(LOGO)
JOHNSONFAMILY
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FUNDS
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1999 ANNUAL REPORT
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TABLE OF CONTENTS
Portfolio Commentaries ................................................... 1
Schedules of Investments
JohnsonFamily Intermediate Fixed Income Fund .......................... 11
JohnsonFamily Large Cap Equity Fund ................................... 14
JohnsonFamily Small Cap Equity Fund ................................... 16
JohnsonFamily International Equity Fund ............................... 18
Statements of Assets and Liabilities ..................................... 22
Statements of Operations ................................................. 23
Statements of Changes in Net Assets ...................................... 24
Financial Highlights ..................................................... 26
Notes to the Financial Statements ........................................ 28
Report of Independent Public Accountants.................................. 32
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NOT FDIC-INSURED
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May lose value No bank guarantee
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Shares of JohnsonFamily Funds are distributed by an independent third party,
Sunstone Distribution Services, LLC.
<PAGE>
PORTFOLIO COMMENTARIES October 31, 1999
Intermediate Fixed Income Fund
Although interest rates declined early in the Fund's fiscal year, the decrease
was more than offset by increases later in the fiscal year. The rise in interest
rates reflected fears that the high growth rate of the economy could cause
shortages of goods and labor, resulting in higher prices and labor costs which
would lead to higher inflation and even higher interest rates. The Federal
Reserve has also voiced these concerns even though there were and still are few
signs of inflation. As the fiscal year ended, there were signs that in spite of
the strength of the economy, higher interest rates and oil prices were starting
to have a dampening effect on home sales and consumer spending. Throughout the
fiscal year, the Fund held corporate securities with an average maturity longer
than its benchmarks at a time when shorter was better. The effects of higher
interest rates, overweighting of corporates and longer maturities led to a total
return of (2.26)%. This figure is composed of the change in the value of the
bonds plus the interest earned on those bonds. The 30-day yield, as of October
31, 1999, was 5.90%; as of September 30, 1999, the yield was 5.82%.
- --------------------------------------------------------------------------------
TOTAL RETURN
For the period ended October 31, 1999 For the period ended September 30, 1999
One Year Average Annual<F1> One Year Average Annual<F1>
- ------------------------------------- ----------------------------------------
(2.26)% 2.19% (3.57)% 2.22%
RETURN ON A $10,000 INVESTMENT (SINCE 3/31/98)
3/31/98 10/31/98 10/31/99
-------- -------- --------
Lehman Bros. Intermediate
Gov't./Corp. Bond Index 10,000 10,635 10,740
Lipper Intermediate Investment 10,000 10,525 10,554
Grade Debt Index
Intermediate Fixed Income Fund 10,000 10,589 10,350
<F1> Annualized
Past performance is not predictive of future results.
- --------------------------------------------------------------------------------
This chart assumes an initial investment of $10,000 made on 3/31/98
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that your shares, when redeemed,
may be worth more or less than their original cost.
The Lehman Brothers Intermediate Government/Corporate Bond Index includes all
public obligations of the U.S. Treasury, excluding flower bonds and foreign-
targeted issues; all publicly issued debt of U.S. government agencies and quasi-
federal corporations and corporate debt guaranteed by the U.S. government; all
publicly issued, fixed rate, nonconvertible investment-grade dollar-denominated,
SEC-registered corporate debt. The Index sectors are industrial, finance,
utility and Yankee. Also included among Yankees is debt issued or guaranteed by
foreign sovereign governments, municipalities or governmental or international
agencies. It includes only those bonds with maturities of up to 10 years.
The Lipper Intermediate Investment Grade Debt Index includes the 30 largest
funds which, by prospectus or portfolio practice, invest at least 65% of its
assets in investment grade debt issues (rated in the top four grades) with
dollar-weighted average maturities of one to five years.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
PORTFOLIO COMMENTARIES October 31, 1999
Intermediate Fixed Income Fund (continued)
We think corporate bonds are more attractive than they have been in years
compared to other fixed income alternatives and we have positioned the Fund to
be able to take advantage of the attractive competitive returns they offer. The
Fund had a 12% weighting in the mortgage sector as of 10/31/99 because of the
attractive relative yield of mortgage-backed securities and the prospect of less
refinancing. The Fund continues to focus on corporate bonds with their
relatively attractive yield advantage over government bonds, and continues to
maintain less emphasis on treasury issues.
While interest rates have risen over the year, which has been very
disappointing, we expect them to decline as the U.S. and foreign economies show
a more modest growth rate with little inflation. We believe our current strategy
of overweighting corporate securities with their higher relative yields will be
rewarded longer term while providing a competitive yield.
George A. Balistreri, CFA
Portfolio Manager
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
PORTFOLIO COMMENTARIES October 31, 1999
Large Cap Equity Fund
The Fund's 1999 fiscal-year performance was challenging relative to both the
Fund's benchmark and its peer group. The equity markets during the Fund's
fiscal year were marked by exceptional volatility and sector rotation. Corporate
earnings growth during fiscal 1999 proved much better than had been originally
expected as U.S. economic growth rebounded sharply from the anemic levels set
during the height of the Asian economic crisis. Unfortunately, rebounding share
prices were limited to an ever-narrowing number of stocks dominated by large-cap
growth stocks and technology stocks. Remarkable performance by any historic
standard was found in the technology sector as the technology heavy Nasdaq Index
jumped 68.0% while the S&P 500/R Index, with its growing emphasis on technology,
increased 25.7%. In contrast, the Large Cap Equity Fund returned 6.3%. For the
1999 fiscal period, the Fund modestly lagged its peer group as measured by the
Lipper Multi-Cap Value Index, which returned 9.9%.
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TOTAL RETURN
For the period ended October 31, 1999 For the period ended September 30, 1999
One Year Average Annual<F1> One Year Average Annual<F1>
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6.33% 1.39% 9.59% (0.83)%
RETURN ON A $10,000 INVESTMENT (SINCE 3/31/98)
3/31/98 10/31/98 10/31/99
-------- -------- --------
10,000 10,059 12,642
S&P 500/R
Lipper Multi-Cap Value
Fund Index 10,000 9,015 9,907
Large Cap Equity Fund 10,000 9,613 10,222
<F1> Annualized
Past performance is not predictive of future results.
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This chart assumes an initial investment of $10,000 made on 3/31/98
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that your shares, when redeemed,
may be worth more or less than their original cost.
The S&P 500/R Composite Stock Index is an unmanaged index of 500 selected
common stocks, most of which are listed on the New York Stock Exchange. The
Index is heavily weighted toward stocks with large market capitalizations and
represents approximately two-thirds of the total market value of all domestic
common stocks.
The Lipper Multi-Cap Value Fund Index includes the 30 largest funds which, by
prospectus or portfolio practice, invests in companies of various sizes,
normally those that are considered undervalued relative to major stock indexes
based on price-to-current earnings and price-to-book ratios.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
PORTFOLIO COMMENTARIES October 31, 1999
Large Cap Equity Fund (continued)
The Large Cap Equity Fund's performance relative to the S&P 500/R Index was
hampered by both the Fund's broad sector diversification as well as by its
exposure to the mid-cap part of the equity market. The Large Cap Fund remains
fully diversified across most industry sectors, and is intended to provide
consistent returns over longer periods of time. As performance over the past
year in the Fund demonstrates, the merits of diversification were overwhelmed by
the market's narrowness. Both the whipsaws of sector rotation and the market's
growing infatuation for technology contributed to the Fund's lagging performance
during fiscal 1999. While the S&P 500/R Index was setting new highs,
surprisingly brutal multiple contractions sent shares of companies in diverse
industries such as food and other consumer staples, health care, utilities and
financials, including insurance and banking, mostly lower. The Fund's technology
holdings, which averaged about 11% during the year, increased in value by nearly
63% during the period. However, the Fund remained materially underweighted in
technology, limiting its impact on total return. The Fund's mid-cap exposure
also contributed to weak relative performance. For the one year ended October
31, 1999, the S&P/BARRA Mid Cap 400 Value Index increased by only 3.8%,
reflecting the market's narrowness. The Fund's exposure to the mid-cap market
during the fiscal year averaged slightly less than 50%.
Bright spots in the portfolio, outside of technology, included positive
contribution from our overweighting in telecommunications, an industry
undergoing change at a rapid pace. The Fund's largest holding as of October 31
is Sprint, which has agreed to be acquired by MCI WorldCom. The Fund also
benefited from its holdings in Atlantic Richfield and King World Productions,
which agreed to be acquired by BP Amoco and CBS, respectively<F1>.
Stocks remain richly priced relative to current earnings. We believe the Fund is
positioned to perform well on stronger broad market performance as concerns of
rising interest rates and inflation subside. However, should market conditions
deteriorate, the Fund's average multiple on earnings at 23.3x is well below that
of the S&P 500/R Index multiple of 35.6x, positioning the Fund as more
defensive.
Wendell L. Perkins, CFA
Frank J. Gambino, CFA
Portfolio Managers
<F1> As of October 31, 1999, Sprint comprised 3.30% of the Fund, Atlantic
Richfield comprised 0.00% of the Fund and King World Productions comprised
0.00% of the Fund.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
PORTFOLIO COMMENTARIES October 31, 1999
Small Cap Equity Fund
A continued demand for liquidity during the October 31, 1999 fiscal year
extended the outperformance of large-cap versus small-cap stocks that has
persisted over the past five years. The Fund's fiscal year was characterized by
increasing valuations for large-cap technology stocks substantially beyond the
historical normal range. These high valuations continue to push large-cap
indices to all-time record levels. This phenomenon was also somewhat evident in
the small-cap sector where heavy technology-weighted indices and funds performed
well. In the small-cap universe, value lagged growth due to value's heavier
weightings in interest-rate-sensitive sectors and lighter weightings in
technology.
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TOTAL RETURN
For the period ended October 31, 1999 For the period ended September 30, 1999
One Year Average Annual<F1> One Year Average Annual<F1>
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1.67% (10.70)% 6.30% (10.98)%
RETURN ON A $10,000 INVESTMENT (SINCE 3/31/98)
3/31/98 10/31/98 10/31/99
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S&P SmallCap 600 Stock Index 10,000 7,907 8,859
Lipper Small Cap Value Fund Index 10,000 7,966 8,143
Small Cap Equity Fund 10,000 8,220 8,357
<F1> Annualized
Past performance is not predictive of future results.
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This chart assumes an initial investment of $10,000 made on 3/31/98
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that your shares, when redeemed,
may be worth more or less than their original cost.
The S&P SmallCap 600 Index is a capitalization-weighted index of 600 domestic
stocks that measures the performance of companies with a small market
capitalization. The S&P SmallCap 600 Index fluctuates due to changes in the
aggregate market value of these stocks.
The Lipper Small Cap Value Fund Index includes the 30 largest funds which, by
prospectus or portfolio practice, invests primarily in small companies that are
considered undervalued relative to major stock indexes based on price-to-current
earnings and price-to-book ratios.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
PORTFOLIO COMMENTARIES October 31, 1999
Small Cap Equity Fund (continued)
The fiscal year began strong in November and December as the Federal Reserve
continued to lower interest rates to fight off recessionary fears caused by the
Asian crisis. The markets began to cool off in January and February as signs of
inflation caused the Federal Reserve to voice concerns about the possibility of
increasing interest rates. Y2K fears affected certain market sectors as
investors punished those sectors that appeared to be negatively affected by Y2K.
The market began to pick up positive momentum in April as investors began to
grow confident that the global financial crisis was improving and corporate
profits were strong. Value stocks were particularly strong during this period as
prices for commodities began to strengthen. Driving the small-cap market during
this period was a wave of mergers and acquisitions, especially management-led
leveraged buy-outs ("LBOs"). The increase in mergers and LBOs reflected the low
relative and absolute valuations in the small-cap market. In the final four
months of the fiscal year the markets were held back by the Federal Reserve
raising interest rates and the possibility of further increases.
For the fiscal year ended October 31, 1999, the JohnsonFamily Small Cap Equity
Fund lagged its benchmark and tracked its peer group. The Fund's underweighting
in the technology sector versus the benchmark is the principal reason for the
lag in performance. Throughout the year, the Fund maintained a 10-12% weighting
in the technology sector, while the technology weighting of the S&P SmallCap 600
Index climbed to 19% at 10/31/99. We continue to believe that the valuations in
the technology sector are extended, and that over time, investors will
eventually retreat to owning stocks that are priced appropriately given their
earnings potential. Our underweighting reflects a "lack of value," meaning that
there are few stocks that are trading at attractive levels given the true
earnings power of the companies within the sector. Many technology stocks had
strong double (and in some cases triple) digit gains during this period. We are
very encouraged by the performance of the technology stocks in our portfolio.
Also impacting Fund performance versus our benchmark, was the Fund's
overweighted position in financial stocks, which were adversely affected by the
increase in interest rates during the year.
There were many areas of strength during the course of the year. Gains in
technology (+80%), transportation (+56%), utilities (+32%) and retail (+18%)
boosted performance. The following are examples of stocks that performed
extremely well during the year:
Technology: DSP Group, Inc. (up 375% from 2/11/99, the date of purchase,
through 10/31/99) develops and markets digital signal
processing integrated circuits and software for use in
digital speech products targeted at the consumer telephone
and computer telephony markets. DSP's products facilitate
the growth in fast growing areas such as caller ID and voice
recognition. At 10x earnings, a high level of cash on the
balance sheet and no debt, DSP Group presented a terrific
opportunity.
Transportation: Avondale Industries, Inc., maker of oceanic vessels for the
military and commercial markets, agreed to be acquired by
Litton Industries, Inc. We purchased Avondale at $29 on
4/1/98 and made 34% on the investment.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
PORTFOLIO COMMENTARIES October 31, 1999
Small Cap Equity Fund (continued)
Utilities: TNP Enterprises, Inc. (up 15% from 10/26/98, the date of
purchase, through 10/31/99), an electric utility serving
Texas and New Mexico, agreed to be acquired by a private
investor group.
Retail: Herbalife International (up 39% from 8/10/99, the date of
purchase, through 10/31/99) is a network marketing company
that sells a wide range of weight-management products, food
and dietary supplements, and personal-care products
worldwide. Cash on the balance sheet exceeded half of its
total market capitalization and the stock had a compelling
valuation (traded at 7x earnings). We felt that due to the
attractive valuation and the company's global expansion
plans, Herbalife represented a tremendous value. Evidently,
Herbalife's founder felt the same way, as he offered to buy
all the outstanding shares at $17/share (a 73% premium to
our original purchase price).
Well Positioned for a Broad Market Advance
Our process continues to focus on undervalued companies within their sector that
exhibit low leverage and a strong cash flow. Low debt levels provide companies
with the flexibility needed during difficult economic environments. Companies
that generate strong cash flow are in a better position to increase shareholder
wealth over the long term. We feel more comfortable owning companies that have
strong fundamentals supporting their stock price rather than owning companies
that have little or no earnings and which continue to require cash for
investment in anticipation of future profitability.
Outlook
After years of underperformance, the small-cap market is due for a reversal.
Relative valuations remain low compared to the broader market. Y2K influences
seem to be behind us, as corporate America has prepared itself and stands ready.
We are encouraged to see that merger and acquisition activity remains strong,
which reflects the low valuations among the small caps. Momentum in the
technology sector continues to be strong but we remain confident that in the
end, valuation will win out. During most of 1999, advances in the market have
been limited to a small number of sectors, including technology and the
cyclicals (energy, paper, metals). As managers who believe in diversification,
the Fund has broad market exposure to most economic sectors and we believe the
Fund is well positioned when the rest of the market participates in a future
small-cap recovery.
Wendell L. Perkins, CFA
Frank J. Gambino, CFA
Portfolio Managers
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
PORTFOLIO COMMENTARIES October 31, 1999
International Equity Fund
One year ago in the midst of the Asian economic crisis, the Russian currency
crisis and the Long Term Capital Management hedge fund losses, one could hardly
fault an equity investor for seeking the safety of U.S. large cap blue chip
equities or treasury bonds. The uncertainties surrounding the world economies
were ominous, as investors were faced with the perception of a chain reaction
financial meltdown sweeping through the various regions of the world. Fearing
that a lack of liquidity would accelerate further declines in the world markets,
central bankers of the world acted to ensure that the markets would remain
liquid. In the U.S., the Federal Reserve reduced the Federal Funds rate by one-
quarter point on three separate occasions in a matter of a few months. During
the later months of 1998 and the early months of 1999, it became evident that
the world markets had begun to stabilize. Eleven European countries were
adapting well to the January 1, 1999 currency conversion to the Euro. The
Japanese government was forging ahead with a fiscal policy package designed to
stimulate economic growth. Asian markets were beginning to rebound, as many
analysts and economists were speculating that the worst was over. Latin American
countries were rebounding from currency devaluation concerns. As the prospects
for a resumption of world economic growth brightened, world equity markets
responded favorably. For the one-year period ended October 31, 1999, the
JohnsonFamily International Equity Fund returned 17.9%. The benchmark MSCI All
Country World ex-USA Index returned 23.9%. The performance lag was primarily the
result of the Fund's weighting in Japan and emerging Asia being less than that
of the benchmark.
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TOTAL RETURN
For the period ended October 31, 1999 For the period ended September 30, 1999
One Year Average Annual<F1> One Year Average Annual<F1>
- ------------------------------------- ----------------------------------------
17.85% 3.56% 23.34% 2.71%
RETURN ON A $10,000 INVESTMENT (SINCE 3/31/98)
3/31/98 10/31/98 10/31/99
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Morgan Stanley Capital
International All Country 10,000 9,110 11,284
World ex-USA Index
Lipper International Fund Index 10,000 9,119 11,221
International Equity Fund 10,000 8,970 10,571
<F1> Annualized
Past performance is not predictive of future results.
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This chart assumes an initial investment of $10,000 made on 3/31/98
(commencement). Returns shown include the reinvestment of all dividends and
reflect fee waivers in effect; in the absence of fee waivers, performance would
be reduced. Past performance is not predictive of future results. Investment
return and principal value will fluctuate, so that your shares, when redeemed,
may be worth more or less than their original cost.
The Morgan Stanley Capital International All Country World ex-USA Index is
the aggregate of 47 of 51 individual country indices calculated by MSCI. The
Index excludes the USA. Each country index is calculated using the five
following steps: 1) define the local market by constructing a matrix of all
listed securities; 2) sort the matrix by industry; 3) capture 60% of the market
cap of each group by selecting the most investable stocks in each industry; 4)
avoid cross-ownership; and 5) apply full market cap weights to each stock in the
index.
The Lipper International Fund Index includes the 30 largest funds which, by
prospectus or portfolio practice, normally invest their assets in securities
whose primary trading markets are outside the United States. Each fund is
equally weighted in the Index and is adjusted for capital gains distributions
and income dividends.
Unlike actual fund performance, performance of an index does not reflect any
expenses or transaction costs. A direct investment in an unmanaged index is not
possible.
Investors are reminded that, while investing globally can be rewarding,
investments in foreign securities involve investment risks including currency,
liquidity, political, economic and market risks.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
PORTFOLIO COMMENTARIES October 31, 1999
International Equity Fund (continued)
Regional Diversification and the Asian Recovery
The Fund is structured with a focus on developed global markets, with a small
exposure to lesser-developed markets such as Mexico, Brazil and Malaysia. The
holdings in the Fund are diversified across 28 countries. The Fund is nearly
two-thirds invested in Europe and the United Kingdom. Relative to the benchmark
for the fiscal year ended October 31, 1999, the Fund was underweighted in Japan
and in the emerging Asian markets. For the one year period ended October 31,
1999, Japan's Nikkei 225 Index rose 49%(U.S. dollars) and the MSCI All Country
Asia Pacific Free ex-Japan Index rose 36.9%. The surge in the Japanese stock
market is a welcome event given its poor performance over the last ten years.
Fiscal stimulus, consolidation in banking and communications, and corporate
restructuring have provided foreign investors with a sense of optimism. However,
government fiscal stimulus packages cannot go on indefinitely. Ultimately, the
Japanese consumer must begin to regain confidence and purchase more goods and
services to stimulate growth. As corporations embark upon restructuring
programs, the toll will likely include loss of jobs, which will reduce consumer
confidence. Mergers among the large financial institutions are well intended.
However, the benefits of the consolidations may not be realized for several
years due to the cultural underpinnings inherent in the corporate structure,
unlike U.S. mergers which tend to yield cost savings very quickly. As foreign
investors continue to migrate toward Japan, the strengthening Yen could begin to
reduce the profits of Japanese exporters. During the third quarter of 1999, the
Yen appreciated 14% versus the U.S. dollar. An additional catalyst for reform in
Japan is the rise in foreign investment in Japanese companies through joint
ventures and acquisitions.
Industry Sector Diversification and Performance
The holdings in the Fund are diversified across 20 economic sectors, which may
reduce volatility over the long term. The Fund is structured with a value
emphasis and our investment process focuses on companies we consider to be
strong with solid cash flows, conservative balance sheets and a competitive
market share. The industry sector allocation of the Fund as of October 31, 1999
emphasized financials, industrials, communications and consumer staples. Results
in the financial sector were mixed. Bank consolidations and renewed economic
growth were the primary catalysts for the sector, however, the rising interest
rate environment of the past few months has hindered returns. Insurance stocks
were weak in Europe and the United Kingdom as competitive pressures reduced
margins. Energy stocks performed very well as oil prices nearly doubled over the
last 12 months. Prospects for renewed economic growth around the world provided
the impetus for a nice rebound in the cyclical sectors. Chemical and
forest/paper product companies were solid performers. Telecommunication and
technology companies were very strong and drove market returns in most regions.
Pharmaceutical companies were among the weakest sectors as competitive pressures
and regulatory hurdles weighed heavily on the industry. Electric utility
companies were also weak as the industry wrestled with pricing pressures.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
PORTFOLIO COMMENTARIES October 31, 1999
International Equity Fund (continued)
Value Emphasis
The Fund owns international equity securities that we consider to be undervalued
relative to their respective country indices and industry peer groups. In
reviewing the basic valuation measures, the Fund's price/earnings ratio and
price/book ratio as of October 31, 1999 were 24.6x and 3.7x respectively versus
32.2x and 5.0x for the average Morningstar Foreign Stock Fund<F1>. International
mutual fund managers have increased their exposure to Japan during 1999, with a
good deal of their purchases focused on large-cap technology companies, telecoms
and banks. Given the weak corporate earnings environment that has existed in
Japan and the recent plethora of mutual fund purchases, equity valuations in
Japan are very high. We remain cautiously optimistic toward Japan, as it strives
to reshape its corporate culture and enhance its long-term prospects. The
outlook for Europe and the United Kingdom remains favorable, as corporations
focus on restructuring and cost containment, with the goal of enhancing
shareholder value. Pan European and transatlantic consolidation trends that we
have witnessed in the financial, retail and utility sectors are expected to
continue.
Wendell L. Perkins, CFA
Frank J. Gambino, CFA
Portfolio Managers
<F1> The Morningstar Foreign Stock Fund category is comprised of 620
international funds having no more than 10% of their equity holdings
invested in the United States.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
Intermediate Fixed Income Fund
Principal
Amount Value
- ----------- -----------
CORPORATE BONDS - 50.87%
$ 500,000 AT&T Corp., 6.00%, 3/15/09 $462,629
300,000 AT&T Corp., 8.125%, 1/15/22 298,929
750,000 AirTouch Communications, Inc.,
7.50%, 7/15/06 754,544
500,000 Anheuser-Busch Cos., Inc.,
6.90%, 10/1/02 499,338
1,000,000 Anheuser-Busch Cos., Inc.,
7.25%, 9/15/15 990,861
500,000 Bank One Corp.
6.875%, 8/1/06 492,499
1,000,000 Bank One Texas,
6.25%, 2/15/08 936,687
1,000,000 Bear Stearns Co., Inc.,
6.45%, 8/1/02 987,841
500,000 Borg-Warner Automotive, Inc.,
7.00%, 11/1/06 485,551
1,000,000 Carnival Corp., 6.15%, 4/15/08 940,332
500,000 Citigroup, Inc., 6.20%, 3/15/09 467,705
1,500,000 CNA Financial Corp.,
7.25%, 11/15/23 1,336,839
1,000,000 Commercial Credit Co.,
6.25%, 1/1/08 940,396
500,000 Computer Associates,
6.375%, 4/15/05 471,311
1,000,000 Computer Associates,
6.50%, 4/15/08 923,397
500,000 Donaldson, Lufkin & Jenrette,
Inc., 6.50%, 4/1/08 467,261
1,000,000 Equifax Inc., 6.30%, 7/1/05 953,529
1,000,000 Fleet National Bank,
5.75%, 1/15/09 897,869
750,000 Ford Motor Credit Co.,
6.25%, 12/8/05 718,631
1,000,000 GTE Corp., (MBIA Insured),
6.46%, 4/15/08 974,298
400,000 Hertz Corp., 6.30%, 11/15/06 393,539
750,000 Knight-Ridder, Inc.,
6.625%, 11/1/07 722,213
1,000,000 Lincoln National Corp.,
9.125%, 10/1/24 1,076,352
Principal
Amount Value
- ----------- -----------
CORPORATE BONDS - 50.87% (CONTINUED)
$1,375,000 Martin Marietta Corp.,
7.75%, 4/15/23 $1,363,234
1,000,000 Masco Corp., 6.125%, 9/15/03 984,002
1,000,000 McDonald's Corp.,
7.375%, 7/15/33 947,778
1,000,000 MCI WorldCom Inc.,
7.75%, 4/1/27 1,049,848
250,000 Mead Corp., 8.125%, 2/1/23 258,893
350,000 Mellon Financial Co.,
6.875%, 3/1/03 349,267
500,000 Merrill Lynch & Co.,
6.00%, 2/17/09 458,022
1,000,000 Monsanto Co., 6.21%, 2/5/08 935,990
500,000 Nabisco, Inc., 6.00%, 2/15/01 494,987
1,425,000 National Fuel Gas Co.,
6.214%, 8/12/27 1,384,480
500,000 Nationwide Health,
7.90%, 11/20/06 455,270
1,000,000 Olsten Corp., 7.00%, 3/15/06 953,306
1,000,000 PaineWebber Group,
6.55%, 4/15/08 926,719
350,000 Rockwell International Corp.,
8.375%, 2/15/01 358,344
500,000 Suntrust Banks, Inc.,
6.3025%, 4/22/02 497,395
1,000,000 Tribune Co., 5.50%, 10/6/08 898,238
1,000,000 TRW Inc., 6.25%, 1/15/10 898,794
1,000,000 Wells Fargo & Co.,
6.625%, 4/15/13 940,210
------------
TOTAL CORPORATE BONDS
(cost $32,861,084) 31,347,328
------------
CONVERTIBLE CORPORATE BONDS - 0.60%
500,000 Thermo Instrument Systems,
4.00%, 1/15/05
(cost $409,100) 369,375
------------
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
Intermediate Fixed Income Fund (continued)
Principal
Amount Value
- ----------- -----------
MUNICIPAL BONDS - 4.00%
$500,000 Chicago, Illinois Public Building,
7.00%, 1/1/07 $496,605
325,000 Cook County School District,
8.00%, 12/1/06 339,669
500,000 Harris County Sports,
6.75%, 11/15/17 451,370
350,000 Massachusetts State Port Authority,
6.35%, 7/1/07 334,035
500,000 Oakland, California Pension,
6.98%, 12/15/09 490,722
350,000 San Francisco, California,
Series A, 6.95%, 6/15/03 352,181
------------
TOTAL MUNICIPAL BONDS
(cost $2,601,290) 2,464,582
------------
U.S. GOVERNMENT AGENCIES - 32.52%
NOTES - 19.82%
500,000 Federal Farm Credit Bureau Note,
5.05%, 11/6/03 474,164
1,000,000 Federal Home Loan Bank,
5.50%, 1/21/03 974,097
500,000 Federal Home Loan Bank,
6.229%, 4/20/05 486,661
500,000 Federal Home Loan Bank,
5.94%, 12/1/05 478,741
1,000,000 Federal Home Loan Bank,
6.15%, 3/3/08 946,376
500,000 Federal Home Loan Bank,
8.05%, 8/26/09 499,370
2,000,000 Federal Home Loan Mortgage
Corp., 5.90%, 5/4/04 1,941,036
1,000,000 Federal Home Loan Mortgage
Corp., 6.642%, 3/13/06 979,738
250,000 Federal Home Loan Mortgage
Corp., 7.245%, 4/24/06 249,401
900,000 Federal Home Loan Mortgage
Corp., 7.528%, 9/25/06 905,884
Principal
Amount Value
- ----------- -----------
NOTES - 19.82% (CONTINUED)
$500,000 Federal Home Loan Mortgage
Corp., 7.09%, 11/24/06 $492,970
1,000,000 Federal National Mortgage Assoc.,
6.14%, 3/24/03 984,926
300,000 Federal National Mortgage Assoc.,
7.25%, 6/1/05 299,291
750,000 Federal National Mortgage Assoc.,
6.85%, 9/12/05 740,982
800,000 Federal National Mortgage Assoc.,
6.65%, 3/8/06 780,146
500,000 Federal National Mortgage Assoc.,
6.29%, 4/23/08 476,664
500,000 Federal National Mortgage Assoc.,
8.00%, 9/10/09 506,665
------------
12,217,112
------------
REMICS - 11.90%
395,227 Federal Home Loan Mortgage
Corp., 2044 BD, 6.25%, 3/15/09 384,316
970,430 Federal Home Loan Mortgage
Corp., 6.00%, 6/15/09 963,219
1,000,000 Federal Home Loan Mortgage
Corp., 2185 BG, 7.00%, 11/20/24 971,724
1,000,000 Federal Home Loan Mortgage
Corp., 2190 PJ, 7.50%, 4/20/26 1,001,250
64,642 Federal National Mortgage Assoc.,
1994-4, 7.00%, 8/25/23 62,337
1,065,890 Federal National Mortgage Assoc.,
2089, 6.25%, 10/15/28 999,505
1,448,910 Governmental National Mortgage
Association, 6.50%, 8/20/14 1,409,494
1,064,369 Governmental National Mortgage
Association, 7.00%, 9/20/28 1,041,511
500,000 Residential Funding Mortgage
Securities, 6.96%, 8/25/12 499,170
------------
7,332,526
------------
OTHER AGENCY ISSUES - 0.80%
500,000 Private Export Funding Corp.,
6.49%, 7/15/07 493,180
------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $20,457,301) 20,042,818
------------
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
Intermediate Fixed Income Fund (continued)
Principal
Amount Value
- ----------- -----------
U.S. TREASURY OBLIGATIONS - 1.35%
$4,000,000 U.S. Treasury Strips, 11/15/24
(cost $981,354) $830,112
------------
TOTAL BONDS
(cost $57,310,129) 55,054,215
------------
Number
of Shares
- ----------
PREFERRED STOCKS - 3.57%
40,000 Chase Capital VII,
7.00%, 5/15/29 885,000
40,000 Tennessee Valley Authority,
6.75%, 6/1/28 892,500
20,000 WEC Capital Trust,
6.85%, 3/31/39 425,000
------------
TOTAL PREFERRED STOCKS
(cost $2,507,500) 2,202,500
------------
Principal
Amount
- -----------
COMMERCIAL PAPER - 2.43%
$1,500,000 G.E. Capital Corp.,
11/19/99 1,496,055
------------
(cost $1,496,055)
Number
of Shares Value
- ----------- -----------
SHORT-TERM INVESTMENTS - 5.38%
2,051,100 SSGA Money Market Fund $2,051,100
1,261,616 SSGA U.S. Government Money
Market Fund 1,261,616
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $3,312,716) 3,312,716
------------
TOTAL INVESTMENTS - 100.72%
(cost $64,626,400) 62,065,486
Liabilities, less Cash and
Other Assets - (0.72)% (441,813)
------------
NET ASSETS - 100.00% $61,623,673
============
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
Large Cap Equity Fund
Number
of Shares Value
- ----------- -----------
COMMON STOCKS - 93.80%
BANKING - 11.84%
44,950 AmSouth Bancorporation $1,157,463
6,000 Chase Manhattan Corp. 524,250
21,400 Fleet Boston Corporation 933,575
2,000 Mellon Financial Corp. 73,875
18,200 PNC Bank Corp. 1,085,175
23,400 Summit Bancorp. 810,225
21,000 UnionBanCal Corporation 912,187
------------
5,496,750
------------
CHEMICALS - 2.32%
9,100 Dow Chemical Co. 1,076,075
------------
CONSUMER DURABLES - 2.04%
17,300 Ford Motor Co. 949,338
------------
CONSUMER STAPLES - 7.49%
16,978 Albertson's, Inc. 616,514
36,500 ConAgra, Inc. 951,281
5,000 Kroger Co. (The)<F1> 104,062
32,400 Sara Lee Corp. 876,825
44,300 Supervalu, Inc. 930,300
------------
3,478,982
------------
ENERGY - 8.27%
22,500 Coastal Corporation (The) 947,812
13,000 Kerr-McGee Corporation 698,750
19,200 Phillips Petroleum Company 892,800
14,000 Unocal Corporation 483,000
28,000 USX-Marathon Group 815,500
------------
3,837,862
------------
FINANCE - 4.95%
21,000 A.G. Edwards, Inc. 631,312
23,700 Countrywide Credit
Industries, Inc. 804,319
6,600 J.P. Morgan & Co., Inc. 863,775
------------
2,299,406
------------
Number
of Shares Value
- ----------- -----------
HEALTH CARE - 8.08%
23,200 Becton Dickinson & Co. $ 588,700
25,000 Columbia/HCA Healthcare
Corporation 603,125
13,400 Merck & Co., Inc. 1,066,138
24,800 Watson Pharmaceuticals, Inc.<F1> 787,400
12,200 Wellpoint Health
Networks, Inc.<F1> 707,600
------------
3,752,963
------------
INDUSTRIAL - 8.26%
20,000 Cooper Industries, Inc. 861,250
14,000 Eastman Kodak Company 965,125
17,700 Harris Corp. 397,144
17,000 Litton Industries, Inc.<F1> 797,937
14,800 Northrop Grumman Corp. 812,150
------------
3,833,606
------------
INSURANCE - 7.28%
25,000 Allstate Corporation (The) 718,750
42,300 Conseco, Inc. 1,028,419
25,500 ReliaStar Financial Corp. 1,094,906
10,000 XL Capital Ltd., Class A 536,875
------------
3,378,950
------------
RETAIL - 1.12%
5,000 Federated Department
Stores, Inc.<F1> 213,438
8,000 J.C. Penney Company, Inc. 203,000
5,000 Ross Stores, Inc. 103,125
------------
519,563
------------
SERVICES - 6.86%
28,000 Deluxe Corporation 791,000
25,700 Dun & Bradstreet Corp. 754,937
20,000 Galileo International, Inc. 601,250
6,000 Knight-Ridder, Inc. 381,000
27,000 R.R. Donnelley & Sons
Company 654,750
------------
3,182,937
------------
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
Large Cap Equity Fund (continued)
Number
of Shares Value
- ----------- -----------
TECHNOLOGY - 9.38%
16,000 Adobe Systems Incorporated $1,119,000
9,600 Apple Computer, Inc.<F1> 769,200
28,300 Compaq Computer Corp. 537,700
10,950 Computer Associates
International, Inc. 618,675
5,500 Intel Corporation 425,906
25,000 Novell, Inc.<F1> 501,563
8,000 Oracle Corporation<F1> 380,500
------------
4,352,544
------------
TELECOMMUNICATIONS - 11.99%
13,518 Bell Atlantic Corp. 877,825
16,000 BellSouth Corporation 720,000
25,200 CenturyTel, Inc. 1,019,025
2,617 ComSat Corp. 48,905
9,225 Global Crossing Ltd.<F1> 319,416
20,600 Sprint Corporation 1,530,837
17,200 U S WEST, Inc. 1,050,275
------------
5,566,283
------------
UTILITIES - 3.92%
31,500 Edison International 933,188
24,100 Pinnacle West Capital Corp. 888,687
------------
1,821,875
------------
TOTAL COMMON STOCKS
(cost $41,823,069) 43,547,134
------------
Number
of Shares Value
- ----------- -----------
SHORT-TERM INVESTMENTS - 3.76%
1,229,864 SSGA Money Market Fund $ 1,229,864
513,792 SSGA U.S. Government Money
Market Fund 513,792
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $1,743,656) 1,743,656
------------
TOTAL INVESTMENTS - 97.56%
(cost $43,566,725) 45,290,790
Cash and Other Assets,
less Liabilities 2.44% 1,131,615
------------
NET ASSETS - 100.00% $46,422,405
============
<F1> Non-income producing security
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
Small Cap Equity Fund
Number
of Shares Value
- ----------- -----------
COMMON STOCKS - 95.86%
BANKING - 7.42%
8,375 Associated Banc-Corp $ 322,176
39,200 Colonial BancGroup, Inc. 467,950
13,290 F.N.B. Corporation 340,556
24,100 Independent Bank Corp. 322,337
11,300 UMB Financial Corporation 459,063
24,000 USBANCORP, Inc. 318,000
------------
2,230,082
------------
BUILDING - 2.91%
12,400 Centex Construction
Products, Inc. 440,975
21,100 The Ryland Group, Inc. 435,187
------------
876,162
------------
CAPITAL GOODS - 3.00%
20,000 Detroit Diesel Corporation 363,750
24,700 Regal-Beloit Corporation 537,225
------------
900,975
------------
CHEMICALS - 2.80%
12,400 Dexter Corporation (The) 434,775
19,900 Ferro Corporation 405,463
------------
840,238
------------
CONSUMER DURABLES - 3.95%
13,000 Arvin Industries, Inc. 370,500
12,500 Bandag, Incorporated 312,500
9,000 Borg-Warner Automotive, Inc. 355,500
6,000 Skyline Corp. 149,250
------------
1,187,750
------------
CONSUMER STAPLES - 4.40%
21,000 J & J Snack Foods Corp.<F1> 404,250
26,800 Ralcorp Holdings, Inc.<F1> 522,600
16,900 Universal Corporation 397,150
------------
1,324,000
------------
Number
of Shares Value
- ----------- -----------
ENERGY - 4.23%
11,000 Louis Dreyfus Natural
Gas Corp.<F1> $220,000
56,000 Ocean Energy Inc.<F1> 514,500
18,800 Questar Corp. 338,400
23,000 Santa Fe Snyder Corporation<F1> 198,375
------------
1,271,275
------------
FINANCE - 1.22%
20,500 Morgan Keegan, Inc. 366,438
------------
HEALTH CARE - 8.07%
25,000 ADAC Laboratories<F1> 217,188
17,100 Arrow International, Inc. 463,837
18,900 CorVel Corp.<F1> 406,350
22,400 DENTSPLY International Inc. 519,400
19,600 Maxxim Medical, Inc.<F1> 470,400
10,100 West Pharmaceutical
Services, Inc. 349,081
------------
2,426,256
------------
INDUSTRIAL - 11.21%
37,000 ACX Technologies, Inc.<F1> 289,062
22,900 AMETEK, Inc. 452,275
21,600 Barnes Group Inc. 438,750
27,000 CLARCOR Inc. 460,687
13,800 Cordant Technologies, Inc. 430,388
17,600 Myers Industries, Inc. 247,500
10,000 SPS Technologies, Inc.<F1> 310,000
16,000 Standex International
Corporation 331,000
13,800 Trinity Industries, Inc. 411,413
------------
3,371,075
------------
INSURANCE - 6.47%
1,600 American National
Insurance Co. 109,600
23,200 Capital Re Corp. 327,700
9,483 Delphi Financial Group, Inc.,
Class A<F1> 303,456
7,000 Everest Reinsurance
Holdings, Inc. 180,250
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
Small Cap Equity Fund (continued)
Number
of Shares Value
- ----------- -----------
INSURANCE - 6.47% (CONTINUED)
23,000 Harleysville Group, Inc. $392,438
18,300 PXRE Group Limited 224,175
7,594 XL Capital Ltd. - Class A 407,703
------------
1,945,322
------------
RETAIL - 8.76%
23,400 Brown Shoe Company, Inc. 416,812
17,300 Department 56, Inc.<F1> 328,700
48,000 Goody's Family Clothing, Inc.<F1> 486,000
48,000 Herbalife International, Inc. 652,500
53,000 OfficeMax, Inc.<F1> 268,313
12,100 Springs Industries, Inc. 481,731
------------
2,634,056
------------
SERVICES - 12.50%
27,700 Aaron Rents, Inc. 438,006
21,700 Banta Corporation 490,963
44,200 Buffets, Inc.<F1> 411,612
23,000 Computer Task Group,
Incorporated 290,375
17,000 GTECH Holdings Corporation<F1> 342,125
15,300 Ogden Corp. 138,656
36,000 Personnel Group of
America, Inc.<F1> 240,750
17,800 Pittston Brink's Group 341,537
21,000 The Reynolds and Reynolds
Company, Class A 381,938
16,200 UniFirst Corporation 198,450
19,000 United Stationers, Inc. 484,500
------------
3,758,912
------------
TECHNOLOGY - 11.23%
18,000 Actel Corporation<F1> 339,750
15,200 BARRA, Inc.<F1> 335,825
10,500 C-Cube Microsystems, Inc.<F1> 467,250
7,300 DSP Group, Inc.<F1> 348,575
13,100 Progress Software Corporation<F1> 438,850
11,700 Symantec Corporation<F1> 558,675
Number
of Shares Value
- ----------- -----------
TECHNOLOGY - 11.23% (CONTINUED)
11,100 Xircom, Inc.<F1> $559,856
6,000 Zebra Technologies
Corporation - Class A<F1> 326,250
------------
3,375,031
------------
TRANSPORTATION - 1.71%
21,400 Alexander & Baldwin, Inc. 513,600
------------
UTILITIES - 5.98%
13,700 Eastern Enterprises 700,413
14,800 TNP Enterprises, Inc. 590,150
21,100 UGI Corporation 506,400
------------
1,796,963
------------
TOTAL COMMON STOCKS
(cost $31,411,542) 28,818,135
------------
SHORT-TERM INVESTMENTS - 5.32%
943,814 SSGA Money Market Fund 943,814
654,633 SSGA U.S. Government
Money Market Fund 654,633
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $1,598,447) 1,598,447
------------
TOTAL INVESTMENTS - 101.18%
(cost $33,009,989) 30,416,582
Liabilities, less Cash
and Other Assets - (1.18)% (354,179)
------------
NET ASSETS - 100.00% $30,062,403
============
<F1> Non-income producing security
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
International Equity Fund
Number
of Shares Value
- ----------- -----------
COMMON STOCKS - 90.93%
ARGENTINA - 0.29%
29,300 Telefonica de Argentina S.A. -
Class B $74,459
------------
AUSTRALIA - 5.10%
29,100 British American Tobacco
Australasia Limited 273,514
38,100 Coles Myer Ltd. 189,371
55,000 CSR Ltd. 123,367
16,200 National Australia Bank 249,818
35,000 North Limited 67,578
6,000 Rio Tinto Limited 96,375
40,000 Santos Limited 102,721
34,200 Westpac Banking
Corporation Ltd. 219,283
------------
1,322,027
------------
AUSTRIA - 0.72%
1,300 EVN AG 186,515
------------
BELGIUM - 1.33%
800 Electrabel SA 263,696
2,000 G.I.B. Group SA 82,005
2,700 Total Fina SA - Strip VVPR<F1> 28
------------
345,729
------------
BRAZIL - 0.96%
9,100,000 Companhia Brasileira de
Petroleo Ipiranga - Preferred 74,124
4,900 Companhia Vale do Rio Doce -
Preferred A 95,565
1,000,000 Telebras Preferred 51
1,000,000 Telecomunicacoes Brasileiras
S.A.- Preferred Receipts<F1> 77,766
------------
247,506
------------
CANADA - 3.00%
1,300 Alcan Aluminum Ltd. 42,644
1,500 BCE, Inc. 90,353
1,224 BCT.Telus Communications Inc. 25,547
2,408 BCT.Telus Communications
Inc. - Class A 49,522
Number
of Shares Value
- ----------- -----------
CANADA - 3.00% (CONTINUED)
4,400 Canadian Imperial Bank
of Commerce $94,826
1,300 Canadian Pacific Ltd. 30,403
2,000 Imasco Ltd. 53,709
4,200 Imperial Oil Ltd. 97,369
5,500 National Bank of Canada 66,932
1,600 Nortel Networks Corporation 98,498
1,900 Quebecor, Inc. - Class A 45,210
3,600 The Toronto-Dominion Bank 82,602
------------
777,615
------------
DENMARK - 3.52%
2,000 A/S Forsikringsselskabet
Codan 180,995
1,900 Den Danske Bank Group 216,275
5,400 Tele Danmark A.S. - Class B 327,574
2,400 Unidanmark A.S. - Class A 186,652
------------
911,496
------------
FINLAND - 3.06%
1,600 Huhtamaki Oyj 50,452
350 Instrumentarium Corporation 12,066
13,800 Kemira Oyj 85,144
3,200 Nokia Oyj - Class A 365,979
6,000 Orion-Yhtymae OY - Class B 142,527
10,400 Stora Enso Oyj 136,641
------------
792,809
------------
FRANCE - 6.60%
1,100 Cap Gemini SA 166,491
400 Eridania Beghin-Say SA 45,407
200 L'Oreal 133,382
1,800 Pernod Ricard 121,463
250 Sagem SA 76,335
3,300 Scor 164,757
700 Societe Generale - A 152,302
2,338 Total Fina SA 315,842
1,400 Total Fina SA - Class B 186,147
1,400 Union des Assurances Federales 180,114
12,100 Usinor SA 168,006
------------
1,710,246
------------
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
International Equity Fund (continued)
Number
of Shares Value
- ----------- -----------
GERMANY - 5.20%
3,000 BASF AG $133,225
3,700 Commerzbank AG 141,327
9,300 Deutsche Telekom AG 428,637
3,000 Dyckerhoff AG 80,408
3,000 Gehe AG 104,057
3,600 Merck KGaA 125,247
200 SAP AG 74,227
1,500 Schering AG 179,499
3,000 Takkt AG<F1> 17,185
2,600 Wella AG 63,401
------------
1,347,213
------------
GREECE - 0.37%
4,555 Hellenic Telecommunication
Organization SA 96,521
------------
HONG KONG - 3.15%
62,000 Cable & Wireless HKT Limited 141,644
16,800 HSBC Holdings PLC 201,634
64,000 Johnson Electric Holdings Ltd. 345,968
67,000 New World Development
Company Ltd. 126,765
------------
816,011
------------
ITALY - 0.63%
41,000 Benetton Group SpA 90,498
2,290 Fiat SpA 72,450
------------
162,948
------------
JAPAN - 15.19%
19,000 Akita Bank, Ltd. 79,743
10,000 Asahi Chemical Industry
Co., Ltd. 60,368
900 Autobacs Seven Co., Ltd. 44,672
1,200 Bank of Iwate, Ltd. 55,194
9,000 Casio Computer Co., Ltd. 61,748
13,000 Citizen Watch Co. 91,807
4,000 Dai Nippon Printing
Company Ltd. 72,863
10,000 Daiichi Pharmaceutical Co., Ltd. 143,254
Number
of Shares Value
- ----------- -----------
JAPAN - 15.19% (CONTINUED)
5,100 Daito Trust Construction
Co. Ltd. $76,187
14,000 Fuji Heavy Industries Ltd. 118,858
3,000 Fuji Photo Film 96,301
18,000 Higo Bank, Ltd. 81,756
7,000 Kyushu Matsushita Electric
Co., Ltd. 62,783
6,000 Maruichi Steel Tube Ltd. 82,618
6,000 Matsushita Electric Industrial
Company, Ltd. 126,198
15,000 Minolta Co., Ltd. 61,374
19,000 Mitsubishi Rayon Company, Ltd. 47,882
8,000 Mitsui Fudosan Co., Ltd. 59,716
6,000 NEC Corporation 121,311
25,000 Nichido Fire & Marine
Insurance Co., Ltd. 153,555
800 Nintendo Company Ltd. 126,869
5,000 Nippon Electric Glass Co., Ltd. 57,972
14,000 Nippon Express Co. Ltd. 99,003
17 Nippon Telegraph &
Telephone Corp. 260,636
14,000 Nisshin Flour Milling Co., Ltd. 116,309
3,000 Ono Pharmaceutical Co., Ltd. 97,739
7,000 San-in Godo Bank, Ltd. 55,002
4,000 Sankyo Co. Ltd. 113,837
5,000 Sharp Corporation 79,532
17,000 Sumitomo Rubber Industries, Ltd. 100,834
10,000 Suzuki Motor Corp. 151,782
1,000 TDK Corp. 97,835
15,000 Teikoku Oil Co., Ltd. 56,918
700 Toho Co. Ltd. 108,662
55,000 Toho Gas Co., Ltd. 100,661
4,000 Tokyo Electric Power Company,
Incoporated 89,306
7,000 Toppan Printing Co., Ltd. 85,790
12,000 Toyo Suisan Kaisha, Ltd. 108,663
10,000 Wacoal Corp. 103,488
13,000 Yakult Honsha Co., Ltd. 132,790
10,000 Yamatake Corporation 94,864
------------
3,936,680
------------
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
International Equity Fund (continued)
Number
of Shares Value
- ----------- -----------
MALAYSIA - 0.78%
96,000 Golden Hope Plantations Bhd $76,800
110,000 Highlands & Lowlands Bhd 61,079
50,000 Kuala Lumpur Kepong Bhd 64,474
------------
202,353
------------
MEXICO - 1.68%
31,000 Carso Global Telecom 208,222
52,000 Cemexa SA de CV 73,094
26,000 Cemexa SA de CV - Class B 36,547
780 Cemexa SA de CV - CPO 3,482
31,000 Organizacion Soriana SA de CV 114,892
------------
436,237
------------
NETHERLANDS - 6.77%
9,400 ABN AMRO Holding NV 227,145
3,600 DSM NV 136,220
7,292 Fortis Amev NV 250,859
5,000 Hunter Douglas NV 135,327
3,425 ING Group NV 201,886
5,200 KPN NV 266,668
4,800 NV Holdingmaatschappij
De Telegraaf 88,291
1,472 Phillips Electronics NV 150,851
5,000 Royal Dutch Petroleum Co. 298,665
------------
1,755,912
------------
NEW ZEALAND - 0.63%
40,800 Telecom Corporation of
New Zealand Ltd. 163,977
------------
NORWAY - 2.10%
35,200 Christiania Bank Og Kreditkasse 171,410
53,400 Den Norske Bank ASA 206,940
4,300 Norske Skogindustrier ASA 167,185
------------
545,535
------------
PORTUGAL - 0.34%
2,000 Portugal Telecom SA 89,132
------------
Number
of Shares Value
- ----------- -----------
SINGAPORE - 2.80%
24,000 City Developments Ltd. $124,053
6,200 Creative Technology Ltd. 72,292
15,119 DBS Group Holdings Limited 170,836
28,892 Overseas Union Bank Ltd. 125,029
22,000 Singapore Airlines Ltd. 232,720
------------
724,930
------------
SOUTH AFRICA - 0.61%
2,970 Anglo American Corporation
of South Africa Limited 158,046
------------
SPAIN - 2.10%
9,500 Iberdrola SA 138,396
24,762 Telefonica SA 407,061
------------
545,457
------------
SWEDEN - 2.28%
10,000 Electrolux AB - Class B 199,073
4,100 Mo och Domsjo AB - Class B 120,439
21,000 Nordbanken Holding AB 122,357
8,000 Trelleborg AB - Class B 72,831
3,000 Volvo AB - Class B 77,383
------------
592,083
------------
SWITZERLAND - 5.02%
100 Compagnie Financiere
Richemont AG 191,114
200 Hilti AG 152,917
100 Nestle SA 192,951
200 Novartis AG 299,272
100 Schweizerische
Rueckversicherungs-Gesellschaft 207,390
300 SGS Societe Generale
de Surveillance Holding SA 81,709
600 The Swatch Group AG-REG 98,445
300 Valora Holding AG 76,393
------------
1,300,191
------------
TURKEY - 0.50%
7,137,000 Petkim Petrokimya
Holdings A.S. 109,853
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
SCHEDULES OF INVESTMENTS October 31, 1999
International Equity Fund (continued)
Number
of Shares Value
- ----------- -----------
TURKEY - 0.50% (CONTINUED)
5,341,490 Tofas Turk Otomobil
Fabrika A.S. $19,443
------------
129,296
------------
UNITED KINGDOM - 16.20%
15,100 Allied Domecq PLC 84,742
5,350 Allied Zurich PLC<F1> 64,527
10,200 Barclays PLC 311,825
1,117 Bass PLC 12,253
7,900 Boots Company PLC 81,022
14,400 British Aerospace PLC 84,004
7,600 British Airways PLC 39,503
5,350 British American Tobacco PLC 35,380
17,000 British Telecommunications PLC 307,836
9,000 CGU PLC 130,924
46,500 Corus Group PLC 88,513
8,000 Glaxo Wellcome PLC 235,773
7,000 Great Universal Stores PLC 53,069
13,000 Hays PLC 148,581
26,100 Hilton Group PLC 79,448
27,600 HSBC Holdings PLC 339,452
7,000 Johnson Matthey PLC 64,728
21,900 Kelda Group PLC 132,967
13,200 Kingfisher PLC 143,935
9,900 Lonmin PLC 99,422
9,900 Lonrho Africa PLC 5,848
11,800 PowerGen PLC 103,303
18,800 Racal Electronics PLC 138,516
16,800 Shell Transport & Trading Co. 128,605
36,100 Smith (David S.) Holdings 111,961
17,300 SmithKline Beecham PLC 222,566
5,832 Sun Life and Provincial
Holdings PLC 43,472
17,400 Tate & Lyle PLC 113,354
9,808 Thames Water PLC 141,632
14,464 Unilever PLC 133,983
49,800 Woolwich PLC 293,578
20,600 WPP Group PLC 223,274
------------
4,197,996
------------
TOTAL COMMON STOCKS
(cost $22,746,623) 23,568,920
------------
Number
of Shares Value
- ----------- -----------
SHORT-TERM INVESTMENTS - 8.90%
1,191,708 SSGA Money Market Fund $1,191,708
1,113,981 SSGA U.S. Government
Money Market Fund 1,113,981
------------
TOTAL SHORT-TERM INVESTMENTS
(cost $2,305,689) 2,305,689
------------
TOTAL INVESTMENTS - 99.83%
(cost $25,052,312) 25,874,609
Cash and Other Assets,
less Liabilities - 0.17% 43,399
------------
NET ASSETS - 100.00% $25,918,008
============
<F1> Non-income producing security
As of October 31, 1999, the International Equity Fund's investments, excluding
short-term investments, were diversified as follows:
INDUSTRY SECTOR
Consumer Durables 4.3%
Consumer Staples 8.2
Energy 5.8
Financial Services 23.3
Health Care Products 7.1
Industrial 15.1
Retail 4.6
Services 6.4
Technology 7.9
Telecommunications 12.8
Utilities 4.5
-------
TOTAL INDUSTRY SECTOR 100.0%
=======
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES October 31, 1999
<TABLE>
<CAPTION>
INTERMEDIATE LARGE CAP SMALL CAP INTERNATIONAL
FIXED INCOME FUND EQUITY FUND EQUITY FUND EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost $64,626,400,
$43,566,725, $33,009,989 and
$25,052,312, respectively) $62,065,486 $45,290,790 $30,416,582 $25,874,609
Receivable for investments sold - 1,954,878 247,241 -
Capital shares receivable 156,661 42,627 40,090 17,980
Dividends, interest and tax withholding receivable 800,296 73,418 31,205 75,789
Organizational expenses, net
of accumulated amortization 19,936 19,936 19,936 19,936
Prepaids and other assets 11,772 10,392 9,364 7,289
------------ ------------ ------------ ------------
Total Assets 63,054,151 47,392,041 30,764,418 25,995,603
------------ ------------ ------------ ------------
LIABILITIES:
Payable for investments purchased 996,291 850,369 618,505 -
Dividend payable 282,702 - - -
Accrued investment advisory fees 7,358 28,336 18,822 16,769
Accrued distribution fees 80,836 64,154 42,148 32,180
Payable for capital shares redeemed 31,222 - - 3,571
Other liabilities 32,069 26,777 22,540 25,075
------------ ------------ ------------ ------------
Total Liabilities 1,430,478 969,636 702,015 77,595
------------ ------------ ------------ ------------
NET ASSETS $61,623,673 $46,422,405 $30,062,403 $25,918,008
============ ============ ============ ============
NET ASSETS CONSIST OF:
Capital stock $649 $461 $360 $248
Paid-in capital 64,635,417 40,252,287 33,808,298 24,796,797
Undistributed net investment income 29,991 24,767 67,012 220,849
Accumulated net realized gain (loss)
on investments (481,470) 4,420,825 (1,219,860) 9,456
Accumulated net realized gain from foreign
currency transactions - - - 68,957
Net unrealized appreciation (depreciation)
on investments (2,560,914) 1,724,065 (2,593,407) 988,093
Net unrealized depreciation on translation of
assets and liabilities in foreign currencies - - - (166,392)
------------ ------------ ------------ ------------
Net Assets $61,623,673 $46,422,405 $30,062,403 $25,918,008
============ ============ ============ ============
CAPITAL STOCK, $0.0001 PAR VALUE
Authorized 100,000,000 100,000,000 100,000,000 100,000,000
Issued and outstanding 6,488,579 4,614,351 3,599,654 2,475,941
NET ASSET VALUE, REDEMPTION PRICE PER
SHARE AND OFFERING PRICE PER SHARE $9.50 $10.06 $8.35 $10.47
====== ====== ====== ======
</TABLE>
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
STATEMENTS OF OPERATIONS for the fiscal year ended October 31, 1999
<TABLE>
<CAPTION>
INTERMEDIATE LARGE CAP SMALL CAP INTERNATIONAL
FIXED INCOME FUND EQUITY FUND EQUITY FUND EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of withholding taxes of
$0, $8,271, $0 and $78,264, respectively) $81,196 $872,948 $450,365 $581,489
Interest 3,818,110 70,381 60,880 84,020
------------ ------------ ------------ ------------
Total Investment Income 3,899,306 943,329 511,245 665,509
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fees 278,869 345,616 216,617 204,329
Distribution fees 141,622 107,358 68,141 52,722
Administration and fund accounting fees 123,942 92,164 57,765 45,407
Legal fees 23,328 17,129 13,208 11,607
Miscellaneous 18,348 13,755 8,578 6,503
Transfer agent fees and expenses 17,067 17,032 16,625 16,700
Custody fees 13,645 11,155 8,764 27,859
Directors' fees and expenses 12,836 12,835 12,855 12,855
Pricing expenses 10,461 2,829 3,376 28,750
Federal and state registration fees 9,615 10,486 10,008 7,549
Audit fees 6,234 4,165 2,639 2,461
Amortization of organizational costs 5,840 5,840 5,840 5,840
------------ ------------ ------------ ------------
Total Expenses Before Waivers 661,807 640,364 424,416 422,582
Waiver of expenses (135,054) - - (2,572)
------------ ------------ ------------ ------------
Net Expenses 526,753 640,364 424,416 420,010
------------ ------------ ------------ ------------
NET INVESTMENT INCOME 3,372,553 302,965 86,829 245,499
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on investments (481,470) 4,420,822 (869,815) 9,456
Net realized gain on foreign currency transactions - - - 44,127
Net change in unrealized appreciation
(depreciation) on investments (4,300,765) (2,231,221) 1,189,176 4,266,674
Net change in unrealized depreciation on
translation of assets and liabilities
in foreign currencies - - - (986,131)
------------ ------------ ------------ ------------
Net gain (loss) on investments and
foreign currency transactions (4,782,235) 2,189,601 319,361 3,334,126
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $(1,409,682) $2,492,566 $406,190 $3,579,625
============ ============ ============ ============
</TABLE>
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE LARGE CAP SMALL CAP INTERNATIONAL
FIXED INCOME FUND EQUITY FUND EQUITY FUND EQUITY FUND
---------------------- ---------------------- ---------------------- ----------------------
FISCAL YEAR PERIOD FISCAL YEAR PERIOD FISCAL YEAR PERIOD FISCAL YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998<F1> 1999 1998<F1> 1999 1998<F1> 1999 1998<F1>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $3,372,553 $2,046,256 $302,965 $127,415 $86,829 $4,365 $245,499 $217,156
Net realized gain (loss)
on investments (481,470) 38,624 4,420,822 295,452 (869,815) (355,595) 9,456 1,926
Net realized gain (loss)
on foreign currency
transactions - - - - - - 44,127 (27,945)
Change in unrealized
appreciation (depreciation)
on investments (4,300,765) 1,640,755 (2,231,221) (2,106,481) 1,189,176 (3,782,583) 4,266,674 (3,278,581)
Change in unrealized
appreciation (depreciation)
on translation of assets and
liabilities in foreign
currencies - - - - - - (986,131) 819,739
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Increase (Decrease)
in Net Assets Resulting
from Operations (1,409,682) 3,725,635 2,492,566 (1,683,614) 406,190 (4,133,813) 3,579,625 (2,267,705)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID FROM:
Net investment income (3,366,744) (2,027,129) (313,114) (97,237) (23,144) - (193,724) -
Net realized gains (38,627) - (295,454) - - - (1,640) -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(3,405,371) (2,027,129) (608,568) (97,237) (23,144) - (195,364) -
SHARE TRANSACTIONS:
Shares sold 16,417,262 29,847,907 16,303,716 21,512,846 12,902,203 28,599,992 7,469,503 23,895,804
Shares sold during common and
commingled trust fund
conversions - 40,058,886 - 23,721,464 - - - -
Proceeds from reinvestment
of distributions 1,927,071 933,300 334,576 50,640 16,934 - 124,825 -
Shares redeemed (19,955,245) (4,538,961)(13,032,873) (2,619,111) (6,071,115) (1,635,844) (4,918,550) (1,771,130)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Increase (Decrease)
from Share Transactions (1,610,912) 66,301,132 3,605,419 42,665,839 6,848,022 26,964,148 2,675,778 22,124,674
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL INCREASE (DECREASE)
IN NET ASSETS (6,425,965) 67,999,638 5,489,417 40,884,988 7,231,068 22,830,335 6,060,039 19,856,969
NET ASSETS:
Beginning of period 68,049,638 50,000 40,932,988 48,000 22,831,335 1,000 19,857,969 1,000
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
End of period $61,623,673 $68,049,638 $46,422,405 $40,932,988 $30,062,403 $22,831,335 $25,918,008 $19,857,969
=========== =========== =========== =========== =========== =========== =========== ===========
Undistributed net investment
income included in net
assets at end of period $29,991 $21,661 $24,767 $32,397 $67,012 $6,353 $220,849 $191,380
=========== =========== =========== =========== =========== =========== =========== ===========
</TABLE>
<F1> Commenced operations on March 31, 1998.
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE LARGE CAP SMALL CAP INTERNATIONAL
FIXED INCOME FUND EQUITY FUND EQUITY FUND EQUITY FUND
---------------------- ---------------------- ---------------------- ----------------------
FISCAL YEAR PERIOD FISCAL YEAR PERIOD FISCAL YEAR PERIOD FISCAL YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998<F1> 1999 1998<F1> 1999 1998<F1> 1999 1998<F1>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.27 $10.00 $9.59 $10.00 $8.22 $10.00 $8.97 $10.00
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.54 0.31 0.07 0.03 0.03 - 0.09 0.09
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions (0.77) 0.27 0.54 (0.42) 0.11 (1.78) 1.50 (1.12)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total from Investment
Operations (0.23) 0.58 0.61 (0.39) 0.14 (1.78) 1.59 (1.03)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS PAID:
From net investment income (0.53) (0.31) (0.07) (0.02) (0.01) - (0.09) -
From capital gains (0.01) - (0.07) - - - - -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Distributions (0.54) (0.31) (0.14) (0.02) (0.01) - (0.09) -
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $9.50 $10.27 $10.06 $9.59 $8.35 $8.22 $10.47 $8.97
========== ========== ========== ========== ========== ========== ========== ==========
TOTAL RETURN<F2> (2.26)% 5.89% 6.33% (3.87)% 1.67% (17.80)% 17.85% (10.30)%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000s) $61,624 $68,050 $46,422 $40,933 $30,062 $22,831 $25,918 $19,858
Ratio of expenses to average net
assets, net of waivers<F3> 0.85% 0.85% 1.39% 1.45% 1.47% 1.50% 1.85% 1.85%
Ratio of net investment income to
average net assets, net
of waivers<F3> 5.44% 5.32% 0.66% 0.55% 0.30% 0.03% 1.08% 1.85%
Ratio of expenses to average
net assets, before waivers<F3> 1.07% 1.11% 1.39% 1.45% 1.47% 1.57% 1.86% 1.96%
Ratio of net investment income
to average net assets, before
waivers<F3> 5.22% 5.06% 0.66% 0.55% 0.30% (0.04)% 1.07% 1.74%
Portfolio turnover rate<F2> 91% 47% 76% 27% 83% 3% 13% 6%
</TABLE>
<F1> Commenced operations on March 31, 1998
<F2> Not annualized - For the periods less than a full year
<F3> Annualized
See Notes to the Financial Statements.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS October 31, 1999
1. Organization
JohnsonFamily Funds, Inc. (the "Company") was organized on January 27, 1998, as
a Maryland corporation and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company
issuing its shares in series, each series representing a distinct portfolio with
its own investment objectives and policies. At October 31, 1999, the only
series presently authorized are the JohnsonFamily Intermediate Fixed Income
Fund, the JohnsonFamily Large Cap Equity Fund, the JohnsonFamily Small Cap
Equity Fund and the JohnsonFamily International Equity Fund (individually
referred to as a "Fund" and collectively as the "Funds").
As of March 31, 1998, assets of the common and commingled trust funds of the
Johnson Heritage Fund for Income and the Johnson Heritage Income Fund were
transferred to the JohnsonFamily Intermediate Fixed Income Fund and assets of
the common and commingled trust funds of the Johnson Heritage Equity Income Fund
and Johnson Value Fund were transferred to the JohnsonFamily Large Cap Equity
Fund under Section 584(h) of the Internal Revenue Code. These transfers were
treated as a tax-free event. To qualify as a tax-exempt transaction, the
securities were transferred at market value with the original cost basis and
purchase dates being retained for book and tax purposes. Proceeds from
commingled and common trust fund conversions, as shown on the Statements of
Changes in Net Assets, represent the market value of the commingled and common
trust funds at the date of conversion. The net change in unrealized
appreciation on investments on the Statements of Changes in Net Assets for the
period ended October 31, 1998, does not reflect the $99,096 and $6,061,767
unrealized appreciation for the Intermediate Fixed Income Fund and Large Cap
Equity Fund, respectively, that existed at the date of the common and commingled
trust funds transfer.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles
("GAAP").
A. INVESTMENT VALUATION
Equity securities listed on a recognized U.S. or foreign securities exchange are
valued at the last sale price on the securities exchange on which such
securities are primarily traded. Unlisted equity securities for which market
quotations are readily available will be valued at the most recent bid price.
Equity securities listed on a recognized U.S. or foreign securities exchange for
which there were no transactions are valued at the closing bid prices. Debt
securities (other than short-term instruments) are valued at bid prices
furnished by a pricing service. Debt instruments maturing within 60 days are
valued at amortized cost which approximates fair value. Securities for which
market quotations are not readily available are valued at their fair value as
determined in good faith by Johnson Asset Management, Inc. (the "Adviser")
pursuant to guidelines established by the Board of Directors.
B. FOREIGN CURRENCY TRANSLATIONS
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend income are translated into U.S.
dollars using the spot market rate of exchange prevailing on the respective
dates of such transactions. The Funds have elected to separately disclose the
results of operations due solely to the changes in foreign currency rates.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
C. FOREIGN CURRENCY EXCHANGE CONTRACTS
The Funds are authorized to enter into foreign currency contracts for the
purchase of a specific foreign currency at a fixed price on a future date as a
hedge against either specific transactions or portfolio positions. The
objective of a Fund's foreign currency hedging transactions is to reduce the
risk that the U.S. dollar value of a Fund's foreign currency denominated
securities will decline in value due to changes in foreign currency exchange
rates. At October 31, 1999, the International Equity Fund has no such contracts
outstanding.
D. ORGANIZATIONAL COSTS
Costs incurred by the Funds in connection with their organization, registration
and the initial public offering of shares have been deferred and will be
amortized over the period of benefit, but not to exceed five years from the date
upon which the Funds commenced their investment activities. If any of the
original shares of the Funds purchased by the initial shareholder are redeemed
by any holder thereof prior to the end of the amortization period, the
redemption proceeds will be reduced by the pro rata share of the unamortized
costs as of the date of redemption. The pro rata share by which the proceeds
are reduced will be derived by dividing the number of original shares of the
Funds being redeemed by the total number of original shares outstanding at the
time of redemption.
E. FEDERAL INCOME AND EXCISE TAXES
Each Fund intends to comply with the requirements of the Internal Revenue Code
necessary to qualify as a regulated investment company and to make the requisite
distributions of taxable income to its shareholders.
F. DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income, if any, will be declared and paid monthly
for the Intermediate Fixed Income Fund, quarterly for the Large Cap Equity Fund
and annually for both the Small Cap Equity and International Equity Funds.
Distributions of net realized gains, if any, will be declared at least annually.
Distributions to shareholders are recorded on the ex-dividend date. The Funds
may periodically make reclassifications among certain of their capital accounts
as a result of the recognition and characterization of certain income and
capital gain distributions determined annually in accordance with federal tax
regulations which may differ from generally accepted accounting principles.
Accordingly, at October 31, 1999, reclassifications were recorded to increase
(decrease) undistributed net investment income by $2,521, $2,519, $(3,026) and
$(22,306), increase accumulated net realized gain or decrease accumulated net
realized loss on investments and foreign currency transactions by $3, $5, $5,550
and $24,830 and decrease paid-in-capital by $2,524, $2,524, $2,524 and $2,524
for the Intermediate Fixed Income Fund, Large Cap Equity Fund, Small Cap Equity
Fund and International Equity Fund, respectively.
G. SECURITIES TRANSACTIONS AND INVESTMENT INCOME
For financial reporting purposes, investment transactions are accounted for on
the trade date. The Funds determine the gain or loss realized from investment
transactions by comparing the original cost of the security lot sold with the
net sale proceeds. Dividend income is recognized on the ex-dividend date and
interest income is recognized on an accrual basis. Corporate actions for
foreign securities are recorded as soon as the information is available to the
Funds.
H. EXPENSES
The Funds are charged for those expenses that are directly attributable to each
portfolio, such as advisory and custodian fees. Expenses that are not directly
attributable to a portfolio are typically allocated among the portfolios in
proportion to their respective net assets.
I. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principals requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported changes in net assets during the reporting
period. Actual results could differ from those estimates.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
3. Capital Stock
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999
INTERMEDIATE LARGE CAP SMALL CAP INTERNATIONAL
FIXED INCOME FUND EQUITY FUND EQUITY FUND EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,669,046 1,592,118 1,531,197 750,220
Shares issued to holders in reinvestment
of dividends 195,667 32,605 1,990 13,057
Shares redeemed (2,001,261) (1,276,829) (712,097) (502,287)
------------ ------------ ------------ ------------
Net increase (decrease) (136,548) 347,894 821,090 260,990
============ ============ ============ ============
FOR THE PERIOD MARCH 31,1998<F1> TO OCTOBER 31, 1998
INTERMEDIATE LARGE CAP SMALL CAP INTERNATIONAL
FIXED INCOME FUND EQUITY FUND EQUITY FUND EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------------
Shares sold 2,768,369 2,159,747 2,966,300 2,409,981
Shares sold during common and commingled
trust fund conversions 4,205,889 2,372,146 - -
Shares issued to holders in reinvestment
of dividends 92,087 5,366 - -
Shares redeemed (446,218) (275,602) (187,836) (195,130)
------------ ------------ ------------ ------------
Net increase 6,620,127 4,261,657 2,778,464 2,214,851
============ ============ ============ ============
</TABLE>
<F1> Commencement of operations.
4. Purchases and Sales of Securities
Purchases and sales of investment securities, excluding U.S. government and
short-term securities, for the fiscal year ended October 31, 1999 are
as follows:
<TABLE>
<CAPTION>
INTERMEDIATE LARGE CAP SMALL CAP INTERNATIONAL
FIXED INCOME FUND EQUITY FUND EQUITY FUND EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases $31,394,881 $35,375,068 $29,223,970 $7,327,181
Sales 39,444,179 33,597,781 22,775,819 5,047,090
</TABLE>
Purchases and sales of U.S. government securities for the Intermediate Fixed
Income Fund for the period November 1, 1998 to October 31, 1999, were
$21,840,206 and $17,066,796, respectively.
At October 31, 1999, gross unrealized appreciation and depreciation of
securities, based on the cost of investments for federal income tax purposes of
$64,626,400, $43,571,674, $33,009,989 and $25,052,312 for the Intermediate Fixed
Income, Large Cap Equity, Small Cap Equity and International Equity Funds,
respectively, were as follows:
<TABLE>
<CAPTION>
INTERMEDIATE LARGE CAP SMALL CAP INTERNATIONAL
FIXED INCOME FUND EQUITY FUND EQUITY FUND EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unrealized appreciation $ 56,296 $ 5,003,961 $ 2,243,903 $ 3,192,008
Unrealized depreciation (2,617,210) (3,284,845) (4,837,310) (2,369,711)
------------ ------------ ------------ ------------
Net unrealized appreciation (depreciation) $(2,560,914) $ 1,719,116 $(2,593,407) $ 822,297
============ ============ ============ ============
</TABLE>
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
For the year ended October 31, 1999, 2.4%, 100%, 100% and 0% of dividends paid
from net investment income, including short-term capital gains, qualifies for
the dividends received deduction available to corporate shareholders of the
Intermediate Fixed Income Fund, Large Cap Equity Fund, Small Cap Equity Fund and
International Equity Fund, respectively.
At October 31, 1999, the Intermediate Fixed Income and the Small Cap Equity Fund
had accumulated net realized capital loss carryovers of $481,470 and $1,219,860,
respectively, expiring in 2007. To the extent these Funds realize future net
capital gains, taxable distributions to shareholders will be offset by any
unused capital loss carryover.
The Funds hereby designate approximately $4,425,744 and $7,851 as a capital gain
dividend for the Large Cap Equity Fund and the International Equity Fund,
respectively, for the purpose of the dividend paid deduction.
5. Investment Adviser
The Funds have an agreement with the Adviser, with whom certain officers and
Directors of the Funds are affiliated, to furnish investment advisory services
to the Funds. Under the terms of this agreement, the Funds will pay the Adviser
a monthly fee based on the Fund's average daily net assets at the annual rate of
0.45% for the Intermediate Fixed Income Fund, 0.75% for the Large Cap Equity
Fund and the Small Cap Equity Fund and 0.90% for the International Equity Fund.
Under the investment advisory agreements, if the aggregate annual operating
expenses (including the investment advisory fee and the administration fee but
excluding interest, taxes, brokerage commissions and other costs incurred in
connection with the purchase or sale of portfolio securities, and extraordinary
items) exceed 1.50% of the average daily net assets of the Intermediate Fixed
Income Fund, or 2.50% of each of the Large Cap Equity Fund, Small Cap Equity
Fund and International Equity Fund, the Adviser will reimburse the Funds for the
amount of such excess. Additionally, for the fiscal period ended October 31,
1999, the Adviser has voluntarily agreed to reimburse the Funds to the extent
aggregate annual operating expenses exceed 0.85%, 1.45%, 1.50% and 1.85% of the
average daily net assets of the Intermediate Fixed Income Fund, Large Cap Equity
Fund, Small Cap Equity Fund and International Equity Fund, respectively. For
the fiscal year ended October 31, 1999, the Adviser reimbursed the Intermediate
Fixed Income Fund and International Equity Fund $135,054 and $2,572,
respectively.
6. Service and Distribution Plan
The Company has entered into a distribution agreement with Sunstone Distribution
Services, LLC. Pursuant to Rule 12b-1 under the 1940 Act, the Company has
adopted a Service and Distribution Plan (the "Plan"). Under the Plan, each Fund
is authorized to pay expenses incurred for the purpose of financing activities,
including the employment of other dealers, intended to result in the sale of
shares of each Fund at an annual rate of up to 0.25% of the Fund's average daily
net assets.
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of JohnsonFamily Funds, Inc.:
We have audited the accompanying statements of assets and liabilities of
JohnsonFamily Funds, Inc. (the "Funds" or the "Company," a Maryland corporation,
which includes the JohnsonFamily Intermediate Fixed Income Fund, JohnsonFamily
Large Cap Equity Fund, JohnsonFamily Small Cap Equity Fund and JohnsonFamily
International Equity Fund), including the schedules of investments, as of
October 31, 1999, and the related statements of operations for the year then
ended, statements of changes in net assets for the period from inception on
March 31, 1998 to October 31, 1998 and for the year ended October 31, 1999, and
the financial highlights for each of the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Company'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 custodians
and brokers. As to securities purchased but not received, we requested
confirmation from brokers and, when replies were not received, we carried out
other alternative auditing procedures. 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
JohnsonFamily Funds, Inc. as of October 31, 1999, and the results of its
operations for the year then ended, the changes in net assets for the period
from inception on March 31, 1998 to October 31, 1998 and for the year ended
October 31, 1999, and the financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
November 19, 1999
JOHNSONFAMILY FUNDS Annual Report
<PAGE>
This report has been prepared for the general information of JohnsonFamily Funds
shareholders. It is not authorized for distribution to prospective investors
unless accompanied or preceded by a current JohnsonFamily Funds prospectus,
which contains more complete information about JohnsonFamily Funds investment
policies, management fees and expenses. Investors are reminded to read the
prospectus carefully before investing or sending money.
(LOGO)
JohnsonFamily Funds
P.O. Box 515
Racine, WI 53401-0515
