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[LOGO OF KOBRICK FUNDS APPEARS HERE]
IT'S ALL ABOUT VISION
Kobrick Capital Fund
Kobrick Emerging Growth Fund
Kobrick Growth Fund
SEMI-ANNUAL REPORT
March 31, 1999
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Table of Contents
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President's Message .........................................................2
Kobrick Capital Fund
Fund Profile .............................................................4
Schedule of Investments ..................................................5
Kobrick Emerging Growth Fund
Fund Profile .............................................................7
Schedule of Investments ..................................................8
Kobrick Growth Fund
Fund Profile ............................................................10
Schedule of Investments .................................................11
Financial Statements
Statements of Assets and Liabilities ....................................13
Statements of Operations ................................................14
Statements of Changes in Net Assets .....................................15
Financial Highlights ....................................................18
Notes to Financial Statements ..............................................21
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 prospectus
which contains important information concerning the Funds. Please read the
prospectus carefully before investing. To obtain a prospectus, please call
1-888-KCFUND1 (1-888-523-8631).
1 Semi-Annual Report
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PRESIDENT'S MESSAGE
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[PHOTO APPEARS HERE]
Dear Fellow Shareholder:
We are pleased to report the investment results for the six months ended
March 31, 1999, for our three funds: the Kobrick Capital Fund, the Kobrick
Emerging Growth Fund, and the Kobrick Growth Fund. This has been a very exciting
period for us, navigating out of the bear market or "mini crash of 1998,"
addressing the fears associated with the foreign markets' contagion phenomenon,
and the perceived impact of flirting with and eventually surpassing the Dow
10,000 level.
We believe that our funds performed extremely well in this environment
against their respective indices. We are very pleased that the Capital Fund was
recently selected again as a USA Today Mutual Fund All-Star and was recognized
by USA Today as its #1 performing All-Star Fund from 1998.
The recent surge of the Dow past 10,000 and then, shortly thereafter, past
11,000, was fueled by significant money chasing a handful of blue chips. Yet
most stocks had been in a down-trend during this period. In fact, at the end of
March, a record number of stocks, almost 80%, were underperforming the S&P 500
Index by 15 percentage points or more. Our funds achieved strong gains through
the end of March, and, we believe, even better relative gains against most other
similar funds, because our stock-picking worked well. We saw poor earnings
comparisons reach a low point last fall and now corporate earnings are growing
strongly. We expect this important trend to extend through the remainder of this
year and into next. Finding equities with excellent earnings prospects and,
critically, avoiding those that are not competitive or well-managed is the
mission of our fundamental research. We believe that earnings, good valuations
and strong managements make up the "right stuff" to deliver for our investors.
Since the end of March there has been some rotation as investors took some
money out of blue chips and bought economically sensitive stocks such as papers,
chemicals, aluminums and energy. This has also brought with it some money flows
into selected companies with small and mid-sized market capitalizations (total
market value of stock) which has generated enthusiasm for a somewhat broader
market not dominated exclusively by the largest blue chips. While the economic
cyclicals may not endure, as somewhat higher bond yields may decelerate the
economy from its above trendline pace, the broadening is likely to continue in
various areas of growth aside from the
2 Semi-Annual Report
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aforementioned blue chips. Selectivity, though, will continue to be critical in
this globally competitive environment.
We have pointed out at various times that the lure of the blue chips has
fed on itself and the good performing bell-weather stocks, from Microsoft and
Dell, to General Electric and Pfizer, have simply drawn more money into them and
pushed more money into the popular index funds. We continue to be concerned that
these stocks are the focus of investors' attentions, and that people feel the
market is more expensive than it really is. However, with this recent broadening
of the market, our concerns may abate. We shall watch closely and act
accordingly.
The environment continues to be one of strong, healthy economic growth. At
times, this has prompted the Federal Reserve Chairman, Alan Greenspan, to worry
about that strength. His remarks have caused some investors to fear higher
interest rates. That coupled with some seasonal bond sales by the Japanese,
recently pushed bond interest rates up somewhat. We feel that recent concerns
about rising interest rates and a possible increase in the discount rate by the
Federal Reserve are not warranted. Inflation is lower year-to-date than last
year and the economy, we believe, should slow a little.
With the Dow having crossed the 11,000 level, it means there is confidence
in the market, for sure. But, the market will probably fluctuate for awhile,
presenting investment opportunities for good stock pickers and the potential for
continued gains in 1999.
We continue to regularly update our web site (www.kcfund.com) with our
--------------
commentary. We will keep you informed of market developments and our outlook via
this channel, which we encourage you to visit. While there, you can check the
daily performance of each fund. If we can be of any other assistance, please
call us at 1.888.KCFUND1 (1.888.523.8631) from 8am-6pm ET, Monday-Friday. As
always, we sincerely appreciate your confidence by investing with us.
Very truly yours,
/s/ Frederick R. Kobrick
Frederick R. Kobrick
President and Chief Executive Officer
May 18, 1999
The USA Today 1999 Mutual Fund All-Stars (published 2/26/99) were selected from
3,267 diversified U.S. stock mutual funds based on criteria including solid
long-term performance, seasoned managers, reasonable sales fees and reasonable
minimum investments.
Semi-Annual Report 3
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KOBRICK CAPITAL FUND
FUND PROFILE
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(All Information as of March 31, 1999)
Objective: Maximum capital appreciation
Strategy: Invests primarily in equity securities of companies with
small, medium and large capitalizations.
Inception Date: December 31, 1997
Manager: Frederick R. Kobrick
Fund Number: 653
Symbol: KFCFX
Net Asset Value: $17.74
TOP TEN HOLDINGS TOP FIVE INDUSTRIES
% of Fund's % of Fund's
net assets net assets
America Online, Inc. ...........5.0 Computer Software/Services ..8.9
CMG Information Services, Inc. .4.8 Investment Bank/Brokerage ...8.6
Cisco Systems, Inc. ............3.6 Broadcast Media .............7.3
MCI Worldcom, Inc. .............3.4 Communication-Equipment .....7.0
Charles Schwab Corp. ...........3.3 Telecommunications-Long
Merrill Lynch & Company, Inc. ..3.3 Distance ................6.2
Microsoft Corp. ................3.2
AT&T Corp. .....................2.8
American Express Co. ...........2.8
Morgan Stanley Dean Witter & Co.2.8
PORTFOLIO COMPOSITION:
(% of Total Investments)
Common Stocks 89.5%
Short-Term Investments 10.5%
<TABLE>
<CAPTION>
FUND PERFORMANCE:
Total Average Annual Average Annual
Return Total Return Total Return
Year to Date One Year Since Inception
(1.1.99 to 3.31.99) (4.1.98 to 3.31.99) (12.31.97 to 3.31.99)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital Fund 18.3% 54.0% 58.2%
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Russell 3000 Index 3.4% 13.5% 22.4%
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</TABLE>
Performance data quoted represents past performance and does not guarantee
future results and reflects a partial waiver 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 Russell 3000 is an unmanaged
index of the 3000 largest U.S. companies based on total market capitalization.
Index performance includes reinvestment of dividends. Total returns for periods
less than one year are not annualized.
4 Semi-Annual Report
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KOBRICK CAPITAL FUND
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1999
(Unaudited)
Company Shares Value
- ----------------------------------------------------------------------
COMMON STOCKS -- 88.3%
AUTOMOBILES -- 4.3%
Ford Motor Co. ................... 34,800 $1,974,900
General Motors Corp. ............. 23,300 2,024,188
----------
3,999,088
----------
BANKS-MONEY CENTER -- 4.5%
Chase Manhattan Corp. ............ 29,500 2,398,719
J.P. Morgan & Co., Inc. .......... 14,300 1,764,262
----------
4,162,981
----------
BEVERAGES-SOFT DRINK -- 0.8%
Pepsi Bottling Group, Inc. (a) ... 35,100 761,231
----------
BROADCAST MEDIA -- 7.3%
CBS Corp. (a) .................... 54,600 2,235,188
Clear Channel Communications,
Inc. (a) ......................... 37,800 2,534,962
Comcast Corp. .................... 8,400 528,675
Infinity Broadcasting Corp. (a) .. 57,900 1,490,925
----------
6,789,750
----------
COMMUNICATION-EQUIPMENT -- 7.0%
American Tower Corp. (a) ......... 41,200 1,009,400
Covad Communications Group,
Inc. (a) ......................... 13,400 881,050
Nokia Corp. (ADR) ................ 8,300 1,292,725
Powerwave Technologies, Inc. (a) . 32,600 925,025
Qwest Communications
International, Inc. (a) .......... 34,000 2,451,187
----------
6,559,387
----------
COMPUTER SOFTWARE/SERVICES -- 8.9%
Allaire Corp. (a) ................ 1,800 122,400
America Online, Inc. (a) ......... 31,600 4,613,600
Autobytel.Com, Inc. (a) .......... 8,700 364,312
Microsoft Corp. (a) .............. 32,800 2,939,700
MiningCo.com, Inc. (a) ........... 1,700 152,150
Ziff-Davis, Inc. (a) ............. 1,800 64,800
----------
8,256,962
----------
COMPUTERS-NETWORKING -- 3.6%
Cisco Systems, Inc. (a) .......... 30,700 3,363,569
----------
COMPUTERS-PERIPHERAL -- 2.7%
EMC Corp. (a) .................... 19,500 $2,491,125
----------
ENTERTAINMENT -- 1.9%
Time Warner, Inc. ................ 25,000 1,776,563
----------
EQUIPMENT-SEMICONDUCTOR -- 0.6%
Teradyne, Inc. (a) ............... 11,200 611,100
----------
FINANCIAL(DIVERSE)-- 5.5%
American Express Co. ............. 22,000 2,585,000
Morgan Stanley Dean Witter
& Co. .................... 25,600 2,558,400
----------
5,143,400
----------
FOOTWARE -- 0.9%
Kenneth Cole Productions,
Inc. (a) ................. 31,100 820,263
----------
INVESTMENT BANK/BROKERAGE -- 8.6%
Charles Schwab Corp. ............. 31,800 3,056,775
Donaldson Lufkin & Jenrette, Inc. 27,300 1,904,175
Merrill Lynch & Company, Inc. .... 34,300 3,033,406
----------
7,994,356
----------
LODGING-HOTELS -- 0.2%
Four Seasons Hotels, Inc. ........ 4,500 187,875
----------
RETAIL-APPAREL -- 5.8%
Abercrombie & Fitch Co. Cl.A (a) . 18,000 1,656,000
AnnTaylor Stores Corp. (a) ....... 27,600 1,219,575
Cutter & Buck, Inc. (a) .......... 35,000 1,120,000
TJX Companies, Inc. .............. 41,200 1,400,800
----------
5,396,375
----------
RETAIL-BUILDING SUPPLIES -- 2.4%
Home Depot, Inc. ................. 35,600 2,216,100
----------
RETAIL-GENERAL MERCHANDISE-- 5.5%
CSK Auto Corp. (a) ............... 32,600 975,963
Dayton Hudson Corp. .............. 29,100 1,938,787
Wal Mart Stores, Inc. ............ 24,200 2,230,937
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5,145,687
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See Notes to Financial Statements
Semi-Annual Report 5
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KOBRICK CAPITAL FUND
SCHEDULE OF INVESTMENTS
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March 31, 1999
(Unaudited)
Company Shares Value
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RETAIL-SPECIALTY -- 3.9%
Autoweb.Com, Inc. (a) ............ 1,500 $ 53,438
Guitar Center Management,
Inc. (a) ......................... 90,700 1,853,681
Priceline.com, Inc. (a) .......... 1,500 124,312
Staples, Inc. (a) ................ 49,850 1,638,819
----------
3,670,250
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SERVICES-
ADVERTISING/MARKETING -- 6.2%
CMG Information Services,
Inc. (a) ......................... 24,600 4,503,337
Outdoor Systems, Inc. (a) ........ 32,500 975,000
Snyder Communications,
Inc. (a) ................. 9,700 270,388
----------
5,748,725
----------
SERVICES-
COMMERCIAL & CONSUMER -- 0.7%
Career Education Corp. (a) ....... 19,000 657,875
Gabelli Asset Management,
Inc. (a) ................. 1,500 23,344
----------
681,219
----------
TELECOMMUNICATIONS -
CELLULAR -- 0.8%
Pinnacle Holdings, Inc. (a) ...... 47,900 724,488
----------
(a) Non-income producing security
ADR - American Depository Receipt
TELECOMMUNICATIONS -
LONG DISTANCE -- 6.2%
AT&T Corp. ....................... 32,900 $2,625,831
MCI Worldcom, Inc. (a) ........... 35,600 3,152,825
----------
5,778,656
----------
Total Common Stocks
(cost $67,617,283) ....... 82,279,150
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Principal
Amount
(000's)
---------
REPURCHASE AGREEMENT -- 10.4%
State Street Bank and Trust
Company, 4.25%, dated 3/31/99,
due 4/1/99 (collateralized by U.S.
Treasury Bond 10.375%, 11/15/12,
market value $ 9,878,113)
(cost $9,684,000) ............. $9,684 9,684,000
TOTAL INVESTMENTS -- 98.7%
(cost $77,301,283) ............ 91,963,150
Other assets less liabilities -- 1.3% 1,188,293
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NET ASSETS -- 100% $93,151,443
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See Notes to Financial Statements
6 Semi-Annual Report
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KOBRICK EMERGING GROWTH FUND
FUND PROFILE
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(All Information as of March 31, 1999)
Objective: Provide growth of capital
Strategy: Invests primarily in equity securities of emerging growth
companies with emphasis on companies with small
capitalizations.
Inception Date: December 31, 1997
Manager: Frederick R. Kobrick
Fund Number: 656
Symbol: KFEGX
Net Asset Value: $15.17
TOP TEN HOLDINGS TOP FIVE INDUSTRIES
% of Fund's % of Fund's
net assets net assets
CMG Information Services, Inc. ...3.8 Services-Commercial
Hambrecht & Quist Group, Inc. ....2.9 & Consumer ..................13.3
Guitar Center Management, Inc. ...2.9 Computer Software/Services .....10.2
Mens Warehouse, Inc. .............2.3 Services-Advertising/Marketing ..8.1
Iron Mountain Inc. ...............2.2 Communication-Equipment .........8.0
Bright Horizons Family Solutions .2.2 Retail-Apparel ..................5.9
Steiner Leisure Ltd. .............2.1
Donaldson Lufkin & Jenrette, Inc..2.1
CSK Auto Corp. ...................2.1
Ann Taylor Stores Corp. ..........2.0
PORTFOLIO COMPOSITION:
(% of Total Investments)
Common Stocks 93.1%
Short-Term Investments 6.9%
<TABLE>
<CAPTION>
FUND PERFORMANCE:
Total Average Annual Average Annual
Return Total Return Total Return
Year to Date One Year Since Inception
(1.1.99 to 3.31.99) (4.1.98 to 3.31.99) (12.31.97 to 3.31.99)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Emerging Growth Fund 8.8% 29.7% 39.7%
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Russell 2000 Index -5.4% -16.3% -4.7%
- ------------------------------------------------------------------------------------------------
</TABLE>
Performance data quoted represents past performance and does not guarantee
future results and reflects a partial waiver 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. Because the Emerging Growth Fund
invests primarily in emerging growth companies with emphasis on companies with
small capitalizations, an investment in the Emerging Growth Fund involves
greater than average risks and the value of the Emerging Growth Fund's shares
may fluctuate more widely than the value of shares of a fund that invests in
larger, more established companies. 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. Total
returns for periods less than one year are not annualized.
Semi-Annual Report 7
<PAGE>
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KOBRICK EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1999
(Unaudited)
Company Shares Value
- ---------------------------------------------------------------------
COMMON STOCKS -- 87.4%
BANKS-MAJOR REGIONAL -- 1.0%
WestAmerica Bancorp ............. 13,800 $ 436,425
----------
BROADCAST MEDIA-- 1.5%
SFX Entertainment, Inc. (a) ..... 10,000 645,625
----------
COMMUNICATION-EQUIPMENT -- 8.0%
American Tower Corp. (a) ........ 28,600 700,700
Covad Communications Group,
Inc. (a) ........................ 6,800 447,100
Harmonic, Inc. (a) .............. 21,000 580,125
Powerwave Technologies,
Inc. (a) ........................ 15,600 442,650
Qwest Communications
International, Inc. (a) ......... 10,000 720,937
Western Wireless Corp. (a) ...... 15,300 554,625
----------
3,446,137
----------
COMPUTER HARDWARE -- 0.9%
Advanced Digital Information
Corp. (a) ............... 24,000 397,500
----------
COMPUTER
SOFTWARE/SERVICES -- 10.2%
Allaire Corp. (a) ............... 1,100 74,800
Autobytel.Com, Inc. (a) ......... 4,000 167,500
Catapult Communications
Corp. (a) ....................... 37,200 516,150
Descartes Systems Group,
Inc. (a) ........................ 99,700 766,444
Ecsoft Group Plc (ADR) (a) ...... 15,600 497,250
Exchange Applications, Inc. (a) . 28,300 711,037
Infospace.com, Inc. (a) ......... 500 44,313
MiningCo.com, Inc. (a) .......... 800 71,600
Point of Sale Ltd. (a) .......... 64,100 645,006
Sykes Enterprises, Inc. (a) ..... 11,100 358,669
Whittman-Hart, Inc. (a) ......... 24,300 522,450
Ziff-Davis, Inc. (a) ............ 800 28,800
----------
4,404,019
----------
ELECTRICAL EQUIPMENT -- 1.3%
Jabil Circuit, Inc. (a) ......... 14,200 575,100
----------
ELECTRONICS-SEMICONDUCTOR -- 1.3%
Sipex Corp. (a) ................. 43,300 565,606
----------
FOOTWARE -- 1.7%
Kenneth Cole Productions,
Inc. (a) ........................ 27,400 722,675
----------
HEALTHCARE-DRUGS MAJOR -- 1.2%
AmeriSource Health Corp. (a) .... 14,800 505,975
----------
HEALTHCARE-MANAGED CARE-- 1.3%
Trigon Healthcare, Inc. (a) ..... 16,800 575,400
----------
HOUSEHOLD FURNITURE &
APPLIANCES -- 0.8%
Ethan Allen Interiors, Inc. ..... 8,300 344,969
----------
INVESTMENT BANK/BROKERAGE-- 5.0%
Donaldson Lufkin & Jenrette,
Inc. ............................ 13,000 906,750
Hambrecht & Quist Group,
Inc. (a) ........................ 35,800 1,241,812
----------
2,148,562
----------
LEISURE TIME PRODUCTS -- 1.2%
Action Performance Companies,
Inc. (a) ........................ 16,800 506,100
----------
LODGING-HOTELS-- 3.4%
Four Seasons Hotels, Inc. ....... 17,300 722,275
Royal Caribbean Cruises Ltd ..... 18,900 737,100
----------
1,459,375
----------
OIL&GAS-REFIN & MARKETING -- 1.1%
Pennzoil-Quaker State Co. ....... 38,100 471,488
----------
RAILROADS-- 1.0%
MotivePower Industries, Inc. (a) 16,800 422,100
----------
RESTAURANTS -- 0.8%
Arkansas Restaurants Corp. (a) .. 35,000 354,375
----------
See Notes to Financial Statements
8 Semi-Annual Report
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KOBRICK EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1999
(Unaudited)
Company Shares Value
- ----------------------------------------------------------------------
RETAIL-APPAREL -- 5.9%
Abercrombie & Fitch Co. Cl.A (a) . 9,000 $ 828,000
Ann Taylor Stores Corp. (a) ...... 19,900 879,331
Cutter & Buck, Inc. (a) ......... 26,700 854,400
------------
2,561,731
------------
RETAIL-COMPUTER &
ELECTRONICS -- 0.3%
Micro Warehouse, Inc. (a) ........ 8,400 135,450
------------
RETAIL-DEPARTMENT STORES -- 2.3%
Ames Department Stores, Inc. (a) . 15,500 575,438
Family Dollar Stores, Inc. ....... 19,000 437,000
------------
1,012,438
------------
RETAIL-GENERAL MERCHANDISE -- 2.1%
CSK Auto Corp. (a) ............... 30,100 901,119
------------
RETAIL-SPECIALTY -- 5.3%
Autoweb.Com, Inc. (a) ............ 800 28,500
Guitar Center Management,
Inc. (a) ........................ 60,400 1,234,425
Mens Wearhouse, Inc. (a) ......... 34,000 981,750
Priceline.com, Inc. (a) .......... 700 58,012
------------
2,302,687
------------
SAVINGS & LOAN -- 4.3%
Astoria Financial Corp. .......... 11,700 585,000
Bank United Corp. ................ 13,700 559,988
Golden State Bancorp, Inc. (a) ... 31,100 691,975
------------
1,836,963
------------
SERVICES-
ADVERTISING/MARKETING -- 8.1%
CMG Information Services,
Inc. (a) ........................ 9,000 1,647,562
Lamar Advertising Co. (a) ........ 18,000 610,875
Outdoor Systems, Inc. (a) ........ 28,200 846,000
Snyder Communications,
Inc. (a) ........................ 13,900 387,463
------------
3,491,900
------------
(a) Non-income producing security
ADR - American Depository Receipt
SERVICES-
COMMERCIAL & CONSUMER -- 13.3%
Apollo Group, Inc. (a) ........... 22,900 684,137
Argosy Education Group, Inc. (a) . 77,000 664,125
Bright Horizons Family
Solutions, Inc. (a) ............. 42,800 936,250
Career Education Corp. (a) ....... 17,900 619,788
CSG Systems International,
Inc. (a) ........................ 18,900 745,369
Quest Education Corp. (a) ........ 88,300 805,737
Steiner Leisure Ltd. (a) ......... 29,700 913,275
Workflow Management, Inc. (a) .... 51,700 348,975
------------
5,717,656
------------
SERVICES-DATA PROCESSING -- 2.2%
Iron Mountain, Inc. (a) .......... 30,500 953,125
------------
TELECOMMUNICATIONS -
CELLULAR -- 1.9%
Pinnacle Holdings, Inc. (a) ...... 54,900 830,363
------------
Total Common Stocks
(cost $32,132,499) ............... 37,724,863
------------
Principal
Amount
(000's)
---------
REPURCHASE AGREEMENT -- 6.5%
State Street Bank and Trust
Company, 3.25%, dated 3/31/99,
due 4/1/99 (collateralized by U.S.
Treasury Bond 10.375%, 11/15/12,
market value $2,860,169)
(cost $2,802,000) .............. $2,802 2,802,000
TOTAL INVESTMENTS-- 93.9%
(cost $34,934,499) ............. 40,526,863
Other assets less liabilities -- 6.1% 2,618,848
------------
NET ASSETS -- 100% $43,145,711
============
See Notes to Financial Statements
Semi-Annual Report 9
<PAGE>
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KOBRICK GROWTH FUND
FUND PROFILE
- --------------------------------------------------------------------------------
(All Information as of March 31, 1999)
Objective: Provide long-term growth of capital
Strategy: Invests primarily in equity securities of companies with
large capitalizations, whose good track records, excellent
management and strong balance sheets indicate to the fund
manager an ability to grow and better handle market
volatility over time.
Inception Date: September 1, 1998
Manager: Frederick R. Kobrick
Fund number: 446
Symbol: KFGRX
Net Asset Value: $15.47
TOP TEN HOLDINGS TOP FIVE INDUSTRIES
% of Fund's % of Fund's
net assets net assets
America Online, Inc. ...........6.2 Broadcast Media .................9.6
General Electric Co. ...........4.3 Investment Bank/Brokerage .......8.6
CBS Corp. ......................3.9 Computer Software/ Services .....8.2
Cisco Systems, Inc. ............3.6 Financial (Diverse) .............6.1
MCI Worldcom, Inc. .............3.4 Telecommunications-
Merrill Lynch & Company, Inc. ..3.4 Long Distance .................5.8
American Express Co. ...........3.3
Charles Schwab Corp. ...........3.2
Qwest Communications, Inc. .....2.9
Morgan Stanley Dean Witter & Co.2.9
PORTFOLIO COMPOSITION:
(% of Total Investments)
Common Stocks 89.8%
Short-Term Investments 10.2%
FUND PERFORMANCE:
Total
Return Total Return
Year to Date Since Inception
(1.1.99 to 3.31.99) (9.1.98 to 3.31.99)
- --------------------------------------------------------------------------------
Growth Fund 12.4% 54.7%
- --------------------------------------------------------------------------------
S&P 500 Index 5.0% 35.5%
- --------------------------------------------------------------------------------
Performance data quoted represents past performance and does not guarantee
future results and reflects a partial waiver 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. Index
performance includes reinvestment of dividends. Total return is not annualized.
10 Semi-Annual Report
<PAGE>
- --------------------------------------------------------------------------------
KOBRICK GROWTH FUND
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1999
(Unaudited)
Company Shares Value
- --------------------------------------------------------------------------
COMMON STOCKS -- 90.6%
AUTOMOBILES -- 5.0%
Ford Motor Co. ....................... 16,800 $ 953,400
General Motors Corp. ................. 13,400 1,164,125
------------
2,117,525
------------
BANKS-MONEY CENTER -- 5.1%
Chase Manhattan Corp. ................ 14,100 1,146,506
J.P. Morgan & Co., Inc. .............. 8,200 1,011,675
------------
2,158,181
------------
BEVERAGES-SOFT DRINK -- 0.8%
Pepsi Bottling Group, Inc. (a) ....... 16,200 351,338
------------
BROADCAST MEDIA -- 9.6%
CBS Corp. (a) ........................ 40,900 1,674,344
Clear Channel Communications,
Inc. (a) ........................... 17,400 1,166,887
Comcast Corp. ........................ 4,700 295,806
Infinity Broadcasting Corp. (a) ...... 36,500 939,875
------------
4,076,912
------------
COMMUNICATION-EQUIPMENT -- 4.5%
Nokia Corp. (ADR) .................... 4,300 669,725
Qwest Communications
International, Inc. (a) ............ 17,100 1,232,803
------------
1,902,528
------------
COMPUTER
SOFTWARE/SERVICES -- 8.2%
America Online, Inc. (a) ............. 18,100 2,642,600
Microsoft Corp. (a) .................. 9,400 842,475
------------
3,485,075
------------
COMPUTERS-NETWORKING -- 3.7%
Cisco Systems, Inc. (a) .............. 14,100 1,544,831
------------
COMPUTERS-PERIPHERAL -- 2.7%
EMC Corp. (a) ........................ 9,000 1,149,750
------------
DISTRIBUTION(FOOD&HEALTH) -- 1.8%
Cardinal Health, Inc. ................ 11,500 759,000
------------
ELECTRICAL EQUIPMENT -- 4.3%
General Electric Co. ................. 16,500 1,825,313
------------
ENTERTAINMENT -- 1.9%
Time Warner, Inc. .................... 11,500 817,219
------------
EQUIPMENT-SEMICONDUCTOR -- 0.8%
Teradyne, Inc. (a) ................... 6,200 338,288
------------
FINANCIAL(DIVERSE) -- 6.1%
American Express Co. ................. 11,800 1,386,500
Morgan Stanley Dean
Witter & Co. ....................... 12,200 1,219,237
------------
2,605,737
------------
HEALTHCARE-DIVERSE -- 3.3%
American Home Products Corp. ......... 9,700 632,925
Bristol-Myers Squibb Co. ............. 12,000 771,750
------------
1,404,675
------------
HEALTHCARE-DRUGS MAJOR -- 3.9%
Merck & Co., Inc. .................... 7,300 585,369
Pfizer, Inc. ......................... 7,700 1,068,375
------------
1,653,744
------------
INSURANCE-LIFE/HEALTH -- 0.9%
Aetna, Inc. .......................... 4,700 390,100
------------
INVESTMENT BANK/BROKERAGE -- 8.6%
Charles Schwab Corp. ................. 14,000 1,345,750
Donaldson Lufkin & Jenrette, Inc. .... 12,100 843,975
Merrill Lynch & Company, Inc. ........ 16,400 1,450,375
------------
3,640,100
------------
RESTAURANTS -- 3.3%
McDonald's Corp. ..................... 23,600 1,069,375
Tricon Global Restaurants,
Inc. (a) ........................... 4,700 330,175
------------
1,399,550
------------
See Notes to Financial Statements
Semi-Annual Report 11
<PAGE>
- --------------------------------------------------------------------------------
KOBRICK GROWTH FUND
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
March 31, 1999
(Unaudited)
Company Shares Value
- ----------------------------------------------------------------------
RETAIL-APPAREL -- 1.5%
TJX Companies, Inc. .............. 19,100 $ 649,400
------------
RETAIL-BUILDING SUPPLIES -- 1.8%
Home Depot, Inc. ................. 12,400 771,900
------------
RETAIL-GENERAL MERCHANDISE -- 4.7%
Dayton Hudson Corp. .............. 14,700 979,388
Wal Mart Stores, Inc. ............ 11,100 1,023,281
------------
2,002,669
------------
RETAIL-SPECIALTY -- 2.3%
Priceline.com, Inc. (a) .......... 700 58,012
Staples, Inc. (a) ................ 27,850 915,569
------------
973,581
------------
TELECOMMUNICATIONS -
LONG DISTANCE -- 5.8%
AT&T Corp. ....................... 12,400 989,675
MCI Worldcom, Inc. (a) ........... 16,400 1,452,425
------------
2,442,100
------------
Total Common Stocks
(cost $35,810,711) ............... 38,459,516
------------
Principal
Amount
(000's)
---------
REPURCHASE AGREEMENT -- 10.3%
State Street Bank and Trust
Company, 3.25%, dated 3/31/99,
due 4/1/99 (collateralized by U.S.
Treasury Bond 10.375%, 11/15/12,
market value $ 4,463,494)
(cost $4,370,000) .............. $4,370 4,370,000
TOTAL INVESTMENTS--100.9%
(cost $40,180,711) ............. 42,829,516
Other assets less liabilities -- (0.9%) (366,279)
-----------
NET ASSETS -- 100% $42,463,237
===========
(a) Non-income producing security.
ADR - American Depository Receipt
See Notes to Financial Statements
12 Semi-Annual Report
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Statements of Assets and Liabilities
March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Kobrick Kobrick Kobrick
Capital Emerging Growth Growth
Fund Fund Fund
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Investments, at value (Note 2)
Securities (cost $67,617,283, $32,132,499
and $35,810,711, respectively) ...................... $ 82,279,150 $ 37,724,863 $ 38,459,516
Repurchase Agreement .................................... 9,684,000 2,802,000 4,370,000
Cash .................................................... 933 489 340
Dividends and interest receivable ....................... 27,326 1,203 35,531
Receivables for Securities sold ......................... 1,160,653 2,918,045 --
Receivable for Fund shares sold ......................... 1,219,132 43,291 35,138
Deferred organizational costs (Note 2) .................. 32,680 32,684 --
Deferred offering costs (Note 2) ........................ -- -- 3,826
Prepaid expenses ........................................ 9,215 7,086 285
------------ ------------ ------------
TOTAL ASSETS ........................................ 94,413,089 43,529,661 42,904,636
LIABILITIES
Payable for securities purchased ........................ 865,500 253,325 383,800
Payable for Fund shares redeemed ........................ 198,450 3,948 --
Investment advisory fee payable (Note 3) ................ 121,942 64,326 9,930
Distribution fees payable (Note 4) ...................... 17,317 8,039 8,392
Accounts payable and accrued expenses ................... 58,437 54,312 39,277
------------ ------------ ------------
TOTAL LIABILITIES ................................... 1,261,646 383,950 441,399
------------ ------------ ------------
NET ASSETS ....................................... $ 93,151,443 $ 43,145,711 $ 42,463,237
============ ============ ============
NET ASSETS
Paid-in capital ......................................... $ 69,663,011 $ 34,240,526 $ 42,380,481
Undistributed net investment (loss) ..................... (246,826) (196,398) (14,707)
Accumulated net realized gain (loss)
on investments ...................................... 9,073,391 3,509,219 (2,551,342)
Net unrealized appreciation of investments .............. 14,661,867 5,592,364 2,648,805
------------ ------------ ------------
NET ASSETS ....................................... $ 93,151,443 $ 43,145,711 $ 42,463,237
============ ============ ============
Total shares outstanding at end of period ............... 5,251,207 2,845,006 2,744,138
Net asset value, offering price, and
redemption price per share .............................. $ 17.74 $ 15.17 $ 15.47
============ ============ ============
</TABLE>
See Notes to Financial Statements
Semi-Annual Report 13
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Statements of Operations
For the Six Months Ended March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Kobrick Kobrick Kobrick
Capital Emerging Growth Growth
Fund Fund Fund
----------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends (Net of foreign withholding taxes
of $1,349, $0, and $1,505, respectively) .............. $ 110,616 $ 22,674 $ 53,299
Interest .............................................. 76,237 27,181 28,158
----------- ----------- -----------
TOTAL INVESTMENT INCOME ........................ 186,853 49,855 81,457
EXPENSES
Investment advisory fees (Note 3) ..................... 247,801 140,716 68,688
Distribution fees (Note 4) ............................ 61,950 35,179 17,172
Administrative fees ................................... 35,447 35,536 15,027
Custodian fees ........................................ 33,865 35,582 19,945
Audit fees ............................................ 15,005 13,170 3,719
Legal fees ............................................ 25,776 14,683 2,057
Trustees fees (Note 3) ................................ 13,545 13,621 16,740
Transfer agent fees (Note 3) .......................... 18,035 15,881 27,306
Amortization of organizational costs (Note 2) ......... 6,660 6,660 --
Amortization of offering costs (Note 2) ............... 9,755 9,755 8,316
Registration fees ..................................... 7,912 1,576 9,544
Other ................................................. 6,514 -- 1,169
----------- ----------- -----------
TOTAL EXPENSES ................................. 482,265 322,359 189,683
----------- ----------- -----------
Fees waived and/or expenses reimbursed
by investment advisor and transfer agent .............. (48,586) (76,106) (93,519)
----------- ----------- -----------
NET EXPENSES ................................... 433,679 246,253 96,164
----------- ----------- -----------
NET INVESTMENT (LOSS) .......................... $ (246,826) $ (196,398) $ (14,707)
----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments ............... 9,715,104 4,998,326 (2,537,115)
Change in net unrealized appreciation
of investments ........................................ 11,423,694 4,899,216 2,603,370
----------- ----------- -----------
Net realized and unrealized gain
on investments ........................................ 21,138,798 9,897,542 66,255
----------- ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ........................... $20,891,972 $ 9,701,144 $ 51,548
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
14 Semi-Annual Report
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Kobrick Capital Fund Six Months For the period
Ended 12/31/97* to
03/31/1999 09/30/1998
(Unaudited)
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment (loss) ................................................ $ (246,826) $ (346,943)
Net realized gain (loss) on investments .............................. 9,715,104 (618,382)
Change in net unrealized appreciation
of investments .................................................... 11,423,694 3,238,173
------------ ------------
Net increase in net assets resulting from operations ................. 20,891,972 2,272,848
------------ ------------
Distributions to shareholders:
From net investment income ........................................... -- --
From net realized capital gains ...................................... -- --
------------ ------------
Net decrease in net assets resulting from distributions .............. -- --
------------ ------------
Capital stock transactions:
Net proceeds from sales .............................................. 49,900,403 39,227,006
Net proceeds from reinvestment of distributions ...................... -- --
Cost of shares redeemed .............................................. (5,103,638) (14,137,148)
------------ ------------
Net increase in Fund share transactions .............................. 44,796,765 25,089,858
------------ ------------
Net increase in net assets ................................................. 65,688,737 27,362,706
Net assets at beginning of period .......................................... 27,462,706 100,000
------------ ------------
Net assets at end of period ................................................ $ 93,151,443 $ 27,462,706
============ ============
Shares issued and repurchased:
Shares outstanding at beginning of period ............................ 2,563,524 10,000
Shares sold .......................................................... 2,997,651 3,848,564
Shares issued to shareholders from reinvestment
of distributions ..................................................... -- --
Shares repurchased ................................................... (309,968) (1,295,040)
------------ ------------
Net increase ......................................................... 2,687,683 2,553,524
------------ ------------
Shares outstanding at end of period .................................. 5,251,207 2,563,524
------------ ------------
Includes undistributed net investment (loss) ......................... $ (246,826) $ --
============ ============
</TABLE>
* Commencement of operations.
See Notes to Financial Statements
Semi-Annual Report 15
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Kobrick Emerging Growth Fund Six Months For the period
Ended 12/31/97* to
03/31/1999 09/30/1998
(Unaudited)
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment (loss) .............................................. $ (196.398) $ (278,462)
Net realized gain (loss) on investments ............................ 4,998,326 (1,489,107)
Change in net unrealized appreciation
of investments .................................................. 4,899,216 693,148
------------ ------------
Net increase (decrease) in net assets
resulting from operations ....................................... 9,701,144 (1,074,421)
------------ ------------
Distributions to shareholders:
From net investment income ......................................... -- --
From net realized capital gains .................................... -- --
------------ ------------
Net decrease in net assets resulting from distributions .................. -- --
------------ ------------
Capital stock transactions:
Net proceeds from sales ............................................ 18,286,011 35,267,792
Net proceeds from reinvestment of distributions .................... -- --
Cost of shares redeemed ............................................ (3,171,681) (15,963,134)
------------ ------------
Net increase in Fund share transactions .................................. 15,114,330 19,304,658
------------ ------------
Net increase in net assets ............................................... 24,815,474 18,230,237
Net assets at beginning of period ........................................ 18,330,237 100,000
------------ ------------
Net assets at end of period .............................................. $ 43,145,711 $ 18,330,237
============ ============
Shares issued and repurchased:
Shares outstanding at beginning of period .......................... 1,807,244 10,000
Shares sold ........................................................ 1,266,906 3,395,365
Shares issued to shareholders from reinvestment
of distributions ................................................... -- --
Shares repurchased ................................................. (229,144) (1,598,121)
------------ ------------
Net increase ....................................................... 1,037,762 1,797,244
------------ ------------
Shares outstanding at end of period ................................ 2,845,006 1,807,244
------------ ------------
Includes undistributed net investment (loss) ....................... $ (196,398) $ --
============ ============
</TABLE>
* Commencement of operations
See Notes to Financial Statements
16 Semi-Annual Report
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Kobrick Growth Fund Six Months For the period
Ended 09/01/98* to
03/31/1999 09/30/1998
(Unaudited)
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss) ......................................... $ (14,707) $ 273
Net realized (loss) on investments ................................... (2,537,115) (14,227)
Change in net unrealized appreciation
of investments .................................................... 2,603,370 45,435
------------ ------------
Net increase in net assets resulting from operations ................. 51,548 31,481
------------ ------------
Distributions to shareholders:
From net investment income ........................................... (273) --
From net realized capital gains ...................................... -- --
------------ ------------
Net decrease in net assets resulting from distributions .................... (273) --
------------ ------------
Capital stock transactions:
Net proceeds from sales .............................................. 42,100,088 1,023,020
Net proceeds from reinvestment of distributions ...................... 273 --
Cost of shares redeemed .............................................. (742,838) (62)
------------ ------------
Net increase in Fund share transactions .................................... 41,357,523 1,022,958
------------ ------------
Net increase in net assets ................................................. 41,408,798 1,054,439
Net assets at beginning of period .......................................... 1,054,439 --
------------ ------------
Net assets at end of period ................................................ $ 42,463,237 $ 1,054,439
============ ============
Shares issued and repurchased:
Shares outstanding at beginning of period ............................ 102,189 --
Shares sold .......................................................... 2,692,146 102,195
Shares issued to shareholders from reinvestment
of distributions ..................................................... 21 --
Shares repurchased ................................................... (50,218) (6)
------------ ------------
Net increase ......................................................... 2,641,949 102,189
------------ ------------
Shares outstanding at end of period .................................. 2,744,138 102,189
------------ ------------
Includes undistributed net investment income (loss) .................. $ (14,707) $ 273
============ ============
</TABLE>
* Commencement of operations
See Notes to Financial Statements
Semi-Annual Report 17
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Financial Highlights
Selected data for a share of capital stock
outstanding throughout each period
<TABLE>
<CAPTION>
Kobrick Capital Fund Six Months For the period
Ended 12/31/97* to
03/31/1999 09/30/1998
(Unaudited)
---------- -----------
<S> <C> <C>
Net asset value, beginning of period ................................ $ 10.71 $ 10.00
Income (loss) from investment operations:
Net investment (loss) ....................................... (0.05) (0.127) (c)
Net realized and unrealized gain ............................ 7.08 0.837
---------- -----------
Total from investment operations ............................ 7.03 0.710
---------- -----------
Less distributions from and in excess of:
Net investment income ....................................... -- --
Net realized gain ........................................... -- --
---------- -----------
Total distributions ......................................... -- --
---------- -----------
Net asset value, end of period ...................................... $ 17.74 $ 10.71
========== ===========
Total Return (a) .................................................... 65.64% 7.10%
Ratios and Supplemental Data
Net Assets, end of period (000's) ............................. $ 93,151 $ 27,463
Ratios to average net assets:
Net expenses (b) ...................................... 1.75% 1.75%
Gross expenses (b) .................................... 1.95% 2.21%
Net investment (loss) (b) ............................. (1.00)% (1.38)%
Portfolio turnover rate ....................................... 250% 350%
</TABLE>
See footnotes to Financial Highlights (page 20).
See Notes to Financial Statements
18 Semi-Annual Report
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Financial Highlights
Selected data for a share of capital stock
outstanding throughout each period
<TABLE>
<CAPTION>
Kobrick Emerging Growth Fund Six Months For the period
Ended 12/31/97* to
03/31/1999 09/30/1998
(Unaudited)
------------ ------------
<S> <C> <C>
Net asset value, beginning of period .................................. $ 10.14 $ 10.00
Income (loss) from investment operations:
Net investment (loss) ......................................... (0.07) (0.107) (c)
Net realized and unrealized gain .............................. 5.10 0.247 (d)
------------ ------------
Total from investment operations .............................. 5.03 0.140
------------ ------------
Less distributions from and in excess of:
Net investment income ......................................... -- --
Net realized gain ............................................. -- --
------------ ------------
Total distributions ........................................... -- --
------------ ------------
Net asset value, end of period ........................................ $ 15.17 $ 10.14
============ ============
Total Return (a) ...................................................... 49.70% 1.40%
Ratios and Supplemental Data
Net Assets, end of period (000's) ............................. $ 43,146 $ 18,330
Ratios to average net assets:
Net expenses (b) ............................................ 1.75% 1.75%
Gross expenses (b) .......................................... 2.29% 2.24%
Net investment (loss) (b) ................................... (1.40)% (1.16)%
Portfolio turnover rate ....................................... 138% 287%
</TABLE>
See footnotes to Financial Highlights (page 20).
See Notes to Financial Statements
Semi-Annual Report 19
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Financial Highlights
Selected data for a share of capital stock
outstanding throughout each period
<TABLE>
<CAPTION>
Kobrick Growth Fund Six Months For the period
Ended 09/01/1998* to
03/31/1999 09/30/1998
(Unaudited)
--------------- -----------------
<S> <C> <C>
Net asset value, beginning of period .................................. $ 10.32 $ 10.00
Income (loss) from investment operations:
Net investment income (loss) .................................. (0.01) 0.003 (c)
Net realized and unrealized gain .............................. 5.16 0.317
----------- ----------
Total from investment operations .............................. 5.15 0.320
----------- ----------
Less distributions from and in excess of:
Net investment income ......................................... -- --
Net realized gain ............................................. -- --
----------- ----------
Total distributions ........................................... -- --
----------- ----------
Net asset value, end of period ........................................ $ 15.47 $ 10.32
=========== ==========
Total Return (a) ...................................................... 49.93% 3.20%
Ratios and Supplemental Data
Net Assets, end of period (000's) ............................. $ 42,463 $ 1,054
Ratios to average net assets:
Net expenses (b) ............................................ 1.40% 1.40%
Gross expenses (b) .......................................... 2.76% 11.11%
Net investment income (loss) (b) ............................ (0.21)% 0.32%
Portfolio turnover rate ....................................... 180% 11%
</TABLE>
Notes to Financial Highlights
* Commencement of operations
(a) Total Returns are historical and assume changes in share price,
reinvestments of dividends, and no sales charge. Had certain expenses not
been reduced during the periods shown, total returns would have been lower.
Periods of less than one year are not annualized.
(b) Annualized for periods less than one year.
(c) Computed using the average shares method.
(d) Amount shown for a share outstanding does not correspond with the net
realized and unrealized gain (loss) on investments due to timing of sales
and repurchases of fund shares in relation to fluctuating market values of
the investments of the fund.
See Notes to Financial Statements
20 Semi-Annual Report
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Notes to Financial Statements
March 31, 1999
(Unaudited)
NOTE 1 -- ORGANIZATION
The Kobrick Investment Trust (the "Trust") (formerly the Kobrick-Cendant
Investment 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 three separate Funds: Kobrick Capital Fund (formerly
Kobrick-Cendant Capital Fund), Kobrick Emerging Growth Fund (formerly
Kobrick-Cendant Emerging Growth Fund) and Kobrick Growth Fund (formerly
Kobrick-Cendant Growth Fund) (individually, a "Fund", collectively, the
"Funds"). The investment objective of the Kobrick Capital Fund is to seek
maximum capital appreciation by investing primarily in equity securities of
companies with small, medium and large capitalizations. The investment objective
of the Kobrick Emerging Growth Fund is to provide growth of capital by investing
primarily in equity securities of emerging growth companies with emphasis on
companies with small capitalizations. The investment objective of the Kobrick
Growth Fund is to provide long-term growth of capital by investing primarily in
equity securities of companies with large capitalizations believed by the Fund's
investment manager to have better than average long-term growth potential.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
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.
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 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 the last sale prices are not readily available, at the
last bid prices as quoted by the brokers that make markets in the securities) 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 Funds LLC ("Kobrick")
(successor to Kobrick-Cendant Funds, Inc.), has determined are creditworthy
pursuant to criteria adopted by the Board of Trustees. The repurchase agreements
are collateralized by U.S. Government securities. The
Semi-Annual Report 21
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Notes to Financial Statements (continued)
March 31, 1999
(Unaudited)
Fund's custodian takes possession of the underlying collateral on behalf of the
Funds. 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 102% of 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. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to delay due to legal proceedings and the
Fund may suffer a loss.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: Investment security transactions
are recorded on trade date. Realized gains and losses on investments sold are
recorded based on the specific identification method. Dividend income on
investment securities, less foreign taxes 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. The Funds elected to defer to their fiscal
year ending September 30, 1999, losses of $23,331, $1,290,191 and $13,133 on
Kobrick Capital Fund, Kobrick Emerging Growth Fund and Kobrick Growth Fund,
respectively.
OFFERING AND 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 each Fund commenced its operations. Costs and expenses of the
Trust in connection with the organization of the Trust and the initial offering
of shares of each Fund, excluding the Kobrick Growth Fund, have been deferred by
the Trust and are being amortized on a straight-line basis from the date
operations
22 Semi-Annual Report
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Notes to Financial Statements (continued)
March 31, 1999
(Unaudited)
commenced over a period that a benefit is expected will be realized, not to
exceed sixty months. If any of the initial shares of the Kobrick Capital Fund
and Kobrick Emerging Growth Fund are redeemed during the amortization period of
these organizational costs by any holder thereof, the redemption proceeds will
be reduced by a pro rata portion of the unamortized organization costs.
Organizational costs associated with the Kobrick Growth Fund have been borne by
Kobrick.
LINE OF CREDIT: The Trust has entered into a committed line of credit with a
bank. This line of credit agreement includes restrictions that the Trust
maintain an asset coverage ratio of at least 300% and borrowings must not exceed
prospectus limitations. For the six months ended March 31, 1999, the Trust had
no borrowings against the line of credit.
NOTE 3 -- INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into an investment advisory agreement (the "Advisory
Agreement") with Kobrick. Under the agreement, Kobrick 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.
Cendant Corporation has an interest in non-voting preferred stock of
Kobrick and warrants which, if exercised, could result in Cendant Corporation
owning a majority of the total common stock in Kobrick. At March 31, 1999,
Cendant Corporation owned 47%, 68%, and 89% of the Kobrick Capital Fund, Kobrick
Emerging Growth Fund, and Kobrick Growth Fund, respectively. Investment
activities of this shareholder could have a material impact on the Funds.
Subject to certain contractual expense caps, Kobrick may be required to, or
may voluntarily, waive all or a portion of its investment advisory fees.
Pursuant to the transfer agent agreement, Boston Financial Data Services, Inc.
("BFDS") has agreed to waive a portion of its fees for the first twelve months
of each Fund's operations. For the six months ended March 31, 1999, Kobrick and
BFDS waived fees and/or reimbursed expenses as follows:
<TABLE>
<CAPTION>
Kobrick
Kobrick Emerging Growth Kobrick
Capital Fund Fund Growth Fund
------------ ---- -----------
<S> <C> <C> <C>
Expenses Reimbursed by the
Investment Adviser .................................... $ -- $ -- $ 15,331
Investment Advisory Fees Waived ............................ 48,586 76,106 68,688
Transfer Agent Fees Waived ................................. -- -- 9,500
---------- ---------- ---------
Total Fees Waived and/or Reimbursed ........................ $ 48,586 $ 76,106 $ 93,519
========== ========== =========
</TABLE>
No officer, director or employee of Kobrick, 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 the Trust of $4,000 plus $500 from each Fund for each board meeting
attended and $500 from each Fund for each audit committee meeting attended. The
Trust also reimburses out-of-pocket expenses incurred by each Trustee for
attending such meetings.
Semi-Annual Report 23
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Kobrick Investment Trust
Notes to Financial Statements (continued)
March 31, 1999
(Unaudited)
NOTE 4 -- DISTRIBUTION PLAN
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, 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 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 amounts of purchases and sales of investment securities,
excluding short-term investments, for the six months ended March 31, 1999, were
as follows:
Purchases Sales
------------ ------------
Kobrick Capital Fund ..................... $158,408,156 $122,938,832
Kobrick Emerging Growth Fund ............. 48,706,956 37,875,535
Kobrick Growth Fund ...................... 68,045,550 30,621,987
At March 31, 1999, the identified cost of investments for federal income
tax purposes 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 Capital Fund $77,301,283 $15,019,006 $ 357,139 $14,661,867
Kobrick Emerging Growth Fund 34,934,499 6,420,459 828,095 5,592,364
Kobrick Growth Fund 40,180,711 3,164,616 515,811 2,648,805
</TABLE>
24 Semi-Annual Report
<PAGE>
[LOGO OF KOBRICK FUNDS APPEARS HERE]
IT'S ALL ABOUT VISION
P.O. Box 8075
Boston
Massachusetts
02266.8075
www.kcfund.com
1.888.KCFUND1
1.888.523.8631
Investment Advisor
Kobrick Funds LLC
Trustees and Officers
Frederick R. Kobrick,
President and Trustee
Jay H. Atlas,
Trustee
Samuel L. Hayes, III,
Trustee
Joseph P. Paster,
Trustee
Richard A. Goldman,
Secretary and Treasurer
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
PricewaterhouseCoopers LLP
Legal Counsel
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Kobrick 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, prospectus and
applications, manager profiles, market perspectives and more.
- - Unlimited exchanges between funds; exchanges also permitted between
Kobrick Funds and SSgAsm US Government Money Market Fund.
- - Written confirmation of each transaction and quarterly account statements.
- - Available through many fund supermarkets.
