MILLENNIUM GROWTH FUND
MILLENNIUM GROWTH & INCOME FUND
Semi-Annual Report
December 31, 1998
<PAGE>
Millennium RHIM Funds, Inc.
Growth Fund SCHEDULE OF INVESTMENTS
December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Shares Market Value
<S> <C> <C>
COMMON STOCKS - 66.87%
Applications Software - 4.24%
10,000 i2 Technologies Inc................................. $303,438
--------
Computers-Integrated Systems - 3.38%
2,500 Rambus Inc.......................................... 241,562
-------
Computers-Micro - 6.14%
6,000 Dell Computer Corp.................................. 439,313
-------
Computer Software - 7.75%
4,000 Microsoft Corp...................................... 554,125
-------
Consulting Services - 7.35%
20,000 USWeb Corp.......................................... 526,250
-------
Electronic Components-Semi Conductors - 3.45%
5,000 Novellus Systems Inc................................ 247,031
-------
Internet Software - 1.66%
500 Yahoo! Inc.......................................... 118,453
-------
Networking Products - 5.84%
4,500 Cisco Systems Inc................................... 417,797
-------
Printers & Related Products - 5.59%
10,000 Electronics For Imaging Inc......................... 399,688
-------
Telecommunications Equipment - 21.47%
20,000 Advanced Fibre Communication Inc.................... 218,750
-------
15,000 CIENA Corp.......................................... 218,906
-------
5,000+ Lucent Technologines Inc............................ 550,000
-------
8,000 Tellabs Inc......................................... 548,500
-------
1,536,156
---------
TOTAL COMMON STOCKS
(Cost $3,939,463) 4,783,813
---------
Total Investments at Market
(Cost $3,939,463) 66.87% 4,783,813
Other Assets less Liabilities 33.13% 2,369,765
----- ---------
Total Net Assets 100.00% $7,153,578
------ ----------
The accompanying notes are an integral part of these financial statements
<PAGE>
(1) Federal Tax Information: At December 31, 1998, the net unrealized
appreciation based on cost for Federal Income tax purposes of $3,939,463 was as
follows:
Aggregate gross unrealized apprecation for all investments for
` which there was an excess of value over cost................ $886,068
Aggregate gross unrealized deprecation for all investments for which
there was an excess of cost over value................. (41,718)
-------
Net unrealized appreciation........................................ $844,350
--------
+ Denotes non-income producing security
The accompanying notes are an integral part of these financial statements
<PAGE>
Millennium RHIM Funds, Inc.
Growth & Income Fund
SCHEDULE OF INVESTMENTS
December 31, 1998
(Unaudited)
Shares Market Value
COMMON STOCKS - 95.05%
Applications Software- 6.52%
10,000 + i2 Technologies Inc.................................. $303,438
20,000 + Manugistics Group Inc............................... 552,813
-------
Auto-Cars/Light Trucks - 2.80%
15,000 Volkswagen AG ADR................................ 237,243
------ -------
Commercial Services - 3.37%
15,000 + Cendant Corp........................................... 285,937
------ -------
Computers-Micro - 4.31%
5,000 + Dell Computer Corp................................... 366,094
----- -------
Computer Software - 3.26%
2,000 + Microsoft Corp......................................... 277,062
----- -------
Consulting Services - 6.20%
20,000 + USWeb Corp............................................ 526,250
------ -------
Diversified Manufacturing Operations - 3.01%
2,500 General Electric Co.................................... 255,156
----- -------
Electronic Components-Semi Conductors - 9.76%
1,000 + Applied Materials Inc.................................. 42,719
3,600 Intel Corp................................................. 426,712
1,200 + Level One Communications Inc.................... 42,638
6,400 + Novellus Systems Inc................................. 316,200
-------
828,269
-------
Internet Software - 7.54%
4,000 + America Online Inc.................................... 640,000
----- -------
Medical-Drugs - 9.72%
1,200 Merck & Co Inc......................................... 177,225
1,600 Pfizer Inc................................................. 200,700
4,000 Schering-Plough Corp................................ 221,000
3,000 Warner-Lambert Co................................... 225,562
----- -------
824,487
-------
The accompanying notes are an integral part of these financial statements
<PAGE>
Networking Products - 14.74%
11,500 + Cisco Systems Inc..................................... 1,067,703
10,000 + FORE Systems Inc.................................... 182,813
------ -------
1,250,516
---------
Printers & Related Products - 4.71%
10,000 + Electronics For Imaging Inc.......................... 399,687
------ -------
Telecommunications Equipment - 19.11%
34,000 + Advanced Fibre Communication Inc............... 371,875
15,000 + CIENA Corp............................................ 218,906
2,400 Lucent Technologines Inc............................ 264,000
2,900 Nokia Oyj ADR......................................... 349,269
6,000 Telefonaktiebolaget LM Ericsson ADR........... 143,438
4,000 + Tellabs Inc............................................ 274,250
----- -------
1,621,738
---------
TOTAL COMMON STOCKS
(Cost $6,326,854) 8,065,252
---------- ---------
REPURCHASE AGREEMENTS - 2.30%
195,000 Star Bank Repurchase Agreement
(Cost $195,000) 195,000
-------- -------
Total Investments at Market
(Cost $6,521,854) 97.35% 8,260,252
Other Assets less Liabilities 2.65% 224,579
---- -------
Total Net Assets 100.00% $8,484,831
====== ==========
<FN>
(1) Federal Tax Information: At December 31, 1998, the net unrealized
appreciation based on cost for Federal Income tax purposes of $6,056,395 was
as follows:
Aggregate gross for all investments for of value over
cost................. $2,385,297
Aggregate grossunrealized deprecation for all
investments for which there was an excess of cost
over value................. (181,439)
--------
Net unrealized appreciation...................... $2,203,858
==========
+ Denotes non-income producing security
</FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Millennium RHIM Funds, Inc. STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998 (Unaudited)
<S> <C> <C>
GROWTH &
GROWTH INCOME
ASSETS:
Investments in securities, at value
(cost $3,939,463 and $6,521,854,
respectively)(Note2)............................. $4,783,813 $8,260,252
Cash.......................................................... 1,956,888 163
Receivable for securities sold......................... 377,281 201,137
Receivable for fund shares sold...................... 8,738 0
Interest & dividends..................................... 0 1,861
Due from investment adviser (Note 4)............... 21,1510
Other assets.............................................. 36,294 40,142
------ ------
Total Assets........................................... 7,184,165 8,503,555
--------- ---------
LIABILITIES:
Payables:
Fund shares redeemed........................... $ 971 $ 0
Advisory fees (Note4)............................ 0 18,724
Dividends Payable................................. 10,459 0
Other liabilities...................................... 19,157 0
------ -
Total Liabilities...................................... 30,587 18,724
------ ------
Net Assets............................................ $7,153,578 $8,484,831
========== ==========
NET ASSETS CONSIST OF:
Additional paid in capital......................... 4,532,203 $6,889,530
Accumulated net investment loss.............. (81,307) (769)
Accumulated net realized gain/(loss) from investment transactions........ 1,858,332 (142,328)
Net unrealized appreciation on
investments........................................ 844,350 1,738,398
------- ---------
Net
Assets........................................... $7,153,578 $8,484,831
========== ==========
Net asset value and redemption
price per share
($7,153,578/519,404 and 8,484,831/683,817 shares
of capital stock outstanding, respectively
(Note 5).............................................. $ 13.77 $ 12.41
= ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
<CAPTION>
Millennium RHIM Funds, Inc. STATEMENT OF OPERATIONS
For the six months ended December 31, 1998
(Unaudited)
GROWTH &
GROWTH INCOME
INVESTMENT INCOME:
<S> <C> <C>
Dividend........................................................... $ 765 $ 17,461
Interest............................................................ 14,675 30,033
------ ------
15,440 47,494
Expenses:
Advisory fee...................................................... 24,210 31,619
Administration fee............................................... 15,123 11,654
Fund accounting fee............................................ 8,571 0
Transfer agent fee.............................................. 9,075 0
Audit fee.......................................................... 5,546 2,011
Shareholder reporting fee.................................... 4,033 1,508
Amortization of organizational cost......................... 3,583 4,328
Custody fee....................................................... 3,428 2,414
Trustee fee........................................................ 2,521 705
Legal fee.......................................................... 2,017 5,027
Insurance.......................................................... 1,610 0
Registration....................................................... 226 1,760
Other............................................................... 4,877 0
----- -
Total expenses...................................... 84,820 61,026
------ ------
Reimbursed expenses............................ (47,867) (12,766)
------- -------
Net investment loss................................ (21,513) (766)
------- ----
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
(Note 2)
Net realized gain from investment
transactions.......................................... 3,713,037 12,167
Net change in unrealized appreciation of
investments.......................................... (1,236,841) 1,738,398
---------- ---------
Net realized and unrealized gain
on investments...................................... 2,476,196 1,750,565
--------- ---------
Net increase in net assets resulting
from operations..................................... $ 2,454,683 $ 1,749,799
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
<CAPTION>
Millennium RHIM Funds, Inc. Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
For the six months For the period
ended ended
December 31, 1998 June 30, 1998*
(Unaudited)
<S> <C> <C>
Net investment loss...................................................... $ (21,513) $ (59,794)
Net realized gain (loss) from investment transactions.............. 3,713,037 (668,793)
Net change in unrealized appreciation of investments................. 2,081,191
Net increase (decrease)in net assets resulting from operations.... 1,352,604 2,081,191
--------- ---------
Distributions from net investment income................................. 0 0
Distributions from net gain on investments............................... (1,185,912) 0
Net capital share transactions (Note 5).................................... (3,983,923) 8,516,126
- ---------- ---------
Net increase in net assets.................................................... (2,715,152) 9,868,730
NET ASSETS:
Beginning of period............................................................. 9,868,730 0
End of period............................................................... $ 7,153,578 $ 9,868,730
============= ============
<FN>
* Commencement of operations was July 16, 1997.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
<CAPTION>
Millennium RHIM Funds, Inc. Growth & Income Fund
STATEMENTS OF CHANGES IN NET ASSETS
For the period For the period
ended ended
December 31, 1998 June 30, 1998**
(Unaudited)
<S> <C> <C>
Net investment loss.......................................................... $ (766) $ (3)
Net realized gain from investment transactions.......................... 12,167 0
Net change in unrealized appreciation of investments................. 1,738,398 0
--------- -
Net decrease in net assets resulting from operations.................. 1,749,799 (3)
Distributions from net investment income................................. 0 0
Distributions from net realized gains....................................... (154,495) 0
Net capital share transactions (Note 5).................................... 5,717,862 1,171,668
- --------- ---------
Net increase in net assets.................................................... 7,313,166 1,171,665
NET ASSETS:
Beginning of period............................................................. 1,171,665 0
--------- -
End of period........................................................ $ 8,484,831 $ 1,171,665
============== =============
<FN>
** Commencement of operations was June 26, 1998.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
<CAPTION>
Millennium RHIM Funds, Inc.
GROWTH FUND FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout the period)
For the six months For the period
ended ended
December 31,1998 June 30, 1998**
(Unaudited)
<S> <C> <C>
Net asset value, beginning of period................... $ 11.78 $ 10.00
--------------- ---------------
Income from investment operations
Net investment income/(loss)........................... (0.04) (0.07)
Net realized and unrealized gain on investments... 4.75 1.85
---- ----
Total from investment operations....................... 4.71 1.78
---- ----
Less distributions
Dividends from net investment income................ 0.00 0.00
Distribution from realized gains from security
transaction (2.72) 0.00
----- ----
Total distributions........................................... (2.72) 0.00
----- ----
Net asset value, end of period $ 13.77 $ 11.78
=============== ===============
Total return................................................... 39.28% 17.80%
Ratios/supplemental data
Net assets, end of period (in 000's).................... $ 7,154 $ 9,869
Ratio of expenses to average
net assets (Note 4)........................................ 1.45% * 1.45% *
Ratio of expenses to average
net assets before expense reimbursement......... 3.33% * 2.48%
*Ratio of net investment income (loss) to
average net assets....................................... (0.84%) * (0.87%) *
Portfolio turnover
rate........................... 686.65% 110.76%
<FN>
* Annualized
** Commencement of operations was July 16, 1997.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
<CAPTION>
Millennium RHIM Funds, Inc. GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS (For a fund share outstanding throughout the(period)
For the six months For the period
ended ended
December 31,1998 June 30, 1998**
(Unaudited)
<S> <C> <C>
Net asset value, beginning of period................... $10.00 $10.00
Income from investment operations
Net investment income/(loss)........................... 0.00 0.00
Net realized and unrealized gain on
investments... 2.64 0.00
---- ----
Total from investment operations....................... 2.64 0.00
---- ----
Less distributions
Dividends from net investment income................ 0.00 0.00
Distribution from realized gains from security
transactions.............................................. (0.23) 0.00
----- ----
Total distributions........................................... (0.23) 0.00
----- ----
Net asset value, end of period $12 $10.00
=== ======
Total return................................................... 26.34% 0.00%
Ratios/supplemental data
Net assets, end
of period (in 000's).................... $8,485 $1,172
Ratio of expenses to average
net assets (Note 4)....................................... 1.45% * 1.45% *
Ratio of expenses to average
net assets before expense reimbursement................. 1.83% * 5.31% *
Ratio of net investment income to
average net assets....................................... (0.02%) * (1.45%)*
Portfolio turnover rate...................................... 315.82% 0.00%
<FN>
* Annualized
** Commencement of operations was June 26, 1998.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Notes to Financial Statements
Millennium RHIM Funds, Inc.
December 31, 1998
(Unaudited)
1. ORGANIZATION:
The Millennium RHIM Growth Fund (the "Growth Fund") and the Millennium RHIM
Growth & Income Fund (the "Growth & Income Fund') are registered as diversified
open-end management investment companies under the Investment Company Act of
1940, as amended. The Growth Fund's primary investment objective is growth of
capital. The Growth & Income Fund's primary investment objective is growth of
capital and dividend income. The Growth Fund commenced operations on July 16,
1997, and the Growth & Income Fund commenced operations on June 26, 1998.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies consistently
followed by the funds in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A. Security Valuation - Securities traded on national securities exchanges are
valued at the last sales price. Over-the-counter securities and listed
securities, for which no sales price is available, are valued at the last
bid price. Short-term securities which mature in 60 days or less are valued
at cost, which, when combined with accrued interest receivable,
approximates value. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith by or under
the direction of the Board of Trustees.
B. Security Transactions - Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is accrued daily.
C. Federal Income Tax Status - No provision for federal income taxes is
required since the funds intend to qualify as a regulated investment
companies and distribute all of their taxable income to their shareholders.
D. Dividends and Distributions to Shareholders - The funds record dividends
and distributions to shareholders on the ex-dividend date.
E. Deferred Organization Costs-The Growth Fund has incurred expenses of
$35,000 in connection with its organization. These costs have been deferred
and are being amortized on a straight-line basis through July 15, 2002. The
Growth and Income Fund has incurred expenses of $42,687 in connection with
its organization. Those costs have been deferred and are being amortized on
a straight-line basis through June 25, 2003.
F. 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 of revenues and expenses during the reported period. Actual results
could differ from those estimates.
<PAGE>
Millennium RHIM Funds, Inc.
Notes to Financial Statements
December 31, 1998
(Unaudited)
3. INVESTMENT TRANSACTIONS:
Investment transactions, excluding short-term investments, for the six months
ended December 31, 1998, were as follows:
Growth Fund:
Purchases.................$34,074,197
Sales......................40,259,839
Growth & Income Fund:
Purchases............... $22,766,159
Sales.................... $17,189,858
4. INVESTMENT MANAGEMENT AGREEMENT:
The Funds have an investment advisory agreement with Millennium Capital
Advisors, Inc. (the "Advisor"). Under this agreement, the Advisor provides the
Funds with investment advisory and management services for which the Funds pay a
fee at an annual rate of .95% of the average daily net assets of the funds.
The Funds are responsible for their own operating expenses. The Advisor has
agreed to reimburse the Funds to the extent necessary to limit aggregate annual
operating expenses to 1.45% of average net assets annually. Any such reductions
made by the Advisor in its fees or payments may be subject to reimbursement by
the Funds, if the Funds are able to effect such reimbursement and remain in
compliance with any expense limitations in effect at that time. For the six
months ended December 31, 1998, the Advisor has reimbursed the Growth Fund in
the amount of $47,867, and the Growth and Income Fund $12,766.
Ridgeway Helms Securities Corp. (the "Distributor") acts as the principal
underwriter in a continuous public offering of both Funds shares.The Distributor
is an affiliate of the Advisor.
5. FUND SHARE TRANSACTIONS:
At December 31, 1998, there were an unlimited number of shares authorized
with no par value.
<PAGE>
<TABLE>
<CAPTION>
Growth Fund:
For the Six For the period
Months ended July 16, 1997* to
December 31,1998 June 30, 1998
Shares Value Shares Value
<S> <C> <C> <C> <C>
Shares sold........................................... 178,169 $2,060,292 928,042 $9,530,260
Dividend reinvestment................................. 82,778 1,175,453 0 0
Shares repurchased.................................... (579,169) (7,219,688) (90,417) (1,014,133)
-------- ---------- ------- ----------
(318,222) ($3,983,923) 837,625 $8,516,127
-------- ----------- ------- ----------
Growth & Income Fund:
For the Six For the period
Months ended July 16, 1997* to
December 31,1998 June 30, 1998
Shares Value Shares Value
Shares sold............................................... 593,057 $6,002,871 117.177 $1,171,668
Dividend reinvestment.............................. 12,098 154,495 0 0
Shares repurchased..................................... (38,504) (439,504) 0 0
------- -------- - -
566,651 $5,717,862 117,177 $1,171,688
------- ---------- ------- ----------
<FN>
* Commencement of operations.
</FN>
</TABLE>
<PAGE>
Advisor
Millennium Capital Advisors, Inc.
400 Montgomery Street, Suite 800
San Francisco, CA 94104
Distributor
Ridgeway Helms Securities Corporation
400 Montgomery Street, Suite 800
San Francisco, CA 94104
Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202
Transfer Agent
American Data Services, Inc.
150 Motor Parkway, Suite 109
Hauppauge, NY 11788
(800) 535-9169
Legal Counsel
Spitzer & Feldman, P.C.
405 Park Avenue, 6th floor
New York, New York 10022
This report is intended for shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.
Past performance results shown in this report should not be considered a
representation of future performance. Share price and returns will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Statements and other information herein are dated and are subject to change.
