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[LOGO OF KOBRICK CENDANT FUNDS APPEARS HERE]
Kobrick-Cendant Capital Fund
Kobrick-Cendant Emerging Growth Fund
Semi-Annual Report
March 31, 1998
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TABLE OF CONTENTS
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President's Message................................................... 2
Portfolio Profiles.................................................... 4
Schedule of Investments............................................... 6
Financial Statements
Statements of Assets and Liabilities.............................10
Statements of Operations.........................................11
Statements of Changes in Net Assets..............................12
Financial Highlights.............................................13
Notes to Financial Statements.........................................14
The information contained in this report is intended for the general information
of the shareholders of the Funds. Due to active management, there is no
guarantee that a Fund currently invests or will continue to invest in the
securities listed in this report. This report is not authorized for distribution
to prospective investors unless preceded or accompanied by a current Fund's
prospectus which contains important information concerning the Fund. Please read
the prospectus carefully before investing. To obtain a prospectus, please call
1-888-KCFUND1 (1-888-523-8631).
1 Semi-Annual Report
<PAGE>
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PRESIDENT'S MESSAGE
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[PHOTO OF FREDERICK R. KOBRICK APPEARS HERE]
Dear Fellow Shareholder:
We are pleased to report the investment results for the three months ending
March 31, 1998 for the Kobrick-Cendant Capital Fund and Emerging Growth Fund. As
the Funds were launched on January 2, 1998, this report provides a perspective
on their first three months of operation.
Both Funds performed very well, handily beating their respective indices. The
Emerging Growth Fund was up 17.0%, comparing favorably with the Russell 2000
Index which gained 10.1%. Similarly, the Capital Fund was up 15.2% vs. 13.9% for
the S&P 500 Index.
As 1998 opened, the prevailing attitude among many investors was one of
caution. In question was whether the equity markets could sustain momentum
following a strong three year period and amid concerns about Southeast Asia and
weakening corporate earnings. Yet, we believed that an environment of low
interest rates, low inflation and improving productivity would sustain US
economic growth and continue to drive the overall stock market higher.
Indeed, as the quarter progressed we remained optimistic towards the equity
markets and began to see substantial opportunities for the Funds. In particular,
we believed consumer cyclicals and technology issues, having been punished,
unjustly in our view, in late 1997 were set for a rebound. We took full
advantage by adding to the portfolios quality retailers, such as Timberland and
Cutter & Buck, as well as select technology companies, including Compuware Corp.
and Advanced Fibre Communications. Our investment in America Online, the world's
largest internet service company, was a standout performer during the quarter.
In the Capital Fund, our performance was also enhanced by our investment in
Microsoft, Worldcom, and Boston Scientific, a medical devices company. The
strong performance in the Emerging Growth Fund was also
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TOTAL RETURN
January 2, 1998 - March 31, 1998
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Kobrick-Cendant Capital Fund* 15.2%
S&P 500 Index 13.9%
Kobrick-Cendant Emerging Growth Fund* 17.0%
Russell 2000 Index 10.1%
* Since inception January 2, 1998.
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Semi-Annual Report 2
<PAGE>
driven by significant gains in smaller capitalization companies including
Winsloew Furniture, a furniture manufacturer, and Ecsoft Group, a European
technology consulting firm.
Looking ahead, we see continued opportunity in the US equity markets as the
economy remains strong and inflation stays in check. We remain watchful of
events unfolding in Asia, particularly Japan, and are shying away from
investments in companies with large exposure to that region of the world.
Consequently, we expect to remain somewhat overweighted in consumer cyclicals
with largely domestic orientations such as apparel manufacturers and retailers
as well as select airline stocks.
Lastly, I am often asked in times like these when the markets look high if it
is a good time to invest. My answer is always the same. So-called market timing
undermines the long-term success potential of individual and professional
investors alike. We believe that all the great mutual fund records have been
built by avoiding predictions of where the market indices are going and
concentrating on the most undervalued stock selections. For their part,
individual investors are far better served by identifying their goals and then
developing a plan, including a regular investment program, than by trying to
guess the direction of the market.
If we can be of any assistance, please call us at 1-888-KCFUND1
(1-888-523-8631) from 8am-6pm, Monday-Friday or visit our web site at
www.kcfund.com
Thank you for investing in Kobrick-Cendant Funds.
Sincerely,
/s/ Frederick R. Kobrick
Frederick R. Kobrick
President and Chief Executive Officer
Performance data quoted represent past performance and do not guarantee future
results and reflect a partial waiver and/or reimbursement of fees without which
the total return would have been lower. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. The S&P 500 is an
unmanaged index of 500 publicly traded stocks representing a variety of
industries. The Russell 2000 is an unmanaged index of 2000 small capitalization
U.S. stocks and is a commonly used index of U.S. small stock performance. Index
performance includes reinvestment of dividends. You cannot invest directly in an
index.
3 Semi-Annual Report
<PAGE>
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KOBRICK-CENDANT CAPITAL FUND
PORTFOLIO PROFILE
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FUND FACTS
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Objective: Maximum capital appreciation
Strategy: Invests in common stocks of emerging growth companies
and companies determined by the manager to be
undervalued special situations.
Inception Date: January 2, 1998
Manager: Frederick R. Kobrick
Assets (3/31/98): $36.75 million
Fund Number: 653
Symbol: KCCFX
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TOP TEN HOLDINGS AS OF MARCH 31, 1998
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% of Fund's
net assets
Republic Industries, Inc. 3.0
Delta Air Lines, Inc. 2.9
Advanced Fibre Communications 2.8
Centocor, Inc. 2.3
Chancellor Media Corp. 2.3
Ascend Communications, Inc. 2.2
Caribiner International, Inc. 2.2
Microsoft Corp. 2.2
Timberland Company 2.2
Party City Corp. 1.9
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TOP FIVE INDUSTRIES AS OF MARCH 31, 1998
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% of Fund's
net assets
Computer Software/Services 17.8
Retail - Specialty 10.0
Airlines 8.3
Communication - Equipment 6.7
Computers - Networking 5.2
Semi-Annual Report 4
<PAGE>
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KOBRICK-CENDANT EMERGING GROWTH FUND
PORTFOLIO PROFILE
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FUND FACTS
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Objective: Provide growth in capital
Strategy: Invests in equity securities of emerging growth and
small capitalization companies.
Inception Date: January 2, 1998
Manager: Frederick R. Kobrick
Assets (3/31/98): $36.49 million
Fund Number: 656
Symbol: KCEGX
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TOP TEN HOLDINGS AS OF MARCH 31, 1998
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% of Fund's
net assets
Timberland Company 3.2
America West Airlines, Inc. 3.0
Advanced Fibre Communications 2.8
Centocor, Inc. 2.3
Chancellor Media Corp. 2.3
Caribiner International, Inc. 2.2
Aris Corp. 2.1
Cutter & Buck, Inc. 2.1
Guitar Center Management, Inc. 2.0
SBS Technologies, Inc. 2.0
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TOP FIVE INDUSTRIES AS OF MARCH 31, 1998
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% of Fund's
net assets
Computer Software/Services 17.6
Retail - Specialty 13.4
Services - Commercial and Consumer 6.9
Communication - Equipment 6.1
Footware 5.1
5 Semi-Annual Report
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SCHEDULE OF INVESTMENTS
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Kobrick-Cendant Investment Trust
Schedule of Investments
KOBRICK-CENDANT CAPITAL FUND
March 31, 1998 (unaudited)
Company Shares Value
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COMMON STOCKS -- 97.1%
AEROSPACE/DEFENSE-- 0.7%
Ladish Co., Inc. ............................. 15,600 $ 239,850
----------
AIRLINES -- 8.3%
America West Airlines, Inc. (a) .............. 25,600 656,000
Delta Air Lines, Inc. ........................ 9,100 1,076,075
Southwest Airlines Co. ....................... 19,100 564,644
UAL Corp. (a) ................................ 4,100 381,044
US Airways Group, Inc. (a) ................... 5,100 378,037
----------
3,055,800
----------
BIOTECHNOLOGY-- 2.3%
Centocor, Inc. (a) ........................... 19,000 847,875
----------
BROADCAST MEDIA -- 3.4%
Chancellor Media Corp. (a) ................... 18,500 848,687
SFX Entertainment, Inc. (a) .................. 15,900 381,600
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1,230,287
----------
COMMUNICATION-EQUIPMENT -- 6.7%
ADC Telecommunications, Inc. (a) ............. 21,200 584,325
Advanced Fibre Communications (a) ............ 28,200 1,025,775
Brightpoint, Inc. (a) ........................ 17,200 295,625
EIS International, Inc. (a) .................. 4,000 33,500
Nokia Corp. (ADR) ............................ 3,400 366,987
Westell Technologies Cl.A (a) ................ 11,800 150,450
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2,456,662
----------
COMPUTER HARDWARE -- 0.7%
SBS Technologies, Inc. (a) ................... 9,300 267,375
----------
COMPUTER SOFTWARE/SERVICES-- 17.8%
America Online, Inc. (a) ..................... 10,000 683,125
Aris Corp. ................................... 9,200 273,700
Autodesk, Inc. ............................... 11,600 500,250
BMC Software, Inc. (a) ....................... 4,700 393,919
Citrix Systems, Inc. (a) ..................... 6,000 325,125
Computer Associates International, Inc. ...... 9,200 531,300
Compuware Corp. (a) .......................... 7,800 385,125
Excite, Inc. (a) ............................. 5,400 275,063
HBO & Co. .................................... 9,600 579,600
Micro Focus Group, Inc. (a) .................. 7,100 338,137
Microsoft Corp. (a) .......................... 8,900 796,550
Open Market, Inc. (a) ........................ 23,900 492,937
Open Text Corp. (a) .......................... 15,800 286,375
Symantec Corp. (a) ........................... 13,600 366,350
Synopsys, Inc. (a) ........................... 9,500 311,125
----------
6,538,681
----------
COMPUTERS-NETWORKING -- 5.2%
Ascend Communications, Inc. (a) .............. 21,300 806,737
Bay Networks, Inc. (a) ....................... 9,500 257,688
Cisco Systems, Inc. (a) ...................... 7,800 533,325
Splash Technology Holdings, Inc. (a) ......... 18,700 313,225
----------
1,910,975
----------
COMPUTERS-PERIPHERAL-- 1.5%
EMC Corp. (a) ................................ 9,700 366,781
Western Digital Corp. (a) .................... 10,200 179,138
----------
545,919
----------
ELECTRONICS-SEMICONDUCTOR-- 2.2%
Linear Technology Corp. ...................... 4,800 331,200
Maxim Integrated Products, Inc. (a) .......... 8,700 317,006
Xilinx, Inc. (a) ............................. 4,600 172,213
----------
820,419
----------
FOOTWARE -- 3.8%
Kenneth Cole Productions, Inc. (a) ........... 28,200 567,525
Timberland Co. Cl.A (a) ...................... 11,500 822,250
----------
1,389,775
----------
GAMING & LOTTERY -- 1.0%
Powerhouse Technologies, Inc. (a) ............ 26,100 371,925
----------
INSURANCE-MULTILINE-- 2.0%
Cigna Corp. .................................. 1,800 369,000
Travelers Group, Inc. ........................ 6,000 360,000
----------
729,000
----------
INVESTMENT BANK/BROKERAGE -- 1.9%
Charles Schwab Corp. ......................... 8,700 330,600
Hambrecht & Quist Group, Inc. (a) ............ 10,300 359,856
----------
690,456
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See Notes to Financial Statements
Semi-Annual Report 6
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SCHEDULE OF INVESTMENTS
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Kobrick-Cendant Investment Trust
Schedule of Investments
KOBRICK-CENDANT CAPITAL FUND
March 31, 1998 (unaudited)
Company Shares Value
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LEISURE TIME PRODUCTS -- 1.7%
Action Performance Cos., Inc. (a) ............ 7,400 $ 260,387
Winnebago Industries, Inc. ................... 30,700 362,644
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623,031
-----------
LODGING-HOTELS -- 1.8%
Four Seasons Hotels, Inc. .................... 19,700 672,263
-----------
MEDICAL PRODUCTS & SUPPLIES -- 2.7%
Boston Scientific Corp. (a) .................. 8,900 600,750
The Cooper Companies, Inc. (a) ............... 9,000 380,699
-----------
981,449
-----------
RESTAURANTS -- 1.1%
Starbucks Corp. (a) .......................... 8,700 394,219
-----------
RETAIL-APPAREL -- 1.2%
Cutter & Buck, Inc. (a) ...................... 17,200 445,050
-----------
RETAIL-BUILDING SUPPLIES -- 1.4%
Home Depot, Inc. ............................. 7,800 526,013
-----------
RETAIL-DEPARTMENT STORES-- 4.5%
Dollar General Corp. ......................... 9,425 364,630
Family Dollar Stores, Inc. ................... 11,700 444,600
Proffitts, Inc. (a) .......................... 11,300 409,625
Ross Stores, Inc. ............................ 9,700 428,012
-----------
1,646,867
-----------
RETAIL-GENERAL MERCHANDISE -- 2.0%
BJ's Wholesale Club, Inc. (a) ................ 9,200 358,800
Dayton Hudson Corp. .......................... 4,300 378,400
-----------
737,200
-----------
RETAIL-SPECIALTY-- 10.0%
Amazon.com, Inc. (a) ......................... 5,400 461,869
Gadzooks, Inc. (a) ........................... 15,300 342,338
Guitar Center Management, Inc. (a) ........... 23,900 564,637
Men's Wearhouse, Inc. (a) .................... 8,700 321,900
Party City Corp. (a) ......................... 20,500 694,437
Pier 1 Imports, Inc. ......................... 20,200 547,925
Staples, Inc. (a) ............................ 17,850 413,897
Williams Sonoma, Inc. (a) .................... 5,800 335,675
-----------
3,682,678
-----------
SERVICES-
ADVERTISING/MARKETING -- 2.0%
Outdoor Systems, Inc. (a) .................... 9,800 $ 343,613
Snyder Communications, Inc. (a) .............. 8,600 403,125
-----------
746,738
-----------
SERVICES-
COMMERCIAL & CONSUMER -- 4.6%
Budget Group, Inc. Cl.A (a) .................. 10,000 375,000
Caribiner International, Inc. (a) ............ 21,400 823,900
Century Business Services, Inc. (a) .......... 27,600 488,175
-----------
1,687,075
-----------
SERVICES-COMPUTER SYSTEMS -- 1.1%
Keane, Inc. (a) .............................. 7,000 395,500
-----------
TELECOMMUNICATIONS -
LONG DISTANCE -- 1.5%
Worldcom, Inc. ............................... 13,200 568,425
-----------
TEXTILES-APPAREL -- 1.0%
St. John Knits, Inc. ......................... 8,100 382,725
-----------
WASTE MANAGEMENT -- 3.0%
Republic Industries, Inc. (a) ................ 42,700 1,102,194
-----------
Total Common Stocks
(cost $32,071,676) ....................... 35,686,426
-----------
TOTAL INVESTMENTS -- 97.1%
(cost $32,071,676)*........................ 35,686,426
Other assets less liabilities -- 2.9% 1,063,804
-----------
NET ASSETS-- 100% $36,750,230
===========
*Aggregate cost for Federal tax purposes.
(a) Non-income producing security.
Abbreviation:
ADR American Depositary Receipt
See Notes to Financial Statements
7 Semi-Annual Report
<PAGE>
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SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
Kobrick-Cendant Investment Trust
Schedule of Investments
KOBRICK-CENDANT EMERGING GROWTH FUND
March 31, 1998 (unaudited)
Company Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS -- 96.7%
AEROSPACE/DEFENSE-- 0.7%
Ladish Co., Inc. ............................. 15,600 $ 239,850
----------
AIRLINES -- 3.0%
America West Airlines, Inc. (a) .............. 42,400 1,086,500
----------
BIOTECHNOLOGY-- 2.3%
Centocor, Inc. (a)............................ 18,800 838,950
----------
BROADCAST MEDIA -- 3.3%
Chancellor Media Corp. (a) ................... 18,200 834,925
SFX Entertainment, Inc. (a) .................. 15,700 376,800
----------
1,211,725
----------
COMMUNICATION-EQUIPMENT -- 6.1%
ADC Telecommunications, Inc. (a) ............. 20,900 576,056
Advanced Fibre Communications (a) ............ 27,800 1,011,225
Brightpoint, Inc. (a) ........................ 26,100 448,594
EIS International, Inc. (a) .................. 3,900 32,662
Westell Technologies Cl.A (a) ................ 11,600 147,900
----------
2,216,437
----------
COMPUTER HARDWARE -- 2.0%
SBS Technologies, Inc. (a) ................... 25,700 738,875
----------
COMPUTER
SOFTWARE/SERVICES -- 17.6%
America Online, Inc. (a) ..................... 6,600 450,862
Aris Corp. ................................... 25,700 764,575
Autodesk, Inc. ............................... 11,500 495,937
BMC Software, Inc. (a) ....................... 4,700 393,919
Citrix Systems, Inc. (a) ..................... 6,000 325,125
Compuware Corp. (a) .......................... 7,700 380,188
Ecsoft Group Plc (ADR) (a) ................... 19,300 482,500
Egghead.com, Inc. (a) ........................ 24,600 264,450
Excite, Inc. (a) ............................. 5,300 269,969
Micro Focus Group, Inc. (a) .................. 10,300 490,537
Midway Games, Inc. (a) ....................... 14,900 341,769
Open Market, Inc. (a)......................... 23,700 488,812
Open Text Corp. (a)........................... 15,500 280,938
Symantec Corp. (a)............................ 26,100 703,069
Synopsys, Inc. (a) ........................... 9,400 307,850
----------
6,440,500
----------
COMPUTERS-NETWORKING -- 1.9%
Ascend Communications, Inc. (a) .............. 10,400 393,900
Splash Technology Holdings, Inc. (a) ......... 18,400 308,200
----------
702,100
----------
COMPUTERS-PERIPHERAL -- 0.5%
Western Digital Corp. (a) .................... 10,200 179,138
----------
ELECTRONICS-SEMICONDUCTOR-- 2.0%
Linear Technology Corp. ...................... 4,700 324,300
Samsung Electronics (GDR) .................... 21,800 234,350
Xilinx, Inc. (a) ............................. 4,600 172,213
----------
730,863
----------
FOOTWARE -- 5.1%
Kenneth Cole Productions, Inc. (a) ........... 34,700 698,337
Timberland Co. Cl.A (a) ...................... 16,100 1,151,150
----------
1,849,487
----------
GAMING & LOTTERY -- 1.4%
Powerhouse Technologies, Inc. (a) ............ 35,200 501,600
----------
HOMEBUILDING -- 2.1%
Champion Enterprises, Inc. (a) ............... 9,700 258,869
NVR, Inc. (a)......... ....................... 16,200 511,312
----------
770,181
----------
HOUSEHOLD FURNITURE &
APPLIANCES -- 1.6%
Winsloew Furniture, Inc. (a) ................. 27,100 596,200
----------
INSURANCE-MULTILINE -- 1.0%
Blanch E W Holdings, Inc. .................... 9,200 353,050
----------
INVESTMENT BANK/BROKERAGE -- 1.2%
Hambrecht & Quist Group, Inc. (a) ............ 13,100 457,681
----------
LEISURE TIME PRODUCTS -- 2.4%
Action Performance Cos., Inc. (a) ............ 14,600 513,737
Winnebago Industries, Inc. ................... 30,000 354,375
----------
868,112
----------
See Notes to Financial Statements
Semi-Annual Report 8
<PAGE>
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SCHEDULE OF INVESTMENTS
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Kobrick-Cendant Investment Trust
Schedule of Investments
KOBRICK-CENDANT EMERGING GROWTH FUND
March 31, 1998 (unaudited)
Company Shares Value
- --------------------------------------------------------------------------------
LODGING-HOTELS -- 1.8%
Four Seasons Hotels, Inc. ................... 19,400 $ 662,025
-----------
MANUFACTURE-DIVERSE -- 0.8%
Aavid Thermal Technologies, Inc. (a) ........ 10,100 311,838
-----------
MEDICAL PRODUCTS & SUPPLIES -- 1.0%
The Cooper Companies, Inc. (a) .............. 9,000 380,699
-----------
REAL ESTATE
INVESTMENT TRUST -- 1.9%
Laser Mortgage Management, Inc. ............. 42,300 690,019
-----------
RESTAURANTS -- 2.5%
Ark Restaurants Corp. (a) ................... 44,900 516,350
Starbucks Corp. (a) ......................... 8,500 385,156
-----------
901,506
-----------
RETAIL-APPAREL -- 2.1%
Cutter & Buck, Inc. (a) ..................... 29,500 763,313
-----------
RETAIL-DEPARTMENT STORES-- 5.0%
Dollar General Corp. ........................ 11,375 440,070
Family Dollar Stores, Inc. .................. 14,500 551,000
Proffitts, Inc. (a) ......................... 11,000 398,750
Ross Stores, Inc. ........................... 9,500 419,188
-----------
1,809,008
-----------
RETAIL-GENERAL MERCHANDISE -- 1.7%
BJ's Wholesale Club, Inc. (a) ............... 15,600 608,400
-----------
RETAIL-SPECIALTY-- 13.4%
Amazon.com, Inc. (a) ........................ 5,300 453,315
Borders Group, Inc. (a) ..................... 7,100 241,844
Gadzooks, Inc. (a) .......................... 22,600 505,675
Guitar Center Management, Inc. (a) .......... 30,700 725,287
Men's Wearhouse, Inc. (a) ................... 19,400 717,800
Party City Corp. (a) ........................ 20,200 684,275
Pier 1 Imports, Inc. ........................ 19,800 537,075
Staples, Inc. (a) ........................... 17,550 406,941
Williams Sonoma, Inc. (a) ................... 10,800 625,050
-----------
4,897,262
-----------
SERVICES-
ADVERTISING/MARKETING -- 3.5%
Outdoor Systems, Inc. (a) ................... 19,500 $ 683,719
Snyder Communications, Inc. (a) ............. 12,600 590,625
-----------
1,274,344
-----------
SERVICES-
COMMERCIAL & CONSUMER -- 6.9%
Avis Rent A Car, Inc. (a) ................... 17,200 557,925
Budget Group, Inc. Cl.A (a) ................. 18,200 682,500
Caribiner International, Inc. (a) ........... 21,200 816,200
Century Business Services, Inc. (a) ......... 26,900 475,794
-----------
2,532,419
-----------
SERVICES-COMPUTER SYSTEMS -- 1.1%
Keane, Inc. (a) ............................. 7,000 395,500
-----------
TEXTILES-APPAREL -- 0.8%
St. John Knits, Inc. ........................ 6,000 283,500
-----------
Total Common Stocks
(cost $31,554,841) ....................... 35,291,082
-----------
REPURCHASE AGREEMENT -- 1.4%
State Street Bank and Trust Company,
2.00%, dated 3/31/98, due 4/1/98
(collateralized by U.S. Treasury Notes
6.125%, 5/15/98, market value $506,138)
(amortized cost $492,000) ................ 492,000
-----------
TOTAL INVESTMENTS -- 98.1%
(cost $32,046,841)* ....................... 35,783,082
Other assets less liabilities-- 1.9% ........ 710,253
-----------
NET ASSETS -- 100% .......................... $36,493,335
===========
*Aggregate cost for Federal tax purposes.
(a) Non-income producing security.
Abbreviations:
ADR American Depositary Receipt
GDR Global Depositary Receipt
See Notes to Financial Statements
9 Semi-Annual Report
<PAGE>
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FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick-Cendant Investment Trust
Statements of Assets and Liabilities
March 31, 1998 (unaudited)
<TABLE>
<CAPTION>
Kobrick-Cendant Kobrick-Cendant
Capital Emerging Growth
Fund Fund
-------------- --------------
<S> <C> <C>
ASSETS
Investments, at value (Note 2)
Securities (cost $32,071,676 and
$32,046,841, respectively) ............... $ 35,686,426 $ 35,291,082
Repurchase Agreement...................... -- 492,000
------------ ------------
Total Investments........................ 35,686,426 35,783,082
Cash........................................ 436,171 916
Dividends and interest receivable........... 15,355 20,977
Receivable for securities sold.............. 2,345,044 1,885,578
Receivable for Trust shares sold............ 9,945 23,080
Deferred organizational costs (Note 2)...... 40,476 40,476
Deferred offering costs (Note 2)............ 17,651 17,651
Prepaid expenses............................ 11,101 11,102
------------ ------------
TOTAL ASSETS............................. 38,562,169 37,782,862
LIABILITIES
Payable for securities purchased............ 1,747,672 1,224,655
Investment advisory fee payable (Note 3).... 23,022 22,427
Distribution fees payable (Note 4).......... 14,878 14,538
Accounts payable and accrued expenses....... 26,367 27,907
------------ ------------
TOTAL LIABILITIES........................ 1,811,939 1,289,527
------------ ------------
NET ASSETS......................... $ 36,750,230 $ 36,493,335
============ ============
NET ASSETS
Paid-in capital............................. $ 32,422,647 $ 31,994,363
Net investment loss......................... (57,443) (42,113)
Accumulated net realized gain on investments 770,276 804,844
Net unrealized appreciation of investments.. 3,614,750 3,736,241
------------ ------------
NET ASSETS......................... $ 36,750,230 $ 36,493,335
============ ============
Total shares outstanding at end of period... 3,190,381 3,118,032
Net asset value, offering price, and
redemption price per share $ 11.52 $ 11.70
============ ============
</TABLE>
See Notes to Financial Statements
Semi-Annual Report 10
<PAGE>
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FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick-Cendant Investment Trust
Statements of Operations
Three Months Ended March 31, 1998 (unaudited) (1)
<TABLE>
<CAPTION>
Kobrick-Cendant Kobrick-Cendant
Capital Emerging Growth
Fund Fund
-------------- --------------
<S> <C> <C>
INVESTMENT INCOME
Dividends (Net of foreign withholding taxes
of $696 and $0, respectively)............. $ 24,329 $ 24,504
Interest.................................... 22,375 35,150
------------ ------------
TOTAL INVESTMENT INCOME ................. 46,704 59,654
EXPENSES
Investment advisory fees (Note 3) .......... 59,513 58,152
Distribution fees (Note 4).................. 14,878 14,538
Administrative fees......................... 3,541 3,541
Custodian fees.............................. 6,145 6,145
Audit fees.................................. 6,568 6,568
Legal fees.................................. 6,568 6,568
Trustees fees (Note 3)...................... 1,951 1,951
Transfer agent fees......................... 2,688 2,688
Amortization of organizational costs (Note 2) 2,058 2,058
Amortization of offering costs (Note 2)..... 5,692 5,692
Registration fees........................... 10,828 10,828
Other....................................... 9,639 9,640
------------ ------------
TOTAL EXPENSES .......................... 130,069 128,369
Fees waived and/or expenses reimbursed by
investment advisor and transfer agent.... (25,922) (26,602)
------------ ------------
NET EXPENSES ............................ 104,147 101,767
------------ ------------
NET INVESTMENT LOSS ............... $ (57,443) $ (42,113)
------------ ------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments............ $ 770,276 $ 804,844
Change in net unrealized appreciation of
investments ............................. 3,614,750 3,736,241
------------ ------------
Net realized and unrealized gain on
investments .......................... 4,385,026 4,541,085
------------ ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS................... $ 4,327,583 $ 4,498,972
============ ============
</TABLE>
(1) For the period January 2, 1998 (commencement of investment operations)
through March 31, 1998.
See Notes to Financial Statements
11 Semi-Annual Report
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick-Cendant Investment Trust
Statements of Changes in Net Assets
Three Months Ended March 31, 1998 (unaudited)(1)
<TABLE>
<CAPTION>
Kobrick-Cendant Kobrick-Cendant
Capital Emerging Growth
Fund Fund
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment loss...................... $ (57,443) $ (42,113)
Net realized gain on investments......... 770,276 804,844
Change in net unrealized appreciation
of investments......................... 3,614,750 3,736,241
------------ ------------
Net increase in net assets resulting
from operations........................ 4,327,583 4,498,972
Net increase from Trust share
transactions (Note 6).................. 32,322,647 31,894,363
------------ ------------
Net increase in net assets resulting
from operations........................ 36,650,230 36,393,335
Net Assets
Beginning of period...................... 100,000 100,000
------------ ------------
End of period............................ $ 36,750,230 $ 36,493,335
============ ============
Net investment loss......................... $ (57,443) $ (42,113)
============ ============
</TABLE>
(1) For the period January 2, 1998 (commencement of investment operations)
through March 31, 1998.
See Notes to Financial Statements
Semi-Annual Report 12
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick-Cendant Investment Trust
Financial Highlights
For a Share Outstanding Throughout the Period
Three Months Ended March 31, 1998 (1)
<TABLE>
<CAPTION>
Kobrick-Cendant Kobrick-Cendant
Capital Emerging Growth
Fund Fund
--------------- ---------------
<S> <C> <C>
Net Asset Value at Beginning of Period......... $ 10.00 $ 10.00
Income from Investment Operations:
Net Investment Loss (2) .................... (0.018) (0.014)
Net Realized and Unrealized Gain
on Investments .......................... 1.538 1.714
------------ ------------
Total from Investment Operations............ 1.520 1.700
------------ ------------
Net Asset Value at End of Period............... $ 11.52 $ 11.70
============ ============
Total Return (3)............................... 15.20% 17.00%
Ratios & Supplemental Data
Net Assets at End of Period (000's)......... $ 36,750 $ 36,493
Ratio of Operating Expenses to Average
Net Assets (2) (4)....................... 1.75% 1.75%
Ratio of Net Investment Loss to Average
Net Assets (4) .......................... (0.97)% (0.72)%
Portfolio Turnover Rate(3).................. 119.26% 80.39%
</TABLE>
(1) For the period January 2, 1998 (commencement of investment operations)
through March 31, 1998.
(2) Net Investment Loss is after waiver/reimbursement of certain expenses by
Kobrick-Cendant Funds, Inc. and the transfer agent (See Note 3 to the
Trust's financial statements). Had the Investment Adviser and transfer agent
not undertaken to waive or reimburse expenses related to the Fund, the Net
Investment Loss per share and Ratio of Operating Expenses to Average Net
Assets would have been as follows for the Capital Fund and the Emerging
Growth Fund: ($0.026), 2.19% and ($0.022), 2.21%, respectively.
(3) Not annualized.
(4) Annualized.
See Notes to Financial Statements
13 Semi-Annual Report
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick-Cendant Investment Trust
Notes to Financial Statements
March 31, 1998 (unaudited)
NOTE 1 -- ORGANIZATION
The Kobrick-Cendant Investment Trust (the "Trust") was organized as a
Massachusetts business trust on October 10, 1997, and is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end management
investment company. The Trust consists presently of two separate Funds:
Kobrick-Cendant Capital Fund and Kobrick-Cendant Emerging Growth Fund
(individually, a "Fund", collectively, the "Funds"). The investment objective of
the Funds is to provide shareholders with long-term capital appreciation.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements.
SECURITY VALUATION: Each Fund's investment securities which are traded on stock
exchanges or are quoted by the National Association of Security Dealers
Automated Quotation system ("NASDAQ") are valued at the last reported sale
prices as of the close of the regular session of the trading on the New York
Stock Exchange ("NYSE") on the day the securities are valued, or if not traded
on a particular day, at the closing bid prices. Securities traded in the
over-the-counter market, and which are not quoted by NASDAQ, are valued at the
last sale prices (or, if a last sale price is not readily available, at the last
bid price as quoted by the brokers that make markets in the security) as of the
close of the regular session of trading on the NYSE on the day the securities
are being valued. Securities which are traded both in the over-the-counter
market and on a stock exchange are valued according to the broadest and most
representative market. Short-term investments with maturities less than 60 days
are valued at amortized cost which approximates market value. Securities for
which current market quotations are not readily available are valued at their
fair value as determined in good faith in accordance with procedures approved by
the Board of Trustees.
REPURCHASE AGREEMENTS: Each Fund may enter into repurchase agreements with
institutions that the Fund's investment adviser, Kobrick-Cendant Funds, Inc.
("Kobrick-Cendant"), has determined are creditworthy pursuant to criteria
adopted by the Board of Trustees. The repurchase agreements are collateralized
by U.S. Government securities. The Fund's custodian takes possession of the
underlying securities. It is the policy of the Funds to value the underlying
collateral daily on a mark-to-market basis to determine that the value of the
collateral held, including accrued interest, is at least equal to the repurchase
price. In the event of default of the obligation to repurchase, the Funds have
the right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Investment security transactions
are recorded on a trade date basis. Realized gains and losses on investments
sold are recorded based on the specific identification method. Dividend income
on investment securities, less foreign taxes
Semi-Annual Report 14
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick-Cendant Investment Trust
Notes to Financial Statements (continued)
March 31, 1998 (unaudited)
withheld, if any, is recorded on the ex-dividend date. Interest income on
investment securities is recorded on the accrual basis.
EXPENSES: Certain of the Trust's expenses are allocated equally to those Funds
which make up the Trust. Other expenses of the Trust are allocated to the
respective Funds based upon the relative net assets of each Fund. Operating
expenses directly attributable to a Fund are charged to the Fund's operations.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of each Fund to
declare and pay dividends from net investment income at least annually. Each
Fund will distribute net realized capital gains (including net short-term
capital gains) unless offset by any available capital loss carryforward, at
least annually. Income distributions and capital gain distributions are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These differences are due
primarily to differing treatments of income and gain on various investment
securities held by the Funds, timing differences and differing characterizations
of distributions made by the Funds.
FEDERAL INCOME TAXES: Each Fund intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), by complying with the provisions available to regulated investment
companies, as defined in applicable sections of the Code, and to make
distributions of taxable income to shareholders sufficient to relieve each Fund
from all or substantially all federal income taxes. Accordingly, no provision
for federal income tax has been made.
ORGANIZATION COSTS: Offering costs, including the fees and expenses of
registering and qualifying shares of each Fund for distribution under Federal
and state securities regulations, are being amortized over the one-year period
from the date upon which each Fund commenced its operations. Costs and expenses
of the Trust in connection with the organization of the Trust have been deferred
by the Trust and are being amortized on a straight-line basis from the date
operations commenced over a period that a benefit is expected will be realized,
not to exceed sixty months. If any of the initial shares are redeemed during the
amortization period by any holder thereof, the redemption proceeds will be
reduced by a pro rata portion of the then unamortized organization costs.
USE OF ESTIMATES: The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
15 Semi-Annual Report
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick-Cendant Investment Trust
Notes to Financial Statements (continued)
March 31, 1998 (unaudited)
NOTE 3 -- INVESTMENT ADVISORY FEES AND OTHER
TRANSACTIONS WITH AFFILIATES
The Trust has entered into an investment advisory agreement (the "Advisory
Agreement") with Kobrick-Cendant. Under the agreement, Kobrick-Cendant provides
investment management services to the Trust and is entitled to receive a fee,
computed daily and paid monthly, at the annual rate of 1.00% based on average
daily net assets of each Fund.
Kobrick-Cendant may, from time to time, voluntarily waive its fees or
reimburse expenses charged to each Fund. Pursuant to the transfer agent
agreement, Boston Financial Data Services, Inc. ("BFDS") has agreed to waive a
portion of their fees for the first six months of fund operations. For the three
months ended March 31, 1998, Kobrick-Cendant and BFDS waived fees and/or
reimbursed expenses as follows:
<TABLE>
<CAPTION>
Kobrick-Cendant Kobrick-Cendant
Capital Emerging Growth
Fund Fund
-------------- --------------
<S> <C> <C>
Expenses Reimbursed by the Investment Adviser.. $ 12,022 $ 12,587
Investment Advisory Fees Waived................ 12,556 12,671
Transfer Agent Fees Waived..................... 1,344 1,344
-------- --------
Total Fees Waived and/or Reimbursed............ $ 25,922 $ 26,602
======== ========
</TABLE>
No officer, director or employee of Kobrick-Cendant, or any affiliate
thereof, receives any compensation from the Trust for serving as trustee or
officer of the Trust. Each Trustee who is not an "affiliated person" receives an
annual fee from each Fund of $2,000 plus $500 from each Fund for each board
meeting attended. The Trust also reimburses out-of-pocket expenses incurred by
each Trustee in attending such meetings.
NOTE 4 -- DISTRIBUTION PLAN
Pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the "plan"),
the Trust has adopted a plan of distribution (the "plan") under which each Fund
may directly incur certain distribution-related expenses, including: payments to
securities dealers and others who are engaged in the sale of shares of each Fund
and who may be advising shareholders of each Fund regarding the purchase, sale
or retention of such shares; expenses of maintaining personnel who engage in or
support distribution of shares or who render shareholder support services not
otherwise provided by the Trust's transfer agent; expenses of formulating and
implementing marketing and promotional activities; expenses of preparing,
printing and distributing sales literature, prospectuses, statements of
additional information and reports for recipients other than existing
shareholders of
Semi-Annual Report 16
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick-Cendant Investment Trust
Notes to Financial Statements (continued)
March 31, 1998 (unaudited)
each Fund; expenses of obtaining such information, analyses and reports with
respect to marketing and promotional activities as the Trust may, from time to
time, deem advisable, and any other expenses related to the distribution of the
Funds' shares. The annual limitation for expenses pursuant to the plan is .25%
of each Fund's average daily net assets.
NOTE 5 -- PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate amount of purchases and sales of investment securities,
excluding short-term investments, for the three months ended March 31, 1998,
were as follows:
Purchases Sales
------------ ------------
Kobrick-Cendant Capital Fund................... $ 61,834,765 $ 30,533,365
Kobrick-Cendant Emerging Growth Fund.......... 49,808,435 19,058,438
At March 31, 1998, the identified cost of investments for federal income tax
purposes of investments owned by each Fund and their respective gross unrealized
appreciation and unrealized depreciation were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Identified Unrealized Unrealized Unrealized
Cost Appreciation Depreciation Appreciation
----------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Kobrick-Cendant Capital Fund $ 32,071,676 $ 3,948,717 $ 333,967 $ 3,614,750
Kobrick-Cendant Emerging Growth Fund 32,046,841 4,143,879 407,638 3,736,241
</TABLE>
NOTE 6 - SCHEDULE OF CAPITAL STOCK ACTIVITY
As of March 31, 1998, an unlimited number of shares of beneficial interest,
having no par value, were authorized for the Trust. The capital stock activity
for the three months ended March 31, 1998 was as follows:
<TABLE>
<CAPTION>
Kobrick-Cendant Capital Fund:* Shares Amount
--------- -----------
<S> <C> <C>
Shares Sold 3,185,725 $32,382,647
Shares Redeemed (5,344) (60,000)
--------- -----------
Net Increase 3,180,381 $32,322,647
========= ===========
Kobrick-Cendant Emerging Growth Fund:*
Shares Sold 3,109,106 $31,906,895
Shares Redeemed (1,074) (12,532)
--------- -----------
Net Increase 3,108,032 $31,894,363
========= ===========
</TABLE>
* Kobrick-Cendant Capital Fund and Kobrick-Cendant Emerging Growth Fund
commenced operations on January 2, 1998.
17 Semi-Annual Report
<PAGE>
Investment Advisor
Kobrick-Cendant Funds, Inc.
Trustees and Officers
Frederick R. Kobrick,
President and Trustee
Michael T. Carmen,
Treasurer and Trustee
Jay H. Atlas, Trustee
Samuel L. Hayes, III, Trustee
Joseph P. Paster, Trustee
Richard A. Goldman, Secretary
Distributor
Funds Distributor Inc.
Transfer and Shareholder
Servicing Agent
Boston Financial Data Services, Inc.
Administrator, Accounting Agent
and Custodian
State Street Bank and Trust Company
Independent Auditors
Ernst & Young LLP
Legal Counsel
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Kobrick-Cendant Funds offer a variety of services to make investing easier and
more convenient for you.
. Traditional and Roth IRAs.
. Automatic investment and redemption plans.
. Automated telephone services for prices and account balances 24 hours a day, 7
days per week.
. Representative-assisted services 8 AM to 6 PM ET.
. Web site with daily fund prices and performance, prospectuses and
applications, manager profiles, market outlook and more.
. Exchanges between funds; exchanges also permitted between Kobrick-Cendant
Funds and SSgA(SM) US Government Money Market Fund.
. Written confirmation of each transaction and quarterly account statements.
Kobrick Cendant Funds
P.O. Box 8075
Boston, MA 02266-8075
1-888-KCFUND1
(1-888-523-8631)
www.kcfund.com
Distributor: Funds Distributor Inc.
