GRAND PRIX FUNDS, INC.
SEMI-ANNUAL REPORT
APRIL 30, 1999
GRAND PRIX FUND
1/1/98 10/31/98 4/30/99
--------- --------- ---------
Grand Prix Fund $9,479 $13,668 $24,386
S&P 500 Index $10,000 10,122 $12,031
S&P 400 MidCap Index $10,000 $11,463 $14,021
S&P 600 SmallCap Index $10,000 $8,782 $9,575
-------------------------------------------------------------
FOR PERIOD ENDED APRIL 30, 1999
Average Annual
One Year Since Inception
4/30/99 1/1/98 to 4/30/99
-------------------------------------------------------------
GRAND PRIX FUND 103.70% 95.59%
S&P 500 Stock Index 21.82% 28.96%
S&P 400 MidCap Index 6.43% 14.93%
S&P 600 SmallCap Index -14.29% -3.21%
-------------------------------------------------------------
This chart assumes an initial investment of $10,000 made after the close of
business on 1/1/98 (Commencement). Returns shown include the reinvestment of all
dividends and are shown net of the 5.25% sales load. Performance figures reflect
fee waivers in effect and represent past performance which is no guarantee of
future results. The investment return and principal value of an investment in
the Grand Prix Fund will fluctuate so that an investor's shares in the Fund,
when redeemed, may be worth more or less than their original cost.
The S&P 400 MidCap Index is an unmanaged capitalization weighted total return
index that measures the performance of the mid-range sector of the U.S. stock
market.
The S&P 500 Composite Stock Index is an unmanaged index of 500 selected common
stocks, most of which are listed on the New York Stock Exchange. The Index is
heavily weighted toward stocks with large market capitalizations and represents
approximately two-thirds of the total market value of all domestic common
stocks.
The S&P 600 SmallCap Index is an unmanaged capitalization weighted total return
index that measures the performance of the small-cap sector of the U.S. stock
market.
GRAND PRIX FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999 (UNAUDITED)
NUMBER OF
SHARES VALUE
-------- --------
COMMON STOCKS 97.2%
AIRLINES 3.6%
50,000 Southwest Airlines Co. $1,628,125
------------
AUTO MANUFACTURERS 4.5%
38,000 Navistar International Corp. 1,987,875
------------
COMMUNICATIONS EQUIPMENT 6.0%
18,000 Tellabs, Inc.* 1,972,125
6,000 Uniphase Corp.* 728,250
------------
2,700,375
------------
COMPUTER INTEGRATED SYSTEMS 4.5%
31,000 Comverse Technology, Inc.* 1,987,875
------------
COMPUTER LOCAL NETWORKS 4.1%
16,000 Cisco Systems, Inc.* 1,825,000
------------
COMPUTER MINI/MICRO 8.7%
10,000 International Business Machines, Inc. 2,091,875
30,000 Sun Microsystems, Inc.* 1,794,375
------------
3,886,250
------------
COMPUTER SOFTWARE 12.3%
30,000 Adobe Systems, Inc. 1,901,250
14,000 America Online, Inc.* 1,998,500
9,000 Yahoo!, Inc.* 1,572,188
------------
5,471,938
------------
FINANCIAL SERVICES 12.6%
10,000 Capital One Financial Corp. 1,736,875
12,000 Knight/Trimark Group, Inc.* 1,838,250
16,000 Providian Corp. 2,065,000
------------
5,640,125
------------
MACHINERY 3.9%
25,000 Ingersoll-Rand Co. 1,729,687
------------
PRINTERS & RELATED PRODUCTS 7.4%
36,000 Electronics for Imaging, Inc.* 1,703,250
13,000 Lexmark International Group, Inc.* 1,605,500
------------
3,308,750
------------
GRAND PRIX FUND
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SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 1999 (UNAUDITED)
NUMBER OF
SHARES VALUE
-------- --------
RENTAL AUTO/EQUIPMENT 3.5%
26,000 The Hertz Corp. $1,551,875
------------
RETAIL 12.1%
20,000 Abercrombie & Fitch Co.* 1,902,500
32,000 Intimate Brands, Inc. 1,600,000
15,000 Linens 'n Things, Inc.* 686,250
30,000 The Wet Seal, Inc.* 1,222,500
------------
5,411,250
------------
SEMICONDUCTORS 11.0%
22,000 Altera Corp.* 1,589,500
10,000 Maxim Integrated Products, Inc.* 560,000
10,000 Qlogic Corp.* 699,375
19,000 SDL, Inc.* 2,075,750
------------
4,924,625
------------
TELECOMMUNICATION EQUIPMENT 3.0%
18,000 Nokia Corp. ADR 1,335,375
------------
Total Common Stocks (cost $40,356,274) 43,389,125
------------
SHORT-TERM INVESTMENTS 1.2%
528,978 Fifth Third Treasury Fund 528,978
------------
Total Short-term Investments (cost $528,978) 528,978
------------
Total Investments (cost $40,885,252) 98.4% 43,918,103
Other Assets less Liabilities 1.6% 714,928
------------
NET ASSETS 100.0% $44,633,031
============
*Non-income producing security
See notes to the financial statements.
GRAND PRIX FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
(UNAUDITED)
ASSETS:
Investments at value (cost $40,885,252) $43,918,103
Receivable for investments sold 667,946
Receivable from adviser 40,185
Deferred organization costs, net 58,417
Prepaid expenses 21,936
Dividends and interest receivable 6,023
------------
Total Assets 44,712,610
------------
LIABILITIES:
Accrued investment advisory fees 64,394
Accrued distribution fees 11,974
Other accrued expenses 3,211
------------
Total Liabilities 79,579
Net Assets $44,633,031
============
NET ASSETS CONSIST OF:
Capital stock $39,003,655
Accumulated net investment loss (96,067)
Accumulated net realized gain on investments 2,692,592
Net unrealized appreciation on investments 3,032,851
------------
Net Assets $44,633,031
============
CAPITAL STOCK, $0.01 PAR VALUE, 500,000,000 SHARES AUTHORIZED
Issued and outstanding 2,052,738
NET ASSET VALUE PER SHARE $21.74
============
MAXIMUM OFFERING PRICE PER SHARE $22.94
============
See notes to the financial statements.
GRAND PRIX FUND
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STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1999
(UNAUDITED)
INVESTMENT INCOME:
Interest $29,881
Dividends (net of $1,136 foreign withholding taxes) 15,847
------------
45,728
------------
EXPENSES:
Investment advisory fees 82,635
Legal fees 42,379
Fund administration and accounting fees 33,515
Distribution fees 20,659
Reports to shareholders 14,073
Shareholder servicing fees 13,953
Federal and state registration fees 9,815
Amortization of organization costs 7,889
Custody fees 5,906
Audit fees 3,390
Other 2,830
------------
Total expenses before reimbursement 237,044
Reimbursement of expenses by Advisor (95,249)
------------
Net expenses 141,795
------------
NET INVESTMENT LOSS (96,067)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 2,710,409
Change in net unrealized appreciation on investments 2,858,076
------------
Net gain on investments 5,568,485
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $5,472,418
============
See notes to the financial statements.
GRAND PRIX FUND
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STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1999 OCTOBER 31,
(UNAUDITED) 1998<F1>
------------ ------------
OPERATIONS:
Net investment loss $(96,067) $(10,705)
Net realized gain on investments 2,710,409 296,012
Change in unrealized appreciation on investments 2,858,076 174,775
----------- -----------
Net increase in net assets resulting
from operations 5,472,418 460,082
----------- -----------
DISTRIBUTIONS PAID FROM:
Net realized gains on investments (312,180) -
----------- -----------
Net decrease in net assets resulting from
distributions paid (312,180) -
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Shares sold 41,158,741 1,045,326
Shares issued to holders in reinvestment
of distributions 312,180 -
Shares redeemed (3,593,536) (10,000)
----------- -----------
Net increase from share transactions 37,877,385 1,035,326
----------- -----------
TOTAL INCREASE IN NET ASSETS 43,037,623 1,495,408
NET ASSETS:
Beginning of period 1,595,408 100,000
----------- -----------
End of period $44,633,031 $1,595,408
=========== ===========
TRANSACTIONS IN SHARES:
Shares sold 2,099,656 101,364
Shares issued to holders in reinvestment
of distributions 21,770 -
Shares redeemed (179,358) (694)
----------- -----------
Net increase 1,942,068 100,670
=========== ===========
<F1> Commenced operations on January 1, 1998
See notes to the financial statements.
GRAND PRIX FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 1999 OCTOBER 31,
(UNAUDITED) 1998<F1>
---------- ----------
Net asset value, beginning of period $14.42 $10.00
Income from investment operations:
Net investment income (loss) (0.05) (0.10)
Net realized gain on investments 10.00 4.52
---------- ----------
Total from investment operations 9.95 4.42
Less distributions from net realized gains (2.63) -
---------- ----------
Net asset value, end of period $21.74 $14.42
========== ==========
Total return <F2><F3> 78.41% 44.20%
Supplemental data and ratios:
Net assets, end of period $44,633,031 $1,595,408
Ratio of net expenses to average net
assets <F4><F5> 1.70% 1.65%
Ratio of net investment loss to average
net assets <F4><F5> (1.15)% (1.03)%
Portfolio turnover rate 441.9% 521.6%
<F1> Commenced operations on January 1, 1998
<F2> The total return calculation does not reflect any sales load imposed on the
purchase of shares.
<F3> Not annualized
<F4> Annualized
<F5> Net of reimbursements and waivers. Without reimbursements and waivers, the
ratio of expenses to average net assets would have been 2.84% and 15.93%,
and the ratio of net investment loss to average net assets would have been
(2.29)% and (15.31)% for the periods ended April 30, 1999 and October 31,
1998, respectively.
See notes to the financial statements.
Grand Prix Fund
Notes to the Financial Statements
April 30, 1999 (Unaudited)
(1)Organization
The Grand Prix Funds, Inc. (the "Corporation") was incorporated on October
30, 1997 as a Maryland Corporation and is registered as an open-end
management investment company under the Investment Company Act of 1940 (the
"1940 Act"). The Corporation is authorized to issue its shares in series,
each series representing a distinct portfolio with its own investment
objectives and policies. The only series presently authorized is the Grand
Prix Fund (the "Fund") which commenced operations on January 1, 1998.
Effective December 1, 1998, the Fund changed from a no-load mutual fund to a
load fund.
(2)Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles
("GAAP"). The presentation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates and assumptions.
(a) Investment Valuation
Securities are stated at value. Securities which are traded on a
recognized stock exchange are valued at the last sale price on the
securities exchange on which such securities are primarily traded.
Securities traded on only over-the-counter markets are valued on the
basis of closing over-the-counter trade prices. Securities for which
there were no transactions are valued at the average of the latest bid
and asked prices. Debt securities (other than short-term instruments)
are valued at prices furnished by a pricing service. Debt instruments
maturing within 60 days are valued by the amortized cost method. Any
securities for which market quotations are not readily available are
valued at their fair value as determined in good faith by Target
Investors (the "Advisor") pursuant to guidelines established by the
Board of Directors.
(b) Organization Costs
Costs incurred by the Fund in connection with its organization,
registration and the initial public offering of shares have been
deferred and will be amortized over the period of benefit, but not to
exceed five years from the date upon which the Fund commenced its
investment activities. If any of the original shares of the Fund
purchased by the initial shareholder are redeemed prior to the end of
the amortization period, the redemption proceeds will be reduced by the
pro rata share of the unamortized costs as of the date of redemption.
The pro rata share by which the proceeds are reduced will be derived by
dividing the number of original shares of the Fund being redeemed by the
total number of original shares outstanding at the time of redemption.
(c) Federal Income and Excise Taxes
The Fund intends to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute
substantially all net investment company taxable income and net capital
gains to shareholders in a manner which results in no tax cost to the
Fund. Therefore, no federal income or excise tax provision is required.
(d) Distribution to Shareholders
Dividends from net investment income will be declared and paid annually.
Distributions of net realized gains, if any, will be declared at least
annually. Distributions to shareholders are recorded on the ex-dividend
date. The Fund may periodically make reclassifications among certain of
its capital accounts as a result of the recognition and characterization
of certain income and capital gain distributions determined annually in
accordance with federal tax regulations which may differ from generally
accepted accounting principles.
(e) Securities Transactions and Investment Income
Investment transactions are recorded on the trade date for financial
statement purposes. The Fund determines the gain or loss realized from
investment transactions by comparing the original cost of the security
lot sold with the net sale proceeds. Dividend income is recognized on
the ex-dividend date and interest income is recognized on an accrual
basis. Acquisition and market discounts are amortized over the life of
the security.
(3)Investment Advisor
The Fund has an agreement with the Advisor, with whom certain officers and
directors of the Fund are affiliated, to furnish investment advisory
services to the Fund. Under the terms of this agreement, the Advisor is
compensated at an annual rate of 1.00% of average daily net assets of the
Fund. For the six months ended April 30, 1999, the Advisor has agreed to
waive its investment advisory fee and/or reimburse the Fund's operating
expenses (exclusive of brokerage, interest, taxes and extraordinary
expenses) to the extent necessary to ensure that the Fund's total operating
expenses do not exceed 1.72% of the Fund's average daily net assets (prior
to February 26, 1999, the limitation was 1.65%). During the six months
ended April 30, 1999, the Advisor waived and reimbursed the Fund for
expenses totaling $95,249, including $82,635 of investment advisory fees.
(4)Distribution Plan
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the 1940 Act. Under the Plan, the Fund is authorized to pay expenses
incurred for the purpose of financing activities, including the employment
of other dealers, intended to result in the sale of shares of the Fund at an
annual rate of up to 0.25% of the Fund's average daily net assets.
(5)Investment Transactions
The aggregate purchases and sales of securities, excluding short-term
investments and U.S. government obligations, for the Fund for the six months
ended April 30, 1999 are summarized below. There were no purchases or sales
of long-term U.S. government securities.
Purchases $112,928,771
Sales $76,705,412
At April 30, 1999, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax purposes of $41,582,990,
were as follows:
Unrealized appreciation $3,199,793
Unrealized depreciation (864,680)
----------
Net unrealized appreciation on investments $2,335,113
==========
(6)Offering Price Per Share
The public offering price is the net asset value plus a sales charge which
varies in accordance with the amount of the purchase as follows:
Sales Charge Sales Charge
as a as a
Percentage of Percentage of
Amount of Investment Offering Price Investment
-------------------- ------------- -------------
Less than $50,000 5.25% 5.54%
$50,000 - $99,999 4.50% 4.71%
$100,000 - $249,999 3.50% 3.63%
$250,000 - $499,999 2.50% 2.56%
$500,000 - $999,999 2.00% 2.04%
$1,000,000 or more 1.00% 1.01%
As specified in the Fund's Prospectus, certain sales of Fund shares can be
made at net asset value per share without the imposition of any sales
charge.
(7)Results of the Shareholder Meeting
A special meeting of shareholders of the Fund was held on February 8, 1999.
The matters voted on by the shareholders of record as of January 15, 1999
and the results of the vote at the shareholder meeting held on February 8,
1999 were as follows:
PROPOSAL 1 - To eliminate the Fund's fundamental investment restriction
which did not permit the Fund to borrow money for the purpose of making
investments.
For Against Abstain
-------- -------- --------
371,791 16,353 -
PROPOSAL 2 - To consider and act upon any other business which may properly
come before the meeting or any adjournments thereof.
For Against Abstain
-------- -------- --------
361,981 4,943 21,220
