<PAGE>
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Table of Contents
Portfolios of Investments ...................... 2
Statement of Assets and Liabilities ............ 14
Statement of Operations ........................ 16
Statements of Changes in Net Assets ............ 18
Financial Highlights ........................... 22
Notes to Financial Statements .................. 26
Forward Funds are distributed by Provident Distributors, Inc. For more
complete information about Forward Funds, including obtaining a prospectus,
please visit our Web site at www.forwardfunds.com or call 1-800-999-6809. Read
it carefully before investing money.
--------------------------------------------------------------------------------
June 30, 2000
<PAGE>
--------------------------------------------------------------------------------
Hoover Small Cap Equity Fund
Portfolio of Investments (unaudited)
VALUE
SHARES (NOTE 2)
------ --------
COMMON STOCKS - 96.99%
AGRICULTURE - 1.07%
33,000 Delta & Pine Land Co. .............................. $ 827,063
-----------
BASIC MATERIALS - 0.94%
15,800 Cabot Microelectronics Corp. * ..................... 722,850
-----------
CAPITAL GOODS AND CONSTRUCTION - 9.50%
23,700 Applied Power, Inc., Class A ....................... 793,950
40,500 Florida Rock Industries, Inc. ...................... 1,442,812
25,400 Granite Construction, Inc. ......................... 622,300
49,600 Manitowoc Co., Inc. ................................ 1,326,800
35,000 Mobile Mini, Inc. * ................................ 772,188
30,800 Simpson Manufacturing Co., Inc. * .................. 1,472,625
27,400 United Stationers, Inc. ............................ 887,075
-----------
7,317,750
-----------
CONSUMER CYCLICAL - 9.57%
30,400 AnnTaylor Stores Corp. * ........................... 1,007,000
30,950 Cost Plus, Inc. * .................................. 887,878
19,100 McClatchy Co., Class A ............................. 632,687
41,400 Nordstrom, Inc. .................................... 998,775
69,900 Ross Stores, Inc. .................................. 1,192,669
50,000 Sonic Automotive, Inc. * ........................... 534,375
57,200 Steiner Leisure, Ltd. * ............................ 1,294,150
71,600 Topps Co., Inc. * .................................. 823,400
-----------
7,370,934
-----------
CONSUMER STAPLES - 7.22%
30,600 ITT Educational Services, Inc. * ................... 537,412
56,800 Rent-Way, Inc. * ................................... 1,657,850
40,000 Sylvan Learning Systems, Inc. * .................... 550,000
60,700 Taco Cabana, Inc., Class A * ....................... 402,138
29,700 Whole Foods Market, Inc. * ......................... 1,226,981
36,500 Williams-Sonoma, Inc. * ............................ 1,183,969
-----------
5,558,350
-----------
ENERGY - 19.45%
56,200 3TEC Energy Corp. * ................................ 562,000
16,800 Barrett Resources Corp. * .......................... 511,350
29,800 Basin Exploration, Inc. * .......................... 532,675
72,800 Brown (Tom), Inc. * ................................ 1,678,950
110,800 Comstock Resources, Inc. * ......................... 886,400
18,283 Devon Energy Corp. ................................. 1,027,276
22,000 EOG Resources, Inc. ................................ 737,000
47,300 Forest Oil Corp. * ................................. 753,844
24,400 Global Marine, Inc. * .............................. 687,775
49,700 Grant Prideco, Inc. * .............................. 1,242,500
16,100 Nabors Industries, Inc. * .......................... 669,156
23,200 National-Oilwell, Inc. * ........................... 762,700
21,000 Precision Drilling Corp. * ......................... 811,125
26,100 Spinnaker Exploration Co. * ........................ 668,812
26,500 UTI Energy Corp. * ................................. 1,063,313
74,503 Varco International, Inc. * ........................ 1,732,195
16,400 Weatherford International, Inc. * .................. 652,925
-----------
14,979,996
-----------
FINANCE - 8.63%
28,200 City National Corp. ................................ 979,950
60,300 Fidelity National Financial, Inc. .................. 1,104,244
16,500 Greater Bay Bancorp ................................ 771,375
15,400 Legg Mason, Inc. ................................... 770,000
26,900 National Discount Brokers Group, Inc. * ............ 857,437
33,400 Silicon Valley Bancshares .......................... 1,423,675
22,650 Waddell & Reed Financial, Inc., Class A ............ 743,203
-----------
6,649,884
-----------
HEALTH CARE - 2.91%
52,900 Acuson Corp. * ..................................... 714,150
65,300 Mid Atlantic Medical Services, Inc. * .............. 881,550
16,500 Varian Medical Systems, Inc. ....................... 645,562
-----------
2,241,262
-----------
TECHNOLOGY - 36.90%
21,300 ACT Manufacturing, Inc. * .......................... 989,119
23,300 Anixter International, Inc. * ...................... 617,450
48,200 Apex, Inc. * ....................................... 2,108,750
24,600 August Technology Corp. * .......................... 404,362
15,450 Burr-Brown Corp. * ................................. 1,339,322
31,700 Credence Systems Corp. * ........................... 1,749,444
39,300 Cypress Semiconductor Corp. * ...................... 1,660,425
18,500 Electro Scientific Industries, Inc. * .............. 814,578
51,600 GaSonics International Corp. * ..................... 2,034,975
22,200 InFocus Corp. * .................................... 714,563
29,100 Integrated Device Technology, Inc. * ............... 1,742,363
13,200 Kulicke & Soffa Industries, Inc. * ................. 783,750
46,600 Mentor Graphics Corp. * ............................ 926,175
12,300 MKS Instruments, Inc. * ............................ 481,238
35,700 Pinnacle Systems, Inc. * ........................... 802,692
15,300 Polycom, Inc. * .................................... 1,439,634
12,300 RadiSys Corp. * .................................... 698,025
20,900 Rainbow Technologies, Inc. * ....................... 1,016,262
10,800 Rudolph Technologies, Inc. * ....................... 418,500
9,500 Technitrol, Inc. ................................... 920,313
11,800 Tektronix, Inc. * .................................. 873,200
41,900 Titan Corp. * ...................................... 1,875,025
15,100 Varian, Inc. * ..................................... 696,488
28,700 Varian Semiconductor Equipment Associates, Inc. * .. 1,802,719
20,700 Veeco Instruments, Inc. * .......................... 1,516,275
-----------
28,425,647
-----------
TRANSPORTATION - 0.80%
96,500 RailAmerica, Inc. * ................................ 615,187
-----------
TOTAL COMMON STOCKS ................................ 74,708,923
(Cost $58,469,280) -----------
TOTAL INVESTMENTS - 96.99% ...................................... 74,708,923
(Cost $58,469,280) -----------
NET OTHER ASSETS AND LIABILITIES - 3.01% ........................ 2,316,966
-----------
NET ASSETS - 100.00% ............................................ $77,025,889
===========
----------------------------------
Non-income producing security.
--------------------------------------------------------------------------------
June 30, 2000 See Notes to Financial Statements
<PAGE>
--------------------------------------------------------------------------------
Hansberger International Growth Fund
Portfolio of Investments (unaudited)
VALUE
SHARES (NOTE 2)
------ --------
COMMON STOCKS - 89.40%
AUSTRALIA - 1.13%
6,000 News Corp., Ltd., ADR ............................ $ 285,000
-----------
BELGIUM - 1.15%
1,900 Dexia ............................................ 290,244
-----------
BERMUDA - 0.94%
5,000 Tyco International, Ltd. ......................... 236,875
-----------
BRAZIL - 2.35%
10,005 Companhia Vale do Rio Doce, ADR .................. 282,641
10,300 Petroleo Brasileiro S.A., ADR .................... 311,256
-----------
593,897
-----------
CANADA - 1.27%
18,000 Manulife Financial Corp. ......................... 320,625
-----------
DENMARK - 1.02%
7,000 Vestas Wind Systems A/S .......................... 257,070
-----------
FINLAND - 0.95%
3 Metso Oyj ........................................ 36
4,800 Nokia Oyj, ADR ................................... 239,700
-----------
239,736
-----------
FRANCE - 5.38%
7,000 Alcatel SA, ADR .................................. 465,500
2,800 Clarins .......................................... 288,449
7,901 Total Fina Elf, ADR .............................. 606,896
-----------
1,360,845
-----------
GERMANY - 6.96%
4,500 Adidas-Salomon AG ................................ 248,330
6,200 DePfa Deutsche Pfandbriefbank AG ................. 624,502
8,900 E.On AG, ADR ..................................... 443,887
3,100 SAP AG, ADR ...................................... 145,506
4,500 SGL Carbon AG .................................... 299,457
-----------
1,761,682
-----------
HONG KONG - 2.96%
1,300 China Moblie (Hong Kong), Ltd., ADR * ............ 231,156
224,000 Esprit Holdings, Ltd. ............................ 232,750
129,000 Yue Yuen Industrial (Holdings), Ltd. ............. 286,281
-----------
750,187
-----------
IRELAND - 3.60%
58,500 Bank of Ireland .................................. 367,233
11,210 Elan Corp., Plc, ADR* ............................ 542,984
-----------
910,217
-----------
ISRAEL - 1.09%
5,000 Teva Pharmaceutical Industries, Ltd., ADR ........ 277,187
-----------
ITALY - 3.76%
38,000 Luxottica Group S.p.A., ADR ...................... 463,125
97,000 Telecom Italia Mobile S.p.A ...................... 488,058
-----------
951,183
-----------
JAPAN - 15.74%
13,000 Canon, Inc. ...................................... 646,967
23,000 Canon Sales Co., Inc. ............................ 411,895
18,000 Diamond Lease Co., Ltd. .......................... 232,603
2,000 Fanuc, Ltd. ...................................... 203,403
5,000 Honda Motor Co., Ltd. ............................ 170,131
48,000 Makita Corp. ..................................... 457,401
106,000 Nippon Sanso Corp. ............................... 368,670
12,000 Nomura Securities Co., Ltd. ...................... 293,511
13 NTT DoCoMo, Inc. * ............................... 351,666
3,120 Orix Corp., ADR .................................. 234,585
1,200 Rohm Co., Ltd. ................................... 350,629
5,000 Santen Pharmaceutical Co., Ltd. .................. 120,647
9,000 Shiseido Co., Ltd. ............................... 139,121
-----------
3,981,229
-----------
MEXICO - 0.96%
12,900 Coca-Cola Femsa S.A., ADR ........................ 243,487
-----------
NETHERLANDS - 8.03%
6,438 ING Groep N.V. ................................... 435,185
6,000 Koninklijke Numico N.V. .......................... 284,706
14,488 Koninklijke (Royal) Philips Electronics N.V. ..... 683,321
8,500 Randstad Holding N.V ............................. 314,471
11,735 Wolters Kluwer NV, ADR ........................... 312,591
-----------
2,030,274
-----------
NORWAY - 1.26%
12,000 Tomra Systems ASA ................................ 318,237
-----------
SINGAPORE - 1.76%
55,000 NatSteel Electronics, Ltd. ....................... 168,790
40,000 Oversea-Chinese Banking Corp., Ltd. .............. 275,622
-----------
444,412
-----------
SOUTH AFRICA - 2.25%
69,000 Dimension Data Holdings, Ltd. .................... 570,508
-----------
SOUTH KOREA - 5.78%
23,700 Kookmin Bank, GDR, 144A (A) ...................... 300,990
2,300 Samsung Electronics .............................. 761,149
11,000 SK Telecom Co., Ltd., ADR* ....................... 399,437
-----------
1,461,576
-----------
SPAIN - 1.46%
17,179 Telefonica S.A. .................................. 369,037
-----------
SWEDEN - 0.95%
12,000 Telefonaktiebolaget LM Ericsson AB, ADR .......... 240,000
-----------
SWITZERLAND - 1.77%
46 Roche Holding AG - Genussshein ................... 447,776
-----------
UNITED KINGDOM - 16.88%
34,000 Amvescap, Plc .................................... 545,321
66,000 Billiton, Plc .................................... 268,636
9,000 Cable & Wireless, Plc, ADR ....................... 450,563
18,000 HSBC Holdings, Plc ............................... 205,503
65,000 Lloyds TSB Group, Plc ............................ 613,713
7,600 Pearson, Plc ..................................... 241,491
51,500 Reckitt Benckiser, Plc ........................... 576,642
62,000 Rolls-Royce, Plc ................................. 219,990
27,000 SEMA Group, Plc .................................. 384,025
152,166 Smith & Nephew, Plc .............................. 546,826
3,000 WPP Group, Plc, ADR .............................. 217,875
-----------
4,270,585
-----------
TOTAL COMMON STOCKS .............................. 22,611,869
(Cost $20,828,315) -----------
PAR VALUE
---------
CONVERTIBLE BONDS - 6.90%
FRANCE - 0.94%
$ 125,775 Finaxa ........................................... 238,449
3.000%, due 01/02/11 -----------
JAPAN - 1.49%
16,000,000 Sony Corp. ....................................... 377,774
1.400%, due 04/01/09 -----------
NETHERLANDS - 2.18%
71,000 Stmicroelectron .................................. 241,489
.000%, due 06/11/12 (B)
30,000,000 Sumitomo Bank International ...................... 309,628
.750%, due 06/01/05 -----------
551,117
-----------
UNITED KINGDOM - 2.29%
200,000 British Aerospace ................................ 578,004
3.750%, due 07/22/10 -----------
TOTAL CONVERTIBLE BONDS .......................... 1,745,344
(Cost $1,882,093) -----------
TOTAL INVESTMENTS - 96.30% ...................................... 24,357,213
(Cost $22,710,408) -----------
NET OTHER ASSETS AND LIABILITIES - 3.70% ........................ 935,882
-----------
TOTAL NET ASSETS - 100.00% ...................................... $25,293,095
===========
--------------------------
* Non income producing security.
(A) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933, as amended. This security may be resold, in
transactions exempt from registration, to qualified institutional buyers.
At June 30, 2000, this security amounted to $300,990, or 1.19% of net
assets.
(B) Zero Coupon.
ADR American Depositary Receipt
GDR Global Depositary Receipt
OTHER INFORMATION:
Industry Concentration as a percentage of net assets:
% OF NET ASSETS
Consumer Goods 26.20%
Finance 20.91%
Telecommunications 12.79%
Services 12.09%
Multi-Industry 6.35%
Pharmaceuticals 5.49%
Materials 4.82%
Energy 4.65%
Short-Term & Other Investments 3.70%
Capital Equipment 3.00%
-------
TOTAL INVESTMENTS 100.00%
=======
--------------------------------------------------------------------------------
June 30, 2000 See Notes to Financial Statements
<PAGE>
--------------------------------------------------------------------------------
Garzarelli U.S. Equity Fund
Portfolio of Investments (unaudited)
VALUE
SHARES (NOTE 2)
------ --------
COMMON STOCKS - 98.56%
AEROSPACE/AIRLINES - 0.38%
4,824 AT&T Corp. - Liberty Media Group, Class A* ......... $ 116,982
-----------
AUTO REPAIR/AUTO PARTS - 0.00%#
1 Delphi Automotive Systems Corp. .................... 12
-----------
BUSINESS SERVICES - 0.02%
100 TMP Worldwide, Inc.* ............................... 7,381
-----------
CHEMICALS AND DRUGS - 9.39%
6,000 Abbott Laboratories ................................ 267,375
8,200 Bristol-Myers Squibb Co. ........................... 477,650
8,000 Mallinckrodt, Inc. ................................. 347,500
12,000 Merck & Co., Inc. .................................. 919,500
6,000 Philip Morris Cos., Inc. ........................... 159,375
14,000 Schering-Plough Corp. .............................. 707,000
-----------
2,878,400
-----------
CONSTRUCTION - 2.53%
7,300 Black & Decker Corp. ............................... 286,981
10,000 Centex Corp. ....................................... 235,000
14,000 Masco Corp. ........................................ 252,875
-----------
774,856
-----------
CONSUMER CYCLICAL - 14.02%
12,600 Clorox Co. ......................................... 564,637
16,700 ConAgra, Inc. ...................................... 318,344
1,833 Energizer Holdings, Inc.* .......................... 33,452
20,000 Fort James Corp. ................................... 462,500
9,800 H.J. Heinz Co. ..................................... 428,750
2,500 Procter & Gamble Co. ............................... 143,125
5,000 Quaker Oats Co. .................................... 375,625
20,100 Ralston-Ralston Purina Group ....................... 400,744
5,000 Safeway, Inc.* ..................................... 225,625
21,800 Sara Lee Corp. ..................................... 421,013
8,300 Suiza Foods Corp.* ................................. 405,663
35,100 UST, Inc. .......................................... 515,531
-----------
4,295,009
-----------
CONTAINERS/PACKAGING - 0.90%
8,200 Bemis Co., Inc. .................................... 275,725
-----------
ENERGY - 16.21%
10,000 Chevron Corp. ...................................... 848,125
11,000 Coastal Corp. ...................................... 669,625
1,472 Conoco, Inc., Class B .............................. 36,156
10,000 Consolidated Edison, Inc. .......................... 296,250
7,000 Duke Energy Corp. .................................. 394,625
6,400 Enron Corp. ........................................ 412,800
12,812 Exxon Mobil Corp. .................................. 1,005,742
11,400 Phillips Petroleum Co. ............................. 577,837
6,700 Ultramar Diamond Shamrock Corp. .................... 166,244
13,400 Williams Cos., Inc. ................................ 558,613
-----------
4,966,017
-----------
FINANCE - 15.34%
11,560 Bank of America Corp. .............................. 497,080
6,096 Bank One Corp. ..................................... 161,925
10,500 Chase Manhattan Corp. .............................. 483,656
12,125 Citigroup, Inc. .................................... 730,531
5,000 Comerica, Inc. ..................................... 224,375
9,000 Donaldson, Lufkin & Jenrette, Inc. ................. 381,937
8,000 Fannie Mae ......................................... 417,500
10,000 FleetBoston Financial Corp. ........................ 340,000
10,594 First Union Corp. .................................. 262,864
14,000 MBNA Corp. ......................................... 379,750
6,500 Morgan Stanley Dean Witter & Co. ................... 541,125
6,000 PNC Financial Services Group ....................... 281,250
1 Washington Mutual, Inc. ............................ 24
-----------
4,702,017
-----------
HEALTH CARE - 4.29%
3,900 Allergan, Inc. ..................................... 290,550
21,325 Pfizer, Inc. ....................................... 1,023,600
-----------
1,314,150
-----------
TECHNOLOGY - 24.16%
4,800 3Com Corp.* ........................................ 276,600
8,000 ActionPoint, Inc.* ................................. 62,000
11,000 Adaptec, Inc.* ..................................... 250,250
8,000 Apple Computer, Inc.* .............................. 419,000
4,000 Applied Materials, Inc.* ........................... 362,500
5,000 CMGI, Inc.* ........................................ 229,063
7,000 Conexant Systems, Inc.* ............................ 340,375
11,400 Dell Computer Corp.* ............................... 562,162
2,400 EMC Corp.* ......................................... 184,650
6,000 Gateway, Inc.* ..................................... 340,500
8,000 Intel Corp. ........................................ 1,069,500
15,000 Microsoft Corp.* ................................... 1,200,000
9,000 Motorola, Inc. ..................................... 261,563
10,200 Oracle Corp.* ...................................... 857,437
7,000 Sun Microsystems, Inc.* ............................ 636,563
4,800 Texas Instruments, Inc. ............................ 329,700
200 VERITAS Software Corp.* ............................ 22,603
-----------
7,404,466
-----------
TELECOMMUNICATIONS - 8.96%
10,000 BellSouth Corp. .................................... 426,250
19,500 Cisco Systems, Inc.* ............................... 1,239,469
12,700 Lucent Technologies, Inc. .......................... 752,475
82 VoiceStream Wireless Corp.* ........................ 9,536
6,961 WorldCom, Inc.* .................................... 319,336
-----------
2,747,066
-----------
UTILITIES - 2.36%
7,400 Bell Atlantic Corp.* ............................... 376,012
10,000 Public Service Enterprise Group, Inc. .............. 346,250
-----------
722,262
-----------
TOTAL U.S. COMMON STOCKS ........................... 30,204,343
(Cost $25,514,192) -----------
TOTAL INVESTMENTS - 98.56% ...................................... 30,204,343
(Cost $25,514,192) -----------
NET OTHER ASSETS AND LIABILITIES - 1.44% ......................... 441,295
-----------
NET ASSETS - 100.00% ............................................. $30,645,638
===========
------------------------------------
* Non-income producing security.
# Amount represents less than 0.01%.
--------------------------------------------------------------------------------
See Notes to Financial Statements June 30, 2000
<PAGE>
--------------------------------------------------------------------------------
Uniplan Real Estate Investment Fund
Portfolio of Investments (unaudited)
VALUE
SHARES (NOTE 2)
------ --------
COMMON STOCKS - 94.64%
HEALTH CARE - 2.69%
18,600 Healthcare Realty Trust, Inc. ...................... $ 317,362
-----------
INDUSTRIAL - 22.55%
10,000 Alexandria Real Estate Equities, Inc. .............. 343,125
15,000 AMB Property Corp. ................................. 342,187
8,500 CenterPoint Properties Corp. ....................... 346,375
18,000 Duke-Weeks Realty Corp. ............................ 402,750
12,000 First Industrial Realty Trust, Inc. ................ 354,000
4,300 Liberty Property Trust ............................. 111,531
41,000 Mission West Properties, Inc. ...................... 430,500
12,800 Plum Creek Timber Co., Inc. ........................ 332,800
-----------
2,663,268
-----------
OFFICE - 22.48%
9,500 Boston Properties, Inc. ............................ 366,938
13,000 Brandywine Realty Trust ............................ 248,625
12,000 CarrAmerica Realty Corp. ........................... 318,000
16,000 Equity Office Properties Trust ..................... 441,000
20,000 Great Lakes REIT, Inc. ............................. 340,000
10,000 Prentiss Properties Trust .......................... 240,000
9,000 SL Green Realty Corp. .............................. 240,750
10,000 Spieker Properties, Inc. ........................... 460,000
-----------
2,655,313
-----------
RESIDENTIAL - 21.55%
7,800 Apartment Investment & Management Co., Class A ..... 337,350
15,200 Archstone Communities Trust ........................ 320,150
11,000 Avalonbay Communities, Inc. ........................ 459,250
11,400 Chateau Communities, Inc. .......................... 322,050
9,000 Equity Residential Properties Trust ................ 414,000
10,900 Home Properties of New York, Inc. .................. 327,000
14,600 Pacific Gulf Properties, Inc. ...................... 365,913
-----------
2,545,713
-----------
RETAIL - 16.08%
10,000 Chelsea GCA Realty, Inc. ........................... 345,625
8,500 General Growth Properties, Inc. .................... 269,875
13,000 Simon Property Group, Inc. ......................... 288,438
20,000 Taubman Centers, Inc. .............................. 220,000
13,000 Vornado Realty Trust ............................... 451,750
8,000 Weingarten Realty Investors ........................ 323,000
-----------
1,898,688
-----------
SELF STORAGE - 1.98%
10,000 Public Storage, Inc. ............................... 234,375
-----------
SPECIALTY - 7.31%
12,100 Hospitality Properties Trust ....................... 273,006
18,000 Pinnacle Entertainment, Inc. ....................... 349,875
10,000 PS Business Parks, Inc. ............................ 240,000
-----------
862,881
-----------
TOTAL COMMON STOCKS ................................ 11,177,600
(Cost $10,514,620) -----------
TOTAL INVESTMENTS - 94.64% ...................................... 11,177,600
(Cost $10,514,620) -----------
NET OTHER ASSETS AND LIABILITIES - 5.36% ........................ 633,251
-----------
NET ASSETS - 100.00% ............................................ $11,810,851
===========
--------------------------
REIT Real Estate Investment Trust
--------------------------------------------------------------------------------
See Notes to Financial Statements June 30, 2000
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited)
<CAPTION>
HOOVER HANSBERGER
SMALL CAP INTERNATIONAL
EQUITY FUND GROWTH FUND
------------ -------------
<S> <C> <C>
ASSETS:
Investments
Investments at cost (Note 2) ....................... $ 58,469,280 $ 22,710,408
Net unrealized appreciation on investments ......... 16,239,643 1,646,805
------------ ------------
Total investments at value ....................... 74,708,923 24,357,213
Cash ............................................... 3,330,694 426,093
Foreign currency, at value (cost $33) .............. -- 34
Receivable from investment adviser ................. -- --
Receivable for investments sold .................... 332,195 974,859
Receivable for shares sold ......................... 61,334 --
Interest and dividend receivable ................... 13,727 117,320
Prepaid expenses ................................... 12,829 5,189
------------ ------------
Total Assets ..................................... 78,459,702 25,880,708
------------ ------------
LIABILITIES:
Payable for investments purchased .................... 1,384,465 558,287
Payable for dividends ................................ -- --
Advisory fee payable ................................. 45,042 6,049
Accrued expenses and other payables .................. 4,306 23,277
------------ ------------
Total Liabilities ................................ 1,433,813 587,613
------------ ------------
NET ASSETS ............................................. $ 77,025,889 $ 25,293,095
============ ============
<CAPTION>
HOOVER HANSBERGER
SMALL CAP INTERNATIONAL
EQUITY FUND GROWTH FUND
------------ -------------
NET ASSETS CONSIST OF:
Paid-in capital ...................................... $ 59,828,838 $ 26,020,371
Accumulated undistributed net investment income/(loss) (324,969) (49,156)
Accumulated net realized gain/(loss) on investments
sold ............................................... 1,282,377 (2,322,763)
Net unrealized appreciation of investments and
assets and liabilities denominated in foreign
currency ........................................... 16,239,643 1,644,643
------------ ------------
TOTAL NET ASSETS ....................................... $ 77,025,889 $ 25,293,095
============ ============
SHARES OF BENEFICIAL INTEREST OUTSTANDING .............. 5,110,167 1,876,718
============ ============
NET ASSET VALUE,
offering and redemption price per share
(Net Assets / Shares Outstanding) .................... $ 15.07 $ 13.48
============ ============
---------------------------------------------------------------------------------------------
See Notes to Financial Statements June 30, 2000
</TABLE>
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) (continued)
<CAPTION>
UNIPLAN
GARZARELLI REAL ESTATE
U.S. INVESTMENT
EQUITY FUND FUND
------------ ------------
<S> <C> <C>
ASSETS:
Investments
Investments at cost (Note 2) ....................... $ 25,514,192 $ 10,514,620
Net unrealized appreciation on investments ......... 4,690,151 662,980
------------ ------------
Total investments at value ....................... 30,204,343 11,177,600
Cash ............................................... 413,024 671,764
Foreign currency, at value (cost $33) .............. -- --
Receivable from investment adviser ................. -- 1,784
Receivable for investments sold .................... -- --
Receivable for shares sold ......................... 3,000 --
Interest and dividend receivable ................... 33,553 102,959
Prepaid expenses ................................... 7,141 2,171
------------ ------------
Total Assets ..................................... 30,661,061 11,956,278
------------ ------------
LIABILITIES:
Payable for investments purchased .................... -- --
Payable for dividends ................................ -- 132,039
Advisory fee payable ................................. 10,019 --
Accrued expenses and other payables .................. 5,404 13,388
------------ ------------
Total Liabilities ................................ 15,423 145,427
------------ ------------
NET ASSETS ............................................. $ 30,645,638 $ 11,810,851
============ ============
<CAPTION>
UNIPLAN
GARZARELLI REAL ESTATE
U.S. INVESTMENT
EQUITY FUND FUND
------------ ------------
NET ASSETS CONSIST OF:
Paid-in capital ...................................... $ 22,300,768 $ 11,401,766
Accumulated undistributed net investment income/(loss) (1,777) 24,520
Accumulated net realized gain/(loss) on investments
sold ............................................... 3,656,496 (278,415)
Net unrealized appreciation of investments and
assets and liabilities denominated in foreign
currency ........................................... 4,690,151 662,980
------------ ------------
TOTAL NET ASSETS ....................................... $ 30,645,638 $ 11,810,851
============ ============
SHARES OF BENEFICIAL INTEREST OUTSTANDING .............. 2,107,787 1,201,446
============ ============
NET ASSET VALUE,
offering and redemption price per share
(Net Assets / Shares Outstanding) .................... $ 14.54 $ 9.83
============ ============
---------------------------------------------------------------------------------------------
See Notes to Financial Statements June 30, 2000
</TABLE>
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------
Statement of Operations (unaudited)
<CAPTION>
HOOVER HANSBERGER
SMALL CAP INTERNATIONAL
EQUITY FUND GROWTH FUND
------------ ------------
<S> <C> <C>
INVESTMENT INCOME:
Interest ............................................. $ 76,464 $ --
Dividends ............................................ 76,554 179,280
Less net foreign taxes withheld ...................... -- (20,467)
------------ ------------
Total investment income ............................ 153,018 158,813
------------ ------------
EXPENSES:
Investment advisory fee .............................. 308,212 97,916
Administration fee ................................... 58,707 24,704
Custodian fee ........................................ 30,393 43,356
Fund accounting fee .................................. 18,875 33,886
Legal and audit fee .................................. 21,076 19,876
Transfer agent fee ................................... 15,752 10,156
Directors' fees and expenses ......................... 2,594 1,477
Registration/filing fees ............................. 10,891 5,718
Report to shareholder fees ........................... 8,142 4,261
Service fee .......................................... 86,477 15,865
Insurance expense .................................... 4,831 2,163
Miscellaneous ........................................ 3,680 1,094
------------ ------------
Total expenses before waiver ....................... 569,630 260,472
Less fees waived/reimbursed by investment advisor
and/or business manager ............................ (91,643) (52,503)
------------ ------------
Total expenses net of waiver ......................... 477,987 207,969
------------ ------------
NET INVESTMENT INCOME/(LOSS) ........................... (324,969) (49,156)
------------ ------------
Net realized gain/(loss) on investment sold ............ 5,172,833 (1,928,099)
Net realized loss on foreign currency .................. -- (31,272)
Net change in unrealized appreciation of assets and
liabilities denominated in foreign currencies ........ -- 1,229
Net change in unrealized appreciation/(depreciation)
of investments ....................................... 7,160,367 1,116,562
------------ ------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS, FOREIGN CURRENCY AND NET OTHER ASSETS ... 12,333,200 (841,580)
------------ ------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ........................................... $ 12,008,231 $ (890,736)
============ ============
---------------------------------------------------------------------------------------------
June 30, 2000 See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------
<CAPTION>
UNIPLAN
GARZARELLI REAL ESTATE
U.S. INVESTMENT
EQUITY FUND FUND
------------ ------------
<S> <C> <C>
INVESTMENT INCOME:
Interest ............................................. $ 24,029 $ 29,787
Dividends ............................................ 221,589 362,788
Less net foreign taxes withheld ...................... -- --
------------ ------------
Total investment income ............................ 245,618 392,575
------------ ------------
EXPENSES:
Investment advisory fee .............................. 124,502 47,195
Administration fee ................................... 33,973 7,917
Custodian fee ........................................ 35,656 21,184
Fund accounting fee .................................. 22,638 18,288
Legal and audit fee .................................. 20,080 8,889
Transfer agent fee ................................... 12,593 7,357
Directors' fees and expenses ......................... 2,092 529
Registration/filing fees ............................. 5,968 7,458
Report to shareholder fees ........................... 5,787 846
Service fee .......................................... 14,989 18,472
Insurance expense .................................... 3,138 629
Miscellaneous ........................................ 1,542 497
------------ ------------
Total expenses before waiver ....................... 282,958 139,261
Less fees waived/reimbursed by investment advisor
and/or business manager ............................ (34,491) (44,320)
------------ ------------
Total expenses net of waiver ......................... 248,467 94,941
------------ ------------
NET INVESTMENT INCOME/(LOSS) ........................... (2,849) 297,634
------------ ------------
Net realized gain/(loss) on investment sold ............ 3,676,390 (276,891)
Net realized loss on foreign currency .................. -- --
Net change in unrealized appreciation of assets and
liabilities denominated in foreign currencies ........ -- --
Net change in unrealized appreciation/(depreciation)
of investments ....................................... (3,662,201) 1,287,832
------------ ------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS, FOREIGN CURRENCY AND NET OTHER ASSETS ... 14,189 1,010,941
------------ ------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ........................................... $ 11,340 $ 1,308,575
============ ============
---------------------------------------------------------------------------------------------
See Notes to Financial Statements June 30, 2000
</TABLE>
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------
Statement of Changes in Net Assets
<CAPTION>
HOOVER
SMALL CAP
EQUITY FUND
-------------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
------------ ------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ...................... $ 46,747,955 $ 31,837,506
------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income/(loss) ......................... (324,969) (246,682)
Net realized gain/(loss) on investments sold ......... 5,172,833 (3,268,065)
Net realized loss on foreign currency ................ -- --
Net change in unrealized appreciation/(depreciation)
of investments and foreign currency ................ 7,160,367 6,452,529
------------ ------------
Net increase/(decrease) in net assets resulting from
operations ......................................... 12,008,231 2,937,782
------------ ------------
DIVIDENDS TO SHAREHOLDERS:
From net investment income ........................... -- (2,175)
In excess of net investment income ................... -- (94)
From net realized gains on investments ............... -- --
In excess of net realized gain on investments, forward
foreign currency contracts and foreign currency .... -- --
------------ ------------
Total dividends ...................................... -- (2,269)
------------ ------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares .................... 50,558,036 26,008,448
Issued in exchange for certain net assets of The
Global Asset Allocation Fund (Note 10) ............. -- --
Issued to shareholders in reinvestment of distributions -- 25,061
Cost of shares repurchased ........................... (32,288,333) (14,058,573)
------------ ------------
Net increase/(decrease) from share transactions ...... 18,269,703 11,974,936
------------ ------------
Net increase/(decrease) in net assets ................ 30,277,934 14,910,449
------------ ------------
NET ASSETS AT END OF PERIOD ............................ $ 77,025,889 $ 46,747,955
============ ============
Undistributed net investment income/(loss) ............. $ (324,969) $ --
============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold ................................................. 3,849,886 2,274,534
Issued in exchange for certain net assets of The Global
Asset Allocation Fund .............................. -- --
Issued to shareholders in reinvestment of distributions -- 2,188
Repurchased .......................................... (2,573,399) (1,235,401)
------------ ------------
Net increase/(decrease) in shares outstanding ........ 1,276,487 1,041,321
============ ============
---------------------------------------------------------------------------------------------
June 30, 2000 See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<CAPTION>
HANSBERGER
INTERNATIONAL
GROWTH FUND
-------------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
------------ ------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ...................... $ 25,886,932 $ 23,169,618
------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income/(loss) ......................... (49,156) 389,896
Net realized gain/(loss) on investments sold ......... (1,928,099) 255,677
Net realized loss on foreign currency ................ (31,272) (33,369)
Net change in unrealized appreciation/(depreciation)
of investments and foreign currency ................ 1,117,791 4,976,435
------------ ------------
Net increase/(decrease) in net assets resulting from
operations ......................................... (890,736) 5,588,639
------------ ------------
DIVIDENDS TO SHAREHOLDERS:
From net investment income ........................... -- (355,734)
In excess of net investment income ................... -- (7,124)
From net realized gains on investments ............... -- --
In excess of net realized gain on investments, forward
foreign currency contracts and foreign currency .... -- --
------------ ------------
Total dividends ...................................... -- (362,858)
------------ ------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares .................... 37,811,012 565,825
Issued in exchange for certain net assets of The
Global Asset Allocation Fund (Note 10) ............. -- --
Issued to shareholders in reinvestment of distributions -- 430,339
Cost of shares repurchased ........................... (37,514,113) (3,504,631)
------------ ------------
Net increase/(decrease) from share transactions ...... 296,899 (2,508,467)
------------ ------------
Net increase/(decrease) in net assets ................ (593,837) 2,717,314
------------ ------------
NET ASSETS AT END OF PERIOD ............................ $ 25,293,095 $ 25,886,932
============ ============
Undistributed net investment income/(loss) ............. $ (49,156) $ --
============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold ................................................. 2,763,400 43,956
Issued in exchange for certain net assets of The
Global Asset Allocation Fund ....................... -- --
Issued to shareholders in reinvestment of distributions -- 32,120
Repurchased .......................................... (2,744,536) (270,667)
------------ ------------
Net increase/(decrease) in shares outstanding ........ 18,864 (194,591)
============ ============
---------------------------------------------------------------------------------------------
See Notes to Financial Statements June 30, 2000
</TABLE>
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<CAPTION>
GARZARELLI
U.S. EQUITY
FUND
-------------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
------------ ------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ...................... $ 40,431,704 $ 36,406,766
------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income/(loss) ......................... (2,849) (6,362)
Net realized gain/(loss) on investments sold ......... 3,676,390 1,122,327
Net realized loss on foreign currency ................ -- --
Net change in unrealized appreciation/(depreciation)
of investments and foreign currency ................ (3,662,201) 5,647,372
------------ ------------
Net increase/(decrease) in net assets resulting from
operations ......................................... 11,340 6,763,337
------------ ------------
DIVIDENDS TO SHAREHOLDERS:
From net investment income ........................... -- (2,278)
In excess of net investment income ................... -- (243)
From net realized gains on investments ............... -- (152,188)
In excess of net realized gain on investments, forward
foreign currency contracts and foreign currency .... -- (1,885)
------------ ------------
Total dividends ...................................... -- (156,594)
------------ ------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares .................... 100,546,021 32,620
Issued in exchange for certain net assets of The
Global Asset Allocation Fund (Note 10) ............. -- --
Issued to shareholders in reinvestment of distributions -- 196,063
Cost of shares repurchased ........................... (110,343,427) (2,810,488)
------------ ------------
Net increase/(decrease) from share transactions ...... (9,797,406) (2,581,805)
------------ ------------
Net increase/(decrease) in net assets ................ (9,786,066) 4,024,938
------------ ------------
NET ASSETS AT END OF PERIOD ............................ $ 30,645,638 $ 40,431,704
============ ============
Undistributed net investment income/(loss) ............. $ (1,777) $ 1,072
============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold ................................................. 7,150,503 2,697
Issued in exchange for certain net assets of The
Global Asset Allocation Fund ....................... -- --
Issued to shareholders in reinvestment of distributions -- 14,187
Repurchased .......................................... (7,854,986) (217,449)
------------ ------------
Net increase/(decrease) in shares outstanding ........ (704,483) (200,565)
============ ============
---------------------------------------------------------------------------------------------
June 30, 2000 See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<CAPTION>
UNIPLAN
REAL ESTATE INVESTMENT
FUND
-------------------------------
SIX MONTHS
ENDED PERIOD ENDED
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999(1)
------------ ------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ...................... $ 4,567,539 $ --
------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income/(loss) ......................... 297,634 169,720
Net realized gain/(loss) on investments sold ......... (276,891) --
Net realized loss on foreign currency ................ -- --
Net change in unrealized appreciation/(depreciation)
of investments and foreign currency ................ 1,287,832 (624,852)
------------ ------------
Net increase/(decrease) in net assets resulting from
operations ......................................... 1,308,575 (455,132)
------------ ------------
DIVIDENDS TO SHAREHOLDERS:
From net investment income ........................... (287,737) (147,244)
In excess of net investment income ................... -- --
From net realized gains on investments ............... (1,682) --
In excess of net realized gain on investments, forward
foreign currency contracts and foreign currency .... -- (7,695)
------------ ------------
Total dividends ...................................... (289,419) (154,939)
------------ ------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares .................... 32,646,108 --
Issued in exchange for certain net assets of The
Global Asset Allocation Fund (Note 10) ............. -- 5,022,671
Issued to shareholders in reinvestment of distributions 157,375 154,939
Cost of shares repurchased ........................... (26,579,327) --
------------ ------------
Net increase/(decrease) from share transactions ...... 6,224,156 5,177,610
------------ ------------
Net increase/(decrease) in net assets ................ 7,243,312 4,567,539
------------ ------------
NET ASSETS AT END OF PERIOD ............................ $ 11,810,851 $ 4,567,539
============ ============
Undistributed net investment income/(loss) ............. $ 24,520 $ 14,623
============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold ................................................. 3,665,051 502,591
Issued in exchange for certain net assets of The
Global Asset Allocation Fund ....................... -- --
Issued to shareholders in reinvestment of distributions 17,643 17,075
Repurchased .......................................... (3,000,914) --
------------ ------------
Net increase/(decrease) in shares outstanding ........ 681,780 519,666
============ ============
------------------------
(1) The Fund commenced operations on May 10, 1999.
---------------------------------------------------------------------------------------------
See Notes to Financial Statements June 30, 2000
</TABLE>
<PAGE>
<TABLE>
--------------------------------------------------------------------------------------------------------
Financial Highlights
For a Share outstanding throughout the periods presented.
<CAPTION>
HOOVER SMALL CAP EQUITY FUND(1)
--------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 2000 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1999 1998
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period ................................. $ 12.19 $ 11.40 $ 10.00
------------- ------------- -------------
Income (loss) from Investment Operations:
Net investment income/(loss) ........... (0.06) (0.07) 0.00+
Net realized and unrealized gain/
(loss) on investments ................ 2.94 0.86 1.41
------------- ------------- -------------
Total from Investment Operations ..... 2.88 0.79 1.41
------------- ------------- -------------
Less Dividends:
From net investment income ............. -- (0.00)+ (0.00)+
In excess of net investment
income ............................... -- (0.00)+ (0.01)
From capital gains ..................... -- -- --
------------- ------------- -------------
Total Dividends ...................... -- (0.00)+ (0.01)
------------- ------------- -------------
Net increase/(decrease) in net asset value 2.88 0.79 1.40
------------- ------------- -------------
Net Asset Value, End of Period ........... $ 15.07 $ 12.19 $ 11.40
============= ============= =============
Total Return (A) ......................... 23.63% 7.03% 13.99%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ........ $ 77,026 $ 46,748 $ 31,838
Ratios to average net assets:
Net investment income/(loss)
including reimbursement/
waiver ............................... (1.11)%* (0.54)% 0.21%*
Operating expenses including
reimbursement/waiver ................. 1.63%* 1.45% 1.45%*
Operating expenses excluding
reimbursement/waiver ................. 1.94%* 2.00% 3.19%*
Portfolio turnover rate .................. 91% 134% 23%
----------------------
* Annualized.
+ Amount represents less than $0.01 per share.
(1) The Fund commenced operations on October 1, 1998.
(2) The Fund commenced operations on May 10, 1999.
(A) Assumes investment at the net asset value at the beginning of the period, reinvestment of all
distributions, a complete redemption of the investment at the net asset value at the end of the
period.
--------------------------------------------------------------------------------------------------------
June 30, 2000 See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
--------------------------------------------------------------------------------------------------------
Financial Highlights (continued)
For a Share outstanding throughout the periods presented.
<CAPTION>
HANSBERGER INTERNATIONAL GROWTH FUND(1)
--------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 2000 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1999 1998
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period ................................. $ 13.93 $ 11.29 $ 10.00
------------- ------------- -------------
Income (loss) from Investment Operations:
Net investment income/(loss) ........... (0.03) 0.21 0.02
Net realized and unrealized gain/
(loss) on investments ................ (0.42) 2.63 1.30
------------- ------------- -------------
Total from Investment Operations ..... (0.45) 2.84 1.32
------------- ------------- -------------
Less Dividends:
From net investment income ............. -- (0.20) (0.02)
In excess of net investment
income ............................... -- -- (0.01)
From capital gains ..................... -- -- --
------------- ------------- -------------
Total Dividends ...................... -- (0.20) (0.03)
------------- ------------- -------------
Net increase/(decrease) in net asset value (0.45) 2.64 1.29
------------- ------------- -------------
Net Asset Value, End of Period ........... $ 13.48 $ 13.93 $ 11.29
============= ============= =============
Total Return (A) ......................... (3.23)% 25.15% 13.23%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ........ $ 25,293 $ 25,887 $ 23,170
Ratios to average net assets:
Net investment income/(loss) including
reimbursement/waiver ................. (0.40)%* 1.65% 0.87%*
Operating expenses including
reimbursement/waiver ................. 1.68%* 1.60% 1.60%*
Operating expenses excluding
reimbursement/waiver ................. 2.10%* 2.30% 2.46%*
Portfolio turnover rate .................. 121% 31% 8%
----------------------
* Annualized.
+ Amount represents less than $0.01 per share.
(1) The Fund commenced operations on October 1, 1998.
(2) The Fund commenced operations on May 10, 1999.
(A) Assumes investment at the net asset value at the beginning of the period, reinvestment of all
distributions, a complete redemption of the investment at the net asset value at the end of the
period.
--------------------------------------------------------------------------------------------------------
See Notes to Financial Statements June 30, 2000
</TABLE>
<PAGE>
<TABLE>
--------------------------------------------------------------------------------------------------------
Financial Highlights (continued)
For a Share outstanding throughout the periods presented.
<CAPTION>
GARZARELLI U.S. EQUITY FUND(1)
--------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 2000 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1999 1998
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period ................................. $ 14.38 $ 12.08 $ 10.00
------------- ------------- -------------
Income (loss) from Investment Operations:
Net investment income/(loss) ........... (0.00)+ 0.00+ 0.01
Net realized and unrealized gain/
(loss) on investments ................ 0.16 2.36 2.08
------------- ------------- -------------
Total from Investment Operations ..... 0.16 2.36 2.09
------------- ------------- -------------
Less Dividends:
From net investment income ............. -- (0.00)+ (0.01)
In excess of net investment
income ............................... -- -- 0.00+
From capital gains ..................... -- (0.06) --
------------- ------------- -------------
Total Dividends ...................... -- (0.06) (0.01)
------------- ------------- -------------
Net increase/(decrease) in net asset value 0.16 2.30 2.08
------------- ------------- -------------
Net Asset Value, End of Period ........... $ 14.54 $ 14.38 $ 12.08
============= ============= =============
Total Return (A) ......................... 1.11% 19.50% 20.93%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ........ $ 30,646 $ 40,432 $ 36,407
Ratios to average net assets:
Net investment income/(loss) including
reimbursement/waiver ................. (0.02)%* (0.02)%* 0.24%*
Operating expenses including
reimbursement/waiver ................. 1.46%* 1.40% 1.40%*
Operating expenses excluding
reimbursement/waiver ................. 1.66%* 1.46% 1.60%*
Portfolio turnover rate .................. 67% 30% 26%
----------------------
* Annualized.
+ Amount represents less than $0.01 per share.
(1) The Fund commenced operations on October 1, 1998.
(2) The Fund commenced operations on May 10, 1999.
(A) Assumes investment at the net asset value at the beginning of the period, reinvestment of all
distributions, a complete redemption of the investment at the net asset value at the end of the
period.
--------------------------------------------------------------------------------------------------------
June 30, 2000 See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------------
Financial Highlights (continued)
For a Share outstanding throughout the periods presented.
<CAPTION>
UNIPLAN REAL ESTATE
INVESTMENT FUND(2)
-----------------------------------
SIX MONTHS
ENDED PERIOD ENDED
JUNE 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
------------- -------------
<S> <C> <C>
Net Asset Value, Beginning of Period ..................... $ 8.79 $ 10.00
------------- -------------
Income (loss) from Investment Operations:
Net investment income/(loss) ........................... 0.23 0.41
Net realized and unrealized gain/(loss) on investments . 1.05 (1.24)
------------- -------------
Total from Investment Operations ..................... 1.28 (0.83)
------------- -------------
Less Dividends:
From net investment income ............................. (0.24) (0.38)
In excess of net investment income ..................... -- --
From capital gains ..................................... (0.00)+ --
------------- -------------
Total Dividends ...................................... (0.24) (0.38)
------------- -------------
Net increase/(decrease) in net asset value ............... 1.04 (1.21)
------------- -------------
Net Asset Value, End of Period ........................... $ 9.83 $ 8.79
============= =============
Total Return (A) ......................................... 14.78% (9.10)%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ........................ $ 11,811 $ 4,568
Ratios to average net assets:
Net investment income/(loss) including reimbursement/
waiver ............................................... 5.63%* 5.64%*
Operating expenses including reimbursement/waiver ...... 1.80%* 1.80%*
Operating expenses excluding reimbursement/waiver ...... 2.63%* 4.02%*
Portfolio turnover rate .................................. 12% 0%
----------------------
* Annualized.
+ Amount represents less than $0.01 per share.
(1) The Fund commenced operations on October 1, 1998.
(2) The Fund commenced operations on May 10, 1999.
(A) Assumes investment at the net asset value at the beginning of the period, reinvestment
of all distributions, a complete redemption of the investment at the net asset value at
the end of the period.
--------------------------------------------------------------------------------------------------------
See Notes to Financial Statements June 30, 2000
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
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 diversified management investment company. At June 30, 2000, the
Company offered four managed investment portfolios. The accompanying financial
statements and financial highlights are those of the Hoover Small Cap Equity
Fund ("Small Cap") (formerly the Small Capitalization Equity Fund), the
Hansberger International Growth Fund ("International Growth") (formerly the
International Equity Fund), the Garzarelli U.S. Equity Fund ("U.S. Equity")
(formerly the U.S. Equity Fund) and the Uniplan Real Estate Investment Fund
("Real Estate") (formerly the Real Estate Investment Fund) (collectively the
"Funds").
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 the significant accounting policies consistently followed by each Fund in
the preparation of its financial statements. These policies are in conformity
with generally accepted accounting principles.
PORTFOLIO VALUATION: Portfolio securities which are traded on a national
securities exchange or on NASDAQ are valued at the last sale price on the
securities exchange on which such securities are primarily traded, or in the
event that no sale has occurred, at the average of the bid and ask price.
Other 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 are valued at the most recent closing
values of such securities on their respective exchanges. Investments in 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 Funds generally value their holdings
including fixed income securities through the use of independent pricing
agents, except for securities for which a ready market does not exist, which
are valued under the direction of the Board of Directors or which are valued
by the Sub-Advisors using methodologies approved by the Board of Directors.
REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, it is the Funds' policy that its custodian take possession of the
underlying collateral securities, the fair value of which exceeds the
principal amount of the repurchase transaction, including accrued interest, at
all times. If the seller defaults, and the fair value of the collateral
declines, realization of the collateral by a Fund may be delayed or limited.
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,
adjusted for accretion of discounts and amortization of premiums, is recorded
on the accrual basis. Dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
a Fund is informed of the ex-dividend date, if the ex-dividend date has
passed.
OPTIONS: Premiums received by a Fund upon writing options are recorded as an
asset with a corresponding liability which is subsequently adjusted to the
current market value of the option with changes in the market value reflected
as unrealized gain/(loss) in the Statement of Operations. When an option
expires, is exercised, or is closed, a Fund realizes a gain or loss equal to
the difference between the premium received and the amount paid on effecting a
closing transaction, and the liability is eliminated. The Fund as writer of an
option bears the market risk of an unfavorable change in the price of the
security underlying the written option.
INTEREST-RATE SWAP CONTRACTS: The Funds may use interest-rate swap contracts
to help manage interest-rate risk. Interest-rate swaps represent an agreement
between counterparties to exchange cash flows based on the difference between
two interest rates, applied to a notional principal amount for a specified
period. The most common type of interest-rate swap involves the exchange of
fixed-rate cash flows for variable-rate cash flows. Interest-rate swaps do not
involve the exchange of principal between the parties. A Fund will not enter
into interest-rate swap contracts unless the unsecured commercial paper,
unsecured senior debt or the claims-paying ability of the counterparty is
rated either AA or A or better by Standard & Poor's Corporation, or Aa or P-1
or better by Moody's Investors Service, Inc. (or is otherwise acceptable to
either agency) at the time of entering into such a transaction. If the
counterparty to the swap transaction defaults, a Fund will be limited to
contractual remedies pursuant to the agreements governing the transaction.
There is no assurance that interest-rate swap contract counterparties will be
able to meet their obligations under the swap contracts or that, in the event
of default, a Fund will succeed in pursuing contractual remedies. A Fund may
thus assume the risk that payments owed a Fund under a swap contract will be
delayed, or not received at all. Should interest rates move unexpectedly, a
Fund may not achieve the anticipated benefits of the interest-rate swaps, and
may realize a loss. A Fund recognizes gains and losses under interest-rate
swap contracts as realized gains or losses on investments upon sale or
settlement of the swap contracts.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Funds may enter into forward
foreign currency exchange contracts whereby a 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 may also be
used to enhance the Fund's returns. 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
"Statements 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. The use of forward
contracts involves the risk that anticipated currency movements will not be
accurately predicted. A forward contract would limit the risk of loss due to a
decline in the value of a particular currency; however, it also would limit
any potential gain that might result should the value of the currency increase
instead of decrease. These contracts may involve market risk in excess of the
unrealized gain or loss reflected in the Statement of Assets and Liabilities.
In addition, a Fund could be exposed to risks if counterparties of the
contracts are unable to meet the terms of their contracts. The counterparty
risk exposure is, therefore, closely monitored and contracts are only executed
with high credit quality financial institutions.
FOREIGN CURRENCY TRANSLATION: The books and records of the Funds 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 are declared
and paid annually for the Small Cap, International Growth and U.S. Equity
Funds and quarterly for the Real Estate Fund. Net realized capital gains, if
any, are distributed at least annually.
Income dividends and capital gain distributions are determined in accordance
with income tax regulations, which may differ from generally accepted
accounting principles. Therefore, the source of the Funds' distributions may
be shown in the accompanying financial statements as either from or in excess
of net investment income or net realized gain, or from paid-in-capital,
depending upon the type of book/tax differences that may exist.
FEDERAL INCOME TAXES: The Company treats each Fund as a separate entity for
federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, each 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, each
Fund will not be subject to a federal excise tax. Therefore, no provision is
made by the Funds for federal income or excise taxes. 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 Funds bear all costs in connection with their
organization, including the fees and expenses of registering and qualifying
their initial shares for distribution under federal and state securities laws.
The organization costs for the Small Cap, International Growth, Equity and
Real Estate Funds have been expensed as incurred.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS: The Funds may purchase
securities on a when-issued or delayed-delivery basis. A Fund will engage in
when-issued and delayed-delivery transactions only for the purpose of
acquiring portfolio securities consistent with its investment objective and
policies, not for investment leverage. When-issued securities are securities
purchased for delivery beyond the normal settlement date at a stated price and
yield and thereby involve a risk that the yield obtained in the transaction
will be less than that available in the market when delivery takes place. A
Fund will not pay for such securities or start earning interest on them until
they are received. When a Fund agrees to purchase securities on a when-issued
basis, the custodian will set aside cash or liquid securities equal to the
amount of the commitment in a segregated account. Securities purchased on a
when-issued basis are recorded as an asset and are subject to changes in value
based upon changes in the general level of interest rates. In when-issued and
delayed-delivery transactions, a Fund relies on the seller to complete the
transaction; the seller's failure to do so may cause the Fund to miss an
advantageous price or yield.
3. INVESTMENT ADVISORY, ADMINISTRATION AND OTHER FEES
The Company has entered into an investment advisory agreement with Webster
Investment Management Company, LLC ("Webster,"or the "Advisor") pursuant to
which Webster provides investment advisory services to the Funds and is
entitled to receive a fee calculated daily and payable monthly at the
following annual rates based on each Fund's average daily net assets: Small
Cap, 1.05%; International Growth, 0.75%; U.S. Equity, 0.80% on the first $100
million, 0.725% on the next $400 million, and 0.65% on assets over $500
million; Real Estate Fund, 0.85% on the first $100 million, 0.80% on the next
$400 million, and 0.70% on assets over $500 million.
Webster has entered into investment sub-advisory agreements with Garzarelli
Investment Management, LLC ("Garzarelli") for the U.S. Equity Fund; Hansberger
Global Investors, Inc. ("HGI") for the International Growth Fund; Hoover
Investment Management, LLC ("Hoover") (formerly Hoover Capital Management,
LLC) for the Small Cap Fund; and Uniplan, Inc. ("Uniplan") for the Real Estate
Fund (each, a "Sub-Advisor"). Pursuant to these agreements, the Sub-Advisors
provide investment sub-advisory services to the Funds and are entitled to
receive a fee from Webster calculated daily and payable monthly at the
following annual rates based on each Fund's average daily net assets: Small
Cap, 0.80%; International Growth, 0.50%; U.S. Equity, 0.55% on the first $100
million, 0.475% on the next $400 million, and 0.40% on assets over $500
million; Real Estate Fund, 0.60% on the first $100 million, 0.55% on assets
over $100 million and up to $500 million, and 0.45% on assets over $500
million.
The Funds (except for Institutional shares of the Small Cap Fund) have a
Distribution Plan pursuant to which up to 0.25% of each Fund's average daily
net assets may be used to pay shareholder servicing and distribution fees. In
addition, the Funds have a Shareholder Servicing Plan which may be used to pay
shareholder servicing fees at an annual rate of up to 0.10% (0.35% for the
Institutional shares of the Small Cap Fund) of each Fund's average net assets.
The expenses of the Distribution and Shareholder Servicing Plan are reflected
as distribution and service fees in the Statement of Operations.
The Company has entered into an administration agreement with PCPC Inc. (the
"Administrator"). The Administrator also serves as the Company's transfer
agent and dividend paying agent.
Provident Distributors, Inc. (the "Distributor") serves as the Funds'
distributor. The Distributor acts as an agent for the Funds and the
distributor of their shares.
Overall responsibility for oversight of the Funds rests with the Directors of
the Company. There are currently four directors, three of whom are not
"interested persons" of the Company within the meaning of that term under the
Investment Company Act of 1940, as amended. Each disinterested Director
receives $3,000 for each board meeting attended.
4. WAIVER OF FEES
The Adviser has agreed to voluntarily waive a portion of its fees and/or
reimburse certain expenses. These voluntary waivers and/or reimbursements will
continue until at least January 1, 2001. As a result of such waivers, the
aggregate net expenses (as a percentage of net assets and exclusive of 12b-1
and shareholder servicing fees) for the six months ended June 30, 2000 have
been limited to 1.50%, 1.65%, 1.45% and 1.80%, for the Small Cap,
International Growth, U.S. Equity and Real Estate Funds, respectively. For the
six months ended June 30, 2000, the fee waivers and/or reimbursements were as
follows:
FEES FEES
WAIVED BY REIMBURSED
FUND ADVISOR BY ADVISOR TOTAL
---- --------- ---------- -------
Small Cap $73,384 $18,259 $91,643
International Growth 30,880 21,623 52,503
U.S. Equity 34,491 -- 34,491
Real Estate 13,194 31,126 44,320
5. SHARES OF BENEFICIAL INTEREST
The Company's Articles of Incorporation authorize the Directors to issue an
unlimited number of shares of beneficial interest. All of the Funds except for
the Small Cap Fund currently offer a single class of shares. The Small Cap
Fund offers both an Investor and Institutional class of shares. There were no
Institutional shares outstanding during the period ended June 30, 2000. 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 U.S.
Government and short-term investments, for the six months ended June 30, 2000
were as follows:
FUND PURCHASES SALES
---- ----------- -----------
Small Cap $67,949,891 $51,511,689
International Growth 29,195,588 28,864,421
U.S. Equity 22,427,521 32,589,977
Real Estate 7,163,577 1,084,274
The cost of purchases and proceeds from sales of long-term U.S. Government
securities for the six months ended June 30, 2000 were as follows:
FUND PURCHASES SALES
---- --------- -----
U.S. Equity $ 309,255 $ --
At June 30, 2000 the aggregate cost of investments, gross unrealized
appreciation and depreciation and net unrealized appreciation/(depreciation)
for federal tax purposes was as follows:
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
FUND COST APPRECIATION DEPRECIATION (DEPRECIATION)
---- ---- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Small Cap $58,469,280 $17,310,834 $(1,071,191) $ 16,239,643
International Growth 22,710,408 2,988,601 (1,340,387) 1,648,214
U.S. Equity 25,514,192 6,347,721 (1,657,570) 4,690,151
Real Estate 10,514,620 806,787 (143,807) (662,980)
</TABLE>
7. FOREIGN SECURITIES
Each Fund may directly 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.
On January 1, 1999, the European Monetary Union ("EMU") introduced a new
single currency, the Euro, which will replace the national currencies of the
participating member countries. Until 2002, the national currencies will
continue to exist, but exchange rates will be tied to the Euro. The
introduction of the Euro affects all stages of the investment process,
including trading, foreign exchange and accounting. Because this change to a
single currency is new, the introduction of the Euro may result in market
volatility and may affect the business or financial conditions of European
issuers or of a portfolio investing in European issuers. In addition, while
the conversion will eliminate currency risk among the participating nations,
currency risk between the Euro and the U.S. dollar remains a factor.
8. RISK FACTORS OF THE REAL ESTATE FUND
Because the Real Estate Fund may invest a substantial portion of its assets in
real estate investment trusts (REITs), the Real Estate Fund may be subject to
certain risks associated with direct investments in REITs. REITs may be
affected by changes in the value of their underlying properties and by
defaults by borrowers or tenants. REITs depend generally on their ability to
generate cash flow to make distributions to shareowners, and certain REITs
have self-liquidation provisions by which mortgages held may be paid in full
and distributions of capital returns may be made at any time. In addition, the
performance of a REIT may be affected by its failure to qualify for tax-free
pass-through of income under the Internal Revenue Code or its failure to
maintain exemption from registration under the 1940 Act.
9. SPECIAL MEETING OF SHAREHOLDERS
A special meeting of shareholders of the Equity Fund and the International
Growth Fund was held on February 29, 2000 to vote on the proposals listed
below. The results were as follows:
PROPOSAL 1: To consider a new investment sub-advisory agreement between
Webster and Garzarelli relating to the U.S. Equity Fund.
VOTES FOR VOTES AGAINST
--------- -------------
2,793,512 0
PROPOSAL 2: To consider an amendment to the investment management agreement
between the Company and Webster to increase the advisory fee payable with
respect to the International Growth Fund.
VOTES FOR VOTES AGAINST
--------- -------------
1,847,036 0
PROPOSAL 3: To consider a new investment sub-advisory agreement between
Webster and HGI relating to the International Growth Fund.
VOTES FOR VOTES AGAINST
--------- -------------
2,793,512 0
10. LIQUIDATING DISTRIBUTIONS
The Global Bond Fund and the Global Asset Allocation Fund were liquidated on
February 8, 2000 and February 10, 2000, respectively, and shareholders
received liquidating distributions. On February 8, 2000, $23,550,003 in cash
was distributed to shareholders from the Global Bond Fund upon dissolution. On
February 10, 2000 the Global Asset Allocation Fund was liquidated and an in-
kind distribution of the Global Asset Allocation Fund's investments in the
Small Cap, International Equity, U.S. Equity, Global Bond and Real Estate
Funds was made to shareholders on a pro-rata basis.
