The CLS AdvisorOne Funds
Semiannual Report
October 31, 1999
- --------------------------------------------------------------------------------
Clark Lanzen Skalla Investment Firm, Inc.
<PAGE>
2 The CLS AdvisorOne Funds
CONTENTS OF THE REPORT
President's 3 Patrick Clarke on the CLS AdvisorOne
Message Funds
Fund 5 The manager's review of fund
Performnance performance, strategy & outlook
Review
Portfolio of 8 A complete list of Amerigo's investments
Investments with their market values
(Clermont)
Portfolio of 10 A complete list of Clermont's investments
Investments with their market values
(Amerigo)
Financial 12 Statements of assets and liabilities,
Statements operations, and changes in net assets,
as well as financial highlights
Notes 18 Footnotes to the Financial Statements
CLS ADVISORONE FUNDS
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 to determine which mutual funds are
currently earning the greatest returns considering the amount of risk. The CLS
AdvisorOne Funds attempt to build a portfolio of some of the very best funds
available, and put them together into one portfolio 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.
The CLS AdvisorOne Funds provide a simple solution to a challenging investment
world.
<PAGE>
Semiannual Report October 31, 1999 3
A MESSAGE FROM THE PRESIDENT
[PHOTO] W. Patrick Clarke, President
Dear Shareholder,
WHEN WE embarked on the journey to develop a FUND OF FUNDS back in July of 1997,
the idea of a portfolio diversified across various asset classes was up against
very heavy competition as major market indexes were dominated by only a few
asset classes, with one dominant leader in Blue Chip S&P 500 Stocks. A high
degree of scrutiny was placed on our two funds whose holdings included various
classes of equity funds, international funds, bond funds and cash positions.
Determinedly, we stayed focused on the disciplined management of our clients'
portfolios, keeping them aligned with our original investment objectives. Our
philosophy didn't gain favor when, in October of 1998, the markets saw the
biggest one day drop of the decade, and we remained invested against the tide of
investors selling their positions. Staying the course proved to be the correct
decision, allowing our investors to take full advantage of the advance that
shortly took place.
However, the Asian Currency Crisis of that period had investors fearing
international markets, giving even more credence to owning little more than the
"ever faithful" S&P 500 big hitters. We continued to believe that solidly
performing funds could be found in almost any market environment.
But finally, after a very strong Summer for Blue Chips and Large Caps in 1999,
it began to appear as though that decade of dominance may be faced with a breeze
of flux. In fact, on two different occasions, June 30th and August 24th of 1999,
the winds of change began to shake the markets as the Federal Reserve Board
steadily raised interest rates. All told, the Federal Funds rate gusted to a
crisp .50% increase with more to come in November.
Now, as we move towards the end of 1999, The CLS AdvisorOne Funds have entered
their third year and the disciplined strategy we've followed all along becomes
more important than ever.
As of the printing of this report, Amerigo has posted 40.00% growth since
inception, and 18.32% year-to-date. Clermont, our more conservative portfolio
has a 19.09% return since inception, and 9.49% year-to-date. I am very excited
about the progress of our fund family, and its achievements in the past few
years. Apart from posting strong returns while maintaining relatively lower
<PAGE>
4 The CLS AdvisorOne Funds
levels of market risk, we've opened up a new class of funds, and the most
exciting news is yet to come upon the first of the year...
Orbitex Financial Services, Inc.
The CLS AdvisorOne Funds have been invited to join the Orbitex Group of Funds, a
global mutual fund family with funds ranging from an Info-Tech & Communications
fund, to a Strategic Natural Resources fund, to a Health & Biotechnology fund,
and many more.
By combining our investment expertise with the worldwide resources of Orbitex,
we will have the ability to provide access to global investment management,
research, economists, and a new sector rotation product which is currently in
the stages of development.
We will have new opportunities with Orbitex's increased financial strength and
access to different facets of the investment world.
It gives me great pleasure that you are able to take part in the CLS AdvisorOne
Funds, and move with us into the next phase of our fund family's development. Of
course, possibly the most important component of The CLS AdvisorOne Funds is the
expertise of our Portfolio Manager, Randy Skalla. In the next section of this
report, he'll discuss performance of the funds along with some market
perspective over the past six months.
Additionally, in this report you'll find a detailed breakdown of our funds'
holdings, the financial statements, fund highlights, and accompanying notes.
I'd 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
<PAGE>
Semiannual Report October 31, 1999 5
PERFORMANCE REVIEW
by Randy Skalla
IN THE six month period ending October 31, 1999, money managers ranged in
opinion regarding the interpretation of common financial signals. The more
bearish an investor was, the more likely he or she was to take the negatives as
a sign to sidestep equity markets in an attempt to miss a potential decline.
They tended to seek safe harbor in a much more conservative cash position.
Others questioned the negatives in the market, sighting some overlooked positive
aspects. They sought performance despite many negative fundamentals Regardless,
the trend in the market proved to be quite flat. From May 1st, 1999 through
October's end, the Dow Jones Industrial Average gained only 0.26%, making either
investment decision (whether you were bullish or bearish) relatively
inconsequential.
Probably the most prominent negative signal came from the Federal Reserve
Board's attempt to tighten the reigns, amounting to a total .50% increase in the
Federal Funds rate between June and August, with another raise likely in
mid-November.
As our investment models continually pointed towards the importance of
investigating the counterbalancing effects of those positives, we found reason
to explore the opportunities of remaining invested.
We found that while there are clearly some negative factors at play in the US
market, they are largely counterbalanced by a strong economy, strong corporate
performance, national productivity growth, low unemployment and low inflation.
Domestic markets had begun to demonstrate a broadening-out among those funds
that had been leading performance in Growth and Large Cap asset classes. The
result, specifically in the S&P 500, was continued economic expansion that
relied less on the largest fifty companies. A broader base of companies were
generating returns, and contributing to the strength (as well as stability) of
the market.
With the combination of decisively negative signals, yet a strong overall growth
rate in the market, asset allocation became increasingly important. And with a
general trend away from a market dominated by the same asset classes year after
year, the market environment over the past six months has been an excellent test
of the AdvisorOne philosophy.
In a generally flat environment, AdvisorOne's goal was to find skilled managers
to pick funds with the ability to outperform their asset classes. Even though
indexes were flat, International and Small Cap asset classes helped our
portfolios find growth.
Additionally, both funds were able to take advantage of the rising strength in
the technology sector. Amerigo is overweighted in technology stocks, while
Clermont is considered to hold a neutral technology weighting. However, when you
consider Clermont's 33.44% fixed income position, both funds are overweighted in
technol-
<PAGE>
6 The CLS AdvisorOne Funds
ogy stocks relative to the S&P 500 Index.
By maintaining a diverse asset allocation, however, the funds will be subject to
drawbacks in performance by asset classes that are currently underperforming.
For instance, bonds were a drag on Clermont's performance as the rising interest
rate environment pushed bond valuations lower.
Before I get into the specific analysis of the individual funds, I'll mention
that we've held these funds with little need to make major trades in either
portfolio. As you turn to the portfolio of investments later in this report,
you'll notice very low fund turnover in both funds.
AMERIGO FUND REVIEW
The total return for the Amerigo Fund during the past six months ending October
31, 1999 was 8.31%. During the same time period the S&P 500 Composite Stock
Price Index* gained 2.67%, and the Multi Asset Global mutual fund monitored by
Morningstar, Inc. ** gained 2.72%. Amerigo benefitted from strong growth in
International Funds. The two best performing positions in Amerigo are Warburg
Pincus Japan Growth, which is up 80.10% for the period of this report, and
Federated International Small, up 32.74% for the period. We continue to
overweight Amerigo in this area and look for future opportunities in
International markets.
CLERMONT FUND REVIEW
The total return for the Clermont Fund during the past six months ending October
31, 1999 was 2.96%. During the same time period the S&P 500 Composite Stock
Price Index* gained 2.67%, and the Multi Asset Global mutual fund monitored by
Morningstar, Inc. ** gained 2.72%.
Like Amerigo, part of Clermont's strength over this six month period comes from
its International positions. Clermont used such positions to stay competitive,
and actually beat the S&P 500 despite its heavy overweighting in bonds. The top
performing funds in Clermont were the Montgomery Global Long Short fund, up
26.46%
[GRAPH] The following information was presented as a bar graph:
Total Returns for The CLS AdvisorOne Funds Since May 1, 1999 through October 31,
1999.
Amerigo 8.31%
Clermont 2.96%
S&P 500* 2.67%
Dow Jones Industrial Average** 0.26%
Multi-Asset Global*** 2.72%
EAFE IL**** 2.24%
* 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. 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.
** DOW JONES INDUSTRIAL AVERAGE is a price -weighted average of 30 actively
traded Blue Chip, primarily industrial stocks.
*** MULTI-ASSET GLOBAL is an index of 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.
**** EAFE IL is the EUROPE & AUSTRALASIA, FAR EAST EQUITY index for
international stock portfolios listed in local currency.
<PAGE>
Semiannual Report October 31, 1999 7
for the period, and Rydex OTC, up 23.13%.
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. Taking less risk than Amerigo by design, in a down market the Clermont
Fund will retain more of its value 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. This was clearly illustrated during the period of recovery after the
market's October 8, 1998 low. From that low through October, 29, 1999, Amerigo
gained 59.06%, while Clermont gained 28.56%. AdvisorOne's goal is to outperform
its indexes on a risk adjusted basis. For the period of this report, not only
did the funds beat the S&P 500 Index on a risk adjusted basis, but also on total
return.
My outlook for the funds is that both Amerigo and Clermont are well positioned
to move forward through end of the year financial cycles, the beginning of 2000,
and the uncertainty of the Y2K transition. I'll be keeping an eye on the
managers who have been a part of AdvisorOne's success, keeping them a large part
of our portfolios. I feel confident in the areas we are overweighted and I will
also keep an eye on the asset classes I've chosen to underweight, looking for a
turning point in their performance.
RANDY SKALLA ON THE STRATEGY OF FUND PICKING
WHEN I CHOOSE FUNDS for Amerigo and Clermont, I focus heavily on the management
characteristics of those funds. Management characteristics of their Portfolio
Managers, as well as tendencies of their management style are very telling of
whether or not these funds have what I am looking for.
An issue to be largely concerned with is style drift, or how closely a fund
sticks to its originally stated investment objectives. It's always important
to make sure a fund's trading and rebalancing strategies reflect a high degree
of loyalty to their objectives because those affect the financial goals of the
investors.
I find it important to research funds well ahead of time as they meet the
criteria of an AdvisorOne holding. I'll talk personally with fund managers,
build relationships with them, and follow them closely as they continue to play
important roles in our portfolio makeup.
Regarding the managers we currently use, I can honestly say I highly respect
their work and stock picking skills. The combination of my established in-depth
research and their abilities, AdvisorOne is able to hold on to these funds for a
while and maximize the benefits of owning them.
<PAGE>
8 The CLS AdvisorOne Funds
CLS AdvisorOne Funds
PORTFOLIO OF INVESTMENTS
October 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
The Amerigo Fund
% of
Shares Net Assets Value
------ ---------- -----
<S> <C> <C> <C>
Registered Investment Companies
Large Cap Value
Masters Select Equity Fund 62,646 4.04% $978,527
Fidelity Advisor Growth Opportunities I Fund 19,145 4.04% 977,758
Large Cap Growth
Rydex OTC Fund # 48,119 11.79% 2,853,464
SSgA Growth and Income Fund 58,055 5.58% 1,349,202
Nations Marsico Focused Equities Fund -- Advisor Class # 40,979 3.06% 740,893
Janus Growth and Income Fund 15,806 2.41% 582,292
Janus Mercury Fund # 15,555 2.29% 554,379
Warburg Pincus Health Sciences Fund # 32,714 2.02% 488,089
Large Cap Blend
S&P Depositary Receipts * 28,900 16.35% 3,959,300
Strong Growth and Income Fund 10,088 1.05% 254,817
Mid Cap Value
Oakmark Select Fund 56,461 5.17% 1,252,304
Small Cap Value
Weitz Series Hickory Fund 28,117 4.42% 1,069,297
Small Cap Growth
TIP Funds Turner Small Cap Equity Fund # 25,145 3.90% 945,213
Baron Asset Fund 8,678 1.91% 463,585
O'Shaughnessy Cornerstone Growth Fund # 28,977 1.58% 382,205
Undiscovered Managers Behavioral Growth Fund # 15,385 1.39% 337,385
Bonds
Rydex U.S. Government Bond Fund 78,931 2.95% 714,325
International Equity
Janus Overseas Fund 48,601 5.08% 1,231,057
Federated International Small Company Fund -- Class A # 39,080 4.67% 1,129,804
Montgomery Global Long-Short Fund # 29,057 2.73% 661,048
Warburg Pincus Japan Growth Fund # 25,894 2.59% 628,184
Templeton Developing Markets Trust Fund 6,766 0.35% 85,925
Total Registered Investment Companies
(Cost $16,394,343) 89.37% 21,639,053
Money Market Mutual Funds
Flex-funds Money Market Fund 2,532,615 10.46% 2,532,615
Alliance Prime Portfolio 33,548 0.14% 33,548
Total Money Market Mutual Funds
(Cost $2,566,163) 10.60% 2,566,163
Total Investments
(Cost $18,960,506) 99.97% 24,205,216
Other Assets in Excess of Liabilities 0.03% 8,119
Total Net Assets 100% $24,213,335
<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>
Semiannual Report October 31, 1999 9
[CHART] The following information was presented as a pie chart:
AMERIGO'S COMPOSITION %
Bonds & Cash 13.55%
International 15.42%
U.S. Stocks 71.00%
Composition % based on holdings of underlying funds within Amerigo as of October
31, 1999
THE AMERIGO FUND'S
INVESTMENT STYLE % IN
U.S. STOCK FUNDS
October 31, 1999
Value Blend Growth
- ----- ----- ------
8.08% 17.40% 27.15% Large
5.17% Mid
4.42% 8.78% Small
<PAGE>
10 The CLS AdvisorOne Funds
CLS AdvisorOne Funds
PORTFOLIO OF INVESTMENTS
October 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
The Clermont Fund
% of
Shares Net Assets Value
<S> <C> <C> <C>
Registered Investment Companies
Large Cap Value
Invesco Financial Strategic Utilities Fund 20,292 4.22% $359,579
Large Cap Growth
Invesco Blue Chip Growth Fund 137,213 12.31% 1,049,676
Rydex OTC Fund # 2,566 1.78% 152,135
Large Cap Blend
S&P Depositary Receipts * 12,200 19.60% 1,671,400
Mid Cap Value
Weitz Series Fund Value Portfolio 14,868 6.00% 511,906
Oakmark Select Fund 13,422 3.49% 297,692
Oakmark Equity and Income Fund 8,148 1.51% 128,989
Small Cap Value
Third Avenue Value Fund 2,457 1.41% 120,360
Small Cap Growth
Baron Growth & Income Fund 6,586 2.16% 183,892
Bonds
Strong Corporate Bond Fund 69,321 8.61% 734,806
Invesco High-Yield Bond Fund 109,975 8.16% 696,139
Fidelity Advisor Intermediate Bond Fund 38,284 4.63% 394,705
Rydex U.S. Government Bond Fund 12,852 1.36% 116,312
Strong Short-Term High-Yield Bond Fund 10,059 1.20% 102,707
International Equity
Tweedy Browne Global Value Fund 30,533 7.31% 623,781
Montgomery Global Long-Short Fund # 12,873 3.43% 292,851
Oakmark International Small Cap Fund 19,951 2.93% 249,586
Total Registered Investment Companies
(Cost $6,785,081) 90.11% 7,686,516
Money Market Mutual Funds
Flex-funds Money Market Fund 789,078 9.25% 789,078
Alliance Prime Portfolio 19,436 0.23% 19,436
Total Money Market Mutual Funds
(Cost $808,514) 9.48% 808,514
Total Investments
(Cost $7,593,595) 99.59% 8,495,030
Other Assets in Excess of Liabilities 0.41% 35,239
Total Net Assets 100% $8,530,269
<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>
Semiannual Report October 31, 1999 11
[CHART] The following information was presented as a pie chart:
CLERMONT'S COMPOSITION %
Bonds & Cash 33.44%
International 13.67%
U.S. Stocks 52.48%
Composition % based on holdings of underlying funds within Clermont as of
October 31, 1999
THE CLERMONT FUND'S
INVESTMENT STYLE % IN
U.S. STOCK FUNDS
October 31, 1999
Value Blend Growth
- ----- ----- ------
4.22% 19.60% 14.09% Large
11.00% Mid
1.41% 2.16% Small
<PAGE>
CLS AdvisorOne Funds
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1999
(Unaudited)
The The
Amerigo Clermont
Fund Fund
Assets:
Investments, at market value (cost $18,960,506 $ 24,205,216 $ 8,495,030
and $7,593,595, respectively)
Interest and dividends receivable 12,020 3,062
Receivable from advisor 11,390 21,838
Unamortized organization costs 28,035 28,035
Prepaid expense and other assets 9,258 16,158
Total Assets 24,265,919 8,564,123
Liabilities:
Management fees payable 19,336 6,882
12b-1 fees - Class C 11 ---
Shareholder service fees - Class C 4 ---
Other accrued liabilities 33,233 26,972
Total Liabilities 52,584 33,854
Net Assets $ 24,213,335 $ 8,530,269
Components of Net Assets:
Capital $ 18,863,763 $ 7,526,144
Accumulated undistributed net investment (46,978) 11,381
income (loss)
Accumulated undistributed net realized gains 151,840 91,309
Net unrealized appreciation of investments 5,244,710 901,435
Total Net Assets $ 24,213,335 $ 8,530,269
Net Assets:
Class N Shares $ 24,184,286 $ 8,530,166
Class C Shares 29,049 103
Total 24,213,335 8,530,269
Capital Stock Outstanding
Class N Shares 1,734,218 743,858
Class C Shares 2,086 9
Total 1,736,304 743,867
Net Asset Value -- Offering and Redemption Price Per Share
Class N Shares $ 13.95 $ 11.47
Class C Shares* $ 13.93 $ 11.45
* Redemption price varies based upon holding period.
See accompanying notes to financial statements.
12 The CLS AdvisorOne Funds
<PAGE>
CLS AdvisorOne Funds
STATEMENTS OF OPERATIONS
For the Six Months Ended October 31, 1999
(Unaudited)
The The
Amerigo Clermont
Fund Fund
Investment Income:
Dividends $ 74,904 $ 93,179
Total Investment Income 74,904 93,179
Fund Expenses:
Investment advisory fees 105,314 39,416
12b-1 fees - Class C 11 ---
Shareholder service fees - Class C 4 ---
Administrative fees 14,969 14,969
Transfer agent fees 14,314 9,932
Fund accounting fees 9,974 10,000
Registration 17,879 8,234
Printing and postage expense 9,438 2,624
Insurance expense 8,878 4,980
Trustee fees 5,707 5,707
Audit fees 5,642 5,642
Amortization of organization expense 5,196 5,196
Custodian fees 4,368 4,272
Legal expense 488 488
Miscellaneous expenses 392 392
Total expenses before reimbursements 202,574 111,852
Reimbursement of expenses by advisor (80,744) (66,012)
Net Expenses 121,830 45,840
Net Investment Income (Loss) (46,926) 47,339
Realized and Unrealized Gains (Losses)
from Investments
Net realized gains (losses) from investment
transactions (82,963) 12,175
Net realized gains from distributions of
realized gains by other investment companies 87,094 21,819
Net increase in unrealized appreciation of
investments 1,804,630 149,007
Net realized and unrealized gains from investments 1,808,761 183,001
Net Increase in Net Assets Resulting from Operations $ 1,761,835 $ 230,340
See accompanying notes to financial statements.
Semiannual Report October 31, 1999 13
<PAGE>
CLS AdvisorOne Funds
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
The Amerigo Fund The Clermont Fund
Increase In Net Assets: For the Six Months For the Year Ended For the Six Months For the Year Ended
Ended October 31, April 30, 1999 Ended October 31, April 30, 1999
1999 (Unaudited) 1999 (Unaudited)
Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) $ (46,926) $ (68,623) $ 47,339 $ 99,008
Net realized gains from investment transactions 4,131 97,342 33,994 72,054
Net increase in unrealized appreciation 1,804,630 2,728,302 149,007 485,096
of investments
Net Increase in Net Assets Resulting from Operations 1,761,835 2,757,021 230,340 656,158
Dividends and Distributions to Class N Shareholders:
From net investment income --- --- (47,339) (85,324)
In excess of net investment income --- --- (16,923) ---
From net realized gains --- --- --- (14,730)
Net Decrease in Net Assets Resulting from Dividends --- --- (64,262) (100,054)
and Distributions to Shareholders
Capital Transactions:
Proceeds from shares subscribed 4,668,301 13,030,874 1,814,673 5,587,792
Reinvestment of dividends --- --- 64,156 99,556
Cost of shares redeemed (1,750,755) (3,811,473) (1,334,721) (2,863,923)
Net Increase in Net Assets Resulting from 2,917,546 9,219,401 544,108 2,823,425
Capital Transactions
Total Increase In Net Assets 4,679,381 11,976,422 710,186 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 $ 24,213,335 $ 19,533,954 $ 8,530,269 $ 7,820,083
Share Transactions:
Subscribed 353,814 1,181,402 161,167 546,210
Reinvested --- --- 5,741 9,453
Redeemed (133,624) (329,748) (119,243) (270,426)
Net Increase in Shares Outstanding 220,190 851,654 47,665 285,237
<FN>
* Date of commencement of operations.
</FN>
</TABLE>
See accompanying notes to financial statements.
14 The CLS AdvisorOne Funds Semiannual Report October 31, 1999 15
<PAGE>
CLS AdvisorOne Funds
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
The Amerigo Fund - Class N The Amerigo Fund - Class C
For the Period
For the Six Months For the Year For the Period from August 31, 1999*
Ended October 31, Ended from July 14, 1997* through October 31,
1999 (Unaudited) April 30, 1999 through April 30, 1998 1999 (Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.88 $ 11.37 $ 10.00 $ 13.19
Investment Operations:
Net investment income (loss) (0.03) (0.05) 0.02 0.02
Net realized and unrealized gains
from investments 1.10 1.56 1.39 0.72
Total 1.07 1.51 1.41 0.74
Distributions:
From net investment income --- --- (0.02) ---
In excess of net investment income --- --- (0.02) ---
Total --- --- (0.04) ---
Net Asset Value, End of Period $ 13.95 $ 12.88 $ 11.37 $ 13.93
Total Return (excludes redemption charges
and assumes reinvestment of distributions) 8.31%(1) 13.28% 14.11%(1) 5.61%(1)
Ratios/Supplemental Data:
Net assets, end of period $ 24,184,286 $ 19,533,954 $7,557,532 $ 29,049
Ratio of expenses to average net assets(3) 1.15%(2) 1.15% 1.15%(2) 2.15%(2)
Ratio of net investment income (loss) to (0.44%)(2) (0.51%) 0.15%(2) 3.63%(2)
average net assets
Ratio of expenses to average net assets, 1.91%(2) 2.29% 4.45%(2) 2.79%(2)
before voluntary fee reductions and
reimbursements(3)
Ratio of net investment income (loss) to (1.20%)(2) (1.65%) (3.15%)(2) 2.99%(2)
average net assets before voluntary fee
reductions and reimbursements
Portfolio turnover rate 3.23%(1) 37.56% 14.36%(1) 3.23%(1)
</TABLE>
<TABLE>
<CAPTION>
The Clermont Fund - Class N The Clermont Fund - Class C
For the Period
For the Six Months For the For the Period from August 31, 1999*
Ended October 31, Year Ended from July 14, 1997* through October 31,
1999 (Unaudited) April 30, 1999 through April 30, 1998 1999 (Unaudited)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.23 $ 10.81 $ 10.00 $ 11.15
Investment Operations:
Net investment income (loss) 0.07 0.14 0.17 0.02
Net realized and unrealized gains
from investments 0.26 0.42 0.80 0.32
Total 0.33 0.56 0.97 0.34
Distributions:
From net investment income (0.07) (0.12) (0.16) (0.02)
In excess of net investment income (0.02) --- --- (0.02)
From net realized gains --- (0.02) --- ---
Total (0.09) (0.14) (0.16) (0.04)
Net Asset Value, End of Period $ 11.47 $ 11.23 $ 10.81 $ 11.45
Total Return (excludes redemption charges 2.96%(1) 5.31% 9.84%(1) 3.06%(1)
and assumes reinvestment of distributions)
Ratios/Supplemental Data:
Net assets, end of period $ 8,530,166 $ 7,820,083 $ 4,440,554 $ 103
Ratio of expenses to average net assets(3) 1.15%(2) 1.15% 1.15%(2) 2.15%(2)
Ratio of net investment income (loss) to 1.19%(2) 1.46% 2.53%(2) 0.90%(2)
average net assets
Ratio of expenses to average net assets, 2.82%(2) 3.31% 5.95%(2) 5.07%(2)
before voluntary fee reductions and
reimbursements(3)
Ratio of net investment income (loss) to (0.48%)(2) (0.70%) (2.27%)(2) (2.02%)(2)
average net assets before voluntary fee
reductions and reimbursements
Portfolio turnover rate 2.86%(1) 64.67% 22.24%(1) 2.86%(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 Semiannual Report October 31, 1999 17
<PAGE>
CLS AdvisorOne Funds
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
(Unaudited)
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 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.
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 companies (the
"underlying funds"). Underlying funds are valued at their respective net asset
values as reported by such investment companies under the 1940 Act. The
underlying funds value securities in their portfolios for which market
18 The CLS AdvisorOne Funds
<PAGE>
CLS AdvisorOne Funds
NOTES TO FINANCIAL STATEMENTS, CONTINUED
October 31, 1999
(Unaudited)
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 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 October 31, 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
Semiannual Report October 31, 1999 19
<PAGE>
CLS AdvisorOne Funds
NOTES TO FINANCIAL STATEMENTS, CONTINUED
October 31, 1999
(Unaudited)
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 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. Certain October 31, 1999 amounts have been
reclassified to conform to their presentation as of April 30, 1999.
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 October 31, 1999.
INVESTMENT INCOME & EXPENSES: Income and realized and unrealized gains and
losses are allocated to the separate classes based on their relative net assets.
Expenses of the Funds, other than expenses incurred pursuant to the Class C
distribution and shareholder service plans, are allocated to the separate
classes based on their relative net assets or other appropriate basis.
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 Funds' 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 reim-
20 The CLS AdvisorOne Funds
<PAGE>
CLS AdvisorOne Funds
NOTES TO FINANCIAL STATEMENTS, CONTINUED
October 31, 1999
(Unaudited)
20 The CLS AdvisorOne Funds
burse each Fund through an expense reimbursement to the extent necessary to keep
total expenses of each Funds Class N and Class C shares at or below 1.15% and
2.15% of average daily net assets, respectively. 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 $80,744 and
$66,012, respectively, for the six months ended October 31, 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.
Pursuant to Rule 12b-1 of the Act, each Fund has adopted two Distribution
Plans (the "Plans") that allow Class C shares to pay distribution fees for the
sale and distribution of its shares and to pay for services provided to
shareholders. Class C shares pay annual 12b-1 and service fee expenses of 1.00%
(of which 0.75% is an asset based sales charge and 0.25% is a service fee) of
average daily net assets.
4. INVESTMENT TRANSACTIONS: For the six months ended October 31, 1999, purchases
and sales of portfolio securities (excluding short-term securities) were as
follows:
The Amerigo Fund The Clermont Fund
Purchases $1,932,712 $214,323
Sales $633,002 $353,494
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 October 31, 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 Amerigo Fund The Clermont Fund
Gross unrealized appreciation $5,271,903 $998,336
Gross unrealized depreciation (32,259) (96,984)
-------------- -------------
Net unrealized appreciation $5,239,644 $901,352
-------------- -------------
Aggregate cost basis $18,965,572 $7,593,678
Semiannual Report OCTOBER 31, 1999 21
<PAGE>
CLS AdvisorOne Funds
NOTES TO FINANCIAL STATEMENTS, CONTINUED
October 31, 1999
(Unaudited)
5. FUND SHARE TRANSACTIONS:
The Amerigo Fund for the six months ended October 31, 1999
CLASS N CLASS C*
Shares Amount Shares Amount
Subscribed 351,723 $4,639,841 2,091 $28,460
Redeemed (133,619) (1,750,688) (5) (67)
Net Increase 218,104 $2,889,153 2,086 $28,393
The Clermont Fund for the six months ended October 31, 1999
CLASS N CLASS C*
Shares Amount Shares Amount
Subscribed 161,158 $1,814,573 9 $100
Reinvested 5,741 64,156 -- --
Redeemed (119,243) (1,334,721) -- --
Net Increase 47,665 $544,008 9 $100
* Commencement of operations began August 31, 1999.
For the year ended April 30, 1999
AMERIGO - CLASS N CLERMONT - CLASS N
Shares Amount Shares Amount
Subscribed 1,181,402 $13,030,874 546,210 $5,587,792
Reinvested -- -- 9,453 99,556
Redeemed (329,748) (3,811,473) (270,426) (2,863,923)
Net Increase 851,654 $9,219,401 285,237 $ 2,823,425
6. SPECIAL MEETING OF SHAREHOLDERS: A meeting has been called for December 22,
1999 for the purpose of considering two proposals, which are described
below, and transacting any other business that may properly come before the
meeting.
The first proposal asks shareholders to consider and act on 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").
The second proposal asks shareholders to consider and act on 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. Both proposals are more fully described in a
proxy statement that was mailed to shareholders on November 30, 1999. Since
the results of the meeting were not available at the time this report was
printed please call 1-800-635-3427 to obtain them.
22 The CLS AdvisorOne Funds
<PAGE>
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
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
Semiannual Report OCTOBER 31, 1999 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 Semiannual Report, October 31, 1999
