[logo omitted]
E.I.I. Realty
SECURITIES FUND
INSTITUTIONAL SHARES
DECEMBER 31, 1999
SEMI-ANNUAL REPORT
(UNAUDITED)
888-323-8912
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
TABLE OF CONTENTS
Letter to Shareholders.........................................................1
Schedule of Investments........................................................2
Statement of Assets and Liabilities............................................4
Statement of Operations........................................................5
Statements of Changes in Net Assets............................................6
Financial Highlights...........................................................7
Notes to Financial Statements..................................................8
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
LETTER TO SHAREHOLDERS
DECEMBER 31, 1999
To Our Shareholders:
We are pleased to submit to you our report for the six-month period ended
December 31, 1999. The net asset value (NAV) of the Fund on December 31, 1999
was $8.32 per share. For the six-month period, the Fund declared and paid three
dividends totaling $0.32 per share. The specific dividend distributions were as
follows:
Record Date Pay Date Per Share
- ----------- -------- ---------
7/1/99 7/2/99 $0.10
10/1/99 10/4/99 $0.11
12/27/99 12/28/99 $0.11
Please do not hesitate to contact us if you have any questions about the report
or your account.
Sincerely,
/S/RICHARD J. ADLER /S/DAVID P. O'CONNOR
Richard J. Adler David P. O'Connor
Chairman President
1
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES COST VALUE
--------- ---------- ----------
<S> <C> <C> <C>
COMMON STOCK -- 95.1%
AMB Property Corp. 33,600 $ 673,616 $ 669,900
Apartment Investment & Management Company, Class A 76,000 2,931,690 3,025,750
Arden Realty Group, Inc. 98,900 2,370,636 1,984,181
Avalonbay Communities, Inc. 41,555 1,427,774 1,425,856
Boston Properties, Inc. 73,700 2,388,054 2,293,912
Bradley Real Estate Trust, Inc. 48,500 977,379 845,719
Brandywine Realty Trust 66,700 1,183,104 1,092,212
BRE Properties, Inc., Class A 38,900 979,960 882,544
Camden Property Trust 30,600 812,788 837,675
CarrAmerica Realty Corp. 34,500 761,885 728,812
Charles E. Smith Residential Realty, Inc. 42,300 1,355,026 1,496,362
Chateau Communities, Inc. 65,224 1,907,123 1,691,747
Cornerstone Properties, Inc. 112,200 1,758,450 1,640,925
Duke Realty Investments, Inc. 5,600 116,984 109,200
Equity Office Properties Trust 182,459 4,568,479 4,493,053
Equity Residential Properties Trust 65,337 2,801,964 2,789,073
Federal Realty Investment Trust 42,600 925,938 801,412
Franchise Finance Corporation of America 106,100 2,516,674 2,539,769
General Growth Properties, Inc. 72,800 2,595,853 2,038,400
Highwoods Properties, Inc. 68,600 1,711,214 1,594,950
Host Marriott Corp. 116,100 1,286,680 957,825
Kilroy Realty Corp. 90,100 2,071,240 1,982,200
Kimco Realty Corp. 81,100 3,076,333 2,747,263
Liberty Property Trust 77,600 1,850,377 1,881,800
Macerich Co. 52,600 1,288,032 1,094,738
Nationwide Health Properties, Inc. 61,800 947,909 849,750
Post Properties, Inc. 44,820 1,759,210 1,714,365
Prologis Trust 111,148 2,346,999 2,139,599
Public Storage, Inc. 66,998 1,795,948 1,520,017
Reckson Associates Realty Corp. 95,600 2,208,063 1,959,800
Reckson Associates Realty Corp. Class B 14,196 378,181 326,508
Rouse Company 92,500 2,155,700 1,965,625
Simon Property Group, Inc. 132,900 3,797,791 3,048,394
SL Green Realty Corp. 68,800 1,441,453 1,496,400
Spieker Properties, Inc. 55,800 2,016,647 2,033,213
Starwood Hotels & Resorts Worldwide, Inc. 59,486 1,649,563 1,397,921
Storage USA, Inc. 23,600 652,052 713,900
Sun Communities, Inc. 60,100 2,069,444 1,934,469
Taubman Centrers, Inc. 126,300 1,645,149 1,357,725
Urban Shopping Centers, Inc. 22,500 716,378 610,313
Vornado Realty Trust 81,200 2,855,664 2,639,000
----------
TOTAL COMMON STOCK (COST $72,773,404) 67,352,277
----------
</TABLE>
See accompanying Notes to Financial Statements
2
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES COST VALUE
------ --------- ----------
<S> <C> <C> <C>
PREFERRED STOCK -- 1.2%
Vornado Realty Trust Preferred Convertible, Series A
(COST $908,113) 17,400 $908,113 $ 811,275
----------
PAR (000) COST (000)
--------- ----------
TEMPORARY INVESTMENTS -- 3.7%
Provident Institutional Funds, Treasury Trust Fund Portfolio
(COST $2,648,492) 2,648 2,648 2,648,492
-----------
TOTAL INVESTMENTS -- 100.0% (COST $76,330,009) $70,812,044
===========
</TABLE>
See accompanying Notes to Financial Statements
3
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
(UNAUDITED)
ASSETS
Investments at value (Cost $76,330,009)....................$70,812,044
Dividends receivable....................................... 585,479
Organizational expenses.................................... 125,837
Prepaid expenses and other assets.......................... 36,350
Interest receivable........................................ 12,022
Receivable for fund shares sold............................ 9,976
-----------
TOTAL ASSETS......................................... 71,581,708
-----------
LIABILITIES
Accrued expenses........................................... 56,459
Payable for fund shares redeemed........................... 1,076
-----------
TOTAL LIABILITIES.................................... 57,535
-----------
TOTAL NET ASSETS (Applicable to 8,595,682
Institutional Class shares outstanding, $.01
par value, unlimited shares authorized)......................$71,524,173
===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER INSTITUTIONAL
CLASS SHARE.................................................. $8.32
=====
See accompanying Notes to Financial Statements
4
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
STATEMENT OF OPERATIONS
Six Months
Ended
December 31, 1999
(Unaudited)
--------------------
INVESTMENT INCOME
Dividend Income .......................................... $ 2,374,823
Interest Income .......................................... 68,259
-----------
Total Investment Income ........................... 2,443,082
-----------
EXPENSES
Investment advisory fees ................................ 247,266
Administrative fees ..................................... 82,423
Custodian fees .......................................... 11,600
Transfer agency services fee ............................. 14,565
Organization expenses ................................... 18,420
Audit fee ............................................... 13,905
Legal fee ............................................... 23,547
Shareholders' reports ................................... 3,823
Filing fees ............................................. 12,537
Directors' fees and expenses ............................ 19,737
Insurance expense ....................................... 5,807
Other expenses .......................................... 2,714
-----------
TOTAL EXPENSES ................................... 456,344
Less: Expenses Waived or Reimbursed ..................... (126,655)
-----------
Net Expenses ............................................ 329,689
-----------
NET INVESTMENT INCOME ................................... 2,113,393
-----------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENT SECURITIES
Net Realized Loss on Securities Sold .................... (1,927,926)
Net Unrealized Depreciation of Investment Securities .... (5,245,834)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ... (7,173,760)
-----------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................................. $(5,060,367)
===========
See accompanying Notes to Financial Statements
5
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
December 31, 1999 Ended
(Unaudited) June 30, 1999
---------------------- -------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
<S> <C> <C>
Net Investment Income ........................................ $ 2,113,393 $ 1,661,894
Net Realized Loss on Securities ............................... (1,927,926) (690,030)
Change in Unrealized Appreciation of Investment
Securities ................................................. (5,245,834) (286,028)
----------- -----------
Net Increase (Decrease) in Net Assets Resulting
from Operations ....................................... (5,060,367) 685,836
----------- -----------
Distributions From:
Net Investment Income ........................................ (2,421,253) (1,022,314)
Realized Capital Gains -- --
----------- -----------
Total Distributions ..................................... (2,421,253) (1,022,314)
----------- -----------
Capital Share Transactions -- Institutional Class: (1)
Shares Issued ................................................. 25,662,394 53,243,697
Shares Issued in Reinvestment of Cash Distributions ........... 1,964,808 944,623
Shares Redeemed ............................................... (969,862) (2,017,245)
----------- -----------
Net Increase From Capital Share Transactions ............ 26,657,340 52,171,075
----------- -----------
Total Increase in Net Assets ....................................... 19,175,720 51,834,597
----------- -----------
NET ASSETS
Beginning of Period .......................................... 52,348,453 513,856
----------- -----------
End of Period ................................................. $71,524,173 $52,348,453
=========== ===========
(1) SHARES ISSUED AND REDEEMED -- INSTITUTIONAL CLASS:
Shares Issued ................................................. 2,895,756 5,642,946
Shares Reinvested ............................................ 229,918 108,533
Shares Redeemed ............................................... (110,661) (220,901)
----------- -----------
Net Increase in Share Transactions ............................ 3,015,013 5,530,578
=========== ===========
</TABLE>
See accompanying Notes to Financial Statements
6
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
FINANCIAL HIGHLIGHTS
FOR AN INSTITUTIONAL CLASS SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
Six-Months
Ended Year June 11, 1998(a)
December 31, 1999 Ended through
(Unaudited) June 30,1999 June 30,1998
----------------- ------------ ----------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period ............... $9.38 $10.26 $10.00
----- ------ ------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS
Net Investment Income ........................ 0.24 0.39 0.05
Net Gain (Loss) on Securities
(Realized and Unrealized) .................. (0.98) (0.95) 0.21
----- ------ ------
Total from Investment Operations ........ (0.74) (0.56) 0.26
----- ------ ------
LESS DISTRIBUTIONS
Net Investment Income ......................... (0.32) (0.32) --
Net Realized Gains ............................ -- -- --
----- ------ ------
Total Distributions .................... (0.32) (0.32) --
----- ------ ------
Net Asset Value, End of Period .................... $8.32 $ 9.38 $10.26
===== ====== ======
Total Return ...................................... (7.95%)# (5.18%) 2.60%#
Net Assets, End of Period .......................... $71,524,173 $52,348,453 $513,856
Ratio of Expenses to Average Net Assets ............ 1.00%* 1.00% 1.00%*
Ratio of Expenses to Average Net Assets
(Excluding Waivers and Assumptions of
Expenses) ....................................... 1.38%* 1.83% 37.75%*
Ratio of Net Investment Income to Average
Net Assets ...................................... 6.41%* 6.11% 10.50%*
Ratio of Net Investment Income to Average
Net Assets (Excluding Waivers and
Assumptions of Expenses) ........................ 6.03%* 5.28% (26.25%)*
Portfolio Turnover Rate ............................ 18.37% 17.27% 22.23%
<FN>
* Annualized.
# Non-Annualized.
(a) Commencement of Operations.
</FN>
</TABLE>
See accompanying Notes to Financial Statements
7
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
NOTES TO FINANCIAL STATEMENTS
A. ORGANIZATION:
E.I.I. Realty Securities Trust was incorporated in the State of Delaware on
December 22, 1997 and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company. E.I.I. Realty Securities
Trust may offer one or more portfolios of its shares; at present only shares of
E.I.I. Realty Securities Fund (the "Fund") are being offered. The Fund may offer
three classes of shares: Institutional, Adviser and Investor. As of December 31,
1999, the Adviser and Investor Classes had not commenced operations. Shares of
all classes represent equal pro-rata interests in the Fund, except that each
class will bear different expenses which will reflect the difference in the
range of services to be provided to them.
B. SIGNIFICANT ACCOUNTING POLICIES:
The following significant accounting policies are in conformity with generally
accepted accounting principles. Such policies are consistently followed by the
Fund in preparation of its financial statements.
The preparation of financial statements in accordance with generally accepted
accounting principles may require management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates. Estimates include the
classification of distributions received by the Fund from the issuers of the
Fund's portfolio securities. These distributions may be classified as either
dividend income, capital gains or as non-taxable distributions. The final
classifications of these distributions cannot be determined until reported to
the Fund by the issuers of the Fund's portfolio securities, which normally
occurs in January after the end of the calendar year. Reclassification of
distributions made to the Fund will not affect the net assets of the Fund. The
reclassification of distributions received by the Fund may require the Fund to
reclassify a portion of its distributions to Fund shareholders.
SECURITY VALUATION: Securities traded on a nationally recognized securities
exchange will be valued at the last sale price, or if no sale, at the mean
between the latest bid and asked price. Securities traded in any other U.S. or
foreign market shall be valued in a manner as similar as possible to the above,
or if not so traded, on the basis of the latest available price. Where there are
no readily available quotations for securities they will be valued at a fair
value as determined by the Board of Trustees acting in good faith.
FEDERAL INCOME TAXES: The Fund's policy is to comply with the requirements of
the Internal Revenue Code that are applicable to regulated investment companies
and to distribute all its taxable income to its shareholders. Therefore, no
federal income tax provision is required.
ORGANIZATIONAL COSTS: Organizational costs have been capitalized and are being
amortized on a straight line basis over a period of 60 months.
OTHER: Security transactions are accounted for on the date the securities are
purchased or sold. Costs used in determining realized gains and losses on the
sale of investment securities are those of specific securities sold. Dividend
income and distributions to shareholders are recorded on the ex-dividend date.
Interest income is recorded on an accrual basis.
8
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
NOTES TO FINANCIAL STATEMENTS
C. INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES:
The Fund has entered into an Investment Advisory Agreement with E.I.I. Realty
Securities, Inc. (the "Adviser" or "E.I.I.") for day-to-day portfolio management
services to be provided by the Adviser. The Investment Advisory Agreement
provides for the Adviser to receive a fee calculated daily and payable monthly
at an annual rate of 0.75% of the Fund's average daily net assets.
E.I.I. will also provide administrative services to the Fund. Under the
Administrative Services Agreement, E.I.I. will receive a fee payable monthly at
an annual rate of 0.25% of the Fund's average daily net assets. For the
Institutional Share Class, E.I.I. has agreed to waive 0.10% of its
administrative fee resulting in a net annual rate of 0.15% of average daily net
assets. E.I.I. has entered into a sub-administration contract with PFPC Inc.
under which E.I.I. pays PFPC Inc. to provide certain administrative services to
E.I.I.
E.I.I. has agreed to waive a portion of its Investment Advisory Fee and/or
assume the expenses of the Fund to the extent necessary to keep the annual
expenses of the Fund to not more than 1.00% of the average daily net assets of
the Institutional Share Class of the Fund.
D. DISTRIBUTION AND SHAREHOLDER SERVICING PLANS:
According to the Fund's Distribution and Service Plan for the Investor Share
Class under which the Fund may pay up to 0.75% of the average daily net assets
of the Investor Share Class, for distribution assistance.
Under the Shareholder Servicing Plan, the Adviser will provide shareholder
services to its clients that invest in the Fund. The Fund may also enter into
shareholder service agreements pursuant to which a shareholder servicing agent
other than the Adviser performs shareholder services for its customers who are
shareholders of the Fund. In exchange for these services, the Fund pays up to
0.25% of the average daily net assets of the Adviser or Investor Shares serviced
by the Adviser or the agent (collectively, the "Shareholder Servicing Agents").
Shareholder Servicing Agents may waive all or a portion of their fee
periodically. No amounts have been expensed under the Shareholder Servicing
Plan.
E. INVESTMENT TRANSACTIONS:
For the period ended December 31, 1999, the Fund made the following purchases
and sales of investment securities other than U.S. Government Securities:
Purchases................. $32,128,907
Sales..................... 5,881,062
At December 31, 1999, gross unrealized appreciation and depreciation for federal
income tax purposes on investment securities for the Fund was as follows:
Gross Unrealized Appreciation ............ $ 448,162
Gross Unrealized Depreciation ............ (5,966,127)
-----------
Net....................................... $(5,517,965)
===========
9
<PAGE>
E.I.I. REALTY SECURITIES TRUST
E.I.I. REALTY SECURITIES FUND
NOTES TO FINANCIAL STATEMENTS
At June 30, 1999, the Fund had a capital loss carryover for federal income
tax purposes of $665,828 of which $2,559 and $663,269 expires on June 30, 2006
and 2007, respectively.
F. COMPONENTS OF NET ASSETS:
At December 31, 1999, net assets consisted of:
Paid-In Capital............................ $79,328,415
Undistributed Net Investment Income........ 334,238
Accumulated Net Realized Loss ............. (2,620,515)
Net Unrealized Depreciation of
Investment Securities.................... (5,517,965)
-----------
$71,524,173
===========
10
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