<PAGE> 1
(front cover)
Undiscovered Managers Funds
Semi-Annual Report
February 29, 2000
Undiscovered Managers
Behavioral Growth Fund
Undiscovered Managers
Behavioral Value Fund
Undiscovered Managers
Behavioral Long/Short Fund
Undiscovered Managers
REIT Fund
Undiscovered Managers
Special Small Cap Fund
Undiscovered Managers
Small Cap Value Fund
Undiscovered Managers
Hidden Value Fund
Undiscovered Managers
All Cap Value Fund
Undiscovered Managers
Core Equity Fund
UM International Small Cap Equity Fund
UM International Equity Fund
(UM logo)
<PAGE> 2
Investment Adviser
Undiscovered Managers, LLC
700 North Pearl Street, Suite 1700
Dallas, Texas 75201
Distributor
Provident Distributors, Inc.
Four Falls Corporate Center
West Conshohocken, PA 19428
Legal Counsel
Ropes & Gray
One International Place
Boston, Massachusetts 02110
Transfer Agent
PFPC Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
Independent Auditors
Deloitte & Touche LLP
116-300 Village Boulevard
Princeton, New Jersey 08540
Custodians
The Bank of New York
48 Wall Street
New York, New York 10286
Custodial Trust Company
101 Carnegie Center
Princeton, New Jersey 08540
<PAGE> 3
To Our Shareholders:
The past six months have been as exciting as they have been busy at
Undiscovered Managers. Our assets have continued to grow at a remarkable rate,
making our fund family one of the nation's fastest growing. More importantly,
our funds have continued to provide strong performance for our clients.
As a result of this performance, and our commitment to service our clients as
best as we possibly can, our assets grew nearly 100% during the past six
months-from approximately $189mm to $376mm.
Also noteworthy, we now have our own group heading in the newspaper-UM Funds.
Under this heading you will now find the REIT Institutional Class Fund. It will
be listed as "REIT," joining the Institutional Class Behavioral Growth Fund
(which is listed as "BehavGr") and the Institutional Class Small Cap Value Fund
("SmCpVal").
In addition to the enclosed information, we invite you to visit our web site,
www.undiscoveredmanagers.com, for more up-to-date and detailed information on
Undiscovered Managers Funds. As always, please do not hesitate to contact the
Investor Services Group at (888) 242-3514 if you have any questions or need
additional information.
We hope that the next six months will be as exciting as the past six here at
Undiscovered Managers. We know they will be just as busy, as we continue to
try to help provide our shareholders with excellent service and outstanding
products.
Sincerely,
Mark P. Hurley
President and Chief Executive Officer
Undiscovered Managers, LLC
Past performance is no guarantee of future results. Investment return and
principal value of mutual funds will vary with market conditions, so that
shares, when redeemed, may be worth more or less than their original cost.
(2) Small company stocks may be subject to a higher degree of market risk
than the securities of more established companies.
(3) REIT funds may be subject to a higher degree of market risk than
diversified funds because of concentration in a specific industry, sector
or geographic sector. Risks also include declines in the value of real
estate, general and economic conditions, changes in the value of the
underlying property and defaults by borrowers.
Distributor: Provident Distributors, Inc. Date of First Use: 5/1/00
<PAGE> 4
UNDISCOVERED MANAGERS(TM)
BEHAVIORAL GROWTH FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
Shares (NOTE 2)
- ------ -------------
<S> <C> <C>
COMMON STOCKS--97.12%
ADVERTISING--3.65%
44,000 Modem Media Poppe Tyson, Inc.* $ 3,492,500
41,800 TMP Worldwide, Inc.* 5,682,187
-------------
9,174,687
-------------
BUILDING & CONSTRUCTION--1.06%
76,800 American Standard Companies, Inc.* 2,678,400
-------------
BUSINESS SERVICES--2.68%
99,500 Robert Half International, Inc. 4,203,875
66,800 Viant Corp.* 2,534,225
-------------
6,738,100
-------------
COMPUTER HARDWARE & SOFTWARE--19.27%
72,500 Adaptec, Inc.* 2,972,500
99,900 Autodesk, Inc. 4,464,281
67,400 Bell & Howell Co.* 2,207,350
21,100 F5 Networks, Inc.* 1,899,000
142,400 FileNET Corp.* 6,096,500
130,400 Hyperion Solutions Corp.* 6,438,500
30,700 Lexmark International Group, Inc., Class A* 3,660,975
184,400 Progress Software Corp.* 4,598,475
100,300 Project Software & Development, Inc.* 7,766,981
233,200 Sybase, Inc.* 5,844,575
61,000 Xircom, Inc.* 2,533,406
-------------
48,482,543
-------------
CONSUMER PRODUCTS--3.60%
137,200 Church & Dwight Co., Inc. 2,340,975
74,175 Fossil, Inc.* 1,682,845
147,100 NBTY, Inc.* 2,068,594
54,500 Whirlpool Corp. 2,960,031
-------------
9,052,445
-------------
ELECTRONICS--16.57%
88,400 AVX Corp. 5,613,400
115,700 Conexant Systems, Inc.* 11,367,525
42,200 RF Micro Devices, Inc.* 5,836,788
137,600 Semtech Corp.* 8,600,000
210,200 Sensormatic Electronics Corp.* 3,993,800
157,400 Varian, Inc.* 6,276,325
-------------
41,687,838
-------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 5
<TABLE>
<S> <C> <C>
ENTERTAINMENT--1.60%
60,400 Westwood One, Inc.* 4,035,475
-------------
FOOD & BEVERAGE--0.65%
130,100 IBP, Inc. 1,626,250
-------------
HOTELS & CASINOS--0.71%
90,008 MGM Grand, Inc.* 1,788,909
-------------
LEISURE--0.39%
119,000 Players International, Inc.* 978,031
-------------
MACHINERY--2.46%
77,800 Kulicke & Soffa Industries, Inc.* 6,185,100
-------------
MEDICAL PRODUCTS--6.77%
106,200 Allergan, Inc. 5,343,188
55,200 Jones Pharma, Inc. 3,960,600
85,300 Universal Health Services, Inc., Class B 3,316,038
110,800 Varian Medical Systems, Inc. 4,425,075
-------------
17,044,901
-------------
OIL, GAS & PETROLEUM--1.86%
81,900 BJ Services Co.* 4,673,419
-------------
PUBLISHING--1.60%
117,500 Reader's Digest Association, Inc., Class A 4,039,062
-------------
RETAIL--3.02%
101,000 BJ's Wholesale Club, Inc.* 3,131,000
72,500 Too, Inc.* 1,740,000
72,700 Zale Corp.* 2,735,338
-------------
7,606,338
-------------
SEMICONDUCTORS--14.55%
104,300 Electroglas, Inc.* 4,041,625
212,900 ESS Technology, Inc.* 3,313,256
53,400 GlobeSpan, Inc.* 4,031,700
112,800 QLogic Corp.* 17,596,800
213,200 S3, Inc.* 3,397,875
167,000 Silicon Valley Group, Inc.* 4,227,188
-------------
36,608,444
-------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 6
<TABLE>
<S> <C> <C>
TELECOMMUNICATIONS--16.68%
68,900 Apex Inc.* 3,091,887
53,100 Carrier Access Corp.* 3,013,425
60,100 Copper Mountain Networks, Inc.* 5,224,944
159,000 Corsair Communications, Inc.* 4,531,500
67,600 Ditech Communications Corp.* 7,385,300
21,564 JDS Uniphase Corp.* 5,687,505
126,700 Paradyne Networks, Inc.* 5,669,825
71,600 Scientific-Atlanta, Inc. 7,352,425
1,600 Spectrian Corp.* 36,800
-------------
41,993,611
-------------
TOTAL COMMON STOCKS--97.12% 244,393,553
(Cost $165,090,991) -------------
TOTAL INVESTMENTS--97.12% 244,393,553
(Cost $165,090,991) -------------
NET OTHER ASSETS AND LIABILITIES--2.88% 7,259,921
-------------
NET ASSETS--100.00% $ 251,653,474
=============
</TABLE>
------------------------------------------------------
* Non-income producing security
See Notes to Financial Statements.
<PAGE> 7
UNDISCOVERED MANAGERS(TM)
BEHAVIORAL VALUE FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
Shares (NOTE 2)
- ------ ------------
<S> <C> <C>
COMMON STOCKS--94.46%
ADVERTISING--2.29%
8,800 ADVO, Inc. $ 244,200
------------
AEROSPACE & DEFENSE--0.81%
9,700 BE Aerospace, Inc.* 86,087
------------
AIRLINES/AIR TRANSPORTATION--1.24%
9,900 America West Holdings Corp.* 132,412
------------
AUTOMOBILE--0.27%
3,900 Titan International, Inc. 28,762
------------
BUILDING & CONSTRUCTION--1.19%
3,200 Rayonier, Inc. 127,200
------------
BUSINESS SERVICES--5.13%
9,900 Harland (John H.) Co. 152,831
12,100 Precision Response Corp.* 285,862
8,100 Romac International, Inc.* 109,350
------------
548,043
------------
CHEMICALS--2.11%
18,000 Airgas, Inc.* 124,875
7,400 Engelhard Corp. 100,825
------------
225,700
------------
COMPUTER HARDWARE & SOFTWARE--9.71%
20,600 Concurrent Computer Corp. 368,225
17,800 Mentor Graphics Corp.* 304,825
7,300 Seagate Technology, Inc.* 364,087
------------
1,037,137
------------
CONSUMER PRODUCTS--4.01%
26,000 Acclaim Entertainment, Inc.* 129,187
19,800 Central Garden & Pet Co.* 190,575
6,300 Tupperware Corp. 108,281
------------
428,043
------------
ELECTRONICS--11.56%
18,600 Cirrus Logic, Inc.* 387,112
7,000 Digi International, Inc.* 78,750
9,200 Integrated Device Technology, Inc.* 339,250
7,000 Three Five Systems, Inc.* 429,625
------------
1,234,737
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 8
<TABLE>
<S> <C> <C>
ENTERTAINMENT--1.91%
19,300 Aldila, Inc.* 32,569
22,800 Topps Company (The), Inc.* 171,000
------------
203,569
------------
FINANCIAL SERVICES--7.19%
4,100 Bank United Corp., Class A 107,369
10,400 Doral Financial Corp. 102,050
13,500 First American Financial Corp. 156,937
5,900 Hibernia Corp. 53,469
5,000 Phoenix Investment Partners 35,937
4,650 PMI Group (The), Inc. 168,853
14,260 Republic Bancorp, Inc. 114,080
1,900 Roslyn Bancorp, Inc. 29,213
------------
767,908
------------
FOOD & BEVERAGE--1.20%
12,500 Lance, Inc. 128,125
------------
HEALTH CARE SERVICES--1.04%
24,700 Caremark Rx, Inc.* 111,150
------------
LEISURE--1.70%
15,100 Callaway Golf Co. 181,200
------------
MANUFACTURING--6.03%
18,300 Foamex International, Inc.* 155,550
8,900 Lincoln Electric Holdings, Inc. 173,550
23,200 RTI International Metals, Inc.* 163,850
13,000 Unova, Inc.* 150,313
------------
643,263
------------
MEDICAL PRODUCTS--4.85%
13,850 IVAX Corp. 315,088
18,400 Owens & Minor, Inc. 202,400
------------
517,488
------------
OIL, GAS & PETROLEUM--6.24%
13,900 EEX Corp. 33,881
36,600 Newpark Resources, Inc.* 285,938
41,600 OMI Corp.* 158,600
23,000 Seitel, Inc.* 188,313
------------
666,732
------------
PUBLISHING--1.42%
8,300 Banta Corp. 151,475
------------
RESTAURANTS--3.87%
24,700 Avado Brands, Inc. 107,291
8,700 Darden Restaurants, Inc. 114,731
10,100 RARE Hospitality International, Inc.* 190,638
------------
412,660
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 9
<TABLE>
<S> <C> <C>
RETAIL--14.27%
9,800 Enesco Group, Inc. 71,050
3,000 Footstar, Inc.* 74,063
17,500 Gadzooks, Inc.* 278,906
4,906 Limited (The), Inc. 166,804
30,300 OfficeMax, Inc.* 213,994
14,700 Paul Harris Stores, Inc.* 63,394
34,900 PETsMART, Inc.* 115,606
31,100 Pier 1 Imports, Inc. 272,125
9,600 Ross Stores, Inc. 139,200
11,200 Saks, Inc.* 128,800
------------
1,523,942
------------
TELECOMMUNICATIONS--5.58%
16,500 Intervoice, Inc.* 596,063
------------
TRANSPORTATION--0.84%
4,300 Overseas Shipholding Group, Inc. 89,494
------------
TOTAL COMMON STOCKS--94.46% 10,085,390
(Cost $9,228,098) ------------
TOTAL INVESTMENTS--94.46% 10,085,390
(Cost $9,228,098) ------------
NET OTHER ASSETS AND LIABILITIES--5.54% 591,908
------------
NET ASSETS--100.00% $ 10,677,298
============
</TABLE>
--------------------------------------------------
* Non-income producing security
See Notes to Financial Statements.
<PAGE> 10
UNDISCOVERED MANAGERS(TM)
BEHAVIORAL LONG/SHORT FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -----------
<S> <C> <C>
COMMON STOCKS--96.39%
ADVERTISING--1.01%
400 TMP Worldwide, Inc.* $ 54,375
-----------
AEROSPACE & DEFENSE-0.93%
1,100 Northrop Grumman Corp. 49,981
-----------
AUTOMOBILE--1.04%
1,300 PACCAR, Inc. 55,981
-----------
BUILDING & CONSTRUCTION--1.16%
1,800 American Standard Companies, Inc.* 62,775
-----------
BUSINESS SERVICES--4.73%
7,400 Data Broadcasting Corp.* 73,075
3,000 Harland (John H.) Co. 46,312
1,900 NOVA Corp.* 43,819
2,300 Precision Response Corp.* 54,338
1,000 Viant Corp.* 37,937
-----------
255,481
-----------
CHEMICALS--2.92%
900 Eastman Kodak Co. 51,581
1,400 Rohm and Haas Co. 56,525
3,600 Solutia, Inc. 49,725
-----------
157,831
-----------
COMPUTER HARDWARE & SOFTWARE--16.78%
1,800 Adaptec, Inc.* 73,800
1,300 Autodesk, Inc. 58,094
800 BISYS Group (The), Inc.* 41,250
1,700 Compaq Computer Corp. 42,287
700 Computer Associates International, Inc. 45,019
900 Electronic Data Systems Corp. 58,275
2,400 Hyperion Solutions Corp.* 118,500
1,000 Project Software & Development, Inc.* 77,437
1,300 Seagate Technology, Inc.* 64,837
3,200 Sybase, Inc.* 80,200
3,066 Three-Five Systems, Inc.* 188,176
1,400 Xircom, Inc.* 58,144
-----------
906,019
-----------
CONSUMER PRODUCTS--1.67%
2,100 Tupperware Corp. 36,094
1,000 Whirlpool Corp. 54,312
-----------
90,406
-----------
</TABLE>
See Notes to Financial Statements.
<PAGE> 11
<TABLE>
<S> <C> <C>
ELECTRONICS--9.47%
1,900 Arrow Electronics, Inc. 57,475
800 AVX Corp. 50,800
800 Conexant Systems, Inc.* 78,600
4,800 Digi International, Inc.* 54,000
1,400 SCI Systems, Inc.* 56,350
2,600 Semtech Corp.* 162,500
1,200 Vishay Intertechnology, Inc.* 51,600
-----------
511,325
-----------
ENERGY & UTILITIES--1.90%
1,800 Alliant Energy Corp. 50,625
2,100 GPU, Inc. 52,237
-----------
102,862
-----------
ENTERTAINMENT--1.01%
7,300 Topps Company (The), Inc.* 54,750
-----------
FINANCIAL SERVICES--1.75%
1,800 Bank One Corp. 46,463
1,500 UnionBanCal Corp. 48,187
-----------
94,650
-----------
FOOD & BEVERAGE--1.60%
2,600 IBP, Inc. 32,500
1,900 Ralston-Ralston Purina Group 53,794
-----------
86,294
-----------
HEALTH CARE SERVICES--1.66%
9,400 Caremark Rx, Inc.* 42,300
700 Wellpoint Health Networks, Inc.* 47,250
-----------
89,550
-----------
INSURANCE--4.70%
1,100 Allmerica Financial Corp. 45,925
700 CIGNA Corp. 51,669
1,500 Hartford Life, Inc., Class A 53,063
2,000 MONY Group, Inc. 57,250
2,000 Nationwide Financial Services, Inc., Class A 46,125
-----------
254,032
-----------
LEISURE--1.80%
2,700 Brunswick Corp. 47,756
4,100 Callaway Golf Co. 49,200
-----------
96,956
-----------
MANUFACTURING--4.32%
400 Corning, Inc. 75,200
3,400 Hasbro, Inc. 53,550
1,200 Nucor Corp. 59,625
3,900 UNOVA, Inc.* 45,094
-----------
233,469
-----------
MEDICAL INFORMATION SYSTEMS--2.03%
3,100 Cerner Corp.* 109,856
-----------
MEDICAL PRODUCTS--2.89%
2,000 Allergan, Inc. 100,625
1,700 Abbott Laboratories 55,675
-----------
156,300
-----------
PUBLISHING--1.04%
900 Dow Jones & Co., Inc. 56,138
-----------
RESTAURANTS--0.88%
10,900 Avado Brands, Inc. 47,347
-----------
</TABLE>
See Notes to Financial Statements.
<PAGE> 12
<TABLE>
<S> <C> <C>
RETAIL--12.53%
2,100 American Eagle Outfitters, Inc.* 53,550
1,900 AutoZone, Inc.* 46,669
2,500 Barnes & Noble, Inc.* 43,125
1,600 CVS Corp. 56,000
6,300 Gadzooks, Inc.* 100,406
1,700 May Department Stores Co. 44,519
5,000 Office Depot, Inc.* 60,938
4,200 Ross Stores, Inc. 60,900
1,600 Safeway, Inc.* 61,700
1,700 Sears, Roebuck & Co. 46,856
4,600 Toys 'R' Us, Inc. 56,925
1,200 Zale Corp.* 45,150
-----------
676,738
-----------
SEMICONDUCTORS--10.37%
6,000 Cirrus Logic, Inc.* 124,875
2,400 Electroglas, Inc.* 93,000
3,700 ESS Technology, Inc.* 57,581
3,100 Integrated Device Technology, Inc.* 114,313
600 QLogic Corp.* 93,600
4,800 S3, Inc.* 76,500
-----------
559,869
-----------
TECHNOLOGY--1.23%
3,700 Concurrent Computer Corp. 66,138
-----------
TELECOMMUNICATIONS--6.97%
1,200 Carrier Access Corp.* 68,100
800 Ditech Communications Corp.* 87,400
600 Nortel Networks Corp. 66,900
1,500 Scientific-Atlanta, Inc. 154,031
-----------
376,431
-----------
TOTAL COMMON STOCKS--96.39% 5,205,554
-----------
(Cost $4,184,846)
REPURCHASE AGREEMENTS--10.17%
$ 549,355 Bear Stearns 5.71%,
due 03/01/00
(Cost $549,355) 549,355
-----------
TOTAL INVESTMENTS--106.56% 5,754,909
-----------
(Cost $4,734,201)
TOTAL SECURITIES SOLD SHORT--(72.65%)--
SEE SCHEDULE BELOW (3,923,694)
(Proceeds $3,906,158)
NET OTHER ASSETS AND LIABILITIES--66.09% 3,569,664
-----------
NET ASSETS--100.00% $ 5,400,879
===========
</TABLE>
-----------------------------------------------
Certain investments in common stocks are held in a segregated account
with the broker as collateral for securities sold short.
* Non-income producing security.
+ Colateralized by $1,675,000 par value, 6.5%, due 06/15/29, value
$560,896 Federal Agency Obligations.
See Notes to Financial Statements.
<PAGE> 13
SECURITIES SOLD SHORT
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
------ -----------
<S> <C> <C>
COMMON STOCKS
(3,600) Abercrombie & Fitch Co., Class A* $ (52,875)
(5,200) Advance Paradigm, Inc.* (123,012)
(1,200) Aetna, Inc. (49,350)
(1,900) Albertson's, Inc. (46,550)
(800) Amazon.com, Inc. (55,100)
(800) Avnet, Inc. (53,500)
(4,400) Bally's Total Fitness Holding Corp. (118,250)
(1,400) BMC Software, Inc.* (64,400)
(400) Broadcom Corp., Class A* (78,950)
(600) Calpine Corp.* (54,900)
(1,000) CareInsite, Inc. (68,000)
(2,000) Charles Schwab Corp. (83,625)
(800) Ciena Corp. (127,850)
(2,600) CMS Energy Corp. (43,550)
(2,200) Concord EFS, Inc. (43,038)
(2,400) Dana Corp. (51,150)
(600) Diamond Technology Partners, Inc., Class A* (41,025)
(1,000) Dollar Tree Stores, Inc.* (38,813)
(2,800) E*TRADE Group, Inc.* (68,950)
(400) Emulex Corp.* (64,000)
(2,700) eToys Inc. (37,969)
(1,000) Exodus Communications, Inc. (142,375)
(900) Gateway, Inc.* (61,875)
(1,700) General Mills, Inc. (55,994)
(3,100) Hercules, Inc. (51,150)
(8,800) Horizon Organic Holding Corp.* (87,450)
(4,600) Informix Corp.* (73,600)
(800) Jabil Circuit, Inc. (55,550)
(2,700) J.C. Penney Company, Inc. (42,525)
(800) Kohl's Corp. (60,650)
(1,800) Legato Systems, Inc.* (64,125)
(1,500) Litton Industries, Inc.* (44,906)
(1,000) Lucent Technologies, Inc. (59,500)
(4,500) Lyondell Chemical Co. (38,531)
(1,100) MarketWatch.com, Inc.* (47,163)
(1,000) Marshall & Ilsley Corp. (45,938)
(5,600) Mattel, Inc. (53,900)
(1,700) Maytag Corp. (44,944)
(3,700) Metris Companies, Inc. (95,738)
(1,100) NCO Group, Inc. (25,713)
(1,500) NVIDIA Corp.* (96,000)
(3,800) O'Reilly Automotive, Inc.* (53,200)
(1,300) PacifiCare Health Systems, Inc.* (59,069)
(1,900) Parametric Technology Corp.* (57,594)
(2,100) Premier Parks, Inc. (42,525)
(1,500) Profit Recovery Group International, Inc. (27,750)
(600) Rambus, Inc. (180,975)
(1,500) ReliaStar Financial Corp. (41,906)
(1,500) Schering-Plough Corp. (52,313)
(1,100) Scripps Co. (E.W.), Class A (47,438)
(2,000) St. Paul Companies, Inc. (44,750)
(2,250) Staples, Inc. (60,750)
(2,800) Sunrise Assisted Living, Inc. (35,350)
(2,300) Thomas & Betts Corp. (51,606)
(600) Tiffany & Co. (38,513)
(2,000) Torchmark Corp. (39,625)
(3,400) UnumProvident Corp. (45,475)
(2,300) USX-U.S. Steel Group (50,313)
(2,300) Vicor Corp.* (52,325)
(1,800) Walgreen Co. (46,463)
(1,300) Wells Fargo & Company (42,981)
(1,000) Whittman-Hart, Inc.* (45,375)
(4,800) Wild Oats Market, Inc. (90,000)
(2,500) Xerox Corp. (54,219)
(3,900) Yankee Candle Co., Inc.* (50,700)
------------
TOTAL SECURITIES SOLD SHORT $ (3,923,694)
(Proceeds $3,906,158) ============
</TABLE>
See Notes to Financial Statements.
<PAGE> 14
UNDISCOVERED MANAGERS(TM)
REIT FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
Shares (NOTE 2)
- ------ ------------
<S> <C> <C>
COMMON STOCKS--97.75%
APARTMENTS--22.83%
67,700 Archstone Communities Trust $ 1,324,381
47,500 Avalonbay Communities, Inc. 1,603,125
10,000 Equity Residential Properties Trust 399,375
36,500 Home Properties of New York, Inc. 976,375
25,500 Post Properties, Inc. 959,437
21,500 Smith (Charles E.) Residential Realty, Inc. 751,156
6,013,849
------------
DIVERSIFIED--9.25%
45,700 Franchise Finance Corp. of America 1,028,250
35,100 Spieker Properties, Inc. 1,408,387
------------
2,436,637
------------
HEALTH CARE--0.99%
22,800 Nationwide Health Properties, Inc. 260,775
------------
HOTELS, LODGING & RESTAURANTS--0.81%
17,100 LaSalle Hotel Properties 213,750
------------
INDUSTRIAL--16.51%
59,600 AMB Property Corp. 1,203,175
55,800 Prentiss Properties Trust 1,147,388
82,000 ProLogis Trust 1,481,125
23,700 PS Business Parks, Inc 518,438
------------
4,350,126
------------
MANUFACTURED HOMES--6.04%
49,800 Manufactured Home Communities, Inc. 1,139,175
15,300 Sun Communities, Inc. 451,350
------------
1,590,525
------------
NEIGHBORHOOD SHOPPING CENTERS--3.87%
33,400 Vornado Realty Trust 1,020,788
------------
OFFICE PROPERTIES--18.57%
22,400 Alexandria Real Estate Equities, Inc. 684,600
13,500 Boston Properties, Inc. 409,219
29,000 CarrAmerica Realty Corp. 616,250
25,400 Cousins Properties, Inc. 901,700
24,100 Crescent Real Estate Equities Co. 411,206
33,500 Equity Office Properties Trust 801,906
49,900 Kilroy Realty Corp. 1,066,612
------------
4,891,493
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 15
<TABLE>
<S> <C> <C>
OUTLET CENTERS--3.72%
37,000 Chelsea GCA Realty, Inc. 980,500
------------
REGIONAL MALLS--9.59%
37,800 Macerich Co. 760,725
77,300 Taubman Centers, Inc. 801,988
34,700 Urban Shopping Centers, Inc. 962,925
------------
2,525,638
------------
STORAGE--5.57%
46,700 Storage USA, Inc. 1,468,131
------------
TOTAL COMMON STOCKS--97.75% 25,752,212
(Cost $26,379,597) ------------
TOTAL INVESTMENTS--97.75% 25,752,212
(Cost $26,379,597) ------------
NET OTHER ASSETS AND LIABILITIES--2.25% 591,779
------------
NET ASSETS--100.00% $ 26,343,991
============
</TABLE>
- -------------------------------------------------------------------------
REIT Real Estate Investment Trust
See Notes to Financial Statements.
<PAGE> 16
UNDISCOVERED MANAGERS(TM)
SPECIAL SMALL CAP FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
Shares (NOTE 2)
------ ------------
<S> <C> <C>
COMMON STOCKS--99.24%
AUTOMOBILE--10.31%
43,300 Midas, Inc. $ 1,039,200
6,500 Strattec Security Corp.* 216,125
34,300 TBC Corp.* 180,075
56,800 Tenneco Automotive, Inc. 418,900
------------
1,854,300
------------
BUILDING MATERIALS--3.19%
31,800 Justin Industries, Inc. 574,387
------------
BUILDING SERVICES--2.84%
18,200 Jacobs Engineering Group, Inc.* 510,737
------------
BUSINESS SERVICES--2.18%
139,400 Lanier Worldwide, Inc.* 392,063
------------
CAPITAL GOODS--6.96%
15,800 Hardinge, Inc. 162,937
15,800 Lawson Products, Inc. 355,500
31,900 Royal Appliance Manufacturing Co.* 169,469
49,400 U.S. Industries, Inc. 565,012
------------
1,252,918
------------
CHEMICALS--5.91%
25,400 Ethyl Corp. 80,962
12,200 NCH Corp. 483,425
53,200 Octel Corp.* 498,750
------------
1,063,137
------------
CONSUMER PRODUCTS--4.04%
63,200 Wolverine World Wide, Inc. 726,800
------------
DATA PROCESSING--0.19%
4,400 Information Resources, Inc.* 34,375
------------
DISTRIBUTION--4.27%
28,600 United Stationers, Inc.* 768,625
------------
ELECTRONICS--7.94%
4,100 CommScope, Inc.* 159,644
12,200 ESCO Electronics Corp.* 183,000
5,400 Franklin Electric Co., Inc. 359,775
37,500 MagneTek, Inc.* 323,437
10,100 Varian, Inc. 402,737
------------
1,428,593
------------
ENERGY & UTILITIES--3.74%
36,900 Castle Energy Corp. 217,941
47,600 El Paso Electric Co. 455,175
------------
673,116
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 17
<TABLE>
<S> <C> <C>
FINANCIAL SERVICES--11.43%
44,418 ADVANTA Corp., Class A 827,285
14,000 Echelon International Corp., Inc.* 469,875
33,400 PFF Bancorp, Inc.* 505,175
13,344 Queens County Bancorp, Inc. 253,536
------------
2,055,871
------------
HEALTH CARE SERVICES--3.44%
20,700 CorVel Corp.* 520,087
4,100 First Health Group Corp.* 98,913
------------
619,000
------------
INSURANCE--6.95%
26,300 Horace Mann Educators Corp. 407,650
25,200 Penn-America Group, Inc. 200,025
19,200 Presidential Life Corp. 300,000
3,100 White Mountains Insurance Group, Inc. 341,775
------------
1,249,450
------------
LEISURE--3.22%
48,100 Handleman Co.* 499,038
4,800 Scientific Games Holdings Corp.* 79,800
------------
578,838
------------
MEDICAL PRODUCTS--2.75%
12,400 Varian Medical Systems, Inc. 495,225
------------
PAPER & RELATED PRODUCTS--1.44%
19,800 Wausau-Mosinee Paper Corp. 258,638
------------
REAL ESTATE DEVELOPMENT--1.15%
12,300 Avatar Holding, Inc.* 207,563
------------
REAL ESTATE INVESTMENT TRUST--3.34%
8,900 Mid-America Apartment Communities, Inc. 203,588
20,400 Tanger Factory Outlet Centers, Inc. 396,525
------------
600,113
------------
RETAIL--1.78%
74,200 Stein Mart, Inc.* 319,988
------------
TEXTILES--1.96%
38,200 Guilford Mills, Inc. 353,350
------------
TRANSPORTATION--10.21%
46,800 Arnold Industries, Inc. 552,825
20,500 Landstar Systems, Inc.* 1,151,844
3,300 XTRA Corp.* 131,381
------------
1,836,050
------------
TOTAL COMMON STOCKS--99.24% 17,853,137
(Cost $17,993,127) ------------
TOTAL INVESTMENTS--99.24% 17,853,137
(Cost $17,993,127) ------------
NET OTHER ASSETS AND LIABILITIES--0.76% 137,289
------------
NET ASSETS--100.00% $ 17,990,426
============
</TABLE>
-------------------------------------------------------------
* Non-income producing security
See Notes to Financial Statements.
<PAGE> 18
UNDISCOVERED MANAGERS(TM)
SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
Shares (NOTE 2)
------ ------------
<S> <C>
COMMON STOCKS--97.00%
ADVERTISING--1.75%
1,100 Grey Advertising, Inc. $ 435,600
------------
AEROSPACE & DEFENSE--0.60%
20,000 Aviation Sales Co.* 148,750
------------
AIRLINES/AIR TRANSPORTATION--2.30%
31,000 Airborne Freight Corp. 573,500
------------
AUTOMOBILE--1.09%
20,400 Wynn's International, Inc. 271,575
------------
BASIC MATERIALS--8.42%
32,000 AptarGroup, Inc. 766,000
50,000 Intermet Corp. 562,500
20,000 Reliance Steel & Aluminum Co. 387,500
26,500 Timken Co. 379,281
------------
2,095,281
------------
BUILDING & CONSTRUCTION--1.82%
30,000 NCI Building Systems, Inc.* 453,750
------------
BUSINESS SERVICES--2.13%
40,000 Deltek Systems, Inc.* 530,000
------------
CAPITAL GOODS--2.98%
44,200 GP Strategies Corp.* 226,525
17,100 Graco, Inc. 516,206
------------
742,731
------------
CHEMICALS--4.49%
18,000 Cambrex Corp. 722,250
19,300 Stepan Co. 395,650
------------
1,117,900
------------
COMPUTER HARDWARE & SOFTWARE--4.25%
25,000 ANSYS, Inc.* 321,875
30,000 Diebold, Inc. 735,000
------------
1,056,875
------------
CONGLOMERATES--3.76%
39,000 Stewart & Stevenson Services, Inc. 382,687
30,000 United Dominion Industries, Ltd. 553,125
</TABLE>
See Notes to Financial Statements.
<PAGE> 19
<TABLE>
<S> <C>
------------
935,812
------------
ELECTRONICS--22.02%
32,000 Arrow Electronics, Inc. 968,000
20,000 C & D Technologies, Inc. 935,000
40,000 GenRad, Inc. 590,000
50,000 Innovex, Inc. 471,875
24,000 Kollmorgen Corp. 309,000
30,000 Park Electrochemical Corp. 682,500
40,000 Quixote Corp. 540,000
39,000 Silicon Valley Group, Inc.* 987,187
------------
5,483,562
------------
FINANCIAL SERVICES--5.21%
17,000 Centura Banks, Inc. 573,750
25,000 Prosperity Bancshares, Inc. 351,562
46,646 Republic Bancorp, Inc. 373,168
------------
1,298,480
------------
FOOD & BEVERAGE--3.82%
27,000 Ralcorp Holdings, Inc.* 403,313
14,000 Suiza Foods Corp.* 547,750
------------
951,063
------------
FURNITURE--4.34%
28,200 Chromcraft Revington, Inc.* 239,700
19,500 Ethan Allen Interiors, Inc. 454,594
21,000 Hon Industries, Inc. 387,188
------------
1,081,482
------------
INSURANCE--2.43%
16,000 Renaissance Re Holdings, Ltd. 606,000
------------
LEISURE--1.20%
25,000 Coachmen Industries, Inc. 300,000
------------
MEDICAL PRODUCTS--2.84%
10,000 Lincare Holdings, Inc.* 234,375
30,000 Spacelabs Medical, Inc.* 472,500
------------
706,875
------------
OIL, GAS & PETROLEUM--5.02%
54,500 Key Production Co., Inc.* 582,469
40,000 Trico Marine Services, Inc.* 233,750
30,000 Vintage Petroleum, Inc. 435,000
------------
1,251,219
------------
PAPER & RELATED PRODUCTS--1.33%
25,300 Wausau-Mosinee Paper Corp. 330,481
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 20
<TABLE>
<S> <C>
REAL ESTATE INVESTMENT TRUST--2.43%
30,000 Pacific Gulf Properties, Inc. 605,625
------------
RESTAURANTS--4.11%
18,000 Applebee's International, Inc. 506,813
54,000 Ryan's Family Steak Houses, Inc.* 516,375
------------
1,023,188
------------
RETAIL--5.86%
20,000 Group 1 Automotive, Inc.* 195,000
80,000 HomeBase, Inc.* 205,000
32,000 Maxwell Shoe Co., Inc.* 268,000
45,000 Ross Stores, Inc. 652,500
16,800 Sport Supply Group, Inc.* 138,600
------------
1,459,100
------------
TECHNOLOGY--2.80%
45,000 MAPICS, Inc.* 697,500
------------
TOTAL COMMON STOCKS--97.00% 24,156,349
------------
(Cost $25,471,246)
TOTAL INVESTMENTS--97.00% 24,156,349
------------
(Cost $25,471,246)
NET OTHER ASSETS AND LIABILITIES-3.00% 746,033
------------
NET ASSETS--100.00% $ 24,902,382
============
</TABLE>
- -----------------------------------------------------------
* Non-income producing security
See Notes to Financial Statements.
<PAGE> 21
undiscovered managers(TM)
HIDDEN VALUE FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
Shares (Note 2)
------ --------
<S> <C> <C>
COMMON STOCKS--95.55%
ADVERTISING--2.60%
1,300 Young & Rubicam, Inc.* $ 65,650
-----------
AEROSPACE & DEFENSE--1.42%
1,500 Goodrich (B.F.) Co. 35,906
-----------
AIRLINES/AIR TRANSPORTATION--4.99%
3,600 Airborne Freight Corp. 66,600
1,300 Delta Air Lines, Inc. 59,312
-----------
125,912
-----------
AUTOMOBILE--1.69%
2,000 Dana Corp. 42,625
-----------
BANKS--4.49%
2,600 Cullen/Frost Bankers, Inc. 55,900
3,500 North Fork Bancorporation, Inc. 57,312
-----------
113,212
-----------
BASIC MATERIALS--4.52%
1,100 PPG Industries, Inc. 54,312
2,700 Trinity Industries, Inc. 59,737
-----------
114,049
-----------
BUSINESS SERVICES--3.50%
3,200 Reynolds & Reynolds Co., Class A 88,400
-----------
CAPITAL GOODS--2.60%
3,300 Crane Co. 65,587
-----------
CHEMICALS--1.91%
1,200 Cambrex Corp. 48,150
-----------
COMPUTER HARDWARE & SOFTWARE--7.63%
4,200 Compuware Corp.* 92,925
2,000 Seagate Technology, Inc.* 99,750
-----------
192,675
-----------
CONGLOMERATES--8.65%
3,500 Federal Signal Corp. 52,281
3,000 Lancaster Colony Corp. 89,250
1,600 TRW, Inc. 76,800
-----------
218,331
-----------
CONSUMER PRODUCTS--3.14%
3,000 Maytag Corp. 79,313
-----------
</TABLE>
See Notes to Financial Statements.
<PAGE> 22
<TABLE>
<S> <C> <C>
ELECTRONICS--3.96%
3,300 Arrow Electronics, Inc.* 99,825
-----------
FINANCIAL SERVICES--3.99%
2,940 Charter One Financial, Inc. 46,305
2,000 Fleet Financial Group, Inc. 54,500
-----------
100,805
-----------
FOOD & BEVERAGE--3.26%
2,100 Suiza Foods Corp.* 82,163
-----------
MACHINERY--2.84%
3,000 AptarGroup, Inc. 71,813
-----------
MEDICAL PRODUCTS--9.31%
3,000 Becton, Dickinson & Co. 93,188
2,700 DENTSPLY International, Inc. 69,188
3,100 Lincare Holdings, Inc.* 72,656
-----------
235,032
-----------
OFFICE PRODUCTS--2.58%
3,000 Xerox Corp. 65,063
-----------
OIL, GAS & PETROLEUM--4.39%
2,500 Tidewater, Inc. 70,781
1,500 Unocal Corp. 40,125
-----------
110,906
-----------
PUBLISHING--4.89%
600 Gannett Co., Inc. 39,113
1,800 Knight-Ridder, Inc. 84,375
-----------
123,488
-----------
REAL ESTATE INVESTMENT TRUST--4.75%
2,000 Boston Properties, Inc. 60,625
2,500 Mack-Cali Realty Corp. 59,375
-----------
120,000
-----------
RETAIL--4.03%
1,600 BJ's Wholesale Club, Inc.* 49,600
3,600 Ross Stores, Inc. 52,200
-----------
101,800
-----------
TELECOMMUNICATIONS--4.41%
4,500 Andrew Corp.* 111,375
-----------
TOTAL COMMON STOCKS--95.55% 2,412,080
(Cost $2,562,288) -----------
TOTAL INVESTMENTS--95.55% 2,412,080
(Cost $2,562,288) -----------
NET OTHER ASSETS AND LIABILITIES--4.45% 112,419
-----------
NET ASSETS--100.00% $ 2,524,499
===========
</TABLE>
- -----------------------------------------------------
* Non-income producing security
See Notes to Financial Statements.
<PAGE> 23
UNDISCOVERED MANAGERS(TM)
ALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
Shares (NOTE 2)
------ ---------
<S> <C> <C>
COMMON STOCKS--92.00%
AEROSPACE & DEFENSE--6.27%
500 Honeywell International, Inc. $ 24,062
489 United Technologies Corp. 24,909
---------
48,971
---------
AUTOMOBILE--4.26%
800 Ford Motor Company 33,300
---------
BANKS--6.71%
350 Chase Manhattan Corp. 27,869
900 Fleet Financial Group, Inc. 24,525
---------
52,394
---------
BUSINESS SERVICES--2.24%
400 Sterling Commerce, Inc.* 17,525
---------
CHEMICALS--3.10%
600 Rohm and Haas Co. 24,225
---------
COMPUTER HARDWARE & SOFTWARE--13.99%
600 Compuware Corp.* 13,275
210 International Business Machines Corp. 21,420
500 Sun Microsystems, Inc.* 47,625
900 Unisys Corp.* 26,944
---------
109,264
---------
CONSUMER PRODUCTS--5.21%
800 Avon Products, Inc. 21,650
350 Whirlpool Corp. 19,009
---------
40,659
---------
DIVERSIFIED--3.12%
400 Textron, Inc. 24,400
---------
ELECTRONICS--3.48%
800 American Power Conversion Corp.* 27,150
---------
FINANCIAL SERVICES--14.37%
200 American Express Co. 26,837
650 Citigroup, Inc. 33,597
600 Freddie Mac 25,050
700 Paine Webber Group, Inc. 26,775
---------
112,259
---------
HEALTH CARE SERVICES--3.34%
600 American Home Products Corp. 26,100
---------
</TABLE>
See Notes to Financial Statements.
<PAGE> 24
<TABLE>
<S> <C> <C>
INSURANCE--4.73%
500 AFLAC, Inc. 18,281
500 MGIC Investment Corp. 18,688
---------
36,969
---------
OIL, GAS & PETROLEUM--11.41%
350 Atlantic Richfield Co. 24,850
700 BP Amoco Plc, ADR 32,900
425 Schlumberger, Ltd. 31,397
---------
89,147
---------
PUBLISHING--3.30%
550 Knight-Ridder, Inc. 25,781
---------
RETAIL--6.47%
300 CVS Corp. 10,500
1,300 Kroger Co. 19,338
750 Sears, Roebuck & Co. 20,672
---------
50,510
---------
TOTAL COMMON STOCKS--92.00% 718,654
(Cost $716,346) ---------
TOTAL INVESTMENTS--92.00% 718,654
(Cost $716,346) ---------
NET OTHER ASSETS AND LIABILITIES--8.00% 62,529
---------
NET ASSETS--100.00% $ 781,183
=========
</TABLE>
- ------------------------------------------------------------------
* Non-income producing security
ADR American Depository Receipt
See Notes to Financial Statements.
<PAGE> 25
UNDISCOVERED MANAGERS(TM)
CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
Shares (NOTE 2)
- ------ -----------
<S> <C> <C>
COMMON STOCKS--94.60%
AIRLINES/AIR TRANSPORTATION--1.12%
1,000 Delta Air Lines, Inc. $ 45,625
-----------
AUTOMOBILE--4.73%
1,537 Delphi Automotive Systems Corp. 25,649
2,200 General Motors Corp. 167,337
-----------
192,986
-----------
BANKS--10.83%
3,400 Bank of America Corp. 156,612
5,700 Bank of New York Co., Inc. 189,881
2,900 Wells Fargo Co. 95,881
-----------
442,374
-----------
BASIC MATERIALS--2.18%
1,300 Alcoa, Inc. 89,050
-----------
CONSUMER PRODUCTS--7.53%
1,500 Hershey Foods Corp. 65,906
3,100 Kimberly-Clark Corp. 160,231
1,500 Whirlpool Corp. 81,469
-----------
307,606
-----------
DIVERSIFIED--7.60%
2,400 American General Corp. 125,250
1,400 General Electric Co. 185,062
-----------
310,312
-----------
FINANCIAL SERVICES--4.15%
3,200 Fannie Mae 169,600
-----------
HEALTH CARE SERVICES--4.58%
4,300 American Home Products Corp. 187,050
-----------
INSURANCE--4.49%
2,075 American International Group, Inc. 183,508
-----------
MACHINERY--2.53%
2,700 Ingersoll-Rand Co. 103,444
-----------
MANUFACTURING--2.85%
1,700 Caterpillar, Inc. 59,606
1,100 Illinois Tool Works, Inc. 56,856
-----------
116,462
-----------
</TABLE>
See Notes to Financial Statements.
<PAGE> 26
<TABLE>
<S> <C> <C>
OFFICE PRODUCTS--5.45%
2,200 Avery Dennison Corp. 133,512
4,100 Xerox Corp. 88,919
-----------
222,431
-----------
OIL, GAS & PETROLEUM--5.10%
2,768 Exxon Mobil Corp. 208,465
-----------
PAPER & RELATED PRODUCTS--1.53%
1,800 Georgia-Pacific Group 62,438
-----------
RETAIL--15.97%
5,000 Costco Wholesale Corp.* 248,125
5,800 May Department Stores Co. 151,888
1,800 Safeway, Inc.* 69,413
3,100 Target Corp. 182,900
-----------
652,326
-----------
SEMICONDUCTORS--7.47%
2,700 Intel Corp. 305,100
-----------
TELECOMMUNICATIONS--6.49%
2,000 AT&T Corp. 98,875
3,400 Bell Atlantic Corp. 166,388
-----------
265,263
-----------
TOTAL COMMON STOCKS--94.60% 3,864,040
(Cost $3,928,802) -----------
TOTAL INVESTMENTS--94.60% 3,864,040
(Cost $3,928,802) -----------
NET OTHER ASSETS AND LIABILITIES--5.40% 220,538
-----------
NET ASSETS--100.00% $ 4,084,578
===========
</TABLE>
- --------------------------------------------------------------------
* Non-income producing security
See Notes to Financial Statements.
<PAGE> 27
UNDISCOVERED MANAGERS(TM)
INTERNATIONAL SMALL CAP EQUITY FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
Shares (NOTE 2)
- ------ ------------
<S> <C> <C>
COMMON STOCKS--81.74%
AUSTRIA--9.55%
980 BWT AG $ 309,100
2,200 Pankl Racing Systems AG (Berlin)* 75,331
1,000 Pankl Racing Systems AG (EASDAQ)* 34,531
24,000 Uproar Ltd. 787,073
2,380 Yline Internet Business Services AG* 505,038
------------
1,711,073
------------
BELGIUM--1.01%
3,250 Creyf's N.V. 73,041
10,000 Internoc Holding N.V. 25,561
3,900 Xeikon N.V. ADR 82,388
------------
180,990
------------
CZECH REPUBLIC--1.04%
3,000 Ceske Radiokomunikace* 186,375
------------
FRANCE--7.10%
4,290 Infogrames Entertainment SA 224,482
8,000 Jet Multimedia 925,968
5,200 Pharming Group N.V.* 121,630
------------
1,272,080
------------
GERMANY--4.57%
2,320 Boewe Systec AG 58,182
3,000 QIAGEN N.V.* 517,963
3,000 Rhoen-Klinikum AG 128,767
8,600 Scala Business Solutions N.V.* 72,168
3,480 Vossloh AG 42,126
------------
819,206
------------
GREECE--0.24%
1,500 Ideal Group SA* 39,279
1,500 Ideal Group SA* - Rights 3,510
------------
42,789
------------
HONG KONG--1.15%
53,000 SmarTone Telecommunications Holdings, Ltd. 204,978
------------
ITALY--1.77%
3,600 Banca Popolare Santa Venera 125,527
13,000 Brembo Spa 152,852
13,500 Carraro Spa 39,064
------------
317,443
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 28
<TABLE>
<S> <C> <C>
JAPAN--17.94%
18,000 Asia Securities Printing Co., Ltd. 258,922
4,200 Aucnet, Inc. 210,306
350 Bellsystem 24, Inc. 307,493
3,100 Dentsu Tec, Inc. 519,301
5,000 Diamond Computer Service Co., Ltd. 111,526
1,100 Doutor Coffee Co., Ltd. 86,626
1,000 Konami Co., Ltd. 176,165
2,000 Lasertec Corp. 62,090
4,000 Meitec Corp. 114,712
7,000 Mimasu Semiconductor Industry Co., Ltd. 136,699
8,400 Paltek Corp. 217,953
2,700 Paris Miki, Inc. 211,398
600 Publicis SA 306,148
6,000 Ushio, Inc. 131,100
6,000 Woodland Corp. 363,256
------------
3,213,695
------------
NETHERLANDS--4.08%
2,000 Fugro N.V. 106,583
4,000 Koninklijke Frans 85,266
4,000 Landis Group N.V.* 182,107
6,800 Prolion Holding N.V.* 189,881
7,795 Unique International N.V. 168,042
------------
731,879
------------
POLAND--0.60%
3,100 Prokom Software 107,260
------------
SINGAPORE--0.73%
245,000 Informatics Holdings, Ltd. 131,491
------------
SPAIN--1.48%
5,200 Funespana SA* 47,849
3,700 Mapfre Vida Seguros 113,882
9,820 Prosegur, CIA de Seguridad SA* 104,191
------------
265,922
------------
SWEDEN--1.51%
3,800 IBS AB* 116,375
8,000 Semcon AB 153,582
------------
269,957
------------
SWITZERLAND--11.80%
1,650 Charles Voegele Holding AG* 272,359
350 Gretag-Macbeth Holding AG 265,756
270 PubliGroupe SA 284,424
440 Selecta Group 136,014
800 SEZ Holding AG* 720,288
1,000 Swisslog Holding AG 435,174
------------
2,114,015
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 29
<TABLE>
<S> <C> <C>
UNITED KINGDOM--17.17%
3,000 Autonomy Corp. Plc* 354,000
1,570 Belvedere SA* 93,132
56,000 Cordiant Communications Group Plc 299,995
51,700 Corporate Services 85,784
14,100 Eidos Plc* 163,546
4,667 Filtronic Plc 164,636
7,700 Granger Telecom Plc* 111,650
5,000 International Quantum Epitaxy Plc* 317,500
3,100 JSB Software Technologies Plc* 465,000
5,200 Memory Corp. Plc* 114,400
4,000 Psion Plc 335,519
36,000 Saatchi & Saatchi Plc 234,098
70,000 Scoot.com Plc 337,384
------------
3,076,644
------------
TOTAL COMMON STOCKS--81.74% 14,645,797
(Cost $7,717,939) ------------
TOTAL INVESTMENTS--81.74% 14,645,797
(Cost $7,717,939) ------------
NET OTHER ASSETS AND LIABILITIES--18.26% 3,271,319
------------
NET ASSETS--100.00% $ 17,917,116
============
</TABLE>
- ----------------------------------------------------------------
* Non-income producing security
ADR American Depository Receipt
See Notes to Financial Statements.
<PAGE> 30
UNDISCOVERED MANAGERS(TM)
INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
Shares (NOTE 2)
------ ------------
<S> <C> <C>
COMMON STOCKS--93.05%
AUSTRALIA--0.11%
3,000 Smith (Howard), Ltd. $ 15,232
------------
BELGIUM--0.36%
2,000 Fortis Bank Nederland* 50,157
------------
BRAZIL--0.58%
1,500 Telesp Celular Participacoes SA ADR 80,812
------------
FINLAND--7.17%
3,480 Nokia Oyj* 694,823
3,900 Sonera Group Oyj 301,316
------------
996,139
------------
FRANCE--8.19%
600 Alcatel 140,747
3,450 Aventis SA 176,368
700 CAP Gemini SA 193,103
3,650 CNP Assurances* 94,352
700 Compagnie De Saint Gobain 97,564
220 Essilor International SA 56,445
1,000 Sidel SA 81,987
2,529 Vivendi 297,600
------------
1,138,166
------------
GERMANY--5.67%
500 AXA Colonia Konzern AG 45,430
3,000 Deutsche Telekom AG 251,458
850 Douglas Holding AG 26,154
500 Fresenius AG 90,668
1,500 Karstadt AG 46,588
1,700 Siemens AG 304,171
1,000 Volkswagen AG 22,860
------------
787,329
------------
HONG KONG--1.13%
10,000 Hutchison Whampoa, Ltd. 156,756
------------
ITALY--9.12%
39,000 Credito Italiano 144,075
1,150 Gucci Group N.V. 98,999
13,600 Mediaset Spa* 330,571
5,750 San Paolo-IMI Spa 90,957
80,000 Seat-Pagine Gialle Spa 497,708
794 Total Fina SA, Class B 105,305
------------
1,267,615
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 31
<TABLE>
<S> <C> <C>
JAPAN--24.72%
800 ADVANTEST Corp. 145,084
2,600 Asatsu-DK, Inc. 152,677
300 Bellsystem 24, Inc. 263,565
500 Benesse Corp. 100,146
2,000 CANON, Inc. 83,212
5,300 FamilyMart Co., Ltd. 231,610
2,000 Fuji Machine Mfg. Co., Ltd. 132,374
3,000 Honda Motor Co., Ltd. 98,325
1,000 Hoya Corp. 81,664
2,000 Matsushita Communication Industrial Co. 338,674
10,000 Mitsui Fudosan Co., Ltd. 80,299
900 NIDEC Corp. 170,430
7,000 Nomura Securities Co., Ltd. 197,560
8 NTT Mobile Communications 322,651
9,000 Sanwa Bank, Ltd. 82,839
3,000 Secom Co., Ltd. 268,755
3,000 Shin-Etsu Chemical Co., Ltd. 162,509
1,100 Sony Corp. 325,473
7,000 Sumitomo Bank, Ltd. 82,657
3,000 Tokio Marine & Fire Insurance Co., Ltd. 27,394
4,000 Ushio, Inc. 87,400
------------
3,435,298
------------
NETHERLANDS--3.88%
3,117 ING Groep N.V. 157,901
2,060 Koninklijke (Royal) Philips Electronics N.V. 381,996
------------
539,897
------------
SINGAPORE--1.14%
9,000 DBS Group Holdings, Ltd. 111,227
2,500 Singapore Press Holdings 47,723
------------
158,950
------------
SWEDEN--5.48%
9,000 ForeningsSparbanken AB 114,158
1,500 NetCom AB, Class B* 143,126
12,300 Skandia Forksakrings 504,594
------------
761,878
------------
SWITZERLAND--5.78%
575 Credit Suisse Group 91,634
87 Nestle SA 146,897
102 Novartis AG 130,041
18 Roche Holding AG 194,262
200 Selecta Group 61,825
50 SEZ Holding AG 45,018
550 UBS AG 133,869
------------
803,546
------------
UNITED KINGDOM--19.72%
12,300 British Sky Broadcasting Group Plc 316,241
13,000 British Telecom Plc 227,208
14,000 Cadbury Schweppes Plc 82,963
16,440 Compass Group Plc 192,247
</TABLE>
See Notes to Financial Statements.
<PAGE> 32
<TABLE>
<S> <C> <C>
5,400 Glaxo Wellcome Plc 129,536
18,000 Invensys Plc 82,774
14,350 Lloyds TSB Group Plc 132,998
24,000 National Grid Group 186,406
22,000 Shell Transport & Trading Co. Plc 151,578
19,000 SmithKline Beecham 213,776
90,916 Vodafone AirTouch Plc 510,029
26,800 WPP Group Plc 514,561
------------
2,740,317
------------
TOTAL COMMON STOCKS--93.05% 12,932,092
(Cost $9,810,954) ------------
TOTAL INVESTMENTS--93.05% 12,932,092
(Cost $9,810,954) ------------
NET OTHER ASSETS AND LIABILITIES--6.95% 965,840
------------
NET ASSETS--100.0% $ 13,897,932
============
</TABLE>
- --------------------------------------------------------------------
* Non-income producing security
ADR American Depository Receipt
See Notes to Financial Statements.
<PAGE> 33
UNDISCOVERED MANAGERS(TM)
STATEMENTS OF ASSETS AND LIABILITIES - FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
BEHAVIORAL
BEHAVIORAL BEHAVIORAL LONG/SHORT
GROWTH FUND VALUE FUND FUND
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost $ 165,090,991 $ 9,228,098 $ 4,706,193
Net unrealized appreciation (depreciation) 79,302,562 857,292 1,048,716
------------- ------------- -------------
Total investments at value 244,393,553 10,085,390 5,754,909
Cash (Note 2) 15,608,332 527,253 --
Deposit with broker for securities sold short (Note 2) -- -- 4,560,787
Foreign currencies, at value (1) (Note 2) -- -- --
Receivables:
Investments sold 661,927 122,987 255,639
Fund shares sold 351,054 119,740 18,857
Dividends and interest 39,484 3,467 1,533
Organization costs (Note 2) 18,071 -- --
Prepaid expenses and other assets 63,509 3,850 7,431
------------- ------------- -------------
Total Assets 261,135,930 10,862,687 10,580,299
------------- ------------- -------------
LIABILITIES:
Payables:
Investments purchased 9,115,081 170,689 451,730
Fund shares redeemed 26,123 -- --
Securities sold short, at value (Proceeds $3,906,158) (Note 2) -- -- 3,923,694
Investment advisory fees - net (Note 3) 165,656 8,148 6,797
Service and distribution fees (Note 3) 3,375 -- --
Administration fees (Note 3) 43,594 1,940 1,096
Accrued expenses and other payables (Note 5) 128,627 4,612 796,103
------------- ------------- -------------
Total Liabilities 9,482,456 185,389 5,179,420
------------- ------------- -------------
NET ASSETS $ 251,653,474 $ 10,677,298 $ 5,400,879
============= ============= =============
NET ASSETS CONSIST OF (NOTE 4):
Paid-in capital (no par value) $ 156,382,829 $ 9,873,299 $ 5,123,128
Undistributed net investment income (loss) (691,130) (9,629) 2,830
Accumulated net realized gain (loss) on investments 16,659,213 (43,664) (756,259)
Net unrealized appreciation (depreciation) on investments 79,302,562 857,292 1,031,180
------------- ------------- -------------
TOTAL NET ASSETS $ 251,653,474 $ 10,677,298 $ 5,400,879
============= ============= =============
SHARES OF BENEFICIAL INTEREST
Institutional Class:
Net Assets $ 240,156,680 $ 10,677,298 $ 5,400,879
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) 7,080,469 626,717 426,979
------------- ------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 33.92 $ 17.04 $ 12.65
============= ============= =============
Investor Class:
Net Assets $ 10,498,286 N/A N/A
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) 310,974 N/A N/A
------------- ------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 33.76 N/A N/A
============= ============= =============
C Class:
Net Assets $ 998,508 N/A N/A
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) 29,710 N/A N/A
------------- ------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 33.61 N/A N/A
============= ============= =============
MAXIMUM OFFERING PRICE PER SHARE (NAV / 99%) $ 33.95 N/A N/A
============= ============= =============
<CAPTION>
REIT SPECIAL SMALL SMALL CAP
FUND CAP FUND VALUE FUND
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost $ 26,379,597 $ 17,993,127 $ 26,257,542
Net unrealized appreciation (depreciation) (627,385) (139,990) (2,101,193)
------------- ------------- -------------
Total investments at value 25,752,212 17,853,137 24,156,349
Cash (Note 2) 707,899 110,584 599,906
Deposit with broker for securities sold short (Note 2) -- -- --
Foreign currencies, at value (1) (Note 2) -- -- --
Receivables:
Investments sold 272,951 211,741 97,819
Fund shares sold -- 97,951 --
Dividends and interest 67,894 16,379 33,777
Organization costs (Note 2) 18,088 18,053 18,053
Prepaid expenses and other assets 6,318 4,718 10,410
------------- ------------- -------------
Total Assets 26,844,219 18,214,612 25,014,265
------------- ------------- -------------
LIABILITIES:
Payables:
Investments purchased 426,883 -- 41,912
Fund shares redeemed 32,130 136,661 28,870
Securities sold short, at value (Proceeds $3,906,158) (Note 2) -- -- --
Investment advisory fees - net (Note 3) 22,227 58,018 20,929
Service and distribution fees (Note 3) 271 -- 455
Administration fees (Note 3) 5,292 8,266 4,983
Accrued expenses and other payables (Note 5) 13,425 21,241 14,734
------------- ------------- -------------
Total Liabilities 500,228 224,186 111,883
------------- ------------- -------------
NET ASSETS $ 26,343,991 $ 17,990,426 $ 24,902,382
============= ============= =============
NET ASSETS CONSIST OF (NOTE 4):
Paid-in capital (no par value) $ 28,807,924 $ 18,032,573 $ 26,303,887
Undistributed net investment income (loss) 168,028 17,499 7,540
Accumulated net realized gain (loss) on investments (2,113,629) 80,344 687,452
Net unrealized appreciation (depreciation) on investments (518,332) (139,990) (2,096,497)
------------- ------------- -------------
TOTAL NET ASSETS $ 26,343,991 $ 17,990,426 $ 24,902,382
============= ============= =============
SHARES OF BENEFICIAL INTEREST
Institutional Class:
Net Assets $ 25,727,391 $ 17,990,426 $ 23,192,326
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) 2,506,517 1,393,934 1,743,686
------------- ------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 10.26 $ 12.91 $ 13.30
============= ============= =============
Investor Class:
Net Assets $ 458,943 N/A $ 1,551,398
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) 44,768 N/A 117,049
------------- ------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 10.25 N/A $ 13.25
============= ============= =============
C Class:
Net Assets $ 157,657 N/A $ 158,658
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) 15,428 N/A 12,020
------------- ------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 10.22 N/A $ 13.20
============= ============= =============
MAXIMUM OFFERING PRICE PER SHARE (NAV / 99%) $ 10.32 N/A $ 13.33
============= ============= =============
</TABLE>
- -------------------------------------------------------------
(1) Cost of foreign currencies for International Small Cap Equity Fund and
International Equity Fund is $49,179 and $119,070, respectively.
See Notes to Financial Statements.
<PAGE> 34
<TABLE>
<CAPTION>
HIDDEN ALL CAP CORE
VALUE FUND VALUE FUND EQUITY FUND
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost $ 2,562,288 $ 716,346 $ 3,928,802
Net unrealized appreciation (depreciation) (150,208) 2,308 (64,762)
------------- ------------- -------------
Total investments at value 2,412,080 718,654 3,864,040
Cash (Note 2) 86,042 36,964 189,016
Deposit with broker for securities sold short (Note 2) -- -- --
Foreign currencies, at value (1) (Note 2) -- -- --
Receivables:
Investments sold 9,782 -- --
Fund shares sold -- -- 157,000
Dividends and interest 3,615 1,897 8,718
Organization costs (Note 2) 18,071 18,071 18,071
Prepaid expenses and other assets 5,971 6,527 8,829
------------- ------------- -------------
Total Assets 2,535,561 782,113 4,088,674
------------- ------------- -------------
LIABILITIES:
Payables:
Investments purchased -- -- --
Fund shares redeemed 4,716 -- --
Securities sold short, at value (Proceeds $3,906,158) (Note 2) -- -- --
Investment advisory fees - net (Note 3) 1,877 471 2,517
Service and distribution fees (Note 3) 384 26 149
Administration fees (Note 3) 494 159 850
Accrued expenses and other payables (Note 5) 3,591 275 580
------------- ------------- -------------
Total Liabilities 11,062 931 4,096
------------- ------------- -------------
NET ASSETS $ 2,524,499 $ 781,182 $ 4,084,578
============= ============= =============
NET ASSETS CONSIST OF (NOTE 4):
Paid-in capital (no par value) $ 2,744,453 $ 829,014 $ 4,216,120
Undistributed net investment income (loss) 1,131 69 6,635
Accumulated net realized gain (loss) on investments (70,877) (50,209) (73,415)
Net unrealized appreciation (depreciation) on investments (150,208) 2,308 (64,762)
------------- ------------- -------------
TOTAL NET ASSETS $ 2,524,499 $ 781,182 $ 4,084,578
============= ============= =============
SHARES OF BENEFICIAL INTEREST
Institutional Class:
Net Assets $ 1,123,825 $ 740,764 $ 3,635,442
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) 99,061 54,397 262,867
------------- ------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 11.34 $ 13.62 $ 13.83
============= ============= =============
Investor Class:
Net Assets $ 1,400,674 N/A $ 435,280
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) 123,501 N/A 31,494
------------- ------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 11.34 N/A $ 13.82
============= ============= =============
C Class:
Net Assets N/A $ 40,418 $ 13,856
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) N/A 2,974 1,004
------------- ------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE N/A $ 13.59 $ 13.80
============= ============= =============
MAXIMUM OFFERING PRICE PER SHARE (NAV / 99%) N/A $ 13.73 $ 13.94
============= ============= =============
<CAPTION>
INTERNATIONAL INTERNATIONAL
SMALL CAP EQUITY
EQUITY FUND FUND
------------- -------------
<S> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost $ 7,717,939 $ 9,810,954
Net unrealized appreciation (depreciation) 6,927,857 3,121,138
------------- -------------
Total investments at value 14,645,796 12,932,092
Cash (Note 2) 2,883,297 1,072,474
Deposit with broker for securities sold short (Note 2) -- --
Foreign currencies, at value (1) (Note 2) 48,677 117,277
Receivables:
Investments sold 297,817 172,607
Fund shares sold 8,953
Dividends and interest 5,023 21,038
Organization costs (Note 2) -- --
Prepaid expenses and other assets 6,720 5,328
------------- -------------
Total Assets 18,044,330 14,329,769
------------- -------------
LIABILITIES:
Payables:
Investments purchased 97,856 408,987
Fund shares redeemed -- --
Securities sold short, at value (Proceeds $3,906,158) (Note 2) -- --
Investment advisory fees - net (Note 3) 13,361 9,675
Service and distribution fees (Note 3) -- --
Administration fees (Note 3) 2,905 2,546
Accrued expenses and other payables (Note 5) 13,092 10,629
------------- -------------
Total Liabilities 127,214 431,837
------------- -------------
NET ASSETS $ 17,917,116 $ 13,897,932
============= =============
NET ASSETS CONSIST OF (NOTE 4):
Paid-in capital (no par value) $ 10,225,741 $ 10,854,781
Undistributed net investment income (loss) (71,781) (89,993)
Accumulated net realized gain (loss) on investments 840,188 14,091
Net unrealized appreciation (depreciation) on investments 6,922,968 3,119,053
------------- -------------
TOTAL NET ASSETS $ 17,917,116 $ 13,897,932
============= =============
SHARES OF BENEFICIAL INTEREST
Institutional Class:
Net Assets $ 17,917,116 $ 13,807,845
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) 619,088 697,944
------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 28.94 $ 19.78
============= =============
Investor Class:
Net Assets N/A N/A
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) N/A N/A
------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE N/A N/A
============= =============
C Class:
Net Assets N/A $ 90,087
Shares of beneficial interest outstanding (unlimited shares
authorized, no par value) N/A $ 4,572
------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE N/A $ 19.71
============= =============
MAXIMUM OFFERING PRICE PER SHARE (NAV / 99%) N/A $ 19.91
============= =============
</TABLE>
See Notes to Financial Statements.
<PAGE> 35
UNDISCOVERED MANAGERS FUNDS
STATEMENTS OF OPERATIONS o FOR THE PERIODS ENDED FEBRUARY 29, 2000 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BEHAVIORAL BEHAVIORAL BEHAVIORAL REIT
GROWTH FUND(1)(7)(8) VALUE FUND(2) LONG/SHORT FUND(2) FUND(3)(4)(9)
-------------------- ------------- ------------------ -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (Note 2) ......................................... $ 108,198 $ 21,592 $ 13,698 $ 870,174
Foreign taxes withheld on dividend income (Note 2) ......... -- -- -- --
Interest (Note 2) .......................................... 171,904 9,758 119,837 10,839
------------ ------------ ------------ ------------
Total investment income .................................. 280,102 31,350 133,535 881,013
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fees (Note 3) .......................... 700,694 30,329 44,473 126,857
Administration fees (Note 3) ............................... 184,393 7,221 7,173 30,204
Custodian fees (Note 3) .................................... 23,783 10,092 3,526 7,745
Professional fees .......................................... 32,656 10,661 9,144 9,963
Transfer agent fees ........................................ 77,351 13,566 13,823 43,406
Trustees' fees (Note 5) .................................... 12,203 474 372 1,605
Amortization of organization costs (Note 2) ................ 3,181 -- -- 3,181
Offering costs ............................................. 35,640 11,655 10,000 13,920
Service and distribution fees - Investor Class (Note 3) .... 11,354 -- -- 928
Service and distribution fees - C Class (Note 3) ........... 2,349 -- -- 621
Other fees ................................................. 3,874 527 1,796 4,163
Dividends on securities sold short (Note 2) ................ -- -- 7,659 --
------------ ------------ ------------ ------------
Total expenses before waiver/reimbursement ............... 1,087,478 84,525 97,966 242,593
Less: Waiver/reimbursement (Note 3) ...................... (116,246) (44,120) (32,940) (71,970)
------------ ------------ ------------ ------------
Total expenses net of waiver/reimbursement ............... 971,232 40,405 65,026 170,623
------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) .................................. (691,130) (9,055) 68,509 710,390
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain (loss) on:
Investments sold ......................................... 19,673,649 70,596 1,476,755 (859,479)
Securities sold short .................................... -- -- (1,755,831) --
Foreign currency related transactions .................... -- -- -- --
Net change in unrealized appreciation (depreciation) on:
Investments .............................................. 55,649,863 905,609 316,157 (709,979)
Securities sold short .................................... -- -- 35,794 --
Foreign currency related transactions .................... -- -- -- --
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS ................................................... 75,323,512 976,205 72,875 (1,569,458)
------------ ------------ ------------ ------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $ 74,632,382 $ 967,150 $ 141,384 $ (859,068)
============ ============ ============ ============
<CAPTION>
SPECIAL SMALL SMALL CAP HIDDEN
CAP FUND(5) Value Fund(5)(7)(8) Value Fund(1)(7)
------------ ------------------- ----------------
<S> <C> <C> <C>
INVESTMENT INCOME $ 107,818 $ 129,895 $ 26,689
Dividends (Note 2) ......................................... -- -- --
Foreign taxes withheld on dividend income (Note 2) ......... 16,799 50,884 1,333
Interest (Note 2) .......................................... ----------- ----------- -----------
124,617 180,779 28,022
Total investment income .................................. ----------- ----------- -----------
EXPENSES: 94,566 127,866 14,178
Investment advisory fees (Note 3) .......................... 22,323 30,444 3,731
Administration fees (Note 3) ............................... 5,130 4,685 3,325
Custodian fees (Note 3) .................................... 11,580 11,473 9,315
Professional fees .......................................... 17,412 43,619 25,053
Transfer agent fees ........................................ 1,172 1,489 184
Trustees' fees (Note 5) .................................... 3,181 3,181 3,181
Amortization of organization costs (Note 2) ................ 10,472 13,600 12,501
Offering costs ............................................. -- 1,807 2,732
Service and distribution fees - Investor Class (Note 3) .... -- 641 --
Service and distribution fees - C Class (Note 3) ........... 7,673 4,196 249
Other fees ................................................. -- -- --
Dividends on securities sold short (Note 2) ................ ----------- ----------- -----------
173,509 243,001 74,449
Total expenses before waiver/reimbursement ............... (66,391) (70,177) (52,322)
Less: Waiver/reimbursement (Note 3) ...................... ----------- ----------- -----------
107,118 172,824 22,127
Total expenses net of waiver/reimbursement ............... ----------- ----------- -----------
17,499 7,955 5,895
NET INVESTMENT INCOME (LOSS) .................................. ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain (loss) on: 670,742 1,005,049 (30,735)
Investments sold ......................................... -- -- --
Securities sold short .................................... -- -- --
Foreign currency related transactions ....................
Net change in unrealized appreciation (depreciation) on: (532,760) (1,053,649) (79,108)
Investments .............................................. ----------- ----------- -----------
Securities sold short .................................... -- -- --
Foreign currency related transactions .................... ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS ................................................... 137,982 (48,600) (109,843)
----------- ----------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $ 155,481 $ (40,645) $ (103,948)
=========== =========== ===========
<CAPTION>
ALL CAP CORE
VALUE FUND(1)(10)* EQUITY FUND(1)(7)(11)
------------------ ---------------------
<S> <C> <C>
INVESTMENT INCOME $ 6,909 $ 39,441
Dividends (Note 2) ......................................... -- --
Foreign taxes withheld on dividend income (Note 2) ......... 1,721 7,239
Interest (Note 2) .......................................... ----------- -----------
8,630 46,680
Total investment income .................................. ----------- -----------
EXPENSES: 3,484 17,446
Investment advisory fees (Note 3) .......................... 1,177 5,894
Administration fees (Note 3) ............................... 3,635 3,515
Custodian fees (Note 3) .................................... 10,211 9,154
Professional fees .......................................... 34,325 37,493
Transfer agent fees ........................................ 60 248
Trustees' fees (Note 5) .................................... 3,181 3,181
Amortization of organization costs (Note 2) ................ 10,001 12,501
Offering costs ............................................. -- 1,014
Service and distribution fees - Investor Class (Note 3) .... 208 42
Service and distribution fees - C Class (Note 3) ........... 134 1,054
Other fees ................................................. -- --
Dividends on securities sold short (Note 2) ................ ----------- -----------
66,416 91,542
Total expenses before waiver/reimbursement ............... (61,549) (67,147)
Less: Waiver/reimbursement (Note 3) ...................... ----------- -----------
4,867 24,395
Total expenses net of waiver/reimbursement ............... ----------- -----------
3,763 22,285
NET INVESTMENT INCOME (LOSS) .................................. ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain (loss) on: (35,994) (41,059)
Investments sold ......................................... -- --
Securities sold short .................................... -- --
Foreign currency related transactions ....................
Net change in unrealized appreciation (depreciation) on: (57,127) (385,780)
Investments .............................................. ----------- -----------
Securities sold short .................................... -- --
Foreign currency related transactions .................... ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS ................................................... (93,121) (426,839)
----------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $ (89,358) $ (404,554)
=========== ===========
<CAPTION>
INTERNATIONAL SMALL INTERNATIONAL
CAP EQUITY FUND(6) EQUITY FUND(6)(12)
------------------- ------------------
<S> <C> <C>
INVESTMENT INCOME $ 5,941 $ 20,978
Dividends (Note 2) ......................................... (779) (2,204)
Foreign taxes withheld on dividend income (Note 2) ......... 8,191 9,367
Interest (Note 2) .......................................... ----------- -----------
13,353 28,141
Total investment income .................................. ----------- -----------
EXPENSES: 53,642 39,080
Investment advisory fees (Note 3) .......................... 11,661 10,284
Administration fees (Note 3) ............................... 6,932 8,247
Custodian fees (Note 3) .................................... 11,587 10,708
Professional fees .......................................... 14,584 24,189
Transfer agent fees ........................................ 671 576
Trustees' fees (Note 5) .................................... -- --
Amortization of organization costs (Note 2) ................ 11,139 11,535
Offering costs ............................................. -- --
Service and distribution fees - Investor Class (Note 3) .... -- 142
Service and distribution fees - C Class (Note 3) ........... 1,666 1,436
Other fees ................................................. -- --
Dividends on securities sold short (Note 2) ................ ----------- -----------
111,882 106,197
Total expenses before waiver/reimbursement ............... (37,322) (46,462)
Less: Waiver/reimbursement (Note 3) ...................... ----------- -----------
74,560 59,735
Total expenses net of waiver/reimbursement ............... ----------- -----------
(61,207) (31,594)
NET INVESTMENT INCOME (LOSS) .................................. ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain (loss) on: 936,716 50,727
Investments sold ......................................... -- --
Securities sold short .................................... (6,163) (21,936)
Foreign currency related transactions ....................
Net change in unrealized appreciation (depreciation) on: 6,062,866 2,623,017
Investments .............................................. ----------- -----------
Securities sold short .................................... (4,946) (2,179)
Foreign currency related transactions .................... ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS ................................................... 6,988,473 2,649,629
----------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $ 6,927,266 $ 2,618,035
=========== ===========
</TABLE>
(1) The Fund's Institutional Class commenced investment operations on December
31, 1997.
(2) The Fund commenced investment operations on December 28, 1998.
(3) The Fund's Investor Class commenced investment operations on March 24,
1999.
(4) The Fund's Institutional Class commenced investment operations on January
1, 1998.
(5) The Fund's Institutional Class commenced investment operations on December
30, 1997.
(6) The Fund's Institutional Class commenced investment operations on December
30, 1998.
(7) The Fund's Investor Class commenced investment operations on July 31, 1998.
(8) The Fund's C Class commenced investment operations on June 21, 1999.
(9) The Fund's C Class commenced investment operations on August 3, 1999.
(10) The Fund's C Class commenced investment operations on May 27, 1999.
(11) The Fund's C Class commenced investment operations on August 31, 1999.
(12) The Fund's C Class commenced investment operations on September 28, 1999
* On December 22, 1999, the All Cap Value Fund ceased offering Investor Class
shares.
See Notes to Financial Statements.
22
<PAGE> 36
UNDISCOVERED MANAGERS FUNDS
UNDISCOVERED BEHAVIORAL LONG/SHORT FUND
STATEMENT OF CASH FLOWS o FOR THE PERIOD ENDED FEBRUARY 29, 2000
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
NET INCREASE IN CASH:
Cash flows from operating activities:
Interest and dividends received ........................................ $ 137,898
Operating expenses paid ................................................ (93,832)
Purchases of long-term securities ...................................... (3,313,990)
Net purchases of short term securities ................................. (272,527)
Proceeds from sales of long-term securities ............................ 5,957,676
-----------
Net cash used in operating activities ....................................... $ 2,415,225
Cash flows from financing activities:
Dividends on securities sold short ..................................... (3,446)
Net shareholder subscriptions and redemptions .......................... (678,596)
Cash dividends paid .................................................... (4,258)
Proceeds from securities sold short .................................... 3,253,698
Purchases of securities sold short ..................................... (6,656,904)
Deposit with broker for securities sold short .......................... 1,674,281
Net cash provided by financing activities ................................... (2,415,225)
-----------
Net increase in cash ........................................................ 0
Cash - beginning of period .................................................. 0
-----------
Cash - end of period ........................................................ $ 0
===========
RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET
CASH PROVIDED BY OPERATING AND INVESTING
ACTIVITIES:
Net increase in net assets resulting from operations ........................ $ 141,384
Increase in investments, net ........................................... 2,293,836
Increase in dividends and interest receivable .......................... 8,577
Decrease in prepaid expenses and other assets .......................... (6,069)
Decrease in investment advisory fee payable ............................ (1,118)
Decrease in administration fee payable ................................. (181)
Decrease in accrued expenses and other payables ........................ (21,204)
-----------
Total adjustments ...................................................... 2,273,841
-----------
Net cash used in operating activities ....................................... $ 2,415,225
===========
</TABLE>
See Notes to Financial Statements.
23
<PAGE> 37
UNDISCOVERED MANAGERS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BEHAVIORAL
GROWTH FUND (1)(7)(8)
-----------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
NET ASSETS at beginning of period ........................................... $ 98,849,739 $ 5,294,388
Increase (decrease) in net assets resulting from operations:
Net investment income (loss) ............................................. (691,130) (291,498)
Net realized gain (loss) on investments .................................. 19,673,649 (2,841,027)
Net change in unrealized appreciation (depreciation) on investments ...... 55,649,863 24,604,678
----------------- -----------------
Net increase (decrease) in net assets resulting from operations .......... 74,632,382 21,472,153
----------------- -----------------
Distributions to shareholders (Note 4):
Institutional Class Shares:
Net investment income ................................................. -- --
Net realized gains .................................................... -- --
Investor Class Shares:
Net investment income ................................................. -- --
Net realized gains .................................................... -- --
C Class Shares:
Net investment income ................................................. -- --
Net realized gains .................................................... -- --
----------------- -----------------
Total distributions to shareholders ...................................... -- --
----------------- -----------------
Capital share transactions:
Institutional Class Shares:
Proceeds from Shares issued ............................................ 103,788,248 74,149,825
Issued to shareholders in reinvestment of distributions ................ -- --
Cost of Shares redeemed ................................................ (28,772,057) (6,080,995)
----------------- -----------------
Increase in net assets derived from Institutional Class
Share transactions ................................................... 75,016,191 68,068,830
----------------- -----------------
Investor Class Shares:
Proceeds from Shares issued ............................................ 2,930,656 4,233,947
Issued to shareholders in reinvestment of distributions ................ -- --
Cost of Shares redeemed ................................................ (331,183) (397,454)
----------------- -----------------
Increase in net assets derived from Investor Class
Share transactions ................................................... 2,599,473 3,836,493
----------------- -----------------
C Class Shares:
Proceeds from Shares issued ............................................ 589,018 177,875
Issued to shareholders in reinvestment of distributions ................ -- --
Cost of Shares redeemed ................................................ (33,329) --
----------------- -----------------
Increase in net assets derived from C Class Share transactions ......... 555,689 177,875
----------------- -----------------
Increase in net assets derived from capital share transactions .............. 78,171,353 72,083,198
----------------- -----------------
Total increase in net assets ................................................ 152,803,735 93,555,351
----------------- -----------------
NET ASSETS at end of period ................................................. $ 251,653,474 $ 98,849,739
================= =================
Undistributed net investment income (loss) .................................. $ (691,130) $ --
----------------- -----------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Institutional Class Shares:
Sold ................................................................... 3,753,839 4,306,126
Issued to shareholders in reinvestment of distributions ................ -- --
Redeemed ............................................................... (1,074,196) (348,452)
----------------- -----------------
Total Institutional Class transactions ............................... 2,679,643 3,957,674
----------------- -----------------
Investor Class Shares:
Sold ................................................................... 109,808 233,173
Issued to shareholders in reinvestment of distributions ................ -- --
Redeemed ............................................................... (14,177) (21,222)
----------------- -----------------
Total Investor Class transactions .................................... 95,631 211,951
----------------- -----------------
C Class Shares:
Sold ................................................................... 22,243 8,687
Issued to shareholders in reinvestment of distributions ................ -- --
Redeemed ............................................................... (1,220) --
----------------- -----------------
Total C Class transactions ........................................... 21,023 8,687
----------------- -----------------
Net increase in capital shares .............................................. 2,796,297 4,178,312
================= =================
<CAPTION>
BEHAVIORAL
VALUE FUND (2)
----------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
NET ASSETS at beginning of period ........................................ $ 3,651,462 $ --
Increase (decrease) in net assets resulting from operations:
Net investment income (loss) .......................................... (9,055) (3,435)
Net realized gain (loss) on investments ............................... 70,596 79,254
Net change in unrealized appreciation (depreciation) on investments ... 905,609 (48,317)
----------------- -----------------
Net increase (decrease) in net assets resulting from operations ....... 967,150 27,502
----------------- -----------------
Distributions to shareholders (Note 4):
Institutional Class Shares:
Net investment income .............................................. (17,601) --
Net realized gains ................................................. (193,513) --
Investor Class Shares:
Net investment income .............................................. N/A N/A
Net realized gains ................................................. N/A N/A
C Class Shares:
Net investment income .............................................. N/A N/A
Net realized gains ................................................. N/A N/A
----------------- -----------------
Total distributions to shareholders ................................... (211,114) --
----------------- -----------------
Capital share transactions:
Institutional Class Shares:
Proceeds from Shares issued ......................................... 6,436,021 3,656,376
Issued to shareholders in reinvestment of distributions ............. 144,132 --
Cost of Shares redeemed ............................................. (310,353) (32,416)
----------------- -----------------
Increase in net assets derived from Institutional Class
Share transactions ................................................ 6,269,800 3,623,960
----------------- -----------------
Investor Class Shares:
Proceeds from Shares issued ......................................... N/A N/A
Issued to shareholders in reinvestment of distributions ............. N/A N/A
Cost of Shares redeemed ............................................. N/A N/A
----------------- -----------------
Increase in net assets derived from Investor Class
Share transactions ................................................ N/A N/A
----------------- -----------------
C Class Shares:
Proceeds from Shares issued ......................................... N/A N/A
Issued to shareholders in reinvestment of distributions ............. N/A N/A
Cost of Shares redeemed ............................................. N/A N/A
----------------- -----------------
Increase in net assets derived from C Class Share transactions ...... N/A N/A
----------------- -----------------
Increase in net assets derived from capital share transactions ...... 6,269,800 3,623,960
----------------- -----------------
Total increase in net assets ............................................. 7,025,836 3,651,462
----------------- -----------------
NET ASSETS at end of period .............................................. $ 10,677,298 $ 3,651,462
================= =================
Undistributed net investment income (loss) ............................... $ (9,629) $ 17,026
----------------- -----------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Institutional Class Shares:
Sold ................................................................ 395,147 243,753
Issued to shareholders in reinvestment of distributions ............. 9,065 --
Redeemed ............................................................ (19,151) (2,097)
----------------- -----------------
Total Institutional Class transactions ............................ 385,061 241,656
----------------- -----------------
Investor Class Shares:
Sold ................................................................ N/A N/A
Issued to shareholders in reinvestment of distributions ............. N/A N/A
Redeemed ............................................................ N/A N/A
----------------- -----------------
Total Investor Class transactions ................................. N/A N/A
----------------- -----------------
C Class Shares:
Sold ................................................................ N/A N/A
Issued to shareholders in reinvestment of distributions ............. N/A N/A
Redeemed ............................................................ N/A N/A
----------------- -----------------
Total C Class transactions ........................................ N/A N/A
----------------- -----------------
Net increase in capital shares ........................................... 385,061 241,656
================= =================
<CAPTION>
BEHAVIORAL
LONG/SHORT FUND (2)
----------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 PERIOD ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
NET ASSETS at beginning of period ......................................... $ 5,942,350 $ --
Increase (decrease) in net assets resulting from operations:
Net investment income (loss) ........................................... 68,509 83,033
Net realized gain (loss) on investments ................................ (279,076) (477,182)
Net change in unrealized appreciation (depreciation) on investments .... 351,951 679,229
----------------- -----------------
Net increase (decrease) in net assets resulting from operations ........ 141,384 285,080
----------------- -----------------
Distributions to shareholders (Note 4):
Institutional Class Shares:
Net investment income ............................................... (169,174) --
Net realized gains .................................................. -- --
Investor Class Shares:
Net investment income ............................................... N/A N/A
Net realized gains .................................................. N/A N/A
C Class Shares:
Net investment income ............................................... N/A N/A
Net realized gains .................................................. N/A N/A
----------------- -----------------
Total distributions to shareholders .................................... (169,174) --
----------------- -----------------
Capital share transactions:
Institutional Class Shares:
Proceeds from Shares issued .......................................... 150,292 5,936,333
Issued to shareholders in reinvestment of distributions .............. 164,915 --
Cost of Shares redeemed .............................................. (828,888) (279,063)
----------------- -----------------
Increase in net assets derived from Institutional Class
Share transactions ................................................. (513,681) 5,657,270
----------------- -----------------
Investor Class Shares:
Proceeds from Shares issued .......................................... N/A N/A
Issued to shareholders in reinvestment of distributions .............. N/A N/A
Cost of Shares redeemed .............................................. N/A N/A
----------------- -----------------
Increase in net assets derived from Investor Class
Share transactions ................................................. N/A N/A
----------------- -----------------
C Class Shares:
Proceeds from Shares issued .......................................... N/A N/A
Issued to shareholders in reinvestment of distributions .............. N/A N/A
Cost of Shares redeemed .............................................. N/A N/A
----------------- -----------------
Increase in net assets derived from C Class Share transactions ....... N/A N/A
----------------- -----------------
Increase in net assets derived from capital share transactions ....... (513,681) 5,657,270
----------------- -----------------
Total increase in net assets .............................................. (541,471) 5,942,350
----------------- -----------------
NET ASSETS at end of period ............................................... $ 5,400,879 $ 5,942,350
================= =================
Undistributed net investment income (loss) ................................ $ 2,830 $ 103,494
----------------- -----------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Institutional Class Shares:
Sold ................................................................. 11,754 492,681
Issued to shareholders in reinvestment of distributions .............. 13,663 --
Redeemed ............................................................. (66,405) (24,714)
----------------- -----------------
Total Institutional Class transactions ............................. (40,988) 467,967
----------------- -----------------
Investor Class Shares:
Sold ................................................................. N/A N/A
Issued to shareholders in reinvestment of distributions .............. N/A N/A
Redeemed ............................................................. N/A N/A
----------------- -----------------
Total Investor Class transactions .................................. N/A N/A
----------------- -----------------
C Class Shares:
Sold ................................................................. N/A N/A
Issued to shareholders in reinvestment of distributions .............. N/A N/A
Redeemed ............................................................. N/A N/A
----------------- -----------------
Total C Class transactions ......................................... N/A N/A
----------------- -----------------
Net increase in capital shares ............................................ (40,988) 467,967
================= =================
<CAPTION>
REIT FUND (3)(4)(9)
----------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
NET ASSETS at beginning of period ........................................... $ 22,884,294 $ 9,122,042
Increase (decrease) in net assets resulting from operations:
Net investment income (loss) ............................................. 710,390 841,893
Net realized gain (loss) on investments .................................. (859,479) (1,172,811)
Net change in unrealized appreciation (depreciation) on investments ...... (709,979) 1,508,354
----------------- -----------------
Net increase (decrease) in net assets resulting from operations .......... (859,068) 1,177,436
----------------- -----------------
Distributions to shareholders (Note 4):
Institutional Class Shares:
Net investment income ................................................. (1,058,795) (363,218)
Net realized gains .................................................... -- --
Investor Class Shares:
Net investment income ................................................. (24,421) --
Net realized gains .................................................... -- --
C Class Shares:
Net investment income ................................................. (6,162) --
Net realized gains .................................................... -- --
----------------- -----------------
Total distributions to shareholders ...................................... (1,089,378) (363,218)
----------------- -----------------
Capital share transactions:
Institutional Class Shares:
Proceeds from Shares issued ............................................ 9,351,484 15,763,544
Issued to shareholders in reinvestment of distributions ................ 1,052,208 362,073
Cost of Shares redeemed ................................................ (5,134,989) (3,695,055)
----------------- -----------------
Increase in net assets derived from Institutional Class
Share transactions ................................................... 5,268,703 12,430,562
----------------- -----------------
Investor Class Shares:
Proceeds from Shares issued ............................................ 83,443 498,714
Issued to shareholders in reinvestment of distributions ................ 24,421 --
Cost of Shares redeemed ................................................ (115,371) (1,253)
----------------- -----------------
Increase in net assets derived from Investor Class
Share transactions ................................................... (7,507) 497,461
----------------- -----------------
C Class Shares:
Proceeds from Shares issued ............................................ 145,128 20,011
Issued to shareholders in reinvestment of distributions ................ 1,819 --
Cost of Shares redeemed ................................................ -- --
----------------- -----------------
Increase in net assets derived from C Class Share transactions ......... 146,947 20,011
----------------- -----------------
Increase in net assets derived from capital share transactions ......... 5,408,143 12,948,034
----------------- -----------------
Total increase in net assets ................................................ 3,459,697 13,762,252
----------------- -----------------
NET ASSETS at end of period ................................................. $ 26,343,991 $ 22,884,294
================= =================
Undistributed net investment income (loss) .................................. $ 168,028 $ 547,016
----------------- -----------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Institutional Class Shares:
Sold ................................................................... 895,759 1,440,463
Issued to shareholders in reinvestment of distributions ................ 113,390 29,824
Redeemed ............................................................... (499,993) (330,562)
----------------- -----------------
Total Institutional Class transactions ............................... 509,156 1,139,725
----------------- -----------------
Investor Class Shares:
Sold ................................................................... 7,847 45,642
Issued to shareholders in reinvestment of distributions ................ 2,549 --
Redeemed ............................................................... (11,158) (112)
----------------- -----------------
Total Investor Class transactions .................................... (762) 45,530
----------------- -----------------
C Class Shares:
Sold ................................................................... 13,450 1,788
Issued to shareholders in reinvestment of distributions ................ 190 --
Redeemed ............................................................... -- --
----------------- -----------------
Total C Class transactions ........................................... 13,640 1,788
----------------- -----------------
Net increase in capital shares .............................................. 522,034 1,187,043
================= =================
<CAPTION>
SPECIAL SMALL
CAP FUND (5)
--------------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
NET ASSETS at beginning of period ........................................... $ 16,077,580 $ 11,286,389
Increase (decrease) in net assets resulting from operations:
Net investment income (loss) ............................................. 17,499 (82,457)
Net realized gain (loss) on investments .................................. 670,742 (196,115)
Net change in unrealized appreciation (depreciation) on investments ...... (532,760) 3,226,443
----------------- -----------------
Net increase (decrease) in net assets resulting from operations .......... 155,481 2,947,871
----------------- -----------------
Distributions to shareholders (Note 4):
Institutional Class Shares:
Net investment income ................................................. -- --
Net realized gains .................................................... -- --
Investor Class Shares:
Net investment income ................................................. N/A N/A
Net realized gains .................................................... N/A N/A
C Class Shares:
Net investment income ................................................. N/A N/A
Net realized gains .................................................... N/A N/A
----------------- -----------------
Total distributions to shareholders ...................................... -- --
----------------- -----------------
Capital share transactions:
Institutional Class Shares:
Proceeds from Shares issued ............................................ 7,628,072 12,234,293
Issued to shareholders in reinvestment of distributions ................ -- --
Cost of Shares redeemed ................................................ (5,870,707) (10,390,973)
----------------- -----------------
Increase in net assets derived from Institutional Class
Share transactions ................................................... 1,757,365 1,843,320
----------------- -----------------
Investor Class Shares:
Proceeds from Shares issued ............................................ N/A N/A
Issued to shareholders in reinvestment of distributions ................ N/A N/A
Cost of Shares redeemed ................................................ N/A N/A
----------------- -----------------
Increase in net assets derived from Investor Class
Share transactions ................................................... N/A N/A
----------------- -----------------
C Class Shares:
Proceeds from Shares issued ............................................ N/A N/A
Issued to shareholders in reinvestment of distributions ................ N/A N/A
Cost of Shares redeemed ................................................ N/A N/A
----------------- -----------------
Increase in net assets derived from C Class Share transactions ......... N/A N/A
----------------- -----------------
Increase in net assets derived from capital share transactions ......... 1,757,365 1,843,320
----------------- -----------------
Total increase in net assets ................................................ 1,912,846 4,791,191
----------------- -----------------
NET ASSETS at end of period ................................................. $ 17,990,426 $ 16,077,580
================= =================
Undistributed net investment income (loss) .................................. $ 17,499 $ --
----------------- -----------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Institutional Class Shares:
Sold ................................................................... 597,439 1,068,414
Issued to shareholders in reinvestment of distributions ................ -- --
Redeemed ............................................................... (456,247) (900,945)
----------------- -----------------
Total Institutional Class transactions ............................... 141,192 167,469
----------------- -----------------
Investor Class Shares:
Sold ................................................................... N/A N/A
Issued to shareholders in reinvestment of distributions ................ N/A N/A
Redeemed ............................................................... N/A N/A
----------------- -----------------
Total Investor Class transactions .................................... N/A N/A
----------------- -----------------
C Class Shares:
Sold ................................................................... N/A N/A
Issued to shareholders in reinvestment of distributions ................ N/A N/A
Redeemed ............................................................... N/A N/A
----------------- -----------------
Total C Class transactions ........................................... N/A N/A
----------------- -----------------
Net increase in capital shares .............................................. 141,192 167,469
================= =================
<CAPTION>
SMALL CAP
VALUE FUND (5)(7)(8)
----------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
NET ASSETS at beginning of period ...........................................$ 21,111,171 $ 13,879,749
Increase (decrease) in net assets resulting from operations:
Net investment income (loss) ............................................. 7,955 (21,511)
Net realized gain (loss) on investments .................................. 1,005,049 47,095
Net change in unrealized appreciation (depreciation) on investments ...... (1,053,649) 3,182,571
----------------- -----------------
Net increase (decrease) in net assets resulting from operations .......... (40,645) 3,208,155
----------------- -----------------
Distributions to shareholders (Note 4):
Institutional Class Shares:
Net investment income ................................................. -- (23,442)
Net realized gains .................................................... (316,055) (71,791)
Investor Class Shares:
Net investment income ................................................. -- (30)
Net realized gains .................................................... (13,704) (182)
C Class Shares:
Net investment income ................................................. -- --
Net realized gains .................................................... (1,741) --
----------------- -----------------
Total distributions to shareholders ...................................... (331,500) (95,445)
----------------- -----------------
Capital share transactions:
Institutional Class Shares:
Proceeds from Shares issued ............................................ 11,888,341 14,233,391
Issued to shareholders in reinvestment of distributions ................ 309,357 93,248
Cost of Shares redeemed ................................................ (8,686,549) (11,202,241)
----------------- -----------------
Increase in net assets derived from Institutional Class
Share transactions ................................................... 3,511,149 3,124,398
----------------- -----------------
Investor Class Shares:
Proceeds from Shares issued ............................................ 759,954 1,731,869
Issued to shareholders in reinvestment of distributions ................ 13,704 211
Cost of Shares redeemed ................................................ (165,964) (858,334)
----------------- -----------------
Increase in net assets derived from Investor Class
Share transactions ................................................... 607,694 873,746
----------------- -----------------
C Class Shares:
Proceeds from Shares issued ............................................ 43,196 120,568
Issued to shareholders in reinvestment of distributions ................ 1,317 --
Cost of Shares redeemed ................................................ -- --
----------------- -----------------
Increase in net assets derived from C Class Share transactions ......... 44,513 120,568
----------------- -----------------
Increase in net assets derived from capital share transactions ......... 4,163,356 4,118,712
----------------- -----------------
Total increase in net assets ................................................ 3,791,211 7,231,422
----------------- -----------------
NET ASSETS at end of period .................................................$ 24,902,382 $ 21,111,171
================= =================
Undistributed net investment income (loss) ..................................$ 7,540 $ (415)
----------------- -----------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Institutional Class Shares:
Sold ................................................................... 890,571 1,109,410
Issued to shareholders in reinvestment of distributions ................ 23,742 5,981
Redeemed ............................................................... (650,253) (906,129)
----------------- -----------------
Total Institutional Class transactions ............................... 264,060 209,262
----------------- -----------------
Investor Class Shares:
Sold ................................................................... 57,634 131,580
Issued to shareholders in reinvestment of distributions ................ 1,055 18
Redeemed ............................................................... (12,394) (63,698)
----------------- -----------------
Total Investor Class transactions .................................... 46,295 67,900
----------------- -----------------
C Class Shares:
Sold ................................................................... 3,267 8,652
Issued to shareholders in reinvestment of distributions ................ 101 --
Redeemed ............................................................... -- --
----------------- -----------------
Total C Class transactions ........................................... 3,368 8,652
----------------- -----------------
Net increase in capital shares .............................................. 313,723 285,814
================= =================
</TABLE>
- ---------------------------
(1) The Fund's Institutional Class commenced investment operations on December
31, 1997.
(2) The Fund commenced investment operations on December 28, 1998.
(3) The Fund's Investor Class commenced investment operations on March 24,
1999.
(4) The Fund's Institutional Class commenced investment operations on January
1, 1998.
(5) The Fund's Institutional Class commenced investment operations on December
30, 1997.
(6) The Fund's Institutional Class commenced investment operations on December
30, 1998.
(7) The Fund's Investor Class commenced investment operations on July 31, 1998.
(8) The Fund's C Class commenced investment operations on June 21, 1999.
(9) The Fund's C Class commenced investment operations on August 3, 1999.
(10) The Fund's C Class commenced investment operations on May 27, 1999.
(11) The Fund's C Class commenced investment operations on August 31, 1999.
(12) The Fund's C Class commenced investment operations on September 28, 1999.
See Notes to Financial Statements.
24
<PAGE> 38
UNDISCOVERED MANAGERS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIDDEN VALUE FUND (1)(7)
-------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
--------------- ---------------
<S> <C> <C>
NET ASSETS at beginning of period ......................................... $ 3,294,923 $ 964,979
Increase (decrease) in net assets resulting from operations:
Net investment income (loss) ........................................... 5,895 7,651
Net realized gain (loss) on investments ................................ (30,735) 104,786
Net change in unrealized appreciation (depreciation) on investments .... (79,108) 309,551
--------------- ---------------
Net increase (decrease) in net assets resulting from operations ........ (103,948) 421,988
--------------- ---------------
Distributions to shareholders (Note 4):
Institutional Class Shares:
Net investment income ................................................ (8,111) (8,960)
Net realized gains ................................................... (63,114) (13,732)
Investor Class Shares:
Net investment income ................................................ (5,550) (318)
Net realized gains ................................................... (73,839) (488)
C Class Shares:
Net investment income ................................................ N/A N/A
Net realized gains ................................................... N/A N/A
--------------- ---------------
Total distributions to shareholders .................................... (150,614) (23,498)
--------------- ---------------
Capital share transactions:
Institutional Class Shares:
Proceeds from Shares issued .......................................... 105,435 1,862,645
Issued to shareholders in reinvestment of distributions .............. 70,718 22,692
Cost of Shares redeemed .............................................. (563,531) (1,586,895)
--------------- ---------------
Increase in net assets derived from Institutional Class
Share transactions ................................................. (387,378) 298,442
--------------- ---------------
Investor Class Shares:
Proceeds from Shares issued .......................................... 209,948 3,396,388
Issued to shareholders in reinvestment of distributions .............. 79,389 806
Cost of Shares redeemed .............................................. (417,821) (1,764,182)
--------------- ---------------
Increase in net assets derived from Investor Class
Share transactions ................................................. (128,484) 1,633,012
--------------- ---------------
C Class Shares:
Proceeds from Shares issued .......................................... N/A N/A
Issued to shareholders in reinvestment of distributions .............. N/A N/A
Cost of Shares redeemed .............................................. N/A N/A
--------------- ---------------
Increase in net assets derived from C Class Share transactions ....... N/A N/A
--------------- ---------------
Increase in net assets derived from capital share transactions ............ (515,862) 1,931,454
--------------- ---------------
Total increase in net assets .............................................. (770,424) 2,329,944
--------------- ---------------
NET ASSETS at end of period ............................................... $ 2,524,499 $ 3,294,923
=============== ===============
Undistributed net investment income (loss) ................................ $ 1,131 $ 8,896
--------------- ---------------
OTHER INFORMATION:
Share transactions:
Institutional Class Shares:
Sold ................................................................. 8,784 162,951
Issued to shareholders in reinvestment of distributions .............. 6,133 2,035
Redeemed ............................................................. (46,315) (129,289)
--------------- ---------------
Total Institutional Class transactions ........................... (31,398) 35,697
--------------- ---------------
Investor Class Shares:
Sold ................................................................. 17,730 269,258
Issued to shareholders in reinvestment of distributions .............. 6,886 72
Redeemed ............................................................. (34,972) (139,609)
--------------- ---------------
Total Investor Class transactions ................................ (10,356) 129,721
--------------- ---------------
C Class Shares:
Sold ................................................................. N/A N/A
Issued to shareholders in reinvestment of distributions .............. N/A N/A
Redeemed ............................................................. N/A N/A
--------------- ---------------
Total C Class transactions ....................................... N/A N/A
--------------- ---------------
Net increase in capital shares ............................................ (41,754) 165,418
=============== ===============
<CAPTION>
ALL CAP VALUE FUND (1)(10)*
-------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
--------------- ---------------
<S> <C> <C>
NET ASSETS at beginning of period ......................................... $ 1,039,432 $ 329,619
Increase (decrease) in net assets resulting from operations:
Net investment income (loss) ........................................... 3,763 3,377
Net realized gain (loss) on investments ................................ (35,994) (3,137)
Net change in unrealized appreciation (depreciation) on investments .... (57,127) 119,489
--------------- ---------------
Net increase (decrease) in net assets resulting from operations ........ (89,358) 119,729
--------------- ---------------
Distributions to shareholders (Note 4):
Institutional Class Shares:
Net investment income ................................................ (8,824) (5,967)
Net realized gains ................................................... -- --
Investor Class Shares:
Net investment income ................................................ (595) (839)
Net realized gains ................................................... -- --
C Class Shares:
Net investment income ................................................ (172) --
Net realized gains ................................................... -- --
--------------- ---------------
Total distributions to shareholders .................................... (9,591) (6,806)
--------------- ---------------
Capital share transactions:
Institutional Class Shares:
Proceeds from Shares issued .......................................... 124,769 716,676
Issued to shareholders in reinvestment of distributions .............. 8,746 5,967
Cost of Shares redeemed .............................................. (250,640) (160,519)
--------------- ---------------
Increase in net assets derived from Institutional Class
Share transactions ................................................. (117,125) 562,124
--------------- ---------------
Investor Class Shares:
Proceeds from Shares issued .......................................... (17) --
Issued to shareholders in reinvestment of distributions .............. 594 840
Cost of Shares redeemed .............................................. (53,673) --
--------------- ---------------
Increase in net assets derived from Investor Class
Share transactions ................................................. (53,096) 840
--------------- ---------------
C Class Shares:
Proceeds from Shares issued .......................................... 29,748 33,926
Issued to shareholders in reinvestment of distributions .............. 172 --
Cost of Shares redeemed .............................................. (19,000) --
--------------- ---------------
Increase in net assets derived from C Class Share transactions ....... 10,920 33,926
--------------- ---------------
Increase in net assets derived from capital share transactions ............ (159,301) 596,890
--------------- ---------------
Total increase in net assets .............................................. (258,250) 709,813
--------------- ---------------
NET ASSETS at end of period ............................................... $ 781,182 $ 1,039,432
=============== ===============
Undistributed net investment income (loss) ................................ $ 69 $ 5,897
--------------- ---------------
OTHER INFORMATION:
Share transactions:
Institutional Class Shares:
Sold ................................................................. 8,379 47,852
Issued to shareholders in reinvestment of distributions .............. 598 443
Redeemed ............................................................. (17,119) (10,829)
--------------- ---------------
Total Institutional Class transactions ........................... (8,142) 37,466
--------------- ---------------
Investor Class Shares:
Sold ................................................................. -- --
Issued to shareholders in reinvestment of distributions .............. 41 62
Redeemed ............................................................. (3,629) --
--------------- ---------------
Total Investor Class transactions ................................ (3,588) 62
--------------- ---------------
C Class Shares:
Sold ................................................................. 2,067 2,170
Issued to shareholders in reinvestment of distributions .............. 12 --
Redeemed ............................................................. (1,274) --
--------------- ---------------
Total C Class transactions ....................................... 805 2,170
--------------- ---------------
Net increase in capital shares ............................................ (10,925) 39,698
=============== ===============
<CAPTION>
CORE EQUITY FUND (1)(7)(11)
----------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
$ 5,146,986 $ 1,338,493
NET ASSETS at beginning of period ......................................... 22,285 39,086
Increase (decrease) in net assets resulting from operations: (41,059) (29,336)
Net investment income (loss) ........................................... (385,780) 501,435
Net realized gain (loss) on investments ................................ ----------------- -----------------
Net change in unrealized appreciation (depreciation) on investments .... (404,554) 511,185
----------------- -----------------
Net increase (decrease) in net assets resulting from operations ........
Distributions to shareholders (Note 4): (41,681) (20,802)
Institutional Class Shares: -- --
Net investment income ................................................
Net realized gains ................................................... (4,711) (281)
Investor Class Shares: -- --
Net investment income ................................................
Net realized gains ................................................... (34) --
C Class Shares: -- --
Net investment income ................................................ ----------------- -----------------
Net realized gains ................................................... (46,426) (21,083)
----------------- -----------------
Total distributions to shareholders ....................................
Capital share transactions: 129,524 3,793,601
Institutional Class Shares: 41,681 20,801
Proceeds from Shares issued .......................................... (698,887) (1,050,831)
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Cost of Shares redeemed ..............................................
(527,682) 2,763,571
Increase in net assets derived from Institutional Class ----------------- -----------------
Share transactions .................................................
163,344 611,946
Investor Class Shares: 4,712 281
Proceeds from Shares issued .......................................... (262,438) (62,423)
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Cost of Shares redeemed ..............................................
(94,382) 549,804
Increase in net assets derived from Investor Class ----------------- -----------------
Share transactions .................................................
10,602 5,016
C Class Shares: 34 --
Proceeds from Shares issued .......................................... -- --
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Cost of Shares redeemed .............................................. 10,636 5,016
----------------- -----------------
Increase in net assets derived from C Class Share transactions ....... (611,427) 3,318,391
----------------- -----------------
Increase in net assets derived from capital share transactions ............ (1,062,408) 3,808,493
----------------- -----------------
Total increase in net assets .............................................. $ 4,084,578 $ 5,146,986
================= =================
NET ASSETS at end of period ...............................................
$ 6,635 $ 30,776
----------------- -----------------
Undistributed net investment income (loss) ................................
OTHER INFORMATION:
Share transactions: 8,729 261,172
Institutional Class Shares: 2,731 1,431
Sold ................................................................. (46,292) (66,490)
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Redeemed ............................................................. (34,832) 196,113
----------------- -----------------
Total Institutional Class transactions ...........................
10,850 38,348
Investor Class Shares: 309 19
Sold ................................................................. (17,523) (3,899)
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Redeemed ............................................................. (6,364) 34,468
----------------- -----------------
Total Investor Class transactions ................................
C Class Shares: 674 328
Sold ................................................................. 2 --
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Redeemed ............................................................. -- --
----------------- -----------------
Total C Class transactions ....................................... 676 328
================= =================
Net increase in capital shares ............................................ (40,520) 230,909
<CAPTION>
INTERNATIONAL SMALL
CAP EQUITY FUND (6)
-----------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
---------------- -----------------
<S> <C> <C>
$ 6,768,075 $ --
NET ASSETS at beginning of period ......................................... (61,207) (7,385)
Increase (decrease) in net assets resulting from operations: 930,553 (25,685)
Net investment income (loss) ........................................... 6,057,920 865,049
Net realized gain (loss) on investments ................................ ---------------- -----------------
Net change in unrealized appreciation (depreciation) on investments .... 6,927,266 831,979
---------------- -----------------
Net increase (decrease) in net assets resulting from operations ........
Distributions to shareholders (Note 4): -- --
Institutional Class Shares: (91,237) --
Net investment income ................................................
Net realized gains ................................................... N/A N/A
Investor Class Shares: N/A N/A
Net investment income ................................................
Net realized gains ................................................... N/A N/A
C Class Shares: N/A N/A
Net investment income ................................................ ---------------- -----------------
Net realized gains ................................................... (91,237) --
---------------- -----------------
Total distributions to shareholders ....................................
Capital share transactions: 4,246,569 6,095,840
Institutional Class Shares: 91,237 --
Proceeds from Shares issued .......................................... (24,794) (159,744)
Issued to shareholders in reinvestment of distributions .............. ---------------- -----------------
Cost of Shares redeemed ..............................................
4,313,012 5,936,096
Increase in net assets derived from Institutional Class ---------------- -----------------
Share transactions .................................................
N/A N/A
Investor Class Shares: N/A N/A
Proceeds from Shares issued .......................................... N/A N/A
Issued to shareholders in reinvestment of distributions .............. ---------------- -----------------
Cost of Shares redeemed ..............................................
N/A N/A
Increase in net assets derived from Investor Class ---------------- -----------------
Share transactions .................................................
N/A N/A
C Class Shares: N/A N/A
Proceeds from Shares issued .......................................... N/A N/A
Issued to shareholders in reinvestment of distributions .............. ---------------- -----------------
Cost of Shares redeemed .............................................. N/A N/A
---------------- -----------------
Increase in net assets derived from C Class Share transactions ....... 4,313,012 5,936,096
---------------- -----------------
Increase in net assets derived from capital share transactions ............ 11,149,041 6,768,075
---------------- -----------------
Total increase in net assets .............................................. $ 17,917,116 $ 6,768,075
================ =================
NET ASSETS at end of period ...............................................
$ (71,781) $ (10,574)
---------------- -----------------
Undistributed net investment income (loss) ................................
OTHER INFORMATION:
Share transactions: 168,295 459,420
Institutional Class Shares: 4,762 --
Sold ................................................................. (1,220) (12,169)
Issued to shareholders in reinvestment of distributions .............. ---------------- -----------------
Redeemed ............................................................. 171,837 447,251
---------------- -----------------
Total Institutional Class transactions ...........................
N/A N/A
Investor Class Shares: N/A N/A
Sold ................................................................. N/A N/A
Issued to shareholders in reinvestment of distributions .............. ---------------- -----------------
Redeemed ............................................................. N/A N/A
---------------- -----------------
Total Investor Class transactions ................................
C Class Shares: N/A N/A
Sold ................................................................. N/A N/A
Issued to shareholders in reinvestment of distributions .............. ---------------- -----------------
Redeemed ............................................................. N/A N/A
---------------- -----------------
Total C Class transactions ....................................... N/A N/A
================ =================
Net increase in capital shares ............................................ 171,837 447,251
<CAPTION>
INTERNATIONAL
EQUITY FUND (6)(12)
----------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
$ 5,565,655 $ --
NET ASSETS at beginning of period ......................................... (31,594) 31,844
Increase (decrease) in net assets resulting from operations: 28,791 (26,492)
Net investment income (loss) ........................................... 2,620,838 498,215
Net realized gain (loss) on investments ................................ ----------------- -----------------
Net change in unrealized appreciation (depreciation) on investments .... 2,618,035 503,567
----------------- -----------------
Net increase (decrease) in net assets resulting from operations ........
Distributions to shareholders (Note 4): (101,492) --
Institutional Class Shares: -- --
Net investment income ................................................
Net realized gains ................................................... N/A N/A
Investor Class Shares: N/A N/A
Net investment income ................................................
Net realized gains ................................................... (326) --
C Class Shares: -- --
Net investment income ................................................ ----------------- -----------------
Net realized gains ................................................... (101,818) --
----------------- -----------------
Total distributions to shareholders ....................................
Capital share transactions: 5,699,413 5,163,208
Institutional Class Shares: 101,492 --
Proceeds from Shares issued .......................................... (66,071) (101,120)
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Cost of Shares redeemed ..............................................
5,734,834 5,062,088
Increase in net assets derived from Institutional Class ----------------- -----------------
Share transactions .................................................
N/A N/A
Investor Class Shares: N/A N/A
Proceeds from Shares issued .......................................... N/A N/A
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Cost of Shares redeemed ..............................................
N/A N/A
Increase in net assets derived from Investor Class ----------------- -----------------
Share transactions .................................................
80,900 N/A
C Class Shares: 326 N/A
Proceeds from Shares issued .......................................... -- N/A
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Cost of Shares redeemed .............................................. 81,226 N/A
----------------- -----------------
Increase in net assets derived from C Class Share transactions ....... 5,816,060 5,062,088
----------------- -----------------
Increase in net assets derived from capital share transactions ............ 8,332,277 5,565,655
----------------- -----------------
Total increase in net assets .............................................. $ 13,897,932 $ 5,565,655
================= =================
NET ASSETS at end of period ...............................................
$ (89,993) $ 43,419
----------------- -----------------
Undistributed net investment income (loss) ................................
OTHER INFORMATION:
Share transactions: 301,670 401,990
Institutional Class Shares: 5,727 --
Sold ................................................................. (3,443) (8,000)
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Redeemed ............................................................. 303,954 393,990
----------------- -----------------
Total Institutional Class transactions ...........................
N/A N/A
Investor Class Shares: N/A N/A
Sold ................................................................. N/A N/A
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Redeemed ............................................................. N/A N/A
----------------- -----------------
Total Investor Class transactions ................................
C Class Shares: 4,553 N/A
Sold ................................................................. 19 N/A
Issued to shareholders in reinvestment of distributions .............. ----------------- -----------------
Redeemed ............................................................. -- N/A
----------------- -----------------
Total C Class transactions ....................................... 4,572 N/A
================= =================
Net increase in capital shares ............................................ 308,526 393,990
</TABLE>
(1) The Fund's Institutional Class commenced investment operations on December
31, 1997.
(2) The Fund commenced investment operations on December 28, 1998.
(3) The Fund's Investor Class commenced investment operations on March 24,
1999.
(4) The Fund's Institutional Class commenced investment operations on January
1, 1998.
(5) The Fund's Institutional Class commenced investment operations on December
30, 1997.
(6) The Fund's Institutional Class commenced investment operations on December
30, 1998.
(7) The Fund's Investor Class commenced investment operations on July 31, 1998.
(8) The Fund's C Class commenced investment operations on June 21, 1999.
(9) The Fund's C Class commenced investment operations on August 3, 1999.
(10) The Fund's C Class commenced investment operations on May 27, 1999.
(11) The Fund's C Class commenced investment operations on August 31, 1999.
(12) The Fund's C Class commenced investment operations on September 28, 1999.
* On December 22, 1999, the All Cap Value Fund ceased offering Investor Class
shares.
See Notes to Financial Statements.
25
<PAGE> 39
UNDISCOVERED MANAGERS(TM)
FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
================================================================================
<TABLE>
<CAPTION>
BEHAVIORAL GROWTH FUND
------------------------------------------------------------
INSTITUTIONAL CLASS(1)
------------------------------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED PERIOD ENDED
(UNAUDITED) AUGUST 31, 1999 AUGUST 31, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.38 $ 11.86 $ 12.50
Income from Investment Operations:
Net investment income (loss)(+) (0.12) (0.13) (0.02)
Net realized and unrealized gain (loss) on
investments 12.66 9.65 (0.62)
----------------- ----------------- -----------------
Total income (loss) from Investment Operations 12.54 9.52 (0.64)
Less Distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains 0.00 0.00 0.00
----------------- ----------------- -----------------
Total distributions 0.00 0.00 0.00
----------------- ----------------- -----------------
Net increase (decrease) in net asset value 12.54 9.52 (0.64)
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 33.92 $ 21.38 $ 11.86
================= ================= =================
TOTAL RETURN** 58.65% 80.27% (5.12)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 240,157 $ 94,075 $ 5,254
Ratios to average net assets:
Net investment income (loss) including
reimbursement (0.92)%* (0.72)% (0.35)%*
Operating expenses including reimbursement 1.30%* 1.30% 1.30%*
Portfolio turnover rate** 52% 72% 67%
(+) The operating expenses may reflect a
reduction of the adviser fee, an
allocation of expenses to the Investment
Adviser, or both. Had such actions not
been taken, the ratios and net
investment income (loss) per share would
have been as follows:
Net investment income (loss) (1.08)%* (1.26)% (5.08)%*
Operating Expenses 1.46%* 1.84% 6.03%*
Net investment income (loss) per share $ (0.14) $ (0.23) $ (0.27)
</TABLE>
<TABLE>
<CAPTION>
BEHAVIORAL GROWTH FUND
------------------------------------------------------------
INVESTOR CLASS(7)
------------------------------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED PERIOD ENDED
(UNAUDITED) AUGUST 31, 1999 AUGUST 31, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.31 $ 11.85 $ 14.74
Income from Investment Operations:
Net investment income (loss)(+) (0.16) (0.20) 0.00(A)
Net realized and unrealized gain (loss) on
investments 12.61 9.66 (2.89)
----------------- ----------------- -----------------
Total income (loss) from Investment Operations 12.45 9.46 (2.89)
Less Distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains 0.00 0.00 0.00
----------------- ----------------- -----------------
Total distributions 0.00 0.00 0.00
----------------- ----------------- -----------------
Net increase (decrease) in net asset value 12.45 9.46 (2.89)
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 33.76 $ 21.31 $ 11.85
================= ================= =================
TOTAL RETURN** 58.42% 79.83% (19.61)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 10,498 $ 4,590 $ 40
Ratios to average net assets:
Net investment income (loss) including
reimbursement (1.27)%* (1.09)% (0.35)%*
Operating expenses including reimbursement 1.65%* 1.65% 1.30%*
Portfolio turnover rate** 52% 72% 67%
(+) The operating expenses may reflect a
reduction of the adviser fee, an
allocation of expenses to the Investment
Adviser, or both. Had such actions not
been taken, the ratios and net
investment income (loss) per share would
have been as follows:
Net investment income (loss) (1.47)%* (1.77)% (5.43)%*
Operating Expenses 1.85%* 2.33% 6.38%*
Net investment income (loss) per share $ (0.19) $ (0.32) $ (0.07)
</TABLE>
<TABLE>
<CAPTION>
BEHAVIORAL GROWTH FUND
---------------------------------------
C CLASS(8)
---------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 PERIOD ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.28 $ 19.44
Income from Investment Operations:
Net investment income (loss)(+) (0.26) (0.07)
Net realized and unrealized gain (loss) on
investments 12.59 1.91
----------------- -----------------
Total income (loss) from Investment Operations 12.33 1.84
Less Distributions:
Dividends from net investment income 0.00 0.00
Distributions from capital gains 0.00 0.00
----------------- -----------------
Total distributions 0.00 0.00
----------------- -----------------
Net increase (decrease) in net asset value 12.33 1.84
----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 33.61 $ 21.28
================= =================
TOTAL RETURN** 57.87% 9.52%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 999 $ 185
Ratios to average net assets:
Net investment income (loss) including
reimbursement (1.93)%* (1.66)%*
Operating expenses including reimbursement 2.30%* 2.25%*
Portfolio turnover rate** 52% 72%
(+) The operating expenses may reflect a
reduction of the adviser fee, an
allocation of expenses to the Investment
Adviser, or both. Had such actions not
been taken, the ratios and net
investment income (loss) per share would
have been as follows:
Net investment income (loss) (2.21)%* (2.62)%*
Operating Expenses 2.58%* 3.21%*
Net investment income (loss) per share $ (0.30) $ (0.11)
</TABLE>
- ----------
* Annualized
** For periods less than one year, percentages are not annualized.
(1) The Fund's Institutional Class commenced investment operations on December
31, 1997.
(2) The Fund commenced investment operations on December 28, 1998.
(3) The Fund's Investor Class commenced investment operations on March 24,
1999.
(4) The Fund's Institutional Class commenced investment operations on January
1, 1998.
(5) The Fund's Institutional Class commenced investment operations on December
30, 1997.
(6) The Fund's Institutional Class commenced investment operations on December
30, 1998.
(7) The Fund's Investor Class commenced investment operations on July 31, 1998.
(8) The Fund's C Class commenced investment operations on June 21, 1999.
(9) The Fund's C Class commenced investment operations on August 3, 1999.
(10) The Fund's C Class commenced investment operations on May 27, 1999.
(11) The Fund's C Class commenced investment operations on August 31, 1999.
(12) The Fund's C Class commenced investment operations on September 28, 1999.
(A) Represents less than $0.005 per share.
(B) The Fund incurred dividend expenses on securities sold short for the six
months ended February 29, 2000 and the period ended August 31, 1999. If the
dividend expense had not been incurred, the ratios of operating expenses to
average net assets would have been 2.00% for each period.
PER SHARE DATA IS CALCULATED BASED UPON THE AVERAGE SHARES OUTSTANDING DURING
THE PERIOD.
See Notes to Financial Statements.
<PAGE> 40
UNDISCOVERED MANAGERS(TM)
FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
================================================================================
<TABLE>
<CAPTION>
BEHAVIORAL VALUE FUND BEHAVIORAL LONG/SHORT FUND
-------------------------------------- --------------------------------------
INSTITUTIONAL CLASS(2) INSTITUTIONAL CLASS(2)
-------------------------------------- --------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
FEBRUARY 29, 2000 PERIOD ENDED FEBRUARY 29, 2000 PERIOD ENDED
(UNAUDITED) AUGUST 31, 1999 (UNAUDITED) AUGUST 31, 1999
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.11 $ 12.50 $ 12.70 $ 12.50
Income from Investment Operations:
Net investment income (loss)(+) (0.03) (0.03) 0.15 0.20
Net realized and unrealized gain (loss) on
investments 2.66 2.64 0.16 0.00(A)
----------------- ----------------- ----------------- -----------------
Total income (loss) from Investment Operations 2.63 2.61 0.31 0.20
Less Distributions:
Dividends from net investment income (0.06) 0.00 (0.36) 0.00
Distributions from capital gains (0.64) 0.00 0.00 0.00
----------------- ----------------- ----------------- -----------------
Total distributions (0.70) 0.00 (0.36) 0.00
----------------- ----------------- ----------------- -----------------
Net increase (decrease) in net asset value 1.93 2.61 (0.05) 0.20
----------------- ----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 17.04 $ 15.11 $ 12.65 $ 12.70
================= ================= ================= =================
TOTAL RETURN** 17.75% 20.88% 2.57% 1.60%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 10,677 $ 3,651 $ 5,401 $ 5,942
Ratios to average net assets:
Net investment income (loss) including
reimbursement (0.31)%* (0.35)% 2.39%* 2.56%*
Operating expenses including reimbursement 1.40%* 1.40% 2.27%* 2.00%*
Portfolio turnover rate** 26% 58% 93% 128%
(+) The operating expenses may reflect a
reduction of the adviser fee, an
allocation of expenses to the Investment
Adviser, or both. Had such actions not
been taken, the ratios and net
investment income (loss) per share would
have been as follows:
Net investment income (loss) (1.84)%* (6.84)% 1.24%* 0.77%*
Operating Expenses 2.93%* 7.89% 3.42%* 3.79%*
Net investment income (loss) per share $ (0.15) $ (0.68) $ 0.08 $ 0.06
<CAPTION>
REIT FUND
--------------------------------------------------------------------------------
INSTITUTIONAL CLASS(4) INVESTOR CLASS(3)
------------------------------------------------------------ -----------------
SIX MONTHS ENDED SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED PERIOD ENDED FEBRUARY 29, 2000
(UNAUDITED) AUGUST 31, 1999 AUGUST 31, 1998 (UNAUDITED)
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD 11.19 $ 10.64 $ 12.50 $ 11.18
Income from Investment Operations:
Net investment income (loss)(+) 0.31 0.53 0.20 0.29
Net realized and unrealized gain (loss) on
investments (0.75) 0.30 (2.06) (0.75)
---------------- ----------------- ----------------- ----------------
Total income (loss) from Investment Operations (0.44) 0.83 (1.86) (0.46)
Less Distributions:
Dividends from net investment income (0.49) (0.28) 0.00 (0.47)
Distributions from capital gains 0.00 0.00 0.00 0.00
---------------- ----------------- ----------------- ----------------
Total distributions (0.49) (0.28) 0.00 (0.47)
---------------- ----------------- ----------------- ----------------
Net increase (decrease) in net asset value (0.93) 0.55 (1.86) (0.93)
---------------- ----------------- ----------------- ----------------
NET ASSET VALUE, END OF PERIOD 10.26 $ 11.19 $ 10.64 $ 10.25
================ ================= ================= ================
TOTAL RETURN** (3.59)% 7.84% (14.88)% (3.79)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) 25,727 $ 22,355 $ 9,122 $ 459
Ratios to average net assets:
Net investment income (loss) including
reimbursement 5.90% 4.86%* 4.85%* 5.56%*
Operating expenses including reimbursement 1.40% 1.40%* 1.40%* 1.75%*
Portfolio turnover rate** 33% 67% 52% 33%
(+) The operating expenses may reflect a
reduction of the adviser fee, an
allocation of expenses to the Investment
Adviser, or both. Had such actions not
been taken, the ratios and net
investment income (loss) per share would
have been as follows:
Net investment income (loss) 5.31%* 4.28%* 1.63%* 4.82%*
Operating Expenses 1.99% 1.98%* 4.62%* 2.49%*
Net investment income (loss) per share $ 0.28 $ 0.47) $ 0.07 $ 0.25
</TABLE>
- ----------
* Annualized
** For periods less than one year, percentages are not annualized.
(1) The Fund's Institutional Class commenced investment operations on December
31, 1997.
(2) The Fund commenced investment operations on December 28, 1998.
(3) The Fund's Investor Class commenced investment operations on March 24,
1999.
(4) The Fund's Institutional Class commenced investment operations on January
1, 1998.
(5) The Fund's Institutional Class commenced investment operations on December
30, 1997.
(6) The Fund's Institutional Class commenced investment operations on December
30, 1998.
(7) The Fund's Investor Class commenced investment operations on July 31, 1998.
(8) The Fund's C Class commenced investment operations on June 21, 1999.
(9) The Fund's C Class commenced investment operations on August 3, 1999.
(10) The Fund's C Class commenced investment operations on May 27, 1999.
(11) The Fund's C Class commenced investment operations on August 31, 1999.
(12) The Fund's C Class commenced investment operations on September 28, 1999.
(A) Represents less than $0.005 per share.
(B) The Fund incurred dividend expenses on securities sold short for the six
months ended February 29, 2000 and the period ended August 31, 1999. If the
dividend expense had not been incurred, the ratios of operating expenses to
average net assets would have been 2.00% for each period.
PER SHARE DATA IS CALCULATED BASED UPON THE AVERAGE SHARES OUTSTANDING DURING
THE PERIOD.
See Notes to Financial Statements.
<PAGE> 41
UNDISCOVERED MANAGERS(TM)
FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
================================================================================
<TABLE>
<CAPTION>
REIT FUND
------------------------------------------------------------
INVESTOR CLASS(3) C CLASS(9)
------------------ --------------------------------------
SIX MONTHS ENDED
PERIOD ENDED FEBRUARY 29, 2000 PERIOD ENDED
AUGUST 31, 1999 (UNAUDITED) AUGUST 31, 1999
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.13 $ 11.17 $ 11.19
Income from Investment Operations:
Net investment income (loss)(+) 0.20 0.28 0.04
Net realized and unrealized gain (loss) on
investments 0.85 (0.76) (0.06)
----------------- ----------------- -----------------
Total income (loss) from Investment Operations 1.05 (0.48) (0.02)
Less Distributions:
Dividends from net investment income 0.00 (0.47) 0.00
Distributions from capital gains 0.00 0.00 0.00
----------------- ----------------- -----------------
Total distributions 0.00 (0.47) 0.00
----------------- ----------------- -----------------
Net increase (decrease) in net asset value 1.05 (0.95) (0.02)
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 11.18 $ 10.22 $ 11.17
================= ================= =================
TOTAL RETURN** 10.37% (4.04)% (0.18)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 509 $ 158 $ 20
Ratios to average net assets:
Net investment income (loss) including
reimbursement 3.97%* 5.35%* 4.57%*
Operating expenses including reimbursement 1.75%* 2.40%* 2.21%*
Portfolio turnover rate** 67% 33% 67%
(+) The operating expenses may reflect a reduction
of the adviser fee, an allocation of expenses
to the Investment Adviser, or both. Had such
actions not been taken, the ratios and net
investment income (loss) per share would have
been as follows:
Net investment income (loss) 3.26%* 4.30%* 3.68%*
Operating Expenses 2.46%* 3.45%* 3.10%*
Net investment income (loss) per share $ 0.16 $ 0.22 $ 0.03
<CAPTION>
SPECIAL SMALL CAP FUND
------------------------------------------------------------
INSTITUTIONAL CLASS(5)
------------------------------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED PERIOD ENDED
(UNAUDITED) AUGUST 31, 1999 AUGUST 31, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.83 $ 10.40 $ 12.50
Income from Investment Operations:
Net investment income (loss)(+) 0.01 (0.06) (0.03)
Net realized and unrealized gain (loss) on
investments 0.07 2.49 (2.07)
----------------- ----------------- -----------------
Total income (loss) from Investment Operations 0.08 2.43 (2.10)
Less Distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains 0.00 0.00 0.00
----------------- ----------------- -----------------
Total distributions 0.00 0.00 0.00
----------------- ----------------- -----------------
Net increase (decrease) in net asset value 0.08 2.43 (2.10)
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 12.91 $ 12.83 $ 10.40
================= ================= =================
TOTAL RETURN** 0.62% 23.37% (16.80)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 17,990 $ 16,078 $ 11,286
Ratios to average net assets:
Net investment income (loss) including
reimbursement 0.20%* (0.52)% (0.51)%*
Operating expenses including reimbursement 1.20%* 1.66% 1.70%*
Portfolio turnover rate** 34% 42% 9%
(+) The operating expenses may reflect a reduction
of the adviser fee, an allocation of expenses
to the Investment Adviser, or both. Had such
actions not been taken, the ratios and net
investment income (loss) per share would have
been as follows:
Net investment income (loss) (0.55)%* (0.70)% (3.13)%*
Operating Expenses 1.95%* 1.84% 4.32%*
Net investment income (loss) per share $ (0.04) $ (0.08) $ (0.15)
<CAPTION>
SMALL CAP VALUE FUND
---------------------------------------
INSTITUTIONAL CLASS(5)
---------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.54 $ 10.90
Income from Investment Operations:
Net investment income (loss)(+) 0.01 (0.01)
Net realized and unrealized gain (loss) on
investments (0.07) 2.72
----------------- -----------------
Total income (loss) from Investment Operations (0.06) 2.71
Less Distributions:
Dividends from net investment income 0.00 (0.02)
Distributions from capital gains (0.18) (0.05)
----------------- -----------------
Total distributions (0.18) (0.07)
----------------- -----------------
Net increase (decrease) in net asset value (0.24) 2.64
----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 13.30 $ 13.54
================= =================
TOTAL RETURN** (0.42)% 24.89%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 23,192 $ 20,038
Ratios to average net assets:
Net investment income (loss) including
reimbursement 0.08%* (0.11)%
Operating expenses including reimbursement 1.40%* 1.40%
Portfolio turnover rate** 29% 56%
(+) The operating expenses may reflect a reduction
of the adviser fee, an allocation of expenses
to the Investment Adviser, or both. Had such
actions not been taken, the ratios and net
investment income (loss) per share would have
been as follows:
Net investment income (loss) (0.49)%* (0.85)%
Operating Expenses 1.97%* 2.14%
Net investment income (loss) per share $ (0.03) $ (0.11)
</TABLE>
- ----------
* Annualized
** For periods less than one year, percentages are not annualized.
(1) The Fund's Institutional Class commenced investment operations on December
31, 1997.
(2) The Fund commenced investment operations on December 28, 1998.
(3) The Fund's Investor Class commenced investment operations on March 24,
1999.
(4) The Fund's Institutional Class commenced investment operations on January
1, 1998.
(5) The Fund's Institutional Class commenced investment operations on December
30, 1997.
(6) The Fund's Institutional Class commenced investment operations on December
30, 1998.
(7) The Fund's Investor Class commenced investment operations on July 31, 1998.
(8) The Fund's C Class commenced investment operations on June 21, 1999.
(9) The Fund's C Class commenced investment operations on August 3, 1999.
(10) The Fund's C Class commenced investment operations on May 27, 1999.
(11) The Fund's C Class commenced investment operations on August 31, 1999.
(12) The Fund's C Class commenced investment operations on September 28, 1999.
(A) Represents less than $0.005 per share.
(B) The Fund incurred dividend expenses on securities sold short for the six
months ended February 29, 2000 and the period ended August 31, 1999. If the
dividend expense had not been incurred, the ratios of operating expenses to
average net assets would have been 2.00% for each period.
PER SHARE DATA IS CALCULATED BASED UPON THE AVERAGE SHARES OUTSTANDING DURING
THE PERIOD.
See Notes To Financial Statements.
<PAGE> 42
UNDISCOVERED MANAGERS(TM)
FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
================================================================================
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
------------------------------------------------------------
INSTITUTIONAL
CLASS(5) INVESTOR CLASS(7)
------------------ --------------------------------------
SIX MONTHS ENDED
PERIOD ENDED FEBRUARY 29, 2000 YEAR ENDED
AUGUST 31, 1998 (UNAUDITED) AUGUST 31, 1999
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.50 $ 13.52 $ 10.91
Income from Investment Operations:
Net investment income (loss)(+) 0.00(A) (0.01) (0.07)
Net realized and unrealized gain (loss) on
investments (1.60) (0.08) 2.74
----------------- ----------------- -----------------
Total income (loss) from Investment Operations (1.60) (0.09) 2.67
Less Distributions:
Dividends from net investment income 0.00 0.00 (0.01)
Distributions from capital gains 0.00 (0.18) (0.05)
----------------- ----------------- -----------------
Total distributions 0.00 (0.18) (0.06)
----------------- ----------------- -----------------
Net increase (decrease) in net asset value (1.60) (0.27) 2.61
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 10.90 $ 13.25 $ 13.52
================= ================= =================
TOTAL RETURN** (12.80)% (0.65)% 24.51%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 13,849 $ 1,551 $ 957
Ratios to average net assets:
Net investment income (loss) including
reimbursement 0.15%* (0.23)%* (0.50)%
Operating expenses including reimbursement 1.40%* 1.75%* 1.75%
Portfolio turnover rate** 10% 29% 56%
(+) The operating expenses may reflect a reduction
of the adviser fee, an allocation of expenses
to the Investment Adviser, or both. Had such
actions not been taken, the ratios and net
investment income (loss) per share would have
been as follows:
Net investment income (loss) (3.32)%* (0.95)%* (1.43)%
Operating Expenses 4.87%* 2.47%* 2.68%*
Net investment income (loss) per share $ (0.08) $ (0.06) $ (0.19)
<CAPTION>
SMALL CAP VALUE FUND
------------------------------------------------------------
INVESTOR CLASS(7) C CLASS(8)
------------------ --------------------------------------
SIX MONTHS ENDED
PERIOD ENDED FEBRUARY 29, 2000 YEAR ENDED
AUGUST 31, 1998 (UNAUDITED) AUGUST 31, 1999
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.45 $ 13.51 $ 13.86
Income from Investment Operations:
Net investment income (loss)(+) 0.00(A) (0.06) (0.03)
Net realized and unrealized gain (loss) on
investments (2.54) (0.07) (0.32)
----------------- ----------------- -----------------
Total income (loss) from Investment Operations (2.54) (0.13) (0.35)
Less Distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains 0.00 (0.18) 0.00
----------------- ----------------- -----------------
Total distributions 0.00 (0.18) 0.00
----------------- ----------------- -----------------
Net increase (decrease) in net asset value (2.54) (0.31) (0.35)
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 10.91 $ 13.20 $ 13.51
================= ================= =================
TOTAL RETURN** (18.88)% (0.95)% (2.53)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 31 $ 159 $ 117
Ratios to average net assets:
Net investment income (loss) including
reimbursement 0.15%* (0.90)%* (0.97)%*
Operating expenses including reimbursement 1.40%* 2.40%* 2.31%*
Portfolio turnover rate** 10% 29% 56%
(+) The operating expenses may reflect a reduction
of the adviser fee, an allocation of expenses
to the Investment Adviser, or both. Had such
actions not been taken, the ratios and net
investment income (loss) per share would have
been as follows:
Net investment income (loss) (3.67)%* (1.89)%* (2.19)%*
Operating Expenses 5.22%* 3.39%* 3.53%*
Net investment income (loss) per share $ (0.04) $ (0.12) $ (0.06)
<CAPTION>
HIDDEN VALUE FUND
---------------------------------------
INSTITUTIONAL CLASS(1)
---------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
----------------- -----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.48 $ 9.76
Income from Investment Operations:
Net investment income (loss)(+) 0.03 0.06
Net realized and unrealized gain (loss) on
investments (0.50) 2.86
----------------- -----------------
Total income (loss) from Investment Operations (0.47) 2.92
Less Distributions:
Dividends from net investment income (0.08) (0.08)
Distributions from capital gains (0.59) (0.12)
----------------- -----------------
Total distributions (0.67) (0.20)
----------------- -----------------
Net increase (decrease) in net asset value (1.14) 2.72
----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 11.34 $ 12.48
================= =================
TOTAL RETURN** (3.85)% 30.11%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 1,124 $ 1,628
Ratios to average net assets:
Net investment income (loss) including
reimbursement 0.59%* 0.45%
Operating expenses including reimbursement 1.30%* 1.30%
Portfolio turnover rate** 25% 74%
(+) The operating expenses may reflect a reduction
of the adviser fee, an allocation of expenses
to the Investment Adviser, or both. Had such
actions not been taken, the ratios and net
investment income (loss) per share would have
been as follows:
Net investment income (loss) (2.49)%* (4.18)%
Operating Expenses 4.38%* 5.93%
Net investment income (loss) per share $ (0.15) $ (0.50)
</TABLE>
- ----------
* Annualized
** For periods less than one year, percentages are not annualized.
(1) The Fund's Institutional Class commenced investment operations on December
31, 1997.
(2) The Fund commenced investment operations on December 28, 1998.
(3) The Fund's Investor Class commenced investment operations on March 24,
1999.
(4) The Fund's Institutional Class commenced investment operations on January
1, 1998.
(5) The Fund's Institutional Class commenced investment operations on December
30, 1997.
(6) The Fund's Institutional Class commenced investment operations on December
30, 1998.
(7) The Fund's Investor Class commenced investment operations on July 31, 1998.
(8) The Fund's C Class commenced investment operations on June 21, 1999.
(9) The Fund's C Class commenced investment operations on August 3, 1999.
(10) The Fund's C Class commenced investment operations on May 27, 1999.
(11) The Fund's C Class commenced investment operations on August 31, 1999.
(12) The Fund's C Class commenced investment operations on September 28, 1999.
(A) Represents less than $0.005 per share.
(B) The Fund incurred dividend expenses on securities sold short for the six
months ended February 29, 2000 and the period ended August 31, 1999. If the
dividend expense had not been incurred, the ratios of operating expenses to
average net assets would have been 2.00% for each period.
PER SHARE DATA IS CALCULATED BASED UPON THE AVERAGE SHARES OUTSTANDING DURING
THE PERIOD.
See Notes to Financial Statements.
<PAGE> 43
UNDISCOVERED MANAGERS(TM)
FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
================================================================================
<TABLE>
<CAPTION>
HIDDEN VALUE FUND
------------------------------------------------------------
INSTITUTIONAL
CLASS (1) INVESTOR CLASS (7)
------------------ --------------------------------------
SIX MONTHS ENDED
PERIOD ENDED FEBRUARY 29, 2000 YEAR ENDED
AUGUST 31, 1998 (UNAUDITED) AUGUST 31, 1999
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.50 $ 12.46 $ 9.76
Income from Investment Operations:
Net investment income (loss)(+) 0.03 0.01 (0.03)
Net realized and unrealized gain (loss) on
investments (2.77) (0.49) 2.87
----------------- ----------------- -----------------
Total income (loss) from Investment Operations (2.74) (0.48) 2.90
Less Distributions:
Dividends from net investment income 0.00 (0.04) (0.08)
Distributions from capital gains 0.00 (0.60) (0.12)
----------------- ----------------- -----------------
Total distributions 0.00 (0.64) (0.20)
----------------- ----------------- -----------------
Net increase (decrease) in net asset value (2.74) (1.12) 2.70
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 9.76 $ 11.34 $ 12.46
================= ================= =================
TOTAL RETURN** (21.92)% (3.94)% 29.90%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 925 $ 1,401 $ 1,667
Ratios to average net assets:
Net investment income (loss) including
reimbursement 0.58%* 0.22%* 0.18%
Operating expenses including reimbursement 1.30%* 1.65%* 1.63%
Portfolio turnover rate** 74% 25% 74%
(+) The operating expenses may reflect a reduction
of the adviser fee, an allocation of expenses
to the Investment Adviser, or both. Had such
actions not been taken, the ratios and net
investment income (loss) per share would have
been as follows:
Net investment income (loss) (15.16)%* (3.70)%* (4.45)%
Operating Expenses 17.04%* 5.57%* 6.26%*
Net investment income (loss) per share $ (0.77) $ (0.22) $ (0.58)
<CAPTION>
HIDDEN VALUE FUND ALL CAP VALUE FUND
------------------ --------------------------------------
INVESTOR CLASS (7) INSTITUTIONAL CLASS (1)
------------------ --------------------------------------
SIX MONTH ENDED
PERIOD ENDED FEBRUARY 29, 2000 YEAR ENDED
AUGUST 31, 1998 (UNAUDITED) AUGUST 31, 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.09 $ 15.22 $ 11.53
Income from Investment Operations:
Net investment income (loss)(+) 0.01 0.06 0.08
Net realized and unrealized gain (loss) on
investments (2.34) (1.49) 3.85
----------------- ----------------- -----------------
Total income (loss) from Investment Operations (2.33) (1.43) 3.93
Less Distributions:
Dividends from net investment income 0.00 (0.17) (0.24)
Distributions from capital gains 0.00 0.00 0.00
----------------- ----------------- -----------------
Total distributions 0.00 (0.17) (0.24)
----------------- ----------------- -----------------
Net increase (decrease) in net asset value (2.33) (1.60) 3.69
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 9.76 $ 13.62 $ 15.22
================= ================= =================
TOTAL RETURN** (19.27)% (9.50)% 34.33%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 40 $ 741 $ 952
Ratios to average net assets:
Net investment income (loss) including
reimbursement 0.58%* 0.85%* 0.51%
Operating expenses including reimbursement 1.30%* 0.99%* 0.99%
Portfolio turnover rate** 74% 41% 61%
(+) The operating expenses may reflect a reduction
of the adviser fee, an allocation of expenses
to the Investment Adviser, or both. Had such
actions not been taken, the ratios and net
investment income (loss) per share would have
been as follows:
Net investment income (loss) (15.51)%* (11.70)%* (15.02)%
Operating Expenses 17.39%* 13.54%* 16.52%
Net investment income (loss) per share $ (0.15) $ (0.85) $ (2.24)
<CAPTION>
ALL CAP VALUE FUND
---------------------------------------
INSTITUTIONAL
CLASS (1) C CLASS (10)
---------------- ----------------
SIX MONTHS ENDED
PERIOD ENDED FEBRUARY 29, 2000
AUGUST 31, 1998 (UNAUDITED)
----------------- -----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.50 $ 15.18
Income from Investment Operations:
Net investment income (loss)(+) 0.06 (0.01)
Net realized and unrealized gain (loss) on
investments (1.03) (1.50)
----------------- -----------------
Total income (loss) from Investment Operations (0.97) (1.51)
Less Distributions:
Dividends from net investment income 0.00 (0.08)
Distributions from capital gains 0.00 0.00
----------------- -----------------
Total distributions 0.00 (0.08)
----------------- -----------------
Net increase (decrease) in net asset value (0.97) 1.59
----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 11.53 $ 13.59
================= =================
TOTAL RETURN** (7.76)% (10.00)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 289 $ 40
Ratios to average net assets:
Net investment income (loss) including
reimbursement 0.95%* (0.14)%*
Operating expenses including reimbursement 0.99%* 1.99%*
Portfolio turnover rate** 36% 41%
(+) The operating expenses may reflect a reduction
of the adviser fee, an allocation of expenses
to the Investment Adviser, or both. Had such
actions not been taken, the ratios and net
investment income (loss) per share would have
been as follows:
Net investment income (loss) (41.18)%* (25.39)%*
Operating Expenses 43.12%* 27.24%*
Net investment income (loss) per share $ (2.73) $ (1.85)
</TABLE>
- ----------
* Annualized
** For periods less than one year, percentages are not annualized.
(1) The Fund's Institutional Class commenced investment operations on December
31, 1997.
(2) The Fund commenced investment operations on December 28, 1998.
(3) The Fund's Investor Class commenced investment operations on March 24,
1999.
(4) The Fund's Institutional Class commenced investment operations on January
1, 1998.
(5) The Fund's Institutional Class commenced investment operations on December
30, 1997.
(6) The Fund's Institutional Class commenced investment operations on December
30, 1998.
(7) The Fund's Investor Class commenced investment operations on July 31, 1998.
(8) The Fund's C Class commenced investment operations on June 21, 1999.
(9) The Fund's C Class commenced investment operations on August 3, 1999.
(10) The Fund's C Class commenced investment operations on May 27, 1999.
(11) The Fund's C Class commenced investment operations on August 31, 1999.
(12) The Fund's C Class commenced investment operations on September 28, 1999.
(A) Represents less than $0.005 per share.
(B) The Fund incurred dividend expenses on securities sold short for the six
months ended February 29, 2000 and the period ended August 31, 1999. If the
dividend expense had not been incurred, the ratios of operating expenses to
average net assets would have been 2.00% for each period.
PER SHARE DATA IS CALCULATED BASED UPON THE AVERAGE SHARES OUTSTANDING DURING
THE PERIOD.
<PAGE> 44
UNDISCOVERED MANAGERS(TM)
FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
================================================================================
<TABLE>
<CAPTION>
ALL CAP VALUE FUND CORE EQUITY FUND
------------------ ----------------------------------------------------------
C CLASS(10) INSTITUTIONAL CLASS(1)
------------------ ----------------------------------------------------------
SIX MONTHS ENDED
PERIOD ENDED FEBRUARY 29, 2000 YEAR ENDED PERIOD ENDED
AUGUST 31, 1999 (UNAUDITED) AUGUST 31, 1999 AUGUST 31, 1998
--------------- ----------------- --------------- -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.45 $ 15.33 $ 12.75 $ 12.50
--------------- ----------------- --------------- -----------------
Income from Investment Operations:
Net investment income (loss)(+) 0.00(A) 0.08 0.14 0.05
Net realized and unrealized gain (loss) on
investments (0.27) (1.42) 2.52 0.20
--------------- ----------------- --------------- -----------------
Total income (loss) from Investment Operations (0.27) (1.34) 2.66 0.25
Less Distributions:
Dividends from net investment income 0.00 (0.16) (0.08) 0.00
Distributions from capital gains 0.00 0.00 0.00 0.00
--------------- ----------------- --------------- -----------------
Total distributions 0.00 (0.16) (0.08) 0.00
--------------- ----------------- --------------- -----------------
Net increase (decrease) in net asset value (0.27) (1.50) 2.58 0.25
--------------- ----------------- --------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 15.18 $ 13.83 $ 15.33 $ 12.75
=============== ================= =============== =================
TOTAL RETURN** (1.75)% (8.86)% 20.92% 2.00%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 33 $ 3,635 $ 4,562 $ 1,295
Ratios to average net assets:
Net investment income (loss) including
reimbursement 0.03%* 0.99%* 0.90% 1.18%*
Operating expenses including reimbursement 1.88%* 0.99%* 0.99% 0.99%*
Portfolio turnover rate** 61% 8% 15% 46%
(+) The operating expenses may reflect a
reduction of the adviser fee, an
allocation of expenses to the Investment
Adviser, or both. Had such actions not
been taken, the ratios and net investment
income (loss) per share would have been
as follows:
Net investment income (loss) (30.36)%* (1.74)%* (1.25)% (16.23)%*
Operating Expenses 32.27%* 3.72%* 3.14% 18.40%*
Net investment income (loss) per share $ (1.15) $ (0.13) $ (0.19) $ (0.68)
</TABLE>
<TABLE>
<CAPTION>
CORE EQUITY FUND
----------------------------------------------------------------------------
INVESTOR CLASS(7) C CLASS(8)
------------------------------------------------------- -----------------
SIX MONTHS ENDED SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED PERIOD ENDED FEBRUARY 29, 2000
(UNAUDITED) AUGUST 31, 1999 AUGUST 31, 1998 (UNAUDITED)
----------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.31 $ 12.75 $ 14.75 $ 15.21
----------------- --------------- --------------- -----------------
Income from Investment Operations:
Net investment income (loss)(+) 0.05 0.08 0.01 0.02
Net realized and unrealized gain (loss) on
investments (1.42) 2.56 (2.01) (1.32)
----------------- --------------- --------------- -----------------
Total income (loss) from Investment Operations (1.37) 2.64 (2.00) (1.30)
Less Distributions:
Dividends from net investment income (0.12) (0.08) 0.00 (0.11)
Distributions from capital gains 0.00 0.00 0.00 0.00
----------------- --------------- --------------- -----------------
Total distributions (0.12) (0.08) 0.00 (0.11)
----------------- --------------- --------------- -----------------
Net increase (decrease) in net asset value (1.49) 2.56 (2.00) (1.41)
----------------- --------------- --------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 13.82 $ 15.31 $ 12.75 $ 13.80
================= =============== =============== =================
TOTAL RETURN** (9.01)% 20.76% (13.56)% (9.24)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 435 $ 580 $ 43 $ 14
Ratios to average net assets:
Net investment income (loss) including
reimbursement 0.63%* 0.53% 1.18%* 0.28%*
Operating expenses including reimbursement 1.34%* 1.28% 0.99%* 1.99%*
Portfolio turnover rate** 8% 15% 46% 8%
(+) The operating expenses may reflect a
reduction of the adviser fee, an
allocation of expenses to the Investment
Adviser, or both. Had such actions not
been taken, the ratios and net investment
income (loss) per share would have been
as follows:
Net investment income (loss) (3.07)%* (6.22)% (16.58)%* (5.26)%*
Operating Expenses 5.04%* 8.03% 18.75%* 7.53%*
Net investment income (loss) per share $ (0.23) $ (0.98) $ (0.21) $ (0.38)
</TABLE>
- ----------
* Annualized
** For periods less than one year, percentages are not annualized.
(1) The Fund's Institutional Class commenced investment operations on December
31, 1997.
(2) The Fund commenced investment operations on December 28, 1998.
(3) The Fund's Investor Class commenced investment operations on March 24,
1999.
(4) The Fund's Institutional Class commenced investment operations on January
1, 1998.
(5) The Fund's Institutional Class commenced investment operations on December
30, 1997.
(6) The Fund's Institutional Class commenced investment operations on December
30, 1998.
(7) The Fund's Investor Class commenced investment operations on July 31, 1998.
(8) The Fund's C Class commenced investment operations on June 21, 1999.
(9) The Fund's C Class commenced investment operations on August 3, 1999.
(10) The Fund's C Class commenced investment operations on May 27, 1999.
(11) The Fund's C Class commenced investment operations on August 31, 1999.
(12) The Fund's C Class commenced investment operations on September 28, 1999.
(A) Represents less than $0.005 per share.
(B) The Fund incurred dividend expenses on securities sold short for the six
months ended February 29, 2000 and the period ended August 31, 1999. If the
dividend expense had not been incurred, the ratios of operating expenses to
average net assets would have been 2.00% for each period.
PER SHARE DATA IS CALCULATED BASED UPON THE AVERAGE SHARES OUTSTANDING DURING
THE PERIOD.
See Notes to Financial Statements.
<PAGE> 45
UNDISCOVERED MANAGERS(TM)
FINANCIAL HIGHLIGHTS - FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
================================================================================
<TABLE>
<CAPTION>
CORE EQUITY FUND INTERNATIONAL SMALL CAP EQUITY FUND
----------------- --------------------------------------
C CLASS(11) INSTITUTIONAL CLASS(6)
----------------- --------------------------------------
SIX MONTHS ENDED
PERIOD ENDED FEBRUARY 29, 2000 PERIOD ENDED
AUGUST 31, 1999 (UNAUDITED) AUGUST 31, 1999
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.31 $ 15.13 $ 12.50
Income from Investment Operations:
Net investment income (loss)(+) 0.00(A) (0.13) (0.02)
Net realized and unrealized gain (loss) on
investments (0.10) 14.14 2.65
----------------- ----------------- -----------------
Total income (loss) from Investment Operations (0.10) 14.01 2.63
Less Distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from capital gains 0.00 (0.20) 0.00
----------------- ----------------- -----------------
Total distributions 0.00 (0.20) 0.00
----------------- ----------------- -----------------
Net increase (decrease) in net asset value (0.10) 13.81 2.63
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 15.21 $ 28.94 $ 15.13
================= ================= =================
TOTAL RETURN** (0.65)% 93.30% 21.04%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 5 $ 17,917 $ 6,768
Ratios to average net assets:
Net investment income (loss) including
reimbursement (0.88)%* (1.32)%* (0.22)%*
Operating expenses including reimbursement 1.99%* 1.60%* 1.60%*
Portfolio turnover rate** 15% 17% 52%
(+) The operating expenses may reflect a
reduction of the adviser fee, an
allocation of expenses to the Investment
Adviser, or both. Had such actions not
been taken, the ratios and net
investment income (loss) per share would
have been as follows:
Net investment income (loss) (1.84)%* (2.12)%* (2.35)%*
Operating Expenses 2.95%* 2.40%* 3.73%*
Net investment income (loss) per share $ 0.00(A) $ (0.21) $ (0.24)
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
------------------------------------------------------------
INSTITUTIONAL CLASS(6) C CLASS(12)
--------------------------------------- -----------------
SIX MONTHS ENDED SIX MONTHS ENDED
FEBRUARY 29, 2000 PERIOD ENDED FEBRUARY 29, 2000
(UNAUDITED) AUGUST 31, 1999 (UNAUDITED)
----------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.13 $ 12.50 $ 14.21
Income from Investment Operations:
Net investment income (loss)(+) (0.07) 0.09 (0.08)
Net realized and unrealized gain (loss) on
investments 5.97 1.54 5.83
----------------- ----------------- -----------------
Total income (loss) from Investment Operations 5.90 1.63 5.75
Less Distributions:
Dividends from net investment income (0.25) 0.00 (0.25)
Distributions from capital gains 0.00 0.00 0.00
----------------- ----------------- -----------------
Total distributions (0.25) 0.00 (0.25)
----------------- ----------------- -----------------
Net increase (decrease) in net asset value 5.65 1.63 5.50
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD $ 19.78 $ 14.13 $ 19.71
================= ================= =================
TOTAL RETURN** 41.97% 13.04% 40.67%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000s) $ 13,808 $ 5,566 $ 90
Ratios to average net assets:
Net investment income (loss) including
reimbursement (0.77)%* 1.08%* (1.06)%*
Operating expenses including reimbursement 1.45%* 1.45%* 2.45%*
Portfolio turnover rate** 6% 10% 6%
(+) The operating expenses may reflect a
reduction of the adviser fee, an
allocation of expenses to the Investment
Adviser, or both. Had such actions not
been taken, the ratios and net
investment income (loss) per share would
have been as follows:
Net investment income (loss) (1.90)%* (1.07)%* (2.96)%*
Operating Expenses 2.58%* 3.60%* 4.35%*
Net investment income (loss) per share $ (0.16) $ (0.09) $ (0.24)
</TABLE>
- ----------
* Annualized
** For periods less than one year, percentages are not annualized.
(1) The Fund's Institutional Class commenced investment operations on December
31, 1997.
(2) The Fund commenced investment operations on December 28, 1998.
(3) The Fund's Investor Class commenced investment operations on March 24,
1999.
(4) The Fund's Institutional Class commenced investment operations on January
1, 1998.
(5) The Fund's Institutional Class commenced investment operations on December
30, 1997.
(6) The Fund's Institutional Class commenced investment operations on December
30, 1998.
(7) The Fund's Investor Class commenced investment operations on July 31, 1998.
(8) The Fund's C Class commenced investment operations on June 21, 1999.
(9) The Fund's C Class commenced investment operations on August 3, 1999.
(10) The Fund's C Class commenced investment operations on May 27, 1999.
(11) The Fund's C Class commenced investment operations on August 31, 1999.
(12) The Fund's C Class commenced investment operations on September 28, 1999.
(A) Represents less than $0.005 per share.
(B) The Fund incurred dividend expenses on securities sold short for the six
months ended February 29, 2000 and the period ended August 31, 1999. If the
dividend expense had not been incurred, the ratios of operating expenses to
average net assets would have been 2.00% for each period.
PER SHARE DATA IS CALCULATED BASED UPON THE AVERAGE SHARES OUTSTANDING DURING
THE PERIOD.
See Notes to Financial Statements.
<PAGE> 46
UNDISCOVERED MANAGERS(TM)
NOTES TO FINANCIAL STATEMENTS FEBRUARY 29, 2000 (UNAUDITED)
1. ORGANIZATION
Undiscovered Managers Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Trust currently consists of eleven separately managed portfolios advised by
Undiscovered Managers, LLC (the "Advisers"). The accompanying financial
statements and financial highlights are those of Undiscovered Managers
Behavioral Growth Fund ("Behavioral Growth Fund"), Undiscovered Managers
Behavioral Value Fund ("Behavioral Value Fund"), Undiscovered Managers
Behavioral Long/Short Fund ("Behavioral Long/Short Fund"), Undiscovered Managers
REIT Fund ("REIT Fund"), Undiscovered Managers Special Small Cap Fund ("Special
Small Cap Fund"), Undiscovered Managers Small Cap Value Fund ("Small Cap Value
Fund"), Undiscovered Managers Hidden Value Fund ("Hidden Value Fund"),
Undiscovered Managers All Cap Value Fund ("All Cap Value Fund"), Undiscovered
Managers Core Equity Fund ("Core Equity Fund"), UM International Small Cap
Equity Fund ("International Small Cap Equity Fund") and UM International Equity
Fund ("International Equity Fund"), each a "Fund", and collectively, the
"Funds". Each Fund is a diversified fund except for Special Small Cap Fund and
REIT Fund, which are non-diversified.
Behavioral Growth Fund, REIT Fund, Small Cap Value Fund and Core Equity Fund are
authorized to issue three classes of shares (Institutional Class shares,
Investor Class shares and Class C shares). Behavioral Value Fund, Behavioral
Long/Short Fund, Special Small Cap Fund and International Small Cap Equity Fund
are authorized to issue only Institutional Class shares. Hidden Value Fund
offers only Institutional and Investor Class shares, and All Cap Value Fund and
International Equity Fund offer only Institutional and Class C shares. Each
share of a particular Fund represents an interest in the assets of the relevant
Fund and has identical dividend, liquidation and other rights as the other
shares of the Fund. Each share of a Fund has one vote, with fractional shares
voting proportionally. All Trust shares are entitled to vote will vote together
irrespective of Fund or class when the right of a particular Fund or class would
be adversely affected by the vote, in which case a separate vote of that Fund or
class will be required to decide the question. Each class of shares bears its
own proportional share of fund level expenses with the Investor Class and Class
C shares bearing a service and distribution fee.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during the
reporting periods. Actual results could differ from those estimates. The
following is a summary of the significant accounting policies consistently
followed by each Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
Portfolio Valuation: Domestic and foreign investments in securities which are
traded on a recognized stock exchange or on the NASDAQ National Market System
are normally valued at their last sale price on the exchange where primarily
traded or, if there is no reported sale during the day, or in the case of
over-the-counter securities not traded on a recognized stock exchange or on the
NASDAQ National Market System, at the last bid price. Short-term obligations
that mature in sixty days or less are valued at amortized cost, which
approximates market value. All other securities for which market quotations are
not readily available (including restricted securities, if any) and all other
assets are appraised at their fair value as determined in good faith by the
Board of Trustees, although the actual calculations may be made by persons
acting pursuant to the direction of the Board.
Securities Sold Short: The Behavioral Long/Short Fund may enter into short
sales. A short sale involves selling a security which the Fund does not own.
This requires the borrowing of shares from a broker. The proceeds received for
short sales are recorded as liabilities and the Fund records an unrealized gain
or loss to the extent of the difference between the proceeds received and the
value of the open short position on the day of determination. The Fund records a
realized gain or loss when the short position is closed out. By entering into a
short sale, the Fund bears the market risk of an unfavorable change in the price
of the security sold short. Dividends on short sales are recorded as an expense
by the Fund on the ex-dividend date.
The Fund is required to establish a margin account with the broker lending the
security short. While the short sale is outstanding, the broker retains the
proceeds of the short sale. This interest-bearing amount is shown as deposit
with the broker for securities sold short in the financial statements. As
collateral for the securities sold short, the Fund must maintain an account
consisting of cash and/or securities having a value at least equaling the
current market value of such securities sold short.
Foreign Currency Translation: The books and records of each Fund are maintained
in United States (U.S.) dollars. Foreign currencies, investments and other
assets and liabilities for International Small Cap Equity Fund and International
Equity Fund are translated into U.S. dollars at the exchange rates prevailing at
the end of each business day, and purchases and sales of investment securities,
income and expenses are translated at the exchange rate prevailing on the
respective dates of such transactions. Unrealized gains and losses, which result
from changes in foreign exchange rates and/or changes in market prices of
securities, have been included in net unrealized appreciation/ (depreciation) on
investments. Net realized and unrealized foreign currency gains and losses
resulting from changes in exchange rates include foreign currency gains and
losses occurring between trade date and settlement date on investment securities
transactions, foreign currency transactions and the difference between the
amounts of interest and dividends recorded on the books of each Fund and the
amounts actually received. The portion of foreign currency gains and losses
related to fluctuation in exchange rates between the initial trade date and
subsequent sale trade date is included in realized gain/(loss) on investments.
<PAGE> 47
Forward Foreign Currency Exchange Contracts: International Small Cap Equity Fund
and International Equity Fund may participate in forward currency exchange
contracts, but such participation will be limited to hedging involving either
specific transactions or portfolio positions. Transaction hedging involves the
purchase or sale of foreign currency with respect to specific receivables or
payables of a Fund generally arising in connection with the purchase or sale of
its portfolio securities. Risk may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their contracts
and is generally limited to the amount of unrealized gain on the contracts, if
any, at the date of the default. Risk may also arise from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
Contracts are marked-to-market daily and the change in market value is recorded
as unrealized appreciation or depreciation. Realized gains or losses arising
from such transactions are included in net realized gains or losses from foreign
currency transactions.
Security Transactions and Investment Income: Security transactions are accounted
for on a trade date basis. Net realized gains or losses on sales of securities
are determined by the identified cost method on the date that security is sold.
Interest income is recorded on the accrual basis. Dividend income is recorded on
the ex-dividend date.
Federal Income Taxes: Each Fund intends to qualify each year as a "regulated
investment company" under Subchapter M of the Internal Revenue Code and to
distribute substantially all of its net investment income. Accordingly, no
provisions for federal income taxes have been made in the accompanying financial
statements. The Funds intend to utilize provisions of the federal income tax
laws which allow them to carry a realized capital loss forward for eight years
following the year of the loss and offset such losses against any future
realized capital gains.
Classes: For each Fund, any class-specific expenses are borne by the relevant
class. Income, non-class specific expenses and realized and unrealized gains
(losses) are allocated to the respective classes on the basis of relative net
assets.
Expenses: The Trust accounts separately for the assets, liabilities, and
operations of each Fund. Expenses directly attributable to a Fund are charged to
that Fund, while expenses which are attributable to more than one Fund are
allocated based upon the relative net assets of each Fund.
Cash: The Fund's uninvested cash balances are swept daily into an
interest-bearing account at the custodial bank, except in the case of the
Behavioral Long/Short Fund which has its cash swept on a daily basis into a
repurchase agreement.
Organization Costs: Organization costs are being amortized on a straight-line
basis over five years for Behavioral Growth Fund, REIT Fund, Special Small Cap
Fund, Small Cap Value Fund, Hidden Value Fund, All Cap Value Fund and Core
Equity Fund.
Repurchase Agreements: Each Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, a Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral is at
least equal to 102%, to the total amount of the repurchase obligations,
including interest. In the event of counterparty default, the Fund has the right
to use the collateral to satisfy the terms of the repurchase agreement. However,
there could be potential loss to the Fund in the event the Fund is delayed or
prevented from exercising its right to dispose of the collateral securities,
including the risk of a possible decline in the value of the collateral
securities during the period while the Fund seeks to assert its rights. The
value of the collateral is monitored daily.
3. INVESTMENT ADVISORY, SUB-ADVISORY, ADMINISTRATION AND OTHER FEES
For each Fund, the Trust and the Adviser are parties to a management agreement
under which the Adviser provides services for a fee, computed daily and paid at
least quarterly, at the following annual percentage rates based on the average
daily net assets of each Fund: 0.95% for the Behavioral Growth Fund, 1.05% for
the Behavioral Value Fund, 1.55% for the Behavioral Long/Short Fund, 1.05% for
the REIT Fund, 0.65% to 1.65% (depending on the investment performance of the
Fund) for the Special Small Cap Fund, 1.05% for the Small Cap Value Fund, 0.95%
for the Hidden Value Fund, 0.74% for the All Cap Value Fund, 0.74% for the Core
Equity Fund, 1.15% for the International Small Cap Equity Fund and 0.95% for the
International Equity Fund; provided however, with respect to the Special Small
Cap Fund, prior to December 30, 1998, its annual advisory fee rate was 1.15%.
After December 29, 1998, the advisory fee rate for the Special Small Cap Fund
will vary depending on the investment performance of the Fund. The applicable
fee rate is determined by adding to (or subtracting from) 1.15%, one-fifth of
the number of basis points by which the total return of the Fund (excluding
expenses) during the one-year period ending at the end of a quarter exceeds (or
falls short of) the total return of the Russell 2000 Index during the one-year
period ending at the end of such quarter. The advisory fee rate will not exceed
the annual rate of 1.65% nor be less than the annual rate of 0.65%.
The Adviser has voluntarily agreed, for an indefinite period, to reduce its fees
and pay the expenses of each Fund's Institutional Class, Investor Class and C
Class shares in order to limit such class's expenses (exclusive of brokerage
costs, interest, taxes, dividends payable with respect to securities sold short,
if any, and extraordinary expenses) to the following annual percentage rates of
the average daily net assets of such Fund's Institutional Class, Investor Class
and C Class shares, respectively, subject to the obligation of each Fund to
repay the Adviser in future years, if any, when the relevant class's deferred
fees and expenses (exclusive of brokerage costs, interest, taxes, dividends
payable with respect to securities sold short, if any, and extraordinary
expenses), fall below the stated percentage rate, but only to the extent that
such repayment would not cause such class's expenses (exclusive of brokerage
costs, interest, taxes, dividends payable with respect to securities sold short,
if any, and extraordinary expenses), to exceed the stated percentage rate, and
provided that a Fund is not obligated to repay any amounts more than two years
after the end of the fiscal year in which they were incurred: 1.30%, 1.65% and
2.30% for the Behavioral
<PAGE> 48
Growth Fund's Institutional Class, Investor Class and C Class shares,
respectively, 1.40% for the Behavioral Value Fund's Institutional Class, 2.00%
for the Behavioral Long/Short Fund's Institutional Class, 1.40%, 1.75% and 2.40%
for the REIT Fund's Institutional Class, Investor Class and C Class shares,
respectively, the sum of 0.55% plus the advisory fee rate for the Special Small
Cap Fund's Institutional Class, 1.40%, 1.75% and 2.40% for the Small Cap Value
Fund's Institutional Class, Investor Class and C Class shares, respectively,
1.30% and 1.65% for the Hidden Value Fund's Institutional Class and Investor
Class, respectively, 0.99% and 1.99% for the All Cap Value Fund's Institutional
Class and C Class shares, respectively, 0.99%, 1.34% and 1.99% for the Core
Equity Fund's Institutional Class, Investor Class and C Class shares,
respectively, 1.60% for the International Small Cap Equity Fund's Institutional
Class and 1.45% and 2.45% for the International Equity Fund's Institutional
Class and C Class shares, respectively. Prior to December 29, 1998, the Special
Small Cap Fund's maximum stated percentage rate was 1.70%.
For the six months ended February 29, 2000, the Adviser reduced its fees and
bore expenses pursuant to this voluntary agreement in the aggregate amounts of
$116,246, $44,120, $32,940, $71,970, $66,391, $70,177, $52,322, $61,549,
$67,147, $37,322 and $46,462 for the Behavioral Growth Fund, the Behavioral
Value Fund, the Behavioral Long/Short Fund, the REIT Fund, the Special Small Cap
Fund, the Small Cap Value Fund, the Hidden Value Fund, the All Cap Value Fund,
the Core Equity Fund, the International Small Cap Equity Fund and the
International Equity Fund, respectively. All of such amounts are subject to
recoupment through the end of the Trust's fiscal year ending August 31, 2001.
The Adviser has entered into various sub-advisory agreements pursuant to which
the Adviser shall pay each sub-adviser an annual fee at the following rates:
<TABLE>
<CAPTION>
FEE RATE AS % OF FUND'S
FUND SUB-ADVISER AVERAGE DAILY NET ASSETS
- ---- ----------- ------------------------
<S> <C> <C>
Behavioral Growth Fund Fuller & Thaler Asset 0.60% of the first $200 million
Management, Inc. 0.55% of the next $100 million
0.50% in excess of $300 million
Behavioral Value Fund Fuller & Thaler Asset 0.70% of the first $200 million
Management, Inc. 0.65% of the next $100 million
0.60% in excess of $300 million
Behavioral Long/Short Fund Fuller & Thaler Asset 1.20% of the first $200 million
Management, Inc. 1.15% of the next $100 million
1.10% in excess of $300 million
REIT Fund Bay Isle Financial Corporation 0.70% of the first $200 million
0.65% of the next $100 million
0.60% in excess of $300 million
Special Small Cap Fund Kestrel Investment 0.30% - 1.30%*
Management Corporation
Small Cap Value Fund J.L. Kaplan Associates, LLC 0.70% of the first $200 million
0.65% of the next $100 million
0.60% in excess of $300 million
Hidden Value Fund J.L. Kaplan Associates, LLC 0.60% of the first $200 million
0.55% of the next $100 million
0.50% in excess of $300 million
All Cap Value Fund E.R. Taylor Investments, Inc. 0.40% of the first $200 million
0.35% of the next $100 million
0.30% in excess of $300 million
Core Equity Fund Waite & Associates, LLC 0.40% of the first $200 million
0.35% of the next $100 million
0.30% in excess of $300 million
International Small Cap Unibank Securities, Inc. 0.80% of the first $200 million
Equity Fund 0.75% of the next $100 million
0.70% in excess of $300 million
International Equity Fund Unibank Securities, Inc. 0.60% of the first $200 million
0.55% of the next $100 million
0.50% in excess of $300 million
</TABLE>
* Sub-advisory fee rate for the Special Small Cap Fund varies depending on the
investment performance of the Fund. Prior to December 30, 1998, however, the
annual fee rate was 0.80%.
<PAGE> 49
The Trust and the Adviser have entered into an Administrative Services
Agreement, pursuant to which the Adviser has agreed to provide each Fund all
administrative services. Under the Administrative Services Agreement, each Fund
pays the Adviser at the annual rate of 0.25% of the Fund's average net asset
value.
The Trust has adopted a Service and Distribution Plan with respect to its
Investor Class shares pursuant to Rule 12b-1 (the "Investor Class 12b-1 Plan")
under the Investment Company Act of 1940. Under the Investor Class 12b-1 Plan,
the Trust may pay fees as compensation for any or all of the following: (i)
engaging in activities or bearing expenses primarily intended to result in the
sale of Investor Class shares of the Trust, (ii) providing services relating to
the Investor Class shares of the Trust (which would be in addition to any
general services provided to a Fund as a whole) and (iii) providing additional
personal services to the Trust's Investor Class shareholders and/or for the
maintenance of Investor Class shareholder accounts. On an annual basis, the
aggregate amount of fees under the Investor Class 12b-1 Plan with respect to
each Fund authorized to issue Investor Class shares will not exceed 0.35% of the
Fund's average daily net assets attributable to its Investor Class shares. The
Investor Class 12b-1 Plan replaced the Shareholder Servicing Plan relating to
such shares previously adopted by the Trust.
The Trust has also adopted a Service and Distribution Plan with respect to its C
Class shares pursuant to Rule 12b-1 under Investment Company Act of 1940 (the "C
Class 12b-1 Plan"). Under the C Class 12b-1 Plan, the Trust may pay fees as
compensation for any or all of the following: (i) engaging in activities or
bearing expenses primarily intended to result in the sale of C Class shares of
the Trust and (ii) providing additional personal services to the Trust's C Class
shareholders and/ or for the maintenance of C Class shareholder accounts. On an
annual basis, the aggregate amount of fees under the C Class 12b-1 Plan with
respect to each Fund authorized to issue C Class shares will not exceed 1.00% of
the Fund's average daily net assets attributable to its C Class shares.
Prior to its implementation of the Investor Class 12b-1 Plan, each Fund
authorized to issue Investor Class shares, except the REIT Fund, had a
Shareholder Servicing Plan relating to such shares. Pursuant to the Shareholder
Servicing Plan, the Trust, on behalf of the Investor Class shares of each Fund,
paid to the Adviser, as the shareholder servicing agent of the Investor Class
shares of the Funds, or such other entity as from time to time act as the
shareholder servicing agent of such Investor Class shares (the "Servicing
Agent"), a fee (the "Shareholder Servicing Fee") for services rendered and
expenses borne by the Servicing Agent in connection with the provision of
certain services provided to Investor Class shareholders, at an annual rate not
to exceed 0.35% of a Fund's average daily net assets attributable to such Fund's
Investor Class shares.
The Bank of New York is the custodian for all the Funds except for the
Behavioral Long/Short Fund. The Behavioral Long/Short Fund's custodian is
Custodial Trust Company. Provident Distributors, Inc. acts as the distributor
for the Funds.
For the six months ended February 29, 2000, International Small Cap Equity Fund
and International Equity Fund executed portfolio transactions through an
affiliate of the Sub-Adviser to the Funds, however, no commissions were paid.
4. DIVIDENDS FROM NET INVESTMENT INCOME AND DISTRIBUTIONS OF CAPITAL GAINS
With respect to all Funds, dividends from net investment income are distributed
annually and net realized capital gains from investment transactions, if any,
are normally distributed to shareholders annually, but may, to the extent
permitted by law, be made more frequently as deemed advisable by the Trustees of
the Trust. Dividends and distributions to shareholders are recorded on the
ex-dividend date. Dividends and capital gain distributions are determined in
accordance with income tax requirements which may differ from generally accepted
accounting principles. To the extent the differences are permanent in nature,
such amounts are reclassified within the capital accounts based on their federal
tax-basis treatment. These reclassifications have no effect upon net assets or
net asset values.
5. TRUSTEES' COMPENSATION
Certain officers of the Trust are also officers and directors of the Adviser.
The Trust does not compensate its officers or its trustees who are affiliated
with the Adviser. The Trust pays each unaffiliated trustee an annual retainer of
$10,000. Each unaffiliated Trustee may elect not to receive such fees on a
current basis but to receive in a subsequent period an amount equal to the value
that would have resulted had the fees been invested in one or more of the Funds
(selected in advance by the Trustee) on the normal payment date for such fees.
The Trust did not compensate any officer of the Trust during the Trust's six
months ended February 29, 2000.
6. INVESTMENT TRANSACTIONS
Aggregate purchases and proceeds from sales of investment securities (other than
U.S. Government Obligations and short-term investments) for the six months ended
February 29, 2000 were:
<TABLE>
<CAPTION>
AGGREGATE PROCEEDS FROM
FUND PURCHASES SALES
- ---- ------------ -------------
<S> <C> <C>
Behavioral Growth Fund $152,299,490 $74,978,374
Behavioral Value Fund 7,050,675 1,393,842
Behavioral Long/Short 3,709,922 5,968,157
Behavioral Long/Short Fund - Short Sales 6,712,702 3,377,648
REIT Fund 12,437,711 7,784,791
Special Small Cap Fund 8,193,314 5,718,430
Small Cap Value Fund 12,488,995 6,431,320
Hidden Value Fund 849,872 1,372,634
All Cap Value Fund 359,661 429,751
Core Equity Fund 331,388 992,411
International Small Cap Equity Fund 2,469,919 1,591,784
International Equity Fund 5,222,192 504,172
</TABLE>
<PAGE> 50
The aggregate gross unrealized appreciation and depreciation and net unrealized
appreciation (depreciation) for all securities, net of securities sold short, as
computed on a federal income tax basis, at February 29, 2000, for each Fund were
as follows:
<TABLE>
<CAPTION>
FUND COST APPRECIATION (DEPRECIATION) NET APP.(DEP)
- ---- ------------ ------------ -------------- -------------
<S> <C> <C> <C> <C>
Behavioral Growth Fund $165,090,991 $86,579,563 $ (7,277,001) $79,302,562
Behavioral Value Fund 9,228,098 1,866,995 (1,009,703) 857,292
Behavioral Long/Short 4,706,193 1,392,416 (361,236) 1,031,180
REIT Fund 26,379,597 555,255 (1,182,640) (627,385)
Special Small Cap Fund 17,993,127 2,016,151 (2,156,141) (139,990)
Small Cap Value Fund 26,257,542 2,371,682 (4,472,875) (2,101,193)
Hidden Value Fund 2,562,288 257,310 (407,518) (150,208)
All Cap Value Fund 716,346 89,009 (86,701) 2,308
Core Equity Fund 3,928,802 555,327 (620,089) (64,762)
International Small Cap Equity Fund 7,717,939 7,418,761 (490,904) 6,927,857
International Equity 9,810,954 3,982,671 (861,533) 3,121,138
</TABLE>
7. CONCENTRATION OF RISK
Small Companies: All of the Funds may invest in companies with relatively small
market capitalizations. Several of the Funds will invest primarily in such
companies. Investments in companies with relatively small market capitalizations
may involve greater risk than is usually associated with stocks of larger
companies. These securities may have limited marketability and may be subject to
more abrupt or erratic movements in price than securities of companies with
larger capitalizations.
Real Estate Investment Trusts: REIT Fund invests primarily in shares of
companies in the real estate sector. While the Fund will not invest in real
estate directly, the Fund may be subject to risks similar to those associated
with direct ownership of real estate. These risks may include, but are not
limited to, price movement as a result of interest rate fluctuations, general
and local economic conditions, and heavy cash flow dependency, in addition to
securities market risks.
Foreign Securities: International Equity and International Small Cap Equity
Funds invest primarily in foreign securities. Investments in foreign securities
present risks not typically associated with investments in comparable securities
of U.S. issuers. These risks include re-valuation of currencies, and future
adverse political and economic developments. These risks are heightened for
investments in emerging market countries. Additionally, there may be less
available information about a foreign corporate or government issuer, securities
of many foreign companies, governments and their markets may be less liquid and
their prices more volatile than those of securities of comparable U.S. companies
and the U.S. government.
<PAGE> 51
(back inside cover)
How to reach
By phone
Client Services,
General information or
to obtain a prospectus (888) 242-3514 (toll-free)
Account Information (800) 667-1224 (toll-free)
A Registered Representative of Undiscovered Managers can be reached from
7:30 am - 7:00 pm CT
By fax (214) 999-7201
By mail 700 North Pearl Street, Suite 1700
Dallas, TX 75201
By e-mail [email protected]
<PAGE> 52
(back cover)
Undiscovered Managers Funds
700 North Pearl Street
Suite 1700
Dallas, Texas 75201
(888) 242-3514
www.undiscoveredmanagers.com
