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STOCKCAR STOCKS(SM)
INDEX FUND
www.stockcarstocks.com
INVEST IN THE COMPANIES
THAT INVEST IN YOUR SPORT(SM)
SEMI-
ANNUAL
REPORT
MARCH 31,
2000
<PAGE>
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STOCKCAR STOCKS(SM)
INDEX FUND
Dear StockCar Stocks shareholders:
StockCar Stocks Index Fund currently includes 56 companies that sponsor
or derive revenues from NASCAR Winston Cup Series racing and the past
six months were very significant for the "Business of Nascar racing."
[ID: PHOTO WITH CAPTION]
From left to right: Kim Torrence-Fund Secretary, John Allen-Fund President,
Bob Carter-Portfolio Manager
TELEVISION BROADCASTERS
-----------------------------------------------------------------------------
Over the past decade, NASCAR races have become one of the most-watched
televised professional sports events in the country. A monumental event
in the 52-year history of the sport occurred on November 11, 1999.
NASCAR signed a six-year, $2.6 billion TV contract and joined the ranks
of America's elite professional spectator sports -- Major League
Baseball, the National Basketball Association and the National Football
League.
For long-time NASCAR fans who might list North Wilksboro as one of
his/her favorite tracks -- or who actually watched the original live
broadcast of the 1979 Daytona 500 on CBS -- the announcement that CBS,
ESPN, ABC and TNN would no longer be broadcasting races might be a
little bittersweet.
The current NASCAR television contract which expires at the end of the
year -- negotiated by individual track owners -- bounces from network to
network each week, making it difficult for many viewers to find the
race, especially if they don't have cable/satellite service.
2
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The new 2001 television package was collectively negotiated by NASCAR,
and will divide the season in half. Fox will cover the first half, and
the second half will be primarily on NBC. This is expected to build
more momentum and viewer continuity -- and most importantly -- more
in-depth coverage of the sport. In addition, over 60% of the Winston
Cup races will be on network television rather than on cable networks.
This should help increase viewers and provide sponsors with a
potentially larger television audience.
[ID: PHOTO]
From a fan perspective, the new contract should enable networks to
invest in new technologies and produce a more in-depth broadcast than is
currently provided. A great comparison is the in-depth, week to week
radio coverage of Nascar races on PRN or MRN radio. Other examples of
the importance of broadcast continuity are the weekly radio talk show
"Fast Talk with Benny Parsons," or the weekly TNN show "Inside Nascar
Winston Cup with Ned Jarrett." If these radio or TV shows aired only
once a month, or once every other month, there would be little
opportunity to create a strong audience following.
On the economic front, the new NASCAR television contract allocates
65 percent of the $2.6 billion TV contract revenue to the track owners,
NASCAR will receive 10 percent of the revenue and the race purses will
receive 25 percent.
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3
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WHAT DOES THIS MEAN TO STOCKCAR STOCKS INDEX FUND?
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StockCar Stocks owns shares of International Speedway Corporation (which
includes Daytona, Talladega, Miami and California), Speedway Motorsports
(which includes Charlotte, Bristol and Texas) and Dover Downs (Dover).
The individual track owners will receive approximately $1.7 billion over
the next six years. This will have a major impact on the financial
foundation of the sport and provide the necessary capital for the
continued expansion.
Wall Street money helped finance the construction of Texas Motor
Speedway, California Speedway, the addition of lights to Daytona and
Charlotte, as well as the expansion and modernization of the current
tracks such as Bristol. The new TV revenue will be part of the
underwriting for the construction of the new Kansas City and Chicago
speedways, as well as the proposed speedway in the New York City area.
Included in this report is a schedule of the portfolio holdings --
organized by industry -- with their quarter-end portfolio weightings.
A few of the largest fund holdings include General Motors Corp., Time
Warner, Inc., Home Depot, General Electric and Pfizer, Inc. Each of
these companies represents more than 2 percent of portfolio assets.
Most companies in the fund account for around 1.5 percent of assets.
Included among these are Anheuser-Busch, duPont, Exxon-Mobil, Eastman
Kodak, International Speedway Corp., Kellogg Co., McDonald's and Texaco,
Inc.
Included among smaller-weighted companies which account for
approximately one percent of the fund's investment are: Mattel, Federal
Mogul and Procter & Gamble.
4
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[ID: PHOTO]
STOCKCAR STOCKS PERFORMANCE UPDATE
-----------------------------------------------------------------------------
Your share performance is impacted by the fluctuating stock price of the
56 companies included in the fund. Accordingly, the larger-weighted
stocks will impact the portfolio more than some of the smaller-weighted
stocks.
Also impacting the performance of StockCar Stocks is the overall
performance of the different sectors of the U.S. economy.
Interestingly, during 2000's first quarter, the utility industry was the
best-performing in the stock market -- up an average of seven percent
for the quarter. This is not what one would expect in the "new
economy."
However, it does reinforce the validity of a diversified portfolio.
StockCar Stocks Index Fund currently invests in the majority of the
industries of the U.S. economy. The diversification will change during
the year as the better-performing industries will account for a larger
portion of the fund's performance and, conversely, the weights of under-
performing sectors will shrink.
Those of you that have invested in the fund since inception in Oct. 1,
1998 (Direct Share Class) are now seeing many of the same companies
listed in each shareholder mailing. As the fund employs a long-term
buy-and-hold strategy for these companies, we believe this core list of
companies will continue in the future, with a few additions and
deletions along the way as outlined in the prospectus.
5
<PAGE>
While many of us have watched as one "dot com" company after another
went public and doubled on its first day, it seems that the stock market
may finally have returned to normalcy and investors are returning to
fundamental analysis of earnings, financial stability and growth
potential. As you continue to make investment decisions in the future,
the words of the legendary investor Ben Graham, author of the 1949 book
entitled The Intelligent Investor, are as timely now, as they were then.
"In the short-term, the stock market is a voting machine reflecting
a voter registration test that requires only money, not intelligence
or emotional stability, but in the long-run, the market is a
weighing machine."
-Ben Graham, 1949
Sincerely,
/s/ JOHN P. ALLEN, II
John P. Allen, II
President
StockCar Stocks Mutual Fund, Inc.
Please call 1.87.RACE.FUND or visit our website at
www.stockcarstocks.com for a free prospectus, which includes information
on all fees and expenses. Read the prospectus carefully before
investing or sending money. There are special risks associated with
investing in an index fund. StockCar Stocks Index Fund is composed of
only 56 companies, there is potential company turnover, possible
addition of companies in the index which may not have a long operating
history and the risks inherent in the stock car auto racing industry.
These factors may affect the value of your investment. Total return and
principal value will vary so those shares when redeemed, may be worth
more or less than their original value. Past performance is no
guarantee of future results. The Fund offers multiple classes of shares
for which performance will differ. StockCar Stocks Index Fund Direct
Shares were launched October 1, 1998. StockCar Stocks Advisor Share
were launched August 2, 1999. The Fund is distributed by Declaration
Distributors, Inc., Conshohocken, PA. NASCAR is a registered trademark
of the National Association of Stock Car Auto Racing.
6
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STOCKCAR STOCKS(SM)
INDEX FUND
SEMI-ANNUAL REPORT
SCHEDULE OF INVESTMENTS
March 31, 2000 (Unaudited)
-----------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCK -- 96.65%
AGRICULTURAL -- 3.50%
Philip Morris Co., Inc. (Miller Lite) 4,000 $ 84,500
R.J. Reynolds Tobacco Holdings, Inc. 5,650 96,050
----------
180,550
----------
AUTOMOBILE MANUFACTURERS -- 4.06%
Ford Motor Co. 1,900 87,281
General Motors Corp. 1,475 122,148
----------
209,429
----------
AUTOMOBILE PARTS & EQUIPMENT -- 5.30%
Exide Corp. 11,250 132,891
Federal Mogul Corp. 2,500 41,719
Genuine Parts Co. (NAPA) 4,150 99,081
----------
273,691
----------
BROADCASTING -- 7.88%
CBS Corp.* 1,800 101,925
The Walt Disney Co. (ESPN, ABC) 3,500 144,812
Time Warner, Inc. (TBS, Cartoon Network) 1,600 160,000
----------
406,737
----------
BUILDING -- 1.44%
Oakwood Homes Corp. 19,500 74,344
----------
CHEMICALS -- 1.64%
DuPont de Nemours & Co. 1,600 84,600
----------
See notes to financial statements.
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STOCKCAR STOCKS(SM)
INDEX FUND
NUMBER OF MARKET
SHARES VALUE
--------- ------
DIVERSIFIED CONGLOMERATES -- 2.10%
General Electric Co. (NBC) 700 $ 108,631
----------
ENTERTAINMENT & LEISURE -- 7.97%
Action Performance* 5,000 66,563
Dover Downs Entertainment, Inc. 5,000 63,750
International Speedway Corp. CL A 1,900 85,381
Mattel, Inc. 5,250 54,797
Racing Champions Corp.* 12,750 48,609
Speedway Motorsports, Inc.* 3,700 92,269
----------
411,369
----------
FINANCIAL SERVICES -- 5.15%
Amex S&P Depository 300 45,169
Associates First Capital Corp. 2,500 53,594
Conseco, Inc. 5,900 67,481
MBNA Corp. 3,900 99,450
----------
265,694
----------
FOOD & BEVERAGE -- 14.35%
Adolph Coors Co. 1,950 93,234
Anheuser-Busch Companies, Inc. 1,475 91,819
Coca-Cola Co. 1,850 86,834
General Mills, Inc. (Cheerios) 2,750 99,516
Kellogg Co. 3,225 82,641
Kroger Co. 5,000 87,812
PepsiCo, Inc. 2,900 100,231
Quaker Oats Co. (Gatorade) 1,625 98,516
----------
740,603
----------
INTERNET SERVICES - 1.42%
Go.com* 3,500 73,063
----------
See notes to financial statements.
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STOCKCAR STOCKS(SM)
INDEX FUND
NUMBER OF MARKET
SHARES VALUE
--------- ------
MACHINERY, GENERAL INDUSTRIAL -- 4.32%
Caterpillar, Inc. 2,025 $ 79,861
Deere & Co. 2,450 93,100
Nationsrent, Inc.* 9,500 49,875
----------
222,836
----------
MINING & BUILDING MATERIALS -- 0.10%
Arch Coal, Inc. 763 5,340
----------
OIL & GAS -- 11.91%
Ashland, Inc. (Valvoline) 3,100 103,656
BP Amoco PLC ADR 1,750 92,859
Exxon Mobil Corp. 1,300 101,156
Pennzoil - Quaker State Co. 9,800 102,288
Texaco Inc. 1,850 99,206
Tosco Corp. (Unocal 76) 3,800 115,663
Tosco Corp. rights exp. 12/6/08 * 325 --
----------
614,828
----------
PERSONAL & HOUSEHOLD PRODUCTS -- 4.64%
Block Drug, Inc. (Goody's Headache Powder) 65 1,792
Pfizer, Inc. 3,150 115,172
Procter & Gamble Co. (Tide) 1,025 57,656
The Clorox Co. (STP) 2,000 65,000
----------
239,620
----------
PHOTOGRAPHY EQUIPMENT -- 1.47%
Eastman Kodak Co. 1,400 76,038
----------
RESTAURANT - RETAIL -- 3.74%
CBRL Group, Inc. (Cracker Barrel) 9,750 97,500
McDonald's Corp. 2,550 95,784
----------
193,284
----------
See notes to financial statements.
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STOCKCAR STOCKS(SM)
INDEX FUND
NUMBER OF MARKET
SHARES VALUE
--------- ------
RETAIL STORES -- 8.12%
Home Depot, (The) Inc. 1,650 $ 106,425
K-Mart Corp.* 10,300 99,781
Lowe's Cos., Inc. 1,850 107,994
Sears, Roebuck & Co. (Die Hard) 3,400 104,975
----------
419,175
----------
TELECOMMUNICATIONS -- 3.67%
BellSouth Corp. 2,200 103,400
Global Crossing Ltd.* 2,100 85,969
----------
189,369
----------
TIRE & RUBBER -- 1.51%
Goodyear Tire & Rubber 3,350 78,097
----------
UTILITIES -- 2.36%
Peco Energy Co. (Power Team) 3,300 121,687
----------
TOTAL COMMON STOCK (Cost $5,618,730) 4,988,985
----------
SHORT-TERM INVESTMENTS - 3.16%
Evergreen Money Market Trust CL Y (Cost $163,159) 163,159 163,159
----------
TOTAL INVESTMENTS (Cost $5,781,889) 5,152,144
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.19% 10,001
----------
NET ASSETS - 100.00% $5,162,145
==========
*Non-income producing investment.
ADR - American Depository Receipt
See notes to financial statements.
10
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STOCKCAR STOCKS(SM)
INDEX FUND
SEMI-ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000 (Unaudited)
-----------------------------------------------------------------------------
ASSETS:
Investments, at market (cost $5,781,889) (note 1) $5,152,144
Receivables:
Dividends and interest 12,585
Fund shares sold 11,520
----------
Total assets 5,176,249
==========
LIABILITIES:
Payables:
Fund shares redeemed 10,079
Due to Advisor 2,809
Distribution fees payable 1,060
Other liabilities 156
----------
Total liabilities 14,104
----------
NET ASSETS $5,162,145
==========
NET ASSETS CONSIST OF:
Common stock $ 30
Paid-in capital 5,513,610
Undistributed net investment income 13,211
Accumulated realized gain on investments 265,039
Net unrealized loss on investments (629,745)
----------
Total Net Assets $5,162,145
==========
NO-LOAD DIRECT CLASS SHARES:
Net Assets (Unlimited shares of $0.0001 par value
authorized; 279,969 shares outstanding) (note 2) $4,873,200
==========
Net Asset Value, offering and redemption price per share $ 17.41
==========
ADVISOR CLASS SHARES:
Net Assets (Unlimited shares of $0.0001 par value
authorized; 21,999 shares outstanding) (note 2) $ 288,945
==========
Net Asset Value and redemption price per share $ 13.13
==========
Offering price per share Advisor class ($13.13/.9600) $ 13.68
==========
See notes to financial statements.
11
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STOCKCAR STOCKS(SM)
INDEX FUND
SEMI-ANNUAL REPORT
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 2000 (Unaudited)
-----------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 7,017
Dividends 47,371
---------
Total investment income 54,388
---------
EXPENSES:
Investment advisory fees 13,050
Administration fee 17,226
12b-1 fees -- No-load class 6,188
12b-1 fees -- Advisor class 337
---------
Total expenses 36,801
---------
Net investment income 17,587
---------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain on investments 265,051
Change in net unrealized depreciation on investments (395,768)
---------
(130,717)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(113,130)
=========
See notes to financial statements.
12
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STOCKCAR STOCKS(SM)
INDEX FUND
SEMI-ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------------------------------------------------
FOR THE SIX MONTHS
ENDED FOR THE YEAR
MARCH 31, 2000 ENDED
(UNAUDITED) SEPTEMBER 30, 1999
------------------ ------------------
OPERATIONS:
Net investment income $ 17,587 $ 6,551
Net realized gain on investments 265,051 19,772
Change in net unrealized depreciation
on investments (395,768) (233,977)
---------- ----------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS (113,130) (207,654)
---------- ----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (10,927) --
Net realized gain on investments (19,784) --
---------- ----------
Net decrease from dividends
and distributions (30,711) --
---------- ----------
Net increase from capital share
transactions (note 2) 446,000 4,967,640
---------- ----------
Net increase in net assets 302,159 4,759,986
NET ASSETS:
Beginning of period 4,859,986 100,000
---------- ----------
End of period** $5,162,145 $4,859,986
========== ==========
**Including undistributed net investment income of $13,211 and $6,551,
respectively.
See notes to financial statements.
13
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<TABLE>
<CAPTION>
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STOCKCAR STOCKS(SM)
INDEX FUND
SEMI-ANNUAL REPORT
FINANCIAL HIGHLIGHTS
Per Share Data (For a Share Outstanding Throughout Each Period)
----------------------------------------------------------------------------------------------------------
NO-LOAD DIRECT CLASS ADVISOR CLASS
-------------------------------------- ---------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED FOR THE YEAR ENDED FOR THE PERIOD
MARCH 31, 2000 ENDED MARCH 31, 2000 ENDED
(UNAUDITED) SEPTEMBER 30, 1999 (UNAUDITED) SEPTEMBER 30, 1999*
------------------ ------------------ ------------------ -------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $17.84 $15.00 $13.49 $14.40
------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment income 0.06 0.02 0.04 0.01
Net realized and
unrealized gain/(loss)
on investments (0.38) 2.82 (0.29) (0.92)
------ ------ ------ ------
Total from investment
operations (0.32) 2.84 (0.25) (0.91)
------ ------ ------ ------
DISTRIBUTIONS:
Net investment income (0.04) -- (0.04) --
Net realized capital gains (0.07) -- (0.07) --
------ ------ ------ ------
Total distributions (0.11) -- (0.11) --
------ ------ ------ ------
NET ASSET VALUE, END
OF PERIOD $17.41 $17.84 $13.13 $13.49
====== ====== ====== ======
TOTAL RETURN (1.88%) 18.93% (1.91%) (6.32%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in 000's) $4,873 $4,652 $289 $208
Ratio of expenses to
average net assets(1) 1.41% 1.41% 1.41% 1.41%
Ratio of net investment
income to average
net assets(1) 0.67% 0.28% 0.70% 0.63%
Portfolio turnover rate 27.80% 6.60% 27.80% 6.60%
</TABLE>
(1) Annualized
* The StockCar Stocks Index Fund Advisor class shares commenced
operations on August 2, 1999.
See notes to financial statements.
14
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STOCKCAR STOCKS(SM)
INDEX FUND
SEMI-ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2000
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
StockCar Stocks Mutual Fund, Inc. (the "Company") was incorporated
under the laws of the state of Maryland on May 18, 1998, and consists
solely of StockCar Stocks Index Fund (the "Fund"). The Company is
registered as an open-end, diversified management investment company of
the series type under the Investment Company Act of 1940 (the "1940
Act"). The Company is registered to offer two classes of shares,
Advisor class and No Load Direct class. The Fund seeks growth of
capital and current income by investing in the companies of the StockCar
Stocks Index. The Fund became effective with the SEC on September 18,
1998 and commenced operations on October 1, 1998.
The costs incurred in connection with the organization, initial
registration and public offering of shares have been paid by StockCar
Stocks Advisors, LLC (the "Advisor"). Accordingly, no organization
costs have been recorded by the Fund.
The following is a summary of significant accounting policies
consistently followed by the Fund.
a) Investment Valuation -- Common stocks and other equity-type
securities listed on a securities exchange are valued at the last quoted
sales price on the day of the valuation. Price information on listed
stocks is taken from the exchange where the security is primarily
traded. Securities that are listed on an exchange but which are not
rated on the valuation date are valued at the most recent bid prices.
Other assets and securities for which no quotations are readily
available are valued at fair value as determined in good faith by the
Advisor under the supervision of the Board of Directors. Short-term
instruments (those with remaining maturities of 60 days or less) are
valued at amortized cost, which approximates market value.
b) Federal Income Taxes -- No provision for federal income taxes has been
made since the Fund has complied to date with the provision of the
Internal Revenue Code applicable to regulated investment companies and
intends to so comply in the future and to distribute substantially all
of its net investment income and realized capital gains in order to
relieve the Fund from all federal income taxes.
c) Distributions to Shareholders -- Dividends from net investment income
and distributions of net realized capital gains, if any, will be
declared and paid at least annually. Income and capital gain
distributions are determined in accordance with income tax regulations
that may differ from generally accepted accounting principles.
d) Use of 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.
e) Other -- Investment and shareholder transactions are recorded on
trade date. The Fund determines the gain or loss realized from the
investment transactions by comparing the original cost of the security
lot sold with the net sales proceeds. Dividend income is recognized on
the ex-dividend date or as soon as information is available to the Fund,
and interest income is recognized on an accrual basis.
15
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STOCKCAR STOCKS(SM)
INDEX FUND
SEMI-ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2000 (CONTINUED)
2. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund for the six months ended March 31,
2000 were as follows:
NO-LOAD DIRECT CLASS ADVISOR CLASS
-------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
Sold ............. 51,601 $919,035 7,615 $102,551
Reinvested ....... 1,529 28,108 161 2,235
Redeemed ......... (33,939) (590,602) (1,186) (15,327)
------- -------- ------ --------
Net Increase ..... 19,191 $356,541 6,590 $ 89,459
======= ======== ====== ========
Transactions in shares of the Fund for the year ended September 30, 1999
were as follows:
NO-LOAD DIRECT CLASS ADVISOR CLASS*
-------------------- -------------------
SHARES AMOUNT SHARES AMOUNT
Sold ............. 270,133 $5,025,170 15,842 $224,193
Redeemed ......... (16,022) (275,665) (433) (6,058)
------- ---------- ------ --------
Net Increase ..... 254,111 $4,749,505 15,409 $218,135
======= ========== ====== ========
*The Advisor Class commenced operations on August 2, 1999.
3. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investments, excluding short-term
investments, by the Fund for the six months ended March 31, 2000, were
as follows:
Purchases ......................... $1,824,516
Sales ............................. 1,386,048
At March 31, 2000, net unrealized depreciation of investments for tax
purposes was as follows:
Appreciation ...................... $ 326,763
Depreciation ...................... (956,508)
----------
Net depreciation on investments.... $ (629,745)
==========
At March 31, 2000, the cost of investments for federal income tax
purposes was $5,781,889.
16
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STOCKCAR STOCKS(SM)
INDEX FUND
SEMI-ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2000 (CONTINUED)
4. ADVISORY FEES AND OTHER RELATED PARTY TRANSACTIONS
The Fund has entered into an Advisory Agreement with the Advisor to
provide investment management services to the Fund. Pursuant to the
Advisory Agreement, the Advisor is entitled to receive a fee, calculated
daily and payable monthly at the annual rate of 0.50% as applied to the
Fund's daily net assets. For the six months ended March 31, 2000, the
Advisor received advisory fees of $13,050.
The Fund has entered into an Operating Services Agreement (the
"Servicing Agreement") with the Advisor to provide or arrange for
day-to-day operational services to the Fund. Pursuant to the Servicing
Agreement, the Advisor is entitled to receive a fee, calculated daily
and payable monthly at the annual rate of 0.66% as applied to the Fund's
daily net assets. Prior to May 26, 1999 the Advisor received a monthly
fee at an annual rate of 0.91%. For the six months ended March 31,
2000, the Advisor received service fees of $17,226.
The Fund and the Advisor have entered into an Investment Company
Services Agreement (the "ICSA") with Declaration Service Company to
provide day-to-day operational services to the Fund including, but not
limited to, accounting, administrative, transfer agent, dividend
disbursement, registrar and recordkeeping services.
The effect of the Advisory Agreement and the Servicing Agreement is to
place a "cap" on the Funds' normal operating expenses at 1.16%. The
only other expenses incurred by the fund are distribution fees,
brokerage fees, taxes, if any, legal fees relating to litigation, and
other extraordinary expenses.
The Fund and the Advisor have entered into a Distribution Agreement with
Declaration Distributors, Inc. to provide distribution services to the Fund.
Declaration Distributors, Inc. serves as underwriter/distributor of the Fund.
A separate plan of distribution has been adopted under Rule 12b-1 of the
Investment Company Act of 1940 for each class of shares. With respect
to all shares offered by the Fund, each plan provides that the Fund may
pay a servicing or Rule 12b-1 fee of 0.25% of the Fund's average net
assets on an annual basis to persons or institutions for performing
certain servicing functions for the Fund's shareholders. The
distribution plan also allows the Fund to pay or reimburse expenditures
in connection with sales and promotional services related to
distribution of the Fund's shares, including personal services provided
to prospective and existing shareholders. The distribution plans for
the Advisor class and the No-Load Direct class of shares took effect
July 1, 1999 and May 26, 1999, respectively.
Certain directors and officers of the Fund are directors and officers of
the Advisor; however, they receive no compensation from the Fund.
17
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STOCKCAR STOCKS(SM)
INDEX FUND
SEMI-ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2000 (CONTINUED)
5. SUBSEQUENT EVENT
Submission of Matters to a Vote of Shareholders
On March 1, 2000, a proxy statement from StockCar Stocks Mutual Fund,
Inc. was mailed to shareholders of record on February 16, 2000 inviting
such shareholders to a Special Meeting of Shareholders on April 12, 2000
at Conseco Conference Center in Carmel, Indiana for the following
purposes and to transact such other business as properly brought before
the meeting:
Proposal 1 -- To approve a new investment advisory agreement with Conseco
Capital Management, Inc.
Proposal 2 -- To approve a new Rule 12b-1 distribution plan
Proposal 3 -- To approve Amended and Restated Articles of Incorporation
Proposal 4 -- To elect six (6) Directors to the Board of Directors
Proposal 5 -- To ratify the selection of PricewaterhouseCoopers LLC as
the Fund's independent auditors for the current fiscal year.
The April 12, 2000 Special Meeting of Shareholders was convened on
that date in order to allow additional shareholders to vote on the
proposals listed above. The adjourned Special Meeting of Shareholders
was reconvened on April 27, 2000 in Mooresville, North Carolina where
the following votes were cast:
Proposal 1 -- Approve a new investment advisory agreement with Conseco
Capital Management, Inc.
Votes Required Votes For Votes Against
-------------- --------- -------------
102,315.18 206,026.63 12,456.90
Proposal 2 -- Approve a new Rule 12b-1 distribution plan
NO-LOAD DIRECT CLASS SHARES
Votes Required Votes For Votes Against
-------------- --------- -------------
134,911.93 192,603.98 24,478.39
ADVISOR CLASS SHARES
Votes Required Votes For Votes Against
-------------- --------- -------------
10,810.07 11,515.95 364.81
18
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STOCKCAR STOCKS(SM)
INDEX FUND
SEMI-ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2000 (CONTINUED)
5. SUBSEQUENT EVENT (CONTINUED)
Proposal 3 -- Approve Amended and Restated Articles of Incorporation
Votes Required Votes For Votes Against
-------------- --------- -------------
204,630.36 205,390.70 13,965.59
Proposal 4 -- Elect six Directors to the Board of Directors
William P. Daves, Jr.
Maxwell E. Bublitz
Dr. Jess H. Parrish
David N. Walthall
Harold W. Hartley
Dr. R. Jan LeCroy
This vote required the plurality of the total outstanding shares for
each Nominee.
Votes For Votes Against
--------- -------------
213,927.20 12,621.25
Proposal 5 -- Ratify the selection of PricewaterhouseCoopers LLP as the
Fund's independent auditors for the current fiscal year
Votes Required Votes For Votes Against
-------------- --------- -------------
102,315.18 217,678.10 3,028.77
19
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