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UPRIGHT
INVESTMENTS TRUST
UPRIGHT GROWTH FUND
September 30, 1999
Annual Report
<PAGE>
November 8,1999
Dear Shareholder:
We are pleased to present you the first annual report of the Upright Growth
Fund, for the period of January 21, 1999 (inception date) to September 30, 1999.
Over this period, the Fund produced a total return of 0.8%. This is compared to
2.97% for the S & P 500 (large companies), and 0% for the Russell 2000 (smaller
companies).
Market Review
Most investors get the impression that a strong domestic economy, low inflation,
and increased stability in the emerging economies should support a strong stock
market. However, the performance of the S & P 500 index and the Russell 2000
during this period is not indicative of this fact. Some growth companies from
the beginning of this year to September 30 were actually hit quite hard. They
were down at least 30%, such as, Coca-Cola (-28%), Disney (-13%), Philip Morris
(-36%), Gillette (-29%), AT&T (-14%), Sears (-26%), etc.
In summary, on October 31, 1999, only 31% of the stocks on the New York Stock
Exchange (NYSE) were up. In other words, almost 70% of the stocks on the NYSE
were down and a couple of sectors were down from the peak over 20%, such as
financial, insurance, and health care. These sectors and out of favor growth
companies will provide us a great buying opportunity in the future.
Investment Strategy
As of September 30, 1999, the Fund has 41% cash on hand. It is able to provide
the investment funds for us to commit to some greater growth companies that we
have been waiting for. Therefore, our investment strategies in the next quarter
or two are as follows:
(1) Invest our cash during the financial service sector's correction. We are
optimistic about the financial sector for the following reasons: (a)
Ongoing deregulation of the financial services industry, both at home and
abroad, is creating enormous
opportunities for leading companies.
(b) As legislation changes, corporations will be able to offer banking,
insurance and brokerage services to customers under one umbrella. Under
this situation, many companies may be driven to consolidate in the near
future.
(2) Continue to hold the technology and health care sectors, such as
telecommunication, semiconductor, software, and pharmaceutical companies.
(3) The Fund will be more focused on 40-60 stocks compared to most other growth
funds. This will provide the fund enough diversification and reduce the
volatility.
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Portfolio Review
Over the last eight months, the Fund allocated 20.12 % in the technology
sector(including computer, electronic and cable sector), 4.35 % in the financial
service sector, 6.59 % in the health care sector, 1.25 % in the retail sector.
However, this eight-month period was a time characterized by strong performance
in technology stocks. Indeed, this sector led the market up from the last
October market low. The best performing companies in the fund pertaining to the
technology sector were AVX Corp, Adaptec, BMC Software, Citrix system, Micron
Technology and R.F.
Micro Device Inc.
The volatility presents opportunities as well. The sharp price swings in many
technology stocks present us with the chance to pick up good growth stocks while
they are set back. The above mentioned technology stocks that the Fund purchased
were good examples.
The Medical sectors did not perform as well as we expected. Only Roberts
Pharmaceutical did well. The others were lagged with the S & P 500 over the same
period. However, we believe that the fundamental drivers for this sector is
still sound. Companies such as as Barr Laboratories, Merck & Co. and Watson
Pharmaceuticals are still attractive, and they will eventually reward the
patient investors.
During this period, the worst performers in the fund were AT&T, Mckesson Hboc
Inc and Wet Seal Inc. Nonetheless, we still have a positive outlook for AT&T,
which is one of the leading companies for telecommunication. Mckesson was hit
hard due to the acquisition of Hboc. Even though the accounting irregularities
of Hboc caused the stock's downward plunge, the McKesson's core business remains
sound, and Hboc's business represents only a small portion of the companies.
Our Y2K preparation continues to be on schedule, and we remain confident that we
are prepared for this coming millennium.
We would like to take this opportunity to thank our shareholders for their
confidence and patience with us. We will continue to do our best and seek
rewarding returns on your behalf.
Best regards,
- --------------------------------
David Y.S. Chiueh
President, Portfolio Manager
<PAGE>
Upright Growth Fund
Schedule of Investments
September 30, 1999
SHARES VALUES
Securities/Common Stocks
BANK 0.88%
FIRST UNION CORP 200 $7,125
BUILDING 1.11%
ARMSTRONG WORLD IND INC 200 8,987
CABLE 1.76%
UNITEDGLOBALCOM INC CL A * 200 14,325
COMPUTER 10.82%
ADAPTEC INC * 200 7,938
B M C SOFTWARE INC * 100 7,156
CITRIX SYSTEMS INC * 200 12,388
COMPAQ COMPUTER CORP. 100 2,287
INTL BUSINESS MACH CORP 200 24,200
INTL NETWORK SERVICES * 150 8,156
NETWORK APPLIANCE INC * 100 7,162
NOVELL INC * 200 4,138
3 COM CORP * 500 14,375
87,800
CONSUMER 0.66%
CENDANT CORP * 300 5,325
DEFENSE 1.85%
BOEING CO 200 8,525
LOCKHEED MARTIN CORP. 200 6,538
15,063
ELECTRONIC 7.54%
A V X CORP 300 10,537
INTEL CORP 200 14,863
MICRON TECHNOLOGY INC * 400 26,600
R F MICRO DEVICES INC * 200 9,150
61,150
ENERGY 2.10%
CALPINE CORP * 200 17,013
See accompanying notes to financial statements
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SHARES VALUES
FINANCIAL 4.35%
ADVANTA CORP CL A 600 $8,775
FIRST DATA CORP 200 8,775
KNIGHT/TRIMARK GROUP INC-CL A * 600 17,775
35,325
FOOD 1.37%
RALSTON PURINA CORP 400 11,150
HOUSEHOLD 1.15%
SALTON INC * 300 9,300
LEISURE 2.19%
CALLAWAY GOLF CO 400 4,875
INTL GAME TECH. * 400 7,200
MATTEL INC 300 5,700
17,775
MEDICAL 6.59%
BARR LABORATORIES INC * 300 9,525
I C N PHARMACEUTICALS 400 6,875
MCKESSON HBOC INC 100 2,900
MERCK & CO INC 200 12,962
ROBERTS PHARMACEUTICAL CORP. * 500 15,125
WATSON PHARMACEUTICALS INC * 200 6,113
53,500
OIL 0.75%
TRANSOCEAN OFFSHORE INC 200 6,125
PROTECTION 0.66%
WACKENHUT CORRECTIONS * 400 5,350
RETAIL 1.25%
ABERCROMBIE & FITCH CL A * 200 6,812
WET SEAL INC CL A * 200 3,313
10,125
TELECOMMUNICATION 6.98%
A T&T CORP 400 17,400
ALCATEL ALSHOM ADR + 300 8,325
GENERAL INSTRUMENT CORP * 200 9,600
NIPPON TEL & TEL CO + 200 12,337
NOKIA CORP + 100 8,988
56,650
See accompanying notes to financial statements
<PAGE>
SHARES VALUES
TEXTILE 1.59%
NAUTICA ENTERPRISES INC * 800 12,900
TOBACCO 1.26%
PHILIP MORRIS COS INC 300 10,256
TRANSPORTATION 0.81%
CONTINENTAL AIRLINES INC-CL B * 200 6,550
UTILITY 2.19%
TELEPHONE & DATA SYSTEMS INC 200 17,762
Total Securities/Common Stocks (cost $467,325) 57.86% 469,556
- ---------------------------------------------- -------
Cash EquivalentS 41.44%
Fifth/Third Bank repurchase
agreement 136,258
due 10/01/99 at 4.78%
Fifth/Third Bank Treasury Obligations Fund
4.89% 200,000
Total Cash Equivalents (cost $336,258) 336,258
Total Securities (cost $803,583) 99.30%
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805,814
Other assets less liabilities 0.70% 5,656
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Net Assets 100.00% $811,470
* Non-income producing security
+ American Depository Receipt
See accompanying notes to financial statements
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UPRIGHT GROWTH FUND
Statement of Assets and Liabilities
September 30, 1999
Assets:
Investment in securities, at value ( cost $803,583) $805,814
--------
Security Sales Receivable 9,812
Dividends Receivable 361
Accrued Interest Receivable 436
Accounts Receivable --Advisor 3,001
Total Assets 819.424
Liabilities:
Accrued Custodian Fees 583
Accrued Professional Fees 7,371
Total Liabilities 7,954
Net Assets 811,470
Net assets consist of:
Paid in capital 807,604
Accumulated undistributed net investment income 1,772
Accumulated undistributed net realized gain (loss) (137)
Net unrealized appreciation(depreciation) 2,231
Net Assets for 80,520 shares outstanding $811,470
Net Asset Value and redemption price per share $10.08
Maximum offering price per share, (100/97 of $10.08) $10.39
See accompanying notes to financial statements
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UPRIGHT GROWTH FUND
Statement of Operations
January 21, 1999 1 to September 30, 1999
Investment Income
Dividends $1,385
Interest 7,732
Total Income 9,117
Expenses
Advisor fees 5,650
Administrative fees 1,695
Custodian fees 2,353
Professional fees 7,992
Trustee fees 504
Blue Sky fees 1,512
Insurance fees 888
Total expenses before reductions 20,594
Reimbursement from advisor (13,249)
Net expenses (after reimbursement) 7,345
Net investment income (Loss) 1,772
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investment securities (137)
Change in net unrealized appreciation (depreciation) on
Investment securities 2,231
Net gain (loss) 2,094
Net increase (decrease) in net assets resulting
from operations $3,866
See accompanying notes to financial statements
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1 Inception of Fund
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UPRIGHT GROWTH FUND
Statement of Changes in Net Assets
January 21, 19991 to September 30, 1999
September 30, 1999
Increase (Decrease) in Net Assets
Operations
Net investment income $1,772
Net realized gain (loss) on investments (137)
Change in net unrealized appreciation (depreciation) 2,231
Net increase (decrease) in net assets from operations 3,866
Distributions to shareholders
From net investment income 0
From net realized gain 0
Total distributions 0
Share transactions
Net proceeds from sales of shares 707,604
Reinvestment of distributions 0
Shares redeemed 0
Net increase (decrease) in net assets from transaction 707,604
Total increase (decrease) in net assets $711,470
Net Assets
Beginning of period $100,000
End of period (including accumulated
undistributed net investment Income of $1,772) $811,470
See accompanying notes to financial statement
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1 Inception of Fund
<PAGE>
UPRIGHT GROWTH FUND
Financial Highlights
January 21, 1999 to September 30, 1999
Selected Per-Share Data
Net asset value, beginning of period $10.00
Income from investment operations
Net investment income 0.03
Net realized and unrealized gain (loss) on investments 0.05
Total from investment operations 0.08
Less Distributions
From net investment income 0.00
From net realized gain 0.00
Total distributions 0.00
Net asset value, end of period $10.08
Total Return 0.8%2
Ratios and Supplemental Data
Net assets, end of period $811,470
Ratio of expenses to average net assets (before
expense reimbursement) 5.47%
Ratio of expenses to average net assets (after
expense reimbursement) 1.95%
Ratio of net investment income to average net assets (before
expense reimbursement) (3.05%)
Ratio of net investment income to average net assets (after
expense reimbursement) 0.47%
Portfolio turnover rate 8.87%
See accompanying notes to financial statements
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Notes to financial statements
<PAGE>
UPRIGHT GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
September 30,1999
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Upright Investments trust (the "Trust") is an open-end management Investment
Company organized as a business trust under the laws of the State of
Delaware under a Certificate of Formation dated March 4, 1998. The
Certificate of Formation provides for an unlimited number of authorized
shares of beneficial interest, which may, without shareholder approval, be
divided into an unlimited number of series of such shares, and which
presently consist of one series of shares for the Upright Growth Fund. The
Fund's investment objective is to provide long term growth Of capital, with
income as a secondary objective.
SECURITY VALUATION
The Fund intends to invest in a wide variety of equity and debt securities.
The investments in securities are carried at market value. The market
quotation used for common stocks, including those listed on the NASDAQ
National Market System, is the last sale price on the date on which the
valuation is made or, in the absence of sales, at the closing bid price.
Over- the-counter securities will be valued on the basis of the bid price at
the close of each business day. Short-term investments are valued at
amortized cost, which approximates market. Securities for which market
quotations are not readily available will be valued at fair value as
determined in good faith pursuant to procedures established by the Board of
Directors.
SECURITY TRANSACTION TIMING
Security transactions are recorded on the date's transactions are entered
into. Dividend income and distributions to shareholders are recorded on the
ex-dividend data. Interest income is recorded as earned. The Fund uses the
identified cost basis in computing gain or loss on sale of investment
securities.
INCOME TAXES
It is the Fund's policy to distribute annually, prior to the end of the
calendar year, dividends sufficient to satisfy excise tax requirements of
the Internal Revenue Service. This Internal Revenue Service requirement may
cause an excess of distributions over the book year-end accumulated income.
In addition, it is the Fund's policy to distribute annually, after the end
of the fiscal year, any remaining net investment income and net realized
capital gains.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
<PAGE>
UPRIGHT GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
September 30, 1999
2. RELATED PARTY TRANSACTIONS
David Y. S. Chiueh is an officer of Upright Financial Corporation,
the Fund Advisor. He is also an officer and trustee of the Fund.
Upright Financial Corporation, the Fund's investment advisor, is registered
as an investment advisor under the Investment Advisers Act of 1940. As
compensation for Upright Financial Corporation's services rendered to the
Fund, such Fund pays a fee, computed at an annual rate of 1.50% of its
average daily net assets. The Fund has accrued $5,650 of advisor fees
through September 30, 1999, none of which have been paid. For the period
ended September 30, 1999 the advisor has agreed to waive its fees and
reimburse expenses to the extent necessary to limit expenses to 1.95% of
average net assets. For the period ended September 30,1999, the advisor
waived fees and reimbursed expenses of $13,249.
Upright Financial Corporation is the Fund's administrator. As compensation
for Upright Financial's services rendered to the Fund, such Fund pays a fee
computed at an annual rate of .45% of its average daily net assets. The Fund
has accrued $1,695 of administration fees through September 30,1999, none of
which have been paid.
3. CAPITAL STOCK AND DISTRIBUTION
At September 30, 1999, an unlimited number of shares were authorized and
paid in capital amounted to $807,604 for the Upright Growth Fund.
Transactions in capital stock were as follows:
Shares Sold 70,520
Shares Redeemed 0
Net Increase 70,520
Shares Outstanding:
Beginning of period 10,000
End of period 80,520
4. SALES CHARGE
The sales charge for shares of the Fund are outlined below:
As a % of
Investment Offering Price Net Amount Invested
Up to $49,999 3.0% 3.09%
$ 50,000 - 99,999 2.5% 2.56%
$100,000 - 249,999 2.25% 2.30%
$250,000 - 499,999 1.75% 1.78%
$500,000 - 749,999 1.50% 1.52%
$750,000 - 999,999 1.25% 1.27%
$1 million and up .75% .76%
<PAGE>
UPRIGHT GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
September 30, 1999
5. PURCHASES AND SALES OF SECURITIES
During the period ended September 30,1999, purchases and sales of
investment securities other than U. S. Government obligations
and short-term investments aggregated $493,999 and $26,537,
respectively. Purchases and sales of U. S. Government
obligations aggregated $0 and $0, respectively.
6. SECURITY TRANSACTIONS
For federal income tax purposes, the cost of investments owned at September
30, 1999 was the same as identified cost.
At September 30, 1999, the composition of unrealized appreciation (the excess
of value over tax cost) and depreciation (the excess of tax cost over value)
was as follows:
Net Appreciation
Appreciation (Depreciation) (Depreciation)
$56,782 $54,551 $2,231
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To The Shareholders and
Board of Trustees
Upright Growth Fund
We have audited the accompanying statement of assets and liabilities of the
Upright Growth Fund, including the schedule of portfolio investments, as of
September 30, 1999, and the related statement of operations for the year then
ended, the statement of changes in net assets for the year then ended, and
financial highlights for the period from January 21, 1999 to September 30, 1999
in the period 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 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. Our procedures included confirmation of investments and cash held as
of September 30, 1999 by correspondence with the custodian and broker. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Upright Growth Fund as of September 30, 1999, the results of its operations for
the year then ended, the changes in its net assets for the year then ended, and
the financial highlights for the period from January 21, 1999 to September 30,
1999 in the period then ended, in conformity with generally accepted accounting
principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
October 31, 1999
<PAGE>
Upright Growth Fund
Annual Report September 30, 1999
Investment Adviser and Administrator
Upright Financial Corporation
615 West Mt. Pleasant Avenue
Livingston, NJ 07039
Custodian
Fifth Third Bank Corporation
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Independent Auditors
McCurdy & Associates CPA's Inc.
27955 Clemens Road
Westlake, OH 44145
Transfer Agent
Mutual Shareholder Services
1301 East Ninth Street, Suite 1005
Cleveland, OH 44114
Underwriter
Maxus Securities Corp.
1301 East Ninth Street, Suite 3600
Cleveland, OH 44114
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