===============================================================================
IMPERIAL FINANCIAL SERVICES FUND
Semi-Annual Report
August 31, 2000
(Unaudited)
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IMPERIAL FINANCIAL SERVICES FUND
October 25, 2000
Dear Fellow Imperial Financial Services Fund Shareholders:
Let us start by saying that this year, as you probably know, has been one of
extreme volatility. It is absolutely amazing the amount of volatility that we
have experienced since our last report. As tech stocks have faltered this year,
investors have been drawn to more traditional types of sectors which we call
"real economy" stocks. Sectors such as healthcare, utilities, real estate and
the financials have performed relatively well compared to the overall market. It
appears, again, that last year's losers are this year's winners
In the third quarter of this year, we saw a number of takeovers in the financial
sector which had a positive effect on your fund. We continue to believe, that
for the foreseeable future, consolidation will continue to happen in the
financial services sector. Banks, brokerage firms and insurance companies
continue compete for a larger piece of the financial pie.
Although we do not know which companies will be "taken over" next, we do know
that as long term investors, we will continue to own high quality financial
services companies. Compared to the overall market, financial stocks still
appear to be relatively inexpensive and valuations are compelling.
In closing, as we stated in our last report, investors who have the foresight to
own shares in financial services companies should be, over time, rewarded for
their patience. We would like to thank you for continued patience and support.
Sincerely,
David W. Allaire Michael R. Laliberte'
CO-Portfolio Manager CO-Portfolio Manager
<PAGE>
<TABLE>
<CAPTION>
Imperial Financial Services Fund
Schedule of Investments
August 31, 2000
(Unaudited)
MARKET
SHARES VALUE
------ -----
COMMON STOCKS - 96.09%
BUSINESS SERVICES - 4.11%
<C> <S> <C>
150 Paychex, Inc. .................................... $22,313
400 Reuters Group PLC Sponsored ADR .................. 48,025
-------
70,338
-------
COMMERCIAL BANKS - 4.19%
4,000 Boston Private Financial Holding ................. 53,250
300 Investors Financial Services Corp. ............... 18,469
-------
71,719
-------
ELECTRIC UTILITIES - 1.73%
300 +Calpine Corp. ................................... 29,700
-------
FINANCIAL SERVICES - 40.93%
1,200 A.G. Edwards, Inc. ............................... 62,400
300 American Express Company ......................... 17,737
700 +Bear Stearns Companies, Inc. ..................... 46,944
500 Compucredit Corp. ................................ 19,812
1,200 +Concord EFS, Inc. ................................ 38,550
500 Dain Rauscher Corp. .............................. 40,219
735 +E*Trade Group, Inc. .............................. 13,046
500 John Hancock Financial ........................... 12,625
300 Legg Mason, Inc. ................................. 15,825
500 Lehman Brothers Holdings, Inc. ................... 72,500
200 Marsh & McLennan Companies, Inc. ................. 23,750
500 Merrill Lynch & Co., Inc. ........................ 72,500
2,100 Metris Companies, Inc. ........................... 75,469
700 Morgan Stanley Dean Witter ....................... 75,294
400 +Silicon Valley Bancshares ........................ 23,050
700 Southwest Securities Group ....................... 23,231
400 The Goldman Sachs Group, Inc. .................... 51,225
700 Tucker Anthony Sutro ............................. 16,494
-------
700,671
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INSURANCE - 4.09%
1,200 Citigroup, Inc. .................................. 70,050
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INTERNET BROKER - 1.76%
1,000 +LaBranche & Co., Inc. ............................ 30,125
-------
See Notes to Financial Statements
<PAGE>
Imperial Financial Services Fund
Schedule of Investments
August 31, 2000
(Unaudited) - (Continued)
MARKET
SHARES VALUE
------ -----
INVESTMENT SERVICES - 10.23%
2,500 +Knight Trading Group, Inc. ...................... $78,437
2,000 +Stilwell Financial, Inc. ........................ 96,750
--------
175,187
--------
REGIONAL BANK - 20.15%
2,500 Firstar Corp. .................................... 59,687
1,600 Fleet Boston Financial Corp. ..................... 68,300
2,200 MBNA Corp. ....................................... 77,688
700 Providian Finanical Corp. ........................ 80,456
500 State Street Corp. ............................... 58,875
--------
345,006
--------
SAVINGS & LOAN BANK - 7.68%
1,200 Capital One Financial Corp. ...................... 72,375
2,200 Charter One Financial, Inc. ...................... 52,250
600 +Net.B@nk, Inc. ................................... 6,825
--------
131,450
--------
SOFTWARE - 1.22%
300 +Microsoft Corp. .................................. 20,944
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TOTAL COMMON STOCK
(Cost $1,294,580) ................................ 1,645,190
---------
SHORT TERM INVESTMENTS - 3.34%
57,245 Firstar Treasury Fund
(Cost $57,245) ................................... 57,245
--------
TOTAL INVESTMENTS
(Cost $1,351,825) ......................... 99.43% 1,702,435
Other assets less liabilities ............. 0.57% 9,734
------ ----------
TOTAL NET ASSET ........................... 100.00% $1,712,169
====== ==========
<FN>
+ Denotes non-income producing security.
</FN>
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Financial Services Fund
Statement of Assets and Liabilities
August 31, 2000
(Unaudited)
ASSETS:
<S> <C>
Investments in securities, at value
(cost $1,351,825) .................... (Note 2) $1,702,435
Receivable for securities sold ................. 63,061
Dividends and interest receivable .............. 893
Receivable for fund shares sold ................ 12,858
Due from advisor (Note 3) ..................... 21,802
Prepaid expenses ............................... 2,710
-----------
Total assets ................................... 1,803,759
-----------
LIABILITIES:
Payable for securities purchased ............... 63,941
Accrued distribution fee (Note 5) ............. 6,748
Accrued directors fees ......................... 4,875
Other accrued expenses ......................... 16,026
-----------
Total liabilities .............................. 91,590
-----------
Net Assets ..................................... $ 1,712,169
===========
NET ASSETS CONSIST OF:
Capital stock, $.001 par value;1,000,000
shares authorized; 154,230 shares outstanding $ 1,510,549
Accumulated net investment loss ................ (6,897)
Accumulated net realized loss from
investment transactions ...................... (142,093)
Net unrealized appreciation on investments ..... 350,610
-----------
Net Assets ..................................... $ 1,712,169
===========
Net asset value per share ( $1,712,169/154,230
shares outstanding) ............................ $ 11.10
===========
Offering price per share (100/95.25 of $11.10) . $ 11.65
===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
IMPERIAL FINANCIAL SERVICES FUND
STATEMENT OF OPERATIONS
For the Six Months Ended August 31, 2000
(Unaudited)
Investment Income:
<S> <C>
Dividends .................................. $ 10,062
Interest ................................... 1,077
---------
Total investment income .................. 11,139
---------
Expenses:
Advisory fees (Note 3) ..................... 6,557
Distribution fees (Note 5) ................. 3,279
Administration fees ........................ 11,796
Transfer agent fees ........................ 8,349
Directors fees ............................. 2,875
Audit fees ................................. 5,032
Insurance .................................. 1,945
Custody fees ............................... 2,521
Legal fees ................................. 2,521
Registration & filing fees ................. 1,008
Other expenses ............................. 512
---------
Total expenses ............................. 46,395
Less:
Advisory fees waived (Note 3) ............ (6,557)
Expenses reimbursed (Note 3) ............. (21,802)
---------
Net expenses ............................... 18,036
---------
Net investment loss ........................ (6,897)
---------
Net Realized and Unrealized Gain
on Investments: (Note 2)
Net realized loss on investment transactions (127,058)
Net increase in unrealized appreciation
on investments ........................... 510,147
---------
Net gain on investments .................... 383,089
---------
Net increase in net assets resulting
from operations .......................... $ 376,192
=========
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Imperial Financial Services Fund
Statement of Changes in Net Assets
For the For the
six months ended year ended
August 31, 2000 February 29, 2000
--------------- -----------------
(Unaudited)
OPERATIONS:
<S> <C> <C>
Net investment loss ........................................... $ (6,897) $ (8,984)
Net realized loss from investment transactions ................ (127,058) (15,035)
Net increase (decrease) in unrealized appreciation
on investments .............................................. 510,147 (159,537)
----------- -----------
Net increase (decrease) in net assets resulting from operations 376,192 (183,556)
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income .......................... 0 0
Distributions from net realized gains on investments .......... 0 0
FUND SHARE TRANSACTIONS:
Proceeds from shares sold ..................................... 298,488 1,148,971
Dividends reinvested .......................................... 0 0
Payment for shares redeemed ................................... (16,705) (11,221)
----------- -----------
Net increase in net assets from fund share transactions ....... 281,783 1,137,750
----------- -----------
Net increase in net assets .................................... 657,975 954,194
NET ASSETS:
BEGINNING OF PERIOD ................................................ 1,054,194 100,000
----------- -----------
END OF PERIOD (including accumulated
net investment loss of $6,897 and $0, respectively) ............ $ 1,712,169 $ 1,054,194
=========== ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
IMPERIAL FINANCIAL SERVICES FUND
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout each period)
For the For the
six months ended year ended
August 31, 2000 February 29, 2000
--------------- -----------------
(Unaudited)
<S> <C> <C>
Net asset value, beginning of period ................. $ 8.46 $ 10.00
------------ ------------
Income (loss) from investment operations
Net investment loss .................................. (0.03) (0.11)
Net realized and unrealized gain (loss) on investments 2.67 (1.43)
------------ ------------
Total from investment operations ..................... 2.64 (1.54)
------------ ------------
Less distributions
Dividends from net investment income ................. 0.00 0.00
Distributions from net realized gains ................ 0.00 0.00
------------ ------------
Total dividends and distributions .................... 0.00 0.00
------------ ------------
Net asset value, end of period ....................... $ 11.10 $ 8.46
============ ============
Total return* ........................................ 31.21% (15.40%)
Ratios/supplemental data
Net assets, end of period (in thousands) ............. $ 1,712 $ 1,054
Ratio of expenses to average
net assets, net of reimbursement ................ 2.75% ** 2.75%
Ratio of expenses to average
net assets, before reimbursement ................ 7.07% ** 11.75%
Ratio of net investment loss to average
net assets, net of reimbursement ................ (1.05%)** (1.17%)
Ratio of net investment loss to average
net assets, before reimbursement ................ (5.37%)** (10.17%)
Portfolio turnover rate .............................. 40.70% 8.79%
<FN>
* The return does not include the effect of the Fund's sales charge.
** Annualized
</FN>
</TABLE>
See Notes to Financial Statements.
<PAGE>
IMPERIAL FINANCIAL SERVICES FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2000
(UNAUDITED)
NOTE 1. ORGANIZATION
Imperial Financial Services Fund (the "Fund"), formerly Imperial
BankFund, is a series of Questar Funds, Inc. (the "Company"), organized as a
Maryland Corporation, incorporated on February 13, 1998, and registered as an
open-end, diversified management investment company under the Investment Company
Act of 1940, as amended. The Fund's investment objective is to seek long-term
capital appreciation with income as a secondary objective by investing in a
portfolio consisting primarily of equity securities of regional banks, lending
institutions and financial services companies. The Fund commenced operations on
March 1, 1999.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
consistently followed by the Fund. These policies are in conformity with
generally accepted accounting principles.
A. SECURITY VALUATION - Securities for which market quotations are
readily available are valued at market value. Portfolio
securities for which market quotations are not considered
readily available are stated at fair value on the basis of
valuations furnished by a pricing service approved by the Board
of Directors. The pricing service determines valuations for
normal, institutional-size trading units of such securities
using methods based on market transactions for comparable
securities and various relationships between securities that are
generally recognized by institutional traders. Short-term
investments held by the Fund that mature in 60 days or less are
valued at amortized cost, which approximates market value. All
other securities and assets are valued at their fair value
following procedures approved by the Board of Directors.
B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Securities
transactions are accounted for on the trade date. Dividend
income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis.
C. FEDERAL INCOME TAXES - The Fund intends to comply with
requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its
taxable income to its shareholders. Therefore, no provision for
Federal income tax is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - The Fund records
dividends and distributions to shareholders on the ex-dividend
date. The Fund will distribute its net investment income, if
any, and net realized capital gains, if any, annually.
E. USE OF ESTIMATES - The preparation of financial statements in
conformity with general 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 periods. Actual results could differ from
those estimates.
<PAGE>
IMPERIAL FINANCIAL SERVICES FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2000
(UNAUDITED) - (CONTINUED)
NOTE 3. INVESTMENT ADVISORY AGREEMENT
The Fund has an investment advisory agreement with Retirement Planning
Company of New England, Inc. ("Advisor"). Under this agreement, the Advisor
provides the Fund with investment advice and supervises the Fund's management
and investment programs for which the Fund pays a monthly advisory fee equal,
to 1.00% of its average daily net assets. The Advisor has voluntarily agreed
to waive its advisory fee or, if necessary, to reimburse the Fund if and to
the extent that the Fund's total annual operating expense ratio exceeds 2.75%.
For the six months ended August 31, 2000, the Advisor earned investment
advisory fees of $6,557 with $28,359 reimbursed to the Fund for expenses.
NOTE 4. FUND ADMINISTRATION AGREEMENT
The Fund has an administration agreement with American Data Services,
Inc. ("ADS" or the "Administrator"), of which the Fund's President is also an
officer. Under this agreement, the Administrator provides the Fund with
administrative, transfer agency, and fund accounting services. For the
services rendered to the Fund by the Administrator, the Fund pays the
Administrator a monthly fee equal to 1/12th of 0.175% of the first $75
million, 1/12th of 0.125% of the next $75 million, and 1/12th of 0.075% of the
remaining balance of the Fund's average daily net assets. The fee is subject
to a monthly minimum of $1,950. The Fund also reimburses the Administrator for
any out-of-pocket expenses. For the six months ended August 31, 2000, American
Data Services, Inc. earned $20,145 for administrative, transfer agency, and
fund accounting services.
NOTE 5. DISTRIBUTION FEES
The Board of Directors has adopted a Distribution Plan applicable to
the Fund under Section 12(b) of the 1940 Act and Rule 12b-1 thereunder.
AmeriMutual Funds Distributors, Inc. (the "Distributor"), of which the Fund's
president is also an officer, serves as the Fund's distributor. Pursuant to
the Plan, the Distributor will receive a monthly fee equal to 0.50% of its
average daily net assets, on an annual basis, to enable it to provide
marketing and promotional support to the Fund, shareholder servicing and
maintaining shareholder accounts and to make payments to broker/dealers and
other financial institutions with which it has written agreements and whose
clients are Fund shareholders for providing distribution assistance. Fees paid
under the Plan may not be waived for individual shareholders. For the six
months ended August 31, 2000, the Fund incurred distribution expenses of
$3,279. The Distributor also received $279 as its portion of the sales charge
on sales of shares of the Fund during the six months ended August 31, 2000.
<PAGE>
IMPERIAL FINANCIAL SERVICES FUND
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2000
(UNAUDITED) - (CONTINUED)
NOTE 6. CAPITAL SHARE TRANSACTIONS
At August 31, 2000, there were 1 million shares of $.001 par value
capital stock authorized and total total par value and paid in capital
aggregated $1,510,549.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
AUGUST 31, 2000 FEBRUARY 29, 2000
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C>
Shares sold........................ 31,214 $ 298,488 115,943 $1,148,971
Shares issued for reinvestment of
dividends and distributions
from realized gains............... 0 0 0 0
Shares redeemed.................... ( 1,639) ( 16,705) ( 1,288) ( 11,221)
----------- ------------- ------------ -----------
Net increase....................... 29,575 $ 281,783 114,655 $1,137,750
=========== ============ ============ ===========
</TABLE>
NOTE 7. INVESTMENTS
During the six months ended August 31, 2000, purchases and sales of
investment securities, excluding short-term securities aggregated $779,506 and
$516,003, respectively. The gross unrealized appreciation for all securities
totaled $404,612 and the gross unrealized depreciation for all securities
totaled $54,002, or a net unrealized appreciation of $350,610. The aggregate
cost of securities for federal income tax purposes at August 31, 2000 was
$1,351,825.
<PAGE>
Investment Advisor
Retirement Planning Company of New England, Inc.
One Richmond Square
Providence, Rhode Island 02906
Legal Counsel
Spitzer & Feldman P.C.
405 Park Avenue
New York, NY 10022
Independent Auditors
McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, OH 44145
Administrator
American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
Distributor
AmeriMutual Funds Distributors, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
Transfer Agent (all purchase
and redemption requests)
American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
Custodian
Firstar Bank N.A.
425 Walnut Street
Cincinnati, OH 45202
This report is intended for shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.
