ISI
INTERNATIONAL STRATEGY & INVESTMENT
ISI
STRATEGY
FUND SHARES
(A CLASS OF ISI STRATEGY FUND, INC.)
STRATEGY
ANNUAL REPORT
MAY 31, 2000
<PAGE>
INVESTMENT ADVISOR'S REPORT
--------------------------------------------------------------------------------
We are pleased to report on the progress of the fund during the fiscal year.
Over this time frame, the total return was 6.09%. From its inception on
September 16, 1997, the cumulative total return is 32.01%. These figures assume
the reinvestment of dividends and exclude the impact of any sales charges. The
equity and bond markets have been very volatile over the last year but equities
have outperformed bonds: Wilshire 5000 Index +10.33%; Lehman Treasury Index
+3.35%. Please see the following charts.
WILSHIRE 5000
6/1/99 - 5/31/00
--------------------------------------------------------------------------------
[graphic omitted]
plot points as follows:
6/1/99 11902.5
6/2/99 11894.6
6/3/99 11927.3
6/4/99 12152.3
6/7/99 12239.5
6/8/99 12100.7
6/9/99 12120.9
6/10/99 11982
6/11/99 11885.2
6/14/99 11829.3
6/15/99 11882.7
6/16/99 12144.8
6/17/99 12240.7
6/18/99 12268.5
6/21/99 12344.5
6/22/99 12238.9
6/23/99 12217.3
6/24/99 12072.9
6/25/99 12060.8
6/28/99 12192.4
6/29/99 12377.9
6/30/99 12583.6
7/1/99 12643.5
7/2/99 12735.9
7/6/99 12725.1
7/7/99 12758.1
7/8/99 12749.9
7/9/99 12838.4
7/12/99 12802
7/13/99 12758.9
7/14/99 12813.1
7/15/99 12920.9
7/16/99 12976.9
7/19/99 12877.1
7/20/99 12606.4
7/21/99 12631.3
7/22/99 12470.3
7/23/99 12436.6
7/26/99 12314.3
7/27/99 12450.1
7/28/99 12477.5
7/29/99 12265.1
7/30/99 12169.7
8/2/99 12143.2
8/3/99 12061.3
8/4/99 11882.6
8/5/99 11950.9
8/6/99 11842.7
8/9/99 11800.4
8/10/99 11663.9
8/11/99 11840.4
8/12/99 11832.7
8/13/99 12075.2
8/16/99 12109
8/17/99 12227.7
8/18/99 12145
8/19/99 12060.5
8/20/99 12170.1
8/23/99 12367.2
8/24/99 12393.6
8/25/99 12540.8
8/26/99 12394.9
8/27/99 12277
8/30/99 12069.5
8/31/99 12042.2
9/1/99 12129
9/2/99 12019.2
9/3/99 12350.5
9/7/99 12322.6
9/8/99 12265.1
9/9/99 12303.5
9/10/99 12347.2
9/13/99 12278.7
9/14/99 12211.9
9/15/99 12055.8
9/16/99 12032.5
9/17/99 12182.6
9/20/99 12176.7
9/21/99 11942.8
9/22/99 11974.9
9/23/99 11704.1
9/24/99 11675.9
9/27/99 11722
9/28/99 11697.5
9/29/99 11607.9
9/30/99 11713.8
10/1/99 11703.3
10/4/99 11892.9
10/5/99 11879.1
10/6/99 12092.7
10/7/99 12035.8
10/8/99 12170.4
10/11/99 12197.1
10/12/99 11989.4
10/13/99 11757.6
10/14/99 11751.2
10/15/99 11446.6
10/18/99 11456.4
10/19/99 11534.3
10/20/99 11765.8
10/21/99 11719.6
10/22/99 11874.3
10/25/99 11825.3
10/26/99 11737
10/27/99 11846.4
10/28/99 12229.2
10/29/99 12449.5
11/1/99 12403.2
11/2/99 12369.5
11/3/99 12452.5
11/4/99 12534.6
11/5/99 12619.2
11/8/99 12688.9
11/10/99 12653.6
11/11/99 12697.9
11/12/99 12842.7
11/15/99 12844.8
11/16/99 13078
11/17/99 13002.8
11/18/99 13148.6
11/19/99 13126.3
11/22/99 13127.9
11/23/99 12961.5
11/24/99 13078.8
11/26/99 13101.7
11/29/99 13018.3
11/30/99 12851.9
12/1/99 12923.5
12/2/99 13067.2
12/3/99 13281.1
12/6/99 13219.9
12/7/99 13162.2
12/8/99 13142.9
12/9/99 13183.8
12/10/99 13254.9
12/13/99 13247.1
12/14/99 13088.9
12/15/99 13153.2
12/16/99 13224.4
12/17/99 13251
12/20/99 13248.6
12/21/99 13431.2
12/22/99 13473.3
12/23/99 13652.8
12/27/99 13626.6
12/28/99 13652.2
12/29/99 13734.1
12/30/99 13737.7
12/31/99 13812.7
1/3/00 13709.4
1/4/00 13168.8
1/5/00 13178.5
1/6/00 13134.2
1/7/00 13497
1/10/00 13722.7
1/11/00 13511.9
1/12/00 13426.6
1/13/00 13633.2
1/14/00 13795.3
1/18/00 13759.2
1/19/00 13807.6
1/20/00 13774
1/21/00 13793.4
1/24/00 13433.4
1/25/00 13507.2
1/26/00 13451.8
1/27/00 13395.7
1/28/00 13017.7
1/31/00 13230.6
2/1/00 13392.8
2/2/00 13416.3
2/3/00 13606
2/4/00 13603.8
2/7/00 13642.9
2/8/00 13813.7
2/9/00 13554.6
2/10/00 13631.8
2/11/00 13385.6
2/14/00 13418.3
2/15/00 13503
2/16/00 13422.2
2/17/00 13482.8
2/18/00 13124.3
2/22/00 13150
2/23/00 13294.6
2/24/00 13285
2/25/00 13142.7
2/28/00 13258.8
2/29/00 13511
3/1/00 13693
3/2/00 13692.2
3/3/00 13999.5
3/6/00 13877.5
3/7/00 13583.9
3/8/00 13667.9
3/9/00 14006.4
3/10/00 13952
3/13/00 13762.7
3/14/00 13461
3/15/00 13608.8
3/16/00 14202.2
3/17/00 14273.5
3/20/00 14053.2
3/21/00 14346.2
3/22/00 14521.3
3/23/00 14734.2
3/24/00 14751.6
3/27/00 14703.9
3/28/00 14508.5
3/29/00 14384.6
3/30/00 14133.9
3/31/00 14296.2
4/3/00 14121.6
4/4/00 13955.8
4/5/00 13948.5
4/6/00 14146.6
4/7/00 14341.1
4/10/00 14083.1
4/11/00 13972.6
4/12/00 13586.3
4/13/00 13335.4
4/14/00 12475.1
4/17/00 12849.6
4/18/00 13329
4/19/00 13221.4
4/20/00 13249.4
4/24/00 13126.5
4/25/00 13608
4/26/00 13449.3
4/27/00 13545.3
4/28/00 13541.7
5/1/00 13726.8
5/2/00 13457.9
5/3/00 13179.2
5/4/00 13181.8
5/5/00 13385.8
5/8/00 13264.2
5/9/00 13119.3
5/10/00 12788.7
5/11/00 13041.4
5/12/00 13151.1
5/15/00 13437.6
5/16/00 13601.4
5/17/00 13417.7
5/18/00 13280.6
5/19/00 12980.7
5/22/00 12893.3
5/23/00 12610.7
5/24/00 12804.2
5/25/00 12646.6
5/26/00 12617
5/30/00 13080.6
5/31/00 13053
Strategy Fund performance was helped by its over 60% equity weighting and
under 40% bond weighting. Currently the Fund has 56% in stocks, which is lower
than the Fund's typical allocation for most of the fiscal year. ISI expects that
a slowing economy will blunt corporate profit growth over the balance of 2000.
With stock market valuations historically high, the tolerance for earnings
shortfalls is very limited and should put some pressure on prices. We expect the
pressure on stocks will be modest because of falling interest rates. Please see
ISI's "Market Outlook" discussion that follows this letter for more on the
expected performance of stocks and bonds.
30 YEAR U.S. TREASURY YIELD
5/31/99 - 5/31/00
--------------------------------------------------------------------------------
[graphic omitted]
plot points as follows:
5/31/99 5.828
6/1/99 5.924
6/2/99 5.933
6/3/99 5.963
6/4/99 5.963
6/7/99 5.965
6/8/99 5.994
6/9/99 6.025
6/10/99 6.063
6/11/99 6.159
6/14/99 6.1
6/15/99 6.111
6/16/99 6.065
6/17/99 5.963
6/18/99 5.972
6/21/99 6.018
6/22/99 6.057
6/23/99 6.147
6/24/99 6.161
6/25/99 6.149
6/28/99 6.094
6/29/99 6.068
6/30/99 5.963
7/1/99 6.01
7/2/99 5.998
7/5/99 5.996
7/6/99 6.036
7/7/99 6.048
7/8/99 5.991
7/9/99 5.998
7/12/99 5.907
7/13/99 5.91
7/14/99 5.914
7/15/99 5.918
7/16/99 5.884
7/19/99 5.901
7/20/99 5.885
7/21/99 5.904
7/22/99 5.97
7/23/99 6.025
7/26/99 6.028
7/27/99 6.01
7/28/99 6.009
7/29/99 6.071
7/30/99 6.103
8/2/99 6.121
8/3/99 6.164
8/4/99 6.107
8/5/99 6.039
8/6/99 6.175
8/9/99 6.233
8/10/99 6.241
8/11/99 6.207
8/12/99 6.277
8/13/99 6.103
8/16/99 6.087
8/17/99 6.008
8/18/99 5.995
8/19/99 6.031
8/20/99 5.985
8/23/99 5.983
8/24/99 5.931
8/25/99 5.857
8/26/99 5.901
8/27/99 5.976
8/30/99 6.06
8/31/99 6.059
9/1/99 6.078
9/2/99 6.134
9/3/99 6.018
9/6/99 6.024
9/7/99 6.073
9/8/99 6.068
9/9/99 6.093
9/10/99 6.041
9/13/99 6.052
9/14/99 6.119
9/15/99 6.104
9/16/99 6.076
9/17/99 6.056
9/20/99 6.071
9/21/99 6.089
9/22/99 6.084
9/23/99 5.989
9/24/99 5.973
9/27/99 6.011
9/28/99 6.085
9/29/99 6.124
9/30/99 6.05
10/1/99 6.134
10/4/99 6.087
10/5/99 6.177
10/6/99 6.18
10/7/99 6.183
10/8/99 6.195
10/11/99 6.197
10/12/99 6.224
10/13/99 6.278
10/14/99 6.325
10/15/99 6.257
10/18/99 6.319
10/19/99 6.351
10/20/99 6.335
10/21/99 6.356
10/22/99 6.351
10/25/99 6.35
10/26/99 6.384
10/27/99 6.331
10/28/99 6.252
10/29/99 6.163
11/1/99 6.179
11/2/99 6.139
11/3/99 6.132
11/4/99 6.102
11/5/99 6.056
11/8/99 6.052
11/9/99 6.07
11/10/99 6.09
11/11/99 6.088
11/12/99 6.036
11/15/99 6.024
11/16/99 6.063
11/17/99 6.132
11/18/99 6.168
11/19/99 6.162
11/22/99 6.19
11/23/99 6.196
11/24/99 6.211
11/25/99 6.211
11/26/99 6.232
11/29/99 6.308
11/30/99 6.293
12/1/99 6.293
12/2/99 6.321
12/3/99 6.252
12/6/99 6.238
12/7/99 6.2
12/8/99 6.229
12/9/99 6.214
12/10/99 6.166
12/13/99 6.202
12/14/99 6.306
12/15/99 6.325
12/16/99 6.391
12/17/99 6.374
12/20/99 6.443
12/21/99 6.461
12/22/99 6.451
12/23/99 6.489
12/24/99 6.486
12/27/99 6.465
12/28/99 6.473
12/29/99 6.443
12/30/99 6.418
12/31/99 6.477
1/3/00 6.622
1/4/00 6.537
1/5/00 6.621
1/6/00 6.552
1/7/00 6.546
1/10/00 6.584
1/11/00 6.67
1/12/00 6.719
1/13/00 6.653
1/14/00 6.697
1/17/00 6.689
1/18/00 6.747
1/19/00 6.716
1/20/00 6.747
1/21/00 6.694
1/24/00 6.649
1/25/00 6.634
1/26/00 6.57
1/27/00 6.519
1/28/00 6.452
1/31/00 6.49
2/1/00 6.423
2/2/00 6.284
2/3/00 6.136
2/4/00 6.271
2/7/00 6.341
2/8/00 6.231
2/9/00 6.314
2/10/00 6.429
2/11/00 6.269
2/14/00 6.227
2/15/00 6.246
2/16/00 6.265
2/17/00 6.218
2/18/00 6.157
2/21/00 6.159
2/22/00 6.085
2/23/00 6.126
2/24/00 6.137
2/25/00 6.129
2/28/00 6.187
2/29/00 6.14
3/1/00 6.157
3/2/00 6.131
3/3/00 6.131
3/6/00 6.143
3/7/00 6.145
3/8/00 6.161
3/9/00 6.152
3/10/00 6.176
3/13/00 6.17
3/14/00 6.09
3/15/00 6.079
3/16/00 6.043
3/17/00 6
3/20/00 6.003
3/21/00 5.969
3/22/00 5.957
3/23/00 5.907
3/24/00 5.986
3/27/00 5.978
3/28/00 5.977
3/29/00 5.974
3/30/00 5.878
3/31/00 5.828
4/3/00 5.812
4/4/00 5.773
4/5/00 5.778
4/6/00 5.794
4/7/00 5.709
4/10/00 5.668
4/11/00 5.77
4/12/00 5.813
4/13/00 5.792
4/14/00 5.776
4/17/00 5.931
4/18/00 5.91
4/19/00 5.847
4/20/00 5.83
4/21/00 5.827
4/24/00 5.874
4/25/00 5.936
4/26/00 5.944
4/27/00 5.985
4/28/00 5.96
5/1/00 5.988
5/2/00 6.011
5/3/00 6.116
5/4/00 6.155
5/5/00 6.188
5/8/00 6.243
5/9/00 6.213
5/10/00 6.149
5/11/00 6.146
5/12/00 6.201
5/15/00 6.154
5/16/00 6.113
5/17/00 6.184
5/18/00 6.227
5/19/00 6.206
5/22/00 6.185
5/23/00 6.16
5/24/00 6.193
5/25/00 6.106
5/26/00 6.059
5/29/00 6.06
5/30/00 6.092
5/31/00 6.008
EQUITY PORTFOLIO
The goal of the Fund's equity portfolio is to provide broad exposure to the
U.S. equity market as represented by the Wilshire 5000 Index, the broadest
measure of the U.S. equity market. Currently, the equity portfolio has 1,645
names. The portfolio is constructed to match the index as closely as is possible
on the basis of capitalization and industry exposures. The Fund's industry
profile compared to the Wilshire 5000 Index is shown on the following page.
1
<PAGE>
INVESTMENT ADVISOR'S REPORT (CONTINUED)
--------------------------------------------------------------------------------
INDUSTRY WEIGHTING COMPARISON
(AS OF 5/31/00)
--------------------------------------------------------------------------------
Percent of Portfolio Market Value
---------------------------------
Industry Portfolio (%) Index (%)
--------------------------------------------------------------------------------
Aerospace 0.9 0.9
--------------------------------------------------------------------------------
Air Transportation 0.4 0.4
--------------------------------------------------------------------------------
Apparel 0.3 0.3
--------------------------------------------------------------------------------
Banks 5.3 5.2
--------------------------------------------------------------------------------
Business Machines 12.7 12.6
--------------------------------------------------------------------------------
Business Services 7.3 7.7
--------------------------------------------------------------------------------
Chemicals 1.3 1.3
--------------------------------------------------------------------------------
Construction 0.5 0.5
--------------------------------------------------------------------------------
Consumer Durables 0.2 0.2
--------------------------------------------------------------------------------
Containers 0.1 0.1
--------------------------------------------------------------------------------
Cosmetics 1.3 1.2
--------------------------------------------------------------------------------
Domestic Oil 0.8 0.9
--------------------------------------------------------------------------------
Drugs & Medicine 10.4 10.5
--------------------------------------------------------------------------------
Electronics 11.4 11.3
--------------------------------------------------------------------------------
Energy & Utilities 3.1 3.0
--------------------------------------------------------------------------------
Energy - Raw Materials 1.3 1.4
--------------------------------------------------------------------------------
Food & Agriculture 2.8 2.7
--------------------------------------------------------------------------------
Insurance 3.1 3.0
--------------------------------------------------------------------------------
International Oil 2.5 2.5
--------------------------------------------------------------------------------
Liquor 0.3 0.3
--------------------------------------------------------------------------------
Media 4.1 4.1
--------------------------------------------------------------------------------
Miscellaneous Finance 6.5 6.5
--------------------------------------------------------------------------------
Miscellaneous 1 0.5 0.8
--------------------------------------------------------------------------------
Motor Vehicles 1.2 1.2
--------------------------------------------------------------------------------
Non-Durables & Entertainment 0.9 0.9
--------------------------------------------------------------------------------
Non-Ferrous Metals 0.3 0.3
--------------------------------------------------------------------------------
Optical & Photo 0.5 0.5
--------------------------------------------------------------------------------
Paper & Forest Products 0.8 0.8
--------------------------------------------------------------------------------
Producer Goods 5.3 5.2
--------------------------------------------------------------------------------
Real Property 0.3 0.3
--------------------------------------------------------------------------------
Retail 5.4 5.3
--------------------------------------------------------------------------------
RR & Shipping 0.3 0.3
--------------------------------------------------------------------------------
Steel 0.1 0.1
--------------------------------------------------------------------------------
Telephone 6.5 6.4
--------------------------------------------------------------------------------
Tires & Rubber 0.1 0.1
--------------------------------------------------------------------------------
Tobacco 0.5 0.5
--------------------------------------------------------------------------------
Travel & Recreation 0.5 0.5
--------------------------------------------------------------------------------
Trucking & Freight 0.2 0.2
1 No one industry represents more than 0.1% of the portfolio.
Similarly, the market capitalization profile of the portfolio is
representative of the index. The largest companies in the portfolio are held in
approximately the same weighting as that of the index (see the chart below). The
remaining portfolio holdings reflect a sampling of stocks from each
capitalization range, giving the overall portfolio a capitalization profile
which enables it to closely track the index.
TOP 10 HOLDINGS
(AS OF 5/31/00)
--------------------------------------------------------------------------------
ISI Strategy Fund Wilshire 5000
Equity Portfolio % Market
Company % Market Value Value
--------------------------------------------------------------------------------
General Electric Co. 3.42% 3.41%
--------------------------------------------------------------------------------
Intel Corp. 2.73 2.74
--------------------------------------------------------------------------------
Cisco Systems, Inc. 2.56 2.56
--------------------------------------------------------------------------------
Microsoft Corp. 2.15 2.14
--------------------------------------------------------------------------------
Exxon Mobil Corp. 1.89 1.89
--------------------------------------------------------------------------------
Wal Mart Stores, Inc. 1.70 1.70
--------------------------------------------------------------------------------
Citigroup, Inc. 1.36 1.38
--------------------------------------------------------------------------------
OracleSystemsCorp. 1.34 1.33
--------------------------------------------------------------------------------
International Business Machines 1.26 1.27
--------------------------------------------------------------------------------
Lucent Technologies 1.20 1.20
--------------------------------------------------------------------------------
Subtotal 19.61% 19.62%
BOND PORTFOLIO
For most of the fiscal year our economic outlook leaned towards faster
growth, which we saw causing some price erosion for bonds. As a result, the bond
allocation was smaller than the stock allocation and the bond portfolio's
average maturity was conservative (around 7.5 years) especially in the Fall and
Winter of 1999. Recently, as ISI's Company Business Activity Surveys turned
down, we began to lengthen the bond portfolio. This process began late in the
fiscal year resulting in a small extension by May 31st and the extension program
continued, so that by mid-June the Fund's total portfolio average maturity was
9.2 years. ISI expects that the six
2
<PAGE>
INVESTMENT ADVISOR'S REPORT
--------------------------------------------------------------------------------
(CONCLUDED)
Federal Reserve tightening steps, along with other Central Bank tightenings will
contain the present cyclical rise of inflation. As a result, ISI expects that
the yield on ten-year Treasuries will fall about 50 basis points by the end of
2000.
We appreciate the vote of confidence you have given the newest member of
the ISI Family of Funds.
Sincerely,
/S/SIGNATURE R. ALAN MEDAUGH
R. Alan Medaugh
President
June 15, 2000
MARKET OUTLOOK
--------------------------------------------------------------------------------
OVERVIEW
Looking ahead six months, two big economic factors are likely to influence
the direction of stock and bond prices. The first factor is the pace of U.S.
growth and the second factor is the level of inflation. ISI expects growth to
slow and inflation to moderate. This combination is quite favorable for bonds
but somewhat less favorable for stocks.
GROWTH
The economy is now registering its fastest growth during this expansion
cycle (beginning 1991). The long expansion and recent strong growth has created
22 million new jobs and at the same time significantly reduced the pool of
available workers. The unemployment rate was 4.1% in May, 2000. So far, labor
productivity has more than offset wage increases, so unit labor costs are still
negative. This Goldilocks story has meant high rates of non-inflationary growth.
Prices of financial assets have generally benefited in this environment. The
Federal Reserve has sensed that the cumulative risks associated with this fast
growth has reached a stage where it is pushed to increase short term rates. The
Federal Reserve has increased its benchmark rate six times in an effort to cool
off growth. ISI's Company Surveys have recently signaled a slowing of the
economy meaning the year- long round of tightening has begun to affect the real
economy. Employment growth has slowed recently, another indication of a change
in the economy. Please see the following two graphs for the most current
readings on the U.S. economy.
3
<PAGE>
MARKET OUTLOOK (CONTINUED)
--------------------------------------------------------------------------------
ISI COMPANY SURVEYS OVERALL AVERAGE 1
1/5/96 - 5/26/00
[graphic omitted]
plot points as follows:
5 Jan 96 45.3
12 Jan 96 46.2
19 Jan 96 46.7
26 Jan 96 47.2
2 Feb 96 47.3
9 Feb 96 47.4
16 Feb 96 49.5
23 Feb 96 50.7
1 Mar 96 51.9
8 Mar 96 53.6
15 Mar 96 52.8
22 Mar 96 51.6
29 Mar 96 50.9
5 Apr 96 50.3
12 Apr 96 50
19 apr 96 50
26 apr 96 50.4
3 May 96 50.4
10 May 96 51.6
17 May 96 52
24 may 96 52
31 may 96 51.8
7 Jun 96 51.7
14 Jun 96 51.8
21 Jun 96 50.8
28 Jun 96 50.5
5 Jul 96 50.1
12 Jul 96 49.3
19 Jul 96 49.1
26 Jul 96 48.4
2 Aug 96 47.6
9 Aug 96 48.1
16 Aug 96 48.5
23 Aug 96 49.3
30 Aug 96 49.7
6 Sep 96 50.4
13 Sep 96 50.2
20 Sep 96 49.9
27 Sep 96 49.5
4 Oct 96 49.2
11 Oct 96 49.4
18 Oct 96 49.5
25 Oct 96 49.8
1 Nov 96 49
8 nov 96 48.4
15 Nov 96 48.1
22 Nov 96 47.7
29 Nov 96 47.6
6 Dec 96 47.7
13 Dec 96 47.2
20 Dec 96 46.5
27 Dec 96 46.7
3 Jan 97 46.7
10 Jan 97 47.5
17 Jan 97 48.1
24 Jan 97 48.8
31 Jan 97 49.2
7 Feb 97 50.2
14 Feb 97 51.3
21 Feb 97 51.3
28 Feb 97 51.7
7 Mar 97 51.8
14 Mar 97 52.3
21 Mar 97 52.7
28 Mar 97 53
4 apr 97 52.3
11 Apr 97 51.8
18 Apr 97 51.4
25 Apr 97 50.5
2 May 97 50.1
9 May 97 49.5
16 May 97 49.2
23 May 97 49.5
30 May 97 49.6
6 Jun 97 49.8
13 Jun 97 49.6
20 Jun 97 50
27 jun 97 50.8
4 Jul 97 51.1
11 Jul 97 52.3
18 Jul 97 53.1
25 Jul 97 53.7
1 Aug 97 54.3
8 Aug 97 54.9
15 Aug 97 55
22 aug 97 55
29 aug 97 55.2
5 Sep 97 54.6
12 Sep 97 54.4
19 Sep 97 53.6
26 Sep 97 52.7
3 Oct 97 51.9
10 Oct 97 51.2
17 Oct 97 51.6
24 Oct 97 51.9
31 Oct 97 52.9
7 Nov 97 53.6
14 Nov 97 53.5
21 Nov 97 53.4
28 Nov 97 52.3
5 Dec 97 51.5
12 Dec 97 50.4
19 Dec 97 49.1
26 Dec 97 48.9
2 Jan 98 48.7
9 Jan 98 49.7
16 Jan 98 50.9
23 Jan 98 51.5
30 Jan 98 52.2
6 Feb 98 53.1
13 Feb 98 53.4
20 Feb 98 54
27 feb 98 54.7
6 Mar 98 55.1
13 Mar 98 55.1
20 Mar 98 55.1
27 Mar 98 55
3 apr 98 55.1
10 Apr 98 55.9
17 Apr 98 56.4
24 Apr 98 57.2
1 May 98 56.9
8 May 98 57.2
15 May 98 56.9
22 May 98 56.8
29 May 98 56.8
5 Jun 98 56.8
12 Jun 98 56.4
19 Jun 98 55.4
26 Jun 98 54.4
3 Jul 98 53.8
10 Jul 98 53.2
17 Jul 98 53.1
24 Jul 98 53
31 jul 98 52.4
7 Aug 98 53.2
14 Aug 98 52.8
21 Aug 98 52.4
28 Aug 98 52.2
4 Sep 98 51.6
11 Sep 98 52.3
18 Sep 98 52.5
25 Sep 98 52.2
2 Oct 98 51.2
9 Oct 98 50.9
16 Oct 98 51
23 oct 98 50.2
30 Oct 98 50
6 nov 98 48.7
13 Nov 98 47.8
20 Nov 98 48.2
27 Nov 98 48.4
4 Dec 98 48.9
11 Dec 98 49.4
18 Dec 98 49.3
25 Dec 98 49.3
1 Jan 99 49.7
8 Jan 99 50.5
15 Jan 99 51.6
22 Jan 99 52.3
29 Jan 99 52.9
5 Feb 99 53.4
12 Feb 99 53.5
19 Feb 99 54.1
26 Feb 99 53.9
5 Mar 99 53.1
12 Mar 99 53.2
19 Mar 99 53.3
26 Mar 99 53.8
2 Apr 99 54.6
9 Apr 99 55.1
16 Apr 99 54.7
23 Apr 99 54.3
30 Apr 99 54.5
7 May 99 54.6
14 May 99 55
21 may 99 55.3
28 May 99 55.5
4 Jun 99 55.8
11 Jun 99 56.2
18 Jun 99 56.7
25 Jun 99 56.3
2 Jul 99 55.9
9 Jul 99 55.7
16 Jul 99 55.1
23 Jul 99 54.9
30 Jul 99 55.1
6 Aug 99 55
13 aug 99 54.7
20 Aug 99 54.7
27 Aug 99 53.7
3 Sep 99 53
10 sep 99 53.1
17 Sep 99 53.1
24 Sep 99 53.8
1 Oct 99 54.1
8 Oct 99 54.2
15 Oct 99 53.9
22 Oct 99 53.4
29 Oct 99 52.8
5 Nov 99 52
12 nov 99 51.8
19 Nov 99 51.1
26 Nov 99 51.3
3 Dec 99 52.2
10 Dec 99 52.9
17 Dec 99 52.8
24 Dec 99 52.6
31 Dec 99 52.2
7 Jan 00 52.1
14 Jan 00 53.6
21 Jan 00 54.9
28 Jan 00 55.6
4 Feb 00 55.6
11 Feb 00 56.1
18 Feb 00 56.4
25 Feb 00 57.5
3 Mar 00 58.6
10 Mar 00 59.4
17 Mar 00 59.5
24 Mar 00 59.1
31 Mar 00 59.3
7 Apr 00 59.3
14 Apr 00 59.8
21 Apr 00 60.3
28 Apr 00 59.7
5 May 00 59.6
12 May 00 59.6
19 May 00 59.1
26 May 00 58.9
1 ISI's surveys of retailers, auto dealers, manufacturing companies, home
builders, banks and technology companies where 0 = weak sales and 100 = strong
sales, based on a four week moving average.
U.S. STRENGTH/WEAKNESS 2
1/1/96 - 5/29/00
[graphic omitted]
plot points as follows:
1-Jan-96 -2.9
8-Jan-96 -2.3
15-Jan-96 -2.8
22-Jan-96 -2.5
29-Jan-96 -2.8
5-Feb-96 -2.5
12-Feb-96 -3
19-Feb-96 -2.6
26-Feb-96 -1.9
4-Mar-96 -0.9
11-Mar-96 -0.3
18-Mar-96 0.1
25-Mar-96 -0.5
1-Apr-96 -1.5
8-Apr-96 -0.6
15-Apr-96 0.2
22-Apr-96 0.5
29-Apr-96 1.2
6-May-96 1.8
13-May-96 3.1
20-May-96 2.6
27-May-96 2.6
3-Jun-96 2
10-Jun-96 3.2
17-Jun-96 3.5
24-Jun-96 3.8
1-Jul-96 4.5
8-Jul-96 4.7
15-Jul-96 4.2
22-Jul-96 4.5
29-Jul-96 3.7
5-Aug-96 3.5
12-Aug-96 2.8
19-Aug-96 2.6
26-Aug-96 2.5
2-Sep-96 1.5
9-Sep-96 2.1
16-Sep-96 2
23-Sep-96 2.5
30-Sep-96 2
7-Oct-96 1.2
14-Oct-96 1.2
21-Oct-96 0.9
28-Oct-96 1.5
4-Nov-96 0.2
11-Nov-96 0.4
18-Nov-96 1.1
25-Nov-96 0.8
2-Dec-96 1.8
9-Dec-96 0.4
16-Dec-96 -0.3
23-Dec-96 -0.2
30-Dec-96 1.1
6-Jan-97 1.1
13-Jan-97 1.9
20-Jan-97 1.8
27-Jan-97 1.5
3-Feb-97 1.8
10-Feb-97 2.6
17-Feb-97 3.2
24-Feb-97 3.2
3-Mar-97 4.1
10-Mar-97 4.9
17-Mar-97 6.1
24-Mar-97 6.2
31-Mar-97 6.5
7-Apr-97 6.8
14-Apr-97 5.7
21-Apr-97 5.8
28-Apr-97 5.5
5-May-97 5
12-May-97 4.6
19-May-97 3.6
26-May-97 3.7
2-Jun-97 3.2
9-Jun-97 2
16-Jun-97 2.2
23-Jun-97 1.5
30-Jun-97 1.3
7-Jul-97 0.7
14-Jul-97 1.1
21-Jul-97 1.1
28-Jul-97 1.7
4-Aug-97 3.2
11-Aug-97 3.7
18-Aug-97 3.2
25-Aug-97 3.4
1-Sep-97 3.9
8-Sep-97 4.1
15-Sep-97 3.7
22-Sep-97 3.2
29-Sep-97 2.9
6-Oct-97 3.3
13-Oct-97 3.5
20-Oct-97 4
27-Oct-97 2.8
3-Nov-97 1.4
10-Nov-97 1.2
17-Nov-97 1.9
24-Nov-97 2.2
1-Dec-97 1.8
8-Dec-97 2.5
15-Dec-97 2.4
22-Dec-97 2.2
29-Dec-97 2.2
5-Jan-98 2.1
12-Jan-98 2.4
19-Jan-98 2.5
26-Jan-98 3.3
2-Feb-98 4.1
9-Feb-98 4.8
16-Feb-98 3.9
23-Feb-98 3.2
2-Mar-98 3.8
9-Mar-98 3.5
16-Mar-98 3.1
23-Mar-98 3.5
30-Mar-98 3.5
6-Apr-98 2.8
13-Apr-98 3
20-Apr-98 2.5
27-Apr-98 2.1
4-May-98 2.8
11-May-98 1.4
18-May-98 1.5
25-May-98 1.5
1-Jun-98 0.2
8-Jun-98 0.8
15-Jun-98 0.8
22-Jun-98 0.6
29-Jun-98 0.6
6-Jul-98 0.4
13-Jul-98 -0.3
20-Jul-98 -1.5
27-Jul-98 -1.8
3-Aug-98 -2.8
10-Aug-98 -2.5
17-Aug-98 -2.5
24-Aug-98 -2.2
31-Aug-98 -2
7-Sep-98 -3
14-Sep-98 -2.3
21-Sep-98 -2.7
28-Sep-98 -2.7
5-Oct-98 -3.3
12-Oct-98 -3.5
19-Oct-98 -3.1
26-Oct-98 -3.8
2-Nov-98 -3.8
9-Nov-98 -4.9
16-Nov-98 -4.5
23-Nov-98 -4.5
30-Nov-98 -4
7-Dec-98 -4.6
14-Dec-98 -5.5
21-Dec-98 -4.4
28-Dec-98 -4.2
4-Jan-99 -1.9
11-Jan-99 -0.4
18-Jan-99 0.6
25-Jan-99 2.6
1-Feb-99 4.2
8-Feb-99 6.6
15-Feb-99 6.5
22-Feb-99 6.2
1-Mar-99 6.5
8-Mar-99 8.1
15-Mar-99 8.8
22-Mar-99 8.2
29-Mar-99 8.2
5-Apr-99 7.5
12-Apr-99 6.9
19-Apr-99 6.2
26-Apr-99 5.9
3-May-99 5.8
10-May-99 5.3
17-May-99 5.3
24-May-99 5.2
31-May-99 4.5
7-Jun-99 3.5
14-Jun-99 3.3
21-Jun-99 3.8
28-Jun-99 3
5-Jul-99 3.4
12-Jul-99 3.2
19-Jul-99 3.3
26-Jul-99 2.7
2-Aug-99 2.4
9-Aug-99 1.5
16-Aug-99 1.8
23-Aug-99 1.8
30-Aug-99 1.4
6-Sep-99 1
13-Sep-99 1.4
20-Sep-99 1.3
27-Sep-99 1.5
4-Oct-99 1.2
11-Oct-99 1.5
18-Oct-99 1.7
25-Oct-99 2.2
1-Nov-99 1.1
8-Nov-99 0.5
15-Nov-99 1.2
22-Nov-99 1.9
29-Nov-99 3.4
6-Dec-99 3.5
13-Dec-99 3.9
20-Dec-99 4.3
27-Dec-99 5.2
3-Jan-00 5.8
10-Jan-00 5.5
17-Jan-00 6.5
24-Jan-00 7
31-Jan-00 7.1
7-Feb-00 8.7
14-Feb-00 8.8
21-Feb-00 8.5
28-Feb-00 8.5
6-Mar-00 10
13-Mar-00 10
20-Mar-00 9.9
27-Mar-00 9.7
3-Apr-00 9.8
10-Apr-00 10
17-Apr-00 9.4
24-Apr-00 9.1
1-May-00 9.3
8-May-00 9.2
15-May-00 8.9
22-May-00 9.5
29-May-00 8.8
2 Analysis by ISI of weekly economic reports based on a thirteen week moving
average.
ISI sees real growth slowing this quarter and expects an even slower growth
rate in the second half of 2000. This is likely to put pressure on corporate
profits as demand slows. With stock valuations at unusually high levels, profit
disappointments could hurt stock prices at least temporarily. Possibly reacting
to a change in the outlook for profits, the Wilshire 5000 Index after a strong
1999 is down so far this year. The retracement is even more significant in the
NASDAQ Index. Equity analysts are also revising down their profit estimates more
than they are raising them, and that is a major shift from earlier this year,
when increasing estimates dominated. Long- term interest rates have recently
dropped. This is true for both Treasury and corporate bonds. A slowing growth
environment benefits bonds as it reduces the financing requirements and
constrains the risk of inflation. Lower long-term interest rates can indirectly
benefit stock prices because they lower the rate of return available from a
competing class of assets.
INFLATION
The inflation rate (Consumer Price Index) has crept up from 1.0% in 1998 to
2.0% in 1999 and it is now 3.1%. Rising commodity prices, in part, reflect a
dramatic change in worldwide growth from the Asia crisis environment of 1998 to
the record highs in early 2000. Very recently the trend seems to have reversed.
Please see the ISI's Global Strength / Weakness chart on the following page.
The more recent reversal in the growth indicator shown above may lead to a
retracement in commodity prices. If the world economy is slowing, rising energy
prices will mean falling prices for other commodities. If growth were to
rebound, then an energy price surge can be accompanied by price increases for
other commodities. Commodity prices are an important inflation indicator.
ISI expects inflationary pressures will be with us until the Fall. This is
likely to keep the Federal Reserve on its toes and means that the Federal Funds
Rate
4
<PAGE>
MARKET OUTLOOK (CONCLUDED)
--------------------------------------------------------------------------------
GLOBAL STRENGTH/WEAKNESS 2
9/26/94 - 5/29/00
[graphic omitted]
plot points as follows:
26-Sep-94 1.5
3-Oct-94 2.2
10-Oct-94 3.1
17-Oct-94 4.1
24-Oct-94 6.1
31-Oct-94 6.5
7-Nov-94 7
14-Nov-94 7.5
21-Nov-94 7.5
28-Nov-94 8.6
5-Dec-94 10.4
12-Dec-94 11.3
19-Dec-94 10.8
26-Dec-94 11.1
2-Jan-95 13.2
9-Jan-95 12.5
16-Jan-95 11.4
23-Jan-95 10.5
30-Jan-95 9.5
6-Feb-95 9.3
13-Feb-95 9.4
20-Feb-95 9.8
27-Feb-95 11.2
6-Mar-95 10.5
13-Mar-95 9.2
20-Mar-95 9.7
27-Mar-95 10.3
3-Apr-95 8.7
10-Apr-95 9.2
17-Apr-95 8.5
24-Apr-95 7.4
1-May-95 7.2
8-May-95 5.2
15-May-95 4.4
22-May-95 1.8
29-May-95 -1.4
5-Jun-95 -3.5
12-Jun-95 -3.5
19-Jun-95 -3.8
26-Jun-95 -3.1
3-Jul-95 -3.9
10-Jul-95 -3.8
17-Jul-95 -2.8
24-Jul-95 -3.6
31-Jul-95 -4.8
7-Aug-95 -4.5
14-Aug-95 -3.8
21-Aug-95 -2.7
28-Aug-95 -2.5
4-Sep-95 -1.3
11-Sep-95 -0.6
18-Sep-95 -1
25-Sep-95 -2.7
2-Oct-95 -2.6
9-Oct-95 -4.8
16-Oct-95 -5.3
23-Oct-95 -5.5
30-Oct-95 -5.6
6-Nov-95 -4.5
13-Nov-95 -5.5
20-Nov-95 -6.2
27-Nov-95 -5.5
4-Dec-95 -6.3
11-Dec-95 -7.5
18-Dec-95 -8.1
25-Dec-95 -6.3
1-Jan-96 -5.8
8-Jan-96 -4.8
15-Jan-96 -5.8
22-Jan-96 -6.5
29-Jan-96 -6.1
5-Feb-96 -5.9
12-Feb-96 -7
19-Feb-96 -5.2
26-Feb-96 -4.2
4-Mar-96 -2.8
11-Mar-96 -3.1
18-Mar-96 -3.6
25-Mar-96 -5.5
1-Apr-96 -6.8
8-Apr-96 -6.7
15-Apr-96 -5.4
22-Apr-96 -4.5
29-Apr-96 -3.9
6-May-96 -3.6
13-May-96 -2.6
20-May-96 -4.3
27-May-96 -3.2
3-Jun-96 -3.8
10-Jun-96 -2
17-Jun-96 -1.5
24-Jun-96 -0.8
1-Jul-96 -0.6
8-Jul-96 -0.2
15-Jul-96 -0.1
22-Jul-96 -0.2
29-Jul-96 -1.8
5-Aug-96 -2.8
12-Aug-96 -3
19-Aug-96 -2.7
26-Aug-96 -2.7
2-Sep-96 -3.2
9-Sep-96 -0.9
16-Sep-96 -0.8
23-Sep-96 -0.1
30-Sep-96 0.2
7-Oct-96 0.5
14-Oct-96 -0.2
21-Oct-96 0.3
28-Oct-96 2.2
4-Nov-96 2.5
11-Nov-96 2.8
18-Nov-96 4.8
25-Nov-96 5.9
2-Dec-96 8.1
9-Dec-96 5.8
16-Dec-96 5.9
23-Dec-96 5.2
30-Dec-96 6.9
6-Jan-97 6.2
13-Jan-97 6.6
20-Jan-97 6.5
27-Jan-97 6.1
3-Feb-97 5.8
10-Feb-97 7.5
17-Feb-97 7.3
24-Feb-97 5.2
3-Mar-97 6
10-Mar-97 6
17-Mar-97 8
24-Mar-97 9.4
31-Mar-97 9.1
7-Apr-97 9.4
14-Apr-97 8.2
21-Apr-97 7.9
28-Apr-97 6.9
5-May-97 5.4
12-May-97 4.5
19-May-97 2.8
26-May-97 2.9
2-Jun-97 1.2
9-Jun-97 0.6
16-Jun-97 -0.9
23-Jun-97 -1.8
30-Jun-97 -2.2
7-Jul-97 -1.8
14-Jul-97 0.8
21-Jul-97 0.8
28-Jul-97 3.8
4-Aug-97 6.9
11-Aug-97 8.7
18-Aug-97 9.4
25-Aug-97 10.4
1-Sep-97 12.5
8-Sep-97 12.8
15-Sep-97 13.2
22-Sep-97 13.2
29-Sep-97 14.2
6-Oct-97 14.1
13-Oct-97 14.7
20-Oct-97 14.5
27-Oct-97 12.3
3-Nov-97 10.2
10-Nov-97 9.8
17-Nov-97 9.4
24-Nov-97 8.7
1-Dec-97 6.7
8-Dec-97 6.5
15-Dec-97 6.3
22-Dec-97 5.3
29-Dec-97 3.3
5-Jan-98 1.9
12-Jan-98 0.2
19-Jan-98 2.3
26-Jan-98 2.8
2-Feb-98 2.1
9-Feb-98 1.2
16-Feb-98 -0.4
23-Feb-98 -1.7
2-Mar-98 -1
9-Mar-98 -1.7
16-Mar-98 -2
23-Mar-98 -2.9
30-Mar-98 -1.8
6-Apr-98 -2.1
13-Apr-98 -1.4
20-Apr-98 -3.4
27-Apr-98 -3.2
4-May-98 -1.4
11-May-98 -1.5
18-May-98 -0.5
25-May-98 -1.5
1-Jun-98 -3.5
8-Jun-98 -2.5
15-Jun-98 -4.9
22-Jun-98 -6.2
29-Jun-98 -7.7
6-Jul-98 -8.9
13-Jul-98 -10.2
20-Jul-98 -10.8
27-Jul-98 -11.5
3-Aug-98 -12.1
10-Aug-98 -12.5
17-Aug-98 -13.6
24-Aug-98 -12.8
31-Aug-98 -12.7
7-Sep-98 -14.5
14-Sep-98 -10.8
21-Sep-98 -9.2
28-Sep-98 -8.5
5-Oct-98 -8.9
12-Oct-98 -8.8
19-Oct-98 -9
26-Oct-98 -9.7
2-Nov-98 -10.5
9-Nov-98 -11.5
16-Nov-98 -10.5
23-Nov-98 -11.5
30-Nov-98 -11.5
7-Dec-98 -11.5
14-Dec-98 -13.7
21-Dec-98 -11.8
28-Dec-98 -12
4-Jan-99 -9
11-Jan-99 -7.2
18-Jan-99 -5.8
25-Jan-99 -4.6
1-Feb-99 -2.2
8-Feb-99 1.2
15-Feb-99 1.3
22-Feb-99 2.1
1-Mar-99 3.9
8-Mar-99 5.6
15-Mar-99 7
22-Mar-99 5
29-Mar-99 6.1
5-Apr-99 5.8
12-Apr-99 5.8
19-Apr-99 5.8
26-Apr-99 7.2
3-May-99 8.2
10-May-99 6.8
17-May-99 7.1
24-May-99 9.8
31-May-99 7.8
7-Jun-99 8.2
14-Jun-99 8.9
21-Jun-99 10.2
28-Jun-99 10.2
5-Jul-99 11.8
12-Jul-99 12.6
19-Jul-99 12.8
26-Jul-99 13.5
2-Aug-99 13.5
9-Aug-99 14.5
16-Aug-99 16.2
23-Aug-99 14.9
30-Aug-99 15.6
6-Sep-99 15.2
13-Sep-99 14.9
20-Sep-99 14.9
27-Sep-99 16.4
4-Oct-99 16.4
11-Oct-99 16.8
18-Oct-99 17.3
25-Oct-99 16.4
1-Nov-99 14.1
8-Nov-99 11.7
15-Nov-99 11.6
22-Nov-99 11.3
29-Nov-99 12.6
6-Dec-99 12.5
13-Dec-99 14.3
20-Dec-99 15.2
27-Dec-99 16
3-Jan-00 16.9
10-Jan-00 16.3
17-Jan-00 17.9
24-Jan-00 18.8
31-Jan-00 18.8
7-Feb-00 20.4
14-Feb-00 21.3
21-Feb-00 23
28-Feb-00 23.8
6-Mar-00 27
13-Mar-00 27.2
20-Mar-00 27.1
27-Mar-00 27.3
3-Apr-00 26.1
10-Apr-00 26.6
17-Apr-00 25.2
24-Apr-00 24.2
1-May-00 23.8
8-May-00 23.5
15-May-00 21.7
22-May-00 22.2
29-May-00 20.1
2 Analysis by ISI of weekly economic reports based on a thirteen week moving
average.
GOLDMAN SACHS COMMODITY INDEX
1/1/99 - 5/26/00
[graphic omitted]
plot points as follows:
1/1/99 133.02
1/8/99 138.75
1/15/99 135.08
1/22/99 135.25
1/29/99 135.27
2/5/99 133.04
2/12/99 132.87
2/19/99 131.41
2/26/99 130.83
3/5/99 137.22
3/12/99 142.88
3/19/99 146.41
3/26/99 152.21
4/2/99 152.86
4/9/99 152.72
4/16/99 155.73
4/23/99 157.72
4/30/99 160.98
5/7/99 158.8
5/14/99 158.51
5/21/99 154.76
5/28/99 152.22
6/4/99 155.12
6/11/99 161.49
6/18/99 159.65
6/25/99 159.62
7/2/99 162.66
7/9/99 162.78
7/16/99 165.88
7/23/99 170.42
7/30/99 169.17
8/6/99 175.7
8/13/99 178.93
8/20/99 180.93
8/27/99 178.12
9/3/99 180.5
9/10/99 188.86
9/17/99 188.77
9/24/99 191.84
10/1/99 191.07
10/8/99 175.81
10/15/99 186.54
10/22/99 188.99
10/29/99 181.39
11/5/99 185.74
11/12/99 193.84
11/19/99 196.55
11/26/99 197.97
12/3/99 194.02
12/10/99 189.49
12/17/99 197.77
12/24/99 195.24
12/31/99 194.54
1/7/00 188.55
1/14/00 202
1/21/00 208.46
1/28/00 204.44
2/4/00 212.21
2/11/00 210.64
2/18/00 209.76
2/25/00 214.63
3/3/00 221.94
3/10/00 216.83
3/17/00 213.67
3/24/00 209.33
3/31/00 206.88
4/7/00 198.06
4/14/00 197.37
4/21/00 204.27
4/28/00 203.21
5/5/00 209.6
5/12/00 220.66
5/19/00 224.78
5/26/00 227.72
holds at a high level well into the turn down in economic activity. The Fed's
conservative position should enhance its status as an inflation fighter thereby
encouraging investors.
5
<PAGE>
SEC CALCULATIONS
--------------------------------------------------------------------------------
The shareholder letter included in this report contains statistics designed
to help you evaluate the performance of your Fund's management. To further
assist in this evaluation, the Securities and Exchange Commission (SEC) requires
that we include, on an annual basis, a line graph comparing the Fund's
performance to that of an appropriate market index. This graph measures the
growth of a $10,000 hypothetical investment from the Fund's inception date
through the end of the most recent fiscal year. The SEC also requires that we
report the Fund's total return, according to a standardized formula, for various
time periods through the end of the most recent fiscal year.
Both the line graph and the SEC standardized total return figures include
the impact of the Fund's 4.45% maximum initial sales charge. Returns would be
higher for investors who qualified for a lower initial sales charge.
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
% Return with
Periods ended 5/31/00: Sales Charge
--------------------------------------------------------------------------------
One Year 1.38%
--------------------------------------------------------------------------------
Since Inception (9/16/97) 8.97%
--------------------------------------------------------------------------------
While the graphs and the total return figures are required by SEC rules,
such comparisons are of limited utility since the Fund's total return is
adjusted for sales charges and expenses while the total return of the indices
are not. In fact, if you wished to replicate the total return of these indices,
you would have to make purchases that are not reflected in the index results.
The SEC total return figures may differ from total return figures in the
shareholder letter because the SEC figures include the impact of sales charges
while the total return figures in the shareholder letter do not. Any performance
figures shown are for the full period indicated.
CHANGE IN VALUE OF A $10,000 INVESTMENT*
September 16, 1997 -- May 31, 2000
[graphic omitted]
plot points as follows:
ISI Strategy ISI Wilshire 5000 Index Consumer Price Index
9/16/97 9555 10000 10000
11/97 9622 10065 10049
5/98 10600 11430 10124
11/98 11169 11880 10204
5/99 11889 13450 10329
11/99 12311 11935 10440
5/00 12614 14752 10627
* PAST PERFORMANCE IS NOT AN INDICATOR OF FUTURE RESULTS. These figures assume
the reinvestment of dividends and capital gain distributions and include the
Fund's 4.45% maximum sales charge. Investment return and principal value will
fluctuate so that upon redemption an investor's shares may be worth more or
less than their original cost. The Wilshire 5000 Index is the broadest measure
of the U.S. Equity market and incorporates both large and small capitalization
stocks. Management is not aware of any single index that is truly
representative of the Fund since its active management policy allows the
manager to adjust the stock/bond balance and to adjust the weighted average
maturity throughout each U.S. Treasury sector. The CPI is a widely used
measure of inflation. The CPI performance is based on data released on
6/14/00.
6
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- 56.0%
21st Century Industries 200 $ 4,437
3Com Corp. 1 500 20,906
A.G. Edwards & Sons, Inc. 100 3,494
AAR Corp. 300 4,162
Abbott Laboratories 2,100 85,444
Abercrombie & Fitch Co. --
Class A 1 204 2,002
Abgenix, Inc. 1 100 7,900
Ackerley Group, Inc. 200 2,425
ACNielsen Corp. 1 100 2,219
Active Software 1 100 3,587
Acxiom Corp. 1 100 2,925
Adaptec, Inc. 1 200 3,937
ADC Telecommunications, Inc. 1 400 26,875
Adelphia Communications Corp.
-- Class A 1 200 8,475
Administaff, Inc. 1 100 5,194
Adobe Systems, Inc. 200 22,512
Adtran, Inc. 1 100 6,162
Advance Paradigm, Inc. 1 200 3,100
Advanced Fibre Communications 1 100 4,600
Advanced Micro Devices, Inc. 1 200 16,287
Advent Software, Inc. 100 3,762
Aerosonic Corp. DE 1 100 975
AES Corp. 1 300 26,175
Aether Systems, Inc. 1 100 13,744
Aetna, Inc. 200 13,350
Affiliated Computer Services, Inc.
-- Class A 1 100 3,406
Affiliated Managers Group, Inc. 1 100 3,350
Aflac, Inc. 400 20,675
Aftermarket Technology 1 300 1,800
Ag-Chem Equipment Co., Inc. 1 100 650
AGCO Corp. 300 3,750
Agile Software 1 100 4,187
Agilent Technologies 1 100 7,362
Agribrands International 1 100 4,144
Air Products & Chemicals, Inc. 400 13,850
Airlease, Ltd. 200 2,325
AK Steel Holding Corp. 100 969
Akamai Technologies1 59 3,986
Alamosa PCS Holdings, Inc 1 120 1,800
Alaska Comm Systems 1 200 2,575
Albany International Corp. --
Class A 1 208 2,977
Albertson's, Inc. 615 22,524
Alcoa 566 33,076
Alleghany Corp. 1 100 16,625
Allegheny Energy, Inc. 200 6,187
Allegheny Technologies 150 3,384
Allegiance Telecom, Inc. 1 150 7,931
Allen Telecom, Inc. 1 300 4,800
Allergan, Inc. 200 13,737
Alliance Capital Management
Holding LP 200 9,012
Alliance Pharmaceuticals Corp. 1 100 850
Alliant Energy Corp. 100 2,769
Allied Capital Corp. 200 3,412
Allied Products Corp. 200 262
Allied Waste Industries, Inc. 1 300 3,056
Allmerica Financial Corp. 100 5,769
Allstate Corp. 1,200 31,800
ALLTEL Corp. 1 467 30,559
Alpha Industries, Inc. 1 100 4,606
Alphanet Solutions, Inc. 1 100 453
Alteon Websystems, Inc. 1 100 5,081
Altera Corp. 1 300 25,762
Alterra Healthcare Corp. 1 400 775
Alyn Corp. 1 100 62
ALZA Corp. 1 140 7,114
Amazon.com, Inc. 1 500 24,156
AMB Property Corp. 200 4,500
AMBAC, Inc. 100 5,037
AMC Entertainment, Inc. 300 1,425
Amcol International Corp. 450 7,481
Amcore Financial, Inc. 100 1,937
Amerada Hess Corp. 100 6,637
Amerco 1 100 1,719
Ameren Corp. 1 200 7,337
America Online, Inc. 1 3,060 162,180
American -- Classic Voyages Co. 1 100 1,900
American Axle & Manufacturing
Holdings 1 200 3,287
American BanCorp. Ohio 100 1,406
American Biltrite, Inc. 1 100 1,319
American Dental Partners 1 200 1,500
American Electric Power Co., Inc. 300 10,669
American Express Co. 1,800 96,862
American General Corp. 300 19,219
American Home Products Corp. 1,800 96,975
American International Group, Inc. 2,057 231,541
American Management Systems, Inc. 1 100 3,744
American National 200 3,362
American National Insurance Co. 100 5,400
American Power Conversion Corp. 1 300 10,631
American Retirement Corp. 1 100 550
American Standard Co., Inc. 1 100 4,619
American Tower Corp. 1 200 7,425
Amerisource Health Corp. --
Class A 1 200 4,875
AmeriTrade Holding Corp. 1 200 2,275
AMFM, Inc. 1 249 16,870
Amgen, Inc. 1 1,400 89,075
7
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Amkor Technology, Inc. 1 200 $ 8,950
Amli Residential Properties 200 4,562
Amphenol Corp.-- Class A 1 100 4,600
AMR Corp. 1 200 5,700
Amsouth Bancorp 549 9,916
Anadarko Petroleum Corp. 100 5,306
Analog Devices, Inc. 1 500 38,500
Ancor Communications, Inc. 1 100 2,638
Andrew Corp. 1 200 7,025
ANDRX Corp. 1 100 5,962
Anesta Corp. 1 300 4,444
Anheuser Busch 600 46,500
Answerthink Consulting Group 1 100 1,769
Antec Corp. 1 100 5,025
AON Corp. 350 12,294
Apache Corp. 100 6,087
Apartment Investment & Management Co. 52 2,083
Apogee Enterprises, Inc. 400 1,650
Apollo Group, Inc.-- Class A 1 100 2,906
Apple Computer, Inc. 1 200 16,800
Applebee's International, Inc. 100 3,206
Applica 1 300 4,425
Applied Materials, Inc. 1 1,000 83,500
Applied Micro Circuits Corp. 1 200 19,850
Arabian Shield Development Co. 1 100 91
Arch Coal, Inc. 224 1,680
Archer-Daniels-Midland Co. 1,076 12,845
Archstone Communities Trust 200 4,487
Area Bankshares Corp. 200 3,925
Aremissoft Corporation 1 100 2,337
Argonaut Group, Inc. 100 1,787
Argosy Gaming Corp. 1 100 581
ARI Network Services, Inc. 1 300 919
Ariba, Inc. 1 300 15,637
Arnold Industries, Inc. 100 1,144
Arrow Electronics, Inc. 1 200 7,012
Arrow Financial Corp. 150 2,231
Arrow International, Inc. 100 3,300
Art Technology Group 1 100 5,869
Artesyn Technologies, Inc. 1 100 2,200
Ashford.com, Inc. 1 100 287
Ashland 100 3,494
Aspect Communications, Inc. 1 100 4,012
Aspen Technology, Inc. 1 100 2,062
Associated Banc-Corp. 110 2,800
Associated Estates Realty Corp. 200 1,300
Associates First Capital Corp. 1,024 28,096
At Home Corp. Series A 1 516 9,546
AT&T Corp. 4,287 148,705
Atlas Air, Inc. 1 100 3,237
Atmel Corp. 1 300 11,456
Atplan Inc. 1 300 1,800
Atrion Corp. 1 200 2,412
Autodesk, Inc. 100 3,719
Automatic Data Processing, Inc. 800 43,950
Autonation1 600 4,725
Autozone, Inc. 1 200 5,600
Avalonbay Communities, Inc. 100 3,975
Avax Technologies 1 100 862
Avery Dennison 1 200 12,250
Avid Technology, Inc. 1 300 3,019
Avis Rent A Car, Inc. 1 100 1,925
Avista Corp. 100 2,237
Aviva Petroleum, Inc. 1 500 62
Avnet, Inc. 100 6,919
Avon Products, Inc. 300 12,394
AVT Corp. 1 200 1,812
AVX Corp. 100 5,731
AXA Financial, Inc. 600 23,362
Aztec Technology Partners 1 20 46
Baker Hughes, Inc. 470 17,037
Baldor Electric Co. 1 200 3,750
Bank of America 2,323 129,072
Bank of South Carolina 100 1,250
Bank One Corp. 1 1,536 50,784
Bank Utd. Corp. 100 3,588
Banknorth Group, Inc. 200 2,787
Bard, C.R., Inc. 100 4,562
Barnett, Inc. 1 100 944
Barrett Resources Corp. 1 100 3,956
Bassett Furniture Industries, Inc. 200 2,450
Bausch & Lomb, Inc. 100 6,950
Baxter International, Inc. 400 26,600
BB&T Corp. 467 13,689
Be Free, Inc. 1 100 925
BEA Systems, Inc. 1 300 10,837
Bear Stearns Co., Inc. 120 4,725
Becton, Dickinson & Co. 1 400 11,675
Bed, Bath & Beyond, Inc. 1 200 7,362
Bell Atlantic Corp. 2,100 111,037
Bell Industries, Inc. 100 262
BellSouth Corp. 2,500 116,719
Belo, (A.H.) Corp.-- Class A 100 1,606
Bergen Brunswig Corp. 400 2,075
Beringer Wine Estates Holdings,
Inc. 1 100 3,800
Berkshire Hathaway, Inc.-- Class A 1 2 117,200
8
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Berkshire Hathaway, Inc.-- Class B 1 5 $ 9,430
Best Buy Co., Inc. 1 300 19,200
Bestfoods 400 25,800
Bethlehem Steel Corp. 1 100 387
Beverly Enterprises, Inc. 1 100 300
Beyond.com 1 300 478
BI, Inc. 1 100 544
Biogen, Inc. 1 200 10,900
Biomarin Pharmaceutical 1 100 1,675
Biomet, Inc. 200 7,212
Biotechnology General Corp. 1 100 1,050
Biotransplant 1 100 612
Bisys Group, Inc. 1 100 6,575
BJ Services Co. 1 100 7,162
BJ's Wholesale Club, Inc. 1 100 3,100
Black & Decker Corp. 100 3,650
Blonder Tongue Laboratories, Inc. 1 100 687
Blyth Industries, Inc. 100 2,712
BMC Software, Inc. 1 300 13,200
Bob Evans Farms, Inc. 200 2,725
Boeing Co. 1,200 46,875
Boston Biomedical1 100 362
Boston Properties, Inc. 100 3,494
Boston Scientific Corp. 1 600 15,375
Bowater, Inc. 100 5,169
Brady (W. H.) Co.-- Class A 100 3,012
Brandywine Realty Trust 300 5,306
Brightpoint, Inc. 1 300 3,506
Bristol-Myers Squibb Co. 2,700 148,669
Broadbase Software1 100 2,100
Broadcom Corp.-- Class A 1 200 26,012
BroadVision, Inc. 1 300 10,744
Broadwing Inc. 1 309 7,358
Brocade Communications 1 100 11,794
Brooks Automation, Inc. 1 100 3,975
Brookstone, Inc. 1 100 1,437
Brown Shoe Company, Inc. 200 2,387
Brown-Forman Corp.-- Class B 100 5,806
Brunswick Corp. 200 3,850
Buckeye Technology, Inc. 1 100 1,906
Burlington Industries, Inc. 1 300 994
Burlington Northern Corp. 700 16,537
Burlington Resources, Inc. 300 13,725
Burnham Pacific Properties, Inc. 100 644
Burr-Brown Corp. 1 50 2,847
Bush Boake Allen, Inc. 1 100 3,262
Butler Manufacturing Co. 100 2,231
BWAY Corp. 1 100 719
Cabletron Systems, Inc. 1 200 4,587
Cablevision Systems Corp. --
Class B 1 200 12,525
Cabot Corp. 100 2,606
Cabot Industrial Trust 300 5,812
Cadence Design Systems, Inc. 1 400 6,400
Callon Petroleum Co. 1 200 3,050
Calpine Corp. 1 100 10,594
Cambridge Technology Partners 1 400 3,225
Campbell Soup 600 18,600
Capital One Financial Corp. 300 14,175
Caraustar Industries, Inc. 100 1,656
Cardinal Health, Inc. 424 27,507
Careinsite1 100 1,650
Carematrix, Inc. 1 200 144
Caribiner International, Inc. 1 400 300
Carlisle Companies, Inc. 100 4,156
Carnival Corp.-- Class A 800 21,700
Carolina Power & Light Co. 200 6,875
Carpenter Technology Corp. 100 2,069
Carter-Wallace, Inc. 100 2,000
Cascade Corp. 400 4,500
Cascade Financial Corp. 1 225 1,687
Casella Waste Systems, Inc. 1 300 3,881
Casey's General Stores, Inc. 100 1,181
Catellus Development Corp. 1 200 2,687
Caterpillar, Inc. 500 19,125
CCB Financial Corp. 100 4,600
CDI Corp. 1 100 2,156
CDW Computer Centers 1 100 11,787
CellStar Corp. 1 300 844
Cendant Corp. 1 1,040 13,780
Centex Corp. 100 2,075
Centigram Communications Corp. 1 300 5,681
Central & South West Corp. 400 8,325
Central Newspapers, Inc. -- Class A 100 2,994
Centura Banks, Inc. 100 4,325
Centurytel, Inc. 225 6,075
Ceridian Corp. 1 300 7,237
CH Energy Group 100 3,219
CH Robinson Worldwide 100 4,494
Champion Enterprises, Inc. 1 100 569
Champion International Corp. 100 7,300
Charles Schwab Corp. 1,650 47,437
Charter Communications 1 200 2,437
Charter One Financial 325 7,394
Chase Brass Industries, Inc. 1 100 925
Chase Manhattan Corp. 1,100 82,156
Cheap Tickets, Inc. 1 300 3,769
9
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Checkfree Holdings, Corp. 1 100 $ 4,181
Checkpoint System, Inc. 1 200 1,587
Chesapeake Corp. 100 3,269
Chevron Corp. 900 83,194
Children's Comprehensive Services,
Inc. 1 400 887
Children's Place 1 100 1,912
Chiquita Brands International, Inc. 100 394
Chiron Corp. 1 200 7,587
Choice Hotels Corp., Inc. 1 200 2,425
Choice One Communications, Inc. 1 60 1,425
Chris-Craft Industries, Inc. 1 3 183
Ciber, Inc. 1 100 1,619
CIENA Corp. 1 200 23,937
Cigna Corp. 200 17,762
Cincinnati Financial Corp. 200 8,028
Cinergy Corp. 300 7,987
Cintas Corp. 300 13,200
Circle.com1 375 1,336
Circuit City Stores, Inc. 300 14,944
Cirrus Logic 1 200 3,475
Cisco Systems, Inc. 1 9,210 524,970
CIT Group, Inc. -- Class A 300 5,494
Citigroup, Inc. 4,458 277,232
Citizen Communication 1 500 7,625
Citizens First Financial Corp. 100 1,337
Citrix Systems, Inc. 1 200 10,525
City National Corp. 100 3,900
CKE Restaurants, Inc. 110 364
Clarcor, Inc. 100 1,769
Clayton Homes, Inc. 1 225 1,997
Clayton Williams Energy, Inc. 100 2,600
Clear Channel Communications, Inc. 1 431 32,271
Clorox Company 368 14,582
CMG Information Services 1 426 20,368
CMP Group, Inc. 100 2,900
CMS Energy Corp. 200 4,550
CNA Financial Corp. 1 300 10,706
CNA Surety Corp. 200 2,500
Cnet Networks, Inc. 1 100 3,444
Coastal Corp. 300 18,412
Coca-Cola Co. 3,300 176,137
Coca-Cola Enterprises, Inc. 600 10,275
Cognex Corp. 1 100 5,406
Coherent, Inc. 1 100 5,606
Colgate-Palmolive Co. 800 42,100
Colonial Bancgroup 200 1,912
Columbia Energy Group 150 9,703
Comarco, Inc. 1 100 2,887
Comcast Corp. -- Class A Special 1 1,240 46,965
Comdisco, Inc. 200 5,125
Comerica, Inc. 250 12,656
Comfort Systems USA, Inc. 1 200 1,212
Commerce Bancorp, Inc. 111 5,092
Commerce Bancshares, Inc. 110 3,822
Commerce Group, Inc. 100 2,712
Commerce One 1 200 7,156
Commercial Federal Corp. 200 3,187
Commonwealth Telephone Enterprises,
Inc. 1 100 4,606
Commscope, Inc. 1 100 3,862
Communications Systems, Inc. 200 2,700
Community Banks, Inc. 59 1,165
Compaq Computer Corp. 2,289 60,086
Compass Bancshares, Inc. 150 3,037
Computer Associates International,
Inc. 806 41,509
Computer Sciences Corp. 1 200 19,187
Compuware Corp. 1 500 5,094
Comverse Technology 1 200 18,275
Conagra, Inc. 700 16,144
Concentric Network Corp. 1 100 4,475
Concepts Direct, Inc. 1 100 1,075
Concord Communications, Inc. 1 100 2,487
Concord EFS, Inc. 1 375 9,094
Conexant Systems 1 300 11,287
Conoco Inc. -- Class B 900 25,650
Conseco, Inc. 583 3,644
Consolidated Edison 300 9,787
Consolidated Graphics, Inc. 1 100 1,037
Consolidated Papers, Inc. 100 3,737
Consolidated Stores Corp. 1 182 2,366
Constellation Energy Group 1 200 6,862
Continental Airlines, Inc.--
Class B 1 100 4,381
Convergys Corp. 1 200 8,987
Cooper Cameron Corp. 1 100 6,975
Cooper Industries, Inc. 200 6,700
Copart, Inc. 1 200 3,550
Copper Mountain Networks, Inc. 1 100 8,356
Corn Products International, Inc. 100 2,456
Cornerstone Properties, Inc. 200 3,600
Corning, Inc. 383 74,087
Corrpro Companies, Inc. 1 100 375
Costco Wholesale Corp. 1 600 19,162
Costilla Energy, Inc. 1 400 18
Countrywide Credit Industries, Inc. 200 6,150
Covad Communications 1 150 3,544
Covance, Inc. 1 400 2,850
Covenant Transport, Inc.-- Class A 1 100 1,025
10
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Cox Communications 1 800 $ 35,300
Cox Radio, Inc. -- Class A 1 300 8,550
CPB, Inc. 200 4,800
CPI Corp. 100 2,231
Craig Corp. 1 100 412
Creative Biomolecules, Inc. 1 100 513
Credit Acceptance Corp. 1 200 1,100
Crescent Real Estate Equities Co. 200 4,087
Critical Path, Inc. 1 100 3,181
Crompton Corp. 192 2,328
Cross (A.T.) Co. -- Class A 1 100 612
Crossroads System1 100 3,987
Crown Castle International Corp 1 200 5,237
Crown Cork & Seal Co., Inc. 200 3,425
CSK Auto Corp. 1 100 1,500
CSS Industries, Inc. 1 100 2,000
CSX Corp. 300 6,525
CTC Communications Group, Inc. 1 100 2,475
CTS Corp. 100 5,519
Cullen/Frost Bankers, Inc. 100 2,650
Culp, Inc. 100 625
Cumulus Media, Inc.-- Class A 1 100 1,137
CV Therapeutics 1 100 4,150
CVS Corp. 562 24,447
Cyberian Outpost 1 100 431
Cymer, Inc. 1 100 3,156
Cypress Semiconductor Corp. 1 100 4,206
Cytogen Corp. 1 200 806
Cytyc Corp. 1 100 5,019
D & K Healthcare Resources 1 100 1,150
D.R. Horton, Inc. 100 1,306
DA Consulting Group 1 100 225
Daily Journal Corp. 1 100 2,937
Daisytek International Corp. 1 200 2,012
Dallas Semiconductor Corp. 100 4,000
Dana Corp. 1 285 7,357
Danaher Corp. 129 6,216
Darden Restaurants, Inc. 200 3,437
Data Dimensions, Inc. 1 200 350
Davel Communications 1 200 275
Davox Corp. 1 100 2,087
Dawson Geophysical Co. 1 100 962
Deere & Co. 300 12,469
Delhaize America, Inc. 300 5,550
Delia's, Inc. 1 100 250
Dell Computer Corp. 1 3,500 150,937
Delphi Automotive Systems 738 13,330
Delta & Pine Land Co. 300 6,450
Delta Air Lines, Inc. 200 10,287
Deluxe Corp. 100 2,469
Dendrite International, Inc. 1 100 2,519
Dentsply International 100 3,069
Devon Energy Corp. 144 8,613
DeVry, Inc. 1 200 5,587
Dial Corp. 200 2,850
Diamond Offshore Drilling, Inc. 200 8,175
Dianon Systems, Inc. 1 100 2,112
Digital Island Inc. 1 100 1,834
Digital Lightwave, Inc. 1 100 5,494
Digital Microwave Corp. 1 100 2,794
Digitas 1 60 731
Dillards, Inc. -- Class A 200 2,987
Dime Bancorp, Inc. 200 3,650
Dollar General Corp. 438 7,665
Dollar Tree Stores, Inc 1 100 5,950
Dominion Resources, Inc. 374 17,110
Donaldson, Lufkin & Jenrette, Inc. 200 7,812
Doubleclick 1 200 8,450
Dover Corp. 300 13,950
Dow Chemical Co. 300 32,119
Dow Jones & Co., Inc. 100 6,800
DPL, Inc. 200 4,687
DQE, Inc. 100 4,225
Dress Barn, Inc. 1 200 4,275
Dril-Quip, Inc. 1 100 4,481
Drugstore.com 1 100 600
Dsl.net Inc. 1 100 631
DST Systems 1 100 7,506
DTE Energy Co. 200 6,912
Duke Power Co. 500 29,125
Duke-weeks Realty Corp. 300 6,469
Dun & Bradstreet 200 6,150
Dupont Photomasks, Inc. 1 100 5,762
Dupont, (E.I.) de Nemours & Co. 1,400 68,600
Dura Automotive Systems, Inc. 1 234 2,793
Dura Pharmaceutical, Inc. 1 200 2,337
Dynegy, Inc. 231 17,816
E Trade Group, Inc. 1 400 6,225
E-Loan1 100 484
E-Stamp Corp. 1 100 169
E-Tek Dynamics 1 100 18,381
E. Spire Communications, Inc. 1 100 381
Eagle Geophysical, Inc. 1 6 --
Earthlink 1 161 2,385
Earthshell Container Common 1 200 812
Eastman Chemical Co. 100 4,556
11
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Eastman Kodak Co. 400 $ 23,900
Eaton Corp. 100 7,256
Eaton Vance Corp. 100 4,350
Ebay 1 400 25,025
Echelon Corp. 1 100 5,362
Echostar Communications Corp. 1 300 11,981
Ecolab, Inc. 200 7,650
Edison International, Inc. 600 12,825
Edwards Lifesciences 1 80 1,625
Efficient Networks, Inc. 1 100 4,850
Egghead.com, Inc1 100 337
El Paso Energy Corp. 300 15,450
Elan Corp. PLC ADR 1 38 1,537
Electro Scientific Industries, Inc. 1 100 4,725
Electronic Arts 1 100 6,387
Electronic Data Systems Corp. 600 38,587
Electronics For Imaging 1 100 3,681
Eli Lilly & Co. 1,500 114,187
Eloyalty Corp. 1 200 3,000
Embrex, Inc. 1 100 1,750
EMC Corp. 1 1,400 162,837
Emerson Electric Co. 600 35,400
Emulex Corp.1 1 100 4,550
Energizer Holdings 1 166 2,822
Energy Biosystems 1 100 875
Energy East Corp. 200 4,275
Engage Technology 1 100 1,600
Engelhard Corp. 200 3,487
Enron Corp. 1,000 72,875
Ensco International, Inc. 200 6,987
Entergy 400 11,600
Enterprise Products Partners LP 100 2,169
Entrust Technologies, Inc. 1 100 4,875
EOG Resources, Inc. 200 6,500
Equifax, Inc. 200 5,537
Equity Office Properties Trust 400 10,625
Equity Residential Properties Trust 200 8,925
Erie Indemnity Company 100 2,750
Esco Electronics1 100 1,762
Eshare Technologies, Inc. 1 200 1,200
ESS Technology, Inc. 1 300 3,956
Estee Lauder Co. -- Class A 200 8,962
Etoys 1 200 975
Evans & Sutherland Computer Corp. 1 400 3,200
Evercell1 266 3,724
Evergreen Resources, Inc. 1 200 5,500
Excel Technology, Inc. 1 100 3,150
Excelsior-Henderson Motorcycle 1 100 12
Exodus Communications, Inc. 1 200 14,112
Expedia 1 100 1,837
Expeditors International of
Washington 100 4,056
Express Scripts, Inc. 1 100 5,362
Extended Stay America, Inc. 1 100 900
Extreme Networks 1 100 4,887
Exxon Mobil Corp. 4,652 387,570
F & M National Corp. 103 2,440
Fairchild Semiconductor Intl.
-- Class A 1 100 4,500
Family Dollar Stores, Inc. 300 5,925
Fannie Mae 1,400 84,175
Fastenal Co. 100 6,312
Federal-Mogul Corp. 300 2,981
Federated Department Stores 1 300 11,550
FedEx Corp. 1 400 14,150
Ferro Corp. 200 4,425
Fifth Third Bancorp 404 27,472
FileNet Corp. 1 100 2,100
Finisar Corp 1 300 6,694
Finova Group, Inc. 400 4,775
First Data Corp. 500 28,031
First Financial Bancorp 132 2,343
First Financial Corp. -- Indiana 100 3,200
First Financial Corp./RI 100 1,050
First Health Group Corp. 1 100 3,500
First Midwest Bancorp, Inc. 150 3,750
First Niagara Financial 400 3,600
First Place Financial/Ohio 100 1,031
First Security Corp. 300 4,669
First Tennessee National Corp. 1 200 4,100
First Union Corp. 1,282 45,110
First United Corp. 200 2,362
First Virginia Banks, Inc. 1 100 3,969
First Washington Realty Trust 300 6,225
Firstar Corp. 1 1,411 36,069
Firstcom Corp. 1 100 1,394
Firstenergy Corp. 400 10,050
Fiserv, Inc. 1 225 10,519
Flagstar Bancorp, Inc. 100 937
Fleet Boston Financial Corp. 1,192 45,072
Florida Progress Corp. 1 100 4,962
Flowers Industries, Inc. 1 200 3,612
Flowserve Corp. 300 4,800
Fluor Corp. 100 3,250
Flushing Financial Corp. 1 50 719
Focal Communication Corp. 1 100 2,694
Fogdog 100 250
Ford Motor Company 1,600 77,700
12
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STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Forest Laboratories, Inc. 1 100 $ 8,850
Fort James Corp. 1 300 6,787
Fortune Brands, Inc. 200 5,325
Fossil, Inc. 1 150 3,019
Foster Wheeler Corp. 200 1,687
Foundation Health Systems, Inc. 1 200 2,400
Foundry Networks 1 200 12,612
Fountain Powerboat Industries, Inc. 1 100 237
Fox Entertainment Group 1 200 5,225
FPL Group, Inc. 300 14,850
Franchise Finance Corp. REIT 100 2,256
Franklin Resources, Inc. 300 9,000
Freddie Mac 1 900 40,050
Freeport-McMoran Copper & Gold --
Class B 1 200 1,837
Fremont General Corp. 200 875
French Fragrances, Inc. 1 400 3,050
Friede Goldman Halter, Inc. 1 57 481
Friedmans, Inc. -- Class A 100 600
Frontline Capital 1 100 1,456
Frontline Communications Corp. 1 100 156
Fuelcell Energy, Inc. 1 150 6,506
Fulton Financial Corp. 115 2,368
Funco, Inc. 1 200 4,912
Galileo International, Inc. 200 4,500
Gallagher (Arthur J.) & Co. 100 3,869
Gannett Company, Inc. 400 25,900
Gap, Inc. 1,175 41,198
Gartner Group-- Class B 1 277 3,064
Gateway, Inc. 1 400 19,800
Gaylord Entertainment Company 100 2,262
GBC Bancorp 1 100 2,856
Genentech1 100 10,737
General Cable Corp. 300 2,494
General Dynamics Corp. 300 17,719
General Electric Co. 13,278 698,755
General Mills, Inc. 400 15,875
General Motors Corp. 700 49,437
General Motors Corp. -- Class H 1 300 29,531
General Semiconductor, Inc. 1 300 4,725
Genrad, Inc. 1 200 1,462
Gentex Corp. 1 100 3,100
Gentiva Health Services 1 100 875
Genuine Parts Co. 1 300 7,162
Genzyme Corp. General Division 1 117 863
Genzyme Corp. 1 100 5,681
Genzyme-Molecular Oncology 1 10 110
Geon Co. 1 100 2,150
Georgia Pacific Timber Group 100 2,312
Georgia-Pacific Corp. 300 9,825
Gerber Scientific, Inc. 100 1,200
Giant Industries, Inc. 1 200 1,762
Gilead Sciences, Inc. 1 100 5,469
Gillette Co. 1,400 46,725
Glacier Bancorp 133 1,696
Glatfelter (P.H.) Co. 100 1,181
Glenborough Realty Trust, Inc. 400 6,200
Global Marine, Inc. 1 300 8,494
Global Telesystems Group, Inc. 1 300 3,337
Globecom System, Inc. 1 100 1,087
Globespa 1 100 8,837
Golden State Bancorp, Inc 1 200 3,512
Golden State Bancorp-Litigation
Warrant 1 100 106
Golden West Financial Corp. 200 8,350
Goldman Sachs Group 100 7,356
Goodrich (B.F.) Co. 122 4,331
Goodyear Tire & Rubber Co. 200 4,975
Goto.com 1 100 1,462
GPU, Inc. 200 5,650
Graco, Inc. 100 3,206
Grainger (W.W.), Inc. 100 3,994
Grant Prideco 1 200 4,650
Great Atlantic & Pacific Tea Co.,
Inc. 100 1,837
Great Lakes Chemical Corp. 100 2,775
Green Mountain Power Corp. 100 794
GreenPoint Financial Corp. 200 4,175
Greif Brothers Corp.-- Class A 100 3,100
GTE Corp. 1,300 82,225
Guidant Corp. 1 400 20,250
Gulfmark Offshore, Inc. 100 2,150
H & R Block, Inc. 100 3,087
Haggar Corp. 200 2,300
Halliburton Company 600 30,600
Hallmark Capital Corp. 200 1,700
Hallwood Group, Inc. 1 300 2,962
Hannaford Brothers, Co. 100 7,225
Harbinger Corp. 1 100 1,494
Harcourt General, Inc. 100 3,950
Harley-Davidson, Inc. 400 14,900
Harnischfeger Industries, Inc. 1 200 92
Harrah's Entertainment 1 200 3,950
Harris Corp. 100 3,056
Harsco Corp. 100 2,687
Harte-Hanks Communications, Inc. 100 2,469
Hartford Financial Services Group,
Inc. 300 17,737
Hartford Life, Inc. -- Class A 100 5,019
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STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Hasbro, Inc. 200 $ 3,275
Hayes Lemmerz International, Inc. 1 200 2,887
HCA Healthcare Co. 800 21,600
Headway Corporate Resources 1 200 612
Health Care REIT 300 4,875
Health Management Associates, Inc. 1 350 4,134
Healtheon/Web MD Corp. 1 74 1,082
Healthgrades.com 1 100 112
Healthplan Services Corp. 300 731
Healthsouth Corp. 1 700 4,506
Hearst-Argyle Television 1 100 1,894
Heartland Express, Inc. 1 100 1,831
Hector Communications Corp. 1 200 2,550
Heico Corp. -- Class A 100 1,300
Heico Corp. 100 1,312
Heilig-Meyers Co. 400 675
Heinz, (H.J.) Co. 500 19,594
Heller Financial 200 3,775
Herbalife International, Inc. --
Class A 200 1,737
Hercules, Inc. 200 3,312
Hershey Foods Corp. 200 10,375
Hertz Corp. -- Class A 100 3,131
Hewlett-Packard Co. 1,300 156,162
Hexcel Corp. 1 300 2,325
Hibernia Corp. -- Class A 200 2,575
Hickory Tech Corp. 200 2,700
High Speed Access Corp. 1 100 419
Hillenbrand Industries, Inc. 100 3,069
Hilton Hotels Corp. 512 4,352
HNC Software, Inc. 1 100 4,100
Hollinger International 200 2,437
Home Depot, Inc. 3,150 153,759
Homefed Corp. 1 79 --
Homegold Financial 1 100 87
Homestake Mining Co. 300 2,025
Homestore.com 1 100 2,356
Hon Industries, Inc. 100 2,494
Honeywell International, Inc. 1,075 58,789
Horizon Financial Corp. 200 1,850
Horizon Group Properties, Inc. 1 20 72
Hormel Foods Corp. 200 3,462
Host Marriott Corp. 400 3,850
Household International, Inc. 1 606 28,482
Howmet International, Inc. 1 200 4,037
Hubbell, Inc. -- Class B 100 2,637
Hudson United Bancorp 103 2,504
Human Genome Sciences, Inc. 1 100 8,775
Humana, Inc. 1 300 1,687
Huntington Bancshares, Inc. 351 6,801
Hutchinson Technology, Inc. 1 100 1,175
Hvide Marine Warrants1 1 2
Hvide Marine, Inc. -- Class A 1 100 15
I2 Technologies, Inc. 1 200 21,275
IBP, Inc. 200 3,300
ICG Communications, Inc. 1 131 2,464
ICOS Corp. 1 100 3,500
IDEC Pharmaceuticals Corp. 1 100 6,381
IDX Systems Corp. 1 100 1,475
Il Fornaio (America) Corp. 1 300 2,550
Illinois Tool Works, Inc. 380 22,064
Illuminet Holding 1 100 3,812
IMC Fertilizer Group, Inc. 200 3,075
Immucor, Inc. 1 100 806
Immunex Corp. 1 700 18,112
Immunomedics, Inc. 1 100 1,244
IMS Health 400 6,600
Independent Bank East 64 832
Indymac Mortgage Holdings, Inc. 300 3,919
Inet Technologies 1 100 4,000
Infinity Broadcasting Corp. A 1 612 19,354
Informatica Corp. 1 100 4,025
Information Resources, Inc. 1 200 1,000
Informix Corp. 1 400 2,900
Infospace.com, Inc. 1 300 13,012
Ingersoll-Rand Co. 200 9,112
Inktomi Corp. 1 100 11,162
Innovex, Inc. 100 862
Input/Output, Inc 1 100 787
Insight Communications 1 100 1,419
Insignia Financial Group 1 133 1,505
Insweb Corporation1 100 237
Integra Bank Corp. 126 2,520
Integrated Device Technology, Inc. 1 100 4,744
Integrated Electrical Services 1 100 494
Intel Corp. 4,486 559,348
Interdigital Communications Corp. 1 100 1,606
Interface, Inc. -- Class A 200 862
Interim Services 1 200 4,025
Interliant, Inc. 1 100 1,619
Intermedia Communications of
Florida, Inc. 1 100 2,500
Internap Network Services 1 200 5,725
International Bancshares Corp. 125 5,500
International Business Machines
Corp. 2,400 257,550
International Flavors &
Fragrances, Inc. 100 3,400
International Game Technology 1 200 5,425
International Home Foods, Inc. 1 200 3,400
14
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STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
International Paper Co. 548 $ 19,077
International Rectifier Corp. 1 100 4,125
International Specialty Products 1 200 1,087
International Speedway Corp. --
Class A 100 4,281
Internet Commerce Corp.-- Class A 1 100 825
Interpool, Inc. 200 1,600
Interspeed Inc. 100 1,138
Interpublic Group of Cos., Inc. 510 21,898
Interstate Hotels Corp. 1 10 24
Intertrust Technologies Corp. 1 200 3,550
Intimate Brands 640 15,080
Intuit 1 300 10,875
Invacare Corp. 100 2,475
Investment Technology Group, Inc. 1 100 3,375
Iomega Corp. 1 300 975
Iron Mountain 1 100 3,650
IRT Property Co. 100 806
ISS Group, Inc. 1 100 7,400
ITC Deltacom, Inc. 1 100 1,819
Itron, Inc. 1 300 1,406
ITT Industries 100 3,456
Itxc Corp. 1 100 3,350
Ivax Corp. 300 11,306
IXL Enterprises, Inc. 1 100 1,900
Ixnet Inc. 1 100 3,044
J. D. Edwards & Co. 1 200 2,637
J.C. Penney Co., Inc. 1 400 7,250
Jabil Circuit, Inc. 1 300 10,950
Jacobs Engineering Group, Inc. 1 100 3,325
JDN Realty Corp. 100 1,069
JDS Uniphase Corp. 1 700 61,600
Jefferson-Pilot Corp. 150 10,294
JLG Industries, Inc. 300 2,925
JLM Industries, Inc. 1 100 387
Jo-Ann Stores, Inc.-- Class A 1 300 2,850
John Hancock Financial 1 500 11,156
Johns Manville Corp. 200 2,287
Johnson & Johnson 1,863 166,738
Johnson Controls, Inc. 100 5,694
Jones Apparel Group, Inc. 1 200 5,362
Juniper Networks 1 200 35,037
Juno Online Services 1 100 806
Justin Industries, Inc. 200 3,487
K-V Pharmaceutical Co. -- Class A 1 100 1,919
Kaiser Aluminum Corp. 100 444
Kana Communications 1 100 4,481
Kansas City Southern Industries 100 6,725
Kaufman & Broad Home Corp. 100 1,731
Kaydon Corp. 100 2,331
Keane, Inc. 1 100 2,681
Keebler Foods Co. 100 3,625
Kellogg Co. 600 18,225
Kemet Corp. 1 100 6,719
Kendle International, Inc. 1 100 637
Kennedy-Wilson, Inc. 1 150 778
Kent Electronics Corp. 1 200 5,550
Kerr-McGee Corp. 73 4,357
KeyCorp 600 12,600
Keyspan Energy Corp. 188 5,734
Keystone Financial, Inc. 300 6,394
Kilroy Realty Corp. 100 2,287
Kimball International, Inc.-- Class B 200 3,225
Kimberly Clark Corp. 744 45,012
Kimco Realty Corp. 100 4,050
Kinder Morgan 150 4,894
King Pharmaceuticals 1 50 2,675
Kitty Hawk, Inc. 1 300 225
KLA Instruments Corp. 1 200 9,912
Klamath First Bancorp, Inc. 200 2,225
Kmart Corp. 1 800 6,800
Knight Trading Group 1 200 5,812
Knight-Ridder, Inc. 100 5,300
Kohls Corp. 1 400 20,700
Kopin Corp. 1 100 7,094
Kroger Co. 1 1,200 23,850
L-3 Communications Holdings 1 100 5,600
La-Z-Boy Chair Co. 118 1,895
Labor Ready, Inc. 1 225 2,109
Laclede Gas Co. 200 3,937
Lafarge Corp. 100 2,550
Lam Research Corp. 1 100 3,212
Lamar Advertising Co. 1 100 4,012
Lancaster Colony Corp. 100 2,369
Lance, Inc. 100 975
Landry's Seafood Restaurants, Inc. 300 2,344
Lanier Worldwide1 100 181
Lanvision Systems, Inc. 1 100 150
Lason Holdings, Inc. 1 100 262
Lattice Semiconductor Corp. 1 100 5,931
Lawson Products, Inc. 100 2,394
Leap Wireless International 1 25 1,100
Lear Corp. 1 100 2,344
Lee Enterprises, Inc. 100 2,187
Legato Systems, Inc. 1 100 1,087
Legg Mason, Inc. 100 4,412
Leggett & Platt, Inc. 200 4,012
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STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Lehman Brothers, Inc. 100 $ 7,719
Level 3 Communications, Inc. 1 500 38,156
Level 8 Systems, Inc. 1 100 1,969
Lexmark International Group, Inc. --
Class A 1 200 13,950
LG&E Corp. 200 4,737
LHS Group, Inc. 1 100 3,500
Liberate Technology 1 100 2,331
Liberty Digital Inc. Cl. A 1 100 3,200
Liberty Financial Companies, Inc. 200 4,712
Lifepoint Hospitals 1 57 1,222
Ligand Pharmaceutical -- Class B 1 200 2,137
Limited, Inc. 600 14,475
Lincare Holdings, Inc. 1 100 2,900
Lincoln Electric Holdings 100 1,487
Lincoln National Corp. 300 11,625
Lindsay Manufacturer Co. 150 2,812
Linear Technology Corp. 400 23,625
Linens `N Things, Inc. 1 100 2,656
Lithia Motors 1 200 2,425
Liz Claiborne, Inc. 100 3,931
Lockheed Martin Corp. 600 14,700
Loews Corp. 100 6,587
Logansport Financial Corp. 100 850
Loislaw.com 1 100 687
Longview Fibre Co. 100 1,200
Looksmart Ltd1 100 1,387
Loral Space and Communications Ltd. 1 400 3,025
Louisiana-Pacific Corp. 200 2,250
Lowe's Cos., Inc. 500 23,281
LSI Logic Corp. 1 400 21,075
LTV Corp. 100 262
LTX Corp. 1 100 2,612
Lubrizol Corp. 100 2,312
Lucent Technologies, Inc. 4,303 246,885
Lycos, Inc. 1 100 6,050
Lyondell Petrochemical Co. 200 3,337
M.A. Hanna Co. 300 3,506
Macromedia, Inc. 1 100 8,012
Magellan Petroleum Corp. 1 200 231
Mail Boxes Etc. 1 100 553
Mail-Well, Inc. 1 300 2,812
Mallinckrodt Group, Inc. 100 2,894
Management Network Group Inc. 1 100 2,275
Mandalay Resort Group, Inc. 1 100 2,119
Manor Care 1 200 1,412
Manpower, Inc. 100 3,537
Mapquest.com, Inc. 1 100 1,631
Marchfirst Inc. 1 286 5,398
Marine Transport Corp. 1 10 25
Markel Corp. 1 100 14,525
Mark IV Industries, Inc. 200 4,250
Marriott International -- Class A 300 10,875
Marsh and McLennan 400 44,025
Marshall & Ilsley Corp. 100 4,850
Martin Marietta Materials, Inc. 100 4,894
Masco Corp. 700 13,781
Mascotech, Inc. 200 2,575
Matlack Systems, Inc. 1 100 306
Mattel, Inc. 520 7,052
Maxim Integrated Products, Inc. 1 400 25,375
Maxwell Technologies, Inc. 1 200 2,775
Maxxam, Inc. 1 100 2,550
May Department Stores Co. 500 15,031
Mays (J.W.), Inc. 1 100 475
Maytag Corp. 100 3,275
MBIA, Inc. 100 5,781
MBNA Corp. 1,100 30,662
McClatchy Newspapers, Inc. 100 3,075
McCormick & Co., Inc. 100 3,250
McDermott International, Inc. 300 3,000
McDonald's Corp. 1,800 64,462
McGraw-Hill, Inc. 200 10,287
McKesson HBOC 459 7,545
McLeod USA Inc. -- Class A 1 759 15,180
McMoRan Exploration 1 200 3,112
MCN Corp. 100 2,281
MDC Holdings, Inc. 300 5,794
Mead Corp. 200 6,162
Mech Financial, Inc. 100 3,462
Media Arts Group, Inc. 1 300 1,163
Mediacom Communications 1 240 1,924
Medialink Worldwide 1 100 713
Mediaone Group 1 800 53,450
Medical Assurance, Inc. 1 105 1,194
Medical Manager Corp. 1 100 2,206
Medimmune, Inc. 1 100 15,538
Meditrust Corp. Paired Stock 255 478
Medtronic, Inc. 1,620 83,633
Mellon Financial Corp. 700 26,994
MemberWorks, Inc. 1 100 3,225
Mentor Corp. MN 200 4,800
Mercantile Bankshares Corp. 100 3,313
Mercator Software 1 100 2,975
Merchants New York Bancorp, Inc. 300 5,100
Merck & Co., Inc. 3,100 231,338
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STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Mercury Interactive Corp. 1 100 $ 8,475
Meredith Corp. 100 3,044
Meristar Hospitality Corp. 100 1,900
Meristar Hotels & Resorts, Inc. 1 100 288
Merrill Lynch & Co., Inc. 500 49,313
Merrimac Industries, Inc. 1 10 121
Messagemedia, Inc. 1 100 300
Metamor Worldwide, Inc. 1 100 2,275
Metasolv Software 1 100 3,950
Methode Electronics, Inc. -- Class A 100 3,588
Metris Companies, Inc. 100 3,700
Metro-Goldwyn-Mayer, Inc. 1 300 8,513
Metromedia Fiber Network, Inc. 1 600 18,563
MGC Communications, Inc. 1 100 4,100
MGIC Investment Corp. 100 4,956
MGM Grand, Inc. 166 5,395
Micrel, Inc. 1 100 6,375
Microage, Inc. 1 200 375
Microchip Technology, Inc. 1 50 2,838
Microfinancial 200 1,900
Micron Technology, Inc. 1 700 48,956
Microsoft Corp. 1 7,045 440,753
Milacron 100 1,581
Millennium Pharmaceuticals 1 100 8,363
Miller (Herman) Inc. 100 2,700
Millipore Corp. 100 7,238
Minnesota Mining & Manufacturing Co. 500 42,875
Mirage Resorts, Inc. 1 200 4,188
Mississippi Chemical Corp. 100 581
Mitchell Energy & Development Corp.
-- Class A 200 5,813
MMC Networks, Inc. 1 100 3,263
Modis Professional Services 1 200 2,050
Molex, Inc. 250 12,203
Momentum Business Applications 1 6 44
Montana Power Co. 200 7,563
Morgan Stanley Dean Witter
Discover & Co. 1,500 107,906
Morgan, (J.P.) & Co., Inc. 200 25,750
Morrison Knudsen Corp. 1 200 1,550
Morrison Management Specialist, Inc. 220 5,981
Motient Corp. 1 200 1,813
Motorola, Inc. 915 85,781
MP3.com 1 100 1,113
MRV Communications, Inc. 1 200 5,325
MSB Financial 200 1,313
MTI Technology Corp. 1 100 706
Myers Industries, Inc. 110 1,499
Mylan Laboratories 200 5,363
Myturn.com1 500 5,125
Nabisco Group Holdings 400 8,725
Nabors Industries, Inc. 200 8,600
Nash Finch Co. 300 2,325
National Bancorp Alaska, Inc. 200 8,075
National City Corp. 840 16,800
National Commerce Bancorp 200 3,800
National Computer Systems, Inc. 100 4,544
National Data Corp. 100 2,206
National Fuel & Gas Co. 100 5,181
National Health Investors, Inc. 300 3,094
National Info. Consortium 1 100 1,488
National Instruments Corp. 1 100 3,638
National Semiconductor Corp. 1 200 10,750
National Service Industries, Inc. 100 2,175
National Steel Corp.-- Class B 400 2,100
Navigant Consulting Co. 1 400 1,850
Navigant International, Inc. 1 10 90
Navistar International Corp. 1 100 3,213
NBTY, Inc. 1 200 3,188
NCO Group, Inc. 1 100 2,388
NCR Corp. 1 200 8,438
Neoforma.com, Inc. 1 300 1,950
Neon Systems 1 100 2,100
Netro Corp. 1 100 2,988
Network Access Solutions Corp. 1 100 1,050
Network Appliance Corp. 1 400 25,825
Network Associates, Inc. 1 150 3,281
Network Commerce 1 100 400
Network Plus Corp 1 100 1,263
Network Solutions, Inc. 1 100 14,713
NetZero 1 200 1,588
New Century Energies, Inc. 200 6,725
New Era of Networks 1 100 2,138
New Jersey Resources Corp. 100 3,875
New York Times Co.-- Class A 300 11,513
Newell Rubbermaid, Inc. 336 8,820
Newfield Exploration Co. 1 100 4,188
Newmont Mining Corp. 205 4,728
Newpark Resources, Inc. 1 100 838
Newport Corp. 100 17,056
Newsedge Corp. 1 100 200
Nexell Therapeutics 1 100 347
Next Level Communications 1 100 5,113
Nextcard, Inc. 1 100 969
Nextel Communications, Inc.
-- Class A 1 500 46,313
Nextlink Communications, Inc. 1 100 7,006
Niagara Mohawk Holdings 1 300 4,406
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STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Nieman Marcus Group -- Class A 100 $ 2,625
Nike, Inc. 400 17,150
NL Industries, Inc. 200 3,475
Nobility Homes 1 110 550
Noble Drilling Corp. 1 200 8,675
Nordstrom, Inc. 200 5,025
Norfolk Southern Corp. 600 10,688
North American Vaccine, Inc. 1 200 875
North Fork BanCorp, Inc. 250 4,141
Northeast Utilities 200 4,425
Northern States Power Co. (Minn.) 300 6,638
Northern Trust Corp. 300 19,744
Northfield Laboratories, Inc. 1 200 2,225
Northland Cranberries, Inc.
-- Class A 100 397
Northpoint Communications 1 200 3,125
Northrop Grumman Corp. 100 7,663
Northwest Airlines Corp. -- Class A 1 100 2,844
Northwest Bancorp, Inc. 200 1,513
Northwest Natural Gas Co. 300 6,525
Northwestern Corp. 100 2,325
Norwood Financial Corp. 100 1,838
Nova Corp. (Georgia) 1 100 2,938
Novell, Inc. 1 500 4,156
Novellus Systems, Inc. 1 200 9,638
Nstar 42 1,809
NTL, Inc. 1 156 9,214
Nu Skin Asia Pacific, Inc. 1 100 663
Nucor Corp. 100 3,888
Oakley, Inc. 1 200 1,938
Occidental Petroleum Corp. 600 14,213
Ocean Energy, Inc. 1 400 6,000
Oceaneering International, Inc. 1 200 3,900
Ocwen Financial Corp. 1 200 1,150
Office Depot, Inc. 1 600 4,238
Officemax 1 300 1,631
Offshore Logistics, Inc. 1 100 1,413
Old Kent Financial Corp. 115 3,824
Old National Bancorp 64 1,884
Omnicare, Inc. 200 3,300
Omnicom Group, Inc. 200 16,788
Omnova Solutions 100 713
On Command Corp. 1 300 4,838
One Valley Bancorp, Inc. 100 3,713
Open Market, Inc. 1 100 1,063
Optical Cable Corp. 1 100 2,381
Oracle Systems Corp. 1 3,800 273,125
Orapharma1 200 1,463
Orbital Sciences Corp. 1 400 4,900
Oregon Steel Mills, Inc. 400 875
Organic 1 100 1,013
Orphan Medical, Inc. 1 100 706
Outback Steakhouse 1 150 4,547
Overseas Shipholding Group, Inc. 200 4,638
Owens Corning 100 1,544
Pac-West Telecomm Inc. 1 100 1,475
Paccar, Inc. 100 4,188
Pacific Century Hawaii, Inc. 200 4,500
Pacificamerica Money Center, Inc. 1 200 23
Pacificare Health Systems, Inc. 100 6,481
Pactiv Corp. 1 300 2,681
Paging Network, Inc. 1 100 66
PaineWebber Group, Inc. 200 8,988
Pairgain Technologies, Inc. 1 100 2,869
Pall Corp. 200 4,200
Palm Harbor Homes, Inc. 1 125 1,875
PAM Transportation Services, Inc. 1 100 844
Pameco Corp. 1 200 525
Papa John's International 1 100 2,506
Parametric Technology Corp. 1 400 4,250
Parexel International Corp. 1 100 900
Park Place Entertainment 1 400 5,050
Parker-Hannifin Corp. 200 8,338
Patrick Industries, Inc. 100 625
Patterson Dental Co. 1 100 5,094
Paychex, Inc. 562 19,670
PE Corp. - Celera Genomics Group 1 100 5,563
PE Corp. - PE Biosystems 300 16,650
PECO Energy 300 13,181
Penford Corp. 200 3,650
Pennsylvania Real Estate Investment
Trust 200 3,488
Pennzoil-Quaker State Co. 300 3,300
Penwest Pharmaceuticals Co. 1 150 1,763
Peoples Bank of Bridgeport 200 4,213
Peoplesoft, Inc. 1 400 5,525
Pep Boys (Manny Moe & Jack) 100 713
Pepsi-Cola Bottling 200 5,225
Pepsico, Inc. 2,000 81,375
Perceptron, Inc. 1 300 1,200
Peregrine Systems, Inc. 1 200 4,150
Performance Technologies, Inc. 1 100 1,013
Perot Systems 1 200 3,113
Perrigo Company 1 100 600
PETsMART, Inc. 1 100 300
Pfizer, Inc. 5,200 231,725
PG & E Corp. 600 15,563
Pharmacia Corp. 1,700 88,294
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STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Phelps Dodge Corp. 136 $ 6,103
Philip Morris Companies, Inc. 3,200 83,600
Phillips Petroleum Co. 300 17,175
Phone.com 1 100 6,994
Piedmont Natural Gas Co., Inc. 100 2,975
Pier 1 Imports, Inc. 150 1,275
Pinnacle Entertainment 1 100 1,906
Pinnacle Holdings 1 100 4,900
Pinnacle West Capital Corp. 100 3,575
Pitney Bowes, Inc. 400 17,400
Pittston Services Group 200 3,038
Pixar, Inc. 1 100 3,425
Pizza Inn, Inc. 100 363
Playboy Enterprises, Inc.
-- Class B 1 100 1,313
Playtex Products, Inc. 1 100 1,163
PNC Bank Corp. 400 20,150
Polaroid Corp. 200 3,838
Policy Management Systems 1 100 1,019
Popular, Inc. 200 4,575
Portal Software1 200 8,050
Potomac Electric Power Co. 200 5,188
Powerwave Technologies, Inc. 1 100 5,419
PPG Industries, Inc. 200 9,913
PPL Corp. 300 7,088
Praxair, Inc. 200 8,400
Pre-Paid Legal Services, Inc. 1 100 3,019
Premier Parks, Inc. 1 100 2,381
Presidential Life Corp. 1 300 4,388
Previo Inc. 1 100 563
PRI Automation, Inc. 1 100 5,139
Price Communications Corp. 1 127 2,897
Priceline.com, Inc. 1 200 7,625
Pride International, Inc. 1 200 5,088
Prime Retail, Inc. 400 625
Primedia, Inc. 1 300 5,944
Primus Telecommunications Group,
Inc. 1 61 1,594
Procter & Gamble Co. 1,800 119,700
Prodigy Communications Corp. 1 100 1,075
Programmers Paradise, Inc. 1 500 1,719
Progressive Corp 100 9,388
Prologos Trust 300 6,206
Protection One, Inc. 1 300 563
Provident Bancorp, Inc. 100 2,788
Provident Bankshares Corp. 115 1,696
Providian Financial Group 150 13,341
Proxicom 1 100 4,588
PSINet, Inc. 1 200 5,213
PSS World Medical, Inc. 1 200 1,688
PSW Technologies, Inc. 1 200 1,925
Ptek Holdings Inc. 1 200 688
Public Service Enterprise Group 300 11,175
Public Storage, Inc. 186 4,150
Puerto Rican Cement Co., Inc. 100 3,100
Pulte Corp. 100 2,219
PVF Capital 10 97
Qlogic Corp. 1 100 4,913
Quaker Oats Co. 200 14,713
Qualcomm, Inc. 1 1,000 66,375
Quanta Services, Inc. 1 100 4,900
Quantum Corp. Dlt & Storage 1 300 3,113
Queens County Bancorp 100 1,975
Quest Diagnostics, Inc. 1 100 6,688
Quest Software, Inc. 1 100 4,000
Quiksilver, Inc. 1 150 2,044
Quintiles Transnational Corp. 1 200 2,950
Quintus Corporation 1 237 1,703
Quokka Sports 1 100 456
Quorum Health Group, Inc. 1 100 966
Qwest Communications International,
Inc. 1 1,032 43,667
R&B Falcon Corp. 1 200 4,688
R&G Financial Corp. 300 2,456
R.H. Donnelley Corp. 1 220 4,070
R.L.I. Corp. 200 7,275
R.R. Donnelley & Sons Co. 200 4,938
Radian Group, Inc. 106 5,830
Radio One, Inc. 1 100 7,150
Radioshack Corp. 300 12,731
Rainbow Technologies, Inc. 1 100 3,188
Rainforest Cafe, Inc. 1 100 297
Ralston Purina Group 500 9,281
Rare Hospitality International,
Inc. 1 200 5,475
Rational Software 1 100 7,331
Rayovac Corp. 1 100 1,775
Raytheon Co. -- Class B 500 11,719
Razorfish1 174 2,719
RCN Corp. 1 100 2,306
Reader's Digest Assn., Inc.
-- Class A 200 6,775
RealNetworks, Inc. 1 200 7,263
Red Hat 1 200 3,213
Redback Networks 1 200 16,775
Redwood Empire Bancorp 100 1,900
Reebok International Ltd. 1 200 2,775
Regions Financial Corp. 300 6,788
Reliance Group Holdings 200 463
Reliance Steel & Aluminum Co. 150 3,141
Reliant Energy 500 14,250
19
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Reliastar Financial Corp. 100 $ 5,150
Remedy Corp. 1 100 4,150
Renal Care Group, Inc. 1 200 4,775
Republic Group, Inc. 100 925
Retek, Inc. 1 100 2,063
Reynolds & Reynolds 200 4,375
RF Micro Devices, Inc. 1 100 10,500
RF Monolithics, Inc. 1 100 925
Rhythms Netconnections 1 200 3,300
Rite Aid Corp. 400 2,775
RJ Reynolds Tobacco Holdings 200 5,550
Roanoke Electric Steel Corp. 100 1,325
Robert Half International, Inc. 1 100 5,938
Robert Mondavi Corp.-- Class A 1 100 3,138
Rock of Ages Corp. 1 200 1,000
Rockwell International Corp. 300 12,300
Rohm & Haas Co. 373 12,729
Rollins Truck Leasing Corp. 250 2,359
Roper Industries, Inc. 100 3,525
Rouse Company 100 2,394
Rowan Cos., Inc. 1 100 3,106
Royal Caribbean Cruises Ltd. 200 4,925
RPM, Inc. (Ohio) 200 1,950
RSA Security, Inc. 1 100 5,756
Ruddick Corp. 300 4,163
Rural/Metro Corp. 1 300 356
Ryans Family Steak Houses, Inc. 1 200 1,800
Ryder Systems, Inc. 100 1,919
S&K Famous Brands, Inc. 1 100 644
S1 Corp. 1 100 3,363
S3, Inc. 1 300 4,800
Sabre Group Holdings, Inc. 244 7,015
Safeco 200 4,913
Safeguard Scientifics, Inc. 1 200 6,438
Safety Components International,
Inc. 1 100 46
Safety-Kleen Corp. 1 300 188
Safeway, Inc. 1 700 32,288
Saks, Inc. 1 282 3,261
Sandisk Corp. 1 100 5,813
Sangstat Medical Corp. 1 100 2,663
Sanmina Corp. 1 200 12,725
Sante Fe International Corp. 200 7,763
Santa Fe Snyder Corp. 1 100 1,263
Sapient Corp. 1 100 9,994
Sara Lee Corp. 1,300 23,400
Sauer, Inc. 200 1,725
SBC Communications, Inc. 4,607 201,268
Scana Corporation 70 1,811
Schering-Plough Corp. 2,000 96,750
Schlumberger Ltd. 700 51,494
School Specialty, Inc. 1 11 177
SCI Systems, Inc. 1 200 9,000
Scient Corp. 1 100 4,288
Scientific-Atlanta, Inc. 200 11,275
Scios, Inc. 1 100 438
Scotts Company (The) 1 100 3,763
SCPIE Holdings, Inc. 100 2,431
Scripps Co. (E.W.) -- Cl. A 100 4,788
SDL, Inc. 1 100 22,656
Seagate Technology, Inc. 1 300 17,400
Sealed Air Corp. -- New 1 153 8,568
Sears, Roebuck & Co. 500 18,469
Seitel, Inc. 1 100 850
Sempra Energy 250 4,703
Senior Housing Prop. Trust 220 2,049
Sensormatic Electronics Corp. 1 200 3,138
Sepracor, Inc. 1 100 9,563
Sequa Corp.-- Class A 1 100 4,769
Serologicals Corp. 1 100 406
Service Corp. International 400 1,250
SFX Entertainment, Inc.-- Class A 1 150 6,544
Shared Medical Systems Corp. 100 7,263
Shaw Industries, Inc. 200 2,788
Sherwin Williams Co. 300 6,975
Shuffle Master, Inc. 1 100 1,475
Shurgard Storage Centers -- Class A 100 2,294
Sicor, Inc. 1 300 2,569
Siebel Systems, Inc. 1 300 35,100
Sigma Aldrich Corp. 200 6,675
Silicon Graphics, Inc. 1 300 1,988
Silicon Image, Inc. 1 100 3,606
Siliconix, Inc. 1 100 6,175
Simon Property Group, Inc. 300 7,350
Sky Financial Group, Inc. 310 4,786
SLI, Inc. 400 5,200
SLM Holding Corp. 250 8,422
Smith (A.O.) Corp. 150 3,150
Smucker (J.M.) Co. -- Class A 200 3,538
Smurfit-Stone Container Corp. 1 297 4,214
Snap-On Tools Corp. 100 2,569
Snyder Communications, Inc. 1 100 2,263
Sodexho Marriott Services 325 4,753
Software.com 1 100 8,425
Sola International, Inc. 1 200 1,000
Solectron Corp. 1 802 26,516
Solutia, Inc. 200 2,425
20
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Sonic Automotive, Inc. 1 200 $ 1,950
Sonoco Products 100 2,206
Sotheby's Holdings -- Class A 300 4,894
South Alabama Bancorp 100 1,000
Southern Banc Company 100 813
Southern Co. 1,000 25,938
Southern Union Co. 1 200 3,450
Southtrust Corp. 250 6,766
Southwest Airlines Co. 700 13,431
Southwest Bancorp of Texas, Inc. 1 200 3,950
Sovereign Bancorp, Inc. 260 1,788
Spectrasite Holdings 1 200 3,388
Spectrx 1 100 1,075
Speedfam-Ipec 1 300 3,956
Speedway Motorsports, Inc. 1 100 2,056
Spieker Properties, Inc. 100 4,644
Spinnaker Industries, Inc. 1 100 988
Springs Industries, Inc. -- Class A 100 4,750
Sprint Corp. (FON Group) 1,200 72,600
Sprint Corp. (PCS Group) 1 1,200 66,600
SS&C Technologies, Inc. 1 600 2,925
St. Joe Company 100 2,994
St. Jude Medical, Inc. 1 100 3,594
St. Paul Cos., Inc. 300 11,250
Stage Stores, Inc. 1 100 16
Stamps.com, Inc. 1 100 1,000
Stanley Works 100 2,688
Staples, Inc. 1 650 9,588
Starbucks Corp. 1 200 6,800
Starmedia Network, Inc. 100 1,794
Starwood Hotels & Resorts Worldwide 291 8,603
State Street Corp. 200 22,300
Statefed Financial Corp. 100 863
Steel Dynamics, Inc. 1 300 2,794
Sterile Recoveries 1 100 644
STERIS Corp. 1 300 2,719
Stewart Enterprises, Inc. 200 800
Stillwater Mining Co. 1 100 2,806
Storage Technology Corp. 1 200 2,238
Structural Dynamics Research Corp. 1 300 3,413
Stryker Corp. 200 7,563
Styleclick.com, Inc. 1 200 2,088
Summit Bancorp 300 8,606
Sun Healthcare Group, Inc. 1 300 23
Sun Microsystems, Inc. 1 2,100 160,913
Sunbeam Oster Corp. 1 100 313
Sungard Data Systems, Inc. 1 200 6,788
Sunoco, Inc. 100 3,231
Sunrise Assisted Living, Inc. 1 166 3,019
Suntrust Banks, Inc. 392 23,422
Superior Industries International,
Inc. 100 2,794
Superior Telecom, Inc. 228 2,480
SuperValu, Inc. 200 4,163
SVI Holdings 1 300 2,306
Sybase, Inc. 1 200 3,813
Sybron International Corp. 1 200 6,338
Sycamore Networks 1 300 25,088
Sylvan Learning Systems, Inc. 1 300 3,375
Symantec Corp. 1 100 6,575
Symbol Technologies, Inc. 225 9,914
Synopsys, Inc. 1 100 4,731
Synovus Financial Corp. 450 9,000
Syntel, Inc. 1 150 1,819
Sysco Corp. 500 20,969
T. Rowe Price Associates, Inc. 200 7,638
T/R Systems, Inc. 1 200 2,500
Taco Cabana, Inc. 1 100 638
Talk.com 1 200 1,381
Target Corp. 600 37,613
Targeted Genetics Corp. 1 100 700
Taubman Centers, Inc. 200 2,175
TBC Corp. 1 100 488
TCF Financial Corp. 100 2,619
Technisource, Inc. 1 100 400
TECO Energy, Inc. 200 4,288
Tekelec, Inc. 1 100 3,300
Telecorp PCS 1 100 3,038
Teledyne Technologies 1 42 612
Teleflex, Inc. 100 3,544
Teleglobe, Inc. 177 3,562
Telephone & Data Systems, Inc. 100 10,600
Teletech Holdings, Inc. 1 100 3,275
Tellabs, Inc. 1 500 32,469
Telxon Corp. 100 1,525
Temple Inland, Inc. 100 4,969
Tenet Healthcare, Corp. 500 12,813
Tenneco Automotive, Inc. 360 2,633
Teppco Partners, L.P. 200 4,525
Teradyne, Inc. 1 200 17,200
Terayon Communication Systems 1 100 5,550
Tetra Tech, Inc. 1 250 5,500
Tetra Technologies, Inc. 1 100 1,294
Texaco, Inc. 700 40,206
Texas Biotechnology Corp. 1 100 969
Texas Industries, Inc. 100 2,869
Texas Instruments, Inc. 2,200 158,950
21
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
Textron, Inc. 200 $ 12,550
The Bank of New York Co., Inc. 1,000 46,938
The Chubb Corp. 200 14,000
The Servicemaster Co. 1 400 5,125
Thermo Electron Corp. 1 200 3,713
Thermo Fibertek, Inc. 1 100 613
Thermo Instrument Systems, Inc. 1 200 3,275
Thomas & Betts Corp. 100 2,838
Thomas Nelson, Inc. 100 706
Three Rivers Banc 50 400
Tibco Software, Inc. 1 300 16,688
Tier Technologies, Inc. 1 200 1,013
Tiffany & Co. 100 6,094
Time Warner, Inc. 1,700 134,194
Times Mirror Co. -- Class A 100 9,650
Timken Company 200 3,775
Titan Corp. 1 100 3,588
Titan International, Inc. 100 594
Titanium Metals Corp. 100 438
TJX Companies, Inc. 500 10,813
TMP Worldwide, Inc. 1 100 5,525
Todd-AO Corp. -- Class A 100 2,013
Tokheim Corp. 1 500 688
Toll Brothers, Inc. 1 200 3,875
Tompkins County Trustco, Inc. 200 4,725
Too, Inc. 1 57 1,461
Tootsie Roll Industries, Inc. 103 3,554
Torchmark Corp. 200 5,438
Toro Co. 100 3,150
Tosco Corp. 200 6,125
Total Renal Care Holdings 1 200 788
Total System Services, Inc. 250 4,844
Toys R Us, Inc. 1 400 6300
Trammell Crow Co. 1 200 2,513
Transactions Systems Architects,
Inc. -- Class A 1 100 1,213
Transocean Sedco Forex Inc. 254 12,494
Transtechnology Corp. 100 863
Trendwest Resorts, Inc. 1 100 2,338
Triarc Companies, Inc.-- Class A 1 200 4,150
Tribune Co. 400 15,400
Trico Marine Services, Inc. 1 100 969
Tricon Global Restaurants, Inc. 1 140 4,104
Trinity Industries, Inc. 100 2,206
Triquint Semiconductor, Inc. 1 100 9,438
Tritel, Inc. 1 100 2,294
Triton PCS Holdings, Inc -- Class A 1 100 4,075
True North Communications, Inc. 100 4,369
Trustmark Corp. 300 5,906
TRW, Inc. 200 9,700
Tucker Anthony Sutro 100 1,713
Tularik, Inc. 1 100 2,106
TV Guide, Inc. 1 200 5,147
Txu Corp 400 14,300
Tyson Foods, Inc. -- Class A 400 3,950
U.S. BANCORP 1,100 28,600
U.S. BANCORP, Inc. 100 456
U.S. Can Corp. 1 100 1,650
U.S. Industries, Inc. 200 2,700
U.S. Office Prods Co. 1 25 25
U.S. West, Inc. 708 50,976
U.S.A. Floral Products, Inc. 1 300 244
UAL Corp. 100 5,150
UCAR International, Inc. 1 100 1,225
Ultramar Diamond Shamrock Corp. 200 5,188
Unicom Corp. 300 12,506
Union Carbide Corp. Holding Co. 200 10,938
Union Pacific Corp. 400 16,925
Union Pacific Resources Group, Inc. 400 9,475
Union Planters Corp. 200 6,250
Unionbancal Corp. 200 6,850
Unisys Corp. 1 500 13,563
United Asset Management Co. 300 5,550
United Bankshares, Inc. 200 3,800
United Mobile Homes, Inc. 100 800
United Parcel Service -- Class B 100 5,988
United States Cellular 1 100 6,225
United Technologies Corp. 655 39,587
UnitedGlobalcom, Inc. 1 100 4,800
Unitedhealth Group 200 14,913
Unitrin, Inc. 100 3,206
Unity Bancorp 105 466
Universal Foods Corp. 200 3,450
Univision Communications, Inc. 1 100 10,300
Unocal Corp. 400 15,375
Unova 300 4,144
UnumProvident Corp. 346 7,850
UroCor, Inc. 1 100 381
URS Corp. 1 200 2,625
US Oncology, Inc. 1 188 893
USA Networks, Inc. 400 7,575
USAir Group, Inc. 1 100 4,250
Usana, Inc. 1 200 888
USEC 300 1,388
USG Corp. 100 3,769
USInternetworking, Inc. 1 175 3,139
22
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED) MAY 31, 2000
MARKET
SHARES VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
UST, Inc. 300 $ 4,988
USX Marathon Group 500 13,594
USX-U.S. Steel Group 100 2,256
VA Linux Systems 1 100 3,983
Vail Resorts, Inc. 1 100 1,600
Valassis Communications 1 50 1,650
Valhi, Inc. 200 2,138
Valspar Corp. 100 3,431
Valuevision International, Inc.
-- Class A 1 100 2,894
Varian Medical Systems, Inc. 1 100 4,131
Varian Semiconductor Equip Assoc. 1 100 4,769
Vastar Resources, Inc. 100 8,144
Vector Group Ltd 105 1,181
Venator Group 1 100 1,081
Ventas, Inc. 1 400 1,525
Ventiv Health 1 233 2,053
Ventro Corp. 1 100 1,800
Verio, Inc. 1 100 5,688
Verisign, Inc. 1 100 13,538
VERITAS Software Corp. 1 500 58,250
Verticalnet, Inc. 1 100 3,206
VF Corp. 200 5,738
Viacom, Inc. -- Class B 1 2,072 128,464
Viad Corp. 100 2,631
Viant Corp. 1 100 2,500
Viatel, Inc. 1 100 2,494
Vicinity Corp 1 20 305
Vicor Corp. 1 100 2,644
Vignette Corp. 1 300 8,269
Virata Corp. 1 200 8,250
Vishay Intertechnology, Inc. 1 131 9,268
Vision Twenty-One, Inc. 1 500 250
VISX, Inc. 1 100 1,969
Vitech America, Inc. 1 100 606
Vitesse Semiconductor, Inc. 1 200 10,125
Vitria Technology, Inc. 1 200 7,000
Vlasic Foods International 1 40 88
Voicestream Wireless Corp. 176 20,152
Vornado Operating, Inc. 1 107 849
Vornado Realty Trust 143 4,996
Vulcan Materials Co. 100 4,675
W.R. Grace & Co.-- W/I 1 200 2,513
Wabash National 200 2,563
Wabtec 399 4,489
Wachovia Corp. 300 20,738
Wal-Mart Stores, Inc. 6,000 345,750
Walgreen Co. 1,400 39,725
Walker Interactive Systems, Inc. 1 100 319
Walt Disney Co. 2,800 118,125
Walter Industries, Inc. 200 2,163
Warner Lambert Co. 1,189 145,207
Washington Mutual, Inc. 786 22,598
Waste Connections, Inc. 1 200 3,925
Waste Management, Inc. 889 18,113
Water Pik Technologies 1 15 97
Waters Corp. 1 100 9,450
Watson Pharmaceuticals 1 100 4,413
Wausau-Mosinee Paper Corp. 100 925
Weatherford International 1 200 8,613
Webb Interactive Services, Inc. 1 200 2,088
Webhire 1 400 1,013
Weis Markets, Inc. 100 3,275
Wellpoint Health Networks, Inc. 1 100 7,263
Wells Fargo Company 2,200 99,550
Wendys International, Inc. 200 3,913
West Marine, Inc. 1 100 806
West Teleservices 1 200 5,263
Westamerica BanCorp. 100 2,856
Western Digital Corp. 1 200 938
Western Wireless Corp. 1 100 4,781
Westfield America, Inc. 200 2,975
Westvaco Corp. 200 6,025
Westwood One, Inc. 1 200 6,638
Weyerhaeuser Co. 300 14,888
Whirlpool Corp. 100 5,669
White Mountains Insurance Group 100 14,119
Whitman Corporation 200 2,363
Wiley (John) & Sons, Inc.-- Class A 200 3,563
Willamette Industries, Inc. 200 6,500
Williams Communications Group 1 100 3,669
Williams Companies, Inc. 600 24,938
Williams-Sonoma, Inc. 1 100 3,206
Wilmington Trust Corp. 100 5,075
Wind River Systems 1 92 3,335
Wink Communications 1 100 2,163
Winn Dixie Stores, Inc. 300 4,744
WinStar Communications, Inc. 1 150 4,256
Wireless Facilities 1 100 4,719
Wisconsin Energy Corp. 200 4,225
Wm. Wrigley, Jr. Co. 200 16,013
Wolverine WorldWide, Inc. 200 2,250
Women.com Network 1 200 838
Woodward Governor Co. 100 2,438
Workflow Management, Inc. 1 113 1,363
World Access, Inc. 1 200 2,100
Worldcom, Inc. 1 3,781 142,260
Worthington Industries, Inc. 100 1,213
Wyndham Hotels 1 321 602
23
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS (CONTINUED MAY 31, 2000
SHARES/PAR MARKET
(000) VALUE
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
XCL Ltd. 1 100 $ 15
Xerox Corp. 1,000 27,125
Xilinx, Inc. 1 400 30,450
Xircom, Inc. 1 100 4,125
Xpedior Inc. 1 100 1,413
Yahoo!, Inc. 1 734 82,988
Yardville National Bancorp 200 2,113
York International Corp. 100 2,613
Young & Rubicam 100 4,775
Z-Tel Technologies 1 100 1,288
Zenith Electronics Corp. 1 100 2
Ziff-Davis, Inc. 1 200 1,688
Zions Bancorp. 100 4,663
Zonagen, Inc. 1 200 613
------------
REITS -- 0.0%
Glimcher Realty Trust 300 4,050
------------
TOTAL COMMON STOCK
(Cost $18,771,436) 20,466,578
------------
U.S. TREASURY BONDS -- 31.8%
U.S. Treasury Bond
7.00%, 7/15/06 $2,000 2,043,906
12.75%, 11/15/10 2,100 2,665,360
9.25%, 2/15/16 500 637,578
8.75%, 5/15/17 2,000 2,474,688
U.S. Treasury STRIP 3
0.00%, 8/15/05 1,000 714,238
0.00%, 8/15/15 8,000 3,067,208
------------
TOTAL U.S. TREASURY BONDS
(Cost $11,310,620) 11,602,978
------------
--------------------------------------------------------------------------------
See Notes to Financial Statements.
PRINCIPAL
VALUE MARKET
(000) VALUE
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 11.8%
Goldman Sachs & Co., 6.3%
Dated 5/31/00, principal and interest
in the amount of $4,326,737 to be
repurchased on 6/1/00, collateralized
by U.S. Treasury Bill with a market
value of $4,413,000
0.00%, 11/09/00. $4,326 $ 4,326,000
-----------
TOTAL INVESTMENTS -- 99.6%
(Cost $34,408,056)2 36,395,556
-----------
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 0.4% 148,142
-----------
NET ASSETS -- 100.0% $36,543,698
===========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE
($36,543,698 / 3,007,116 shares outstanding) $12.15
======
MAXIMUM OFFERING PRICE PER SHARE
($12.15 / 0.9555) $12.72
======
--------------------------------------------------------------------------------
1 Non-income producing security.
2 Aggregate cost for federal tax purposes was $34,519,232.
3 Separate trading of registered interest and principal of securities.
24
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE
YEAR ENDED
MAY 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends ................................................. $ 295,130
Interest .................................................. 838,140
------------
Total income ........................................... 1,133,270
------------
EXPENSES:
Investment advisory fee ................................... 146,416
Distribution fee .......................................... 91,510
Administration fee ........................................ 36,388
Printing and postage ...................................... 35,462
Accounting fee ............................................ 35,001
Audit fee ................................................. 33,553
Registration fee .......................................... 31,493
Legal fee ................................................. 24,977
Transfer agent fee ........................................ 22,000
Organization cost ......................................... 14,856
Custodian fee ............................................. 3,001
Miscellaneous ............................................. 5,536
------------
Total expenses ......................................... 480,193
Less: Fees waived ......................................... (114,488)
------------
Net expenses ........................................... 365,705
------------
Net investment income ..................................... 767,565
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from security transactions .............. 2,684,320
Change in unrealized appreciation/(depreciation)
of investments .......................................... (1,248,602)
------------
Net gain on investments ................................... 1,435,718
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ..................... $ 2,203,283
===========
--------------------------------------------------------------------------------
See Notes to Financial Statements.
25
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999
-----------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income ........................... $ 767,565 $ 478,431
Net realized gain from security
transactions ................................. 2,684,320 173,372
Change in unrealized appreciation/
(depreciation) of investments ................ (1,248,602) 2,351,825
----------- -----------
Net increase in net assets
resulting from operations .................... 2,203,283 3,003,628
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ................................ (719,452) (440,554)
Net realized capital gains ...................... (714,883) (369,934)
----------- -----------
Total Distributions ............................. (1,434,335) (810,488)
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares .................... 5,633,029 17,040,574
Value of shares issued in reinvestment
of dividends ................................. 1,301,589 713,228
Cost of shares repurchased ...................... (6,894,103) (2,432,446)
----------- -----------
Increase in net assets derived from capital
share transactions ........................... 40,515 15,321,356
----------- -----------
Total increase in net assets .................... 809,463 17,514,496
NET ASSETS:
Beginning of year ............................... 335,734,235 18,219,739
----------- -----------
End of year (including undistributed
net investment income of $147,300
and $99,187, respectively) .................... $36,543,698 $35,734,235
=========== ===========
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements.
26
<PAGE>
ISI STRATEGY FUND, INC.
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE FOR THE SEPTEMBER 16, 1997 1
YEAR ENDED YEAR ENDED THROUGH
MAY 31, 2000 MAY 31, 1999 MAY 31, 1998
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of year .................. $ 11.91 $ 11.00 $ 10.00
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................. 0.26 0.21 0.13
Net realized and unrealized gain on investments ....... 0.46 1.10 0.96
------- ------- -------
Total from Investment Operations ...................... 0.72 1.31 1.09
------- ------- -------
LESS DISTRIBUTIONS:
Distributions from net investment income .............. (0.24) (0.21) (0.09)
Distributions from capital gains ...................... (0.24) (0.19) --
------- ------- -------
Total distributions ................................... (0.48) (0.40) (0.09)
------- ------- -------
Net asset value at end of year ........................ $ 12.15 $ 11.91 $ 11.00
======= ======= =======
TOTAL RETURN 2 ........................................... 6.09% 12.15% 10.94%
RATIOS TO AVERAGE DAILY NET ASSETS:
Expenses 3 ............................................ 1.00% 1.00% 1.00% 5
Net investment income 4 ............................... 2.10% 1.81% 2.03% 5
SUPPLEMENTAL DATA:
Net assets at end of year (000's) ..................... $36,544 $35,734 $18,220
Portfolio turnover rate ............................... 59.04% 31.93% 20.08%
---------------------------------------------------------------------------------------------------------------------------
<FN>
1 Commencement of operations.
2 Total Return figures exclude the impact of sales charges.
3 Ratio of expenses to average net assets prior to fee waiver and expense
reimbursement was 1.31%, 1.68% and 2.25% for the years ended May 31, 2000,
1999 and the period ended May 31, 1998, respectively.
4 Ratio of net investment income to average net assets prior to fee waiver and
expense reimbursement was 1.79%, 1.12% and 0.78% for the years ended May 31,
2000,1999 and the period ended May 31, 1998, respectively.
5 Annualized.
</FN>
</TABLE>
See Notes to Financial Statements.
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES -- ISI Strategy Fund, Inc. (the "Fund"),
which was organized as a Maryland Corporation on June 12, 1997 and began
operations September 16, 1997, is registered under the Investment Company
Act of 1940 as a diversified, open-end management investment company. It
seeks to maximize total return through a combination of long-term growth of
capital and current income by actively allocating the Funds' assets between
common stocks of U.S. issuers and U.S. Treasury securities.
The Fund consists of one share class, ISI Shares, which has a 4.45% maximum
sales charge and a 0.25% distribution fee.
When preparing the Fund's financial statements, management makes estimates
and assumptions to comply with accounting principles generally accepted in
the United States. These estimates affect 1) the assets and liabilities
that we report at the date of the financial statements; 2) the contingent
assets and liabilities that we disclose at the date of the financial
statements, and 3) the revenues and expenses that we report for the period.
Our estimates could be different from the actual results. The Fund's
significant accounting policies are:
SECURITY VALUATION -- The Fund values a portfolio security that is
primarily traded on a national exchange by using the last sales price
reported for the day. If there are no sales or the security is not traded
on an exchange, the Fund values the security at the average of the last bid
and asked prices in the over-the-counter market. When a market quotation is
not readily available, the Investment Advisor under the direction of the
Board of Directors determines a fair value using the policies and
procedures that the Board of Directors establishes and monitors. At May 31,
2000 there were no securities valued using fair valued procedures. The Fund
values short-term obligations with maturities of 60 days or less at
amortized cost.
REPURCHASE AGREEMENTS -- The Fund may enter into tri-party repurchase
agreements with broker-dealers and domestic banks. A repurchase agreement
is a short-term investment in which the Fund buys a debt security that the
broker agrees to repurchase at a set time and price. The third party, which
is the broker's custodial bank, holds the collateral in a separate account
until the repurchase agreement matures. The agreement ensures that the
collateral's market value, including any accrued interest, is sufficient if
the broker defaults. The Fund's access to the collateral may be delayed or
limited if the broker defaults and the value of the collateral declines or
if the broker enters into an insolvency proceeding.
FEDERAL INCOME TAXES -- The Fund determines its distributions according to
income tax regulations, which may be different from accounting principles
generally accepted in the United States. As a result, the Fund occasionally
makes reclassifications within its capital accounts to reflect income and
gains that are available for distribution under income tax regulations.
The Fund is organized as a regulated investment company. As long as it
maintains this status and distributes to its shareholders substantially all
of its taxable net investment income and net realized capital gains, it
will be exempt from most, if not all, federal income and excise tax.
As a result, the Fund has made no provision for federal income taxes.
SECURITY TRANSACTIONS, INVESTMENT INCOME, DISTRIBUTIONS AND OTHER -- The
Fund uses the trade date to account for security transactions and the
specific identification method for financial
28
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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reporting and income tax purposes to determine the cost of investments sold
or redeemed. Interest income is recorded on an accrual basis and includes
the pro rata scientific method for amortization of premiums and accretion
of discounts when appropriate. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. The Fund has deferred
the costs incurred by its organization and the initial public offering of
shares. These costs are being amortized on the straight-line method over a
five-year period, except for registration fees which are amortized over a
three-year period, which began when the Fund began investment activities.
B. INVESTMENT ADVISORY FEES, TRANSACTIONS WITH AFFILIATES AND OTHER FEES --
International Strategy and Investment Inc. ("ISI") is the Fund's investment
advisor. As compensation for its advisory services, the Fund pays ISI an
annual fee based on the Fund's average daily net assets. This fee is
calculated daily and paid monthly at the annual rate of 0.40%. ISI has
agreed to waive a portion of its fee and reimburse expenses so that the
Fund's total operating expenses for any fiscal year do not exceed 1.00% of
the Fund's average daily net assets. For the year ended May 31, 2000, ISI
waived fees in the amount of $114,488.
Wilshire Associates Incorporated ("Wilshire") is the Fund's sub-advisor. As
compensation for its sub-advisory services, ISI pays Wilshire an annual fee
based on the Fund's average daily net assets. This fee is calculated daily
and paid monthly at the annual rate of 0.16%.
The Fund is a member of the ISI family of Funds ("ISI Funds"). Investment
Company Capital Corp. ("ICCC") provides administrative services to the ISI
Funds for which the ISI Funds pay ICCC a fee that is based on their
combined net assets and is calculated daily and paid monthly at the
following annual rates: 0.20% of the first $75 million, 0.15% of the next
$75 million, 0.10% of the next $75 million, 0.05% of the next $275 million,
and 0.03% of the amount over $500 million. For the year ended May 31, 2000,
ICCC's fee was $36,388, of which $3,132 was payable at May 31, 2000.
Certain officers and directors of the Fund are also officers or directors
of ISI, Wilshire or ICCC.
ICCC also provides accounting services to the Fund for which the Fund pays
ICCC an annual fee that is calculated daily and paid monthly based on the
Fund's average daily net assets. For the year ended May 31, 2000, ICCC's
fee was $35,001, of which $2,959 was payable at May 31, 2000.
ICCC also provides transfer agent services to the Fund for which the Fund
pays ICCC a per account fee that is calculated and paid monthly. For the
year ended May 31, 2000, ICCC's fee was $22,000, of which $1,404 was
payable at May 31, 2000.
ISI Group, Inc., an affiliate of ISI, provides distribution services to the
Fund for which the Fund pays ISI Group Inc., an annual fee that is
calculated daily and paid monthly at an annual rate equal to 0.25% of the
Fund's average daily net assets. For the year ended May 31, 2000, ISI
Group's fee was $91,510, of which $7,726 was payable at May 31, 2000.
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
--------------------------------------------------------------------------------
C. CAPITAL SHARE TRANSACTIONS -- The Fund is authorized to issue up to 25
million shares of $.001 par value capital stock (20 million ISI Class, 5
million Wilshire Institutional Class). Transactions in shares of the Fund
were as follows:
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MAY 31, 2000 MAY 31, 1999
------------ ------------
Shares sold ............... 463,155 1,491,211
Shares issued to share-
holders on reinvest-
ment of dividends ....... 106,906 63,693
Shares redeemed ........... (564,237) (210,438)
----------- -----------
Net increase in shares
outstanding ............. 5,824 1,344,466
=========== ===========
Proceeds from sales
of shares ............... $ 5,633,029 $17,040,574
Value of reinvested
dividends ............... 1,301,589 713,228
Cost of shares
redeemed ................ (6,894,103) (2,432,446)
----------- -----------
Net increase from capital
share transactions ...... $ 40,515 $15,321,356
=========== ===========
D. INVESTMENT TRANSACTIONS -- Excluding short-term and government obligations,
purchases of investment securities aggregated $19,167,606 and sales of
investment securities aggregated $21,803,633 for the year ended May 31,
2000.
On May 31, 2000, aggregate gross unrealized appreciation for all securities
in which there is an excess of value over tax cost was $4,452,694 and
aggregate gross unrealized depreciation for all securities in which there
is an excess of tax cost over value was $2,576,370.
E. NET ASSETS -- On May 31, 2000, net assets consisted of:
Paid-in capital ........................... $ 32,437,960
Accumulated net realized gain
from security transactions .............. 1,970,938
Unrealized appreciation
of investments .......................... 1,987,500
Undistributed net investment
income .................................. 147,300
-----------
$36,543,698
===========
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This report is prepared for the general information of
shareholders. It is authorized for distribution to prospective
investors only when preceded or accompanied by an effective
prospectus.
For more complete information regarding any of the ISI Funds,
including charges and expenses, obtain a prospectus from your
investment representative or directly from the Fund at 1-800-955-7175.
Read it carefully before you invest.
----------------------------------------------------------------------
30
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REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
ISI Strategy Fund,Inc.
We have audited the statement of net assets of the ISI Strategy Fund, Inc., as
of May 31, 2000, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the two years in the
period then ended and the period September 16, 1997 (commencement of operations)
to May 31, 1998. These financial statements and financial highlights are the
responsibility of the Fund's 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit 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 and financial highlights. Our procedures
included confirmation of securities owned as of May 31, 2000, by correspondence
with the custodian and brokers. 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 that 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 the
ISI Strategy Fund, Inc., as of May 31, 2000, the results of its operations, the
changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with accounting principles generally accepted in
the United States of America.
DELOITTE & TOUCHE LLP
Princeton, New Jersey
June 30, 2000
TAX INFORMATION (UNAUDITED)
FOR THE TAX YEAR ENDED MAY 31, 2000
--------------------------------------------------------------------------------
The amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
The fund's distributions to shareholders included $714,883 from long-term
capital gains, all of which is taxable at the 20% capital gains rate.
Of ordinary distributions made during the fiscal year ended May 31, 2000, 38.37%
qualifies for the dividends received deduction available to corporate
shareholders.
Of the net investment income distributions made during the year ended May 31,
2000, 58.55% has been derived from investments in U.S. Treasuries.
31
<PAGE>
ISI
STRATEGY
FUND SHARES
--------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
Edward S. Hyman Margaret M. Beeler
CHAIRMAN ASSISTANT VICE PRESIDENT
R. Alan Medaugh Keith C. Reilly
PRESIDENT ASSISTANT VICE PRESIDENT
Joseph R. Hardiman Suzanne H. Ughetta
DIRECTOR ASSISTANT VICE PRESIDENT
Louis E. Levy Charles A. Rizzo
DIRECTOR TREASURER
Carl W. Vogt, Esq. Felicia A. Emry
DIRECTOR SECRETARY
David R. Borger Amy M. Olmert
VICE PRESIDENT ASSISTANT SECRETARY
Carrie L. Butler Daniel O. Hirsch
VICE PRESIDENT ASSISTANT SECRETARY
Edward J. Veilleux
VICE PRESIDENT
INVESTMENT OBJECTIVE
An open-end mutual fund seeking to maximize total return through a combination
of long-term growth of capital and current income by actively allocating
investments between common stocks of U.S. issuers and United States Treasury
securities.
INVESTMENT ADVISOR
--------------------------------------------------------------------------------
ISI, Inc.
535 Madison Avenue, 30th Floor
New York, NY 10022
(800) 955-7175
SHAREHOLDER SERVICING AGENT
--------------------------------------------------------------------------------
Investment Company Capital Corp.
P.O. Box 419426
Kansas City, MO 64141-6426
DISTRIBUTOR
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535 Madison Avenue, 30th Floor
New York, NY 10022
(800) 955-7175
