<PAGE>
MESSAGE
FROM THE CHAIRMAN
During the first six months of 1999, U.S. equity markets continued to provide
attractive returns to investors. The Standard & Poor's 500 Index, a market
capitalization weighted measure that serves as a good proxy for large-cap stocks
such as Microsoft, General Electric, IBM, and Intel, continued its extraordinary
performance, posting a 12.4% total rate of return. Since 1981, the S&P 500 has
had only one year, 1990, with a negative rate of return. 1999 is shaping up to
be another good year.
The Russell 2000 Index, a widely used benchmark for small-capitalization
stocks, gained 9.3% in the first half, highlighted by an excellent performance
in the second quarter. However, over longer time periods, the Russell 2000 still
has dramatically underperformed large-cap stocks. For example, for the
three-year period ending June 30, 1999, the Russell 2000 had average annual
total returns of 11.2%, compared to the significantly stronger returns of 29.1%
for the S&P 500. Five-year performance numbers also demonstrate a relatively
weak performance for small-caps versus large-caps. These relative returns are
noteworthy because over a much longer time frame, going back to the mid-1920s,
small-cap stocks have outperformed large-cap stocks.
International equities, as measured by the Morgan Stanley EAFE (Europe,
Australia, and Far East) Index, turned in a disappointing performance for the
first half of 1999, gaining 4.1%. Like small-cap stocks, international equities
have woefully underperformed large-cap domestic equities over the last several
years. For example, for the three-year period ending June 30, 1999, the EAFE
Index had average annual total returns of 9.1%, versus 29.1% for the S&P 500.
Five-year and ten-year performance numbers also demonstrate the relatively weak
showing for international equities compared to domestic large-cap equities.
These performance numbers demonstrate that different sectors of the market can
underperform or outperform for years at a time. It is very difficult to know
when relative performance cycles will change, but when they do change, it can
happen quickly. Those portfolios that are well diversified do not have to worry
about trying to time the different sectors of the market, and should be able to
enjoy solid and consistent rates of return over long time frames.
As always, we strongly urge investors in the Investors Mark Series Fund to
read the reports of the various portfolio managers, and to contact us with any
questions or comments.
Sincerely,
[/S/ ROBERT N. SAWYER]
Robert N. Sawyer
Chairman
1
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
LARGE CAP VALUE
The Large Cap Value Portfolio achieved a total return (price change and
reinvested distributions) of 12.6% in the most recent quarter and 13.4% for the
six months ended June 30, 1999. During the same period, the unmanaged Standard
and Poor's 500 Index rose 7.05% and 12.4%, respectively.
In the first quarter, the S&P 500 continued to be dominated by a small number
of large growth stocks, which extended into a sixth year their record run versus
value stocks. Indeed, five of the top-ten highest returning stocks were either
technology- or communications-related, accounting for over 50% of the Index's
return in the quarter, and their valuations were "sky high"--the kinds of
companies our discipline just does not allow us to buy.
But what a difference a month makes! April marked a dramatic turnaround in
market sentiment from growth to value. During that month, we witnessed what was
perhaps the most violent reversal of style in the stock market in our
experience. Most of the shift occurred in six trading days from April 9 through
April 19. At the end of the first quarter, the year-to-date return of the
S&P/BARRA Growth Index exceeded the year-to-date return of the S&P/ BARRA Value
Index by 4.1 percentage points. By the end of April, the Value Index
year-to-date return exceeded the Growth Index by 5.0 percentage points, A SWING
OF 9.1 PERCENTAGE POINTS IN ONE MONTH!
A number of value characteristics of the Portfolio--low absolute and relative
price-to-earnings and price-to-book, for example--were exactly what investors
were looking for when the shift from growth to value occurred. Additionally,
certain sectors (basic materials, consumer cyclical, and financial) and the
Portfolio's overweight positions in those sectors contributed most to our
successful results in the second quarter. Furthermore, because the market caps
of many growth stocks are so large relative to the market caps of most of the
basic materials and cyclical companies, it took only a small percentage of money
flowing from the big favorites into the less liquid value stocks to result a
sharp run-up in the prices of those value stocks.
May was another good month for value stocks. Although the major indices
produced negative returns in May and the Large Cap Value Portfolio experienced a
slight downturn as well, relative performance was positive. Thus the positive
return spread between the Portfolio and the indices that occurred in April
widened in May. The last three days of a very up-and-down June market were
characterized by a sharp rebound in the growth sector, as stocks rallied when
concerns regarding a series of interest rate hikes began to ease. Nonetheless,
the Portfolio held its performance advantage throughout this period.
The Large Cap Value Portfolio strategy continues to possess attractive
valuation characteristics even after the excellent performance of value stocks
in the second quarter. Even though recent performance has been strong, there is
plenty of room for further normalization of the valuation gap between growth
companies and neglected value stocks.
TOP HOLDINGS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Net Assets
----------------
<S> <C>
IBM.................................... 3.1%
Boeing................................. 2.9%
Apple Computer......................... 2.9%
J.C. Penney............................ 2.8%
Reebok International................... 2.8%
</TABLE>
INVESTMENT RESULTS -- TOTAL RETURN
<TABLE>
<CAPTION>
Six Months One Year Since
Ended Ended Commencement
6/30/99 6/30/99 11/13/97
---------- -------- ------------
<S> <C> <C> <C>
Large Cap Value........................ 13.36% 5.08% 9.55%
</TABLE>
DAVID L. BABSON & CO. INC.
2
<PAGE>
LARGE CAP GROWTH
The second quarter may not have marked a turning point for domestic equities,
but it certainly represented a market inversion. Following many consecutive
quarters of large-capitalization, blue-chip dominance, several long-depressed
sectors and investment styles sprung to life to assume, at least temporarily,
market leadership. Heading to the fore were small-cap, value and cyclical stocks
whose fortunes are linked directly to the robust U.S. economy. Viewing this
rotation in the context of the extended market concentration in well-known
large-cap stocks, the dramatic improvement in equity breadth was a healthy
development.
Equity fundamentals suggested a small-stock recovery was long overdue, but
shifting investor psychology and an uncertain global landscape hindered market
momentum. In retrospect, second quarter did not provide an ideal market
environment for the Portfolio, but strong first- quarter corporate earnings
results, very attractive valuations and the robust U.S. economy coalesced to
spur a broad-based expansion. The S&P 500 Index managed to post a solid 7.05%
quarterly gain, but lagged the respective 15.55% and 16.56% returns to the
Russell 2000 and Russell 2000 Value small-stock proxies. The depth in market
rotation is evidenced by small-cap outperformance in every sector except
materials and processing, two areas driven by large, cyclically-oriented
companies.
Second quarter underperformance was concentrated in the Portfolio's technology
services and consumer-oriented industries. Due chiefly to the market's cyclical
bias, drug maker Pfizer and leading consumer products and services companies
Gillette and Proctor & Gamble posted disappointing returns. The reemergence of
value stocks also contributed to a volatile high-tech sector, particularly among
software and Internet-related businesses. Among positive performers,
telecommunications network and equipment manufacturers were the quarter's clear
standouts, led by 24% plus gains to Lucent Technologies, Motorola and Tellabs.
The equity market's solid, fundamental underpinning should remain intact for
the remainder of 1999. Large capitalization corporate earnings remain well ahead
of 1998's pace, and will continue to benefit from robust U.S. economic momentum
and the global economy's gaining recovery. The recent expansion in market
breadth was value and cyclically oriented, but it was a healthy development for
the aggregate U.S. market, and will invite greater liquidity and stability.
Growth stocks have excelled for a series of years, and the earnings growth
generated by the companies we focus on will again attract capital, regardless of
the relative strength in other market sectors.
TOP HOLDINGS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Net Assets
----------------
<S> <C>
Cisco Systems.......................... 5.8%
MCI Worldcom........................... 5.2%
Citigroup.............................. 4.3%
Tyco International..................... 4.3%
Lucent Technologies.................... 4.0%
</TABLE>
INVESTMENT RESULTS -- TOTAL RETURN
<TABLE>
<CAPTION>
Six Months One Year Since
Ended Ended Commencement
6/30/99 6/30/99 11/13/97
---------- --------- ------------
<S> <C> <C> <C>
Large Cap Growth....................... 13.37% 19.36% 28.81%
</TABLE>
STEIN ROE & FARNHAM INCORPORATED
3
<PAGE>
MID CAP EQUITY
Performance of the Mid Cap Equity Portfolio in the first quarter was poor,
down 6.9% (price change and reinvested distributions), but rebounded in the
second quarter, up 7.4%. Relative to the unmanaged Standard & Poor's Mid Cap 400
Index, performance was essentially flat in the first quarter and approximately
6.5% behind the Index in the second quarter and for the first half of the year.
This relative underperformance was primarily due to weakness in the stock
selection process.
Our approach is to buy stocks that offer "growth at a reasonable price." What
worked in the first quarter of 1999 (and all of 1998) was "growth at any price,"
with stocks with the highest price/earnings ratios (P/ E) outperforming the
market by a wide margin. What worked in the second quarter of 1999 was "value
regardless of growth," with the winners being stocks with low P/Es and no
business momentum. We are confident that investors will inevitably return to
focusing on actual company results and valuations. When they do, we should have
very strong relative performance. We believe the Portfolio is well positioned to
perform well when investors become more discriminating and choose stocks that
offer strong growth opportunities at below average P/Es.
We continue to expect the U.S. economy to produce moderate growth and
inflation to remain under control. The Federal Reserve Bank raised the Federal
Funds rate by 0.25% at its June meeting, reversing by one third the 0.75% easing
that it undertook last fall. The market fully expected this rate hike and
reacted positively when it was announced.
We are encouraged that the long and painful cycle of high P/E, large-cap
dominance seems to have been broken. The capitalization and value "winds" are no
longer blowing against us. When the market fully returns to more fundamental
factors for pricing stocks (earnings, estimates and valuation), the Portfolio's
performance should benefit.
TOP HOLDINGS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Net Assets
----------------
<S> <C>
Navistar International................. 2.6%
Ingersoll Rand......................... 1.8%
Synopsys............................... 1.8%
Unisys................................. 1.7%
Gannett................................ 1.7%
</TABLE>
INVESTMENT RESULTS -- TOTAL RETURN
<TABLE>
<CAPTION>
Six Months One Year Since
Ended Ended Commencement
6/30/99 6/30/99 11/13/97
---------- --------- ------------
<S> <C> <C> <C>
Mid Cap Equity......................... -0.18% -2.96% 7.36%
</TABLE>
STANDISH, AYER & WOOD, INC.
4
<PAGE>
SMALL CAP EQUITY
During the second quarter, small company stocks outpaced large company stocks
for the first time since the third quarter of 1993. Rebounding from record low
valuation levels, the small cap sector's reemergence was applauded by those
concerned with the market's heretofore-narrow strength and myopic focus on blue
chip multinationals. Emboldened by favorable corporate earnings results and the
U.S. economy's resolute strength, investors broadened their investment spectrum,
propelling long-time value laggards to market leadership.
The dual market rotation from growth to value and from large cap to small cap
occurred after strong first-quarter corporate earnings and improving
manufacturing data convinced investors that the domestic economy was not slowing
down. With overseas markets rebounding from the tumult of 1998, the domestic
economic outlook improved. Excited by renewed prospects for economic growth
eight years into the current expansion, investors were attracted to both
cyclical stocks and the lower valuations of the small cap sector. In fact,
cyclical stocks led the market, with the Morgan Stanley Cyclical Index up 20.1%.
And, proving the second-quarter dominance of small caps, the Russell 2000 Index
advanced 15.55% while the large cap S&P 500 Index climbed 7.05%.
The Small Cap Equity Portfolio outperformed the benchmark Russell 2000 Index,
16.95% (price change and reinvested distributions) to 15.55%, respectively, for
the quarter ended June 30, 1999. The portfolio's 21% allocation to cyclical
stocks such as Linens 'n Things and Gentex benefited performance as these stocks
rose along with the sector. Despite the fact that the technology sector as a
whole stagnated during the quarter, select technology issues within the
Portfolio continued to contribute positively to performance. Technology stocks
such as Micrel (up 47.8%), Liposome (up 42.3%), and Vitesse Semiconductor (up
33.2%) proved their mettle in a tough technology market. Holdings in less
traditional areas--including energy, transportation, and the capital goods
sectors--also benefited performance.
The expansion in market breadth and the accompanying small cap equity rebound,
establishes a solid foundation heading into the year's latter half. After
several years of relative underperformance, small- and mid-size companies are
poised for an extended rally, building on very favorable valuation levels,
strong earnings growth momentum and robust U.S. economic growth. The degree to
which investors favor small-cap stocks will most likely not maintain the second
quarter's rapid pace, but we expect positive contributions from diverse
industries and businesses favorably impacted by the market's renewed focus on
this sector.
TOP HOLDINGS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Net Assets
----------------
<S> <C>
U.S. Freightways....................... 1.6%
Alpharma............................... 1.6%
Jones Pharmaceutical................... 1.4%
Legg Mason............................. 1.4%
Linens 'n Things....................... 1.3%
</TABLE>
INVESTMENT RESULTS -- TOTAL RETURN
<TABLE>
<CAPTION>
Six Months One Year Since
Ended Ended Commencement
6/30/99 6/30/99 11/13/97
---------- --------- ------------
<S> <C> <C> <C>
Small Cap Equity....................... 10.20% -1.06% -6.44%
</TABLE>
STEIN ROE & FARNHAM INCORPORATED
5
<PAGE>
GROWTH & INCOME
Enhanced prospects for many global economies caused a fundamental shift from a
narrow market in 1998, when investors focused on a limited number of large-cap
growth stocks, to a broader market in 1999, favoring a variety of stocks
including those in cyclical industries, such as paper, aluminum and energy.
Driven by economic reforms in Japan, Asian markets showed signs of improvement.
Latin American markets, after a significant drop in January, appeared poised for
a similar rebound. The trend reversal occurred during the second quarter when
investors began to investigate opportunities in small-cap and value stocks.
Earlier this year, we sold several of our holdings in the technology sector as
they approached what we believed to be their full values. We used the proceeds
to build and add to positions in undervalued cyclical stocks, including
companies in the manufacturing and commodities industries. When cyclical stocks
advanced in April, the Portfolio was positioned to participate in the upswing.
The Portfolio generally reduced its investments in consumer-related companies
and in interest-rate-sensitive financial companies. It still maintains a focus
on insurance companies, however, as this segment continues to benefit from
industry consolidation.
Although themes in the market may deviate in the short term, we expect that
cyclical stocks will continue to perform well in the third quarter and into
year-end. Based on the meaningful steps Japan and other Pacific Rim countries
have taken to stimulate their economies, we believe global economic expansion
will slowly begin. Because of the severity and length of the recent period of
global disinflation, the valuation gap between growth and value stocks became
historically wide. We believe that stock prices for many cyclical companies do
not yet adequately reflect their earnings potential.
TOP HOLDINGS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Net Assets
---------------------
<S> <C>
AT&T................................... 3.5%
IBM.................................... 2.8%
Mobil.................................. 2.8%
Texas Instruments...................... 2.7%
Qualcomm............................... 2.7%
</TABLE>
INVESTMENT RESULTS -- TOTAL RETURN
<TABLE>
<CAPTION>
Six Months One Year Since
Ended Ended Commencement
6/30/99 6/30/99 11/13/97
---------- --------- ------------
<S> <C> <C> <C>
Growth & Income........................ 14.74% 17.38% 19.67%
</TABLE>
LORD, ABBET & CO.
6
<PAGE>
BALANCED
The Balanced Portfolio showed very strong performance during the first six
months of 1999. The six-month total return (price change and reinvested
distributions) through June 30, 1999 was 11.04%. The returns for the past twelve
months and since commencement (November 13, 1997) were 0.70% and 2.78%,
respectively. After an extremely difficult period in 1998 for high-yield
corporate and convertible bonds, the market turned toward more favorable to
these securities in 1999. This turnaround, combined with strong equity
performance, led the Portfolio to the improved returns. Asset allocation at June
30, 1999 was roughly 56% stocks, 15% corporate bonds and 29% convertible
securities. Despite the higher stock exposure, the Portfolio generated an
attractive current yield of more than 5%.
Last fall, investors sold virtually all asset classes except U.S. Treasuries
and large company stocks. There was a clear flight-to-safety for fear of an
Asian-led worldwide recession. As the U.S. economy remained strong and the
prospects for an Asian turnaround improved in 1999, investors gradually took
more risk. We feel this trend will continue throughout 1999, providing a
continued favorable backdrop for high-yield corporate bonds and convertible
securities. Convertible securities should benefit also from the recent recovery
of small company stocks.
We remain quite optimistic about the overall equity market. Compared to 1998
when the stock market was fueled by a select group of large-company growth
stocks, the market in 1999 has been much more balanced. Value stocks, stocks
whose fortunes are generally more tied to the health of the economy, have
performed better in 1999. As mentioned earlier, small-company stocks also have
rebounded sharply. In our opinion, most large-company growth stocks need time
for their earnings to catch up with their lofty stock prices. If current trends
continue, the Balanced Portfolio is well positioned to benefit.
TOP HOLDINGS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Net Assets
---------------------
<S> <C>
Kansas City Southern................... 4.7%
Elcor Corp............................. 4.3%
Bethlehem Steel........................ 3.6%
FDX Corp............................... 3.6%
Integrated Device Technologies 5.50%
6/01/02.............................. 3.6%
</TABLE>
INVESTMENT RESULTS -- TOTAL RETURN
<TABLE>
<CAPTION>
Six Months One Year Since
Ended Ended Commencement
6/30/99 6/30/99 11/13/97
---------- --------- ------------
<S> <C> <C> <C>
Balanced............................... 11.04% 0.70% 2.78%
</TABLE>
KORNITZER CAPITAL MANAGEMENT, INC.
7
<PAGE>
INTERMEDIATE FIXED INCOME
On the strength of its non-Treasury holdings, the Intermediate Fixed Income
Portfolio performed well ahead of its benchmark. The weakness of the bond market
in 1998 left Treasuries overvalued and non-Treasuries undervalued by a
substantial margin. The Portfolio entered 1999 with Treasury and Agency holdings
under 13%, dominated by mortgages and corporates whose initial yield advantage
was supplemented by the outperformance of these areas. The key was to retain
these holdings in the face of the potential threat of a new flight-to-quality.
That flight did not occur as the domestic economy performed well with limited
inflation. This strength was derived from consumer expenditures which we project
to continue at a moderated level in the second half. The decision by the Federal
Reserve Bank to raise rates and eliminate the tightening bias has given the
market needed support. In this environment, corporates and mortgages provided
outperformance. We have reduced the duration, or interest rate sensitivity, of
the Portfolio such that the recent rise in interest rates to over 6% has not
hurt on a relative basis.
The Portfolio's structure has changed only marginally in the belief that
market conditions of the first half will extend through the remainder of the
year. Thus, Treasuries and Agencies remain low, but they have increased as we
have taken profits in corporates. Mortgages remain high as prepayment and
refinancing fears have lessened in the market. Finally, the continuation of a
strong, domestic economy with minimal inflation argues that bonds are attractive
at current levels and the possibility of a new flight-to-quality is low. As
such, corporates and mortgages remain the heart of the portfolio while we keep a
watchful eye on wild card factors such as the economy's growth and what we think
will be benign Y2K effect domestically and in established nations.
TOP HOLDINGS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Net Assets
----------------
<S> <C>
US T-bond 8.125% 5/15/21............... 8.3%
GNMA 8.00% 7/15/29..................... 7.2%
GNMA 7.00% 7/15/28..................... 5.5%
FNMA 4.79% 7/8/99...................... 5.0%
Simon Debartolo Grp 7.125% 6/24/05..... 2.9%
</TABLE>
INVESTMENT RESULTS -- TOTAL RETURN
<TABLE>
<CAPTION>
Six Months One Year Since
Ended Ended Commencement
6/30/99 6/30/99 11/13/97
---------- --------- ------------
<S> <C> <C> <C>
Intermediate Fixed Income.............. -0.50% 0.92% 3.62%
</TABLE>
STANDISH, AYER & WOOD, INC.
8
<PAGE>
GLOBAL FIXED INCOME
The first half of 1999 was not a great environment for global bonds. The
crisis prone second half of 1998 caused panic buying of government debt and
global bonds became overvalued to extremes when central banks around the world,
led by the U.S. Federal Reserve Bank, responded to the crisis by aggressively
cutting interest rates.
The overriding sense of gloom started to lift by the spring of 1999 and the
overvalued bond market became vulnerable. By that time, there were positive
growth surprises in the world economy, especially in developing Asia and Japan,
while the U.S. economy maintained its above-trend growth track. The U.S. Federal
Reserve Bank, encouraged by signs of recovery and increased liquidity in the
world economy, instituted a tightening bias in May followed by a 25 basis point
interest rate hike on June 30. The total return in the 30-year Treasury Note was
down more than 10% by June 30.
Markets are now focused on how much the Fed needs to raise interest rates and
whether other central banks will follow the Fed's lead. That depends on a number
of variables, but fortunately measured inflation is low around the world, even
in the U.S. The implication is that the Fed is being preemptive and doesn't have
to wring the economy of stubborn inflation expectations. European and Japanese
central banks should keep interest rates at current settings into the year 2000.
The fundamental outlook for global bonds in the second half of 1999 is
beginning to look more positive as underlying value has been built into the
market. Offsetting this is the fact that economic momentum appears to continue
to gather steam. Bond markets are likely to remain under pressure until some
moderation in the pace of U.S. growth becomes evident. The Portfolio remains in
a moderately defensive posture, with an underweight position in Japan and
approximate benchmark weights in the U.S. and Europe. We continue to find
attractive securities in corporate bond markets around the world, with special
emphasis on the rapidly developing credit markets in Europe. The Global Fixed
Income Portfolio remains fully hedged into the U.S. dollar and also is
positioned through the options market to benefit if the yen weakens in coming
months.
TOP HOLDINGS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Net Assets
----------------
<S> <C>
Deutschland Rep 6.50% 10/14/05......... 4.4%
Treuhandstalt 7.125% 1/29/03........... 3.6%
Frf Btans 4.50% 7/12/02................ 3.5%
Treuhandstalt 7.50% 9/9/04............. 3.4%
Denmark Govt 8.00% 3/15/06............. 3.2%
</TABLE>
INVESTMENT RESULTS -- TOTAL RETURN
<TABLE>
<CAPTION>
Six Months One Year Since
Ended Ended Commencement
6/30/99 6/30/99 11/13/97
---------- --------- ------------
<S> <C> <C> <C>
Global Fixed Income.................... -0.10% 3.63% 5.40%
</TABLE>
STANDISH INTERNATIONAL MANAGEMENT CO., L.P.
9
<PAGE>
MONEY MARKET
As the world turned into 1999, so began the slow road to recovery for the
financial markets from the aftermath of the global crisis in late 1998. During
the first half of the year, interest rates in the United States increased
dramatically due to the unwinding of the flight-to-quality that took place in
October of 1998. On March 31, the two-to-thirty-year portion of the yield curve
increased approximately 50 basis points on early signs that the crisis was
beginning to cool. By June 30, interest rates were 100 basis points higher.
The second quarter saw evidence that the high-risk countries in Asia and South
America had indeed begun to rebound from near economic collapse, while the U.S.
economy continued to expand without visible signs of inflationary pressures. Low
unemployment, rising wages and a lofty stock market kept the Fed vigilant on the
inflation front despite the fragile nature of the global economy. Consequently,
interest rates continued to rise in the second quarter, compounded by massive
issuance of non-Treasury bonds. The Federal Reserve Bank reacted to the
deteriorating inflation fundamentals by adopting a bias toward higher interest
rates at the May 18 Federal Open Market Committee meeting, followed by a 25
basis point increase in the Federal Funds rate to 5% at the June 30 meeting.
Although inflation continues to remain benign, the decision to increase the
Federal Funds rate indicates the Fed has sufficient concern that the tight labor
market, exuberant stock market and generally strong pace of the economy may
nudge inflation higher. Indeed, while the economy has benefited from
productivity gains from many technological advances, the Fed has voiced concern
that the strong economic fundamentals may soon overtake improvements in
productivity. Federal Open Market Committee meetings in the second half of the
year will be closely watched for any indications of further actions.
INVESTMENT RESULTS -- TOTAL RETURN
<TABLE>
<CAPTION>
Six Months One Year Since
Ended Ended Commencement
6/30/99 6/30/99 11/13/97
---------- --------- ------------
<S> <C> <C> <C>
Money Market........................... 2.16% 4.60% 4.89%
</TABLE>
STANDISH, AYER & WOOD, INC.
PERFORMANCE DATA CONTAINED IN THIS REPORT IS FOR PAST PERIODS ONLY. PAST
PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND SHARE
VALUE WILL FLUCTUATE, AND REDEMPTION VALUE MAY BE MORE OR LESS THAN
ORIGINAL COST.
10
<PAGE>
LARGE CAP
VALUE
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<C> <S> <C>
SHARES COMPANY MARKET VALUE
--------------------------------------------------------------------------
COMMON STOCKS -- 96.28%
BASIC MATERIALS -- 14.20%
1,530 duPont (E.I.) deNemours & Co..................... $ 104,518
300 Martin Marietta Materials, Inc................... 17,700
1,770 Millennium Chemicals, Inc........................ 41,706
2,340 Potlatch Corp.................................... 102,814
3,050 USX-U.S. Steel Group............................. 82,350
1,480 Weyerhaeuser Co.................................. 101,750
1,990 Willamette Industries, Inc....................... 91,664
-------------
542,502
CAPITAL GOODS -- 7.33%
2,540 Boeing Co........................................ 112,236
1,850 Dana Corp........................................ 85,216
2,220 Lockheed Martin Corp............................. 82,695
-------------
280,147
CONSUMER CYCLICAL -- 15.40%
1,750 Harcourt General, Inc............................ 90,234
6,130 Kmart Corp.*..................................... 100,762
2,130 The Limited, Inc................................. 96,649
2,200 Penney (J.C.), Inc............................... 106,838
5,700 Reebok International Ltd......................... 106,162
1,970 Sears, Roebuck & Co.............................. 87,788
-------------
588,433
CONSUMER STAPLES -- 2.25%
2,002 Diageo PLC....................................... 86,086
-------------
ENERGY -- 5.29%
1,170 Atlantic Richfield Co............................ 97,768
1,730 Royal Dutch Petroleum Co......................... 104,232
-------------
202,000
FINANCIAL -- 26.31%
1,000 Aetna, Inc.*..................................... 89,438
2,080 Allstate Corp.................................... 74,620
700 American Express Co.............................. 91,087
31 Berkshire Hathaway, Inc. Cl. B*.................. 69,440
1,210 Chase Manhattan Corp............................. 104,816
1,965 Citigroup, Inc................................... 93,337
1,460 National City Corp............................... 95,630
2,170 SLM Holding Corp................................. 99,413
450 Student Loan Corp................................ 20,025
1,080 Transamerica Corp................................ 81,000
2,980 U.S. Bancorp..................................... 101,320
2,000 Wells Fargo & Co................................. 85,500
-------------
1,005,626
HEALTHCARE -- 4.70%
4,170 Tenet Healthcare Corp............................ 77,406
1,630 United Healthcare Corp........................... 102,079
-------------
179,485
<CAPTION>
SHARES COMPANY MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
MISCELLANEOUS -- 1.16%
1,000 Hanson PLC, ADR.................................. $ 44,375
-------------
TECHNOLOGY -- 10.53%
2,400 Apple Computer, Inc.*............................ 111,150
920 International Business Machines Corp............. 118,910
3,580 Wallace Computer Services, Inc................... 89,500
1,400 Xerox Corp....................................... 82,688
-------------
402,248
TRANSPORTATION & SERVICES -- 4.66%
2,100 CSX Corp......................................... 95,157
2,910 KLM Royal Dutch Airlines......................... 83,117
-------------
178,274
UTILITIES -- 4.45%
3,400 Illinova Corp.................................... 92,650
1,880 Texas Utilities Co............................... 77,550
-------------
170,200
-------------
TOTAL COMMON STOCKS................................................ 3,679,376
-------------
(Cost $3,306,677)
TOTAL INVESTMENTS -- 96.28%........................................ 3,679,376
(Cost $3,306,677)
Other assets less liabilities -- 3.72%............................. 142,046
-------------
TOTAL NET ASSETS -- 100.00%........................................ $ 3,821,422
-------------
-------------
</TABLE>
THE IDENTIFIED COST OF INVESTMENTS OWNED AT JUNE 30, 1999, WAS THE SAME FOR
FEDERAL INCOME TAX AND BOOK PURPOSES. NET UNREALIZED APPRECIATION FOR FEDERAL
INCOME TAX PURPOSES WAS $372,699, WHICH IS COMPRISED OF UNREALIZED APPRECIATION
OF $561,404 AND UNREALIZED DEPRECIATION OF $188,705.
* NON-INCOME PRODUCING SECURITY
11
<PAGE>
LARGE CAP
GROWTH
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<C> <S> <C>
SHARES COMPANY MARKET VALUE
- -------------------------------------------------------------------------
COMMON STOCKS -- 96.66%
CAPITAL GOODS -- 7.17%
1,500 Applied Materials, Inc.*......................... $ 110,812
1,500 Tyco International Ltd........................... 142,125
-------------
252,937
CONSUMER CYCLICAL -- 17.42%
1,500 Disney (Walt) Co................................. 46,219
1,100 General Electric Co.............................. 124,300
1,800 Home Depot, Inc.................................. 115,987
1,400 Kohl's Corp...................................... 108,062
1,800 Time-Warner, Inc................................. 132,300
3,000 Walgreen Co...................................... 88,125
-------------
614,993
CONSUMER STAPLES -- 8.53%
1,000 Coca-Cola Co..................................... 62,500
1,500 Gillette Co...................................... 61,500
4,000 Mattel, Inc...................................... 105,750
800 Procter & Gamble Co.............................. 71,400
-------------
301,150
ENERGY -- 1.80%
1,000 Schlumberger Ltd................................. 63,688
-------------
FINANCIAL -- 10.98%
1,100 American International Group, Inc................ 128,769
3,000 Citigroup, Inc................................... 142,500
1,700 Federal National Mortgage Assn................... 116,237
-------------
387,506
HEALTHCARE -- 12.46%
2,000 Cardinal Health, Inc............................. 128,250
1,700 Medtronic, Inc................................... 132,388
1,000 Pfizer, Inc...................................... 109,750
1,000 Warner-Lambert Co................................ 69,375
-------------
439,763
TECHNOLOGY -- 36.03%
2,000 A T & T Corp..................................... 111,625
500 America Online, Inc.*............................ 55,250
3,000 Cisco Systems, Inc.*............................. 193,500
2,400 Comcast Corp. Cl. A Spl*......................... 92,250
1,800 EMC Corp. MA..................................... 99,000
500 International Business Machines Corp............. 64,625
2,000 Lucent Technologies.............................. 134,875
2,000 MCI Worldcom, Inc................................ 172,500
1,400 Microsoft Corp................................... 126,262
1,200 Motorola, Inc.................................... 113,700
1,600 Tellabs, Inc..................................... 108,100
-------------
1,271,687
<CAPTION>
SHARES COMPANY MARKET VALUE
<C> <S> <C>
- -------------------------------------------------------------------------
TRANSPORTATION -- 2.27%
1,000 Omnicom Group.................................... $ 80,000
-------------
TOTAL COMMON STOCKS....................................... 3,411,724
-------------
(Cost $2,327,314)
TOTAL INVESTMENTS -- 96.66%............................... 3,411,724
(Cost $2,327,314)
Other assets less liabilities -- 3.34%.................... 117,852
-------------
TOTAL NET ASSETS -- 100.00%............................... $ 3,529,576
-------------
-------------
</TABLE>
THE IDENTIFIED COST OF INVESTMENTS OWNED AT JUNE 30, 1999, WAS THE SAME FOR
FEDERAL INCOME TAX AND BOOK PURPOSES. NET UNREALIZED APPRECIATION FOR FEDERAL
INCOME TAX PURPOSES WAS $1,084,410, WHICH IS COMPRISED OF UNREALIZED
APPRECIATION OF $1,107,136 AND UNREALIZED DEPRECIATION OF $22,726.
* NON-INCOME PRODUCING SECURITY
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
MID CAP
EQUITY
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<C> <S> <C>
SHARES COMPANY MARKET VALUE
--------------------------------------------------------------------------
COMMON STOCKS -- 97.00%
BASIC MATERIALS -- 1.09%
400 Air Products & Chemicals......................... $ 16,100
300 Ashland, Inc..................................... 12,037
-------------
28,137
CAPITAL GOODS -- 4.55%
400 Centex Corp...................................... 15,025
450 Crane............................................ 14,147
700 Ingersoll-Rand Co................................ 45,237
300 Lafarge Corp..................................... 10,631
500 Southdown, Inc................................... 32,125
-------------
117,165
CONSUMER CYCLICAL -- 18.29%
500 Brinker International, Inc....................... 13,594
200 Federated Deparment Stores, Inc.*................ 10,588
703 Flowers Industries, Inc.......................... 15,246
1,600 Interim Services*................................ 33,000
1,200 Jones Apparel Group, Inc.*....................... 41,175
1,000 Kroger Co.*...................................... 27,937
600 May Department Stores Co......................... 24,525
1,300 Navistar International*.......................... 65,000
600 Office Depot, Inc.*.............................. 13,238
500 Omnicom Group.................................... 40,000
400 Ross Stores, Inc................................. 20,150
600 Safeway, Inc.*................................... 29,700
1,200 Stewart Enterprises.............................. 17,475
800 Supervalu, Inc................................... 20,550
1,200 TJX Cos., Inc.................................... 39,975
400 Tommy Hilfiger Corp.*............................ 29,400
502 Xerox Corp....................................... 29,649
-------------
471,202
CONSUMER STAPLES -- 12.14%
500 Amgen, Inc....................................... 30,438
300 Ball Corp........................................ 12,675
800 Bergen Brunswig Cl. A............................ 13,800
500 Earthgrain Co.................................... 12,906
600 Gannett, Inc..................................... 42,825
400 Heinz (H.J.) Co.................................. 20,050
500 IBP, Inc......................................... 11,875
600 Kaufman & Broad Home............................. 14,925
700 Knight-Ridder, Inc............................... 38,456
200 Maytag Corp...................................... 13,938
700 Philip Morris Companies, Inc..................... 28,131
500 Sara Lee Corp.................................... 11,344
600 Schering-Plough.................................. 31,800
300 Suiza Food Group*................................ 12,562
804 Universal Foods.................................. 16,985
-------------
312,710
<CAPTION>
SHARES COMPANY MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
ENERGY -- 6.59%
1,600 American Power Conversion*....................... $ 32,200
215 British Petroleum Amoco PLC ADR.................. 23,327
200 Chevron Corp..................................... 19,038
800 Coastal Corp..................................... 32,000
300 DTE Energy Co.................................... 12,000
800 El Paso Energy Corp.............................. 28,150
300 Exxon Corp....................................... 23,138
-------------
169,853
FINANCIAL -- 20.81%
400 AMBAC Financial Group............................ 22,850
1,000 Americredit Corp.*............................... 16,000
750 Amsouth Bancorp.................................. 17,390
3 Chase Manhattan Corp............................. 260
1,000 Conseco, Inc..................................... 30,437
300 CountryWide Credit Industry Inc.................. 12,825
600 Cullen/Frost Bankers............................. 16,538
500 Dime Bancorp, Inc................................ 10,062
300 Federal Home Loan Mortgage Corp.................. 17,400
300 Federal National Mortgage Assn................... 20,513
600 Fleet Financial Group, Inc....................... 26,625
200 General Growth Properties........................ 7,100
200 Golden West Financial Co......................... 19,600
415 Liberty Property Trust........................... 10,323
610 North Fork Bancorp............................... 13,002
400 PMI Group, Inc................................... 25,125
600 Prentiss Properties Trust........................ 14,100
200 Protective Life Corp............................. 6,600
301 Relistar Financial Corp.......................... 13,169
300 SouthTrust Corp.................................. 11,512
1,200 Standard & Poor's 400 Mid-Cap Depository
Receipts..................................... 94,050
602 Standard & Poor's 500 Depository Receipts........ 82,446
500 Travelers Property Casualty Cl. A................ 19,562
500 Washington Mutual, Inc........................... 17,688
400 Webster Financial Corp........................... 10,850
-------------
536,027
HEALTHCARE -- 5.25%
500 Abbott Laboratories.............................. 22,750
800 Amerisource Health*.............................. 20,400
400 Orthodontic Centers of America*.................. 5,650
700 STERIS Corp.*.................................... 13,563
1,400 Sybron Corp.*.................................... 38,588
500 Universal Health Services, Inc.*................. 23,875
300 Watson Pharmaceutical, Inc.*..................... 10,519
-------------
135,345
</TABLE>
13
<PAGE>
MID CAP
EQUITY (CONTINUED)
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES COMPANY MARKET VALUE
--------------------------------------------------------------------------
<C> <S> <C>
TECHNOLOGY -- 21.64%
200 Adobe Systems, Inc............................... $ 16,431
300 Adaptec, Inc.*................................... 10,594
900 Apple Computer*.................................. 41,681
504 AT&T Corp.*...................................... 28,129
400 Black Box Corp.*................................. 20,050
700 BMC Software, Inc.*.............................. 37,800
600 Computer Association International, Inc.......... 33,000
1,100 Compuware Corp.*................................. 34,994
400 Cordant Technologies............................. 18,075
700 DSP Communications............................... 20,213
300 Hewlett Packard Co............................... 30,150
500 Intel Corp....................................... 29,750
200 International Business Machines Corp............. 25,850
400 Sun Microsystem, Inc.*........................... 27,550
950 Symbol Technologies.............................. 35,031
800 Synopsys, Inc.*.................................. 44,150
1,100 Unisys Corp.*.................................... 42,831
400 United Technologies.............................. 28,675
300 Visio Corp.*..................................... 11,419
400 Waters Corp.*.................................... 21,250
-------------
557,623
TRANSPORTATION & SERVICES -- 2.24%
300 General Dynamics Corp............................ 20,550
800 US Freightways Corp.............................. 37,050
-------------
57,600
UTILITIES -- 4.40%
400 Bell Atlantic Corp............................... 26,150
617 BellSouth Corp................................... 28,955
1,050 Century Telephone Enterprises.................... 41,737
302 FPL Group, Inc................................... 16,497
-------------
113,339
TOTAL COMMON STOCKS............................................... 2,499,001
-------------
(Cost $2,181,002)
<CAPTION>
FACE AMOUNT DESCRIPTION MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 7.45%
$ 192,000 State Street Bank and Co.,
3.50% due 7/01/99
(Collateralized by U.S.
Treasury Notes, 6.50%
due 8/31/01 with a
value of $196,974)........................... $ 192,000
-------------
(Cost $192,000)
TOTAL INVESTMENTS -- 104.45%...................................... 2,691,001
(Cost $2,373,002)
Other assets less liabilities -- (4.45%).......................... (114,651)
-------------
TOTAL NET ASSETS -- 100.00%....................................... $ 2,576,350
-------------
-------------
</TABLE>
THE IDENTIFIED COST OF INVESTMENTS OWNED AT JUNE 30, 1999, WAS THE SAME FOR
FEDERAL INCOME TAX AND BOOK PURPOSES. NET UNREALIZED APPRECIATION FOR FEDERAL
INCOME TAX PURPOSES WAS $317,999, WHICH IS COMPRISED OF UNREALIZED APPRECIATION
OF $393,754 AND UNREALIZED DEPRECIATION OF $75,755.
* NON-INCOME PRODUCING SECURITY
14
<PAGE>
SMALL CAP
EQUITY
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<C> <S> <C>
SHARES COMPANY MARKET VALUE
--------------------------------------------------------------------------
COMMON STOCKS -- 96.94%
BASIC MATERIALS -- 2.14%
600 Geon Co.......................................... $ 19,350
750 Stillwater Mining Co............................. 24,516
-------------
43,866
CAPITAL GOODS -- 4.06%
400 Applied Power, Inc. Cl. A........................ 10,925
700 Champion Enterprises, Inc.*...................... 13,037
800 D R Horton, Inc.................................. 13,300
1,100 Motive Power Industries, Inc.*................... 19,525
300 Orbital Sciences Corp............................ 7,087
300 SPS Technologies, Inc.*.......................... 11,250
500 Tetra Technology*................................ 8,250
-------------
83,374
CONSUMER CYCLICAL -- 18.49%
400 ADVO, Inc.*...................................... 8,300
500 Ames Department Stores, Inc.*.................... 22,813
400 Ann Taylor Stores Corp.*......................... 18,000
500 Applebee's International, Inc.................... 15,062
200 Catalina Marketing Corp.......................... 18,400
100 CEC Entertainment*............................... 4,225
600 CLARCOR, Inc..................................... 11,513
300 Consolidated Graphics*........................... 15,000
450 Ethan Allen Interiors............................ 16,988
700 HA-LO Industries, Inc.*.......................... 6,912
500 Harte-Hanks, Inc................................. 13,562
100 Henry (Jack) & Associates, Inc................... 3,925
400 Hollinger International, Inc..................... 4,750
200 K-Swiss, Inc. Cl. A.............................. 9,300
600 Linens'n Things, Inc.*........................... 26,250
600 Men's Wearhouse, Inc.*........................... 15,300
300 Metro Networks................................... 16,013
300 Mohawk Industries, Inc.*......................... 9,113
300 99 Cents Only Stores*............................ 14,981
400 O'Reilly Automotive*............................. 20,150
400 Polaris Industries, Inc.......................... 17,400
200 Radio One, Inc.*................................. 9,300
500 Ruby Tuesday, Inc................................ 9,500
400 School Specialty, Inc............................ 6,425
300 Scotts Co. Ohio Cl. A*........................... 14,288
800 Towere Automotive, Inc.*......................... 20,350
400 Tuesday Morning Corp.*........................... 10,200
300 TV Guide, Inc.*.................................. 10,988
300 Williams Sonoma, Inc.*........................... 10,444
-------------
379,452
CONSUMER STAPLES -- 4.84%
600 Aptargroup, Inc.................................. 18,000
300 Canadaigua Brands, Inc. Cl. A.................... 15,731
500 J & J Snack Food*................................ 12,000
200 Pixar, Inc....................................... 8,625
600 Smithfield Foods, Inc.*.......................... 20,063
100 Whole Food Market, Inc........................... 4,806
500 Zale Corp........................................ 20,000
-------------
99,225
<CAPTION>
SHARES COMPANY MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
ENERGY -- 4.30%
600 Barrett Resources Co............................. $ 23,025
300 Cal Dive International........................... 8,962
600 Devon Energy Corp................................ 21,450
800 Marine Drilling Co............................... 10,950
1,000 Patterson Energy, Inc............................ 9,875
1,845 Santa Fe Snyder Corp.*........................... 14,068
-------------
88,330
FINANCIAL -- 9.28%
410 Commerce Bancorp................................. 17,528
300 Centura Banks, Inc............................... 16,912
800 Cullen Frost Bankers, Inc........................ 22,050
200 E.W. Blanch Holdings, Inc........................ 13,637
500 Hambrecht & Quist Group.......................... 18,562
200 Heller Financial, Inc............................ 5,563
700 Legg Mason, Inc.................................. 26,950
500 Mutual Risk Management, Ltd...................... 16,687
800 Prism Financial Corp............................. 16,350
200 SEI Investments.................................. 17,650
200 U.S. Trust Corp.................................. 18,500
-------------
190,389
HEALTHCARE -- 13.73%
900 Alpharma, Inc.................................... 32,006
400 Biomatrix, Inc.*................................. 8,650
800 Cytyc Corp.*..................................... 15,600
200 Express Scripts*................................. 12,038
200 IDEC Pharmaceuticals Corp........................ 15,413
700 Idexx Laboratories, Inc.*........................ 16,319
700 Jones Pharma, Inc................................ 27,562
1,200 Liposome (The) Company, Inc.*.................... 22,950
200 Medimmune, Inc................................... 13,550
800 Orthodontic Centers of America*.................. 11,300
300 Priority Healthcare Corp. Cl. B.................. 10,350
700 Renal Care Group, Inc.*.......................... 18,113
800 Roberts Pharmaceutical Corp.*.................... 19,400
300 Sunrise Assisted Living, Inc..................... 10,462
500 Techne Corp.*.................................... 12,687
200 Visx, Inc.*...................................... 15,837
400 Xomed Surgical Products.......................... 19,475
-------------
281,712
MISCELLANEOUS -- 6.24%
700 American Management Systems, Inc.*............... 22,444
700 DeVry, Inc....................................... 15,662
500 Dionex Corp.*.................................... 20,250
300 G & K Services, Inc.............................. 15,712
300 Interim Services, Inc............................ 6,187
500 Iron Mountain, Inc.*............................. 14,313
450 Paychex, Inc..................................... 14,344
200 Profit Recovery Group International.............. 9,463
600 Ralcorp Holdings, Inc.*.......................... 9,638
-------------
128,013
</TABLE>
15
<PAGE>
SMALL CAP
EQUITY (CONTINUED)
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES COMPANY MARKET VALUE
--------------------------------------------------------------------------
<C> <S> <C>
TECHNOLOGY -- 27.71%
700 Acxiom Corp.*.................................... $ 17,456
200 Alliant Techsystems, Inc......................... 17,300
104 At Home Corp. Series A .......................... 5,609
400 BISYS Group*..................................... 23,400
500 Burr Brown Corp.*................................ 18,312
400 C-Cube Microsystems*............................. 12,675
700 Ciber, Inc.*..................................... 13,388
300 Comdisco, Inc.................................... 7,687
150 Comverse Technology*............................. 11,325
300 Covad Communications Group*...................... 15,994
200 CTS Corp......................................... 14,000
400 Entrust Technologies*............................ 13,300
300 ETEC Systems, Inc.*.............................. 9,975
600 Gentex Corp.*.................................... 16,800
500 ITC Deltacom, Inc.*.............................. 14,000
100 Inktomi Corp.*................................... 13,056
700 Inter-Tel, Inc................................... 12,775
200 Jones Intercable, Inc.*.......................... 9,800
250 Kronos, Inc.*.................................... 11,375
200 LAM Research Corp.*.............................. 9,337
500 Macromedia, Inc.*................................ 17,625
500 Mercury Interactive Corp......................... 17,688
300 Micrel Semiconductor*............................ 22,200
100 Qlogic Corp.*.................................... 13,200
600 National Computer Systems, Inc................... 20,250
400 National Instruments Corp.*...................... 16,150
300 New England Business Service..................... 9,263
200 Northpoint Communications Group*................. 7,300
200 Novellus Systems*................................ 13,650
500 Plexus........................................... 15,062
200 Sanmina Corp.*................................... 15,175
200 Sapient Corp.*................................... 11,325
500 SPSS, Inc........................................ 12,844
300 Transaction Systems Architects*.................. 11,700
100 Uniphase Corp.*.................................. 16,600
200 Verity*.......................................... 10,838
100 Veritas Software Corp.*.......................... 9,494
300 Vitesse Semiconductor Corp.*..................... 20,231
800 Whittman-Hart, Inc.*............................. 25,400
500 Xircom, Inc.*.................................... 15,031
-------------
568,590
<CAPTION>
SHARES COMPANY MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
TRANSPORTATION & SERVICES -- 4.55%
300 American Freightways Corp........................ $ 5,869
600 Expeditors International......................... 16,350
200 Forward Air Corp.*............................... 5,625
200 Lason, Inc.*..................................... 9,925
300 Metzler (The) Group, Inc.*....................... 8,288
600 SkyWest, Inc..................................... 14,963
700 U.S. Freightways Corp.*.......................... 32,419
-------------
93,439
UTILITIES -- 1.60%
400 Calpine Corp.*................................... 21,600
300 New Jersey Resources Corp........................ 11,231
-------------
32,831
-------------
TOTAL COMMON STOCKS................................................ 1,989,221
-------------
(Cost $1,716,319)
TOTAL INVESTMENTS -- 96.94%........................................ 1,989,221
(Cost $1,716,319)
Other assets less liabilities -- 3.06%............................. 62,889
-------------
TOTAL NET ASSETS -- 100.00%........................................ $ 2,052,110
-------------
-------------
</TABLE>
THE IDENTIFIED COST OF INVESTMENTS OWNED AT JUNE 30, 1999 WAS THE SAME FOR
FEDERAL INCOME TAX AND BOOK PURPOSES. NET UNREALIZED APPRECIATION FOR FEDERAL
INCOME TAX PURPOSES WAS $272,902, WHICH IS COMPRISED OF UNREALIZED APPRECIATION
OF $340,675 AND UNREALIZED DEPRECIATION OF $67,773.
* NON-INCOME PRODUCING SECURITY
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
GROWTH AND
INCOME
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<C> <S> <C>
SHARES COMPANY MARKET VALUE
--------------------------------------------------------------------------
COMMON STOCKS -- 90.03%
BASIC MATERIALS -- 4.91%
800 Alcoa, Inc.*..................................... $ 49,500
1,500 International Paper Co........................... 75,750
800 Rohm & Haas Co................................... 34,300
-------------
159,550
CAPITAL GOODS -- 3.52%
300 Allied Signal, Inc............................... 18,900
1,300 Deere & Co....................................... 51,512
700 Emerson Electric Co.............................. 44,012
-------------
114,424
CONSUMER CYCLICAL -- 8.67%
1,000 CBS Corp......................................... 43,438
800 Dow Jones & Company, Inc......................... 42,450
1,100 Federated Department Stores, Inc.*............... 58,231
600 Ford Motor Co.................................... 33,862
400 Gannett.......................................... 28,550
1,400 Waste Management, Inc............................ 75,250
-------------
281,781
CONSUMER STAPLES -- 3.50%
1,300 Heinz (H.J.) Co.................................. 65,162
1,600 Ralston Purina Group............................. 48,700
-------------
113,862
ENERGY -- 11.72%
400 Atlantic Richfield Co............................ 33,425
500 British Petroleum Co............................. 54,250
1,600 Coastal Corp..................................... 64,000
900 Mobil Corp....................................... 89,100
400 Schlumberger Ltd................................. 25,475
600 Texaco, Inc...................................... 37,500
1,200 Total ADR........................................ 77,325
-------------
381,075
FINANCIAL -- 18.11%
1,200 ACE ltd.......................................... 33,900
300 Aetna, Inc....................................... 26,831
900 Allstate Corp.................................... 32,288
1,000 American General Corp............................ 75,375
1,000 Aon Corp......................................... 41,250
400 Bank of America Corp............................. 29,325
1,100 Banc One Corp.................................... 65,519
500 Cigna Corp....................................... 44,500
700 Chase Manhattan Corp............................. 60,638
1,100 Fleet Financial Group, Inc....................... 48,813
400 Morgan Stanley, Dean Witter...................... 41,000
1,200 St. Paul Cos..................................... 38,175
1,200 Wells Fargo...................................... 51,300
-------------
588,914
HEALTHCARE -- 6.05%
1,300 American Home Products........................... 74,750
700 Baxter International............................. 42,438
1,000 Columbia HCA/Healthcare.......................... 22,813
1,000 Pharmacia & UpJohn, Inc.......................... 56,811
-------------
196,812
<CAPTION>
SHARES COMPANY MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
TECHNOLOGY -- 22.76%
2,000 A T & T Corp..................................... $ 111,625
2,500 Cadence Design System............................ 31,875
1,500 First Data Corp.................................. 73,406
500 Honeywell, Inc................................... 57,938
800 International Business Machines Corp............. 103,400
600 MCI WorldCom, Inc................................ 51,750
400 Oracle*.......................................... 14,850
600 Qualcomm, Inc.................................... 86,100
1,000 Sun Microsystems, Inc............................ 68,875
600 Texas Instruments................................ 87,000
900 Xerox Corp....................................... 53,156
-------------
739,975
UTILITIES -- 10.79%
900 Alltell Corp..................................... 64,350
1,100 Bell Atlantic Corp............................... 71,913
1,100 Carolina Power & Light........................... 47,094
1,100 Duke Energy Corp................................. 59,813
1,600 FirstEnergy Corp................................. 49,600
1,000 SBC Communication, Inc........................... 58,000
-------------
350,770
TOTAL COMMON STOCKS............................................... 2,927,163
-------------
(Cost $2,287,274)
CONVERTIBLE PREFERRED STOCKS -- 3.95%
500 Aetna, Inc....................................... 37,125
200 Comcast Corp.*................................... 17,300
800 Owens Illinois, Inc.............................. 35,000
600 Unisys Corp. Series A............................ 39,075
-------------
TOTAL CONVERTIBLE PREFERRED STOCKS................................ 128,500
-------------
(Cost $120,033)
PREFERRED STOCK -- 1.47%
400 Houston Industries............................... 47,700
-------------
TOTAL INVESTMENTS -- 95.45%....................................... 3,103,363
(Cost $2,439,775)
Other assets less liabilities -- 4.55%............................ 147,789
-------------
TOTAL NET ASSETS -- 100.00%....................................... $ 3,251,152
-------------
-------------
</TABLE>
THE IDENTIFIED COST OF INVESTMENTS OWNED AT JUNE 30, 1999, WAS THE SAME FOR
FEDERAL INCOME TAX AND BOOK PURPOSES. NET UNREALIZED APPRECIATION FOR FEDERAL
INCOME TAX PURPOSES WAS $663,588, WHICH IS COMPRISED OF UNREALIZED APPRECIATION
OF $708,202 AND UNREALIZED DEPRECIATION OF $44,614.
* NON-INCOME PRODUCING SECURITY
17
<PAGE>
BALANCED
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<C> <S> <C>
SHARES COMPANY MARKET VALUE
--------------------------------------------------------------------------
COMMON STOCKS -- 54.74%
BASIC MATERIALS -- 3.10%
4,000 Republic Group, Inc.............................. $ 72,000
1,500 Steel Dynamics, Inc.*............................ 23,203
-------------
95,203
CAPITAL GOODS -- 1.21%
1,000 Lockheed Martin Corp............................. 37,250
-------------
CONSUMER CYCLICAL -- 18.87%
1,000 Barnes & Noble, Inc.............................. 27,375
1,000 Brunswick Corp................................... 27,875
750 Carnival Corp.................................... 36,375
500 Dillard's, Inc. Cl. A............................ 17,562
3,000 Elcor Corp....................................... 131,063
2,125 Ethan Allen Interiors, Inc....................... 80,219
2,000 Interface, Inc................................... 17,250
2,000 Kmart Corp.*..................................... 32,875
1,000 Liz Claiborne, Inc............................... 36,500
2,000 Mirage Resorts, Inc.............................. 33,500
2,000 Service Corp. International...................... 38,500
3,000 ServiceMaster Ltd. Partnership................... 56,250
1,000 Strayer Education, Inc........................... 30,687
500 Sylvan Learning Systems, Inc..................... 13,594
-------------
579,625
CONSUMER STAPLES -- 1.32%
250 PepsiCo, Inc..................................... 9,672
1,000 Walt Disney Co................................... 30,812
-------------
40,484
ENERGY -- 5.83%
14,000 Frontier Oil Corp.*.............................. 95,375
1,000 McDermott International, Inc..................... 28,250
1,500 Nabors Industries*............................... 36,656
1,950 Ocean Energy, Inc................................ 18,769
-------------
179,050
FINANCIAL -- 5.15%
1,000 Allstate Corp.................................... 35,875
250 American Express Co.............................. 32,531
500 Fleet Financial Group, Inc....................... 22,187
500 Union Planters Corp.............................. 22,344
500 Unum Corp........................................ 27,375
500 Washington Mutual................................ 17,687
-------------
157,999
<CAPTION>
SHARES COMPANY MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
HEALTHCARE -- 3.78%
1,000 Merck & Company, Inc............................. $ 74,000
1,000 Quintiles Transnational.......................... 42,000
-------------
116,000
TECHNOLOGY -- 4.93%
1,000 Alcatel Alsthom.................................. 28,375
1,500 Diebold, Inc..................................... 43,125
200 IBM Corp......................................... 25,850
1,500 Scientific Atlantic.............................. 54,000
-------------
151,350
TRANSPORTATION -- 9.22%
2,000 FDX Corp.*....................................... 108,500
2,250 Kansas City Southern............................. 143,578
1,000 Southwest Airlines Co............................ 31,125
-------------
283,203
UTILITIES -- 1.33%
500 Enron Corp....................................... 40,875
-------------
TOTAL COMMON STOCKS.......................................... 1,681,039
-------------
(Cost $1,756,432)
CONVERTIBLE PREFERRED STOCKS -- 11.76%
3,000 Bethlehem Steel.................................. 108,750
2,000 Cyprus Amax Minerals Co.......................... 91,000
2,000 Freeport McMoRan................................. 37,500
6,000 ICO, Inc......................................... 77,625
250 Kmart Financing.................................. 14,625
800 Texas Industries, Inc............................ 31,700
-------------
TOTAL CONVERTIBLE PREFERRED STOCKS........................... 361,200
-------------
(Cost $323,207)
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
FACE
AMOUNT DESCRIPTION MARKET VALUE
--------------------------------------------------------------------------
<C> <S> <C>
CORPORATE BONDS -- 14.98%
$ 100,000 Eagle Geophysical, Inc.,
10.75% due 7/15/08........................... $ 52,500
50,000 Frontier Oil Corp.,
9.125% due 2/15/06........................... 47,750
40,000 Kmart Funding, Series G,
9.44% due 12/01/14........................... 38,989
75,000 Kaiser Aluminum & Chemical Corp.,
12.75% due 2/01/03........................... 76,875
50,000 Republic Group,
9.50% due 7/15/08............................ 49,500
50,000 Specialty Retailers,
9.00% due 7/15/07............................ 30,250
125,000 United Refining Co.,
10.75% due 6/15/07........................... 85,625
100,000 Wiser Oil Co.,
9.5% due 5/15/07............................. 78,500
-------------
TOTAL CORPORATE BONDS........................................ 459,989
-------------
(Cost $504,446)
<CAPTION>
FACE
AMOUNT DESCRIPTION MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS -- 16.53%
55,000 Allwaste, Inc.,
7.25% due 6/01/14............................ $ 4,400
125,000 HMT Technology,
5.75% due 1/15/04............................ 47,344
125,000 Integrated Device Technologies,
5.50% due 6/01/02............................ 101,875
100,000 Intervac, Inc.,
6.50% due 3/01/04............................ 62,625
125,000 Key Energy,
5.00% due 9/15/04............................ 78,750
101,000 Lomak Petroleum,
6.00% due 2/01/07............................ 62,873
50,000 Micron Technology,
7.00% due 7/01/04............................ 51,375
50,000 National Semiconductor 144A,
6.50% due 10/01/02........................... 47,688
75,000 Sabratek Corp.,
6.00% due 4/15/05............................ 50,719
-------------
TOTAL CONVERTIBLE CORPORATE BONDS............................ 507,649
-------------
(Cost $587,984)
TOTAL INVESTMENTS -- 98.01%.................................. 3,009,877
(Cost $3,172,069)
Other assets less liabilities -- 1.99%....................... 61,018
-------------
TOTAL NET ASSETS -- 100.00%.................................. $ 3,070,895
-------------
-------------
</TABLE>
THE IDENTIFIED COST OF INVESTMENTS OWNED AT JUNE 30, 1999, WAS THE SAME FOR
FEDERAL INCOME TAX AND BOOK PURPOSES. NET UNREALIZED DEPRECIATION FOR FEDERAL
INCOME TAX PURPOSES WAS $162,192, WHICH IS COMPRISED OF UNREALIZED APPRECIATION
OF $314,697 AND UNREALIZED DEPRECIATION OF $476,889.
* NON-INCOME PRODUCING SECURITY
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
INTERMEDIATE
FIXED INCOME
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<C> <S> <C>
SHARES COMPANY MARKET VALUE
--------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 0.83%
500 Equity Office Properties......................... $ 21,250
-------------
(Cost $25,000)
<CAPTION>
FACE
AMOUNT DESCRIPTION MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
CORPORATE BONDS -- 35.90%
$ 10,000 American Standard,
7.125% due 2/15/03........................... 9,750
25,000 Aramark Services,
6.75% due 8/01/04............................ 24,078
25,000 Bank of Boston Home,
6.140% due 6/25/13........................... 23,688
25,000 Bear Sterns,
6.15% due 3/02/04............................ 24,265
25,000 Blount, Inc.,
7.00% due 6/15/05............................ 23,968
25,000 Chase Commercial Mortgage,
7.37% due 12/19/07........................... 23,563
50,000 Conseco Financial,
6.80% due 6/15/05............................ 47,221
75,000 Crescent Real Estate,
7.50% due 9/15/07............................ 64,234
50,000 Criimi Mae, Inc.,
9.125% due 12/01/02.......................... 41,000
25,000 First Security,
5.875% due 11/01/03.......................... 24,030
25,000 Fred Meyer,
7.45% due 3/01/08............................ 25,198
15,000 GS Escrow Corp.,
7.00% due 8/01/03............................ 14,428
30,000 GS Escrow Corp.,
7.125% due 8/01/05........................... 28,832
25,000 Homeside Lending,
6.75% due 8/01/04............................ 24,771
25,000 IMC Global,
7.625% due 11/01/05.......................... 25,481
25,000 Lear Corp.,
7.96% due 5/15/05............................ 24,370
50,000 Lehman Brothers,
6.625% due 12/27/02.......................... 49,195
50,000 MMI Cap Trust,
7.625% due 12/15/27.......................... 41,393
25,000 National Westminster Bank,
7.75% due 4/29/49............................ 24,591
25,000 News America Holdings,
7.75% due 12/1/45............................ 23,769
25,000 North Fork Cap Trust,
8.00% due 12/15/27........................... 23,883
25,000 NVR, Inc.,
8.00% due 6/01/05............................ 24,375
25,000 Qwest Communications,
7.50% due 11/01/08........................... 24,344
25,000 Republic Service,
7.125% due 5/15/09........................... 24,384
75,000 Simon Debartolo,
7.125% due 6/24/05........................... 72,805
<CAPTION>
FACE
AMOUNT DESCRIPTION MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
15,000 Smithfield Foods, Inc.,
7.625% due 2/15/08........................... $ 13,650
25,000 Southland Corp.,
4.50% due 6/15/04............................ 20,375
50,000 Tenet Healthcare Corp.,
8.625% due 12/01/03.......................... 50,480
25,000 Tricon Global Restaurants,
7.45% due 5/15/05............................ 24,911
25,000 UPM-Kymmene Corp.,
7.45% due 11/26/27........................... 23,785
25,000 U.S. Bancorp,
6.00% due 5/15/04............................ 24,211
-------------
TOTAL CORPORATE BONDS............................................. 915,028
-------------
(Cost $968,410)
GOVERNMENT SPONSORED -- 40.81%
Federal National Mortgage Assn.
25,000 5.125% due 2/13/04........................... 23,969
16,846 9.00% due 11/01/25........................... 17,931
69,382 6.50% due 5/01/14............................ 68,537
75,000 6.00% due 6/01/29............................ 70,758
125,000 4.79% due 7/08/99............................ 124,884
50,000 4.76% due 7/19/99............................ 49,881
Government National Mortgage Assn.
175,000 8.00% due 7/15/29............................ 180,003
34,629 9.00% due 12/15/17........................... 36,880
24,262 7.00% due 2/15/26............................ 23,936
24,975 7.00% due 4/15/28............................ 24,640
23,568 7.00% due 11/15/27........................... 23,251
24,403 7.00% due 3/15/28............................ 24,076
50,048 7.00% due 7/15/28............................ 49,531
49,907 7.00% due 8/15/28............................ 49,237
139,100 7.00% due 7/15/28............................ 137,231
39,928 7.00% due 11/15/28........................... 39,392
49,999 6.50% due 3/15/29............................ 48,077
49,995 6.50% due 6/15/29............................ 48,073
-------------
TOTAL GOVERNMENT SPONSORED........................................ 1,040,287
-------------
(Cost $1,055,588)
U.S. GOVERNMENT SECURITIES -- 17.00%
U.S. Treasury Notes
25,000 4.625% due 11/30/00.......................... 24,727
75,000 5.75% due 11/30/02........................... 75,117
100,000 4.75% due 11/15/08........................... 91,813
U.S. Treasury Bond
170,000 8.125% due 5/15/21........................... 206,497
U.S. Treasury Inflation Index Bond
20,669 3.625% due 7/15/02........................... 20,476
U.S. Treasury Strip
50,000 0% due 2/15/19............................... 14,550
-------------
TOTAL U.S. GOVERNMENT SECURITIES.................................. 433,180
-------------
(Cost $442,178)
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
FACE
AMOUNT DESCRIPTION MARKET VALUE
--------------------------------------------------------------------------
<C> <S> <C>
COLLATERAL MORTGAGE OBLIGATIONS -- 2.84%
25,000 GMAC Mtg. Oakwood Mortgage Inv.,
6.853% due 9/15/06........................... $ 25,278
25,000 Greentree,
6.94% due 12/01/27........................... 24,095
25,000 Greentree,
7.14% due 2/01/21............................ 23,078
-------------
TOTAL COLLATERAL MORTGAGE OBLIGATIONS.............................
72,451
-------------
(Cost $76,477)
<CAPTION>
FACE
AMOUNT DESCRIPTION MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 8.83%
$ 225,000 State Street Bank and Trust Co.,
3.50% due 7/01/99
(Collateralized by U.S.
Treasury Notes, 5.25%
due 1/31/01 with a
value of $233,638)........................... $ 225,000
-------------
(Cost $225,000)
TOTAL INVESTMENTS -- 106.21%...................................... 2,707,196
(Cost $2,792,653)
Other assets less liabilities -- (6.21%).......................... (158,224)
-------------
TOTAL NET ASSETS -- 100.00%....................................... $ 2,548,972
-------------
-------------
</TABLE>
THE IDENTIFIED COST OF INVESTMENTS OWNED AT JUNE 30, 1999, WAS THE SAME FOR
FEDERAL INCOME TAX AND BOOK PURPOSES. NET UNREALIZED DEPRECIATION FOR FEDERAL
INCOME TAX PURPOSES WAS $85,457 WHICH IS COMPRISED OF UNREALIZED APPRECIATION OF
$1,019 AND UNREALIZED DEPRECIATION OF $86,476.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
GLOBAL FIXED
INCOME
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<C> <S> <C>
FACE
AMOUNT* DESCRIPTION MARKET VALUE
--------------------------------------------------------------------------
CORPORATE BONDS -- 42.93%
DENMARK -- 1.93%
1,000 Denmark Realkredit, 8.00% due 10/01/26........... $ 146
552,000 Denmark Unicredit, 6.00% due 10/01/29............ 72,814
125,000 Denmark NYCredit, 5.00% due 10/01/29............. 15,432
143,000 Danske Kredit, 5.00% due 10/01/29................ 17,690
-------------
106,082
FRANCE -- 3.37%
175,000 FRF Btans, 4.50% due 7/12/02..................... 184,861
-------------
GERMANY -- 1.18%
15,000 DBR, 6.50% due 7/04/27........................... 17,891
46,016 Depfa Bank, 4.75% due 7/15/08.................... 47,178
-------------
65,069
MEXICO -- 0.95%
50,000 Mexico Global, 6.542% due 4/07/04................ 52,424
-------------
NETHERLANDS -- 0.94%
50,000 KPN-Qwest B.V., 7.125% due 6/01/09............... 51,458
-------------
UNITED KINGDOM -- 6.00%
14,000 Abbey National, 7.75% due 12/31/03............... 23,363
100,000 Alliance & Leic, 8.75% due 12/07/06.............. 175,713
50,000 Birmghm Mdshre Bld Soc, 9.125% due 1/05/06....... 89,205
25,000 Merrill Lynch,
7.375% due 12/17/07.......................... 41,281
-------------
329,562
UNITED STATES -- 28.56%
10,000 American Standard, 7.125% due 2/15/03............ 9,750
50,000 American Standard, 7.125% due 1/06/06............ 51,265
25,000 Aramark Services, 6.75% due 8/01/04.............. 24,078
15,000 Avalon Bay Com, 6.50% due 7/15/03................ 14,584
25,000 Canada, 5.25% due 11/05/08....................... 22,497
50,000 City National Corp., 6.375% due 1/15/08.......... 47,142
50,000 Conseco Financial Notes, 6.80% due 6/15/05....... 47,221
75,000 Crescent Real Estate, 7.50% due 9/15/07.......... 64,234
50,000 Criimi Mae Inc., 9.125% due 12/01/02............. 41,000
50,000 Diageo PLC, 6.625% due 6/24/04................... 50,030
49,339 DLJCMC 99-CG, 6.08% due 8/10/08.................. 48,153
15,000 GS Escrow Corp., 7.00% due 8/01/03............... 14,428
85,000 GS Escrow Corp., 7.125% due 8/01/05.............. 81,689
25,000 Homeside Lending, 6.75% due 8/01/04.............. 24,771
<CAPTION>
FACE
AMOUNT* DESCRIPTION MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
25,000 IMC Global, 7.625% due 11/01/05.................. $ 25,482
50,000 Lehman Brothers, 6.625% due 12/27/02............. 49,195
50,000 Lenfest Communications, 10.50% due 6/15/06....... 57,750
50,000 Morgan Stanley, 5.625% due 1/20/04............... 47,812
50,000 MMI Cap Trust, nts., 7.625% due 12/15/27......... 41,394
50,000 National Westminster Bank, 7.75% due 4/29/49..... 49,181
50,000 Newcourt, 6.875% due 2/16/05..................... 48,425
25,000 News Amer Holdings, 7.75% due 12/01/45........... 23,769
25,000 Niagra Mohawk Power, 7.75% due 10/01/08.......... 25,769
25,000 NVR, Inc., 8.00% due 6/01/05..................... 24,375
25,000 Paine Webber, 6.375% due 5/15/04................. 24,376
35,000 Panama, 7.875% due 2/13/02....................... 33,950
20,000 Panama, 8.875% due 9/30/27....................... 16,450
25,000 Panamsat Corp., 6.00% due 1/15/03................ 24,490
25,000 Panamsat Corp., 6.125% due 1/15/05............... 24,149
25,000 Qwest Communications, 0% due 2/01/08............. 18,625
25,000 Qwest Communications, 7.50% due 11/01/08......... 24,344
25,000 Safeway Stores, 6.05% due 11/15/03............... 24,464
75,000 Simon Debartolo, 7.125% due 6/24/05.............. 72,805
50,000 Smithfield Foods, Inc., 7.625% due 2/15/08....... 45,500
25,000 Speedway Motor, 8.50% due 8/15/07................ 25,031
25,000 Star Bank Corp., 5.875% due 11/01/03............. 24,254
50,000 Tenet Healthcare Corp., 8.00% due 1/15/05........ 48,937
50,000 Time Warner, Inc., 7.75% due 6/15/05............. 51,558
25,000 Tricon Global Rest, 7.45% due 5/15/05............ 24,911
25,000 Tricon Global Rest, 7.65% due 5/15/08............ 24,804
30,000 UCFC Home Equi, 6.315% due 4/15/30............... 28,772
25,000 Union Planters, 6.50% due 3/15/18................ 23,615
50,000 UPM-Kymmene Corp., 7.45% due 11/26/27............ 47,569
25,000 Wellsford Reit, 9.375% due 2/01/02............... 25,940
-------------
1,568,538
TOTAL CORPORATE BONDS.............................................. 2,357,994
-------------
(Cost $2,481,083)
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
FACE
AMOUNT* DESCRIPTION MARKET VALUE
--------------------------------------------------------------------------
<C> <S> <C>
GOVERNMENT BONDS -- 42.59%
ARGENTINA -- 0.57%
20,000 Argentina Govt., 11.50% due 8/14/01.............. $ 31,555
-------------
DENMARK -- 3.01%
1,000,000 Denmark Govt., 8.00% due 3/15/06................. 165,415
-------------
FRANCE -- 0.77%
38,112 France OAT,** 6.00% due 10/25/25................. 42,406
-------------
GERMANY -- 19.27%
76,693 Bundesobl, 5.75% due 8/22/00..................... 81,466
80,000 Bundesobl, 3.25% due 2/17/04..................... 80,367
59,999 Deutschland Republic, 8.25% due 9/20/01.......... 68,213
35,790 Deutschland Republic, 8.375% due 5/21/01......... 40,302
62,782 Deutschland Republic, 9.00% due 1/22/01.......... 70,387
200,000 Deutschland Republic, 6.50% due 10/14/05......... 231,423
35,000 Deutschland Republic, 4.75% due 7/04/08.......... 36,687
76,693 German Unity Fund, 8.50% due 2/20/01............. 85,651
165,000 Treuhandanstalt, 7.125% due 1/29/03.............. 188,798
146,693 Treuhandanstalt, 7.50% due 9/09/04............... 175,055
-------------
1,058,349
ITALY -- 0.97%
50,000 BTPS, 5.00% due 2/15/03**........................ 53,382
-------------
JAPAN -- 5.97%
5,000,000 Italy Euroyen, 5.125% due 7/29/03................ 48,072
7,000,000 Italy Euroyen, 3.75% due 6/08/05................. 66,026
10,000,000 JGB, 3.40% due 3/22/04........................... 91,330
3,000,000 South Africa, 3.35% due 6/17/04.................. 24,340
10,000,000 Spanish Kingdom Euroyen, 4.75% due 3/14/05....... 98,235
-------------
328,003
NETHERLANDS -- 1.59%
10,000 Netherland Govt., 5.75% due 9/15/02.............. 10,978
80,000 Netherland Govt., 3.75% due 7/15/09.............. 76,426
-------------
87,404
<CAPTION>
FACE
AMOUNT* DESCRIPTION MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
NEW ZEALAND -- 1.89%
90,000 New Zealand Govt., 8.00% due 4/15/04............. $ 51,050
90,000 New Zealand Govt., 10.00% due 3/15/02............ 52,683
-------------
103,733
SINGAPORE -- 1.40%
90,000 Singapore Govt., 3.50% due 2/01/04............... 52,265
40,000 Singapore Govt., 5.125% due 11/15/04............. 24,537
-------------
76,802
SWEDEN -- 2.84%
1,300,000 Sweden Govt., 5.00% due 1/15/04.................. 156,093
-------------
UNITED KINGDOM -- 3.86%
70,000 UK Gilt Treasury, 8.00% due 6/10/03.............. 120,287
50,000 UK Gilt Treasury, 10.00% due 9/08/03............. 91,652
-------------
211,939
URUGUAY -- 0.45%
45,000 Banco Comercia, 8.25% due 10/04/00............... 24,484
-------------
TOTAL GOVERNMENT BONDS............................................. 2,339,565
-------------
(Cost $2,475,268)
U.S. GOVERNMENT SPONSORED -- 5.05%
125,000 Federal National Mortgage Assn., 6.50% due
7/01/29...................................... 120,586
132,014 Federal National Mortgage Assn., 7.00% due
11/01/27..................................... 130,998
25,000 Government National Mortgage Assn., 8.00% due
7/15/29...................................... 25,715
-------------
TOTAL U.S. GOVERNMENT SPONSORED.................................... 277,299
-------------
(Cost $278,117)
U.S. GOVERNMENT SECURITIES -- 6.18%
U.S. Inflation Index Bonds
26,117 3.375% due 1/15/07........................... 25,057
62,010 3.625% due 7/15/02........................... 61,429
150,000 U.S. Treasury Notes 4.75% due 11/15/08........... 137,719
95,000 U.S. Treasury Bonds 8.125% due 5/15/21........... 115,395
-------------
TOTAL U.S. GOVERNMENT SECURITIES................................... 339,600
-------------
(Cost $344,339)
</TABLE>
23
<PAGE>
GLOBAL FIXED
INCOME (CONTINUED)
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES COMPANY MARKET VALUE
--------------------------------------------------------------------------
<C> <S> <C>
CONVERTIBLE PREFERRED STOCK -- 0.39%
500 Equity Office Properties......................... $ 21,250
-------------
(Cost $25,000)
<CAPTION>
SHARES EXPIRATION DATE/EXERCISE PRICE MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
CALL OPTIONS PURCHASED -- 0.73%
Brazilian Real Cruzeiro
100,000 Sept 99 / 1.350.............................. 25,930
French Franc
625,000 Oct 99 / 108.150............................. 216
German Deutschmark
100,000 Dec 99 / 110.760............................. 21
175,000 Oct 99 / 115.100............................. 39
175,000 Nov 99 / 104.900............................. 138
175,000 Oct 99 / 112.880............................. 102
105,000 Oct 99 / 112.660............................. 105
80,000 Jan 00 / 111.260............................. 8
75,000 Jan 00 / 112.070............................. 15
100,000 Jan 00 / 112.080............................. 31
50,000 Feb 00 / 106.990............................. 36
50,000 Apr 00 / 99.150.............................. 77
50,000 Jun 00 / 96.260.............................. 517
Japanese Yen
75,000 Sept 99 / 138.000............................ 9
55,000 Oct 99 / 125.000............................. 467
100,000 Nov 99 / 127.000............................. 770
50,000 Nov 99 / 128.000............................. 350
125,000 Dec 99 / 116.950............................. 4,488
50,000 Mar 00 / 122.000............................. 1,135
50,000 Apr 00 / 121.500............................. 1,160
6,000,000 Apr 00 / 102.550............................. 1,326
12,000,000 May 00 / 106.68.............................. 1,620
15,000,000 May 00 / 104.66.............................. 225
50,000 Feb 01 / 150.000............................. 90
United States Dollar
100,000 Jul 99 / 101.82.............................. 16
63,000 Sept 99 / 96.500............................. 783
50,000 Mar 00 / 94.370.............................. 599
-------------
TOTAL CALL OPTIONS PURCHASED ...................................... 40,273
-------------
(Cost $80,235)
<CAPTION>
SHARES EXPIRATION DATE/EXERCISE PRICE MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
PUT OPTIONS PURCHASED -- 0.44%
Euro
98,420 Apr 00 / 146.70.............................. $ 14,645
German Deutschmark
50,000 Aug 99 / 105.060............................. 2,111
65,000 Jun 00 / 106.000............................. 3,269
Italian Lira
182,500,000 Jul 07 / 107.690............................. 365
90,000,000 Feb 00 / 105.490............................. 90
United States Dollar
100,000 Dec 99 / 97.780.............................. 3,875
-------------
TOTAL PUT OPTIONS PURCHASED........................................ 24,355
-------------
(Cost $34,931)
TOTAL INVESTMENTS -- 98.31%........................................ 5,400,336
(Cost $5,718,973)
Other assets less liabilities -- 1.69%............................. 92,690
-------------
TOTAL NET ASSETS -- 100.00%........................................ $ 5,493,026
-------------
-------------
</TABLE>
THE IDENTIFIED COST OF INVESTMENTS OWNED AT JUNE 30, 1999, WAS THE SAME FOR
FEDERAL INCOME TAX AND BOOK PURPOSES. NET UNREALIZED DEPRECIATION FOR FEDERAL
INCOME TAX PURPOSES WAS $318,637, WHICH IS COMPRISED OF UNREALIZED APPRECIATION
OF $13,652 AND UNREALIZED DEPRECIATION OF $332,289.
* FACE AMOUNT OF BOND IS REFLECTED IN LOCAL CURRENCY WHILE MARKET VALUE IS
REFLECTED IN U.S. DOLLARS.
** SECURITY IS HELD IN CONNECTION WITH OPEN COVERED CALL OPTIONS AND PUT
OPTIONS.
24
<PAGE>
MONEY
MARKET
SCHEDULE OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<C> <S> <C>
FACE
AMOUNT DESCRIPTION MARKET VALUE
--------------------------------------------------------------------------
GOVERNMENT SPONSORED -- 100.25%
FEDERAL FARM CREDIT BANKS DISCOUNT NOTES
$ 35,000 4.70% due 7/06/99................................ $ 34,977
150,000 4.72% due 7/15/99................................ 149,725
92,000 4.93% due 9/08/99................................ 91,131
FEDERAL HOME LOAN BANK DISCOUNT NOTES
100,000 4.70% due 7/02/99................................ 99,987
100,000 4.75% due 7/02/99................................ 99,987
100,000 5.00% due 7/02/99................................ 99,986
FEDERAL HOME LOAN MORTGAGE CORP. DISCOUNT NOTES
100,000 4.88% due 7/02/99................................ 99,986
70,000 5.00% due 7/08/99................................ 69,932
70,000 4.90% due 8/16/99................................ 69,562
FEDERAL NATIONAL MORTGAGE ASSN. DISCOUNT NOTES
200,000 4.88% due 7/02/99................................ 199,973
188,000 4.73% due 8/05/99................................ 187,135
-------------
TOTAL GOVERNMENT SPONSORED....................................... 1,202,381
-------------
(Cost $1,202,381)
<CAPTION>
FACE
AMOUNT DESCRIPTION MARKET VALUE
<C> <S> <C>
--------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.08%
1,000 State Street Bank and Trust Co.,
3.50% due 7/01/99
(Collateralized by U.S.
Treasury Bills, 8.50%
due 2/15/20 with a
value of $6,362)............................. $ 1,000
-------------
(Cost $1,000)
TOTAL INVESTMENTS -- 100.33%..................................... 1,203,381
(Cost $1,203,381)
Other assets less liabilities -- (0.33%)......................... (2,829)
-------------
TOTAL NET ASSETS -- 100.00%...................................... $ 1,200,552
-------------
-------------
</TABLE>
THE IDENTIFIED COST OF INVESTMENTS OWNED AT JUNE 30, 1999 WAS THE SAME FOR
FINANCIAL STATEMENT AND FEDERAL INCOME TAX AND BOOK PURPOSES.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
STATEMENTS OF ASSETS
AND LIABILITIES
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP MID CAP
VALUE GROWTH EQUITY
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
ASSETS:
Investments, at value (identified
cost $3,306,677, $2,327,314,
$2,373,002, $1,716,319, $2,439,775,
$3,172,069, $2,792,653, $5,718,973,
and $1,203,381, respectively)...... $ 3,679,376 $ 3,411,724 $ 2,691,001
Cash................................. 142,710 81,534 450
Dividends receivable................. 3,200 1,599 2,747
Interest receivable.................. -- -- 19
Forward foreign currency contracts... -- -- --
Receivables for investments sold..... -- 90,184 16,099
Other receivables.................... -- -- --
----------------- ----------------- -----------------
Total assets................... 3,825,286 3,585,041 2,710,316
----------------- ----------------- -----------------
LIABILITIES AND NET ASSETS:
Fees payable......................... 3,864 2,426 1,808
Options written...................... -- -- --
Forward foreign currency contracts... -- -- --
Deferred interest income............. -- -- --
Payable for investments purchased.... -- 53,039 132,158
----------------- ----------------- -----------------
Total liabilities.............. 3,864 55,465 133,966
----------------- ----------------- -----------------
NET ASSETS............................. $ 3,821,422 $ 3,529,576 $ 2,576,350
----------------- ----------------- -----------------
----------------- ----------------- -----------------
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in
capital)........................... $ 3,403,561 $ 2,411,958 $ 2,332,100
Undistributed (overdistributed) net
investment income.................. 19,984 (961) 4,706
Undistributed net realized gain
(loss) on sale of investments and
foreign currency transactions...... 25,178 34,169 (78,455)
Net unrealized appreciation
(depreciation) in value of
investments and translation of
assets and liabilities in foreign
currency........................... 372,699 1,084,410 317,999
----------------- ----------------- -----------------
NET ASSETS APPLICABLE TO OUTSTANDING
SHARES............................... $ 3,821,422 $ 3,529,576 $ 2,576,350
----------------- ----------------- -----------------
----------------- ----------------- -----------------
Capital shares, $.001 par value
Authorized........................... 500,000,000 500,000,000 500,000,000
----------------- ----------------- -----------------
----------------- ----------------- -----------------
Outstanding.......................... 341,062 233,832 232,356
----------------- ----------------- -----------------
----------------- ----------------- -----------------
NET ASSET VALUE PER SHARE.............. $ 11.20 $ 15.09 $ 11.09
----------------- ----------------- -----------------
----------------- ----------------- -----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
<TABLE>
<CAPTION>
SMALL CAP GROWTH INTERMEDIATE GLOBAL MONEY
EQUITY & INCOME BALANCED FIXED INCOME FIXED INCOME MARKET
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at value (identified
cost $3,306,677, $2,327,314,
$2,373,002, $1,716,319, $2,439,775,
$3,172,069, $2,792,653, $5,718,973,
and $1,203,381, respectively)...... $ 1,989,221 $ 3,103,363 $ 3,009,877 $ 2,707,196 $ 5,400,336 $ 1,203,381
Cash................................. 76,270 162,424 20,383 479 65,375 617
Dividends receivable................. 436 5,933 6,309 -- -- --
Interest receivable.................. -- -- 36,510 22,743 118,534 --
Forward foreign currency contracts... -- -- -- -- 85,638 --
Receivables for investments sold..... 38,051 -- -- -- 289,808 --
Other receivables.................... -- -- -- -- 8,594 --
------------ ------------ ------------ ------------ ------------ ------------
Total assets................... 2,103,978 3,271,720 3,073,079 2,730,418 5,968,285 1,203,998
------------ ------------ ------------ ------------ ------------ ------------
LIABILITIES AND NET ASSETS:
Fees payable......................... 592 2,331 2,184 1,496 5,180 444
Options written...................... -- -- -- -- 73,600 --
Forward foreign currency contracts... -- -- -- -- 3,895 --
Deferred interest income............. -- -- -- -- 163,070 --
Payable for investments purchased.... 51,276 18,237 -- 179,950 229,514 3,002
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities.............. 51,868 20,568 2,184 181,446 475,259 3,446
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS............................. $ 2,052,110 $ 3,251,152 $ 3,070,895 $ 2,548,972 $ 5,493,026 $ 1,200,552
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in
capital)........................... $ 2,222,183 $ 2,496,164 $ 3,079,183 $ 2,582,147 $ 5,419,821 $ 1,200,552
Undistributed (overdistributed) net
investment income.................. (3,210) 17,595 75,586 77,348 212,585 --
Undistributed net realized gain
(loss) on sale of investments and
foreign currency transactions...... (439,765) 73,805 78,318 (25,066) 73,595 --
Net unrealized appreciation
(depreciation) in value of
investments and translation of
assets and liabilities in foreign
currency........................... 272,902 663,588 (162,192) (85,457) (212,975) --
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS APPLICABLE TO OUTSTANDING
SHARES............................... $ 2,052,110 $ 3,251,152 $ 3,070,895 $ 2,548,972 $ 5,493,026 $ 1,200,552
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
Capital shares, $.001 par value
Authorized........................... 500,000,000 500,000,000 500,000,000 500,000,000 500,000,000 500,000,000
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
Outstanding.......................... 228,761 245,801 311,446 257,466 554,220 1,200,552
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
NET ASSET VALUE PER SHARE.............. $ 8.97 $ 13.23 $ 9.86 $ 9.90 $ 9.91 $ 1.00
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
27
<PAGE>
STATEMENTS
OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP MID CAP
VALUE GROWTH EQUITY
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Dividends.......................... $ 32,871 $ 8,004 $ 13,384
Interest........................... 2,796 5,308 613
Foreign tax withheld............... (431) -- (82)
----------------- ----------------- -----------------
35,236 13,312 13,915
----------------- ----------------- -----------------
Expenses (Note 2):
Management fees.................... 13,558 12,687 9,771
Custody and accounting fees........ 715 720 8,407
Professional fees.................. 5,083 5,084 5,102
Directors fees..................... 2,127 2,127 2,169
Contractholder reports............. 1,001 1,001 1,021
Other expenses..................... 2,534 2,534 2,173
----------------- ----------------- -----------------
Total expenses before
reimbursement.................. 25,018 24,153 28,643
Less: expense reimbursement...... 9,766 9,880 17,129
----------------- ----------------- -----------------
Net expenses..................... 15,252 14,273 11,514
----------------- ----------------- -----------------
Net investment income (loss)..... 19,984 (961) 2,401
----------------- ----------------- -----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY:
Realized gain (loss) from:
Investment transactions............ 36,107 151,492 (18,203)
Foreign currency transactions...... -- -- --
Option contracts written........... -- -- --
----------------- ----------------- -----------------
Net realized gain (loss) from
investments, options written
and foreign currency
transactions................... 36,107 151,492 (18,203)
----------------- ----------------- -----------------
Change in net unrealized appreciation
(depreciation) from:
Investments........................ 390,482 259,643 11,864
Translation of assets and
liabilities in foreign
currencies....................... -- -- --
----------------- ----------------- -----------------
Net unrealized appreciation
(depreciation)................... 390,482 259,643 11,864
----------------- ----------------- -----------------
Net gain (loss) on investments
and foreign currencies......... 426,589 411,135 (6,339)
----------------- ----------------- -----------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS...... $ 446,573 $ 410,174 $ (3,938)
----------------- ----------------- -----------------
----------------- ----------------- -----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
<TABLE>
<CAPTION>
GLOBAL
SMALL CAP GROWTH INTERMEDIATE FIXED MONEY
EQUITY & INCOME BALANCED FIXED INCOME INCOME MARKET
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Dividends.......................... $ 2,321 $ 27,320 $ 23,415 $ 656 $ 656 $ --
Interest........................... 3,679 1,560 63,101 83,191 168,728 27,538
Foreign tax withheld............... -- (159) -- -- -- --
--------- --------- --------- ------------ --------- ---------
6,000 28,721 86,516 83,847 169,384 27,538
--------- --------- --------- ------------ --------- ---------
Expenses (Note 2):
Management fees.................... 8,333 11,552 10,811 7,402 20,644 2,289
Custody and accounting fees........ 7,170 2,578 692 7,078 9,915 3,850
Professional fees.................. 5,084 5,083 5,129 5,024 5,136 5,113
Directors fees..................... 2,127 2,127 2,230 2,271 2,236 2,141
Contractholder reports............. 1,001 1,001 1,049 1,069 1,052 1,007
Other expenses..................... 2,534 2,534 2,656 2,310 4,140 1,606
--------- --------- --------- ------------ --------- ---------
Total expenses before
reimbursement.................. 26,249 24,875 22,567 25,154 43,123 16,006
Less: expense reimbursement...... 17,039 11,879 10,404 15,284 15,732 13,144
--------- --------- --------- ------------ --------- ---------
Net expenses..................... 9,210 12,996 12,163 9,870 27,391 2,862
--------- --------- --------- ------------ --------- ---------
Net investment income (loss)..... (3,210) 15,725 74,353 73,977 141,993 24,676
--------- --------- --------- ------------ --------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, OPTIONS WRITTEN AND FOREIGN CURRENCY:
Realized gain (loss) from:
Investment transactions............ 139,356 146,023 71,877 (38,760) 86,685 --
Foreign currency transactions...... -- -- -- -- 6,105 --
Option contracts written........... -- -- -- -- (15,734) --
--------- --------- --------- ------------ --------- ---------
Net realized gain (loss) from
investments, options written
and foreign currency
transactions................... 139,356 146,023 71,877 (38,760) 77,056 --
--------- --------- --------- ------------ --------- ---------
Change in net unrealized appreciation
(depreciation) from:
Investments........................ 54,563 249,154 151,561 (49,342) (330,274) --
Translation of assets and
liabilities in foreign
currencies....................... -- -- -- -- 104,090 --
--------- --------- --------- ------------ --------- ---------
Net unrealized appreciation
(depreciation)................... 54,563 249,154 151,561 (49,342) (226,184) --
--------- --------- --------- ------------ --------- ---------
Net gain (loss) on investments
and foreign currencies......... 193,919 395,177 223,438 (88,102) (149,128) --
--------- --------- --------- ------------ --------- ---------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS...... $ 190,709 $ 410,902 $ 297,791 $ (14,125) $ (7,135) $ 24,676
--------- --------- --------- ------------ --------- ---------
--------- --------- --------- ------------ --------- ---------
</TABLE>
29
<PAGE>
STATEMENTS OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
LARGE CAP VALUE
------------------------
SIX MONTHS
ENDED
6/30/99 YEAR ENDED
(UNAUDITED) 12/31/98
<S> <C> <C>
- -----------------------------------------------------------------
OPERATIONS:
Net investment income (loss)......... $ 19,984 $ 40,974
Net realized gain (loss) from
investments, options and foreign
currency transactions.............. 36,107 38,317
Net unrealized appreciation of
investments and translation of
assets and
liabilities in foreign currency.... 390,482 60,044
----------- -----------
Net increase (decrease) in net
assets resulting from
operations....................... 446,573 139,335
DISTRIBUTIONS TO CONTRACTHOLDERS:
Net investment income................ -- (44,421)
Net realized gain from investment
transactions....................... -- (47,594)
----------- -----------
Total distributions to
contractholders.................. -- (92,015)
CAPITAL SHARE TRANSACTIONS:*
Shares sold.......................... 177,115 650,325
Reinvested distributions............. -- 92,015
----------- -----------
177,115 742,340
Shares repurchased................... (27,949) (8,087)
----------- -----------
Net increase from capital share
transactions..................... 149,166 734,253
----------- -----------
Net increase (decrease) in net
assets......................... 595,739 781,573
NET ASSETS:
Beginning of period.................. 3,225,683 2,444,110
----------- -----------
End of period........................ $ 3,821,422 $ 3,225,683
----------- -----------
----------- -----------
Undistributed net investment income
(loss) at end of period............ $ 19,984 $ --
----------- -----------
----------- -----------
*Fund share transactions:
Shares sold.......................... 17,095 65,647
Reinvested distributions............. -- 9,555
----------- -----------
17,095 75,202
Shares repurchased................... (2,606) (773)
----------- -----------
Net increase in fund shares...... 14,489 74,429
----------- -----------
----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP GROWTH MID CAP EQUITY SMALL CAP EQUITY
------------------------ ------------------------ ------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
6/30/99 YEAR ENDED 6/30/99 YEAR ENDED 6/30/99 YEAR ENDED
(UNAUDITED) 12/31/98 (UNAUDITED) 12/31/98 (UNAUDITED) 12/31/98
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income (loss)......... $ (961) $ (500) $ 2,401 $ 8,524 $ (3,210) $ (9,650)
Net realized gain (loss) from
investments, options and foreign
currency transactions.............. 151,492 (117,323) (18,203) (48,813) 139,356 (573,464)
Net unrealized appreciation of
investments and translation of
assets and
liabilities in foreign currency.... 259,643 684,602 11,864 213,717 54,563 269,804
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from
operations....................... 410,174 566,779 (3,938) 173,428 190,709 (313,310)
DISTRIBUTIONS TO CONTRACTHOLDERS:
Net investment income................ -- (923) -- (6,592) -- (768)
Net realized gain from investment
transactions....................... -- (811) -- (17,578) -- --
----------- ----------- ----------- ----------- ----------- -----------
Total distributions to
contractholders.................. -- (1,734) -- (24,170) -- (768)
CAPITAL SHARE TRANSACTIONS:*
Shares sold.......................... 139,096 275,032 118,692 180,028 75,557 140,968
Reinvested distributions............. -- 1,734 -- 24,169 -- 768
----------- ----------- ----------- ----------- ----------- -----------
139,096 276,766 118,692 204,197 75,557 --
Shares repurchased................... (12,837) (5,169) (6,018) (4,756) (439) (1,121)
----------- ----------- ----------- ----------- ----------- -----------
Net increase from capital share
transactions..................... 126,259 271,597 112,674 199,441 75,118 140,615
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets......................... 536,433 836,642 108,736 348,699 265,827 (173,463)
NET ASSETS:
Beginning of period.................. 2,993,143 2,156,501 2,467,614 2,118,915 1,786,283 1,959,746
----------- ----------- ----------- ----------- ----------- -----------
End of period........................ $ 3,529,576 $ 2,993,143 $ 2,576,350 $ 2,467,614 $ 2,052,110 $ 1,786,283
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Undistributed net investment income
(loss) at end of period............ $ (961) $ -- $ 4,706 $ 2,305 $ (3,210) $ --
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
*Fund share transactions:
Shares sold.......................... 9,421 23,665 10,902 18,144 9,292 17,933
Reinvested distributions............. -- 136 -- 2,331 -- 101
----------- ----------- ----------- ----------- ----------- -----------
9,421 23,801 10,902 20,475 9,292 18,034
Shares repurchased................... (895) (397) (559) (433) (55) (130)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in fund shares...... 8,526 23,404 10,343 20,042 9,237 17,904
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
31
<PAGE>
STATEMENTS OF CHANGES
IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
GROWTH & INCOME
------------------------
SIX MONTHS
ENDED
6/30/99 YEAR ENDED
(UNAUDITED) 12/31/98
<S> <C> <C>
- -----------------------------------------------------------------
OPERATIONS:
Net investment income................ $ 15,725 $ 31,164
Net realized gain (loss) from
investments, options and foreign
currency transactions.............. 146,023 (72,218)
Net unrealized appreciation
(depreciation) of investments and
translation of assets and
liabilities in foreign currency.... 249,154 332,012
----------- -----------
Net increase (decrease) in net
assets resulting from
operations....................... 410,902 290,958
DISTRIBUTIONS TO CONTRACTHOLDERS:
Net investment income................ -- (30,378)
Net realized gain from investment
transactions....................... -- --
Tax return of capital................ -- --
----------- -----------
Total distributions to
contractholders.................. -- (30,378)
CAPITAL SHARE TRANSACTIONS:*
Shares sold.......................... 80,187 380,120
Reinvested distributions............. -- 30,378
----------- -----------
80,187 23,801
Shares repurchased................... (5,266) (6,893)
----------- -----------
Net increase (decrease) from
capital share transactions....... 74,921 403,605
----------- -----------
Net increase (decrease) in net
assets......................... 485,823 664,185
NET ASSETS:
Beginning of period.................. 2,765,329 2,101,144
----------- -----------
End of period........................ $ 3,251,152 $ 2,765,329
----------- -----------
----------- -----------
Undistributed net investment income
at end of period................... $ 17,595 $ 1,870
----------- -----------
----------- -----------
*Fund share transactions:
Shares sold.......................... 6,377 35,979
Reinvested distributions............. -- 2,720
----------- -----------
6,377 38,699
Shares repurchased................... (413) (614)
----------- -----------
Net increase (decrease) in fund
shares......................... 5,964 38,085
----------- -----------
----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE FIXED MONEY
BALANCED INCOME GLOBAL FIXED INCOME MARKET
------------------------ ------------------------ ------------------------ -----------
SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
6/30/99 YEAR ENDED 6/30/99 YEAR ENDED 6/30/99 YEAR ENDED 6/30/99
(UNAUDITED) 12/31/98 (UNAUDITED) 12/31/98 (UNAUDITED) 12/31/98 (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income................ $ 74,353 $ 132,900 $ 73,977 $ 130,082 $ 141,993 $ 285,533 $ 24,676
Net realized gain (loss) from
investments, options and foreign
currency transactions.............. 71,877 6,441 (38,760) 29,696 77,056 136,328 --
Net unrealized appreciation
(depreciation) of investments and
translation of assets and
liabilities in foreign currency.... 151,561 (303,573) (49,342) (47,397) (226,184) (52,157) --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from
operations....................... 297,791 (164,232) (14,125) 112,381 (7,135) 369,704 24,676
DISTRIBUTIONS TO CONTRACTHOLDERS:
Net investment income................ -- (132,856) -- (127,884) -- (271,758) (24,676)
Net realized gain from investment
transactions....................... -- -- -- (15,985) -- (30,394) --
Tax return of capital................ -- -- -- -- -- (153,753) --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total distributions to
contractholders.................. -- (132,856) -- (143,869) -- (455,905) (24,676)
CAPITAL SHARE TRANSACTIONS:*
Shares sold.......................... 147,740 294,538 168,328 269,098 17,649 15,852 406,724
Reinvested distributions............. -- 132,856 -- 143,869 -- 455,905 24,675
----------- ----------- ----------- ----------- ----------- ----------- -----------
147,740 427,394 168,328 412,967 17,649 471,757 431,399
Shares repurchased................... (18,193) (4,447) (20,661) (4,087) (104) (1,805) (501,294)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) from
capital share transactions....... 129,547 422,947 147,667 408,880 17,545 469,952 (69,895)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets......................... 427,338 125,859 133,542 377,392 10,410 383,751 (69,895)
NET ASSETS:
Beginning of period.................. 2,643,557 2,517,698 2,415,430 2,038,038 5,482,616 5,098,865 1,270,447
----------- ----------- ----------- ----------- ----------- ----------- -----------
End of period........................ $ 3,070,895 $ 2,643,557 $ 2,548,972 $ 2,415,430 $ 5,493,026 $ 5,482,616 $ 1,200,552
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
Undistributed net investment income
at end of period................... $ 75,586 $ 1,233 $ 77,348 $ 3,371 $ 212,584 $ 70,592 $ --
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
*Fund share transactions:
Shares sold.......................... 15,666 30,307 16,881 26,057 1,771 1,540 406,724
Reinvested distributions............. -- 15,253 -- 14,445 -- 45,911 24,675
----------- ----------- ----------- ----------- ----------- ----------- -----------
15,666 45,560 16,881 40,502 1,771 47,451 431,399
Shares repurchased................... (2,008) (461) (2,067) (401) (10) (171) (501,294)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in fund
shares......................... 13,658 45,099 14,814 40,101 1,761 47,280 (69,895)
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
YEAR ENDED
12/31/98
<S> <C>
- ----------------------------------------------------------------
OPERATIONS:
Net investment income................ $ 52,828
Net realized gain (loss) from
investments, options and foreign
currency transactions.............. --
Net unrealized appreciation
(depreciation) of investments and
translation of assets and
liabilities in foreign currency.... --
-----------
Net increase (decrease) in net
assets resulting from
operations....................... 52,828
DISTRIBUTIONS TO CONTRACTHOLDERS:
Net investment income................ (52,828)
Net realized gain from investment
transactions....................... --
Tax return of capital................ --
-----------
Total distributions to
contractholders.................. (52,828)
CAPITAL SHARE TRANSACTIONS:*
Shares sold.......................... 398,043
Reinvested distributions............. 52,817
-----------
450,860
Shares repurchased................... (199,682)
-----------
Net increase (decrease) from
capital share transactions....... 251,178
-----------
Net increase (decrease) in net
assets......................... 251,178
NET ASSETS:
Beginning of period.................. 1,019,269
-----------
End of period........................ $ 1,270,447
-----------
-----------
Undistributed net investment income
at end of period................... $ --
-----------
-----------
*Fund share transactions:
Shares sold.......................... 398,043
Reinvested distributions............. 52,817
-----------
450,860
Shares repurchased................... (199,682)
-----------
Net increase (decrease) in fund
shares......................... 251,178
-----------
-----------
</TABLE>
33
<PAGE>
NOTES TO FINANCIAL
STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES:
Investors Mark Series Fund (the Fund) is registered under the Investment Company
Act of 1940 (as amended) as a diversified open-end management investment company
of the series type. The Fund is required to account for the assets of each
series separately and to allocate general liabilities of the Fund to each series
based upon the net asset value of each series. Shares of the Fund are
distributed to a variable annuity separate account of Business Men's Assurance
Company of America. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its financial
statements.
A. INVESTMENT VALUATION -- Securities traded on U.S. or foreign securities
exchanges or included in a national market system are valued at the last quoted
sales price; securities for which there were no sales reported are valued at the
mean between the bid and ask prices; exchange listed options are valued at the
last sales price; bonds and other securities for which market quotations are not
readily available are valued at fair value according to methods selected in good
faith by the Board of Directors. Securities with maturities of 60 days or less
when acquired or subsequently within 60 days of maturity are valued at amortized
cost, which approximates market value.
Generally, trading in foreign securities markets is substantially completed each
day at various times prior to the close of the New York Stock Exchange. The
values of foreign securities are determined as of the close of such foreign
markets or the close of the New York Stock Exchange, if earlier. All investments
quoted in foreign currency are valued in U.S. dollars on the basis of the
foreign currency exchange rates prevailing at the close of business. Investment
in foreign securities may involve risks not present in domestic investments.
Since foreign securities may be denominated in a foreign currency and involve
settlement and pay interest or dividends in foreign currencies, changes in the
relationship of these foreign currencies to the U.S. dollar can significantly
affect the value of the investments and earnings of the Fund. Foreign
investments may also subject the Fund to foreign government exchange
restrictions, expropriation, taxation or other political, social or economic
developments, all of which could affect the market and/or credit risk of the
investments.
Pursuant to Rule 2a-7 of the Investment Company Act of 1940 (as amended),
securities in the Money Market Portfolio are valued at amortized cost, which
approximates market value.
B. OPTIONS -- When a call or put option is written, an amount equal to the
premium received is recorded as a liability. The liability is marked-to-market
daily to reflect the current market value of the option written. When a written
option expires, a gain is realized in the amount of the premium originally
received. If a closing purchase contract is entered into, a gain or loss is
realized in the amount of the original premium less the cost of the closing
transaction. If a written call is exercised, a gain or loss is realized from the
sale of the underlying security, and the proceeds from such sale are increased
by the premium originally received. If a written put option is exercised, the
amount of the premium originally received reduces the cost of the security which
is purchased upon exercise of the option.
Purchased options are recorded as investments. If a purchased option expires, a
loss is realized in the amount of the cost of the option. If a closing
transaction is entered into, a gain or loss is realized, to the extent that the
proceeds from the sale are greater or less than the cost of the option. If a put
option is exercised, a gain or loss is realized from the sale of the underlying
security by adjusting the proceeds from such sale by the amount of the premium
originally paid. If a call option is exercised, the cost of the security
purchased upon exercise is increased by the premium originally paid.
C. FOREIGN CURRENCY TRANSLATION -- All assets and liabilities expressed in
foreign currencies are converted into U.S. dollars based on current exchange
rates at the end of the period. Purchases and sales of investments in
securities, dividend and interest income, and certain expenses are translated at
the rates of exchange prevailing on the respective dates of such transactions.
The effects of changes in foreign currency exchange rates on investments in
securities are included in net realized and unrealized gain or loss of
investments in the Statement of Operations.
D. FORWARD FOREIGN CURRENCY CONTRACTS -- The Global Fixed Income Portfolio may
enter into forward foreign currency contracts as a way of managing foreign
exchange rate risk. The portfolio may enter into these contracts to fix the U.S.
dollar value of a security that it has agreed to buy or sell for the period
between the date the trade was entered into and the date the security is
delivered and paid for. These contracts may also be used to hedge the U.S.
dollar value of securities owned which are denominated in foreign currencies.
Forward foreign currency contracts are valued each day at the close of the New
York Stock Exchange at the forward rate, and are marked-to-market daily. The
change in market value is recorded as an unrealized gain or loss. When
34
<PAGE>
the contract is closed, a realized gain or loss equal to the difference between
the value of the contract at the time it was opened and closed is recorded.
The use of forward foreign currency contracts does not eliminate fluctuations in
the underlying prices of the securities, but it does establish a rate of
exchange that can be achieved in the future. Although forward foreign currency
contracts limit the risk of loss due to a decline in the value of the hedged
currency, they also limit any potential gain that might result should the value
of the currency increase. These contracts involve market risk in excess of the
amount reflected in the Statement of Assets and Liabilities. The face or
contract amount in U.S. dollars reflects the total exposure the portfolio has in
that particular currency contract. In addition, there could be exposure to risks
(limited to the amount of unrealized gains) if the counterparties to the
contracts are unable to meet the terms of their contracts.
E. EXPENSE LIMITATIONS -- Investors Mark Advisor, LLC. (the Advisor), has
voluntarily agreed to pay certain operating expenses in an amount that limits
the total operating expenses of the portfolios to an annual rate of .50% of
average daily net assets for the Money Market Portfolio; .80% of average daily
net assets for the Intermediate Fixed Income Portfolio; .90% of the average
daily net assets for Mid Cap Equity, Large Cap Value, Large Cap Growth, Growth &
Income and Balanced Portfolios; 1.00% of average daily net assets for the Global
Fixed Income Portfolio and 1.05% of average daily net assets for the Small Cap
Equity Portfolio. This expense limitation may be modified or terminated at the
discretion of the Advisor at any time without notice to contractholders.
F. DISTRIBUTIONS TO CONTRACTHOLDERS -- Distributions to contractholders are
recorded on the ex-dividend date. The character of distributions made during the
year from net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. These differences are
primarily due to differing treatments for expiration of net operating losses and
recharacterization of foreign currency gains and losses.
G. FEDERAL INCOME TAXES -- The Fund complied with the requirements of the
Internal Revenue Code applicable to regulated investment companies and
therefore, no provision for federal or state tax is required. As of December 31,
1998, the Large Cap Growth, Small Cap Equity, and the Growth & Income Portfolios
had an accumulated net realized loss on sales of investments for federal income
tax purposes of $103,246, $267,437, and $66,440, respectively, expiring in 2006,
which are available to offset future taxable gains.
H. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the securities are purchased or sold. Dividend income
and distributions to contractholders are recorded on the ex-dividend date.
Realized gains and losses from investment transactions are determined on the
identified cost basis.
I. USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from such
estimates.
2. ADVISORY FEES
Advisory fees are paid to the Advisor based on an annual percentage of average
daily net assets. Listed below are advisory fees as a percentage of average
daily net assets.
<TABLE>
<CAPTION>
PORTFOLIO ADVISORY FEE
<S> <C>
- -----------------------------------------------------
Large Cap Value........................ 0.80%
Large Cap Growth....................... 0.80%
Mid Cap Equity......................... 0.80%
Small Cap Equity....................... 0.95%
Growth & Income........................ 0.80%
Balanced............................... 0.80%
Intermediate Fixed Income.............. 0.60%
Global Fixed Income.................... 0.75%
Money Market........................... 0.40%
</TABLE>
3. INVESTMENT TRANSACTIONS
Investment transactions for the period ended June 30, 1999, (excluding
maturities of short-term commercial notes and repurchase agreements) are as
follows:
<TABLE>
<CAPTION>
PROCEEDS
PORTFOLIO PURCHASES FROM SALES
<S> <C> <C>
- -------------------------------------------------------
Large Cap Value........................ $ 316,626 $ 168,149
Large Cap Growth....................... 1,367,718 1,081,860
Mid Cap Equity......................... 1,245,872 1,177,734
Small Cap Equity....................... 1,328,141 1,059,184
Growth & Income........................ 1,116,010 1,073,786
Balanced............................... 670,745 373,934
Intermediate Fixed Income.............. 2,018,630 1,789,132
Global Fixed Income.................... 4,809,277 4,479,877
</TABLE>
35
<PAGE>
NOTES TO FINANCIAL
STATEMENTS (CONTINUED)
4. OPTIONS WRITTEN
The following options written were outstanding for the Global Fixed Income
Portfolio as of June 30, 1999:
PUT OPTIONS WRITTEN
<TABLE>
<CAPTION>
ISSUER/CURRENCY EXPIRATION DATE EXERCISE PRICE NUMBER OF CONTRACTS MARKET VALUE
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
New Zealand Dollar..................... Jul-99 62.000 1,900 $ (101)
Japanese Yen........................... Apr-00 94.058 60,000 (2,556)
Japanese Yen........................... Apr-00 135.000 650 (494)
Japanese Yen........................... May-00 98.832 120,000 (6,936)
German Deutschemark.................... Jun-00 106.300 700 (5,307)
Euro................................... Apr-00 146.700 984 (13,301)
Euro................................... Jun-00 141.350 984 (13,519)
United States Dollar................... Apr-00 106.500 500 (455)
United States Dollar................... Apr-00 104.500 650 (734)
United States Dollar................... Apr-00 113.750 1,250 (3,688)
United States Dollar................... May-00 122.000 750 (5,212)
United States Dollar................... Mar-00 87.250 500 (1,356)
United States Treasury................. Dec-99 90.340 1,000 (2,719)
-------------
Total put options outstanding (premiums
received, $57,006)................... $ (56,378)
-------------
-------------
</TABLE>
CALL OPTIONS WRITTEN
<TABLE>
<CAPTION>
ISSUER/CURRENCY EXPIRATION DATE EXERCISE PRICE NUMBER OF CONTRACTS MARKET VALUE
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
BRL.................................... Sep-99 1.59000 1,000 $ (12,970)
Japanese Yen........................... Sep-99 145.00000 750 (1)
Japanese Yen........................... Nov-99 142.00000 1,000 (80)
Japanese Yen........................... Nov-99 148.50000 500 (30)
Japanese Yen........................... Dec-99 130.00000 1,250 (863)
Japanese Yen........................... Mar-00 140.00000 500 (210)
Japanese Yen........................... Apr-00 135.00000 500 (200)
Japanese Yen........................... Apr-99 111.05800 60,000 (354)
Japanese Yen........................... May-00 114.53200 120,000 (372)
Japanese Yen........................... Sep-99 125.50000 984 (1,815)
German Deutschemark.................... Oct-99 118.08000 1,750 --
German Deutschemark.................... Oct-99 117.91000 1,050 --
German Deutschemark.................... Nov-99 109.70000 1,750 (9)
French Franc........................... Oct-99 113.15000 6,250 (19)
United States Dollar................... Sep-99 96.03125 1,000 (148)
United States Dollar................... Mar-00 101.63000 500 (134)
United States Treasury................. Jul-99 105.00000 1,000 (16)
-------------
Total call options outstanding
(premiums received, $42,156)......... $ (17,221)
-------------
-------------
</TABLE>
36
<PAGE>
Transactions in options written for the Global Fixed Income Portfolio for the
period ended June 30, 1999, were as follows:
<TABLE>
<CAPTION>
NUMBER OF PREMIUM
CONTRACTS AMOUNT
<S> <C> <C>
- ---------------------------------------------------------------
PUT OPTIONS WRITTEN
Balance at December 31, 1998........... 32,475 $ 33,333
Opened................................. 373,218 71,514
Expired................................ (2,800) (3,062)
Closed................................. (213,025) (44,779)
----------- ---------
Balance at June 30, 1999............... 189,868 $ 57,006
----------- ---------
----------- ---------
CALL OPTIONS WRITTEN
Balance at December 31, 1998........... 21,000 $ 38,088
Opened................................. 369,734 17,571
Expired................................ (500) (1,859)
Closed................................. (190,450) (11,644)
----------- ---------
Balance at June 30, 1999............... 199,784 $ 42,156
----------- ---------
----------- ---------
</TABLE>
5. FORWARD FOREIGN CURRENCY CONTRACTS
Following is a summary of forward foreign currency contracts that were
outstanding at June 30, 1999 for the Global Fixed Income Portfolio (excluding
foreign currency contracts used for purchase and sale settlements):
CONTRACTS TO SELL CURRENCY:
<TABLE>
<CAPTION>
FOREIGN AMOUNT TO BE NET UNREALIZED
SETTLEMENT CURRENCY RECEIVED IN U.S. $ VALUE APPRECIATION
DATE TO BE DELIVERED U.S. $ AS OF 6/30/99 (DEPRECIATION)
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
British Pound.......................... 7/2/99-11/5/99 417,278 $ 669,877 $ 658,942 $ 10,935
Danish Krone........................... 7/6/99-9/13/99 2,508,728 359,503 350,193 9,310
Euro................................... 6/18/99-9/29/99 1,848,185 1,973,710 1,918,093 55,617
Hong Kong Dollar....................... 1/14/00 433,593 55,000 55,640 (640)
Japanese Yen........................... 7/1/99-5/17/01 67,662,250 571,831 568,957 2,874
New Zealand Dollar..................... 7/15/99-11/5/99 436,767 240,325 232,774 7,551
Poland Zlotty.......................... 7/24/00 82,198 19,506 20,934 (1,428)
Singapore Dollar....................... 9/14/99 135,177 79,436 79,948 (512)
Swedish Krona.......................... 8/18/99-9/2/99 1,222,876 147,249 145,318 1,931
------------- -------------- ---------------
$ 4,116,437 $ 4,030,799 $ 85,638
------------- -------------- ---------------
------------- -------------- ---------------
</TABLE>
CONTRACTS TO BUY CURRENCY:
<TABLE>
<CAPTION>
FOREIGN AMOUNT TO BE NET UNREALIZED
SETTLEMENT CURRENCY PAID IN U.S. $ VALUE APPRECIATION
DATE TO BE RECEIVED U.S. $ AS OF 6/30/99 (DEPRECIATION)
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
British Pound.......................... 6/30/99-11/5/99 83,952 $ 57,195 $ 55,316 $ (1,879)
Danish Krone........................... 8/9/99 346,710 49,594 48,412 (1,182)
Euro................................... 6/30/99-9/7/99 265,215 155,795 154,562 (1,233)
Greek Drachma.......................... 9/29/99 15,000,000 49,640 47,122 (2,518)
Japanese Yen........................... 6/29/99-8/17/99 34,462,149 281,234 285,917 4,683
New Zealand Dollar..................... 7/15/99-11/5/99 236,482 128,561 126,093 (2,468)
Poland Zlotty.......................... 7/24/00 82,198 20,000 20,934 934
Swedish Krona.......................... 7/1/99 416,834 49,327 49,095 (232)
------------- -------------- ---------------
$ 791,346 $ 787,451 $ (3,895)
------------- -------------- ---------------
------------- -------------- ---------------
</TABLE>
37
<PAGE>
FINANCIAL
HIGHLIGHTS
<TABLE>
<CAPTION>
LARGE CAP VALUE
------------------------------------------------
CONDENSED DATA FOR A FOR THE SIX FOR THE PERIOD
SHARE OF CAPITAL STOCK MONTH PERIOD FOR THE FROM 11/13/97
OUTSTANDING THROUGHOUT ENDED 6/30/99 YEAR ENDED (COMMENCEMENT)
EACH PERIOD (UNAUDITED) 12/31/98 TO 12/31/97
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 9.88 $ 9.69 $ 10.00
-------------- -------------- --------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment
income............. 0.06 0.13 0.02
Net gains (losses) on
securities
(both realized and
unrealized)........ 1.26 0.35 (0.31)
-------------- -------------- --------------
Total income (loss)
from investment
operations........... 1.32 0.48 (0.29)
-------------- -------------- --------------
LESS DISTRIBUTIONS:
Dividends from net
investment
income............. -- (0.14) (0.02)
Distributions from
capital gains...... -- (0.15) --
-------------- -------------- --------------
Total distributions.... -- (0.29) (0.02)
-------------- -------------- --------------
Net asset value, end of
period................. $ 11.20 $ 9.88 $ 9.69
-------------- -------------- --------------
-------------- -------------- --------------
Total return*............ 13.36% 5.03% (2.86%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)......... $ 3,821 $ 3,226 $ 2,444
Ratio of expenses to
average net assets**... 0.90% 0.90% 0.90%
Ratio of net investment
income (loss) to
average net assets**... 1.18% 1.44% 2.21%
Ratio of expenses to
average net assets
before
voluntary expense
reimbursement**........ 1.48% 1.55% 2.78%
Ratio of net investment
income (loss) to
average net assets
before voluntary
expense
reimbursement**........ 0.60% 0.79% 0.33%
Portfolio turnover
rate*.................. 5% 18% --
</TABLE>
* TOTAL RETURN AND PORTFOLIO TURNOVER RATE NOT ANNUALIZED FOR PERIODS LESS
THAN ONE FULL YEAR.
** ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP GROWTH MID CAP EQUITY
------------------------------------------------ ------------------------------------------------
FOR THE SIX FOR THE PERIOD FOR THE SIX FOR THE PERIOD
MONTH PERIOD FOR THE FROM 11/13/97 MONTH PERIOD FOR THE FROM 11/13/97
ENDED 6/30/99 YEAR ENDED (COMMENCEMENT) ENDED 6/30/99 YEAR ENDED (COMMENCEMENT)
(UNAUDITED) 12/31/98 TO 12/31/97 (UNAUDITED) 12/31/98 TO 12/31/97
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 13.31 $ 10.71 $ 10.00 $ 11.11 $ 10.49 $ 10.00
-------------- -------------- -------------- -------------- -------------- --------------
INCOME FROM INVESTMENT
OPERATIONS:
-- -- -- 0.01 0.04 0.02
Net gains (losses) on
securities
(both realized and
unrealized)........ 1.78 2.61 0.71 (0.03) 0.69 0.49
-------------- -------------- -------------- -------------- -------------- --------------
Total income (loss)
from investment
operations........... 1.78 2.61 0.71 (0.02) 0.73 0.51
-------------- -------------- -------------- -------------- -------------- --------------
LESS DISTRIBUTIONS:
Dividends from net
investment
income............. -- (0.01) -- -- (0.03) (0.02)
Distributions from
capital gains...... -- -- -- -- (0.08) --
-------------- -------------- -------------- -------------- -------------- --------------
Total distributions.... -- (0.01) -- -- (0.11) (0.02)
-------------- -------------- -------------- -------------- -------------- --------------
Net asset value, end of
period................. $ 15.09 $ 13.31 $ 10.71 $ 11.09 $ 11.11 $ 10.49
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
Total return*............ 13.37% 24.35% 7.10% (0.18%) 7.03% 5.07%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)......... $ 3,530 $ 2,993 $ 2,157 $ 2,576 $ 2,468 $ 2,119
Ratio of expenses to
average net assets**... 0.90% 0.90% 0.90% 0.90% 0.90% 0.90%
Ratio of net investment
income (loss) to
average net assets**... (0.06%) (0.02%) 0.33% 0.19% 0.38% 1.34%
Ratio of expenses to
average net assets
before
voluntary expense
reimbursement**........ 1.52% 1.66% 3.19% 2.24% 2.38% 3.40%
Ratio of net investment
income (loss) to
average net assets
before voluntary
expense
reimbursement**........ (0.68%) (0.78%) (1.96%) (1.15%) (1.10%) (1.16%)
Portfolio turnover
rate*.................. 33% 49% -- 47% 166% 13%
</TABLE>
* TOTAL RETURN AND PORTFOLIO TURNOVER RATE NOT ANNUALIZED FOR PERIODS LESS
THAN ONE FULL YEAR.
** ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
FINANCIAL
HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
SMALL CAP EQUITY
-------------------------------------------------
CONDENSED DATA FOR A FOR THE SIX FOR THE PERIOD
SHARE OF CAPITAL STOCK MONTH PERIOD FOR THE FROM 11/13/97
OUTSTANDING THROUGHOUT ENDED 6/30/99 YEAR ENDED (COMMENCEMENT)
EACH PERIOD (UNAUDITED) 12/31/98 TO 12/31/97
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 8.14 $ 9.72 $ 10.00
-------------- -------------- --------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)............. (0.01) (0.05) --
Net gains (losses) on
securities
(both realized and
unrealized)........ 0.84 (1.53) (0.28)
-------------- -------------- --------------
Total income (loss)
from investment
operations........... 0.83 (1.58) (0.28)
-------------- -------------- --------------
LESS DISTRIBUTIONS:
Dividends from net
investment
income............. -- -- --
Distributions from
capital gains...... -- -- --
-------------- -------------- --------------
Total distributions.... -- -- --
-------------- -------------- --------------
Net asset value, end of
period................. $ 8.97 $ 8.14 $ 9.72
-------------- -------------- --------------
-------------- -------------- --------------
Total return*............ 10.20% (16.22%) (2.80%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)......... $ 2,052 $ 1,786 $ 1,960
Ratio of expenses to
average net assets**... 1.05% 1.05% 1.05%
Ratio of net investment
income (loss) to
average net assets**... (0.37%) (0.52%) 0.29%
Ratio of expenses to
average net assets
before
voluntary expense
reimbursement**........ 2.99% 2.29% 3.49%
Ratio of net investment
income (loss) to
average net assets
before voluntary
expense
reimbursement**........ (2.31%) (1.76%) (2.15%)
Portfolio turnover
rate*.................. 59% 132% 8%
</TABLE>
* TOTAL RETURN AND PORTFOLIO TURNOVER RATE NOT ANNUALIZED FOR PERIODS LESS
THAN ONE FULL YEAR.
** ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
<TABLE>
<CAPTION>
GROWTH & INCOME BALANCED
------------------------------------------------ ------------------------------------------------
CONDENSED DATA FOR A FOR THE SIX FOR THE PERIOD FOR THE SIX FOR THE PERIOD
SHARE OF CAPITAL STOCK MONTH PERIOD FOR THE FROM 11/13/97 MONTH PERIOD FOR THE FROM 11/13/97
OUTSTANDING THROUGHOUT ENDED 6/30/99 YEAR ENDED (COMMENCEMENT) ENDED 6/30/99 YEAR ENDED (COMMENCEMENT)
EACH PERIOD (UNAUDITED) 12/31/98 TO 12/31/97 (UNAUDITED) 12/31/98 TO 12/31/97
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 11.53 $ 10.41 $ 10.00 $ 8.88 $ 9.96 $ 10.00
-------------- -------------- -------------- -------------- -------------- --------------
INCOME FROM INVESTMENT
OPERATIONS:
0.06 0.13 0.02 0.24 0.47 0.06
Net gains (losses) on
securities
(both realized and
unrealized)........ 1.64 1.12 0.40 0.74 (1.08) (0.04)
-------------- -------------- -------------- -------------- -------------- --------------
Total income (loss)
from investment
operations........... 1.70 1.25 0.42 0.98 (0.61) 0.02
-------------- -------------- -------------- -------------- -------------- --------------
LESS DISTRIBUTIONS:
Dividends from net
investment
income............. -- (0.13) (0.01) -- (0.47) (0.06)
Distributions from
capital gains...... -- -- -- -- -- --
-------------- -------------- -------------- -------------- -------------- --------------
Total distributions.... -- (0.13) (0.01) -- (0.47) (0.06)
-------------- -------------- -------------- -------------- -------------- --------------
Net asset value, end of
period................. $ 13.23 $ 11.53 $ 10.41 $ 9.86 $ 8.88 $ 9.96
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
Total return*............ 14.74% 12.03% 4.25% 11.04% (6.03%) 0.18%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)......... $ 3,251 $ 2,765 $ 2,101 $ 3,071 $ 2,644 $ 2,518
Ratio of expenses to
average net assets**... 0.90% 0.90% 0.90% 0.90% 0.90% 0.90%
Ratio of net investment
income (loss) to
average net assets**... 1.09% 1.23% 1.50% 5.50% 5.00% 4.78%
Ratio of expenses to
average net assets
before
voluntary expense
reimbursement**........ 1.72% 1.75% 3.19% 1.67% 1.59% 2.78%
Ratio of net investment
income (loss) to
average net assets
before voluntary
expense
reimbursement**........ 0.27% 0.38% (0.79%) 4.73% 4.31% 2.90%
Portfolio turnover
rate*.................. 37% 76% -- 14% 73% --
</TABLE>
* TOTAL RETURN AND PORTFOLIO TURNOVER RATE NOT ANNUALIZED FOR PERIODS LESS
THAN ONE FULL YEAR.
** ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41
<PAGE>
FINANCIAL
HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
INTERMEDIATE FIXED
----------------------------------------------------------------------
CONDENSED DATA FOR A FOR THE SIX FOR THE PERIOD
SHARE OF CAPITAL STOCK MONTH PERIOD FOR THE FROM 11/13/97
OUTSTANDING THROUGHOUT ENDED 6/30 YEAR ENDED (COMMENCEMENT)
EACH PERIOD (UNAUDITED) 12/31/98 TO 12/31/97
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 9.95 $ 10.06 $ 10.00
-------------- -------------- --------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment
income............. 0.29 0.57 0.07
Net gains (losses) on
securities
(both realized and
unrealized)........ (0.34) (0.05) 0.06
-------------- -------------- --------------
Total income (loss)
from investment
operations........... (0.05) 0.52 0.13
-------------- -------------- --------------
LESS DISTRIBUTIONS:
Dividends from net
investment
income............. -- (0.56) (0.07)
Distributions from
capital gains...... -- (0.07) --
Tax return of
capital............ -- -- --
-------------- -------------- --------------
Total distributions.... -- (0.63) (0.07)
-------------- -------------- --------------
Net asset value, end of
period................. $ 9.90 $ 9.95 $ 10.06
-------------- -------------- --------------
-------------- -------------- --------------
Total return*............ (0.50%) 5.16% 1.27%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)......... $ 2,549 $ 2,415 $ 2,038
Ratio of expenses to
average net assets**... 0.80% 0.80% 0.80%
Ratio of net investment
income to average net
assets**............... 6.00% 5.75% 5.40%
Ratio of expenses to
average net assets
before
voluntary expense
reimbursement**........ 2.04% 1.97% 3.09%
Ratio of net investment
income to average net
assets
before voluntary
expense
reimbursement**........ 4.76% 4.58% 3.11%
Portfolio turnover
rate*.................. 71% 132% 39%
</TABLE>
* TOTAL RETURN AND PORTFOLIO TURNOVER RATE NOT ANNUALIZED FOR PERIODS LESS
THAN ONE FULL YEAR.
** ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
42
<PAGE>
<TABLE>
<CAPTION>
GLOBAL FIXED INCOME MONEY MARKET
------------------------------------------------ ------------------------------------------------
CONDENSED DATA FOR A FOR THE SIX FOR THE PERIOD FOR THE SIX FOR THE PERIOD
SHARE OF CAPITAL STOCK MONTH PERIOD FOR THE FROM 11/13/97 MONTH PERIOD FOR THE FROM 11/13/97
OUTSTANDING THROUGHOUT ENDED 6/30/99 YEAR ENDED (COMMENCEMENT) ENDED 6/30/99 YEAR ENDED (COMMENCEMENT)
EACH PERIOD (UNAUDITED) 12/31/98 TO 12/31/97 (UNAUDITED) 12/31/98 TO 12/31/97
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period.... $ 9.92 $ 10.09 $ 10.00 $ 1.00 $ 1.00 $ 1.00
-------------- -------------- -------------- -------------- -------------- --------------
INCOME FROM INVESTMENT
OPERATIONS:
0.26 0.84 0.09 0.02 0.05 0.01
Net gains (losses) on
securities
(both realized and
unrealized)........ (0.27) (0.11) 0.08 -- -- --
-------------- -------------- -------------- -------------- -------------- --------------
Total income (loss)
from investment
operations........... (0.01) 0.73 0.17 0.02 0.05 0.01
-------------- -------------- -------------- -------------- -------------- --------------
LESS DISTRIBUTIONS:
Dividends from net
investment
income............. -- (0.54) (0.08) (0.02) (0.05) (0.01)
Distributions from
capital gains...... -- (0.06) -- -- -- --
-- (0.30) -- -- -- --
-------------- -------------- -------------- -------------- -------------- --------------
Total distributions.... -- (0.90) (0.08) (0.02) (0.05) (0.01)
-------------- -------------- -------------- -------------- -------------- --------------
Net asset value, end of
period................. $ 9.91 $ 9.92 $ 10.09 $ 1.00 $ 1.00 $ 1.00
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
Total return*............ (0.10%) 7.23% 1.70% 2.16% 5.05% 0.71%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)......... $ 5,493 $ 5,483 $ 5,099 $ 1,201 $ 1,270 $ 1,019
Ratio of expenses to
average net assets**... 1.00% 1.00% 1.00% 0.50% 0.50% 0.50%
Ratio of net investment
income to average net
assets**............... 5.18% 5.40% 5.29% 4.31% 4.93% 5.26%
Ratio of expenses to
average net assets
before
voluntary expense
reimbursement**........ 1.57% 1.47% 2.28% 2.80% 2.89% 4.90%
Ratio of net investment
income to average net
assets
before voluntary
expense
reimbursement**........ 4.61% 4.93% 4.01% 2.01% 2.54% 0.86%
Portfolio turnover
rate*.................. 82% 185% 25% -- -- --
</TABLE>
* TOTAL RETURN AND PORTFOLIO TURNOVER RATE NOT ANNUALIZED FOR PERIODS LESS
THAN ONE FULL YEAR.
** ANNUALIZED FOR PERIODS LESS THAN ONE FULL YEAR.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
43
<PAGE>
THIS REPORT HAS BEEN PREPARED FOR THE INFORMATION OF THE CONTRACTHOLDERS OF
INVESTORS MARK SERIES FUND, INC. AND IS NOT TO BE CONSTRUED AS AN OFFERING OF
THE SHARES OF THE FUND. SHARES OF THE FUND ARE OFFERED ONLY BY THE PROSPECTUS, A
COPY OF WHICH MAY BE OBTAINED FROM BUSINESS MEN'S ASSURANCE COMPANY OF AMERICA.
