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ANNUAL
REPORT
OCTOBER 31, 1999
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OAK ASSOCIATES FUNDS
<PAGE>
TABLE OF CONTENTS
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Shareholder Letter ........................ 1
About the Adviser ......................... 2
Investment Team ........................... 2
Market Overview ........................... 3
Pin Oak Aggressive Profile ................ 6
White Oak Growth Profile .................. 8
Red Oak Technology Select Profile .........10
Financial Highlights ......................12
Statement of Net Assets ...................14
Statement of Operations ...................20
Statement of Changes in Net Assets ........21
Notes to Financial Statements .............22
Report of Independent
Public Accountants .....................25
CONTACT US:
BY MAIL:
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OAK ASSOCIATES FUNDS
P.O. Box 219441
Kansas City, MO 64121-6441
BY TELEPHONE:
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1-888-462-5386
Option 1 To order a free investor kit
Option 2 To hear the latest fund prices
Option 3 To obtain fund information & performance
Option 4 For existing shareholders to obtain account information & place
transactions
ON THE WEB:
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WWW.OAKASSOCIATES.COM
[bullet] To obtain fund prices
[bullet] Access your account on-line
[bullet] For portfolio manager commentary
[bullet] To download forms & applications
<PAGE>
To Our Shareholders
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Dear Fellow Shareholders:
We are pleased to send you the latest Annual Report for the Oak Associates
Funds, which covers the fiscal year ended October 31, 1999. This report contains
a discussion of the equity stock markets, detailed information on the holdings
of each Fund, a report from the Fund's Independent Accountants, and other
important financial data. As informed investors, we encourage you to read it
carefully to stay abreast of your investments.
It was another outstanding year for the stock markets and Fund shareholders. The
bull continues to charge ahead, with technology driving a U.S. economy that will
be written about in future history books. Market volatility continues, and our
concentrated investment style tends to magnify some of the daily ups and downs.
But the long-term target is what we keep our eye on, and it has not been a
disappointing strategy.
PERFORMANCE -- As shown in the table below, White Oak Growth and Pin Oak
Aggressive performance has been very strong coming off a market downturn last
fall. And Red Oak Technology Select has vaulted out of the starting blocks since
it opened at the beginning of the year. Look to pages 6 through 11 for more
detailed performance information and illustrations.
ASSET GROWTH -- As of October 31, 1999, the Oak Associates Funds have grown to
become a $2.5 billion fund family, compared to $872 million a year ago.
TAX EFFICIENCY -- As a result of our buy-and-hold strategy and low portfolio
turnover, both White Oak Growth and Red Oak Technology Select had no capital
gain distributions in 1999. Pin Oak Aggressive will have its first distribution
ever, a long-term gain which is relatively small by industry comparison.
As always, we look forward to serving your investment needs and thank you for
choosing the Oak Associates Funds as part of your investment portfolio.
Sincerely,
/S/SIGNATURE
James D. Oelschlager
CHIEF INVESTMENT OFFICER
[BAR GRAPH OMITTED]
1 YEAR PERFORMANCE
PIN OAK AGGRESSIVE 90.57%
WHITE OAK GROWTH 56.52%
PERFORMANCE SINCE INCEPTION 12/31/98
ENDING 10/31/99
RED OAK TECHNOLOGY SELECT 69.40%
1
<PAGE>
About the Adviser
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OAK ASSOCIATES, LTD., THE INVESTMENT ADVISER TO THE FUNDS, WAS ESTABLISHED IN
1985 AND CURRENTLY MANAGES OVER $17.5 BILLION IN PENSION, ENDOWMENT, INDIVIDUAL
AND MUTUAL FUND ASSETS. OAK CONCENTRATES IN THE MARKET SECTORS BELIEVED TO HAVE
THE GREATEST LONG-TERM GROWTH POTENTIAL AND THEN FOCUSES ON KEY COMPANIES IN
THOSE AREAS. OAK BELIEVES THAT A PATIENT BUY-AND-HOLD STRATEGY, LOW PORTFOLIO
TURNOVER, AND CONTROLLED FUND OPERATING EXPENSES ARE INTEGRAL TO ACHIEVING
SUPERIOR LONG-TERM PERFORMANCE.
The Investment Team
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OAK ASSOCIATES, LTD.
Founder, Managing Member, Chief Investment Officer (1985-Present)
Portfolio Manager, White Oak Growth and Pin Oak Aggressive (1992-Present)
Co-Portfolio Manager, Red Oak Technology Select (1998-Present)
THE FIRESTONE TIRE & RUBBER COMPANY
Director of Pension Investments/Assistant Treasurer (1969-1985)
B.A. (Economics), Denison University (1964)
Juris Doctor, Northwestern University (1967)
Graduate Studies in Business, University of Chicago (1968-1969)
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JAMES D. OELSCHLAGER
PRESIDENT
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OAK ASSOCIATES, LTD.
Co-Portfolio Manager, Red Oak Technology Select (1998-Present)
Assistant Portfolio Manager, White Oak Growth, Pin Oak Aggressive (1992-Present)
Research Analyst (1991-Present)
PITTSBURGH NATIONAL BANK
Credit Analyst (1990-1991)
B.S. (Finance), Miami University(1990)
M.B.A., Case Western Reserve University (1994)
Chartered Financial Analyst (1998)
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DOUGLAS S. MACKAY, CFA
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OAK ASSOCIATES, LTD.
Senior Portfolio Trader (1985-Present)
Assistant Portfolio Manager, White Oak Growth, Pin Oak Aggressive (1992-Present)
THE FIRESTONE TIRE & RUBBER COMPANY
Portfolio Investments Department (1979-1985)
Accounting Department (1968-1979)
B.S. (Finance), The University of Akron
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DONNA L. BARTON
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Market Overview
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OCTOBER 31, 1999
As we usher in the new millennium, it seems fitting that the last twelve months
proved to be a winner for the Nasdaq, "the market of the 21st century", with the
composite gaining 65.2%. While respectable, the 25.3% gain in the Dow Jones
Industrial Average and the 24.2% rise in the Standard & Poor's 500 just did not
compare. Our funds fared quite well, with each outpacing their benchmarks and
most competitive offerings.
At the end of last year, many market commentators talked about the narrowness of
the S&P 500's gains -- the fact that a few large, primarily technology-oriented
companies accounted for most of the performance. The conventional view was that
the market's performance would stall, and perhaps even crash, without the
participation of other groups of stocks such as small caps, commodities, and
cyclicals.
At the time, we believed that the problem was not in the measurement, but in the
measure of the economy. The strength of the market was much broader if viewed
from the perspective of the Nasdaq, than of the S&P 500 or Dow Jones Industrial
Average. To be fair, a market may not even have to be broad to be healthy. In
all revolutions, there are those that ride the waves of change to success and
those that ignore it and ultimately fade away. John Chambers, CEO of CISCO
SYSTEMS (CSCO), has recently espoused the view that information technology is
now a matter of survival and not merely a means of enhancing productivity.
TECHNOLOGY HAS LEVELED THE PLAYING FIELD TO THE POINT WHERE IT WON'T NECESSARILY
BE THE BIG WHO EAT THE SMALL, BUT RATHER THE FAST WHO EAT THE SLOW.
Reflective of these changes, MICROSOFT (MSFT), HOME DEPOT (HD), INTEL (INTC) and
SBC COMMUNICATIONS (SBC) recently replaced CHEVRON (CHV), GOODYEAR (GT), SEARS
(S), and UNION CARBIDE (UK) in the venerated Dow Jones Industrial Average. While
largely symbolic, the changes still made headlines. They served
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<PAGE>
Market Overview (continued)
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OCTOBER 31, 1999
not only as an official acceptance of the new economy, but also as the
acknowledgement that the most commonly used measure of the market was, perhaps,
no longer very accurate.
CONSIDER THIS:
[BULLET OMITTED] The four recently added Dow stocks are up a combined 226% since
January 1, 1997, while the four stocks removed were up just 6% during the same
period. (Source: ISI Group, November, 1999.)
[BULLET OMITTED] Real technology equipment spending has increased 91% since the
start of 1994 while the "brick and mortar" spending of the old economy has
increased just 27%. (Source: ISI Group, November, 1999.)
As concentrated investors, we have long believed that investing in an industry
or an individual stock merely because it exists in an index is a poor way to
earn superior returns. We will invest in those areas we feel offer the best
potential for sustained growth, and believe that over time the market will
continue to move towards us, rather than the other way around.
As mentioned earlier, our funds did quite well this year. White Oak Growth
continued to outperform the market as it has done in most years. But the real
surprise has been Pin Oak Aggressive, which soared to new highs not only for a
one year period, but also for the longer three and five year performance
periods. We con-tinue to see strong, new interest in Pin Oak Aggressive, and are
using cash flow to add to some exciting companies, primarily in the technology
area. The Red Oak Technology Select Fund, opened on December 31, 1998, has also
surpassed our expectations, not only in terms of performance, but also in terms
of interest by new and existing shareholders.
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As for the future, we expect more of the same. Inflation is not a problem, nor
do we believe it will become one on the heels of continued strong, economic
growth. While our call on interest rates has been incorrect in the short run we
view the recent rise as temporary, and remain steadfast in our view that they
will resume their decline in the year ahead. Bearish sentiment in the bond
market remains at historical highs, and this indicator has proved to be an
excellent reverse barometer of the market's short-term direction in the past. We
would also point out that while interest rates have steadily declined over the
past seventeen years, the trend has on several occasions been interrupted by
short-term increases.
On the corporate side, earnings prospects look very strong, particularly for
technology issues. We are in the early stages of a new Industrial Revolution,
whose waves will support sustained growth within the areas we favor -- health
care, financial services, and technology. These industries remain the key
drivers of economic growth both here as well as around the world, and we do not
see this situation changing anytime soon. Our team has completed research on
each of our holdings in regards to Y2K risks, and is very comfortable that
appropriate measures are in place to assure a smooth transition. We believe Y2K
will prove to be a non-event, or at most, a minor blip in the road. The markets
will continue to find excuses to have wild gyrations day-to-day. Trying to time
these swings is a loser's game, and we will keep our focus on long-term results.
The year ahead is shaping up to be another strong one. Falling interest rates
and growing earnings represent the best of all worlds for the stock market, and
should go a long way in nourishing this young and hungry bull market. We like
where the funds' holdings are positioned, and await the coming year with
continued optimism.
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<PAGE>
Pin Oak Aggressive Stock Fund
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OCTOBER 31, 1999
PIN OAK AGGRESSIVE
The Fund invests primarily in common stocks of U.S. companies with small to
medium market capitalizations (between $500 million and $5 billion) that are
key performers within growing industries.
This was a strong year for the Pin Oak Aggressive Stock Fund, which focuses on
small to mid-size companies. Given this focus, we often are asked why the
biggest holding in Pin Oak is CISCO SYSTEMS (CSCO), a giant. Unlike many small
and mid-cap funds, we do not sell a strong performing company merely because it
has reached a certain size. In fact, we hope that all of our holdings in Pin Oak
become large companies, since that would help us achieve our ultimate goal of
strong performance results. Letting our portfolio winners run has been, and will
continue to be a hallmark of our investment philosophy.
When we make new investments for the Fund, we invest in companies whose market
capitalization is no more than $5 billion or whose sales are less than $100
million annually. Some recent additions to the Fund include smaller companies
like ADVENT SOFTWARE (ADVS), JUNIPER NETWORKS (JNPR), and FOUNDRY NETWORKS
(FDRY). At this time, approximately 80% of the Fund assets are in the broad
technology sector, and the remaining 20% is split between health care and
financials.
The past year was strong for the telecommunications and semi-conductor stocks in
the Fund, particularly ATMEL (ATML) and CIENA (CIEN), which were oversold by
investors one year ago. Merger and acquisition activity also benefited the
portfolio in 1999, as nearly a quarter of the Fund's holdings were bought by
larger companies. The takeout list included XYLAN, GULFSTREAM AEROSPACE, ASCEND
COMMUNICATIONS, and INTERNATIONAL NETWORK SERVICES, which contributed to the
Fund's first capital gain distribution in its seven year history.
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Pin Oak Aggressive Stock Fund
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ALL DATA BELOW AS OF OCTOBER 31, 1999
PERFORMANCE UPDATE
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AVERAGE ANNUALIZED TOTAL RETURNS
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1 YEAR 3 YEAR 5 YEAR INCEPTION TO
RETURN RETURN RETURN DATE
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PIN OAK AGGRESSIVE STOCK FUND 90.57% 34.81% 29.26% 21.84%
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S&P 400 Mid-Cap Index 21.07% 19.67% 19.51% 17.35%
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S&P 500 Composite Index 25.67% 26.52% 26.01% 20.69%
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Lipper Mid-Cap Universe 33.45% 16.18% 17.61% 16.19%
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FUND DATA
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Ticker Symbol POGSX
Share Price $41.85
Total Net Assets $132m
Portfolio Turnover 26.47%
1999 Capital Gain Distribution $1.53
Long-Term cap gain
Record 12/1/99
Payable 12/3/99
TOP 10 HOLDINGS
- ---------------------------------------
Cisco Systems 10.7%
Vitesse Semiconductor 5.4%
JDS Uniphase 5.3%
Brocade Communications 5.3%
MBNA 4.9%
Advent Software 4.7%
Tellabs 4.6%
Foundry Networks 4.6%
Exodus Communications 4.6%
Juniper Networks 4.4%
COMPARISON OF CHANGE IN THE VALUE OF A $25,000
INVESTMENT IN THE PIN OAK AGGRESSIVE STOCK
FUND, VERSUS THE S&P 400 MID-CAP INDEX, S&P 500
COMPOSITE INDEX, AND THE LIPPER MID-CAP UNIVERSE SINCE INCEPTION (8/3/92)
[LINE GRAPH OMITTED]
PIN OAK S&P 400 S&P 500 LIPPER
AGGRESSIVE MID-CAP COMPOSITE MID-CAP FUNDS
STOCK FUND INDEX INDEX OBJECTIVE
8/31/92 $25000 $25000 $25000 $25000
10/92 27343 25958 25381 26369
10/93 33566 31534 29158 32661
10/94 30854 32278 30283 33481
10/95 46068 39125 38281 41228
10/96 45427 45913 47499 48851
10/97 51755 60903 62746 60536
10/98 58406 64984 76550 58950
10/99 111304 78676 96201 78616
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<PAGE>
White Oak Growth Stock Fund
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OCTOBER 31, 1999
WHITE OAK GROWTH
The Fund invests primarily in common stocks of large capitalization companies
(in excess of $5 billion) that are key performers within growing industries.
Our flagship Fund, the White Oak Growth Stock Fund, surpassed $2.0 billion in
assets this year through strong results and continued interest from new and
existing shareholders. We are often asked when we will close the Fund to new
investors, and our answer remains when we have a difficult time finding good
investment ideas in the large-cap sector. With an average market capitalization
of $65 billion, liquidity is not an issue at this time.
While the performance results of the last five years are certainly newsworthy,
we are particularly pleased with the past year's results, considering the fact
that the market, on an overall basis, has not fared as well.
Our concentrated investment approach runs two ways, first in limiting the number
of names we hold to fewer than twenty-five, and secondly, to those few
industries that we believe have the best potential for long-term growth. PERHAPS
MOST IMPORTANT TO OUR OUTPERFORMANCE THIS YEAR WASN'T SO MUCH WHAT THE FUND
OWNED, BUT WHAT THE FUND DID NOT OWN. As mentioned earlier, the market's showing
in 1999 was domi-nated by technology stocks, while most other areas, including
financials and health care, underperformed. In our view, the underperformance of
financials and health care has more to do with the rise in interest rates, which
we view as short-term, than with any longer-term issues. Given the continued
attractive long-term prospects for these two areas, we have continued to add to
some of our favorite stocks.
Notable White Oak performers over the past twelve months included CITIGROUP (C)
(+73%), TELLABS (TLAB)(+130%), APPLIED MATERIALS (AMAT) (+159%), and SUN
MICROSYSTEMS (SUNW) (+263%).
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White Oak Growth Stock Fund
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ALL DATA BELOW AS OF OCTOBER 31, 1999
PERFORMANCE UPDATE
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AVERAGE ANNUALIZED TOTAL RETURNS
- --------------------------------------------------------------------------------
1 YEAR 3 YEAR 5 YEAR INCEPTION TO
RETURN RETURN RETURN DATE
- --------------------------------------------------------------------------------
WHITE OAK GROWTH STOCK FUND 56.52% 34.84% 35.23% 26.33%
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S&P 500 Composite Index 25.67% 26.52% 26.01% 20.69%
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Lipper Growth Universe 29.12% 21.25% 20.91% 17.57%
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FUND DATA
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Ticker Symbol WOGSX
Share Price $53.28
Total Net Assets $2.2b
Portfolio Turnover 6.27%
1999 Capital Gain Distribution None
TOP 10 HOLDINGS
- ----------------------------------------
Applied Materials 6.0%
EMC 5.3%
Intel 5.3%
Citigroup 5.2%
Morgan Stanley Dean Witter 5.2%
Merck 5.0%
Cisco Systems 5.0%
Sun Microsystems 4.9%
Tellabs 4.9%
Pfizer 4.7%
COMPARISON OF CHANGE IN THE VALUE OF A
$25,000 INVESTMENT IN THE WHITE OAK GROWTH
STOCK FUND, VERSUS THE S&P 500 COMPOSITE INDEX,
AND THE LIPPER GROWTH UNIVERSE SINCE INCEPTION (8/3/92)
[LINE GRAPH OMITTED]
WHITE OAK GROWTH S&P 500 LIPPER GROWTH
STOCK FUND COMPOSITE INDEX FUNDS OBJECTIVE
8/31/92 $25000 $25000 $25000
10/92 27055 25381 25936
10/93 28026 29158 30617
10/94 31456 30283 31279
10/95 47835 38281 38501
10/96 58039 47499 45743
10/97 78039 62746 58391
10/98 90900 76550 64405
10/99 142276 96201 83186
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Red Oak Technology Select Fund
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OCTOBER 31, 1999
RED OAK TECH SELECT
The Fund primarily invests in common stocks of a small number of companies
which rely extensively on technology in their product development or
operations, or which are expected to benefit from technological advances and
improvements.
The launch of the Red Oak Technology Select Fund at the beginning of 1999 has
been met with great success, not only in terms of performance, but also
shareholder purchases. To put things into perspective, White Oak did not have
Red Oak's asset level, $169 million, until it had been in operation for nearly
five years.
The Red Oak Technology Select Fund is an all-cap tech fund, which means that we
are not as much interested in the market capitalization of a portfolio holding
as we are in a company's business fundamentals. While valuation is important, we
look more at a firm's growth rate, the ability to sustain or increase the growth
rate, the size of the company's addressable market, and the likelihood that the
company can leverage its strength into future growth opportunities as they
arise. In making purchase decisions, we like to ask ourselves if the company
under consideration would be one that we would like to work for, given our view
that a com-pany's true value is ultimately created and sustained by its
employees. While we expect the Fund to have low turnover, we will sell when we
feel we've overestimated a company's growth opportunity, their ability to
execute, or when we discover a better opportunity.
Red Oak's performance was relatively broad-based, with semiconductor, storage,
and fiber optics holdings leading the way. JDS Uniphase (JDSU) has grown into
the Fund's largest holding, up nearly five-fold this year, on increased
recognition that the company is positioning itself at the center of a fiber
optics market that is driving the broadband revolution. NETWORK APPLIANCE (NTAP)
and BROCADE COMMUNICATIONS (BRCD) also hit new highs in the storage area, while
VITESSE (VTSS) and TRIQUINT (TQNT) helped in the semiconductor space.
While the computer hardware sector was a tough area to invest in during 1999,
our selections did better than average with GATEWAY (GTW) and SUN MICROSYSTEMS
(SUNW) gaining more than 100% year-to-date. Going forward, we are most excited
about the semiconductor and fiber optics space, both of which should prove to be
the biggest beneficiaries of the demand for speed in the computer and on the
Internet.
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Red Oak Technology Select Fund
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ALL DATA BELOW AS OF OCTOBER 31, 1999
PERFORMANCE UPDATE
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INCEPTION TO
DATE*
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RED OAK TECHNOLOGY SELECT FUND 69.40%
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Lipper Science & Technology Universe 57.62%
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NASDAQ 100 Index 43.74%
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*Since 12/31/98
FUND DATA
- --------------------------------------------
Ticker Symbol ROGSX
Share Price $16.94
Total Net Assets $169m
Portfolio Turnover 16.54%
1999 Capital Gain Distribution None
TOP 10 HOLDINGS
- --------------------------------------
JDS Uniphase 7.1%
Gateway 6.2%
Brocade Communications 5.5%
Cisco Systems 5.4%
Sun Microsystems 5.3%
Vitesse Semiconductor 5.0%
EMC 5.0%
Applied Materials 4.8%
Microsoft 4.8%
Network Appliance 4.8%
COMPARISON OF CHANGE IN THE VALUE OF A
$25,000 INVESTMENT IN THE RED OAK
TECHNOLOGY SELECT FUND, VERSUS THE NASDAQ
100 INDEX, AND THE LIPPER SCIENCE &
TECHNOLOGY UNIVERSE SINCE INCEPTION (12/31/98)
[LINE GRAPH OMITTED]
RED OAK TECHNOLOGY NASDAQ 100 LIPPER SCIENCE & TECHNOLOGY
SELECT FUND INDEX FUNDS OBJECTIVE
12/31/98 $25000 $25000 $25000
10/99 42348 35932 39841
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<PAGE>
Financial Highlights
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FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS ENDED OCTOBER 31,
<TABLE>
<CAPTION>
REALIZED AND NET
NET ASSET NET UNREALIZED DISTRIBUTIONS DISTRIBUTIONS ASSET NET ASSETS RATIO OF
VALUE INVESTMENT GAINS OR FROM NET FROM VALUE END OF EXPENSES TO
BEGINNING INCOME (LOSSES) ON INVESTMENT CAPITAL END OF TOTAL PERIOD AVERAGE
OF PERIOD (LOSS) SECURITIES INCOME GAINS PERIOD RETURN (000) NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PIN OAK AGGRESSIVE STOCK FUND
1999 $21.96 $(0.13) $20.02 -- -- $41.85 90.57% $131,755 1.00%
1998(1) $19.46 (0.15) 2.65 -- -- $21.96 12.85% $41,444 1.00%
1997 $17.08 (0.11) 2.49 -- -- $19.46 13.93% $31,681 0.99%
1996 $17.32 (0.09) (0.15) -- -- $17.08 (1.39)% $23,738 0.96%
1995 $11.60 (0.08) 5.80 -- -- $17.32 49.31% $15,652 0.98%
WHITE OAK GROWTH STOCK FUND
1999 $34.04 $(0.13) $19.37 -- -- $53.28 56.52% $2,196,364 1.00%
1998(1) $29.29 (0.05) 4.86 -- (0.06) $34.04 16.48% $830,219 1.00%
1997 $21.88 0.03 7.49 (0.04) (0.07) $29.29 34.46% $362,404 0.98%
1996 $18.08 0.05 3.80 (0.05) -- $21.88 21.33% $26,109 0.95%
1995 $11.92 0.04 6.15 (0.03) -- $18.08 52.07% $10,495 0.97%
RED OAK TECHNOLOGY SELECT FUND
1999(2) $10.00 $(0.05) $6.99 -- -- $16.94 69.40%+ $168,562 1.00%
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET INCOME
RATIO OF EXPENSES (LOSS) TO
NET INCOME TO AVERAGE AVERAGE NET
(LOSS) TO NET ASSETS ASSETS PORTFOLIO
AVERAGE (EXCLUDING (EXCLUDING TURNOVER
NET ASSETS WAIVERS) WAIVERS) RATE
- -------------------------------------------------------------------
PIN OAK AGGRESSIVE STOCK FUND
<S> <C> <C> <C> <C>
1999 (0.57)% 1.10% (0.67)% 26.47%
1998(1) (0.79)% 1.14% (0.93)% 10.04%
1997 (0.75)% 1.23% (0.99)% 17.30%
1996 (0.62)% 1.47% (1.13)% 31.65%
1995 (0.70)% 1.65% (1.37)% 49.28%
WHITE OAK GROWTH STOCK FUND
1999 (0.34)% 1.04% (0.38)% 6.27%
1998(1) (0.22)% 1.07% (0.29)% 6.16%
1997 0.06 % 1.14% (0.10)% 7.90%
1996 0.23 % 1.50% (0.32)% 8.07%
1995 0.29 % 2.06% (0.80)% 22.43%
RED OAK TECHNOLOGY SELECT FUND
1999(2) (0.81)% 1.20% (1.01)% 16.54%
<FN>
+ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
(1) THE INFORMATION SET FORTH IN THIS TABLE FOR THE PERIODS PRIOR TO FEBRUARY
27, 1998 IS THE FINANCIAL DATA OF THE PIN OAK AGGRESSIVE STOCK FUND AND THE
WHITE OAK GROWTH STOCK FUND, RESPECTIVELY, EACH A SERIES OF THE ADVISORS'
INNER CIRCLE FUND.
(2) THE RED OAK TECHNOLOGY SELECT FUND COMMENCED OPERATIONS ON DECEMBER 31,
1998.
ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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<PAGE>
Statement of Net Assets
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OCTOBER 31, 1999
PIN OAK AGGRESSIVE STOCK FUND
- --------------------------------------------------------------------------------
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 95.5%
APPLICATION SERVICE PROVIDER --4.6%
Exodus Communications 70,500 $ 6,063
--------
6,063
--------
ATM MACHINES -- 2.5%
Diebold 126,000 3,308
--------
3,308
--------
BANKS -- 4.9%
MBNA 233,200 6,442
--------
6,442
--------
COMPUTER-AIDED DESIGN SOFTWARE -- 5.6%
Parametric Technology* 175,000 3,336
Synopsys* 65,000 4,050
--------
7,386
--------
COMPUTER HARDWARE-- 0.8%
Compaq Computer 58,500 1,112
--------
1,112
--------
FIBER OPTICS -- 7.8%
Ciena* 90,700 3,197
JDS Uniphase 42,000 7,009
--------
10,206
--------
INSURANCE -- 0.4%
Mutual Risk Management
Limited 34,732 525
--------
525
--------
MANAGED HEALTH CARE SERVICES -- 2.8%
Express Scripts, Cl A 76,300 3,748
--------
3,748
--------
- --------------------------------------------------------------------------------
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
NETWORKING PRODUCTS-- 19.7%
Cisco Systems 190,800 $ 14,119
Foundry Networks* 32,000 6,064
Juniper Networks* 21,100 5,816
--------
25,999
--------
PREPACKAGED SOFTWARE -- 4.7%
Advent Software 102,000 6,133
--------
6,133
--------
SEMI-CONDUCTOR CAPITAL EQUIPMENT MANUFACTURING -- 3.8%
Applied Materials* 55,900 5,021
--------
5,021
--------
SEMI-CONDUCTORS/ELECTRONICS-- 24.8%
Atmel* 112,500 4,345
Linear Technology 70,600 4,936
Maxim Integrated Products*59,400 4,689
PMC-Sierra 18,600 1,753
TriQuint Semiconductor 56,000 4,480
Vitesse Semiconductor 155,000 7,111
Xilinx 68,800 5,409
--------
32,723
--------
STORAGE AREA NETWORKING -- 5.3%
Brocade Communications* 25,800 6,940
--------
6,940
--------
TELECOMMUNICATIONS EQUIPMENT -- 7.8%
Aspect
Telecommunications* 167,600 4,222
Tellabs 96,200 6,085
--------
10,307
--------
TOTAL COMMON STOCKS
(Cost $70,890) 125,913
--------
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<PAGE>
- --------------------------------------------------------------------------------
PIN OAK AGGRESSIVE STOCK FUND -- CONTINUED
- --------------------------------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.2%
J.P. Morgan
5.170%, dated 10/29/99,
matures 11/01/99, repurchase
price $5,508,128 (collateralized
by U.S. Treasury Bond,
par value $5,651,000,
6.125%, 08/15/29, total
market value:
$5,616,787) $5,506 $ 5,506
--------
TOTAL REPURCHASE AGREEMENT
(Cost $5,506) 5,506
--------
TOTAL INVESTMENTS-- 99.7%
(Cost $76,396) 131,419
--------
OTHER ASSETS AND LIABILITIES,
NET 0.3% 336
--------
- --------------------------------------------------------------------------------
Market
Description Value (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares (unlimited authorization
-- no par value) based on 3,148,526
outstanding shares of
beneficial interest $ 71,269
Accumulated net realized gain
on investments 5,463
Net unrealized appreciation
on investments 55,023
--------
TOTAL NET ASSETS-- 100.0% $131,755
--------
--------
Net Asset Value, Offering and Redemption
Price Per Share $41.85
--------
--------
* NON-INCOME PRODUCING SECURITY
CL --CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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<PAGE>
Statement of Net Assets
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
WHITE OAK GROWTH STOCK FUND
- --------------------------------------------------------------------------------
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 97.6%
BANKS --14.2%
BankAmerica 1,493,000 $ 96,112
Citigroup 2,110,000 114,204
MBNA 3,650,000 100,831
--------
311,147
--------
COMPUTER-AIDED DESIGN SOFTWARE --2.7%
Parametric Technology*3,074,300 58,604
--------
58,604
--------
COMPUTER HARDWARE --9.1%
Compaq Computer 2,080,000 39,520
Dell Computer 1,310,000 52,564
Sun Microsystems 1,025,400 108,500
--------
200,584
--------
COMPUTER STORAGE --5.3%
EMC 1,595,000 116,435
--------
116,435
--------
FIBER OPTICS --2.4%
Ciena* 1,491,200 52,565
--------
52,565
--------
FINANCIAL SERVICES -- 2.9%
Charles Schwab 1,335,000 51,982
First Data 235,100 10,741
--------
62,723
--------
INSURANCE -- 4.3%
American International
Group 924,998 95,217
--------
95,217
--------
MEDICAL INSTRUMENTS -- 4.0%
Medtronic 2,550,000 88,294
--------
88,294
--------
- --------------------------------------------------------------------------------
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
NETWORKING PRODUCTS-- 5.6%
3Com* 500,000 $ 14,500
Cisco Systems 1,471,500 108,891
--------
123,391
--------
PHARMACEUTICALS-- 14.1%
Eli Lilly & Co. 1,405,000 96,769
Merck 1,380,000 109,796
Pfizer 2,640,000 104,280
--------
310,845
--------
PREPACKAGED SOFTWARE -- 4.1%
Microsoft 972,000 89,971
--------
89,971
--------
SECURITIES BROKER -- 5.2%
Morgan, Stanley, Dean
Witter, Discover 1,035,000 114,173
--------
114,173
--------
SEMI-CONDUCTOR CAPITAL EQUIPMENT MANUFACTURING -- 6.0%
Applied Materials* 1,474,200 132,402
--------
132,402
--------
SEMI-CONDUCTORS/ELECTRONICS -- 9.7%
Intel 1,510,000 116,931
Linear Technology 1,382,400 96,682
--------
213,613
--------
TELECOMMUNICATIONS EQUIPMENT -- 8.0%
Lucent Technologies 950,000 61,037
Nortel Networks 109,200 6,764
Tellabs 1,690,000 106,892
--------
174,693
--------
TOTAL COMMON STOCKS
(Cost $1,451,762) 2,144,657
--------
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<PAGE>
- --------------------------------------------------------------------------------
WHITE OAK GROWTH STOCK FUND -- CONTINUED
- --------------------------------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.4%
J.P. Morgan
5.170%, dated 10/29/99, matures
11/01/99, repurchase price
$73,789,168 (collateralized
by U.S. Treasury Note, par
value $75,210,000, 6.125%,
08/15/07, total market
value: $75,233,418) $73,757 $ 73,757
--------
TOTAL REPURCHASE AGREEMENT
(Cost $73,757) 73,757
--------
TOTAL INVESTMENTS -- 101.0%
(Cost $1,525,519) 2,218,414
---------
OTHER ASSETS AND LIABILITIES,
NET -- (1.0%) (22,050)
---------
- --------------------------------------------------------------------------------
Market
Description Value (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par
value) based on 41,221,841
outstanding shares of
beneficial interest $1,513,181
Accumulated net realized loss
on investments (9,712)
Net unrealized appreciation
on investments 692,895
---------
TOTAL NET ASSETS -- 100.0% $2,196,364
---------
---------
Net Asset Value, Offering and Redemption
Price Per Share $53.28
---------
---------
* NON-INCOME PRODUCING SECURITY
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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17
<PAGE>
Statement of Net Assets
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
RED OAK TECHNOLOGY SELECT FUND
- --------------------------------------------------------------------------------
Market
Description Shares Value (000)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 97.4%
APPLICATION SERVICE PROVIDER -- 3.8%
Exodus Communications 75,400 $ 6,484
--------
6,484
--------
COMPUTER-AIDED DESIGN SOFTWARE -- 2.9%
Parametric Technology* 253,700 4,836
--------
4,836
--------
COMPUTER HARDWARE-- 15.4%
Dell Computer 163,700 6,569
Gateway 2000 157,900 10,431
Sun Microsystems 84,000 8,888
--------
25,888
--------
COMPUTER STORAGE-- 9.8%
EMC 116,100 8,475
Network Appliance 108,700 8,044
--------
16,519
--------
FIBER OPTICS -- 11.8%
Ciena* 108,700 3,832
Ortel* 120,000 3,975
JDS Uniphase 72,200 12,048
--------
19,855
--------
FINANCIAL SERVICES -- 3.7%
Charles Schwab 162,200 6,316
--------
6,316
--------
INTERNET SOFTWARE-- 3.8%
America Online 49,500 6,420
--------
6,420
--------
NETWORKING PRODUCTS -- 5.4%
Cisco Systems 121,900 9,021
--------
9,021
--------
- --------------------------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
- --------------------------------------------------------------------------------
PREPACKAGED SOFTWARE-- 4.8%
Microsoft 87,600 $ 8,108
--------
8,108
--------
SEMI-CONDUCTOR CAPITAL EQUIPMENT MANUFACTURING -- 4.8%
Applied Materials* 90,300 8,110
--------
8,110
--------
SEMI-CONDUCTORS/ELECTRONICS -- 22.1%
Intel 100,700 7,798
Maxim Integrated
Products 101,300 7,996
Semtech 149,800 5,739
TriQuint Semiconductor 90,800 7,264
Vitesse Semiconductor 184,800 8,478
--------
37,275
--------
STORAGE AREA NETWORKING -- 5.5%
Brocade Communications* 34,200 9,200
--------
9,200
--------
TELECOMMUNICATIONS EQUIPMENT -- 3.6%
Tellabs 95,900 6,066
--------
6,066
--------
TOTAL COMMON STOCKS
(Cost $113,662) 164,098
--------
REPURCHASE AGREEMENT -- 2.0%
J.P. Morgan
5.170%, dated 10/29/99, matures 11/01/99,
repurchase price $3,370,393 (collateralized by
U.S. Treasury Bond, par value $3,458,000,
6.125%, 08/15/29, total market
value: $3,437,064) $3,369 3,369
--------
TOTAL REPURCHASE AGREEMENT
(Cost $3,369) 3,369
--------
TOTAL INVESTMENTS-- 99.4%
(Cost $117,031) 167,467
--------
OTHER ASSETS AND LIABILITIES,
NET -- 0.6% 1,095
--------
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<PAGE>
RED OAK TECHNOLOGY SELECT FUND -- CONTINUED
- --------------------------------------------------------------------------------
Market
Description Value (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares (unlimited authorization
-- no par value) based on 9,951,962
outstanding shares of
beneficial interest $119,492
Accumulated net realized loss
on investments (1,366)
Net unrealized appreciation
on investments 50,436
--------
TOTAL NET ASSETS-- 100.0% $168,562
--------
--------
- --------------------------------------------------------------------------------
Market
Description Value (000)
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share $16.94
--------
--------
* NON-INCOME PRODUCING SECURITY
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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19
<PAGE>
Statement of Operations (000)
- --------------------------------------------------------------------------------
FOR THE PERIOD ENDED OCTOBER 31, 1999
<TABLE>
<CAPTION>
PIN OAK WHITE OAK RED OAK
AGGRESSIVE STOCK GROWTH STOCK TECHNOLOGY SELECT
FUND FUND FUND
---------------------------------------------
11/01/98 11/01/98 12/31/98 (1)
TO 10/31/99 TO 10/31/99 TO 10/31/99
- ------------------------------------------------------------------------------------------------
Investment Income:
<S> <C> <C> <C>
Dividends ...................................... $ 128 $ 8,174 $ 28
Interest ....................................... 191 2,156 94
- ------------------------------------------------------------------------------------------------
Total Investment Income ..................... 319 10,330 122
- ------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees ....................... 546 11,514 483
Investment Advisory Fee Waiver ................. (73) (570) (134)
Administration Fees ............................ 111 1,540 101
Custodian Fees ................................. 7 76 8
Transfer Agent Fees and Expenses ............... 87 2,271 93
Professional Fees .............................. 4 109 10
Trustee Fees ................................... -- 14 --
Registration Fees .............................. 41 320 73
Printing ....................................... 13 268 18
Insurance and Other Fees ....................... 2 19 1
- ------------------------------------------------------------------------------------------------
Total Expenses .............................. 738 15,561 653
- ------------------------------------------------------------------------------------------------
Net Investment Loss ......................... (419) (5,231) (531)
- ------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) on
Securities Sold ............................. 6,073 (3,755) (1,366)
Net Unrealized Appreciation of
Investment Securities ....................... 41,997 613,797 50,436
- ------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain
on Investments ........................... 48,070 610,042 49,070
- ------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
From Operations .......................... $47,651 $604,811 $48,539
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
<FN>
(1) THE RED OAK TECHNOLOGY SELECT FUND COMMENCED OPERATIONS ON DECEMBER 31,
1998.
</FN>
</TABLE>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
The accompanying notes are an integral part of the financial statements.
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<PAGE>
Statement of Changes in Net Assets (000)
- --------------------------------------------------------------------------------
FOR THE PERIODS ENDED OCTOBER 31
<TABLE>
<CAPTION>
PIN OAK WHITE OAK RED OAK
AGGRESSIVE STOCK GROWTH STOCK TECHNOLOGY
FUND FUND SELECT FUND
----------------------- ----------------------- ------------
11/01/98 11/01/97 11/01/98 11/01/97 12/31/98 (1)
TO 10/31/99 TO 10/31/98 TO 10/31/99 TO 10/31/98 TO 10/31/99
- --------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C> <C>
Net Investment Loss ............... $ (419) $ (277) $ (5,231) $ (1,326) $ (531)
Net Realized Gain (Loss) on
Securities Sold ................ 6,073 1,175 (3,755) (5,957) (1,366)
Net Unrealized Appreciation of
Investment Securities .......... 41,997 2,886 613,797 56,368 50,436
- --------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
From Operations ................ 47,651 3,784 604,811 49,085 48,539
- --------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income ............. -- -- -- -- --
Realized Capital Gains ............ -- -- -- (848) --
- --------------------------------------------------------------------------------------------------------
Total Distributions ............ -- -- -- (848) --
- --------------------------------------------------------------------------------------------------------
Capital Share Transactions (in dollars):
Shares Issued ..................... 84,532 25,022 1,169,912 699,743 137,216
Shares Issued in Lieu of Cash Distributions -- -- -- 802 --
Shares Redeemed ................... (41,872) (19,043) (408,578) (280,967) (17,193)
- --------------------------------------------------------------------------------------------------------
Increase in Net Assets From Capital
Share Transactions .......... 42,660 5,979 761,334 419,578 120,023
- --------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 90,311 9,763 1,366,145 467,815 168,562
- --------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ............ 41,444 31,681 830,219 362,404 --
- --------------------------------------------------------------------------------------------------------
End of Period .................. $131,755 $41,444 $2,196,364 $830,219 $168,562
- --------------------------------------------------------------------------------------------------------
Shares Issued and Redeemed:
Issued ............................ 2,631 1,173 25,841 20,843 11,337
Issued in Lieu of Cash Distributions -- -- -- 29 --
Redeemed .......................... (1,369) (914) (9,008) (8,854) (1,385)
- --------------------------------------------------------------------------------------------------------
Net Increase in Share Transactions 1,262 259 16,833 12,018 9,952
- --------------------------------------------------------------------------------------------------------
<FN>
(1) THE RED OAK TECHNOLOGY SELECT FUND COMMENCED OPERATIONS ON DECEMBER 31,
1998.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
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21
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
1. ORGANIZATION:
THE OAK ASSOCIATES FUNDS (the "Trust") is organized as a Massachusetts business
trust under an Agreement and Declaration of Trust dated November 6, 1997. The
Trust is registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company with three funds: Pin Oak
Aggressive Stock Fund, White Oak Growth Stock Fund and Red Oak Technology Select
Fund (the "Funds"). The assets of each Fund are segregated, and a shareholder's
interest is limited to the Fund in which shares are held. The Funds' prospectus
provides a description of each Fund's investment objectives, policies and
strategies.
On February 25, 1998, the shareholders of the Advisors' Inner Circle White Oak
Growth Stock Fund and the Pin Oak Aggressive Stock Fund (the "Oak Funds") voted
to approve a tax-free reorganization of the Oak Funds through a transfer of all
assets and liabilities to the Oak Associates Funds White Oak Growth Stock Fund
and Pin Oak Aggressive Stock Fund. The reorganization took place on February 27,
1998.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed by
the Funds.
SECURITY VALUATION--Investments in equity securities, which are traded on a
national exchange (or reported on the NASDAQ national market system), are
stated at the last quoted sales price if readily available for such equity
securities on each business day; other equity securities traded in the
over-the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Debt
obligations exceeding sixty days to maturity for which market quotations
are readily available are valued at the most recently quoted bid price.
Debt obligations with sixty days or less remaining until maturity may be
valued at their amortized cost, which approximates market value.
FEDERAL INCOME TAXES--It is each Fund's intention to qualify as a regulated
investment company by complying with the appropriate provisions of the
Internal Revenue Code of 1986, as amended. Accordingly, no provisions for
Federal income taxes are required.
SECURITY TRANSACTIONS AND RELATED INCOME--Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Dividend income is recognized on the ex-dividend date, and interest income
is recognized on the accrual basis. Costs used in determining realized
gains and losses on the sales of investment securities are those of the
specific securities sold.
NET ASSET VALUE PER SHARE--The net asset value per share of each Fund is
calculated on each business day by dividing the total value of each Fund's
assets, less liabilities, by the number of shares outstanding.
EXPENSES--Expenses that are directly related to one of the Funds are
charged to that Fund. Other operating expenses of the Trust are prorated to
the Funds on the basis of relative daily net assets.
REPURCHASE AGREEMENTS--Securities pledged as collateral for repurchase
agreements are held by the custodian bank until maturity of the repurchase
agreements. Provisions of the repurchase agreements and procedures adopted
by the Board of Trustees require
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<PAGE>
- --------------------------------------------------------------------------------
that the market value of the collateral, including accrued interest
thereon, is sufficient in the event of default by the counterparty. If the
counterparty defaults and the value of the collateral declines or if the
counterparty enters an insolvency proceeding, realization of the collateral
by the Portfolio may be delayed or limited.
DISTRIBUTIONS TO SHAREHOLDERS--Distributions from net investment income are
declared and paid to Shareholders on an annual basis, as applicable. Any
net realized capital gains on sales of securities are distributed to
Shareholders at least annually.
Distributions from net investment income and net realized capital gains are
determined in accordance with U.S. Federal income tax regulations, which
may differ from those amounts determined under generally accepted
accounting principles. These book/tax differences are either temporary or
permanent in nature. In accordance with the Statement of Position 93-2, Pin
Oak Aggressive Stock Fund, White Oak Growth Stock Fund and Red Oak
Technology Select Fund reclassed $12,302, $5,231,501, and $531,300,
respectively, from Net Investment Income to Paid In Capital in the
Statement of Net Assets. This reclassification, which has no impact on the
net asset value of the Funds is primarily attributable to net operating
losses and differences in the computation of distributable income under
federal income tax rules versus generally accepted accounting principles.
USE OF ESTIMATES--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 and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
3. TRANSACTIONS WITH AFFILIATES:
Certain officers of the Trust are also officers of SEI Investments Mutual Funds
Services (the "Administrator") and/or SEI Investments Distribution Co. (the
"Distributor"). Such officers are paid no fees by the Trust for serving as
officers of the Trust.
4. ADMINISTRATION, SHAREHOLDER SERVICING AND DISTRIBUTION AGREEMENTS:
The Trust and the Administrator are parties to an Administrative Agreement dated
February 27, 1998, under which the Administrator provides management and
administrative services for an annual fee of 0.15% of the average daily net
assets of each of the Funds up to $250 million, 0.12% on the next $200 million,
0.10% on the next $200 million, and 0.08% of such assets in excess of $650
million. There is a minimum annual fee of $75,000 per fund.
The Trust has entered into an agreement with SEI Investments to manage the
investments of repurchase agreements for the Funds. For its services the
Liquidity Desk received $25,314 for the year ended October 31, 1999.
DST Systems, Inc. (the "Transfer Agent") serves as the transfer agent and
dividend disbursing agent for the Funds under a transfer agency agreement with
the Trust. From time to time,
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23
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
the Funds may pay amounts to third parties that provide sub-transfer agency and
other administrative services relating to the Funds to persons who beneficially
own interests in the Funds.
The Trust and the Distributor are parties to a Distribution Agreement dated
February 27, 1998. The Distributor receives no fees for its distribution
services under this agreement.
5. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENTS:
The Trust and Oak Associates, ltd. (the "Adviser") are parties to an Investment
Advisory Agreement dated February 27, 1998, under which the Adviser receives an
annual fee equal to 0.74% of the average daily net assets of each Fund. The
Adviser has voluntarily agreed to waive all or a portion of its fees (and to
reimburse the Funds' expenses if necessary) in order to limit operating expenses
to not more than 1.00% of the average daily net assets of each of the Funds. Fee
waivers and expense reimbursements are voluntary and may be terminated at any
time.
First Union National Bank acts as custodian (the "Custodian") for the Funds.
Fees of the Custodian are being paid on the basis of the net assets of the
Funds. The Custodian plays no role in determining the investment policies of the
Funds or which securities are to be purchased or sold by the Funds.
6. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the year ended October 31, 1999, are as follows:
PIN OAK WHITE OAK RED OAK
AGGRESSIVE GROWTH TECHNOLOGY
STOCK STOCK SELECT
FUND FUND FUND
(000) (000) (000)
-------------------------------
Purchases $57,084 $818,825 $129,029
Sales 18,825 94,455 14,001
At October 31, 1999, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes were not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Funds
at October 31, 1999, are as follows:
PIN OAK WHITE OAK RED OAK
AGGRESSIVE GROWTH TECHNOLOGY
STOCK STOCK SELECT
FUND FUND FUND
(000) (000) (000)
-------------------------------
Aggregate gross
unrealized
appreciation $57,073 $745,414 $51,386
Aggregate gross
unrealized
depreciation (2,050) (52,519) (950)
------- -------- -------
Net unrealized
appreciation $55,023 $692,895 $50,436
======= ======== =======
7. CAPITAL LOSS CARRYFORWARDS:
The capital loss carryforwards at October 31, 1999, for federal income tax
purposes are as follows (000):
EXPIRES EXPIRES
2006 2007
------- -------
White Oak Growth
Stock Fund $5,957 $3,755
Red Oak Technology
Select Fund $ -- $1,366
The capital loss carryforwards will be used to offset future net realized gains,
if any, and such gains offset will not be distributed.
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24
<PAGE>
Report of Independent Public Accountants
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
Oak Associates Funds:
We have audited the accompanying statements of net assets of the Pin Oak
Aggressive Stock Fund, White Oak Growth Stock Fund, and Red Oak Technology
Select Fund of the Oak Associates Funds (the "Trust") as of October 31, 1999,
and the related statements of operations, the statements of changes in net
assets, and the financial highlights for the periods presented. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1999, by correspondence with the custodian
and the application of alternative auditing procedures with respect to unsettled
securities transactions. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Pin Oak Aggressive Stock Fund, White Oak Growth Stock Fund, and Red Oak
Technology Select Fund of the Oak Associates Funds as of October 31, 1999, and
the results of their operations, the changes in their net assets, and the
financial highlights for the periods presented, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
November 19, 1999
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WWW.OAKASSOCIATES.COM
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NOTES
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