[ICM LOGO]
ICM Series Trust
------------------
Isabelle Small Cap
Value Fund
Semi-Annual Report
June 30, 2000
<PAGE>
ICM/Isabelle
Small Cap Value Fund
TABLE OF CONTENTS
Shareholder Letter ........................................................ 1
Portfolio of Investments .................................................. 4
Statement of Assets and Liabilities ....................................... 7
Statement of Operations ................................................... 8
Statements of Changes in Net Assets ....................................... 9
Financial Highlights ...................................................... 10
Notes to Financial Statements ............................................. 12
<PAGE>
SHAREHOLDER LETTER
Dear Shareholder:
We are fond of thanking you for your continued confidence in us and we wish to
reiterate that thought at the outset of this letter/update. That support is
evidenced in the Fund's assets having expanded from $16.8 million at year-end to
more than $85 million as of this writing.
Following a solid performance in 1999, your Fund continued to make gains through
the first half of this year. Last year's return of 49.49% was achieved during a
period in which the general economy was very strong and nearly every variable
affecting it was favorable. However, the environment has become much more
uncertain: Sentiment now seems to vacillate between inflation worries and the
possible need for intervention by the Federal Reserve in an effort to cool
things off by raising interest rates, to elation at the continued strength seen
in quarterly earnings. This schizophrenia has led to a very choppy market, where
positive returns have been difficult to come by. While small caps have
outperformed, their gains have been minimal. For the first half of the period,
the Russell 2000 Index rose just 3.04% while the S&P 500 Index declined
slightly, by 0.42%. It is therefore all the more gratifying to report to you
that the ICM/Isabelle Small Cap Value Fund advanced by a further 13.17% during
the first six months of the year, while the annualized one-year and since
inception (March 9, 1998) total returns of the Fund were 39.33% and 6.99%,
respectively*.
_________________
*Share prices and performance calculations are based upon Investment Class
shares. 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. Without fee waivers and expense reimbursement in effect
during the period, total return for the Fund would have been lower. The Russell
2000 Index, the most relevant benchmark for the Fund, is an unmanaged index of
stocks considered representative of the small cap market. An individual cannot
invest in the index. The S&P 500 Index is an unmanaged group of stocks
considered to be representative of the stock market in general. Index returns
assume reinvestment of dividends; unlike the Fund's returns, however, they do
not reflect any fees or expenses. Past performance is no guarantee of future
results. For more complete information about the Fund, including fees and
expenses, please call 1-800-472-6114 for a prospectus. Please read the
prospectus carefully before investing or sending money. There are risks
associated with investing in funds that invest in stocks of small companies.
These stocks tend to be more volatile and less liquid than stocks of larger
companies.
Distributors: AmeriMutual Fund Distributors, Inc.
1
<PAGE>
Our investment philosophy has always focused on identifying unrecognized
"business value" among individual companies and our investment goals are built
around it. We believe that by consistently practicing what we preach, we can
produce superior returns over the long-term, through good, uncertain, and, even
bad economic periods. We truly believe that with proper execution, our
investment philosophy will translate into an "all-weather" investment vehicle.
If the investment engine is represented by the Fund, the fuel to power it is
represented by the individual stocks that go into it. Some of those stocks have
reacted very favorably in providing near-term energy to the portfolio. Signal
Technology (Symbol: STCO) has been, and continues to be a favorite, even though
it has risen some 245% this year, through June 30. Similarly, we still find
compelling value in Woodhead Industries (Symbol: WDHD), which was up 59% for the
period. Triton Energy (Symbol: OIL), having met its investment target, has since
been sold, but it also contributed handsomely, gaining 90% through the end of
June.
That our investment philosophy is grounded in real-world economics where
competition is a key element was more than amply demonstrated in the number of
take-over situations that the Fund was involved in. Within the space of one
month the acquisitions of Kollmorgen Corporation (Symbol: KOL), McWhorter
Technologies (Symbol: MWT), The Pioneer Group (Symbol: PIOG), American National
Can (Symbol: CAN), and ACME Electric (Symbol: ACEE) were announced. These all
represented meaningful positions in the ICM/Isabelle Small Cap Value Fund
portfolio, and with premiums ranging from 50% to over 100% being offered for the
companies, performance benefited accordingly. There were a few significant
disappointments including Crown Vantage Corporation (Symbol: CVAN), Medical
Resources Corporation (Symbol: MRIIQ), and Anacomp (Symbol: ANCO), but the
winners clearly outnumbered the losers. As an example of our steadfastness and
resolve, as is the case with Anacomp, if we continue to believe the investment
thesis strongly enough, we will persevere in our efforts, even if events cast a
near-term shadow over the outcome. Anacomp was itself a take-over candidate but
when a deal was unable to be consummated, the market punished the stock
severely, causing it to lose much of its market value. We believe, however, that
the fundamentals remain intact, supporting the original investment thesis, and
have subsequently increased our position, driving down the average cost in the
process.
2
<PAGE>
We are not sure where the economy or the market goes from here. There has been a
long period marked by declining interest rates, high productivity, strong
demand, and increased access to international markets. Going forward, the danger
is not so much in the sudden collapse of earnings or other fundamentals, but
from the investment players themselves. Heavy-handed or misguided attempts at
managing the economy could derail things just as another bout of irrational
exuberance on the part of investors who think that the sky is the limit and
economics don't matter. They do! Just witness the dot.com bubble that recently
burst! Barring this kind of eventuality, the demographics continue to be
favorable towards investing in stocks.
Whatever the case, our job will remain the same, to find companies with
unrecognized economic value. Through careful analysis we believe that we can
also separate perceived risk from actual risk, thus making it possible to reduce
volatility while improving returns. We will continue working diligently in an
effort to maintain the integrity of our product and your confidence in it.
Sincerely,
/s/WARREN J. ISABELLE
---------------------
Warren J. Isabelle
President & Chairman of The Board
July 2000
__________________
The views expressed in this report reflect those of the portfolio manager, only
through the period of this report as stated on the cover. The manager's views
are subject to change at any time based on the market and other conditions.
3
<PAGE>
<TABLE>
<CAPTION>
ICM/ISABELLE SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
June 30, 2000 (UNAUDITED)
MARKET
SHARES VALUE +
------ ---------
COMMON STOCKS - 93.16%
BASIC MATERIALS - 16.82%
<C> <S> <C>
152,654 AK Steel Holding Corp. $ 1,221,232
40,000 American National Can Group, Inc. 675,000
45,500 Cabot Corp. 1,239,875
116,100 Castle (A.M.) & Co. 965,081
219,700 Commonwealth Industries, Inc. 1,290,738
245,700 Crompton Corp. 3,009,825
167,300 Crown Vantage Inc.* 31,369
459,700 Graphic Packaging International Corp.* 976,862
208,800 Hanna (M.A.) Co. 1,879,200
151,400 Material Sciences Corp.* 1,514,000
185,000 Wausau-Mosinee Paper Corp. 1,584,062
-----------
14,387,244
-----------
CAPITAL GOODS - 23.53%
170,881 Acme Electric Corp.* 1,473,849
673,400 Brown & Sharpe Manufacturing Co.* 1,893,938
26,500 Carlisle Companies Inc. 1,192,500
43,800 Chicago Bridge & Iron Co. NV 643,313
234,400 DT Industries, Inc.* 2,197,500
71,000 ESCO Electronics Corp. 1,207,000
24,000 Herley Industries, Inc.* 453,000
51,100 JLG Industries, Inc. 606,813
205,400 Magna Tek, Inc.* 1,643,200
199,300 RTI International Metals, Inc.* 2,267,037
95,000 Sames Corp. 1,496,250
164,700 TransPro, Inc. 833,794
106,600 Woodhead Industries, Inc. 1,945,450
87,200 York International Corp. 2,278,100
-----------
20,131,744
-----------
COMMUNICATION SERVICES - 7.13%
488,275 Arch Communications Group, Inc.* 3,173,788
116,900 Signal Technology Corp.* 2,922,500
-----------
6,096,288
-----------
CONSUMER CYCLICALS - 7.88%
131,300 Cross (A.T.) Co.* 648,294
97,000 InterTAN, Inc.* 1,139,750
106,800 McNaughton Apparel Group, Inc. 1,121,400
68,200 Polaroid Corp. 1,231,862
77,700 Russell Corp. 1,554,000
176,671 Wickes Inc. 1,048,984
-----------
6,744,290
-----------
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
ICM/ISABELLE SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
June 30, 2000 (UNAUDITED)--Continued
MARKET
SHARES VALUE +
------ ---------
COMMON STOCKS - continued
CONSUMER STAPLES - 5.72%
134,300 Homeland Holding Corp.* $ 503,625
87,600 Michael Foods, Inc. 2,146,200
60,400 Tupperware Corp. 1,328,800
197,400 WLR Foods, Inc. 912,975
-----------
4,891,600
-----------
ENERGY - 2.85%
161,200 Bellwether Exploration Co.* 1,339,975
69,200 Plains Resources Inc.* 1,102,875
-----------
2,442,850
-----------
FINANCIAL SERVICES - 8.07%
187,700 Ceres Group, Inc. 1,114,469
81,300 The First American Financial Corp. 1,163,606
37,700 Presidential Life Corp. 523,087
68,000 StanCorp Financial Group, Inc. 2,184,500
452,000 Transmedia Network Inc. 1,921,000
-----------
6,906,662
-----------
HEALTH CARE - 8.73%
55,600 America Service Group Inc.* 1,139,800
134,900 ARIAD Pharmaceuticals, Inc.* 1,795,856
51,800 EPIX Medical, Inc.* 770,525
98,050 I-STAT Corp.* 1,709,747
365,400 Scios Inc.* 2,055,375
-----------
7,471,303
-----------
OTHER - 1.05%
19,000 Shuffle Master, Inc.* 273,125
140,900 Westaff, Inc.* 625,244
-----------
898,369
-----------
TECHNOLOGY - 8.82%
472,700 Anacomp, Inc. 1,418,100
57,215 CSP Inc.* 457,720
60,500 DuraSwitch Industries* 423,500
186,200 Elite Information Group Inc. 1,291,762
130,100 INSO Corp.* 674,894
73,500 Intergraph Corp.* 555,844
90,400 Pioneer-Standard Electronics, Inc. 1,333,400
135,350 Sypris Solutions, Inc.* 1,387,337
-----------
7,542,557
-----------
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
ICM/ISABELLE SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
June 30, 2000 (UNAUDITED)--Continued
MARKET
SHARES VALUE +
------ ---------
COMMON STOCKS - continued
TRANSPORTATION - 2.56%
293,900 Consolidated Freightways Corp.* $ 1,193,969
67,298 Yellow Corp.* 992,645
-----------
2,186,614
-----------
TOTAL COMMON STOCKS (COST $78,076,088) 79,699,521
-----------
SHORT TERM INVESTMENTS - 7.59%
$4,715,938 Fifth Third Repurchase Agreement, 6.57%, 7/3/00,
collateralized by $4,825,316 Federal National
Mortgage Bank, 7.5%, due 9/1/2012 4,715,938
1,781,521 Fifth Third Treasury Cash Reserves Fund 1,781,521
-----------
TOTAL SHORT TERM INVESTMENTS (COST $6,497,459) 6,497,459
-----------
Total Investments (Cost $84,573,547)** - 100.75% 86,196,980
Cash and Other Assets Net of Liabilities - (0.75)% (641,642)
-----------
NET ASSETS - 100.00% $85,555,338
===========
<FN>
______________
+ See Note 1 in Notes to Financial Statements.
* Non-income producing security.
** Cost for federal income tax purposes is $84,573,547 and net unrealized
appreciation consists of:
Gross unrealized appreciation $ 9,344,764
Gross unrealized depreciation (7,721,331)
-----------
Net unrealized appreciation $ 1,623,433
===========
The accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
6
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<TABLE>
<CAPTION>
ICM/ISABELLE SMALL CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (UNAUDITED)
ASSETS:
<S> <C>
Investments in securities at market value
(identified cost $84,573,547) (Note 1) $ 86,196,980
Cash 34,695
Receivable for securities sold 1,214,584
Receivable for fund shares sold 1,048,215
Interest and dividends receivable 63,818
Deferred organization costs (Note 1) 32,408
Prepaid expenses and other assets 1,744
------------
TOTAL ASSETS 88,592,444
------------
LIABILITIES:
Payable for securities purchased 2,754,741
Payable for fund shares redeemed 149,625
Payable to advisor (Note 3) 67,105
Payable for trustee fees (Note 3) 3,046
Accrued expenses 62,589
------------
TOTAL LIABILITIES 3,037,106
------------
NET ASSETS $ 85,555,338
============
Investment Class Shares (Note 1):
Net assets (Unlimited shares of $0.001 par beneficial
interest authorized; 5,891,534 shares outstanding) $ 68,868,412
============
Net asset value, offering and redemption price
per Investment Class Share $ 11.69
============
Institutional Class Shares (Note 1):
Net assets (Unlimited shares of $0.001 par beneficial
interest authorized; 1,422,079 shares outstanding) $ 16,686,926
============
Net asset value, offering and redemption price
per Institutional Class Share $ 11.73
============
NET ASSETS CONSIST OF:
Paid-in capital $ 79,978,560
Accumulated net investment gain (loss) (186,577)
Accumulated net realized gain (loss) on investments 4,139,922
Net unrealized appreciation (depreciation) on investments 1,623,433
------------
NET ASSETS $ 85,555,338
============
The accompanying notes are an integral part of the financial statements.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
ICM/ISABELLE SMALL CAP VALUE FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS
ENDED
JUNE 30, 2000
(UNAUDITED)
-----------
INVESTMENT INCOME:
<S> <C>
Dividends $ 271,450
Interest 183,629
-----------
TOTAL INCOME 455,079
-----------
EXPENSES:
Investment advisory fees (Note 3) 281,245
Distribution fees - Investment Class (Note 4) 57,551
Registration fees 36,733
Administration fees 32,189
Transfer agent fees 30,729
Accounting fees 22,671
Printing expenses 21,492
Custodian fees (Note 3) 16,201
Professional fees 15,653
Amortization of organization costs (Note 1) 6,008
Trustees fees 3,396
Insurance expenses 1,472
Miscellaneous fees 13,961
-----------
TOTAL EXPENSES 539,301
-----------
Fees waived and expenses reimbursed by advisor (Note 3) (2,017)
Credits allowed by custodian (Note 3) (637)
-----------
NET EXPENSES 536,647
-----------
NET INVESTMENT GAIN (LOSS) (81,568)
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investments 2,725,605
Net change in unrealized appreciation (depreciation) of investments 934,773
-----------
Net realized and unrealized gain (loss) on investments 3,660,378
-----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 3,578,810
===========
The accompanying notes are an integral part of the financial statements.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
ICM/ISABELLE SMALL CAP VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months For the Year
Ended Ended
June 30, 2000 December 31,
(Unaudited) 1999
------------------ -------------
OPERATIONS:
<S> <C> <C>
Net investment gain (loss) $ (81,568) $ (105,009)
Net realized gain (loss) on investments 2,725,605 2,226,890
Net change in unrealized appreciation
(depreciation) of investments 934,773 1,687,839
------------ ------------
Net increase (decrease) in net
assets resulting from operations 3,578,810 3,809,720
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares subscribed:
Investment Class 62,135,894 6,998,269
Institutional Class 8,284,891 1,782,304
Cost of shares redeemed:
Investment Class (5,801,049) (544,317)
Institutional Class (84,144) --
------------ ------------
Increase (decrease) in net assets derived
from capital share transactions (a) 64,535,592 8,236,256
------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS 68,114,402 12,045,976
------------ ------------
NET ASSETS:
Beginning of period 17,440,936 5,394,960
------------ ------------
End of period (including accumulated net
investment loss of ($186,577) and
$0, respectively) $ 85,555,338 $ 17,440,936
============ ============
(a) Transactions in capital stock were:
Shares sold:
Investment Class 5,428,851 796,386
Institutional Class 710,309 179,609
Shares redeemed:
Investment Class (504,334) (69,667)
Institutional Class (7,213) --
------------ ------------
Increase (decrease) in shares
outstanding 5,627,613 906,328
============ ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
ICM/ISABELLE SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of capital stock
outstanding throughout each period indicated.
INVESTMENT INVESTMENT INVESTMENT
CLASS CLASS CLASS
FOR THE SIX FOR THE FOR THE PERIOD
MONTHS ENDED YEAR MARCH 9, 1998**
JUNE 30, 2000* ENDED THROUGH
(UNAUDITED) DECEMBER 31, DECEMBER 31, 1998
1999*
-------------- ------------ -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.33 $ 6.91 $ 10.00
---------- --------- ---------
Income (Loss) From
Investment Operations:
Net investment income (loss) (0.02) (0.12) (0.04)
Net gains (losses) on securities
(both realized and unrealized) 1.38 3.54 (3.05)
---------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 1.36 3.42 (3.09)
---------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 11.69 $ 10.33 $ 6.91
========== ========= =========
TOTAL RETURN 13.17% 49.49% (30.90%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000s) $ 68,868 $ 9,993 $ 1,660
Ratio of expenses to average net assets:
Before expense reimbursement 1.96%(1) 4.79% 8.81%(1)
After expense reimbursement(2) 1.95%(1) 1.95% 1.95%(1)
Ratio of net investment income (loss)
to average net assets:
Before expense reimbursement (0.35%)(1) (4.23%) (7.99%)(1)
After expense reimbursement(2) (0.35%)(1) (1.39%) (1.13%)(1)
Portfolio turnover rate 21.36% 84.30% 21.43%
<FN>
_________
* Based on average shares outstanding.
** Commencement of investment operations.
(1) Annualized.
(2) Includes custody earnings credits.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
ICM/ISABELLE SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of capital stock
outstanding throughout each period indicated.
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
CLASS CLASS CLASS
FOR THE SIX MONTHS FOR THE PERIOD
ENDED FOR THE YEAR MARCH 29, 1998**
JUNE 30, 2000* ENDED THROUGH
(UNAUDITED) DECEMBER 31, 1999* DECEMBER 31, 1998
--------------- ------------------ -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.36 $ 6.92 $ 10.00
------------- --------- ---------
Income (Loss) From
Investment Operations:
Net investment income (loss) (0.02) (0.10) (0.04)
Net gains (losses) on securities
(both realized and unrealized) 1.39 3.54 (3.04)
------------- --------- ---------
TOTAL FROM INVESTMENT
OPERATIONS 1.37 3.44 (3.08)
------------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 11.73 $ 10.36 $ 6.92
============= ========= =========
TOTAL RETURN 13.22% 49.71% (30.80%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000s) $ 16,687 $ 7,448 $ 3,734
Ratio of expenses to average net assets:
Before expense reimbursement 1.73%(1) 4.54% 8.56%(1)
After expense reimbursement(2) 1.70%(1) 1.70% 1.70%(1)
Ratio of net investment income (loss) to
average net assets:
Before expense reimbursement (0.06%)(1) (4.14%) (7.74%)(1)
After expense reimbursement(2) (0.03%)(1) (1.30%) (0.88%)(1)
Portfolio turnover rate 21.36% 84.30% 21.43%
<FN>
_____________
* Based on average shares outstanding.
** Commencement of investment operations.
(1) Annualized.
(2) Includes custody earnings credits.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (UNAUDITED)
NOTE 1- SIGNIFICANT ACCOUNTING POLICIES
ICM/Isabelle Small Cap Value Fund (the "Fund"), a series of ICM Series Trust
(the "Trust") was organized as a Massachusetts business trust pursuant to a
trust agreement dated November 18, 1997. The Trust is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund offers two
classes of shares (Investment Class shares and Institutional Class shares), each
of which has equal rights as to class and voting privileges. The Investment
Class has exclusive voting rights with respect to its distribution plan pursuant
to Rule 12b-1 ("12b-1 Plan") and is subject to 12b-1 Plan expenses. The Fund
commenced operations on March 9, 1998 (March 29, 1998 for the Institutional
Class). The investment objective of the Fund is to seek capital appreciation by
investing in a diversified portfolio of securities consisting primarily of
common stocks. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles for investment companies.
A. SECURITY VALUATION. Investments in securities are valued at the last reported
sales price on the national securities exchange or national securities market on
which such securities are primarily traded, on the last business day of the
period. Unlisted securities, or listed securities in which there were no sales,
are valued at the mean of the closing bid and ask prices. Short-term obligations
with remaining maturities of 60 days or less are valued at amortized cost plus
accrued interest, which approximates market value. Any securities or other
assets for which recent market quotations are not readily available are valued
at fair value as determined in good faith under the direction of the Board of
Trustees.
B. INVESTMENT INCOME AND SECURITIES TRANSACTIONS. Security transactions are
accounted for on the date the securities are purchased or sold (trade date).
Cost is determined and gains and losses are based on the identified cost basis
for both financial statement and federal income tax purposes. Dividend income is
reported on the ex-dividend date. Interest income and expenses are accrued
daily.
12
<PAGE>
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (UNAUDITED)--CONTINUED
C. NET ASSET VALUE PER SHARE. Net Asset value per share of each class of shares
of the Fund is determined daily as of the close of trading on the New York Stock
Exchange by dividing the value of its net assets, less liabilities attributable
to that class, by the number of outstanding shares of that class. The net asset
value of the classes may differ because of different fees and expenses charged
to each class.
D. ORGANIZATION COSTS. Organization costs are amortized on a straight line basis
over five years from commencement of operations. If any of the original shares
are redeemed by any holder thereof prior to the end of the amortization period,
the redemption proceeds will be decreased by the prorata share of the
unamortized organizational costs as of the date of redemption. The prorata share
will be derived by dividing the number of original shares redeemed by the total
number of original shares outstanding at the time of redemption.
E. FEDERAL INCOME TAXES. The Trust intends to continue to qualify each year as a
regulated investment company by complying with all requirements of the Internal
Revenue Code of 1986, as amended, applicable to regulated investment companies
including, among other things, distributing substantially all of its earnings to
its shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with federal income tax rules. Therefore,
the source of the Fund's distributions may be shown in the accompanying
financial statements as either from or in excess of net investment income or net
realized gain on investment transactions, or from paid-in capital, depending on
the type of book/tax differences that may exist. At December 31, 1999, the Fund
reclassified $105,009 from accumulated net investment loss to accumulated
undistributed net realized gain on investments. The reclassification has no
impact on the net asset value of the Fund and is designed to present the Fund's
capital accounts on a tax basis.
13
<PAGE>
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (UNAUDITED)--CONTINUED
F. INCOME AND EXPENSES. Expenses directly attributable to a particular class are
charged directly to such class. In calculating net asset value per share of each
class, investment income, realized and unrealized gains and losses and expenses,
other than class specific expenses, are allocated daily to each class of shares
based on the proportion of net assets of each class at the beginning of that
day.
G. DISTRIBUTIONS TO SHAREHOLDERS. The Fund will distribute substantially all of
its net investment income and capital gains, if any, annually. Distributions to
shareholders are recorded on the ex-dividend date. Income and capital gain
distributions are determined in accordance with income tax regulations, which
may differ from generally accepted accounting principles.
H. USE OF ESTIMATES. In preparing financial statements in conformity with
generally accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements, as well as the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those
estimates.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term investments, aggregated
$71,113,906 and $10,960,122 respectively, for the six months ended June 30,
2000.
14
<PAGE>
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (UNAUDITED)--CONTINUED
NOTE 3 - INVESTMENT MANAGEMENT FEE, ADMINISTRATION FEE AND OTHER TRANSACTIONS
Ironwood Capital Management, LLC ("ICM") serves as the investment advisor for
the Fund pursuant to an investment advisory agreement (the "Agreement") dated
March 2, 1998. Under the terms of the Agreement, ICM receives a fee from the
Fund, accrued daily and paid monthly, at an annual rate of 1.00% of the average
daily net assets of the Fund.
Pursuant of the terms of the Agreement, ICM is obligated for as long as the
Agreement remains in effect, to limit total Fund expenses, including its
investment advisory fee, to 1.95% of the average daily net assets annually for
the Investment Class and 1.70% of the average daily net assets annually for the
Institutional Class, and to waive such fees and expenses to the extent that they
exceed these amounts. For the six months ended June 30, 2000, advisory fees of
$2,017 were waived by ICM.
American Data Services, Inc. ("ADS") serves as the administrator, fund
accounting agent and transfer agent to the Fund, and AmeriMutual Fund
Distributors, Inc., an affiliate of ADS, serves as the Fund's distributor.
For providing administrative services, the Fund pays ADS a fee at the annualized
rate of 0.12% of the Fund's average daily net assets up to $100 million and at
reduced percentages thereafter; a minimum fee applies. For providing fund
accounting services, the Fund pays ADS a fixed monthly fee for average net
assets less than $25 million plus out-of-pocket expenses. For providing transfer
agent services, the Fund pays ADS a minimum monthly or per account fee plus
certain transaction fees. Prior to August 23, 1999, First Data Investor Services
Group, Inc., a subsidiary of First Data Corporation, served as the Fund's
administrator.
Fifth Third Bank, as the Fund's custodian, has agreed to compensate the Fund and
decrease custody fees for interest on any cash balances left uninvested. For the
six months ended June 30, 2000, the Fund's custodian expenses were reduced by
$637.
15
<PAGE>
ICM/ISABELLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (UNAUDITED)--CONTINUED
No officer, trustee or employee of ICM, or ADS, or any affiliate thereof,
receives any compensation from the Trust for serving as a Trustee or officer of
the Trust. The Trust pays each unaffiliated Trustee an annual fee of $2,000 for
their services, including their attendance at board and committee meetings. The
Trust also reimburses each unaffiliated Trustee for travel and out-of-pocket
expenses related to the attendance at such meetings.
NOTE 4 - DISTRIBUTION PLAN
The Trustees of the Fund have adopted a 12b-1 Plan with respect to the
Investment Class shares pursuant to Section 12(b) of the 1940 Act and Rule 12b-1
thereunder, which permits the Fund to pay certain expenses associated with the
distribution of its Investment Class shares. Under the 12b-1 Plan, the Fund
compensates the Distributor, at a fee calculated at an annual rate of up to
0.25% of the value of the average daily net assets attributable to the
Investment Class shares for distribution expenses borne, or paid to others, by
the Distributor.
16
<PAGE>
NOTES
17
<PAGE>
IRONWOOD CAPTAL MANAGEMENT, LLC
AND ICM FUNDS
The Ironwood Tree
is a small, hardy tree, which yields a very useful and solid wood. Patiently,
these trees remain under the forest canopy until taller neighbors fall.
Once given the opportunity, the Ironwood grows quickly
to reach its full potential. We believe this imagery is appropriate
for our firm as well as our investment style.
Ironwood Capital Management, LLC,
the investment manager of the ICM/Isabelle Small Cap Value Fund,
is an independent investment management firm specializing
in investing in small company stocks.
ICM Funds
C/O American Data Services, Inc.
P.O. Box 5536
Hauppauge, NY 11788-0132
1-800-472-6114
--------------------------------------------------------------------------------
There are risks associated with investing in funds of this type that invest in
stocks of small-sized companies, which tend to be more volatile and less liquid
than stocks of larger companies. Past Fund performance is not indicative of
future results.
This information is not authorized for distribution unless accompanied or
preceded by a current prospectus.
Distributor: AmeriMutual Fund Distributors, Inc.
For account information and prices, call 1-800-472-6114 between the hours of
9:00 a.m. and 5:00 p.m. (Eastern Time), Monday through Friday.
