MILLENNIUM FUNDS, INC.
ANNUAL REPORT
JUNE 30, 2000
<PAGE>
Millennium Funds, Inc.
----------------------
June 30, 2000
Dear Fellow Shareholders:
Violent market moves in the second quarter, highlighted in particular by the
fluctuating fortunes of the NASDAQ composite index (which is dominated by
technology companies) played havoc in our portfolios.
While we find it difficult to pinpoint any one event as the single cause of the
market turbulence, there were many small issues, that combined, may have led to
this incredible volatility.
The general overvaluation of the NASDAQ stock market, adoption of the tightening
bias by the Federal Reserve Committee, subsequent back to back Fed-rate hikes,
and the dramatic rise in the price of oil all played a role in creating
highlighted fear of inflationary forces and the subsequent high market
volatility.
INVESTMENT OUTLOOK: We continue to believe that the long-term prospects for U.S.
equity markets, specifically the technology and telecommunication sectors,
remain quite strong. As previously noted in prior shareholder letters, nearly
all of the macro-economic trends such as the Federal budget surpluses, labor
productivity enhancements, etc., are alive and well.
Additionally, the most recent economic data, such as housing starts, auto and
truck sales, and same store retail sales seem to suggest that the Federal
Reserve may have been successful in slowing the economy down just enough to
subside the inflationary forces, and any further interest rate hikes are
unlikely. We believe that the interest rate environment should improve going
forward which, in turn, bodes well for company valuations and earnings.
We appreciate having you as a shareholder and look forward to being a part of
your investment program for a long time to come.
Sincerely,
/s/ Robert A. Dowlett
Robert A. Dowlett
Portfolio Manager
<PAGE>
COMPARISON OF CHANGES IN VALUE OF $10,000 SINCE INCEPTION
MILLENNIUM GROWTH
DATE FUND S&P
----- ---- ---
6/97 10000 10000
9/97 10040 10114
12/97 8940 10361
3/98 10730 11763
6/98 11780 12106
9/98 10590 10858
12/98 16407 13124
3/99 19255 13734
6/99 19553 14656
9/99 17360 13695
12/99 33404 15687
3/00 35739 16000
6/00 30373 15530
MILLENNIUM GROWTH & INCOME
DATE FUND S&P
---- ---- ---
6/98 10000 10005
9/98 9360 8974
12/98 12633 10847
3/99 14527 11351
6/99 14079 12113
9/99 13010 11319
12/99 24916 12965
3/00 25617 13224
6/00 22109 12836
AVERAGE ANNUAL TOTAL RETURN
MILLENNIUM GROWTH MILLENNIUM GROWTH & INCOME
----------------- --------------------------
1 Year 55.34% 57.04%
Since Inception 45.52% 48.21%
Past performance is not predictive of future performance.
<PAGE>
Millennium Funds, Inc.
----------------------
GROWTH FUND
SCHEDULE OF INVESTMENTS
June 30, 2000
<TABLE>
<CAPTION>
SHARES MARKET VALUE
------ ------------
COMMON STOCKS - 92.75%
APPLICATIONS SOFTWARE - 1.08%
<C> <S> <C>
6,500 + Clarus Corp. ................................... $ 251,875
-------------
CIRCUITS - 2.32%
10,000 + Intersil Holding Corp. ......................... 540,625
-------------
COMPUTER DATA SECURITY - 3.78%
5,000 + Verisign, Inc. ................................. 881,719
-------------
COMPUTER MEMORY DEVICES - 3.70%
200 + Storagenetworks, Inc. .......................... 17,675
7,500 + Veritas Software Corp. ......................... 847,617
-------------
865,292
-------------
COMPUTER SOFTWARE - 1.75%
10,000 + Aspen Technology, Inc. ......................... 385,000
500 + Numerical Technology ........................... 24,187
-------------
409,187
-------------
DATA PROCESSING/MANAGEMENT - 3.12%
7,000 + i2 Technologies, Inc. .......................... 729,969
-------------
ELECTRONIC COMPONENTS-SEMI CONDUCTORS - 17.28%
4,000 + Conexant Systems, Inc. ......................... 194,875
12,000 + PMC Sierra, Inc. ............................... 2,131,875
42,500 + Ramtron International Corp. .................... 834,063
10,000 + RF Micro Devices, Inc. ......................... 875,625
-------------
4,036,438
-------------
FIBER OPTICS - .14%
400 + New Focus, Inc. ................................ 33,000
-------------
INTERNET CONTENT - 5.27%
1 + At Home Corp Ser A ............................. 11
18,600 + BEA Systems, Inc. .............................. 918,956
7,600 + PurchasePro.com, Inc. .......................... 311,600
-------------
1,230,567
-------------
INTERNET SOFTWARE - 18.65%
5,000 + Ariba, Inc. .................................... 490,312
15,000 + Broadvision, Inc. .............................. 760,781
10,000 + Commerce One, Inc. ............................. 454,687
18,000 + Exodus Communications, Inc. .................... 829,688
The accompanying note are an integral part of these financial statements.
Page 1
<PAGE>
Millennium Funds, Inc.
----------------------
GROWTH FUND
SCHEDULE OF INVESTMENTS
June 30, 2000
SHARES MARKET VALUE
------ ------------
INTERNET SOFTWARE - 18.65% (continued)
4,000 + Phone.com, Inc. ................................ $ 260,875
30,000 + Vignette Corp. ................................. 1,560,938
-------------
4,357,281
-------------
LASER SYSTEMS/COMPONENTS - 20.52%
40,000 + JDS Uniphase Corp. ............................. 4,793,750
-------------
NETWORKING PRODUCTS - 15.14%
500 + Ancor Communications, Inc. ..................... 17,891
20,000 + Emulex Corp. ................................... 1,313,125
20,000 + Foundry Networks, Inc. ......................... 2,206,250
-------------
3,537,266
-------------
TOTAL COMMON STOCKS
(Cost $17,979,934) ............................... 21,666,969
-------------
PRINCIPAL
AMOUNT
------
SHORT TERM INVESTMENTS - 7.53%
$1,758,020 Euro Dollar Overnight Deposit, 6.563%, 7/3/00
(Cost $1,758,020) .............................. $ 1,758,020
-------------
Total Investments at Market
(Cost $19,737,954) ............... 100.28% 23,424,989
Liabilities less Other Assets .... (0.28)% (64,214)
---------------------------
Total Net Assets ................. 100.00% $23,360,775
===========================
<FN>
(1) Federal Tax Information: At June 30, 2000 the net unrealized appreciation
based on cost for Federal Income tax purposes of $19,737,954 was as
follows:
Aggregate gross unrealized appreciation for all
investments for which there was an excess of
value over cost. ............................ $ 7,754,139
Aggregate gross unrealized depreciation for all
investments for which there was an excess of
cost over value. ............................ (4,067,104)
-------------
Net unrealized appreciation .............. $ 3,687,035
=============
+ Denotes non-income producing security
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 2
<PAGE>
Millennium Funds, Inc.
GROWTH & Income Fund
SCHEDULE OF INVESTMENTS
June 30, 2000
<TABLE>
<CAPTION>
SHARES MARKET VALUE
------ ------------
COMMON STOCKS - 92.69%
COMPUTER DATA SECURITY - 5.38%
<C> <S> <C>
5,000 + Verisign, Inc. .................................$ 881,719
-------------
COMPUTER SOFTWARE - 2.35%
10,000 + Aspen Technology, Inc. ......................... 386,250
-------------
ELECTRONIC COMPONENTS-SEMI CONDUCTORS - 17.27%
5,000 + Cree, Inc. ..................................... 668,437
2,500 + Metalink Ltd. .................................. 74,063
6,000 + Novellus Systems, Inc. ......................... 339,563
8,000 + PMC Sierra, Inc. ............................... 1,421,250
5,000 + QLogic Corp. ................................... 330,781
-------------
2,834,094
-------------
FIBER OPTICS - 8.63%
8,500 + Ciena Corp. .................................... 1,416,578
-------------
INTERNET CONTENT - 7.36%
18,600 + BEA Systems, Inc. .............................. 918,956
7,800 + Internet Capital Group, Inc. ................... 288,113
-------------
1,207,069
-------------
INTERNET SOFTWARE - 21.41%
5,000 + Ariba, Inc. .................................... 490,313
15,000 + Broadvision, Inc. .............................. 760,781
20,000 + Exodus Communication, Inc. ..................... 921,875
3,800 + Phone.com, Inc. ................................ 247,831
21,000 + Vignette Corp. ................................. 1,092,656
-------------
3,513,456
-------------
MEDICAL-BIOMEDICAL/GENE - 2.36%
6,000 + Biogen, Inc. ................................... 386,812
-------------
NETWORKING PRODUCTS - 20.87%
1,000 + Ancor Communications, Inc. ..................... 35,781
18,000 + Emulex Corp. ................................... 1,181,813
20,000 + Foundry Networks, Inc. ......................... 2,206,250
-------------
3,423,844
-------------
TELECOMMUNICATION EQUIPMENT - 7.06%
23,200 Nokia Sponsored ADR .............................. 1,158,550
-------------
TOTAL COMMON STOCKS
(Cost $11,356,801) .............................. 15,208,372
-------------
The accompanying notes are an integral part of these financial statements.
Page 3
<PAGE>
Millennium Funds, Inc.
----------------------
GROWTH & Income Fund
SCHEDULE OF INVESTMENTS
June 30, 2000
PRINCIPAL
AMOUNT MARKET VALUE
------ ------------
SHORT TERM INVESTMENTS - 7.04%
$1,154,506 Euro Dollar Overnight Deposit, 6.563%, 7/3/00
(Cost $1,154,506) ................................ $ 1,154,506
------------
Total Investments at Market
(Cost $12,511,307) ................ 99.73% 16,362,878
Other Assets less Liabilities ..... 0.27% 44,255
-----------------------------
Total Net Assets .................. 100.00% $16,407,133
=============================
(1) Federal Tax Information: At June 30, 2000 the net unrealized appreciation
based on cost for Federal Income tax purposes of $12,462,470 was as
follows:
Aggregate gross unrealized appreciation for all
investments for which there was an excess of
value over cost. ..................................... $ 4,919,000
Aggregate gross unrealized depreciation for all
investments for which there was an excess of
cost over value. ..................................... (1,018,592)
-------------
Net unrealized appreciation ......................... $ 3,900,408
=============
<FN>
+ Denotes non-income producing security.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4
<PAGE>
<TABLE>
<CAPTION>
Millennium Funds, Inc.
----------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
GROWTH &
GROWTH INCOME
------ ------
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $19,737,954 and $12,511,307,
respectively) (Note 2) ........... $23,424,989 $16,362,878
Receivable for fund shares sold .......... 25,374 35,000
Interest receivable ...................... 320 211
Other assets ............................. 31,435 39,821
----------- -----------
Total Assets ..................... 23,482,118 16,437,910
----------- -----------
LIABILITIES:
Payables:
Advisory fees (Note 4) ........... $ 704 $ 3,876
Securities purchased ............. 5,400 0
Fund shares redeemed ............. 83,925 0
Other liabilities ........................ 31,314 26,901
----------- -----------
Total Liabilities ................ 121,343 30,777
----------- -----------
Net Assets ....................... $23,360,775 $16,407,133
=========== ===========
NET ASSETS CONSIST OF:
Additional paid in capital ....... $18,637,916 $10,054,249
Accumulated net realized gain from
investment transactions .. 1,035,824 2,501,313
Net unrealized appreciation on
investments .............. 3,687,035 3,851,571
----------- -----------
Net Assets ....................... $23,360,775 $16,407,133
=========== ===========
Net asset value and redemption
price per share
($23,360,775/1,189,342 and $16,407,133/946,534
shares of capital stock outstanding, respectively)
(Note 5) ......................... $ 19.64 $ 17.33
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 5
<PAGE>
<TABLE>
<CAPTION>
Millennium Funds, Inc.
----------------------
STATEMENT OF OPERATIONS
For the year ended June 30, 2000
GROWTH &
GROWTH INCOME
------ ------
INVESTMENT INCOME:
<S> <C> <C>
Interest ......................................... $ 66,615 $ 49,289
Dividend ......................................... 540 11,332
----------- -----------
67,155 60,621
----------- -----------
Expenses:
Advisory fee ..................................... 160,499 127,715
Administration fee ............................... 63,608 48,421
Shareholder reporting fee ........................ 8,800 9,373
Amortization of organizational cost .............. 7,016 8,561
Custody fee ...................................... 4,991 4,261
Trustee fee ...................................... 1,300 1,300
Professional fees ................................ 5,220 15,543
Interest ......................................... 24,455 28,384
Insurance ........................................ 681 681
Registration ..................................... 22,855 21,000
Other ............................................ 9,214 9,562
----------- -----------
Total expenses ................... 308,639 274,801
Less: Reimbursed expenses (Note 4) (63,667) (79,868)
----------- -----------
Net expenses ..................... 244,972 194,933
----------- -----------
Net investment loss .............. (177,817) (134,312)
----------- -----------
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS:
(Note 2)
Net realized gain from investment
transactions ............................. 1,502,150 2,346,710
Net change in unrealized appreciation of
investments .............................. 2,539,210 3,108,467
----------- -----------
Net realized and unrealized gain
on investments ........................... 4,041,360 5,455,177
----------- -----------
Net increase in net assets resulting
from operations .......................... $ 3,863,543 $ 5,320,865
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 6
<PAGE>
<TABLE>
<CAPTION>
Millennium Funds, Inc.
----------------------
GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
For the year For the year
ended ended
June 30, 2000 June 30, 1999
------------- -------------
INCREASE (DECREASE) FROM OPERATIONS:
<S> <C> <C>
Net investment loss ........................ $ (177,817) $ (54,944)
Net realized gain from investment
transactions ....................... 1,502,150 4,715,622
Net change in unrealized appreciation
(depreciation) of investments ...... 2,539,210 (933,366)
------------ ------------
Net increase in net assets resulting
from operations .................... 3,863,543 3,727,312
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain
on investments ..................... (3,094,480) (1,185,913)
Net capital share transactions (Note 5) .... 14,132,955 (3,951,372)
------------ ------------
Net increase (decrease) in net assets ...... 14,902,018 (1,409,973)
NET ASSETS:
Beginning of year .......................... 8,458,757 9,868,730
------------ ------------
End of year ................................ $ 23,360,775 $ 8,458,757
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 7
<TABLE>
<CAPTION>
Millennium Funds, Inc.
----------------------
GROWTH & INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
For the year For the year
ended ended
June 30, 2000 June 30, 1999
------------- -------------
INCREASE (DECREASE) FROM OPERATIONS:
<S> <C> <C>
Net investment loss ......................... $ (134,312) $ (35,473)
Net realized gain from investment
transactions ........................ 2,346,710 1,962,686
Net change in unrealized appreciation
of investments ...................... 3,108,467 743,104
------------ -----------
Net increase in net assets resulting
from operations ..................... 5,320,865 2,670,317
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain
on investments ...................... (2,374,488) (154,495)
Net capital share transactions (Note 5) ..... 4,679,394 5,093,875
------------ -----------
Net increase in net assets .................. 7,625,771 7,609,697
NET ASSETS:
Beginning of year ........................... 8,781,362 1,171,665
------------ -----------
End of year ................................. $ 16,407,133 $ 8,781,362
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 8
<PAGE>
<TABLE>
<CAPTION>
Millennium Funds, Inc.
----------------------
GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout the period)
For the For the For the
year ended year ended period ended
June 30, June 30, June 30,
2000 1999 1998**
---- ---- ----
<S> <C> <C> <C>
Net asset value, beginning of period ..... $ 16.41 $ 11.78 $ 10.00
Income from investment operations
Net investment income (loss) ............. (0.15) (0.15) (0.07)
Net realized and unrealized gain
on investments ................... 8.03 7.50 1.85
--------- ---------- ----------
Total from investment operations ......... 7.88 7.35 1.78
--------- ---------- ----------
Less distributions
Dividends from net investment income ..... 0.00 0.00 0.00
Distributions from realized gains from
security transactions ............ (4.65) (2.72) 0.00
--------- ---------- ----------
Total distributions ...................... (4.65) (2.72) 0.00
--------- ---------- ----------
Net asset value, end of period ........... $ 19.64 $ 16.41 $ 11.78
========== ========= =========
Total return ............................. 55.34% 65.99% 17.80%
Ratios/supplemental data
Net assets, end of period (in 000's) ..... $ 23,361 $ 8,459 $ 9,869
Ratio of expenses to average
net assets ............................. 1.45% 1.45% 1.45%*
Ratio of expenses to average
net assets, before reimbursement ....... 1.82% 3.46% 2.48%*
Ratio of net investment income (loss) to
average net assets ..................... (1.05%) (0.85%) (0.87%)*
Ratio of net investment income (loss) to
average net assets, before reimbursement (1.42%) (2.86%) (1.90%)*
Portfolio turnover rate .................. 104.75% 984.07% 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 9
<PAGE>
<TABLE>
<CAPTION>
Millennium Funds, Inc.
----------------------
GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout the period)
For the For the For the
year ended year ended period ended
June 30, June 30, June 30,
2000 1999 1998**
---- ---- ------
<S> <C> <C> <C>
Net asset value, beginning of period ..... $ 13.83 $ 10.00 $ 10.00
Income from investment operations
Net investment income (loss) ............. (0.14) (0.06) 0.00
Net realized and unrealized gain
on investment .................... 7.19 4.12 0.00
---------- --------- ---------
Total from investment operations ......... 7.05 4.06 0.00
---------- --------- ---------
Less distributions
Dividends from net investment income ..... 0.00 0.00 0.00
Distributions from realized gains from
security transactions ............ (3.55) (0.23) 0.00
---------- --------- ---------
Total distributions ...................... (3.55) (0.23) 0.00
---------- --------- ---------
Net asset value, end of period ........... $ 17.33 $ 13.83 $ 10.00
========== ========== ===========
Total return ............................. 57.04% 40.79% 0.00%
Ratios/supplemental data
Net assets, end of period (in 000's) ..... $ 16,407 $ 8,781 $ 1,172
Ratio of expenses to average
net assets ....................... 1.45% 1.45% 1.45%*
Ratio of expenses to average
net assets, before reimbursement . 2.04% 2.24% 5.31%*
Ratio of net investment income (loss) to
average net assets ............... (1.00%) (0.47%) (1.45%)*
Ratio of net investment income (loss) to
average net assets, before reimbursem (1.59%) (1.26%) (5.31%)*
Portfolio turnover rate .................. 128.41% 578.98% 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 10
<PAGE>
Millennium Funds, Inc.
----------------------
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
1. ORGANIZATION:
The Millennium Growth Fund (the "Growth Fund") and the Millennium Growth &
Income Fund (the "Growth & Income Fund"), formerly the Millennium RHIM Funds,
Inc., are registered as non-diversified open-end management investment companies
under the Investment Company Act of 1940. 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 in the
United States.
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 b y 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 & 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.
Page 11
<PAGE>
Millennium Funds, Inc.
----------------------
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
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.
3. INVESTMENT TRANSACTIONS:
Investment transactions, excluding short-term investments, for the year ended
June 30, 2000 were as follows:
GROWTH FUND:
Purchases ............. $25,822,332
Sales ................. $16,314,912
GROWTH & INCOME FUND:
Purchases ............. $17,693,026
Sales ................. $15,770,612
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, until October 31,
2000. Beginning July 1, 2000, any interest expense incurred by the Funds will
not be subject to reimbursement. Any reductions made by the Advisor in its fees
and expenses it reimburses may be subject to recapture by the Funds, if the
recapture is approved by the Funds' Board of Directors and the Funds are able to
effect such recapture and comply with any expense limitations in effect at that
time. For the year ended June 30, 2000 the Advisor has reimbursed the Growth
Fund in the amount of $63,667, and the Growth & Income Fund $79,868. Cumulative
reimbursed expenses subject to recapture by the Advisor for the Growth Fund and
Growth & Income Fund amounted to $263,891 and $140,725, respectively, at June
30, 2000.
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.
Page 12
<PAGE>
Millennium Funds, Inc.
----------------------
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
5. FUND SHARE TRANSACTIONS:
At June 30, 2000, there were an unlimited number of shares authorized with no
par value.
GROWTH FUND:
For the For the
year ended year ended
June 30, 2000 June 30, 1999
------------- -------------
Shares Value Shares Value
------ ----- ------ -----
Shares sold ........... 1,099,777 $23,475,701 305,890 $4,051,925
Dividend reinvestment.. 197,725 3,086,485 82,778 1,175,453
Shares repurchased .... (623,760) (12,429,231) (710,693) (9,178,750)
--------- ----------- ------- ----------
673,742 $14,132,955 (322,025) ($3,951,372)
========= =========== ======= ==========
GROWTH & INCOME FUND:
For the For the
year ended year ended
June 30, 2000 June 30, 1999
------------- -------------
Shares Value Shares Value
------ ----- ------ -----
Shares sold .......... 501,743 $8,644,345 613,143 $6,279,910
Dividend reinvestment.. 169,199 2,372,168 12,098 154,495
Shares repurchased ... (359,304) (6,337,119) (107,512) (1,340,530)
--------- ----------- ------- ----------
311,638 $4,679,394 517,729 $5,093,875
========= =========== ======= ==========
Page 13
<PAGE>
Millennium Funds, Inc.
----------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of the Millennium Funds, Inc.
In our opinion, the accompanying statements of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Millennium Growth Fund and the
Millennium Growth and Income Fund, each a series of the Millennium Funds, Inc.
(formerly Millennium RHIM Funds, Inc.) at June 30, 2000, the results of their
operations, the changes in each of their net assets and the financial highlights
for the year then ended in conformity with accounting principles generally
accepted in the United States. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at June 30,
2000 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above. The financial statements for the year
ended June 30, 1999, including the financial highlights for the periods prior to
June 30, 2000, were audited by other independent accountants whose report dated
July 30, 1999 expressed an unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
New York, New York
August 4, 2000
Page 14
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Millennium Funds, Inc.
----------------------
CHANGE IN INDEPENDENT ACCOUNTANT
On September 23, 1999, McGladrey & Pullen, LLP ("McGladrey") resigned as
independent auditors of the Fund pursuant to an agreement by
PricewaterhouseCoopers LLP ("PwC") to acquire McGladrey's investment company
practice. The McGladrey partners and professionals serving the Fund at the time
of the acquisition joined PwC.
The reports of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope or accounting
principles.
In connection with its audits for the two most recent fiscal years and through
September 23, 1999, there were no disagreements with McGladrey on any matter of
accounting principle or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
McGladrey would have caused it to make reference to the subject matter of
disagreement in connection with its report.
On May 16, 2000 the Fund, with the approval of its Board of Directors and its
Audit Committee, engaged PwC as its independent auditors.
Page 15
<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
Union Bank of California
475 Sansome Street
San Francisco, CA 94145
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.
