<PAGE>
--------------------------------------------------------------------------------
SAMCO FUNDS, INC.
--------------------------------------------------------------------------------
SAMCO Aggregate Fixed Income Fund Class A Shares
SAMCO Intermediate Fixed Income Fund Class A Shares
SEMI-ANNUAL REPORT
APRIL 30, 2000
<PAGE>
SAMCO FUNDS, INC.
PRESIDENT'S LETTER
--------------------------------------------------------------------------------
June 23, 2000
Dear Shareholder:
We are pleased to provide you with information about the SAMCO Funds, Inc. for
the period ended April 30, 2000.
We greatly appreciate your participation in the Fund. We welcome the opportunity
to discuss the objectives and results of the Fund.
Sincerely,
/s/ Christina Seix /s/ John Talty
------------------------------ --------------------------------
Christina Seix, Chairman John Talty, President
<PAGE>
SAMCO FUNDS, INC.
TABLE OF CONTENTS
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Portfolio of Investments
SAMCO Aggregate Fixed Income Fund ........................... 1
SAMCO Intermediate Fixed Income Fund ........................ 6
Statements of Assets and Liabilities ............................... 9
Statements of Operations ........................................... 10
Statements of Changes in Net Assets ................................ 11
Financial Highlights ............................................... 12
Notes to Financial Statements ...................................... 14
<PAGE>
SAMCO FUNDS, INC.
<TABLE>
<CAPTION>
SAMCO AGGREGATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED) COUPON
APRIL 30, 2000 RATE MATURITY PAR/FACE VALUE (a)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS: 62.8%
U.S. TREASURY OBLIGATIONS: 13.0%
U.S. Treasury Note 5.625% 05/15/2008 $ 1,280,000 $ 1,216,401
U.S. Treasury Note 5.750% 08/15/2003 1,015,000 989,308
U.S. Treasury Note 5.875% 11/15/2004 15,000 14,606
U.S. Treasury Note 6.500% 03/31/2002 205,000 204,231
U.S. Treasury Note 7.000% 07/15/2006 295,000 301,822
U.S. Treasury Bond 6.500% 02/15/2010 150,000 153,000
U.S. Treasury Bond 6.625% 02/15/2027 1,530,000 1,612,716
U.S. Treasury Bond 8.875% 02/15/2019 1,570,000 2,006,656
U.S. Treasury Bond 9.250% 02/15/2016 650,000 837,079
----------------
7,335,819
----------------
U.S. GOVERNMENT AGENCY OBLIGATIONS AND PASS-THROUGH CERTIFICATES: 47.8%
FHLMC 6.500% 06/01/2029 304,211 284,331
FHLMC 7.500% 05/01/2007 620,000 616,528
FHLMC 8.500% 03/01/2020 15,071 15,317
FHLMC (TBA) 6.500% 06/19/2015 770,000 736,794
FHLMC Gold 6.500% 06/01/2013 688,418 660,184
FNMA 6.500% 09/01/2024 561,713 527,576
FNMA 6.500% 02/01/2029 294,203 274,850
FNMA 6.500% 04/01/2029 971,813 907,298
FNMA 6.500% 05/01/2029 391,300 365,323
FNMA 6.500% 06/01/2029 63,952 59,706
FNMA 6.500% 08/01/2029 999,368 933,024
FNMA 6.500% 04/01/2030 609,999 569,190
FNMA 7.500% 02/01/2030 1,179,382 1,154,995
FNMA 7.500% 04/01/2030 1,110,000 1,086,024
FNMA 9.500% 05/01/2018 78,523 82,682
FNMA (TBA) 6.000% 06/01/2014 860,000 804,638
FNMA (TBA) 6.000% 05/01/2029 220,000 199,100
FNMA (TBA) 6.500% 06/21/2014 960,000 918,000
FNMA (TBA) 6.500% 05/01/2030 1,155,000 1,077,398
FNMA (TBA) 7.000% 05/17/2029 3,365,000 3,217,781
FNMA (TBA) 7.000% 06/01/2029 4,265,000 4,074,406
FNMA (TBA) 7.500% 05/01/2029 1,960,000 1,917,125
FNMA (TBA) 8.000% 06/01/2030 700,000 697,593
FNMA Global Bond 6.625% 09/15/2009 1,545,000 1,471,895
FNMA Global Bond 7.125% 01/15/2030 565,000 557,739
GNMA 7.500% 04/15/2029 677,050 666,036
GNMA 9.000% 02/15/2030 49,950 51,670
GNMA 9.000% 03/15/2030 150,551 155,659
GNMA (TBA) 6.500% 05/01/2029 550,000 515,281
GNMA (TBA) 7.500% 06/01/2030 1,655,000 1,624,485
Resolution Funding Corp. - Interest Strip * # 6.590% 10/15/2013 835,582 819,298
----------------
27,041,926
----------------
U.S. GOVERNMENT AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS: 2.0%
FHLMC, Ser. 1944, Class GB 7.500% 04/17/2024 155,000 152,245
FHLMC, Ser. 2211, Class PB 7.000% 02/15/2020 355,000 349,725
FNMA, Ser. 1997-15, Class B 7.500% 07/18/2025 285,000 280,727
FNMA, Ser. 1999-60, Class PB 7.000% 06/25/2000 380,000 374,874
----------------
1,157,571
----------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (COST - $35,819,352) 35,535,316
----------------
1
<PAGE>
<CAPTION>
SAMCO FUNDS, INC.
SAMCO AGGREGATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED) COUPON
APRIL 30, 2000 RATE MATURITY PAR/FACE VALUE (A)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORPORATE OBLIGATIONS: 28.9%
AEROSPACE & DEFENSE: 1.4%
Air 2 US, Ser. C (144A) 10.127% 10/01/2020 $ 660,000 $ 669,709
Lockheed Martin Corp. 8.500% 12/01/2029 110,000 108,146
-----------
777,855
-----------
AIRLINES: 1.5%
American Airlines, Ser. 1991-A 9.710% 01/02/2007 138,045 139,989
Northwest Airlines Corp., Ser. 1999-2B 7.950% 03/01/2015 208,872 196,977
Northwest Airlines Corp., Ser. 1999-2C 8.304% 09/01/2010 493,663 471,828
Northwest Airlines Corp., Ser. 1999-3, Class C 9.152% 04/01/2010 10,000 9,784
-----------
818,578
-----------
AUTOMOTIVE: 1.9%
Chrysler Corp. 7.450% 03/01/2027 160,000 152,964
DaimlerChrysler North America Holding Corp. 6.630% 09/21/2001 545,000 537,699
General Motors Acceptance Corp., Ser. 1 (FRN) (MTN) 6.260% 07/30/2001 390,000 390,624
-----------
1,081,287
-----------
BANKING: 7.7%
African Development Bank - Yankee 8.800% 09/01/2019 50,000 55,529
Aristar, Inc. 7.750% 06/15/2001 325,000 326,126
Bank of America Corp. 6.068% 09/11/2001 500,000 499,124
Bank One Corp., Ser. B (FRN) (MTN) 6.351% 12/20/2001 470,000 468,919
BCI US Funding Trust I (FRN) (144A) 8.010% 12/29/2049 360,000 316,141
Chase Manhattan Corp., Ser. C (FRN) (MTN) 6.123% 01/03/2002 450,000 449,888
Citicorp 8.000% 02/01/2003 225,000 226,291
Continental Bank N.A., Ser. XW 12.500% 04/01/2001 500,000 522,590
Fleet National Bank 6.395% 07/31/2001 425,000 424,406
HSBC Capital Funding LP, Ser. 2 (FRN) (144A) 10.176% 12/31/2049 225,000 223,067
Husky Terra Nova Finance 8.450% 02/01/2012 585,000 580,591
International Bank for Reconstruction & Development - Yankee 9.250% 07/15/2017 115,000 135,705
Royal Bank of Scotland plc, Ser. 2 8.817% 03/31/2049 140,000 140,155
-----------
4,368,532
-----------
COMMERCIAL SERVICES: 0.3%
ERAC USA Finance Co. (144A) 8.250% 05/01/2005 165,000 162,619
-----------
COMMUNICATIONS: 0.6%
Cable & Wireless Communications 6.750% 12/01/2008 350,000 345,665
-----------
COMPUTER SOFTWARE & PROCESSING: 0.4%
Comdisco, Inc. (FRN) 6.130% 08/01/2001 250,000 244,393
-----------
ELECTRIC UTILITIES: 2.2%
Edison International, Inc. 6.875% 09/15/2004 290,000 279,177
Edison Mission Energy Funding, Ser. B (144A) 7.330% 09/15/2008 195,000 186,911
Great Lakes Power 8.300% 03/01/2005 190,000 185,782
PG&E Gas Transmission Northwest Corp. 7.100% 06/01/2005 165,000 161,406
RGS (AEGCO) Funding Corp., Ser. E 9.810% 12/07/2021 119,922 132,940
Sithe/Independence Funding Corp., Ser. A 9.000% 12/30/2013 220,000 232,335
Southern Energy (144A) 7.900% 07/15/2009 70,000 64,296
-----------
1,242,847
-----------
FINANCIAL SERVICES: 3.7%
Abbey National Capital Trust I (FRN) 8.963% 12/29/2049 390,000 377,708
Beneficial Corp., Ser. H (FRN) (MTN) 6.281% 12/05/2001 400,000 400,200
Case Credit Corp. 6.150% 03/01/2002 175,000 168,914
CIT Group, Inc. 7.375% 03/15/2003 320,000 317,465
Morgan Stanley Dean Witter & Co. 7.125% 01/15/2003 435,000 429,799
Ras Laffin-Lincs, Ser. 1997-11 (FRN) (144A) 7.850% 03/18/2014 235,000 234,396
Salomon Smith Barney, Inc. 6.750% 02/15/2003 185,000 180,687
-----------
2,109,169
-----------
2
<PAGE>
<CAPTION>
SAMCO FUNDS, INC.
SAMCO AGGREGATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) COUPON
APRIL 30, 2000 RATE MATURITY PAR/FACE VALUE (a)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEAVY CONSTRUCTION: 0.1%
Centex Corp. 7.375% 06/01/2005 $ 70,000 $ 65,910
---------------
HEAVY MACHINERY: 1.1%
Cummins Engine Co., Inc. 5.650% 03/01/2066 400,000 248,065
UNOVA, Inc. 6.875% 03/15/2005 395,000 343,606
---------------
591,671
---------------
INDUSTRIAL - DIVERSIFIED: 0.2%
Eaton Corp. 6.950% 11/15/2004 135,000 130,892
---------------
INSURANCE: 2.1%
Anthem Insurance Companies, Inc. (144A) 9.000% 04/01/2027 205,000 188,500
Farmers Exchange Capital (144A) 7.050% 07/15/2028 140,000 113,212
Florida Windstorm Underwriting Association (144A) 6.500% 08/25/2002 300,000 292,208
Lumbermens Mutual Casualty (144A) 8.300% 12/01/2037 440,000 359,580
URC Holdings Corp. (144A) 7.875% 06/30/2006 250,000 249,658
---------------
1,203,158
---------------
METALS: 0.4%
Scotia Pacific Co. LLC, Ser. B, Class A-2 7.110% 01/20/2014 300,000 249,464
---------------
OIL & GAS: 1.8%
EdperBrascan Corp. 7.125% 12/16/2003 180,000 172,842
Kern River Funding Corp., Ser. B (144A) 6.720% 09/30/2001 435,000 430,220
ONEOK, Inc. (144A) 7.750% 03/01/2005 255,000 253,007
Yosemite Securities Trust I (144A) 8.250% 11/15/2004 145,000 143,109
---------------
999,178
---------------
PHARMACEUTICALS: 1.1%
Lilly Del Mar, Inc. (FRN) (144A) 7.717% 08/01/2029 605,000 600,532
---------------
REAL ESTATE: 0.1%
Nationwide Health Properties, Inc., Ser. B (REIT) (MTN) 7.670% 04/18/2003 70,000 66,740
---------------
TELEPHONE SYSTEMS: 0.9%
BellSouth Capital Funding 7.875% 02/15/2030 115,000 115,630
Sprint Capital Corp. 6.875% 11/15/2028 120,000 104,008
Telecom New Zealand Finance (144A) 6.250% 02/10/2003 280,000 270,839
---------------
490,477
---------------
TRANSPORTATION: 1.4%
CSX Corp. 7.950% 05/01/2027 145,000 137,003
Union Pacific Corp. 6.625% 02/01/2029 105,000 85,197
Windsor Petroleum (144A) 7.840% 01/15/2021 690,000 559,814
---------------
782,014
---------------
TOTAL CORPORATE OBLIGATIONS (COST - $16,609,561) 16,330,981
---------------
SOVEREIGN DEBT OBLIGATIONS: 0.9%
CANADA: 0.9%
Province of New Brunswick 9.750% 05/15/2020 120,000 147,232
Province of Ontario 7.750% 06/04/2002 150,000 151,040
Province of Quebec 7.500% 09/15/2029 210,000 204,871
---------------
TOTAL SOVEREIGN DEBT OBLIGATIONS (COST - $503,530) 503,143
---------------
PREFERRED STOCKS: 2.1% SHARES
----------
Centaur Funding Corp., Ser. B (144A) 9.080% 425 443,594
Duke-Weeks Realty Corp. (REIT) 7.990% (b) 6,650 293,847
Placer Dome Inc., Ser. A 8.625% 14,900 258,888
SPG Properties, Inc. (REIT) 7.890% (c ) 4,095 182,228
---------------
TOTAL PREFERRED STOCKS (COST - $1,206,999) 1,178,557
---------------
3
<PAGE>
<CAPTION>
SAMCO FUNDS, INC.
SAMCO AGGREGATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) COUPON
APRIL 30, 2000 RATE MATURITY PAR/FACE VALUE (a)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS: 2.5%
Discover Card Master Trust I, Ser. 1997-2, Class A (FRN) 6.792% 04/16/2010 $ 278,471 $ 270,930
Residential Funding Mortgage Securities I, Ser. 1997-S14, Class A6 7.250% 10/25/2027 720,000 690,939
Washington Mutual, Ser. 2000-1, Class A1 (FRN) 6.403% 07/25/2024 468,455 464,909
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (COST - $1,432,503) 1,426,778
-----------
ASSET-BACKED SECURITIES: 27.6%
AFC Home Equity Loan Trust, Ser. 1999-1, Class 2A1 (FRN) 6.259% 02/24/2029 254,069 254,578
American Express Master Trust, Ser. 1996-2, Class A (FRN) 6.005% 08/15/2002 360,000 359,996
AT&T Universal Card Master Trust, Ser. 1996-3, Class A (FRN) 6.273% 09/17/2003 360,000 360,108
BA Master Credit Card Trust, Ser. 1996-A, Class A (FRN) 6.015% 08/15/2003 400,000 400,028
Capital Auto Receivables Asset Trust, Ser. 2000-1, Class A4 7.000% 01/15/2005 465,000 462,815
Champion Home Equity Loan Trust, Ser. 1999-1, Class A (FRN) 6.139% 03/25/2029 30,631 30,420
Chase Credit Card Master Trust, Ser. 1998-6, Class A (FRN) 6.390% 09/15/2004 475,000 476,306
Chase Credit Card Master Trust, Ser. 1999-3, Class B 6.950% 01/15/2007 285,000 278,300
Chase Credit Card Master Trust, Ser. 2000-2, Class B (FRN) 6.420% 07/15/2005 475,000 475,494
Citibank Credit Card Master Trust I, Ser. 1999-3, Class A (FRN) 6.220% 03/15/2004 485,000 485,194
Contimortgage Home Equity Loan Trust, Ser. 1997-5, Class A6 6.870% 03/15/2024 560,000 532,185
Countrywide Home Equity Loan Trust, Ser. 1997-C, Class A (FRN) 6.065% 09/15/2022 187,761 187,457
Countrywide Home Equity Loan Trust, Ser. 1998, Class A 6.194% 03/15/2024 318,800 318,264
Countrywide Home Equity Loan Trust, Ser. 2000-A, Class A2 (FRN) 6.410% 05/15/2026 300,000 299,310
DaimlerChrysler Auto Trust, Ser. 2000-A, Class A3 7.090% 12/06/2003 500,000 498,050
Discover Card Master Trust I, Ser. 1996-1, Class A (FRN) 6.055% 07/16/2003 365,000 365,022
Discover Card Master Trust I, Ser. 1999-3, Class A (FRN) 6.240% 09/15/2004 710,000 709,922
Discover Card Master Trust I, Ser. 1999-4, Class A 5.650% 11/16/2004 360,000 348,156
Discover Card MasterTrust I, Ser. 1997-1, Class A (FRN) 6.220% 02/16/2005 450,000 449,753
Discover Card MasterTrust I, Ser. 1997-4, Class A (FRN) 6.200% 04/16/2003 325,000 324,799
EQCC Home Equity Loan Trust, Ser. 1998-4, Class A1F (FRN) 6.570% 01/15/2029 494,705 498,841
First Chicago Master Trust II, Ser. 1996-Q, Class A (FRN) 6.015% 04/15/2003 500,000 500,055
First Chicago Master Trust II, Ser. 1998-V, Class A (FRN) 6.410% 10/15/2003 470,000 470,362
First Chicago Master Trust II, Ser. 1999-W, Class A (FRN) 5.995% 03/15/2004 480,000 479,947
First National Bank of Chicago, Ser. 1993-A 8.080% 01/05/2018 200,000 203,780
First Union Master Credit Card Trust, Ser. 1996-1, Class A (FRN) 6.055% 09/15/2003 365,000 365,051
First USA Credit Card Master Trust, Ser. 1994-8, Class A (FRN) 5.692% 06/15/2004 465,000 465,791
Fleet Credit Card Master Trust II, Ser. 2000-A, Class A (FRN) 6.134% 07/15/2005 200,000 200,066
Fleet Credit Card Master Trust, Ser. 1995-F, Class A2 (FRN) 6.075% 08/01/2003 320,000 319,984
Ford Credit Auto Owner Trust, Ser. 2000-A, Class A4 7.090% 11/17/2003 800,000 797,250
GS Mortgage Securities Corp. II, Ser. 2000-1, Class A 6.530% 03/15/2023 475,000 475,095
Household Affinity Credit Card Master Trust I, Ser. 1995-1, Class A (FRN) 6.280% 02/15/2002 23,333 23,328
MBNA Master Credit Card Trust, Ser. 1996-H, Class A (FRN) 6.196% 01/15/2004 360,000 359,950
MBNA Master Credit Card Trust, Ser. 1997-N, Class A (FRN) 6.166% 11/15/2002 40,000 39,993
Merrill Lynch Home Equity Loan, Ser. 1997-1, Class A (FRN) 5.994% 09/25/2027 409,883 408,104
Olympic Automobile Receivables Trust, Ser. 1997-A, Class A5 6.800% 02/15/2005 500,000 497,840
Pemex Finance Ltd., Ser. 2000-1, Class A1 (144A) 9.030% 02/15/2011 105,000 106,962
Providian Master Trust, Ser. 1997-3, Class A (FRN) 5.995% 12/15/2005 420,000 419,920
UCFC Home Equity Loan, Ser. 1997-A1, Class A6 7.435% 11/15/2024 190,000 187,961
UCFC Home Equity Loan, Ser. 1997-C, Class A7 6.845% 01/15/2029 380,000 366,309
UCFC Home Equity Loan, Ser. 1997-D, Class A5 6.755% 11/15/2023 390,000 374,903
Union Acceptance Corp., Ser.1999-D, Class A2 6.450% 01/08/2003 270,000 269,471
WFS Financial Owner Trust, Ser. 1998-C, Class A2 5.524% 08/20/2001 154,120 154,027
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TOTAL ASSET-BACKED SECURITIES (COST - $15,635,227) 15,601,147
-----------
4
<PAGE>
<CAPTION>
SAMCO FUNDS, INC.
SAMCO AGGREGATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) COUPON
APRIL 30, 2000 RATE MATURITY PAR/FACE VALUE (a)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENT: 3.7%
Investors Bank & Trust Company Repurchase Agreement, in
the amount of $2,107,423; Issued 04/28/2000 (collateralized by
$2,106,123 par of FNMA-ARM, 7.495% due 10/01/2024
with a market value of $2,212,089) (Cost - $2,106,556) 4.940% 05/01/2000 $ 2,106,556 $ 2,106,556
-------------
TOTAL INVESTMENTS: 128.5% (COST - $73,313,728) 72,682,478
LIABILITIES, NET OF OTHER ASSETS: (28.5%) (16,115,819)
-------------
NET ASSETS: 100.0%
Applicable to 5,992,268 outstanding $.001 par value shares
(authorized 500,000,000 shares) $ 56,566,659
=============
Net Assets Value, Offering and Redemption Price Per Share $ 9.44
=============
</TABLE>
Summary of Abbreviations
------------------------
(a) See note 2 to the Financial Statements
(b) Coupon rate shown represents current rate. Rate will increase by 2.00%
on 10/01/2012.
(c ) Coupon rate shown represents current rate. Rate will increase by 2.00%
on 09/30/2012.
* Coupon rate shown represents yield to maturity at date of purchase.
# Face amount shown represents amortized cost.
144A Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At April 30, 2000, the
aggregate value of the securities is $5,868,374 or 10.4% of the net
assets.
ARM Adjustable Rate Mortgage
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FRN Floating Rate Note
GNMA Government National Mortgage Association
MTN Medium-Term Note
REIT Real Estate Investment Trust
TBA To Be Announced - Security is subject to delayed delivery
Yankee U.S. dollar denominated security issued by a non-U.S. company in the
U.S.
See Notes to the Financial Statements. 5
<PAGE>
SAMCO FUNDS, INC.
<TABLE>
<CAPTION>
SAMCO INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED) COUPON
APRIL 30, 2000 RATE MATURITY PAR/FACE VALUE (a)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS: 33.3%
U.S. TREASURY OBLIGATIONS: 14.8%
U.S. Treasury Note 5.750% 08/15/2003 $ 155,000 $ 151,077
U.S. Treasury Note 5.875% 11/15/2004 30,000 29,212
U.S. Treasury Note 6.375% 09/30/2001 205,000 204,103
U.S. Treasury Note 7.000% 07/15/2006 350,000 358,094
U.S. Treasury Bond 5.625% 05/15/2008 825,000 784,008
U.S. Treasury Bond 6.500% 02/15/2010 65,000 66,300
-----------
1,592,794
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS AND PASS-THROUGH CERTIFICATES: 15.0%
FHLMC Pool 7.500% 05/01/2007 210,000 208,824
FNMA Global Bond (MTN) 6.320% 03/16/2009 160,000 147,455
FNMA Global Bond 6.625% 09/15/2009 430,000 409,654
FNMA Pool 6.500% 04/01/2030 110,000 102,641
FNMA Pool 7.500% 02/01/2030 346,877 339,704
FNMA Pool 7.500% 04/01/2030 310,000 303,304
Overseas Private Investment Corp., Ser. 1998-946-1 7.600% 12/15/2012 100,000 99,492
-----------
1,611,074
-----------
U.S. GOVERNMENT AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS: 3.5%
FHLMC, Ser. 2211, Class PB 7.000% 02/15/2020 100,000 98,514
FNMA, Ser. 1998-40, Class H 6.250% 03/18/2027 183,423 173,332
FNMA, Ser. 1999-60, Class PB 7.000% 06/25/2000 110,000 108,516
-----------
380,362
-----------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (COST - $3,620,202) 3,584,230
-----------
CORPORATE OBLIGATIONS: 30.1%
AEROSPACE & DEFENSE: 0.9%
Lockheed Martin Corp. 7.950% 12/01/2005 95,000 93,591
-----------
AIRLINES: 2.1%
Delta Air Lines, Inc., Ser. 1992-A1 8.270% 09/23/2007 80,905 80,535
Northwest Airlines Corp., Ser. 1999-3, Class C 9.152% 04/01/2010 100,000 97,840
Northwest Airlines Corp., Ser. 1999-3, Class G 7.935% 04/01/2019 49,689 49,510
-----------
227,885
-----------
AUTOMOTIVE: 1.8%
DaimlerChrysler North America Holding Corp. 6.630% 09/21/2001 150,000 147,991
General Motors Acceptance Corp. 6.150% 04/05/2007 55,000 50,542
-----------
198,533
-----------
BANKING: 3.1%
Bank of America Corp. 7.625% 04/15/2005 160,000 158,024
Continental Bank N.A., Ser. XW 12.500% 04/01/2001 95,000 99,292
First Union Corp. 6.950% 11/01/2004 35,000 34,021
Royal Bank of Scotland plc, Ser. 2 8.817% 03/31/2049 40,000 40,044
-----------
331,381
-----------
COMMERCIAL SERVICES: 0.5%
ERAC USA Finance Co. (144A) 8.250% 05/01/2005 50,000 49,278
-----------
ELECTRIC UTILITIES: 3.4%
Great Lakes Power 8.300% 03/01/2005 165,000 161,337
Jersey Central Power & Light 6.375% 05/01/2003 70,000 68,217
PG&E Gas Transmission Northwest Corp. 7.100% 06/01/2005 45,000 44,020
Sithe/Independence Funding Corp., Ser. A 9.000% 12/30/2013 65,000 68,645
Southern Energy (144A) 7.900% 07/15/2009 30,000 27,555
-----------
369,774
-----------
6
<PAGE>
<CAPTION>
SAMCO FUNDS, INC.
SAMCO INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) COUPON
APRIL 30, 2000 RATE MATURITY PAR/FACE VALUE (a)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL SERVICES: 7.2%
Bear Stearns Co., Inc. 6.450% 08/01/2002 $ 150,000 $ 145,678
CIT Group, Inc. 7.375% 03/15/2003 135,000 133,931
CIT Group, Inc. 7.125% 10/15/2004 175,000 170,229
Household Finance Corp. (MTN) 6.125% 07/15/2002 90,000 87,221
Morgan Stanley Dean Witter & Co. 7.125% 01/15/2003 175,000 172,908
Ras Laffin-Lincs, Ser. 1997-11 (FRN) (144A) 7.850% 03/18/2014 70,000 69,820
----------
779,787
----------
HEAVY MACHINERY: 0.6%
UNOVA, Inc. 6.875% 03/15/2005 70,000 60,892
----------
INDUSTRIAL - DIVERSIFIED: 0.8%
Eaton Corp. 6.950% 11/15/2004 90,000 87,261
----------
INSURANCE: 2.7%
Allstate Corp. 7.875% 05/01/2005 140,000 138,389
Progressive Corp. 6.600% 01/15/2004 85,000 81,326
URC Holdings Corp. (144A) 7.875% 06/30/2006 75,000 74,898
----------
294,613
----------
METALS: 1.1%
Scotia Pacific Co. LLC, Ser. B, Class A-1 6.550% 01/20/2007 73,821 69,174
Scotia Pacific Co. LLC, Ser. B, Class A-2 7.110% 01/20/2014 55,000 45,735
----------
114,909
----------
OIL & GAS: 3.3%
EdperBrascan Corp. 7.125% 12/16/2003 40,000 38,409
Kern River Funding Corp., Ser. B (144A) 6.720% 09/30/2001 100,000 98,901
ONEOK, Inc. (144A) 7.750% 03/01/2005 75,000 74,414
Tosco Trust, Ser. 2000-E (144A) 8.580% 03/01/2010 100,000 99,450
Yosemite Securities Trust I (144A) 8.250% 11/15/2004 40,000 39,478
----------
350,652
----------
TELEPHONE SYSTEMS: 1.6%
Vodafone AirTouch plc (144A) 7.750% 02/15/2010 175,000 172,289
----------
TRANSPORTATION: 1.0%
Windsor Petroleum (144A) 7.840% 01/15/2021 130,000 105,472
----------
TOTAL CORPORATE OBLIGATIONS (COST - $3,277,775) 3,236,317
----------
SOVEREIGN DEBT OBLIGATIONS: 1.2%
CANADA: 1.2%
Canada Mortgage & Housing 7.200% 02/01/2005 90,000 89,269
Province of Ontario 7.750% 06/04/2002 45,000 45,312
----------
TOTAL SOVEREIGN DEBT OBLIGATIONS (COST - $135,572) 134,581
----------
PREFERRED STOCKS: 2.0% SHARES
--------
Placer Dome Inc., Ser. A 8.625% 4,400 76,450
SPG Properties, Inc. (REIT) 7.890% (b) 3,100 137,950
----------
TOTAL PREFERRED STOCKS (COST - $214,351) 214,400
----------
ASSET-BACKED SECURITIES: 28.7% PAR/FACE
--------
Capital Auto Receivables Asset Trust, Ser. 2000-1, Class A4 7.000% 01/15/2005 $ 130,000 129,389
Chase Credit Card Master Trust, Ser. 1999-3, Class B 6.950% 01/15/2007 305,000 297,829
Citicorp Lease, Ser. 1999-1, Class A1 (144A) 7.220% 06/15/2005 100,000 98,525
Contimortgage Home Equity Loan Trust, Ser. 1996-2, Class A8 7.900% 07/15/2027 225,000 223,357
Contimortgage Home Equity Loan Trust, Ser. 1997-5, Class A6 6.870% 03/15/2024 155,000 147,301
Continental Airlines, Inc., Ser. 1999-2, Class A-1 7.256% 03/15/2020 54,563 52,361
DaimlerChrysler Auto Trust, Ser. 2000-A, Class A3 7.090% 12/06/2003 225,000 224,122
Discover Card Master Trust I, Ser. 1999-3, Class A (FRN) 6.240% 09/15/2004 205,000 204,977
Discover Card Master Trust I, Ser. 1999-4, Class A 5.650% 11/16/2004 225,000 217,598
7
<PAGE>
<CAPTION>
SAMCO FUNDS, INC.
SAMCO INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) COUPON
APRIL 30, 2000 RATE MATURITY PAR/FACE VALUE (a)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSET-BACKED SECURITIES (CONTINUED)
Ford Credit Auto Owner Trust, Ser. 2000-A, Class A4 7.090% 11/17/2003 $ 390,000 $ 388,659
Olympic Automobile Receivables Trust, Ser. 1996-D, Class A5 6.250% 11/15/2004 260,000 257,798
Olympic Automobile Receivables Trust, Ser. 1997-A, Class A5 6.800% 02/15/2005 170,000 169,266
Pemex Finance Ltd., Ser. 2000-1, Class A1 (144A) 9.030% 02/15/2011 35,000 35,654
UCFC Home Equity Loan, Ser. 1997-A1, Class A6 7.435% 11/15/2024 170,000 168,176
UCFC Home Equity Loan, Ser. 1997-C, Class A5 6.880% 09/15/2022 135,000 132,106
UCFC Home Equity Loan, Ser. 1997-D, Class A5 6.755% 11/15/2023 85,000 81,710
Union Acceptance Corp., Ser.1999-D, Class A2 6.450% 01/08/2003 75,000 74,853
WFS Financial Owner Trust, Ser. 1999-C, Class A2 6.920% 01/20/2004 180,000 178,848
-----------
TOTAL ASSET-BACKED SECURITIES (COST - $3,108,076) 3,082,529
-----------
SHORT-TERM INVESTMENTS: 6.1%
Investors Bank & Trust Company Repurchase Agreement,
in the amount of $420,762; Issued 04/28/2000 (collateralized
by $420,502 par of FNMA - ARM, 7.495% due 10/01/2024
with a market value of $441,659) 4.940% 05/01/2000 420,589 420,589
U.S. Treasury Bill* 5.792% 06/29/2000 200,000 197,271
U.S. Treasury Bill* 6.040% 09/28/2000 40,000 38,840
-----------
TOTAL SHORT-TERM INVESTMENTS (COST - $656,700) 656,700
-----------
TOTAL INVESTMENTS: 101.4% (COST - $11,012,676) 10,908,757
LIABILITIES, NET OF OTHER ASSETS: (1.4%) (151,035)
-----------
NET ASSETS: 100%
Applicable to 1,100,898 outstanding $.001 par value shares
(authorized 500,000,000 shares) $ 10,757,722
===========
Net Assets Value, Offering and Redemption Price Per Share $ 9.77
===========
</TABLE>
SUMMARY OF ABBREVIATIONS
* Coupon rate shown represents yield to maturity at date of purchase.
(a) See note 2 to the Financial Statements
(b) Coupon rate shown represents current rate. Rate will increase by 2.00%
on 09/30/2012.
144A Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified buyers. At April 30, 2000, the
aggregate value of the securities is $945,734 or 8.8% of the net assets.
ARM Adjustable Rate Mortgage
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FRN Floating Rate Note
MTN Medium-Term Note
REIT Real Estate Investment Trust
See Notes to the Financial Statements. 8
<PAGE>
SAMCO FUNDS, INC.
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 2000
-----------------------------------------------------------------------------------------------------
Aggregate Intermediate
Fixed Income Fixed Income
Fund Fund
---------------- ----------------
<S> <C> <C>
ASSETS
Investments, at value (a) (Note 2 and 5) $ 72,682,478 $ 10,908,757
Receivable for securities sold 6,401,239 342,006
Interest receivable 564,770 128,511
Receivable from Investment Adviser - 35,610
Deferred organization costs 51,064 -
Miscellaneous receivable 7,632 -
------------ ------------
Total assets 79,707,183 11,414,884
------------ ------------
LIABILITIES
Payable for securities purchased 23,045,645 559,478
Payable for capital shares redeemed 13,182 -
Dividends payable 18,994 60,219
Payable to Investment Adviser 31,976 -
Accrued expenses and other liabilities 30,727 37,465
------------ ------------
Total liabilities 23,140,524 657,162
------------ ------------
NET ASSETS $ 56,566,659 $ 10,757,722
============ ============
SHARES OUTSTANDING 5,992,268 1,100,898
============ ============
NET ASSET VALUE PER SHARE $ 9.44 $ 9.77
============ ============
COMPOSITION OF NET ASSETS
Paid-in capital $ 60,095,844 $ 11,008,982
Accumulated undistributed net investment income 88,797 9,712
Net accumulated realized loss on investments (2,986,732) (157,053)
Net unrealized depreciation on investments (631,250) (103,919)
------------ ------------
Net assets applicable to capital stock outstanding $ 56,566,659 $ 10,757,722
============ ============
(a) Cost of investments $ 73,313,728 $ 11,012,676
-----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements
9
<PAGE>
SAMCO FUNDS, INC.
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED APRIL 30, 2000
-----------------------------------------------------------------------------------------------------------------
Aggregate Intermediate
Fixed Income Fixed Income
Fund Fund
------------------ -------------------
<S> <C> <C>
INVESTMENT INCOME
Dividend income $ 87,495 $ 2,372
Interest income 1,863,305 371,843
------------------ -------------------
Total income 1,950,800 374,215
------------------ -------------------
EXPENSES
Investment advisory fees (Note 3) 69,289 13,354
Custodian fees 23,746 6,755
Administration fees (Note 3) 20,960 4,041
Audit fees 11,803 8,361
Amortization of organizational costs 9,389 -
Legal fees 9,292 1,800
Directors fees and expenses 6,797 1,318
State registration filing fees 2,471 479
Insurance expense 6,055 1,174
Transfer agent fees 1,487 182
Miscellaneous fees and expenses 705 120
------------------ -------------------
Total operating expenses 161,994 37,584
Waiver of investment advisory fees and
reimbursement of other expenses (37,313) (13,551)
------------------ -------------------
Net expenses 124,681 24,033
------------------ -------------------
Net investment income 1,826,119 350,182
------------------ -------------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized loss on investments (1,102,572) (80,660)
Net change in unrealized appreciation (depreciation) on investments (245,283) (89,851)
------------------ -------------------
Net realized and unrealized loss on investments (1,347,855) (170,511)
------------------ -------------------
Net increase in net assets resulting from operations $ 478,264 $ 179,671
================== ===================
-----------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements
10
<PAGE>
SAMCO FUNDS, INC.
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
Aggregate Fixed Income Fund Intermediate Fixed Income Fund
------------------------------------- ----------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED FOR THE PERIOD FROM
APRIL 30, 2000 YEAR ENDED APRIL 30, 2000 JUNE 30, 1999*
(UNAUDITED) OCTOBER 31, 1999 (UNAUDITED) TO OCTOBER 31, 1999
------------------ ------------------ ------------------ ---------------------
<S> <C> <C> <C> <C>
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
Net investment income $ 1,826,119 $ 2,773,279 $ 350,182 $ 219,337
Net realized loss from investments (1,102,572) (1,848,785) (80,660) (76,393)
Net change in unrealized depreciation
on investments (245,283) (474,264) (89,851) (14,068)
----------------- ----------------- ----------------- --------------------
Net increase in net assets resulting from operations 478,264 450,230 179,671 128,876
----------------- ----------------- ----------------- --------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (1,816,451) (2,731,435) (348,214) (211,593)
From net realized gains on investments - (508,624) - -
----------------- ----------------- ----------------- --------------------
Total distributions to shareholders (1,816,451) (3,240,059) (348,214) (211,593)
CAPITAL SHARE TRANSACTIONS (NOTE 6) 1,619,821 15,176,143 - 11,008,982
----------------- ----------------- ----------------- --------------------
Total increase (decrease) in net assets 281,634 12,386,314 (168,543) 10,926,265
NET ASSETS
Beginning of period 56,285,025 43,898,711 10,926,265 -
----------------- ----------------- ----------------- --------------------
End of period $ 56,566,659 $ 56,285,025 $ 10,757,722 $ 10,926,265
----------------- ----------------- ----------------- --------------------
UNDISTRIBUTED NET INVESTMENT INCOME, END OF PERIOD $ 88,797 $ 79,129 $ 9,712 $ 7,744
================= ================= ================= ====================
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations
See Notes to the Financial Statements
11
<PAGE>
SAMCO FUNDS, INC.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
-----------------------------------------------------------------------------------------------------------------------------------
Aggregate Fixed Income Fund
--------------------------------------------------------------------
SIX MONTHS ENDED FOR THE PERIOD FROM
APRIL 30, 2000 YEAR ENDED DECEMBER 30, 1997*
(UNAUDITED) OCTOBER 31, 1999 TO OCTOBER 31, 1998
------------------ ------------------ -----------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.67 $10.26 $10.00
------------------ ------------------ -----------------------
INVESTMENT OPERATIONS
Net investment income 0.31 0.56 0.21
Net realized and unrealized gain (loss) on investments (0.23) (0.48) 0.46
------------------ ------------------ -----------------------
Total increase from investment operations 0.08 0.08 0.67
------------------ ------------------ -----------------------
DISTRIBUTIONS
From net investment income (0.31) (0.56) (0.41)
From net realized gains on investments - (0.11) -
------------------ ------------------ -----------------------
Total distributions (0.31) (0.67) (0.41)
------------------ ------------------ -----------------------
Net asset value, end of period $9.44 $9.67 $10.26
================== ================== =======================
TOTAL RETURN (BASED ON NET ASSET VALUE) (a) 0.83% (b) 0.80% 6.87% (b)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) $56,567 $56,285 $43,899
Ratio of net expenses to average net assets 0.45% (c) 0.45% 0.45% (c)
Ratio of expenses to average net assets (before expense
waivers and reimbursement of other expenses) 0.58% (c) 0.71% 1.03% (c)
Ratio of net investment income to average net assets 6.59% (c) 5.78% 5.17% (c)
Portfolio turnover rate 236% (b) 562% 478% (b)
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return would have been lower had certain expenses not been waived or
reimbursed
(b) Not Annualized
(c) Annualized
* Commencement of investment operations
See Notes to the Financial Statements
12
<PAGE>
SAMCO FUNDS, INC.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
--------------------------------------------------------------------------------------------------------------------
Intermediate Fixed Income Fund
----------------------------------------------
SIX MONTHS ENDED FOR THE PERIOD FROM
APRIL 30, 2000 JUNE 30, 1999*
(UNAUDITED) TO OCTOBER 31, 1999
------------------ ---------------------
<S> <C> <C>
Net asset value, beginning of period $9.92 $10.00
------------------ ---------------------
INVESTMENT OPERATIONS
Net investment income 0.32 0.20
Net realized and unrealized loss on investments (0.15) (0.09)
------------------ ---------------------
Total increase from investment operations 0.17 0.11
------------------ ---------------------
DISTRIBUTIONS
From net investment income (0.32) (0.19)
------------------ ---------------------
Total distributions (0.32) (0.19)
------------------ ---------------------
Net asset value, end of period $9.77 $9.92
================== =====================
TOTAL RETURN (BASED ON NET ASSET VALUE) (a) 1.70% (b) 1.13% (b)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) $10,758 $10,926
Ratio of net expenses to average net assets 0.45% (c) 0.45% (c)
Ratio of expenses to average net assets (before expense waivers
and reimbursement of other expenses) 0.70% (c) 1.81% (c)
Ratio of net investment income to average net assets 6.56% (c) 5.93% (c)
Portfolio turnover rate 198% (b) 117% (b)
--------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Total return would have been lower had certain expenses not been waived or
reimbursed
(b) Not Annualized
(c) Annualized
* Commencement of investment operations
See Notes to the Financial Statements
13
<PAGE>
SAMCO FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 2000
--------------------------------------------------------------------------------
1. ORGANIZATION
SAMCO Funds, Inc. (the "Fund") was organized as a Maryland corporation on
August 4, 1997 and is registered under the Investment Company Act of 1940, as
amended, as an open-end, non-diversified management investment company. The Fund
currently has two active portfolios, the SAMCO Aggregate Fixed Income Fund (the
"Aggregate Fixed Income Fund") which commenced operations on December 30, 1997,
and the SAMCO Intermediate Fixed Income Fund (the "Intermediate Fixed Income
Fund") which commenced operations on June 30, 1999. (each a "Portfolio",
collectively, the "Portfolios"). Prior to June 10, 1999, the Aggregate Fixed
Income Fund was named the SAMCO Fixed Income Portfolio. The unamortized balance
of organizational expenses at April 30, 2000 for the Aggregate Fixed Income Fund
was $51,064. In the event that any of the initial 10,000 shares (the "Initial
Shares") purchased by Seix Investment Advisors Inc. (the "Investment Adviser")
are redeemed during the amortization period, the Aggregate Fixed Income Fund
will be reimbursed by the Investment Adviser for any remaining unamortized costs
in the same proportion as the number of Initial Shares redeemed bears to the
total number of Initial Shares outstanding at the time of the redemption.
INVESTMENT OBJECTIVE
The Aggregate Fixed Income Fund is designed to provide investors with a total
return, which consistently exceeds the total return of the broad U.S. investment
grade bond market. Performance is measured against the Lehman Brothers Aggregate
Bond Index. The Intermediate Fixed Income Fund is designed to provide investors
with a total return, which consistently exceeds the total return of the
intermediate portion of the broad U.S. investment grade bond market. Performance
is measured against the Lehman Brothers Intermediate Government/Corporate Index.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Fund are in conformity with generally accepted
accounting principles ("GAAP") for investment companies. The following is a
summary of the Fund's significant accounting policies:
ESTIMATES
The preparation of financial statements in accordance with GAAP requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates.
VALUATION
All investments are valued daily at their market price, which results in
unrealized gains or losses. Readily marketable fixed-income securities are
valued on the basis of prices provided by a pricing service when such prices are
believed by the Investment Adviser to reflect the fair value of such securities.
Securities traded on an exchange are valued at their last sales price on that
exchange. Securities for which over-the-counter market quotations are available
are valued at the latest bid price. Securities for which market quotations are
not readily available will be valued in good faith by methods approved by the
Board of Directors. Short-term securities purchased with sixty days or less
remaining to maturity are valued at amortized cost, which approximates market
value.
SECURITIES TRANSACTIONS
Securities transactions are recorded on a trade date basis. The Portfolios use
the specific identification method for determining gain or loss on sales of
securities.
INCOME
Interest income is recorded on an accrual basis. Dividend income is recorded on
the ex-dividend date. The Portfolios accrete discounts or amortize premiums
using the yield-to-maturity method on a daily basis, except for securities
having a maturity date of less than sixty days at the time of acquisition. Such
securities are amortized on a straight-line basis.
14
<PAGE>
SAMCO FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 2000
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAX
There is no provision for Federal income or excise tax since the Portfolios
intend to qualify as regulated investment companies ("RICs") by complying with
the requirements of Subchapter M of the Internal Revenue Code applicable to RICs
and to distribute all of their taxable income.
DIVIDENDS TO SHAREHOLDERS
It is the policy of the Portfolios to declare and pay dividends from net
investment income monthly. Dividends from net short-term capital gains and net
long-term capital gains, if any, are normally declared and paid annually, but
the Portfolios may make distributions on a more frequent basis to comply with
the distribution requirements of the Internal Revenue Code. To the extent that a
net realized capital gain can be reduced by a capital loss carryover, such gain
will not be distributed.
Income and capital gain distributions are determined in accordance with federal
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment, temporary differences do not require such
reclassification.
OPERATING EXPENSES
Expenses are recorded on an accrual basis. Expenses specifically identifiable to
a particular Portfolio are borne by that Portfolio. Other expenses are allocated
to each Portfolio based on its net assets in relation to the total net assets of
both portfolios or on another reasonable basis.
ORGANIZATION EXPENSES
The costs incurred by the Fund in connection with the organization and initial
registration of shares are being amortized on a straight-line basis by the
Aggregate Fixed Income Fund over a sixty-month period beginning with the
commencement of its investment operations on December 30, 1997. On October 29,
1997, the Investment Adviser purchased 10,000 shares of common stock of the Fund
for an aggregate purchase price of $100,000.
3. SIGNIFICANT AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER
The Fund's Board of Directors has approved an investment advisory agreement with
the Investment Adviser. For its services as investment adviser, each Portfolio
pays the Investment Adviser a monthly fee at an annual rate of 0.25% of its
average daily net assets.
The Investment Adviser has voluntarily agreed to limit the total expenses of the
Aggregate Fixed Income Fund and the Intermediate Fixed Income Fund (excluding
interest, taxes, brokerage and extraordinary expenses) to annual rates of 0.45%
of their average daily net assets. During the period ended April 30, 2000, the
Investment Adviser voluntarily waived $37,313 and $13,354 of advisory fees, and
reimbursed $0 and $197 for other expenses which are due from the Investment
Adviser, for the Aggregate Fixed Income Fund and the Intermediate Fixed Income
Fund, respectively.
ADMINISTRATOR
Pursuant to its Administration Agreement, Investors Bank & Trust Company (the
"Administrator"), earns a fee for providing fund administration services to the
Portfolios. Under this agreement, the Fund incurred $25,001 in administration
fees for the six months ended April 30, 2000.
15
<PAGE>
SAMCO FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 2000
--------------------------------------------------------------------------------
3. SIGNIFICANT AGREEMENTS AND TRANSACTIONS WITH AFFILIATES (CONTINUED)
DIRECTORS
Directors' fees of $6,712 and $1,288 were paid by the Aggregate Fixed Income
Fund and the Intermediate Fixed Income Fund, respectively, for the six months
ended April 30, 2000 to Directors who are not employees of the Investment
Adviser. Directors who are not employees of the Investment Adviser received an
annual retainer of $2,000, payable quarterly and $1,000 per meeting attended.
4. INVESTMENT TRANSACTIONS
Cost of purchases and proceeds from sales of investments, other than short-term
investments, for the period ended April 30, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
---------------------------------------- ------------------------------------------
PORTFOLIO U.S. GOVERNMENT OTHER SECURITIES U.S. GOVERNMENT OTHER SECURITIES
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggregate Fixed
Income Fund $128,676,383 $40,954,496 $116,678,234 $40,562,689
Intermediate Fixed
Income Fund $ 13,129,670 $ 7,473,217 $ 13,326,209 $ 7,281,751
</TABLE>
The components of net unrealized depreciation of investments are substantially
the same for book and federal tax purposes at April 30, 2000 for the Portfolios
and are as follows:
<TABLE>
<CAPTION>
COST FOR FEDERAL
PORTFOLIO APPRECIATION DEPRECIATION NET DEPRECIATION TAX PURPOSES
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggregate Fixed
Income Fund $103,305 ($734,555) ($631,250) $73,313,728
Intermediate Fixed
Income Fund $ 14,963 ($118,882) ($103,919) $11,012,676
</TABLE>
5. REPURCHASE AGREEMENTS
The Portfolios may enter into repurchase agreements under which a bank or
securities firm that is a primary or reporting dealer in U.S. Government
securities agrees, upon entering into a contract, to sell U.S. Government
securities to the Portfolios and repurchase such securities from the Portfolios
at a mutually agreed upon price and date.
The Portfolios will engage in repurchase transactions with parties selected on
the basis of such party's creditworthiness. The collateral on repurchase
agreements must have an aggregate market value greater than or equal to the
repurchase price plus accrued interest at all times. If the value of the
underlying securities falls below the value of the repurchase price plus accrued
interest, the Portfolios will require the seller to deposit additional
collateral by the next business day. If the request for additional collateral is
not met, or the seller defaults on its repurchase obligation, the Portfolios
maintain the right to sell the underlying securities at market value and may
claim any resulting loss against the seller. However, in the event of default or
bankruptcy by the counterparty to the agreement, realization and/or retention of
the collateral may be subject to legal proceedings.
16
<PAGE>
6. CAPITAL SHARE TRANSACTIONS
Transactions in capital stock for the Aggregate Fixed Income Fund were as
follows for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, 1999
-------------- ----------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Sold 6,910 $ 65,754 1,789,540 $ 17,634,566
Shares Reinvested 177,832 1,692,086 299,470 2,969,916
Shares Redeemed (14,466) (138,019) (547,552) (5,428,339)
-----------------------------------------------------------------------------
Net Increase 170,276 $1,619,821 1,541,458 $ 15,176,143
=============================================================================
</TABLE>
Transactions in capital stock for the Intermediate Fixed Income Fund were as
follows for the periods indicated:
<TABLE>
<CAPTION>
FOR THE PERIOD FROM
SIX MONTHS ENDED JUNE 30, 1999* TO
APRIL 30, 2000 OCTOBER 31, 1999
-------------- ----------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Sold - $ - 1,100,898 $ 11,008,982
Shares Reinvested - - - -
Shares Redeemed - - - -
-----------------------------------------------------------------------------
NET INCREASE - $ - 1,100,898 $ 11,008,982
=============================================================================
</TABLE>
* Commencement of investment operations
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION
CHANGE IN AUDITOR
For the fiscal year ended October 31, 1999 and for previous years, Ernst & Young
LLP ("E&Y) served as independent auditor for SAMCO Funds, Inc. (the "Fund"). On
December 15, 1999 the Board of Directors and the Audit Committee of the Fund
approved a change in the independent auditor by selecting Deloitte & Touche LLP
("D &T") as independent auditor for the Fund for the fiscal year ended October
31, 2000. The Board's selection of D&T did not result from any dispute between
the Fund and E&Y, and E&Y's reports for the last two fiscal years did not
contain any adverse opinion or disclaimer of opinion, and were not qualified or
modified as to uncertainty, audit scope or accounting principles. During the two
fiscal years ended October 31, 1999 and during the period prior to the selection
of D&T, there was no disagreement between E&Y and the Fund on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure. During the two fiscal years ended October 31, 1999 and
during the period prior to the selection of D&T, there were no reportable events
as defined by Item 304(a) (1) (v) of Regulation S-K and the Fund has not
consulted D&T regarding any matter defined in Item 304 (a) (2) of Regulation S-K
prior to their engagement.
17
<PAGE>
SAMCO FUNDS, INC.
OFFICERS & DIRECTORS AND OTHER PERTINENT INFORMATION
APRIL 30, 2000
--------------------------------------------------------------------------------
OFFICERS AND DIRECTORS INVESTMENT ADVISER
Christina Seix Seix Investment Advisors Inc.
CHAIRMAN AND DIRECTOR 300 Tice Blvd.
OF THE FUND Woodcliff Lake, NJ 07675
John G. Talty DISTRIBUTOR
PRESIDENT AND DIRECTOR
OF THE FUND First Fund Distributors, Inc.
4455 East Camelback Road
C. Alan MacDonald Suite 261E
DIRECTOR OF THE FUND Phoenix, AZ 85018
John E. Manley, Sr. ADMINISTRATOR, CUSTODIAN AND FUND
DIRECTOR OF THE FUND ACCOUNTING AGENT
John R. O'Brien Investors Bank & Trust Company
DIRECTOR OF THE FUND P.O. Box 9130
Boston, MA 02117
Peter J. Bourke
DIRECTOR OF THE FUND TRANSFER AND DIVIDEND DISBURSING AGENT
William E. Vastardis Investors Bank & Trust Company
TREASURER OF THE FUND P.O. Box 9130
Boston, MA 02117
Timothy F. Osborne
ASSISTANT TREASURER LEGAL COUNSEL
OF THE FUND
Dechert Price & Rhoads
Cynthia Surprise 1500 K Street, N.W.
SECRETARY OF THE FUND Washington, D.C. 20005-1208
Sandra I. Madden INDEPENDENT AUDITORS
ASSISTANT SECRETARY
OF THE FUND Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281
