<PAGE>
- -------------------
FORWARD FUNDS, INC.
- -------------------
The Global Fund
PORTFOLIO OF INVESTMENTS
June 30, 1998 (Unaudited)
Value
Shares (Note 2)
------ --------
U.S. COMMON STOCKS - 42.66%
Aerospace / Airlines - 0.64%
200 AMR Corp.* ........................ $ 16,650
4,200 Boeing Co. ........................ 187,163
2,000 Delta Air Lines, Inc. ............. 258,500
2,600 Gulfstream Aerospace Corp.* ....... 120,900
900 Nichols Research Corp.* ........... 24,581
100 Northwest Airlines Corp, Class A* . 3,856
400 Raytheon Co., Class B* ............ 23,650
---------
635,300
---------
Agriculture - 0.12%
1,300 Agco Corp. ........................ 26,731
200 Delta and Pine Land Co. ........... 8,900
2,200 Scotts Company (The), Class A* .... 81,950
---------
117,581
---------
Auto Repair / Auto Parts - 0.68%
600 Arvin Industries, Inc. ............ 21,788
2,500 Eaton Corp. ....................... 194,375
2,600 Federal Mogul Corp. ............... 175,500
3,200 Mascotech, Inc. ................... 76,800
1,400 SPX Corp. ......................... 90,125
1,400 Standard Products Co. ............. 39,375
900 Tenneco, Inc. ..................... 34,256
800 TRW, Inc. ......................... 43,700
---------
675,919
---------
Basic Materials - 1.07%
1,100 ACX Technologies, Inc.* ........... 23,925
2,500 AK Steel Holding Corp. ............ 44,688
300 Aluminum Company of America ....... 19,781
2,300 Carbide/Graphite Group* ........... 63,969
1,000 Carlisle Cos., Inc. ............... 43,188
700 Century Aluminum Co. .............. 10,325
1,300 Champion International Corp. ...... 63,944
4,200 Commonwealth Industries, Inc. ..... 42,000
3,100 Hanna (M.A.) Co. .................. 56,769
2,500 Jefferson Smurfit Corp.* .......... 39,297
200 Maverick Tube Corp.* .............. 2,325
500 Minnesota Mining & Manufacturing Co. 41,094
700 RMI Titanium Co.* ................. 15,925
750 Shorewood Packaging Corp. ......... 11,906
5,900 Timken Co. ........................ 181,794
2,000 Vulcan Materials Co. .............. 213,375
5,900 Willamette Industries, Inc. ....... 188,800
---------
1,063,105
---------
Business Services - 0.54%
2,100 America Online, Inc.* ............. 222,600
2,000 Caribiner International, Inc.* .... 35,000
2,000 Donnelley (R.R.) & Sons, Inc. ..... 91,500
2,200 FirstMerit Corp. .................. 64,075
200 G & K Services, Inc. .............. 8,725
600 Metromedia International Group, Inc.* 7,163
1,700 Ogden Corp. ....................... 47,069
1,900 Superior Services, Inc.* .......... 57,119
---------
533,251
---------
Chemicals and Drugs - 4.08%
2,800 Abbott Laboratories ............... 114,450
2,000 Albemarle Corp. ................... 44,125
8,600 American Home Products Corp. ...... 445,050
500 Bausch & Lomb, Inc. ............... 25,063
3,700 Beckman Coulter, Inc. ............. 215,525
900 Becton Dickinson & Co. ............ 69,863
4,100 Bristol-Myers Squibb Co. .......... 471,244
1,000 Cambrex Corp. ..................... 26,250
4,800 duPont (E.I.) deNemours & Co. ..... 358,200
2,400 Engelhard Corp. ................... 48,600
3,100 Forest Labs, Inc.* ................ 110,825
100 FMC Corp.* ........................ 6,819
7,000 Ferro Corp. ....................... 177,188
2,300 General Chemical Group, Inc. ...... 63,825
11,100 Ivax Corp. ........................ 102,675
200 MacDermid, Inc.* .................. 5,650
5,600 Mallinckrodt, Inc. ................ 166,250
4,700 Merck & Co., Inc. ................. 628,625
100 Owens & Minor, Inc. ............... 1,000
100 Pharmacia & Upjohn, Inc. .......... 4,613
10,300 Philip Morris Cos., Inc. .......... 405,563
3,500 Regeneron Pharmaceutical Co.* ..... 32,266
3,800 Roberts Pharmaceutical Corp.* ..... 87,400
3,700 Schering-Plough Corp. ............. 339,013
100 SEQUUS Pharmaceuticals, Inc. ...... 1,138
3,100 Solutia, Inc. ..................... 88,931
1,100 Vivus, Inc.* ...................... 6,634
---------
4,046,785
---------
Construction - 0.16%
900 Centex Construction Products, Inc. 34,650
800 Foster Wheeler Corp. .............. 17,150
200 Giant Cement Holding, Inc.* ....... 5,725
500 Lennar Corp. ...................... 14,750
300 Martin Marietta Materials, Inc. ... 13,500
200 Masco Corp. ....................... 12,100
1,500 Republic Group, Inc. .............. 31,500
500 USG Corp.* ........................ 27,063
---------
156,438
---------
Consumer Cyclical - 4.06%
2,800 Advo, Inc.* ....................... 78,925
2,500 Anheuser- Busch Cos, Inc. ......... 117,969
200 Archer- Daniels-Midland Co. ....... 3,875
2,800 Best Buy Co., Inc.* ............... 101,150
200 Bestfoods ......................... 11,613
300 Chiquita Brands International, Inc. 4,219
See Notes to Financial Statements.
1
<PAGE>
- -------------------
FORWARD FUNDS, INC.
- -------------------
The Global Fund
PORTFOLIO OF INVESTMENTS (Continued)
June 30, 1998 (Unaudited)
Value
Shares (Note 2)
------ --------
Consumer Cyclical (continued)
2,700 Chrysler Corp. ...................... $ 152,213
7,600 Coca Cola Co. ....................... 649,800
2,700 Coca Cola Entrerprises, Inc. ........ 105,975
2,600 Conagra, Inc. ....................... 82,388
200 Coors (Adolph) Class B .............. 6,800
6,200 Darden Restaurants, Inc. ............ 98,425
1,000 Dean Foods, Inc. .................... 54,938
2,900 Earthgrains Co. ..................... 162,038
3,500 Ford Motor Co. ...................... 206,500
1,000 General Motors Corp. ................ 66,813
1,000 Hannaford Brothers Co. .............. 44,000
800 Herbalife International, Inc. Class A 19,700
1,400 Hormel Foods Corp. .................. 48,388
2,000 Interstate Bakeries Corp. ........... 66,375
5,700 McCormick & Co. ..................... 203,597
1,700 McDonald's Corp. .................... 117,300
4,800 NPC International, Inc.* ............ 58,800
200 Outback Steakhouse, Inc.* ........... 7,800
6,900 PepsiCo, Inc. ....................... 284,194
8,100 Procter & Gamble Co. ................ 737,606
4,500 Ralcorp Holdings, Inc.* ............. 84,938
700 Richfood Holdings Co.* .............. 14,481
7,200 Ryan Family Steak Houses, Inc.* ..... 73,800
3,500 Sara Lee Corp. ...................... 195,781
2,100 Supervalu, Inc. ..................... 93,188
2,700 Triarc Cos. Class A* ................ 59,231
500 Tricon Global Restaurants, Inc.* .... 15,844
----------
4,028,664
----------
Consumer Products - 0.90%
100 Clairborne (Liz), Inc. .............. 5,225
1,900 Colgate- Palmolive Co. .............. 167,200
1,100 Fruit of the Loom, Inc.* ............ 36,575
3,000 Galey & Lord, Inc.* ................. 44,625
5,400 Gillette Co. ........................ 306,113
1,600 Libbey, Inc. ........................ 61,300
300 Mattel, Inc. ........................ 12,694
600 Nimbus CD International, Inc.* ...... 6,825
3,000 Polaroid Corp. ...................... 106,688
2,500 Standard Register Co. ............... 88,594
200 Trans World Entertaiment Corp.* ..... 8,625
1,400 Unifi, Inc........................... 47,950
----------
892,414
----------
Durable Goods - 0.74%
1,600 Alliant Techsystems, Inc.* .......... 101,200
600 AvNet, Inc. ......................... 32,813
3,900 Caterpillar, Inc. ................... 206,213
1,200 Cellstar Corp.* ..................... 15,525
2,600 Corning, Inc. ....................... 90,350
400 Grainger (W.W.), Inc. ............... 19,925
4,300 Maytag, Corp. ....................... 212,313
1,200 Oakwood Homes Corp. ................. 36,000
550 Sonoco Products Co. ................. 16,638
----------
730,977
----------
Electronics - 0.79%
100 American Power Conversion Corp.* .... 3,000
1,300 Dallas Semiconductor Corp. .......... 40,300
2,700 Deere & Co. ......................... 142,763
2,500 Dominion Resources, Inc. ............ 101,875
450 Dynatech Corp. ...................... 1,406
500 Electronic Measure Instrument Corp. . 12,156
700 Jabil Circuit, Inc.* ................ 23,144
3,000 Magnetek, Inc.* ..................... 47,250
700 Oak Industries, Inc.* ............... 24,763
500 Parker Hannifin Corp. ............... 19,063
10,900 Pioneer Standard Electronics, Inc. .. 104,913
1,600 Plexus Corp.* ....................... 31,800
300 Solectron Corp.* .................... 12,619
3,700 Tektronix, Inc. ..................... 130,888
1,000 UCAR International, Inc.* ........... 29,188
700 Unitrode Corp.* ..................... 8,050
200 Vicor Corp.* ........................ 2,775
2,200 Vishay Interntechnology, Inc.* ...... 39,463
400 VLSI Technology, Inc.* .............. 6,713
----------
782,129
----------
Energy - 2.28%
300 Atlantic Richfield Co. .............. 23,438
900 Atwood Oceanics, Inc.* .............. 35,831
600 Belco Oil & Gas, Inc.* .............. 5,250
2,300 Berry Petroleum Co., Class A ........ 29,900
1,700 Cliffs Drilling Company* ............ 55,781
3,000 Comstock Resources, Inc.* ........... 22,313
3,000 Ensco International, Inc. ........... 52,125
8,800 Exxon Corp. ......................... 627,550
300 Global Marine, Inc.* ................ 5,606
1,500 Marine Drilling Cos.* ............... 24,000
5,000 Mobil Corp. ......................... 383,125
2,500 Nabors Industries, Inc .* ........... 49,531
1,200 Noble Affiliates, Inc. .............. 45,600
1,600 Rowan Companies* .................... 31,100
5,000 Sun Co., Inc. ....................... 194,063
2,300 Swift Energy Co.* ................... 36,656
5,400 Texaco, Inc. ........................ 322,313
1,300 Tidewater, Inc. ..................... 42,900
1,900 Tosco Corp. ......................... 55,813
5,000 Vastar Resources, Inc. .............. 218,438
----------
2,261,333
----------
Finance - 7.92%
600 Acceptance Insurance Cos., Inc.* .... 14,738
600 Alfa Corp. .......................... 12,450
1,300 Allstate Corp. ...................... 119,031
400 Ambac Financial Group, Inc. ......... 23,400
1,200 American Express Co. ................ 136,800
1,100 American Financial Group, Inc. ...... 47,644
4,500 American General Corp. .............. 320,344
4,200 American International Group ........ 613,200
1,300 AMRESCO, Inc.* ...................... 37,863
1,217 Associates First Capital Corp. ...... 93,584
See Notes to Financial Statements.
2
<PAGE>
- -------------------
FORWARD FUNDS, INC.
- -------------------
The Global Fund
PORTFOLIO OF INVESTMENTS (Continued)
June 30, 1998 (Unaudited)
Value
Shares (Note 2)
------ --------
Finance (continued)
3,500 BankAmerica Corp. ................... $ 302,531
4,800 Banc One Corp. ...................... 267,900
1,200 Bankers Trust Corp. ................. 139,275
300 Capital One Financial Corp. ......... 37,256
600 Charter One Financial, Inc. ......... 20,213
6,600 Chase Manhattan Corp. ............... 498,300
1,500 CIGNA Corp. ......................... 103,500
2,900 Citicorp ............................ 432,825
1,500 Conseco Inc ......................... 70,125
300 Corus Bankshares, Inc. .............. 12,075
2,400 Delta Financial Corp.* .............. 44,100
600 Equifax, Inc. ....................... 21,788
2,900 Fannie Mae .......................... 176,175
800 First Chicago NBD Corp. ............. 70,900
4,200 First Union Corp. ................... 244,650
700 FIRSTPLUS Financial Group, Inc.* .... 26,425
800 Fleet Financial Group, Inc. ......... 66,800
700 Franklin Resources, Inc. ............ 37,800
600 Freddie Mac ......................... 28,238
200 Gallagher (Arthur J.) & Co. ......... 8,950
300 General Re Corp. .................... 76,875
1,900 Green Tree Financial Corp. .......... 81,344
300 Hartford Financial Services Group,
Inc. ............................... 34,313
900 IMC Mortgage Co.* ................... 9,506
200 Insignia Financial Group, Inc.* ..... 4,900
500 John Alden Financial Corp.* ......... 11,000
3,800 Long Beach Financial Corp. .......... 41,800
500 Magna Group, Inc. ................... 28,250
1,500 Marsh & Mclennan Cos. ............... 90,656
2,500 Merrill Lynch & Co., Inc. ........... 230,625
400 MMI Companies ....................... 9,250
3,700 Morgan Stanley, Dean Witter, Discover 338,088
3,800 National City Corp. ................. 269,800
6,900 NationsBank Corp. ................... 527,850
1,800 Norwest Corp. ....................... 67,275
1,575 Old Kent Financial Corp. ............ 56,651
3,150 Old Republic International Corp. .... 92,334
200 One Valley Bancorp, Inc. ............ 7,275
200 Penncorp Financial Group, Inc. ...... 4,100
1,500 Pioneer Group, Inc. ................. 39,469
4,600 PNC Bank Corp. ...................... 247,538
3,600 Republic New York Corp. ............. 226,575
750 RLI Corp. ........................... 30,516
1,300 SEI Investments, Inc. ............... 80,600
1,600 SLM Holdings Corp. .................. 78,400
300 Southern Pacific Funding Corp.* ..... 4,706
600 SouthTrust Corp. .................... 26,100
6,200 Soveriegn Bancorp, Inc. ............. 101,331
4,200 St. Paul Cos. Inc. .................. 176,663
600 The PMI Group, Inc. ................. 44,025
500 TR Financial Group, Inc. ............ 20,938
6,800 Travelers Group, Inc. ............... 412,250
800 Trustmark Corp. ..................... 17,550
1,200 United Companies Financial Corp. .... 18,750
4,200 U.S. Bancorp ........................ 180,600
3,450 Washington Mutual, Inc. ............. 149,859
----------
7,866,642
----------
Health Care - 1.92%
2,400 Amgen, Inc.* ........................ 156,900
1,000 First Health Group Corp.* ........... 28,500
1,300 Genesis Health Ventures, Inc.* ...... 32,500
2,000 Health Care & Retirement Corp.* ..... 78,875
1,000 Humana, Inc.* ....................... 31,188
100 Immunex Corp.* ...................... 6,625
1,700 Integrated Health Services, Inc. .... 63,750
5,600 Invacare Corp. ...................... 143,500
3,400 Johnson & Johnson Co. ............... 250,750
1,200 Lilly (Eli) & Co. ................... 79,275
1,600 Mylan Labs, Inc. .................... 48,100
700 Pediatrix Medical Group, Inc.* ...... 26,031
6,100 Pfizer, Inc. ........................ 662,994
400 Rexall Sundown, Inc.* ............... 14,100
2,100 Sun Healthcare Group, Inc.* ......... 30,713
100 Tenet Healthcare Corp.* ............. 3,125
1,100 United Healthcare Corp. ............. 69,850
1,500 Warner Lambert Co. .................. 104,063
1,000 Wellpoint Health Networks, inc.* .... 74,000
----------
1,904,839
----------
Leisure and Entertainment - 0.98%
200 Anchor Gaming Co.* .................. 15,525
12,100 Arctic Cat, Inc. .................... 119,488
1,000 Ascent Entertainment Group* ......... 11,125
2,300 GTECH Holdings Corp.* ............... 77,481
3,800 Grand Casinos, Inc.* ................ 63,650
3,200 Harrah's Entertainment, Inc.* ....... 74,400
1,400 Midway Games, Inc.* ................. 21,875
8,400 Spelling Entertainment Group ........ 78,750
4,900 Disney (Walt) Co. ................... 514,806
----------
977,100
----------
Manufacturing - 0.23%
1,600 Foamex International, Inc. .......... 27,900
4,400 Harsco Corp. ........................ 201,575
----------
229,475
----------
Media - 0.13%
300 Gannet, Inc. ........................ 21,319
200 Tribune Co. ......................... 13,763
2,500 True North Communications, Inc. ..... 73,125
800 Westwood One, Inc.* ................. 20,175
----------
128,382
----------
See Notes to Financial Statements.
3
<PAGE>
FORWARD FUNDS, INC.
The Global Fund
PORTFOLIO OF INVESTMENTS (Continued)
June 30, 1998 (Unaudited)
Value
Shares (Note 2)
-------- ----------
Medical Products - 0.22%
700 ATL Ultrasound, Inc.* ..................... $ 31,938
3,200 Haemonetics Corp.* ........................ 51,200
400 Life Technologies, Inc. ................... 12,550
1,175 Organogenesis, Inc.* ...................... 23,206
11,100 Scios, Inc.* .............................. 98,515
------------
217,409
------------
Printing and Publishing - 0.53%
5,100 Deluxe Corp. .............................. 182,644
7,000 Dun & Bradstreet Corp.* ................... 252,875
1,000 Time Warner, Inc. ......................... 85,438
200 Value Line, Inc. .......................... 7,650
------------
528,607
------------
Real Estate - 0.20%
1,000 Crown American Realty Co. ................. 9,688
1,800 Fairfield Communities, Inc.* .............. 34,538
6,100 Merry Land and Investments Co., Inc. ...... 128,481
1,500 Taubman Centers, Inc. ..................... 21,375
------------
194,082
------------
Real Estate Investment Trust - 0.33%
4,100 Capstead Mortgage Corp. ................... 34,338
700 Cousins Properties, Inc. .................. 20,913
1,500 CRIIMI MAE, Inc. .......................... 20,813
500 Excel Realty Trust ........................ 14,469
7,600 Koger Equity, Inc. ........................ 153,425
1,500 LTC Properties, Inc. ...................... 27,938
800 Mack-Cali Realty Corp. .................... 27,500
800 Prentiss Properties Trust Corp. ........... 19,450
200 Starwood Hotels & Resorts Co. ............. 9,663
------------
328,509
------------
Retail - 2.13%
600 American Stores Co. ....................... 14,513
7,600 Burlington Coat Factory Warehouse Co.*..... 171,000
100 Claire's Stores, Inc. ..................... 2,050
400 Finlay, Inc.* ............................. 9,650
400 Footstar, Inc.* ........................... 19,200
2,000 Gap, Inc. (The) ........................... 123,250
900 General Nutrition Cos., Inc.* ............. 28,013
4,700 Heilig-Meyers Co. ......................... 57,869
4,200 Hollywood Entertainment Corp.* ............ 56,963
1,500 Home Depot, Inc. .......................... 124,594
3,600 Kroger Co.* ............................... 154,350
1,100 Lands End, Inc.* .......................... 34,925
1,200 Lowe's Companies. Inc. .................... 48,675
3,200 May Deptartment Stores Co. ................ 209,600
700 Musicland Stores Corp.* ................... 9,800
1,600 Penny (J.C.) Co., Inc. .................... 115,700
2,100 Rite Aid Corp. ............................ 78,881
600 Ross Stores, Inc. ......................... 25,800
6,100 Sunglass Hut International* ............... 67,481
1,600 Tandy Corp. ............................... 84,900
600 TJX Cos., Inc. ............................ 14,475
2,300 Toys `R' Us, Inc.* ........................ 54,194
10,000 Wal-Mart Stores, Inc. ..................... 607,500
------------
2,113,383
------------
Technology - 6.07%
5,000 American Business Information, Inc.*....... 80,000
1,100 American Management Systems, Inc.* ........ 32,931
700 AMP, Inc. ................................. 24,063
1,400 Andrew Corp.* ............................. 25,288
3,900 Apple Computer, Inc.* ..................... 111,881
1,200 Autodesk, Inc. ............................ 46,350
1,300 Automatic Data Processing, Inc. ........... 94,738
2,500 Banctec, Inc.* ............................ 57,813
1,200 Bay Networks, Inc.* ....................... 38,700
1,000 BMC Software, Inc.* ....................... 51,938
12,407 Compaq Computer Corp. ..................... 352,034
10,100 Compucom Systems, Inc.* ................... 65,650
3,400 Computer Associates International, Inc..... 188,913
100 Computer Task Group, Inc. ................. 3,350
300 Compuware Corp.* .......................... 15,338
1,500 Data Transmission Network, Inc.* .......... 60,000
5,200 Dell Computer Corp.* ...................... 482,625
300 Filenet Corp.* ............................ 8,663
1,200 Flowserve Corp. ........................... 29,250
1,000 Gateway 2000* ............................. 50,625
14,300 General Electric Corp. .................... 1,301,300
900 Harris Corp. .............................. 40,219
3,600 Hewlett Packard Co. ....................... 215,550
1,900 HMT Technology Corp.* ..................... 15,913
500 Hutchinson Technology Corp.* .............. 13,625
1,400 Informix Corp.* ........................... 11,069
8,300 Intel Corp. ............................... 615,238
600 Intergraph Corp.* ......................... 5,138
3,400 International Business Machines Corp....... 390,363
100 Intuit, Inc.* ............................. 6,125
1,100 Iomega Corp.* ............................. 6,463
600 Learning Company, Inc.* ................... 17,775
100 Lexmark Holdings Corp. Class A* ........... 6,100
5,700 Mentor Graphics Corp.* .................... 60,206
6,700 Microsoft Corp.* .......................... 726,113
400 Mindspring Enterprises, Inc .* ............ 41,150
100 NCR Corp* ................................. 3,250
3,200 Oracle Systems Corp.* ..................... 78,600
900 PeopleSoft, Inc.* ......................... 42,300
300 Progress Software Corp.* .................. 12,300
1,900 Scientific Atlanta, Inc. .................. 48,213
300 Splash Technology Holdings, Inc.* ......... 5,156
100 Stratus Computer, Inc.* ................... 2,531
2,200 Sun Microsystems, Inc.* ................... 95,563
100 Tellabs, Inc.* ............................ 7,163
3,900 Texas Instruments, Inc. ................... 227,419
1,200 Total System Services, Inc. ............... 25,200
See Notes to Financial Statements.
4
<PAGE>
- ---------------------
FORWARD FUNDS, INC.
- ---------------------
The Global Fund
PORTFOLIO OF INVESTMENTS (Continued)
June 30, 1998 (Unaudited)
Value
Shares (Note 2)
--------- ------------
Technology (continued)
3,400 Unisys Corp.* ............................. $ 96,050
1,000 United Technologies Corp. ................. 92,500
-------------
6,028,742
-------------
Telecommunications - 2.74%
9,100 AT&T Corp. ................................ 519,838
3,200 Aerial Communications, Inc.* .............. 20,000
1,700 AirTouch Communications, Inc.* ............ 99,344
2,400 Aliant Communications, Inc. ............... 65,850
2,900 BellSouth Corp. ........................... 194,663
2,200 Century Communication Corp.* .............. 41,250
2,200 Cisco Systems, Inc.* ...................... 202,538
5,300 Communications Satellite Corp. ............ 150,056
500 Frontier Corp. ............................ 15,750
2,500 General Instrument Corp. .................. 67,969
4,800 GTE Corp. ................................. 267,000
4,200 Lucent Technologies, Inc. ................. 349,388
1,400 NTL, Inc.* ................................ 74,900
1,100 Paging Network, Inc.* ..................... 15,400
1,382 Qwest Communications International, Inc.*.. 48,198
1,600 SmarTalk TeleServices, Inc.* .............. 23,300
5,100 Tele-Communications International, Inc.*... 102,478
2,200 Tele Communications
International, Inc. Class A* ............ 84,563
700 Transaction Network Service, Inc.* ........ 14,744
3,300 U.S. West, Inc.* .......................... 155,100
700 Valassis Communications, Inc.* ............ 26,994
100 World Access, Inc.* ....................... 3,000
3,700 WorldCom, Inc.* ........................... 179,219
-------------
2,721,542
-------------
Transportation - 0.35%
800 Burlington Northern Santa Fe Co. .......... 78,550
600 CSX Corp. ................................. 27,300
300 HVIDE Marine, Inc. Class A* ............... 4,069
5,400 Ryder Systems, Inc. ....................... 170,438
400 U.S. Freightways Corp. .................... 13,138
2,100 Wisconsin Central Transportation Corp.*.... 45,938
700 Yellow Corp.* ............................. 12,994
-------------
352,427
-------------
Utilities - 2.54%
1,400 Allegheny Energy, Inc. .................... 42,175
2,200 Allied Waste Industries, Inc.* ............ 52,800
9,100 Ameritech Corp. ........................... 408,363
11,200 Bell Atlantic Corp. ....................... 511,000
2,900 California Energy, Inc.* .................. 87,181
8,900 Edison International, Inc. ................ 263,106
4,500 Florida Progress Corp. .................... 185,063
1,700 FPL Group, Inc. ........................... 107,100
300 Houston Industries, Inc. .................. 9,263
4,600 NICOR, Inc. ............................... 184,575
3,800 Public Service Co. ........................ 82,650
6,600 Public Service Entreprise Group, Inc....... 227,235
5,100 Puget Sound Energy, Inc. .................. 136,744
4,900 Rochester Gas & Electric Co. .............. 156,494
1,600 Southern Co. .............................. 44,300
300 Southern New England
Telecommunications, Inc. ................ 19,650
100 United Illuminating Co. ................... 5,063
-------------
2,522,762
-------------
Total U.S. Common Stocks .................. 42,037,797
Cost ($41,669,811) -------------
FOREIGN COMMON STOCKS - 23.09%
Argentina - 0.74%
31,600 Perez Companc SA .......................... 158,655
8,710 Telefonos de Argentina, ADR ............... 282,531
9,825 YPF Sociedad Anonima, ADR ................. 295,364
-------------
736,550
-------------
Austria - 0.42%
3,310 VA Technologie AG ......................... 412,201
-------------
Australia - 0.92%
30,150 Broken Hill Proprietary Co. ............... 255,468
168,000 HIH Winterthur International
Holdings, Ltd. .......................... 297,215
77,425 Pacific Dunlop, Ltd. ...................... 125,441
98,810 Pioneer International, Ltd., ADR .......... 235,572
-------------
913,696
-------------
Belgium - 0.61%
1,270 Electrabel SA ............................. 360,272
3,960 Union Miniere SA .......................... 244,905
-------------
605,177
-------------
Brazil - 1.08%
26,715 Banco Bradesco, ADR ....................... 224,045
15,075 Centrais Eletricas Brasileiras SA, ADR..... 226,125
1,508 Centrais Geradoras do
Sul do Brasil SA, ADR ................... 10,741
11,500 Companhia Vale do Rio Doce, ADR ........... 234,370
3,425 Telecomunicacoes Brasileiras SA, ADR....... 373,967
-------------
1,069,248
-------------
Canada - 1.65%
25,505 Agrium, Inc. .............................. 322,001
38,925 Methanex Corp.*............................ 339,904
15,040 Newbridge Networks Corp. .................. 360,020
22,920 Oshawa Group, Ltd., Class A ............... 412,748
13,800 Renaissance Energy, Ltd.*.................. 206,782
-------------
1,641,455
-------------
Chile - 0.09%
5,400 Gener SA, ADR ............................. 98,550
-------------
See Notes to Financial Statements.
5
<PAGE>
The Global Fund
PORTFOLIO OF INVESTMENTS (Continued)
June 30, 1998 (Unaudited)
Value
Shares (Note 2)
------ --------
Denmark - 0.47%
5,155 Unidanmark A/S, Class A ............. $ 463,759
---------
Egypt - 0.28%
14,664 Commercial International Bank, GDR .. 158,371
6,520 Suez Cement Co., GDR (B) ............ 118,990
---------
277,361
---------
France - 1.48%
6,040 Eramet SLN .......................... 239,374
2,730 Compagnie Financiere de Paribas ..... 292,160
5,180 Rhone-Poulenc SA .................... 292,171
5,790 Scor ................................ 367,280
2,930 Sylea SA ............................ 270,915
---------
1,461,900
---------
Finland - 1.30%
29,900 Enso Oyj, R Shares .................. 321,913
26,470 Kemira Oyj .......................... 274,841
58,690 Merita Plc, A Shares ................ 387,693
15,255 Rauma Oyj (The Rauma Group) ......... 313,170
---------
1,297,617
---------
Germany - 0.71%
3,680 Deutshe Bank AG ..................... 311,446
1,090 Muenchener Rueckversicherungs-
Gesellschaft AG* .................. 389,307
---------
700,753
---------
Hong Kong - 1.42%
30,000 Cheung Kong Holdings, Ltd. .......... 147,522
123,500 Honkong Electric Holdings ........... 382,550
204,400 Hong Kong Telecom ................... 383,844
334,000 National Mutual Asia, Ltd. .......... 213,384
105,000 Smartone Telecommunications ......... 256,131
44,000 Swire Pacific, Ltd., Class B ........ 26,407
---------
1,409,838
---------
Israel - 0.53%
7,860 Tadiran, Ltd., ADR .................. 260,363
7,650 Teva Pharmaceutical Industries, ADR . 269,184
---------
529,547
---------
Japan - 0.25%
10,000 Kurita Water Industries, Ltd. ....... 118,609
38,000 Mitsubishi Paper Mills .............. 74,203
8,000 Yamato Kogyo, Ltd. .................. 59,015
---------
251,827
---------
Mexico - 0.81%
60,000 Alfa SA de C.V. ..................... 243,392
40,345 Desc SA de C.V., Series B ........... 204,296
7,400 Telefonos de Mexico SA, ADR ......... 355,663
---------
803,351
---------
Value
Shares (Note 2)
------ --------
Netherlands - 1.20%
4,800 ING Groep N.V. ...................... $ 314,545
7,160 Philips Electronics N.V. ............ 602,347
18,530 Otra N.V. ........................... 279,867
---------
1,196,759
---------
New Zealand - 0.24%
98,840 Fletcher Challenge Energy ........... 236,584
---------
Norway - 0.83%
18,840 Elkem ASA ........................... 226,173
50,875 Fokus Bank ASA* ..................... 394,997
50,875 Fokus Bank ASA Rights ............... 730
6,500 Kvaerner, PLC, B Shares ............. 201,018
---------
822,918
---------
Peru - 0.19%
12,750 Credicorp, Ltd. ..................... 187,266
---------
South Africa - 0.29%
90,880 Illovo Sugar, Ltd. .................. 113,408
59,400 Ingwe Coal Corp., Ltd. .............. 170,287
---------
283,695
---------
Spain - 0.36%
6,450 Repsol SA ........................... 354,571
---------
Sweden - 1.08%
12,500 Autoliv, Inc., Swedish Depository 399,687
Receipt
10,890 Mo och Domsjo AB, B Shares .......... 311,338
2,500 Saab AB, B Shares* .................. 26,332
9,800 Volvo AB, A Shares .................. 285,091
1,700 Volvo AB, B Shares .................. 50,627
---------
1,073,075
---------
Switzerland - 1.26%
1,395 Danzas Holding AG ................... 375,857
250 SGS Societe Generale de
Surveillance Holding SA ........... 424,454
715 Zuerich Versicherungs-Gesellschaft .. 457,056
---------
1,257,367
---------
Thailand - 0.07%
58,500 Bangkok Bank Public Company, Ltd. ... 72,085
---------
United Kingdom - 4.92%
8,755 Ace, Ltd. ........................... 341,445
20,800 British Steel, Plc* ................. 45,756
86,507 BTR, Plc ............................ 246,993
106,470 BTR, Plc, Class B* .................. 61,332
86,250 Caradon, Plc ........................ 267,862
78,950 Danka Business Systems, Plc ......... 249,145
41,666 General Electric Company, Plc ....... 359,328
130,000 Hillsdown Holdings, Plc ............. 351,639
See Notes to Financial Statements.
6
<PAGE>
- -------------------
FORWARD FUNDS, INC.
- -------------------
The Global Fund
PORTFOLIO OF INVESTMENTS (Continued)
June 30, 1998 (Unaudited)
Value
Shares (Note 2)
------ --------
United Kingdom (continued)
31,900 Hogg Robinson, Plc ....................... $ 144,610
76,500 Inchcape, Plc ............................ 243,968
77,500 Laird Group, Plc* ........................ 361,031
34,350 Mckechnie, Plc ........................... 250,064
143,100 Pilkington, Plc* ......................... 265,217
194,000 Salvesen (Christian), Plc ................ 369,271
52,000 Safeway, Plc ............................. 340,786
76,745 Storehouse, Plc .......................... 321,634
44,490 Tate & Lyle, Plc ......................... 353,596
84,775 The Weir Group, Plc ...................... 309,284
-----------
4,882,961
-----------
Venezuela - 0.21%
8,333 Compania Anonima Nacional Telefonos
de Venezuela, ADR ........................ 208,325
-----------
Total Foreign Common Stocks............... 23,248,436
Cost ($25,302,220) -----------
Par Value
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 14.30%
U.S. Treasury Bonds - 6.52%
$ 6,138,000 6.00%, 02/15/26 .......................... 6,386,401
80,000 6.75%, 08/15/26 .......................... 91,613
-----------
6,478,014
-----------
U.S. Treasury Notes - 3.61%
2,942,282 3.63%, 07/15/02 .......................... 2,902,642
300,000 7.00%, 07/15/06 .......................... 327,797
350,000 5.63%, 05/15/08 .......................... 354,867
-----------
3,585,306
-----------
Student Loan Marketing Association - 1.89% (C)
472,545 5.98%, 01/25/03 .......................... 473,209
1,400,000 5.87%, 04/25/07 .......................... 1,400,483
-----------
1,873,692
-----------
U.S. Treasury Bill - 1.27% (A)
1,272,000 0.00%, 07/23/98 .......................... 1,268,164
-----------
Federal National Mortgage Association - 1.01%
1,000,000 6.50%, 07/25/28........................... 999,487
-----------
Total U.S. Government
and Agency Obligations................... 14,204,663
Cost ($12,782,954) -----------
FOREIGN BONDS - 13.84%
Australia - 0.69%
$ 788,000 Australian Government Bond, Series 808
8.75%, 08/15/08 .......................... $ 607,330
109,000 Australian Government Bond, Series 909
7.50%, 09/15/09 .......................... 78,275
-----------
685,605
-----------
Germany - 1.12%
1,928,000 Deutschland Republic Bond, Series 98
5.63%, 01/04/28 .......................... 1,110,330
-----------
Greece - 2.99%
1,250,000 CSFP Credit Linked, Greece ............... 1,249,375
6.20%, 11/19/04
494,300,000 Hellenic Republic, Government Bond
8.80%, 06/19/07 .......................... 1,724,736
-----------
2,974,111
-----------
Poland - 0.28% (D)
200,000 Government of Poland Global Step-Up ...... 133,000
3.00%, 10/27/24
200,000 Government of Poland Step-Up Brady Bond
3.75%, 10/27/24 .......................... 145,500
-----------
278,500
-----------
United Kingdom - 8.76%
280,000 Middleweb PLC, 144A Senior Note
10.50%, 05/30/08 ......................... 467,516
2,400,000 U.K. Treasury
7.00%, 06/07/02 .......................... 4,074,278
2,267,000 U.K. Treasury
7.25%, 12/07/07 .......................... 4,160,182
-----------
8,701,976
-----------
Total Foreign Bonds....................... 13,750,522
Cost ($14,926,931) -----------
CORPORATE BONDS - 1.11% (B) (C)
600,000 Fuji Jgb Inv. LLC, Series A
9.87%, 12/31/49 .......................... 527,722
300,000 SB Treasury Co., LLC
9.40%, 12/29/49 ......................... 295,407
300,000 Tokai Bank Capital Co.
9.98%, 12/29/49 .......................... 277,886
-----------
Total Corporate Bonds .................... 1,101,015
(Cost $1,149,688) -----------
See Notes to Financial Statements
7
<PAGE>
- ---------------------
FORWARD FUNDS, INC
- ---------------------
The Global Fund
PORTFOLIO OF INVESTMENTS (Continued)
June 30, 1998 (Unaudited)
Value
Par Value (Note 2)
--------- --------
TIME DEPOSIT - 1.43%
$ 1,422,000 NationsBank Time Deposit
5.88%, 07/01/98 ............................. $ 1,422,000
-----------
Total U.S. Time Deposit ..................... 1,422,000
(Cost $1,422,000) -----------
COMMERCIAL PAPER (A) - 16.01%
1,100,000 American Express Credit Corp.
5.64%,07/29/98 .............................. 1,095,294
200,000 AmeriTech Corp.
5.52%, 07/13/98 ............................. 199,632
500,000 BellSouth Telecommunications
5.49%, 09/10/98 ............................. 494,418
1,500,000 Caisse D'Amortissement
5.50%, 08/27/98 ............................. 1,486,938
1,500,000 Coca-Cola Co.
5.59%, 07/23/98 ............................. 1,494,958
700,000 Coca-Cola Co.
5.48%, 09/18/98 ............................. 691,332
400,000 Ford Motor Credit Corp.
5.52%, 07/03/98 ............................. 399,877
700,000 Ford Motor Credit Corp.
5.75%, 07/10/98 ............................. 698,978
500,000 General Electric Capital Corp.
5.59%, 07/22/98 ............................. 498,370
800,000 General Electric Capital Corp.
5.57%, 07/29/98 ............................. 796,534
1,500,000 IBM Credit Corp.
5.50%, 07/29/98 ............................. 1,493,583
1,500,000 KFW International Finance Corp.
5.55%, 07/15/98 ............................. 1,496,792
1,300,000 National Rural Utilities
5.51%, 09/08/98 ............................. 1,285,881
1,500,000 New Center Asset Trust Corp.
5.55%, 08/20/98 ............................. 1,488,437
1,500,000 Ontario Hydro
5.50%, 09/08/98 ............................. 1,483,708
800,000 Procter & Gamble Co.
5.61%, 07/15/98 ............................. 798,288
------------
Total Commercial Paper ...................... 15,903,020
(Cost $15,904,335) ------------
Total Investments - 112.44% ................................. 111,667,453
(Cost $113,157,939) ------------
Net Other Assets and Liabilities - (12.44)% ................. (12,356,711)
------------
Net Assets - 100.00% ........................................ $ 99,310,742
============
- ----------------------------------------------
* Non-income producing security.
(A) Effective yield at time of purchase.
(B) Security exempt from registration under 144A of the Securities Act of 1933.
This security may be resold, in transactions exempt from registration, to
qualified institutional buyers. On June 30, 1998 these securities amounted
to $1,687,521 or 1.70% of net assets.
(C) Variable rate security. Rate shown reflects rate currently in effect.
(D) Interest rate steps up periodically to maturity. The interest rate shown
reflects the rate currently in effect.
ADR American Depositary Receipt
GDR Global Depositary Receipt
See Notes to Financial Statements.
8
<PAGE>
- -------------------
FORWARD FUNDS, INC.
- -------------------
The Global Fund
PORTFOLIO OF INVESTMENTS (continued)
June 30, 1998 (unaudited)
LONG FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING:
Contracts to Receive Unrealized
----------------------------------------------- Appreciation/
Expiration Value in In Exchange (Depreciation)
Date Local Currency U.S. $ for U.S. $ of Contracts
- ---------- -------------------- --------- ----------- --------------
07/16/98 CAD 506,000 344,429 343,977 (451)
08/18/98 CAD 2,762,000 1,922,068 1,878,894 (43,174)
08/25/98 CHF 2,211,000 1,498,593 1,468,402 (30,191)
07/23/98 DEM 810,000 452,818 449,868 (2,950)
08/25/98 DEM 1,642,000 915,640 913,787 (1,853)
09/17/98 DEM 972,000 542,536 541,646 (890)
07/16/98 GBP 10,000 16,266 16,683 417
09/17/98 GBP 32,000 53,171 53,192 21
08/18/98 JPY 120,878,000 880,600 880,689 89
07/27/98 NOR 2,865,000 376,252 374,116 (2,136)
08/25/98 NOR 15,671,000 2,108,524 2,047,653 (60,871)
--------------
$(141,989)
--------------
SHORT FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING:
Contracts to Deliver Unrealized
-------------------------------------------------- Appreciation/
Expiration Value in In Exchange (Depreciation)
Date Local Currency U.S. $ for U.S. $ of Contracts
- ---------- --------------------- ----------- ------------ --------------
07/16/98 CAD (1,803,000) (1,233,248) (1,225,674) 7,574
07/17/98 CAD (722,000) (491,250) (490,826) 424
07/21/98 CAD (746,000) (508,303) (507,193) 1,110
08/25/98 CHF (2,197,000) (1,497,614) (1,459,104) 38,510
07/02/98 DEM (216,000) (119,863) (119,794) 69
08/25/98 DEM (2,662,000) (1,492,863) (1,481,426) 11,437
09/17/98 DEM (1,500,000) (847,841) (835,873) 11,968
08/25/98 FRF (76,000) (12,649) (12,614) 35
09/17/98 GBP (280,000) (462,476) (465,429) (2,953)
07/21/98 JPY (53,116,000) (387,489) (385,360) 2,129
07/23/98 JPY (62,000,000) (454,169) (449,963) 4,206
08/18/98 JPY (119,500,000) (906,677) (870,649) 36,028
09/16/98 JPY (242,775,000) (1,758,124) (1,776,231) (18,107)
09/30/98 JPY (60,780,0000) (432,866) (445,599) (12,733)
08/25/98 NOR (6,931,000) (914,081) (905,640) 8,441
09/17/98 NOR (4,102,000) (541,547) (536,220) 5,327
-------------
$ 93,465
-------------
Net Unrealized Appreciation of Forward
Foreign Currency Contracts .......................... $ (48,524)
=============
- --------------------------------------
CAD Canadian Dollars
CHF Swiss Francs
DEM German Deutchemarks
FRF French Francs
GBP British Pounds
JPY Japanese Yen
NOR Norwegian Kroner
See Notes to Financial Statements.
9
<PAGE>
- -----------------------
FORWARD FUNDS, INC
- -----------------------
The Global Fund/(1)/
STATEMENT OF ASSETS AND LIABILITIES
For the period ended June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments
Investments at cost (Note 2)............................................................ $ 113,157,939
Repurchase agreement.................................................................... --
Net unrealized appreciation on investments.............................................. (1,490,486)
--------------
Total Investments at value............................................................ 111,667,453
Foreign currency (Cost $42,608)........................................................... 52,513
Receivable for investments sold........................................................... 17,195,851
Interest and dividend receivable.......................................................... 609,926
Deferred organizational expense (Note 2).................................................. 58,332
Dividend tax reclaim receivable........................................................... 21,539
Prepaid insurance......................................................................... 25,142
--------------
Total Assets............................................................................ 129,630,756
--------------
LIABILITIES:
Payable for investments purchased......................................................... 29,914,491
Payable for foreign currency purchased.................................................... 105,441
Net unrealized depreciation on forward currency contracts................................. 48,524
Barclay's Global Fund Advisors payable (Note 3)........................................... 39,217
Templeton Investment Counsel payable (Note 3)............................................. 46,838
PIMCO payable (Note 3).................................................................... 27,016
Payable to Administrator (Note 3)......................................................... 16,296
Trustees' fees and expenses payable (Note 3).............................................. 2,667
Accrued expenses and other payables....................................................... 119,524
--------------
Total Liabilities....................................................................... 30,320,014
--------------
NET ASSETS.................................................................................. $ 99,310,742
==============
NET ASSETS consist of:
Paid-in capital........................................................................... 100,130,500
Undistributed net investment income....................................................... 727,256
Accumulated net realized (loss) on investments sold....................................... 141,050
Net unrealized depreciation of investments and assets and liabilities in foreign currency. (1,688,064)
--------------
TOTAL NET ASSETS............................................................................. $ 99,310,742
==============
Shares of beneficial interest outstanding.................................................... 10,013,003
NET ASSET VALUE,
offering and redemption price per share
(Net Assets / Shares Outstanding)......................................................... $ 9.92
==============
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
- ---------------------
FORWARD FUNDS, INC
- ---------------------
The Global Fund/(1)/
STATEMENT OF OPERATIONS
For the period ended June 30, 1998 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (Note 2)......................................................................... $ 595,830
Dividends (Note 2)........................................................................ 478,207
Less net foreign taxes witheld............................................................ (31,840)
--------------
Total investment income................................................................. 1,042,197
--------------
EXPENSES:
Business manager fee...................................................................... 74,978
Barclay's Global Fund Advisors fees (Note 3).............................................. 39,217
Templeton Investment Counsel fees (Note 3)................................................ 46,838
PIMCO fees (Note 3)....................................................................... 27,016
Administration fee (Note 3)............................................................... 49,986
Custodian fee ............................................................................ 44,987
Fund accounting fee (Note 3).............................................................. 18,701
Legal fee (Note 3)........................................................................ 38,333
Transfer agent fee (Note 3)............................................................... 21,767
Trustees' fees and expenses (Note 3)...................................................... 7,686
Amortization of organization costs (Note 2)............................................... 3,061
Registration/Filing fees.................................................................. 17,336
Miscellaneous............................................................................. 13
--------------
Total expenses before waiver............................................................ 389,919
Less business manager fee waiver........................................................ (74,978)
--------------
Total expenses net of waiver............................................................ 314,941
--------------
NET INVESTMENT INCOME....................................................................... 727,256
--------------
Net realized gain on investment............................................................. 253,166
Net realized loss on foreign currency transactions.......................................... (112,116)
Net change in unrealized depreciation of assets and liabilities in foreign currencies....... (197,578)
Net change in unrealized depreciation of investments....................................... (1,490,486)
--------------
NET LOSS ON INVESTMENTS..................................................................... (1,547,014)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................ $ (819,758)
==============
</TABLE>
- ----------------------------------------------------
(1) The Fund commmenced operations on April 1, 1998.
See Notes to Financial Statements.
11
<PAGE>
- ----------------------
FORWARD FUNDS, INC.
- ----------------------
The Global Fund(1)
Statement of Changes in Net Assets
For the period ended June 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Period ended
June 30, 1998
(Unaudited)
------------------
<S> <C>
NET ASSETS at beginning of period...................................... $ 100,000,000 (A)
------------------
Increase in Net Assets resulting from operations:
Net investment income............................................... 727,256
Net realized gain on investments sold............................... 141,050
Net change in unrealized depreciation of investments
and assets and liabilities in foreign curreny.................... (1,688,064)
------------------
Net decrease in net assets resulting from operations................ (819,758)
------------------
Dividends to shareholders from:
Net investment income............................................... --
------------------
Share Transactions:
Net proceeds from sales of shares................................... 130,500
Issued to shareholders in reinvestment of dividends................. --
Cost of shares repurchased.......................................... --
------------------
Net increase from share transactions.............................. 130,500
------------------
Net (decrease) in net assets.................................... (689,258)
------------------
NET ASSETS at end of period (including line B)......................... $ 99,310,742
==================
(B) Undistributed net investment income................................ $ 727,256
==================
OTHER INFORMATION:
Share Transactions:
Sold .............................................................. 13,003
Issued to shareholders in reinvestment of dividends................. --
Repurchased......................................................... --
------------------
Net increase in shares outstanding................................ 13,003
==================
</TABLE>
- ----------------------------------------------------
(1) The Fund commmenced operations on April 1, 1998.
(A) Amount represents initial seed money.
See Notes to Financial Statements.
12
<PAGE>
- ----------------------
FORWARD FUNDS, INC.
- ----------------------
The Global Fund(1)
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
Period ended
June 30, 1998
(Unaudited)
--------------
Net Asset Value, Beginning of Period ................... $ 10.00
----------
Income from Investment Operations:
Net investment income (A) ............................ 0.07
Net realized and unrealized gain (loss) on investments (0.15)
----------
Total from Investment Operations: .................. (0.08)
----------
Less Dividends:
Dividends from net investment income ................. --
Dividends from net realized capital gains ............ --
----------
Total Dividends: ................................... --
----------
Net increase (decrease) in net asset value ............. (0.08)
----------
Net Asset Value, End of Period ......................... $ 9.92
==========
Total Return ........................................... (0.80)%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ...................... $ 99,311
Ratios to average net assets:
Net investment income including
reimbursement/waiver ............................... 2.91%*
Operating expenses including reimbursement/waiver .... 1.26%*
Operating expenses excluding reimbursement/waiver .... 1.56%*
Portfolio turnover rate ................................. 95%
- ----------------------------------------------------------
* Annualized.
** Not Annualized.
(1) The Fund commmenced operations on April 1, 1998.
(A) Net investment income per share before waiver of fees by the business
manager was $0.07 for the period ended June 30, 1998.
See Notes to Financial Statements.
13
<PAGE>
- ----------------------
FORWARD FUNDS, INC.
- ----------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. Organization
Forward Funds, Inc. (the "Company"), a Maryland Corporation, is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company. As of the date of this report, the
Company offers one managed investment portfolio. The accompanying financial
statements and financial highlight are those of The Global Fund (the "Fund").
2. Significant Accounting Policies
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of its financial
statements.
Portfolio Valuation: Portfolio securities which are traded on a recognized
stock exchange are valued at the last sale price on the securities exchange on
which such securities are primarily traded, or at the last sale price on the
national securities market. Securities traded on over-the-counter markets are
valued at the average of the last bid and ask price. Portfolio securities which
are primarily traded on foreign securities exchanges, other than the London
Stock Exchange, are generally valued at the preceeding closing values of such
securities on their respective exchanges. Short-term obligations that mature in
60 days or less are valued at amortized cost, which approximates fair value. All
other securities and other assets are appraised at their fair value as
determined in good faith by or under the direction of the Board of Directors.
The Fund generally values its holdings through the use of independent pricing
agents, except for securities which are valued under the direction of the Board
of Directors or which are valued by the Advisers (see footnote #3) using
methodologies approved by the Board of Directors.
Securities Transactions and Investment Income: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date.
Forward Foreign Currency Exchange Contracts: The Fund may enter into forward
foreign currency exchange contracts whereby the Fund agrees to buy or sell a
specific currency at a specified price at a future date in an attempt to hedge
against fluctuations in the value of the underlying currency of certain
portfolio instruments. Forward foreign currency exchange contracts are valued at
the daily exchange rate of the underlying currency. Purchases and sales of
forward foreign currency exchange contracts having the same settlement date and
broker are offset and presented on a net basis in the "Statement of Assets and
Liabilities" herein. Gains or losses on the purchase or sale of forward foreign
currency exchange contracts having the same settlement date and broker are
recognized on the date of offset, otherwise gains or losses are recognized on
the settlement date.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Investment valuations and other assets and liabilities
initially expressed in foreign currencies are converted each business day into
U.S. dollars based upon current exchange rates. Purchases and sales of foreign
investments and income and expenses are converted into U.S. dollars based upon
exchange rates prevailing on the respective dates of such transactions. That
portion of unrealized gains or losses on investments due to fluctuations in
foreign currency exchange rates is not separately disclosed.
Dividends to Shareholders: Dividends from net investment income for the Fund
are declared and paid annually. Net realized capital gains, if any, are
distributed at least annually.
Income dividends and capital gain dividends are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles.
Federal Income Taxes: The Fund intends to qualify each year as a "regulated
investment company" under
See Notes to Financial Statements.
14
<PAGE>
- ----------------------
FORWARD FUNDS, INC.
- ----------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
Subchapter M of the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its taxable or tax-exempt income, if
any, for its tax year ending December 31. In addition, by distributing in each
calendar year substantially all of its net investment income, capital gains and
certain other amounts, if any, the Fund will not be subject to a federal excise
tax. Therefore, no federal income or excise tax provision is recorded.
Withholding taxes on foreign dividends have been paid or provided for in
accordance with the applicable country's tax rules and rates.
Organization Costs: The Fund bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
initial shares for distribution under federal and state securities laws. All
such costs have been fully amortized using the straight-line method over a
period of five years beginning with the commencement of the Fund's operations.
3. Investment Advisory, Business Management, Administration and Other Fees
The Fund has three Investment Advisers. Barclays Global Fund Advisors
("Barclays"), a registered investment adviser under the 1940 Act, and a wholly
owned indirect subsidiary of Barclays Bank PLC, serves as investment adviser for
the Fund's investments in U.S. equity instruments. Templeton Investment Counsel,
Inc. ("Templeton"), an indirect wholly owned subsidiary of Franklin Resources,
Inc., acts as investment adviser for the Fund's non-U.S. equity investments.
Pacific Investment Management Company ("PIMCO"), a subsidiary partnership of
PIMCO Advisers L.P., serves as investment adviser for the Fund's investments in
fixed income and other debt securities.
The Company pays the Investment Advisers a fee which is computed and accrued
daily and paid monthly. This fee is computed as a percentage of the Fund's
average daily net assets for which the respective Adviser has investment
management responsibility. The Fund pays Barclays at a rate of 0.375% on the
first $100 million under management, 0.30% on the next $400 million under
management, and 0.25% on the amounts over $500 million. The Fund pays Templeton
at a rate of 0.70% on amounts up to $25 million, 0.55% on the next $25 million,
0.50% on the next $50 million, 0.40% on the next $150 million, 0.35% on the next
$250 million, and 0.30% on amounts over $500 million. The Fund pays PIMCO at a
rate of 0.35% on amounts up to $200 million and 0.30% on amounts over $200
million.
Pursuant to an agreement with the Company, Sutton Place Management Co., Inc.
(the "Business Manager") provides the facilities and services required to carry
out the Fund's general administrative and corporate affairs. The Agreement
provides that the Fund will pay the Business Manager a fee of 0.30% of the
Fund's average daily net assets. The fee is computed daily and paid monthly.
First Data Investor Services Group, Inc., ("Investor Services Group") a
wholly-owned subsidiary of First Data Corporation, serves as the Fund's
administrator. Under the agreement, Investor Services Group receives a fee
computed daily and paid monthly and is computed as a percentage of the Fund's
average daily net assets at the annual rate of 0.20% of the first $500 million,
0.17% on amounts between $500 million and $1 billion, and 0.125% for amounts
over $1 billion. In addition, Investor Services Group provides certain fund
accounting, transfer agency and dividend disbursing services pursuant to certain
fee arrangements.
First Data Distributors, Inc. (the "Distributor") serves as the Fund's
distributor. The Distributor acts as an agent for the Fund in the distribution
of its shares.
Overall responsibility for management of the Fund rests with the Directors of
the Company, who are elected by the shareholders of the Company. There are
currently three directors, two of whom are not "interested directors" of the
Company within the meaning of the term under the 1940 Act. Each uninterested
director receives an annual retainer fee of $6,000 for their services.
4. Waiver of Fees
The Business Manager has agreed to waive a portion of its fees for certain
expenses. The Business Manager, at its discretion, may revise or discontinue the
voluntary waiver at any time. For the period ended June 30, 1998, the waived
fees with respect to the Fund were $74,978.
See Notes to Financial Statements.
15
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FORWARD FUNDS, INC.
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NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
5. Shares of Beneficial Interest
The Company's Articles of Incorporation authorize the Directors to issue an
unlimited number of shares of beneficial interest. The shares of the Fund are
currently offered as a single class. Each share represents an equal
proportionate interest in the Fund with other shares of the Fund, and each is
entitled to such dividends and distributions out of the income earned on the
assets belonging to the Fund as are declared at the discretion of the Directors.
6. Purchases and Sales of Securities
The cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the period ended June 30, 1998 included $70,308,298
and $3,296,486 of non-governmental issuers, respectively, and $86,226,792 and
$58,932,325 of U.S. Government Agency issuers, respectively.
At June 30, 1998, the aggregate cost of investment securities for tax purposes
was $111,751,977 net unrealized appreciation (depreciation) aggregated
$(1,490,486), of which $3,422,505 related to appreciated investment securities
and $(4,912,991) related to depreciated investment securities.
7. Foreign Securities
The Fund may purchase securities of foreign issuers. Investing in securities
of foreign issuers involves special risks not typically associated with
investing in securities of U.S. issuers. The risks include possible revaluation
of currencies, less complete financial information about companies and possible
future adverse political and economic developments. Moreover, securities of many
foreign issuers and their markets may be less liquid and their prices more
volatile than those of securities of comparable U.S. issuers.
See Notes to Financial Statements.
16
