DUNHILL INVESTMENT TRUST
REGIONAL OPPORTUNITY FUND:
OHIO, INDIANA, KENTUCKY
FINANCIAL STATEMENTS
FEBRUARY 28, 1999
<PAGE>
April 29, 1999
Fellow Shareholders:
It is my pleasure to present to you this Annual Report of the Regional
Opportunity Fund, Ohio, Indiana, Kentucky Series. Although a mutual fund's
performance can be calculated by a simple mathmatical formula, to say that the
stock markets last year were simple would not be correct.
In review we saw a strong 1st quarter with growth of most of the major economic
indicators showing a stable economy. Earnings for companies remained strong and
going toward the end of June enabling the Fund to have grown just over 17%.
Many different factors in selecting stocks and managing the portfolio are
closely monitored during a strong run up as we had during the first half of the
year. July brought on the summer jitters and many investors began to taking
profits as companies began to warn against analyst setting such high
expectations. This caused a 3 month sell off of stocks, erasing and in some
cases giving stocks and stock funds negative returns. During this period we
closely monitored the Funds holdings and remained positive of the long-term
outlook of our selections and did not do any major selling. On the other hand we
did not try and hunt out bargains and chase stocks trying to find the bottom, a
theory that seldom works during such an irrational market.
As the correction came to an end and Nasdaq stocks began to gain momentum the
rest of the markets followed. With this reversal a technology stock driven
buying frenzy took the markets to all time highs and brought the Fund's year-end
closing price to $21.46. The momentum carried over into 1999, giving the Fund a
fiscal year total return of 43.80%. In comparison to the major indices, the Dow
Jones Industrial Average for the same period gained 8.8%, and the S&P 500 index
gained 18.30%.
Looking forward we are adjusting the portfolio as needed. We have taken
advantage of the recent highs to take profits on stocks that we feel have had
tremendous growth and are purchasing stocks that we feel are poised for
excellent growth this year. I am proud to present you with this report and as
always feel free to call me directly if you have any questions.
Sincerely,
/s/ Jasen M. Snelling
Jasen M. Snelling
President
JMS/ddb
<PAGE>
REGIONAL OPPORTUNITY FUND
OHIO, INDIANA, KENTUCKY SERIES CLASS B
Performance Update - $10,000 Investment
For the period from July 26, 1996 (commencement of operations) to
February 28, 1999
[GRAPH OMITTED]
02/28/99
--------
Regional Opportunity Fund - Class B Sharess $20,571.04
S&P 500 Index $19,178.93
This graph depicts the performance of the Class B Shares of the Regional
Opportunity Fund versus the S&P 500 Index. It is important to note that the
Regional Opportunity Fund is a professionally managed mutual fund while the
index is not available for investment and is unmanaged. The comparison is shown
for illustrative purposes only.
--------------------------------------------------
Commencement One Year ended
of operations 2/28/99
through 2-28-99
--------------------------------------------------
Maximum 5% 113.49% 40.80%
Sales Load
--------------------------------------------------
No Sales Load 116.49% 43.80%
--------------------------------------------------
The graph assumes an initial $10,000 investment at July 26, 1996. All dividends
and distributions are reinvested.
At February 28, 1999, the Class B shares would have grown to $20,571.04 - total
investment return of 113.49% since July 26, 1996. Without the deduction of the
3% contingent deferred sales charge (cdsc) the Class B of the Fund would have
grown to $20,871.04 - total investment return of 116.49% since July 26, 1996.
The sales load may be eliminated for purchases over $250,000.
At February 28, 1999, a similar investment in the S&P 500 Index (after cdsc of
3%) would have grown to $19,178.93 - total investment return of 91.79% since
July 26, 1996.
Past performance is not a guarantee of future results. A mutual fund's share
price and investment return will vary with market conditions, and the principal
value of shares, when redeemed, may be worth more or less than the original
cost. Average annual returns are historical in nature and measure net investment
income and capital gain or loss from portfolio investments assuming
reinvestments of dividends.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1999
ASSETS
Investments in common stocks, at value $ 9,738,357
Investment in repurchase agreements 315,890
Cash 23,860
Dividends and interest receivable 4,048
Receivable from fund manager 33,885
Organization costs, net 5,642
------------
Total assets 10,121,682
------------
LIABILITIES
Accrued expenses 6,000
------------
Total liabilities 6,000
------------
NET ASSETS $ 10,115,682
============
Net Assets consist of:
Paid in capital $ 5,998,316
Accumulated net realized loss from security transactions (79,533)
Net unrealized appreciation of securities 4,196,899
------------
$ 10,115,682
============
Shares of beneficial interest outstanding (unlimited number
of shares authorized, no par value) 456,422
============
Net asset value and offering price per share $ 22.16
============
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1999
Market
Shares Value
------ -----
COMMON STOCK - 96.3 %
AIRLINES - 1.4 %
3,855 Comair Holdings, Inc. $ 145,044
------------
AUTOMOBILE PARTS - 0.6%
1,500 Dana Corp. 56,625
------------
BEVERAGES - WINE/SPIRITS - 0.7%
1,000 Bown-Forman Corp. Class B 65,937
------------
COMMUNICATIONS - 1.0%
6,874 Brightpoint, Inc. (a) 102,251
------------
COMPUTERS & INFORMATION - 14.3%
7,000 Dell Computer Corp. (a) 560,875
5,000 EMC Corp. (a) 511,875
3,000 Lexmark International, Inc. Class A (a) 309,563
3,000 Miami Computer Supply Company (a) 65,625
------------
1,447,938
------------
CONGLOMERATES - 2.0%
2,000 General Electric Co. 200,625
------------
CONTAINERS - METAL/GLASS - 0.8%
2,000 Ball Corp. 83,750
------------
DIVERSIFIED MANUFACTURING - 1.5%
2,000 Tyco International, Inc. 148,875
------------
FOOD - 0.7%
1,600 Papa John's International, Inc. (a) 69,200
------------
FOOD RETAILERS - 2.9%
4,500 Kroger Company (a) 291,093
------------
HEALTH CARE PROVIDERS - 1.8%
7,750 Res-Care, Inc. (a) 184,062
------------
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999
Market
Shares Value
------ -----
HOUSEHOLD PRODUCTS, NONDURABLE - 0.8%
860 The Procter & Gamble, Co. $ 76,970
------------
INDUSTRIAL & COMMERCIAL SERVICES - 3.0%
3,500 Cintas Corp. 247,625
3,000 Convergys Corp. (a) 51,938
------------
299,563
------------
INSURANCE, LIFE - 0.6%
2,000 Conseco, Inc. 59,875
------------
MEDICAL SUPPLIES - 9.6%
7,000 Biomet, Inc. 256,813
3,000 Gliatech Inc. (a) 81,000
10,600 Guidant Corp. 604,200
1,000 Steris Corp. (a) 32,875
------------
974,888
------------
PHARMACEUTICALS - 12.2%
4,000 Bindley Western Industries, Inc. 105,250
1,000 Biogen, Inc. (a) 96,125
5,700 Eli Lilly & Co. 539,719
2,800 Johnson & Johnson 239,050
1,344 Priority Healthcare, Class B (a) 52,332
1,600 Pfizer, Inc. 211,100
------------
1,243,576
------------
REGIONAL BANKS - 6.1%
1,100 Bank One Corp. 59,125
3,375 Fifth Third Bancorp 222,961
3,955 Firstar Corp. 331,231
------------
613,317
------------
RETAILERS, APPAREL - 6.2%
3,000 Abercrombie & Fitch (a) 228,000
5,500 Gap, Inc. 355,781
1,000 Intimate Brands, Inc., Class A 39,314
------------
623,095
------------
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999
Market
Shares Value
------ -----
RETAILERS, DRUG-BASED - 0.4%
500 Cardinal Health, Inc. 36,094
------------
SECURITY SERVICES - 0.6%
2,000 Kroll-O'Gara Company (a) 61,750
------------
SEMICONDUCTOR & RELATED - 1.1%
1,000 Intel Corp. 119,937
------------
SOFTWARE & PROCESSING - 27.4%
18,800 America Online, Inc. (a) 1,672,025
4,275 Cisco Systems, Inc. (a) 418,148
6,500 Compuware Corp. (a) 363,594
2,000 Microsoft Corp. (a) 300,250
1,000 Symix Systems, Inc. (a) 20,625
------------
2,774,642
------------
TELEPHONE SYSTEMS - 0.6%
3,000 Cincinnati Bell, Inc. 59,250
------------
TOTAL INVESTMENTS IN COMMON STOCKS
(COST $5,541,458) $ 9,738,357
------------
Face Amount
-----------
REPURCHASE AGREEMENTS (B) - 3.1%
$ 315,890 Fifth Third Bank, 4.18%, dated 2/26/1999,
due 3/1/1999, repurchase proceeds $316,000
(Cost $315,890) 315,890
------------
TOTAL INVESTMENTS IN COMMON STOCKS AND
REPURCHASE AGREEMENTS AT VALUE - 99.4% 10,054,247
OTHER ASSETS IN EXCESS OF LIABILITIES - 0.6% 61,435
------------
NET ASSETS - 100.0% $ 10,115,682
============
(a) Non-income producing security
(b) Repurchase agreement is fully collateralized by $313,000 par value FNMA
Pool #313140, 7.50%, due 9/1/2011.
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
STATEMENT OF OPERATIONS
YEAR ENDED FEBRUARY 28, 1999
INVESTMENT INCOME:
Dividends $ 30,587
Interest 28,172
-----------
Total investment income 58,759
EXPENSES:
Investment advisory fees 85,018
Distribution fees 70,848
Administration fees 9,418
Shareholder services and transfer agent fees 13,000
Reports and notices to stockholders 16,292
Professional fees 14,365
Trustees' fees and expenses 1,700
Custodian fees 2,819
Fund accounting fees 22,459
Registration and filing fees 2,706
Amortization of organization expenses 9,672
Insurance expense 2,817
Miscellaneous 3,163
-----------
Total expenses 254,277
Less fees waived by the Manager (62,988)
-----------
Net expenses 191,289
-----------
NET INVESTMENT LOSS (132,530)
-----------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized losses from security transactions (7,832)
Unrealized appreciation of investments:
Beginning of year $ 1,074,668
End of year 4,196,899
-----------
Net change in unrealized appreciation of investments 3,122,231
-----------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 3,114,399
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 2,981,869
===========
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED FEBRUARY 28, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
OPERATIONS:
<S> <C> <C>
Net investment loss $ (132,530) $ (40,721)
Net realized losses from security transactions (7,832) (20,541)
Net change in unrealized appreciation of investments 3,122,231 946,951
------------ ------------
Net increase in net assets from operations 2,981,869 885,689
FUND SHARE TRANSACTIONS:
Proceeds from shares sold 2,869,376 3,086,528
Payments for shares redeemed (700,997) (154,966)
------------ ------------
Net increase in net assets from capital share transaction 2,168,379 2,931,562
TOTAL INCREASE IN NET ASSETS 5,150,248 3,817,251
------------ ------------
NETASSETS:
Beginning of year 4,965,434 1,148,183
------------ ------------
End of year $ 10,115,682 $ 4,965,434
============ ============
SUMMARY OF FUND SHARE ACTIVITY:
Shares sold 177,719 270,297
Shares redeemed (43,511) (5,124)
------------ ------------
Net increase in shares outstanding 134,208 265,173
Shares outstanding, beginning of year 322,214 57,041
------------ ------------
Shares outstanding, end of year 456,422 322,214
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE
OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
February 28, February 28, February 28,
1999 1998 1997 (2)
------------ ------------ ------------
PER SHARE DATA
<S> <C> <C> <C>
Net asset value at beginning of period $ 15.41 $ 11.33 $ 10.46
Income from investment operations:
Net investment loss (0.32) (0.13) (0.02)
Net realized and unrealized gain 7.07 4.21 1.30
------------ ------------ ------------
Total from investment operations 6.75 4.08 1.28
------------ ------------ ------------
Less distributions:
In excess of net realized gains (0.41)
------------ ------------ ------------
Total distributions -- -- (0.41)
------------ ------------ ------------
Net asset value at end of period $ 22.16 $ 15.41 $ 11.33
============ ============ ============
TOTAL RETURN (1) 43.80% 36.01% 12.25%
============ ============ ============
RATIOS/SUPPLEMENTAL DATA
Net Assets at End of Period $ 10,115,682 $ 4,965,434 $ 646,067
============ ============ ============
Ratio of expenses to average net assets:
Before expense reimbursement and
waived fees 3.64% 5.81% 12.14%(3)
After expense reimbursement and
waived fees 2.70% 2.69% 2.66%(3)
Ratio of net investment loss to average net assets (1.87)% (1.69)% (1.04)%(3)
Portfolio turnover rate 26% 21% 39%(3)
</TABLE>
(1) Calculated without sales charge.
(2) Represents the period from the first public offering to shareholders (July
24, 1996) through February 28, 1997.
(3) Annualized
See accompanying notes to financial statements.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1999
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Regional Opportunity Fund: Ohio, Indiana, Kentucky (the Fund) is a
non-diversified, open-end series of the Dunhill Investment Trust (the
Trust), a registered management investment Company under the Investment
Company Act of 1940 (the 1940 Act). The Trust was organized as an Ohio
business trust on March 31, 1998. Pursuant to an Agreement and Plan of
Reorganization dated May 1, 1998, the Fund, on June 29, 1998 was successor
of the assets and liabilities of another mutual fund of the same name which
was an investment series of Maplewood Investment Trust. 381,360 Shares and
Net Assets of $6,200,646 of the Fund were transferred to the Trust on June
29, 1998. The Financial Statements presented include the assets and
liabilities, results of operations, changes in net assets and financial
highlights of the Fund from the first public offering to shareholders (July
24, 1996) of the shares transferred from the former Trust.
The Fund's investment objective is to provide long-term capital growth by
investing primarily in common stocks and other equity securities of
publicly-traded companies headquartered in Greater Cincinnati and the
Cincinnati tri-state region, and those companies having a significant
presence in the region.
Shares of the Fund are offered at net asset value and are subject to a
maximum 5% contingent deferred sales charge and 12b-1 distribution fees up
to 1% of average daily net assets. The contingent deferred sales charge is
applicable to redemptions during the five-year period from the date of
purchase. The charge declines from 5% to 0% over the five year period.
SECURITIES VALUATION - The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(currently 4:00 p.m. Eastern time). Securities which are traded
over-the-counter are valued at the last sales price, if available,
otherwise, at the last quoted bid price. Securities traded on a national
stock exchange are valued based upon the closing price on the principal
exchange where the security is traded.
REPURCHASE AGREEMENTS - The Fund generally invests its cash reserves by
entering into repurchase agreement with its custodian bank. The repurchase
agreement, which is collateralized by U.S. Government obligations, is
valued at cost which, together with accrued interest, approximates market.
At the time the Fund enters into the repurchase agreement, the seller
agrees that the value of the underlying securities, including accrued
interest, will at times be equal to or exceed the face amount of the
repurchase agreement. In addition, the Fund actively monitors and seeks
additional collateral, as needed.
SHARE VALUATION - The net asset value per share of the Fund is calculated
daily by dividing the total value of the Fund's assets, less liabilities by
the number of shares outstanding.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1999
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENT INCOME - Interest income is accrued as earned. Dividend income
is recorded on the ex-dividend date.
DISTRIBUTIONS TO SHAREHOLDERS - Dividends arising from net investment
income, if any, are declared and paid annually to shareholders of the Fund.
Net realized short-term capital gains, if any, may be distributed
throughout the year and net realized long-term capital gains, if any, are
distributed at least once a year. Income distributions and capital gain
distributions are determined in accordance with income tax regulations.
ORGANIZATION EXPENSES - Expenses of organization have been capitalized and
are being amortized on a straight-line basis over five years. In the event
any of the initial shares of the Fund are redeemed during the amortization
period, the redemption proceeds will be reduced by a pro rata portion of
any unamortized organization expenses in the same proportion as the number
of initial shares being redeemed bears to the number of initial shares of
the Fund outstanding at the time of the redemption.
SECURITY TRANSACTIONS - Security transactions are accounted for on trade
date. Securities sold are valued on a specific identification basis.
ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts or revenue and expenses during the reporting period. Management
believes the estimates utilized in preparing these financial statements are
reasonable and prudent. Actual results could differ from these estimates.
FEDERAL INCOME TAX - It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of federal income tax on the
income distributed. Accordingly, no provision for income taxes has been
made. In order to avoid imposition of the excise tax applicable to
regulated investment companies, it is also the Fund's intention to declare
as dividends in each calendar year at least 98% of its net investment
income (earned during the calendar year) and 98% of its net realized
capital gains (earned during the twelve months ended October 31) plus
undistributed amounts from prior years.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1999
2. INVESTMENTS
During the year ended February 28, 1999, purchases and proceeds from sales
and maturities of investment securities, other than short-term investments,
amounted to $3,690,554 and $1,774,080 respectively.
For federal income tax purposes, the cost of portfolio investments amounted
to $5,541,458 at February 28, 1999. The composition of unrealized
appreciation (the excess of value over cost) and unrealized depreciation
(the excess of tax cost over value) was as follows:
Gross unrealized appreciation $ 4,270,987
Gross unrealized depreciation (74,088)
-----------
Net unrealized appreciation $ 4,196,899
===========
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Trust are also officers of Dunhill Investment
Advisors, Limited (Dunhill) the manager, administrator and transfer agent
for the Fund, CityFund Advisory, Inc. (CityFund) the Advisor and
Alpha-Omega Capital Corp. (Alpha), the Distributor.
FUND MANAGER AGREEMENT
The Fund is managed by Dunhill under the terms of a management agreement.
The Fund pays Dunhill a fee equal to the annual rate of 1.20% of the
average value of its daily net assets. Dunhill currently intends to waive
its management fees and reimburse expenses of the Fund to the extent
necessary to limit the total operating expenses of the Fund to 2.70% of
average daily net assets of the Fund. Accordingly, for the year ended
February 28, 1999, the manager waived $62,988 of advisory fees.
INVESTMENT ADVISORY AGREEMENT
The Fund's investments are managed by CityFund under the terms of an
Investment Advisory Agreement. Under the Investment Advisory Agreement, the
manager (not the Fund) pays CityFund a fee equal to an annual rate of .35%
of the average daily net assets of the Fund.
<PAGE>
REGIONAL OPPORTUNITY FUND: OHIO, INDIANA, KENTUCKY
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1999
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
TRANSFER AGENT AND SHAREHOLDER SERVICING AGREEMENT
Under the terms of a Transfer Agent and Shareholder Servicing Agreement,
Dunhill maintains the records of each shareholder's account, answers
shareholders' inquiries concerning their accounts, processes purchases and
redemptions of the Fund's shares, acts as dividend and distribution
disbursing agent and performs other shareholder service functions. For
these services, Dunhill receives a monthly fee from the Fund at an annual
rate of 0.15% on its average daily net assets up to $50 million; 0.125% on
the next $50 million of such net assets; and 0.10% of such net assets in
excess of $100 million. This fee is subject to a $1,000 minimum monthly
amount. In addition, the Fund pays out-of-pocket expenses, including but
not limited to, postage and supplies. During the year ended February 28,
1999, Dunhill was paid $9,000 of fees under the Agreement.
DISTRIBUTION AGREEMENT
The Fund distributes its shares under the terms of an Underwriting
Agreement with Alpha. Alpha may sell Fund shares to or through qualified
securities dealers or brokers.
4. DISTRIBUTION PLAN
The Fund has adopted a Distribution Plan (the Plan) pursuant to Rule 12b-1
under the 1940 Act. The Plan provides that the Fund may incur certain costs
related to the distribution of Fund shares, generally not to exceed 0.25%
of the Fund's average daily net assets. During the year ended February 28,
1999, the Fund incurred and paid approximately $71,000 of distribution
expenses under the Plan.
<PAGE>
INDEPENDENT AUDITORS REPORT
To the Shareholders and
Board of Trustees
Dunhill Investment Trust
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Regional Opportunity Fund: Ohio, Indiana,
Kentucky (the Fund), a series of the Dunhill Investment Trust, as of February
28, 1999, and the related statement of operations, the statement of changes in
net assets, and financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The statement of changes
in net assets for the year ended February 28, 1998 and the financial highlights
for the period from the first public offering to shareholders (July 24, 1996)
through February 28, 1997 and the year ended February 28, 1998, were audited by
other auditors whose report dated March 27, 1998, expressed an unqualified
opinion on those financial statements and financial highlights.
We conducted our audit 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. Our
procedures included confirmation of securities owned as of February 28, 1999, by
correspondence with the custodian. 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
audit provides a reasonable basis for our opinion.
In our opinion, the 1999 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Regional Opportunity Fund: Ohio, Indiana, Kentucky as of February 28, 1999, the
results of its operations, the changes in its net assets, and the financial
highlights for the year then ended, in conformity with generally accepted
accounting principles.
Berge & Company LTD
Cincinnati, Ohio
April 28, 1999
