGE>
CLS AdvisorOne Funds
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
April 30, 2000
The Amerigo Fund The Clermont Fund
Gross unrealized appreciation $8,385,260 $1,331,364
Gross unrealized depreciation (79,349) (107,849)
Net unrealized appreciation $8,305,911 $1,223,515
Aggregate cost basis $27,482,369 $9,007,509
5. RECLASSIFICATION OF CAPITAL ACCOUNTS: The Funds have adopted Statement of
Position 93-2, Determination, Disclosure and Financial Statement Presentation of
Income, Capital Gain and Return of Capital Distributions by Investment
Companies. As a result of this statement, the Funds changed the classification
of distributions to shareholders to better disclose the differences between
financial statement amounts and distributions determined in accordance with
income tax regulations. As of April 30, 2000, the following reclassifications
have been made to increase (decrease) such accounts:
Accumulated Net Accumulated Net
Investment Income Realized Gain (Loss)
(Loss) on Investments
The Amerigo Fund $492,906 ($492,906)
The Clermont Fund $70,197 ($70,197)
6. Subsequent Event: On January 1, 2000 the Manager merged into a newly-created,
wholly-owned indirect subsidiary of Orbitex Financial Services Group, Inc. On
June 5, 2000 the Funds transferred their net assets to newly-created
corresponding portfolios of the Orbitex Group of Funds in exchange for shares of
the corresponding Orbitex Funds.
Annual Report APRIL 30, 2000 21
<PAGE>
CLS AdvisorOne Funds
--------------------------------------------------------------------------------
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, 2000, 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, 2000, 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,
2000, 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
June 6, 2000
22 The CLS AdvisorOne Funds
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS (UNAUDITED)
On December 22, 1999, the Trust held a Special Meeting of Shareholders to
consider two proposals. The shareholders approved both proposals considered as
follows (with actual vote tabulations):
1. To consider and act upon the approval of an agreement and plan of
reorganization, pursuant to which each Fund will transfer its assets and
liabilities to a newly-created, corresponding portfolio of the Orbitex Group of
Funds in exchange for shares of the corresponding Orbitex Fund (the
"Reorganization"). The Reorganization is related to the pending merger of Clarke
Lanzen Skalla Investment Firm, Inc. ("CLS Advisors"), with and into a
newly-created, wholly-owned, indirect subsidiary of Orbitex Financial Services
Group, Inc. ("New Advisor"). This reorganization is expected to be effective on
June 5, 2000.
--------------------------- ------------------------- -------------------------
In Favor Against Abstained
--------------------------- ------------------------- -------------------------
--------------------------- ------------------------- -------------------------
1,691,882 33,090 50,848
--------------------------- ------------------------- -------------------------
2. To consider and act upon the approval of interim investment advisory
agreements between the Trust, on behalf of each Fund, and the New Advisor, which
would be effective for the period from December 23, 1999 (or such later date on
which the merger of CLS Advisors with and into New Advisors occurs) through the
date on which the Reorganization occurs.
--------------------------- ------------------------- -------------------------
In Favor Against Abstained
--------------------------- ------------------------- -------------------------
--------------------------- ------------------------- -------------------------
1,679,733 38,058 58,029
--------------------------- ------------------------- -------------------------
Annual Report APRIL 30, 2000 23
<PAGE>
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
The CLS AdvisorOne Funds ANNUAL REPORT, April 30, 2000
