- ----------------------------------------------------------
THE SIMMS FUNDS
- ----------------------------------------------------------
Simms U.S. Equity Fund
Simms International Equity Fund
Simms Global Equity Fund
Semi-Annual Report
December 31, 1998
<PAGE>
THE SIMMS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1998
(Unaudited)
<TABLE>
U.S. International Global
Equity Fund Equity Fund Equity Fund
============== =============== ==============
<S> <C> <C> <C>
Assets
Investments in securities at market value (identified
cost $3,172,078, $4,144,880 and $251,085,
respectively) (Note 2) $3,622,933 $4,305,163 $255,922
Cash 0 318 150,000
Dividends and interest receivable 2,155 4,921 82
Other assets 24,521 24,521 25,017
-------------- -------------- --------------
Total assets 3,649,609 4,334,923 431,021
-------------- -------------- --------------
Liabilities
Payable for investment securities purchased 0 0 151,075
Payable to Adviser 18,901 19,323 19,558
Accrued expenses and other liabilities 8,295 9,296 5,530
-------------- -------------- --------------
Total Liabilities 27,196 28,619 176,163
-------------- -------------- --------------
Net Assets $3,622,413 $4,306,304 $254,858
============== ============== ==============
Net Assets Consist Of:
Shares of beneficial interest $3,207,871 $4,112,443 $250,010
Accumulated undistributed net investment income 0 823 11
Accumulated net realized gain (loss) on investments (36,313) 32,755 0
Net unrealized appreciation on investments 450,855 160,283 4,837
-------------- -------------- --------------
Net assets $3,622,413 $4,306,304 $254,858
============== ============== ==============
Class Y
Net assets $3,622,413 $4,306,304 $254,858
Shares of beneficial interest outstanding
(unlimited shares of $.001 par value authorized) 332,345 412,143 24,396
Net asset value and offering price per share $10.90 $10.45 $10.45
============== ============= ==============
</TABLE>
Note: Class A shares were also offered for each Fund but there were no
Class A shareholders in any of the Funds on December 31, 1998.
See notes to financial statements
Page 1
<PAGE>
THE SIMMS FUNDS
STATEMENTS OF OPERATIONS FOR THE PERIODS
December 11, 1998 to December 31, 1998 (U.S. Equity Fund and
International Equity Fund)
December 18, 1998 to December 31, 1998 (Global Equity Fund)
(Unaudited)
<TABLE>
U.S. International Global
Equity Fund Equity Fund Equity Fund
============== =============== ==============
<S> <C> <C> <C>
Investment Income:
Dividends (net of foreign taxes withheld of $0,
$433, and $3 respectively) $1,985 $4,723 $40
Interest 170 198 42
-------------- --------------- --------------
Total investment income 2,155 4,921 82
-------------- --------------- --------------
Expenses:
Investment Advisory fees 1,531 2,514 39
Shareholder servicing and accounting 3,810 4,524 2,540
Professional fees 966 966 644
Directors' fees and expenses 105 105 70
Administration fees 2,301 2,589 1,534
Reports to shareholders 315 315 210
Federal and state registration fees 1,596 1,596 1,064
Custody fees 462 462 308
Organization expenses 38,231 38,232 0
Other 231 231 154
-------------- -------------- --------------
Total expenses before fee waivers 49,548 51,534 6,563
Less: Reimbursement from Adviser (46,874) (47,436) (6,492)
-------------- --------------- --------------
Total expenses 2,674 4,098 71
-------------- --------------- --------------
Net Investment Income (Loss) (519) 823 11
-------------- --------------- --------------
Realized and Unrealized Gain On Investments:
Realized gain (loss) on investments (36,313) 32,755 0
Change in unrealized appreciation on investments 450,855 160,283 4,837
-------------- --------------- --------------
Net realized and unrealized gain on investments 414,542 193,038 4,837
-------------- --------------- --------------
Net Increase in Net Assets Resulting from Operations $414,023 $193,861 $4,848
============== =============== ==============
</TABLE>
See notes to financial statements
Page 2
<PAGE>
THE SIMMS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<S> <C> <C> <C>
U.S. International Global
Equity Fund Equity Fund Equity Fund
======================== ======================== ========================
For the Period For the Period For the Period
December 11,1998(1)<F1>to December 11,1998(1)<F1>to December 18,1998(1)<F1>to
December 31, 1998 December 31, 1998 December 31, 1998
------------------------ ------------------------ ------------------------
Net investment income (loss) (519) 823 11
Net realized gain (36,313) 32,755 0
Change in unrealized appreciation
(depreciation) on investments 450,855 160,283 4,837
------------------------ ------------------------ ------------------------
Net increase (decrease) in net assets
resulting from operations 414,023 193,861 4,848
------------------------ ------------------------ ------------------------
Capital share transactions: (Note 3)
Net increase in net assets resulting
from capital share transactions 3,208,390 4,112,443 250,010
----------------------- ------------------------ ------------------------
Total increase in net assets 3,622,413 4,306,304 254,858
Net Assets:
Beginning of period 0 0 0
----------------------- ------------------------ ------------------------
End of period 3,622,413 4,306,304 254,858
======================= ======================== ========================
</TABLE>
1)<F1>Commencement of operations.
See notes to financial statements
Page 3
<PAGE>
THE SIMMS FUNDS
FINANCIAL HIGHLIGHTS
(Unaudited)
<TABLE>
U.S. Equity Fund International Equity Fund Global Equity Fund
====================== ========================== =========================
December 11, 1998 (1)<F2> December 11, 1998 (1)<F2> December 18, 1998 (1)<F2>
through through through
December 31, 1998 December 31, 1998 December 31, 1998
---------------------- -------------------------- -------------------------
Per Share Data: Class Y Class Y Class Y
---------------------- -------------------------- -------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $10.00 $10.00 $10.00
------ ------ ------
Income from investment operations:
Net investment income 0.00 0.00 0.00
Net realized and unrealized gains on
investments 0.90 0.45 0.45
---- ---- ----
Total from investment operations 0.90 0.45 0.45
---- ---- ----
Net asset value, end of period $10.90 $10.45 $10.45
====== ====== ======
Total return (2)<F3> 9.00% 4.50% 4.50%
Supplemental data and ratios:
Net assets, end of period (000s omitted) $3,622 $4,306 $255
Ratio of expenses to average net assets before
reimbursement by Adviser (3)<F4> 24.24% 20.55% 136.79%
Ratio of expenses to average net assets after
reimbursement by Adviser (3)<F4> 1.31% 1.63% 1.48%
Ratio of net investment income to average net assets
before reimbursement by Adviser (3)<F4> (23.19%) (18.59%) (135.08%)
Ratio of net investment income to average net assets
after reimbursement by Adviser (3)<F4> (0.25%) 0.33% 0.23%
Portfolio turnover rate 0.00% 16.65% 0.00%
</TABLE>
(1)<F2>Commencement of operations.
(2)<F3>Not annualized
(3)<F4>Annualized
Note: Class A Shares were offered for each of the above Funds but there
were no Class A shareholders in any of the Funds on December 31, 1998.
Page 4
<PAGE>
SIMMS U.S. EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Value
Shares (NOTE 2)
COMMON STOCKS 97.9%
BUSINESS SERVICES 8.9%
2,170 Cisco Systems, Inc.*<F5> $201,403
2,110 Omnicom Group Inc. 122,380
--------
323,783
--------
COMPUTERS 12.6%
1,070 Dell Computer Corporation *<F5> 78,311
2,310 EMC Corporation *<F5> 196,350
980 International Business Machines Corporation 181,055
--------
455,716
--------
DRUGS 12.0%
1,150 Eli Lilly and Company 102,206
1,070 Pfizer Inc. 134,218
3,560 Schering-Plough Corporation 196,690
--------
433,114
--------
ELECTRICAL EQUIPMENT 2.5%
880 General Electric Company 89,815
--------
FINANCIAL SERVICES 8.6%
1,580 Fannie Mae 116,920
7,877 MBNA Corporation 196,433
--------
313,353
--------
FOOD, BEVERAGES & TOBACCO 2.2%
1,950 PepsiCo, Inc. 79,828
--------
HEALTHCARE SERVICES & SUPPLIES 2.7%
1,320 Warner-Lambert Company 99,247
--------
INSURANCE 4.4%
3,640 AFLAC Incorporated 160,160
--------
INTERNET SERVICES 8.3%
1,870 America Online, Inc. 299,200
--------
MEDICAL INSTRUMENTS 4.3%
1,420 Guidant Corporation *<F5> 156,555
--------
RETAIL 5.3%
2,750 Tandy Corporation 113,266
980 Wal-Mart Stores, Inc. 79,809
--------
193,075
--------
Page 5
<PAGE>
SIMMS U.S. EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Value
Shares (NOTE 2)
SOFTWARE 14.1%
2,310 BMC Software, Inc. *<F5> $102,939
3,265 Computer Associates International, Inc. 139,171
1,070 Microsoft Corporation *<F5> 148,396
1,820 Network Associates, Inc.*<F5> 120,575
--------
511,081
--------
TELECOMMUNICATIONS 7.8%
2,310 AT&T Corp. 173,827
980 Lucent Technologies Inc. 107,800
--------
281,627
--------
UTILITIES - ELECTRIC 4.2%
3,200 AES Corporation *<F5> 151,600
--------
TOTAL COMMON STOCKS (Cost $3,097,299) 3,548,154
---------
Principal
Amount
SHORT-TERM INVESTMENT - 2.1%
VARIABLE RATE DEMAND NOTES #<F6> 2.1%
$74,779 General Mills, Inc., 5.2337% 74,779
---------
TOTAL SHORT- TERM INVESTMENT
(Cost $74,779) 74,779
---------
TOTAL INVESTMENTS (Cost $3,172,078) 100.0% 3,622,933
---------
LIABILITIES, LESS OTHER ASSETS -0.0% (520)
---------
TOTAL NET ASSETS 100.0% $3,622,413
=========
*<F5>Non-income producing security.
#<F6>Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rated listed is as of December 31, 1998.
Page 6
<PAGE>
SIMMS INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Value
Shares (NOTE 2)
COMMON STOCKS 98.3%
======================================================================
ARGENTINA 2.3%
======================================================================
Telecommunications 2.3%
3,540 Telefonica de Argentina S.A. - ADR $98,899
=======
Total Argentina 98,899
- ----------------------------------------------------------------------
BRAZIL 1.0%
======================================================================
Financial Services 1.0%
3,340 Uniao de Bancos Brasileiros S.A. - GDR 48,221
=======
Total Brazil 48,221
- ----------------------------------------------------------------------
CHILE 2.2%
======================================================================
Telecommunications 2.2%
4,485 Cia. de Telecomunicaciones de Chile S.A. - ADR 92,783
=======
Total Chile 92,783
- ----------------------------------------------------------------------
FINLAND 4.9%
======================================================================
Telecommunications 4.9%
1,750 Nokia Oyj - ADR, Class A 210,766
=======
Total Finland 210,766
- ----------------------------------------------------------------------
FRANCE 2.6%
======================================================================
Insurance 2.6%
1,550 Axa - ADR 111,987
=======
Total France 111,987
- ----------------------------------------------------------------------
GERMANY 3.5%
======================================================================
Software 3.5%
4,100 SAP AG (Systeme, Anwendungen,
Produkte in der Datenverarbeitung) - ADR 147,856
=======
Total Germany 147,856
- ----------------------------------------------------------------------
HONG KONG 1.3%
======================================================================
Telecommunications 1.3%
3,310 Asia Satellite Telecommunications
Holdings Ltd. - ADR 57,925
=======
Total Hong Kong 57,925
=======
Page 7
<PAGE>
SIMMS INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Value
Shares (NOTE 2)
HUNGARY 2.2%
======================================================================
Telecommunications 2.2%
3,240 Magyar Tavkozlesi Rt. - ADR $96,592
=======
Total Hungary 96,592
- ----------------------------------------------------------------------
IRELAND 4.1%
======================================================================
Drugs 4.1%
2,540 Elan Corporation PLC - ADR *<F7> 176,689
=======
Total Ireland 176,689
- ----------------------------------------------------------------------
ITALY 7.6%
======================================================================
Optical Supplies 2.1%
7,430 Luxottica Group SPA - ADR 89,160
- ----------------------------------------------------------------------
Telecommunications 5.5%
2,710 Telecom Italia SPA - ADR 235,770
=======
Total Italy 324,930
- ----------------------------------------------------------------------
JAPAN 11.2%
======================================================================
Computer Accessories 4.1%
1,940 TDK Corporation - ADR 175,085
- ----------------------------------------------------------------------
Electronics 3.2%
6,370 Canon, Inc. - ADR 136,955
- ----------------------------------------------------------------------
Telecommunications 3.9%
4,520 Nippon Telegraph & Telephone Corporation - ADR 169,500
=======
Total Japan 481,540
- ----------------------------------------------------------------------
NETHERLANDS 15.5%
======================================================================
Electronics 3.5%
2,260 Koninklijke (Royal) Philips Electronics N.V. - NYS 152,974
- ----------------------------------------------------------------------
Household Products 4.3%
2,250 Unilever N.V. - NYS 186,609
- -----------------------------------------------------------------------
Insurance 4.6%
1,610 AEGON N.V. - ARS 196,822
- -----------------------------------------------------------------------
Printing & Publishing 3.1%
620 Wolters Kluwer N.V. - ADR 132,744
=======
Total Netherlands 669,149
=======
Page 8
<PAGE>
SIMMS INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Value
Shares (NOTE 2)
PORTUGAL 2.9%
=======================================================================
Telecommunications 2.9%
2,760 Portugal Telecom S.A. - ADR $123,165
=======
Total Portugal 123,165
- -----------------------------------------------------------------------
SPAIN 8.2%
=======================================================================
Telecommunications 4.3%
1,380 Telefonica S.A. - ADR 186,818
- -----------------------------------------------------------------------
Utilities - Electric 3.9%
6,130 Endesa S.A. - ADR 165,510
=======
Total Spain 352,328
- -----------------------------------------------------------------------
SWEDEN 5.3%
=======================================================================
Telecommunications 2.0%
3,620 Telefonaktiebolaget LM Ericsson - ADR, Class B 86,654
- -----------------------------------------------------------------------
Transportation Equipment 3.3%
12,740 ABB AB - ADR, Class B 140,140
=======
Total Sweden 226,794
- -----------------------------------------------------------------------
SWITZERLAND 7.2%
=======================================================================
Drugs 7.2%
1,903 Novartis AG - ADR 187,047
1,020 Roche Holding AG - ADR 124,466
=======
Total Switzerland 311,513
- -----------------------------------------------------------------------
UNITED KINGDOM 16.3%
=======================================================================
Drugs 4.0%
3,860 Zeneca Group PLC - ADR 173,218
- -----------------------------------------------------------------------
Financial Services 3.0%
1,440 Barclays PLC - ADR 129,600
- -----------------------------------------------------------------------
Food, Beverages & Tobacco 4.4%
2,740 Cadbury Schweppes PLC - ADR 189,745
- -----------------------------------------------------------------------
Telecommunications 4.9%
1,300 Vodafone Group PLC - ADR 209,463
=======
Total United Kingdom 702,026
-------
TOTAL COMMON STOCKS (Cost $4,072,880) 4,233,163
---------
Page 9
<PAGE>
SIMMS INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Principal Value
Amount (NOTE 2)
SHORT-TERM INVESTMENT - 1.7%
VARIABLE RATE DEMAND NOTES #<F8> 1.7%
$72,000 General Mills, Inc., 5.2337% $72,000
-------
TOTAL SHORT- TERM INVESTMENT
(Cost $72,000) 72,000
-------
TOTAL INVESTMENTS (Cost $4,144,880) 100.0% 4,305,163
---------
OTHER ASSETS, LESS LIABILITIES 0.0% 1,141
---------
TOTAL NET ASSETS 100.0% $4,306,304
=========
*<F7>Non-income producing security.
#<F8>Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rate listed is as of December 31, 1998.
ADR - American Depository Receipts
GDR - Global Depository Receipts
ARS - American Registered Shares
NYS - New York Shares
Page 10
<PAGE>
SIMMS GLOBAL EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Value
Shares (NOTE 2)
COMMON STOCKS 96.3%
========================================================================
ARGENTINA 1.1%
========================================================================
Telecommunications 1.1%
100 Telefonica de Argentina S.A. - ADR $2,794
=====
Total Argentina 2,794
- ------------------------------------------------------------------------
BRAZIL 0.8%
========================================================================
Financial Services 0.8%
140 Uniao de Bancos Brasileiros S.A. - GDR 2,021
=====
Total Brazil 2,021
- ------------------------------------------------------------------------
CHILE 1.0%
========================================================================
Telecommunications 1.0%
130 Cia. de Telecomunicaciones de Chile S.A. - ADR 2,689
=====
Total Chile 2,689
- ------------------------------------------------------------------------
FINLAND 2.4%
========================================================================
Telecommunications 2.4%
50 Nokia Oyj - ADR, Class A 6,022
=====
Total Finland 6,022
- ------------------------------------------------------------------------
FRANCE 1.4%
========================================================================
Insurance 1.4%
50 Axa - ADR 3,613
=====
Total France 3,613
- ------------------------------------------------------------------------
GERMANY 1.7%
========================================================================
Software 1.7%
120 SAP AG (Systeme, Anwendungen, Produkte
in der Datenverarbeitung) - ADR 4,328
=====
Total Germany 4,328
- ------------------------------------------------------------------------
HONG KONG 1.5%
========================================================================
Telecommunications 1.5%
220 Asia Satellite Telecommunications Holdings Ltd. - ADR 3,850
=====
Total Hong Kong 3,850
=====
Page 11
<PAGE>
SIMMS GLOBAL EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Value
Shares (NOTE 2)
HUNGARY 1.0%
========================================================================
Telecommunications 1.0%
90 Magyar Tavkozlesi Rt. - ADR $2,683
=====
Total Hungary 2,683
- ------------------------------------------------------------------------
IRELAND 1.6%
========================================================================
Drugs 1.6%
60 Elan Corporation PLC - ADR *<F9> 4,174
=====
Total Ireland 4,174
- ------------------------------------------------------------------------
ITALY 3.0%
========================================================================
Optical Supplies 1.0%
210 Luxottica Group SPA - ADR 2,520
- ------------------------------------------------------------------------
Telecommunications 2.0%
60 Telecom Italia SPA - ADR 5,220
=====
Total Italy 7,740
- ------------------------------------------------------------------------
JAPAN 5.0%
========================================================================
Computer Accessories 1.4%
40 TDK Corporation - ADR 3,610
- ------------------------------------------------------------------------
Electronics 1.4%
160 Canon, Inc. - ADR 3,440
- ------------------------------------------------------------------------
Telecommunications 2.2%
150 Nippon Telegraph & Telephone Corporation - ADR 5,625
======
Total Japan 12,675
- ------------------------------------------------------------------------
NETHERLANDS 10.3%
========================================================================
Electronics 1.9%
70 Koninklijke (Royal) Philips Electronics N.V. - NYS 4,738
- ------------------------------------------------------------------------
Household Products 2.3%
70 Unilever N.V. - NYS 5,806
- ------------------------------------------------------------------------
Insurance 1.9%
40 AEGON N.V. - ARS 4,890
- ------------------------------------------------------------------------
Printing & Publishing 4.2%
50 Wolters Kluwer N.V. - ADR 10,705
======
Total Netherlands 26,139
Page 12
<PAGE>
SIMMS GLOBAL EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Value
Shares (NOTE 2)
PORTUGAL 1.4%
========================================================================
Telecommunications 1.4%
80 Portugal Telecom S.A. - ADR $3,570
=====
Total Portugal 3,570
- -------------------------------------------------------------------------
SPAIN 4.0%
=========================================================================
Telecommunications 2.2%
40 Telefonica S.A. - ADR 5,415
- -------------------------------------------------------------------------
Utilities - Electric 1.8%
170 Endesa S.A. - ADR 4,590
=====
Total Spain 10,005
- -------------------------------------------------------------------------
SWEDEN 2.7%
=========================================================================
Telecommunications 1.2%
130 Telefonaktiebolaget LM Ericsson - ADR, Class B 3,112
- -------------------------------------------------------------------------
Transportation Equipment 1.5%
350 ABB AB - ADR, Class B 3,850
=====
Total Sweden 6,962
- -------------------------------------------------------------------------
SWITZERLAND 3.0%
=========================================================================
Drugs 3.0%
40 Novartis AG - ADR 3,932
30 Roche Holding AG - ADR 3,661
=====
Total Switzerland 7,593
- -------------------------------------------------------------------------
UNITED KINGDOM 7.8%
=========================================================================
Drugs 1.9%
110 Zeneca Group PLC - ADR 4,936
- -------------------------------------------------------------------------
Financial Services 1.8%
50 Barclays PLC - ADR 4,500
- -------------------------------------------------------------------------
Food, Beverages & Tobacco 2.2%
80 Cadbury Schweppes PLC - ADR 5,540
- -------------------------------------------------------------------------
Telecommunications 1.9%
30 Vodafone Group PLC - ADR 4,834
=====
Total United Kingdom 19,810
Page 13
<PAGE>
SIMMS GLOBAL EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Value
Shares (NOTE 2)
UNITED STATES 46.6%
=========================================================================
Business Services 4.9%
60 Cisco Systems, Inc. *<F9> $5,569
70 Omnicom Group Inc. 4,060
60 Sterling Commerce, Inc. *<F9> 2,700
-----
12,329
- -------------------------------------------------------------------------
Computers 7.3%
40 Dell Computer Corporation *<F9> 2,927
70 EMC Corporation *<F9> 5,950
30 International Business Machines Corporation 5,542
50 Sun Microsystems, Inc. *<F9> 4,281
------
18,700
- -------------------------------------------------------------------------
Drugs 6.1%
50 Eli Lilly and Company 4,444
40 Pfizer Inc. 5,017
110 Schering-Plough Corporation 6,078
-----
15,539
- -------------------------------------------------------------------------
Electrical Equipment 1.6%
40 General Electric Company 4,082
- -------------------------------------------------------------------------
Financial Services 3.4%
40 Fannie Mae 2,960
230 MBNA Corporation 5,736
-----
8,696
- -------------------------------------------------------------------------
Food, Beverages & Tobacco 1.0%
60 PepsiCo, Inc. 2,456
- -------------------------------------------------------------------------
Healthcare Services & Supplies 1.5%
50 Warner-Lambert Company 3,759
- -------------------------------------------------------------------------
Insurance 1.9%
110 AFLAC Incorporated 4,840
- -------------------------------------------------------------------------
Internet Services 2.5%
40 America Online, Inc. 6,400
- -------------------------------------------------------------------------
Medical Instruments 1.8%
40 Guidant Corporation *<F9> 4,410
- -------------------------------------------------------------------------
Retail 3.5%
100 Tandy Corporation 4,119
60 Wal-Mart Stores, Inc. 4,886
-----
9,005
Page 14
<PAGE>
SIMMS GLOBAL EQUITY FUND
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
Value
Shares (NOTE 2)
Software 6.6%
90 BMC Software, Inc. *<F9> $4,011
80 Computer Associates International, Inc. 3,410
30 Microsoft Corporation *<F9> 4,161
80 Network Associates, Inc. *<F9> 5,300
-----
16,882
- --------------------------------------------------------------------------
Telecommunications 3.5%
60 AT&T Corp. 4,515
40 Lucent Technologies Inc. 4,400
-----
8,915
- --------------------------------------------------------------------------
Utilities - Electric 1.0%
60 AES Corporation *<F9> 2,842
=====
Total United States 118,855
-------
TOTAL COMMON STOCKS (Cost $240,686) 245,523
-------
Principal
Amount
SHORT-TERM INVESTMENT - 4.1%
VARIABLE RATE DEMAND NOTES #<F10> 4.1%
$10,399 Sara Lee Corporation, 5.2287% 10,399
------
TOTAL SHORT- TERM INVESTMENT
(Cost $10,399) 10,399
------
TOTAL INVESTMENTS (Cost $251,085) 100.4% 255,922
-------
LIABILITIES, LESS OTHER ASSETS -0.4% (1,064)
------
TOTAL NET ASSETS 100.0% $254,858
========
*<F9>Non-income producing security.
#<F10>Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates.
The rate listed is as of December 31, 1998.
ADR - American Depository Receipts
GDR - Global Depository Receipts
ARS - American Registered Shares
NYS - New York Shares
Page 15
<PAGE>
THE SIMMS FUNDS
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1998
(Unaudited)
NOTE 1 - DESCRIPTION OF FUNDS
The Simms Funds (the "Trust") was organized as a Delaware business trust on July
1, 1998 and is registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as an open-end management investment company issuing its
shares in series, each series representing a distinct portfolio with its own
investment objectives and policies. The series presently authorized are the U.S.
Equity Fund, the International Equity Fund and the Global Equity Fund
(collectively referred to as the "Funds"). Pursuant to the 1940 Act, the Funds
are a "diversified" series of the Trust.
The Simms U.S. Equity Fund commenced operations on December 11, 1998. The
investment objective of the Fund is capital appreciation through investments
in the common stock of large capitalization U.S. companies, including
multinational companies. The Fund may also invest in convertible securities
and preferred stock of U.S. companies.
The Simms International Equity Fund commenced operations on December 11, 1998.
The investment objective of the Fund is capital appreciation through investments
in the securities of large capitalization foreign companies, including
multinational companies. The Fund invests primarily in ADRs and may also invest
directly in non-U.S. dollar-denominated equity securities of foreign companies.
The Simms Global Equity Fund commenced operations on December 18, 1998. The
investment objective of the Fund is capital appreciation through investments in
the securities of large capitalization U.S. and foreign companies, including
multinational companies. The Fund's foreign equity investments will primarily
consist of ADRs and the Fund may also invest directly in non-U.S.
dollar-denominated equity securities of foreign companies.
Each Fund has issued two classes of shares: Class A and Class Y. The Class A
shares are subject to an initial sales charge imposed at the time of purchase,
in accordance with the Fund's prospectus. The maximum sales charge is 4% of the
offering price.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds.
a) Investment Valuation - Investment securities traded on a national
securities exchange are valued at the last reported sales price at 4:00
p.m. Eastern time, unless there are no transactions on the valuation date,
in which case they are valued at the mean between the closing asked price
and the closing bid price. Securities traded over-the-counter are valued at
the last reported sales price unless there is no reported sales price, in
which case the mean between the closing asked price and the closing bid
price is used. Debt securities with maturities of sixty days or less are
valued at amortized cost, which approximates market value. Where market
quotations are not readily available, securities are valued using methods
which the Board of Trustees believe in good faith accurately reflects their
fair value.
Page 16
<PAGE>
THE SIMMS FUNDS
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1998
(Unaudited)
b) Income Recognition - Interest income is accrued as earned. Dividend
income is recorded on the ex-dividend date.
c) Securities Transactions - Security transactions are accounted for on the
date the securities are purchased or sold. Realized gains and losses on
securities sold are determined using the high cost method.
d) Distributions to Shareholders - The Funds record distributions to
shareholders on the ex-dividend date. Dividends from net investment income
are declared and paid annually. Distributions of net realized capital
gains, if any, will be declared and distributed at least annually. The
amounts of distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax
regulations, which may differ from those amounts determined under generally
accepted accounting principles. These book/tax differences are either
temporary or permanent in nature. To the extent these differences are
permanent, they are charged or credited to paid-in capital in the period
that the difference arises.
e) Federal Income Taxes - The Funds' intend to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies,
including the distribution of substantially all of each Fund's taxable
income. Accordingly, no provision for federal income taxes is considered
necessary in the financial statements.
f) 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 amount of 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.
g) Foreign Securities - Investing in securities of foreign companies and
foreign governments involves special risks and considerations not typically
associated with investing in U.S. companies and the U.S. government. These
risks include revaluation of currencies and future adverse political and
economic developments. Moreover, securities of many foreign companies and
foreign governments and their markets may be less liquid and their prices
more volatile than those of securities of comparable U.S. companies and the
U.S. government.
Page 17
<PAGE>
THE SIMMS FUNDS
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1998
(Unaudited)
NOTE 3 - SHARES OF BENEFICIAL INTEREST
At December 31, 1998, each Fund had an authorized unlimited number of shares of
beneficial interest with no par value.
The following table summarizes the capital share transactions of each class of
shares for each Fund:
Class Y U.S. International Global
Equity Fund Equity Fund Equity Fund
December 11, 1998- December 11, 1998- December 18, 1998-
December 31, 1998 December 31, 1998 December 31, 1998
Shares Amount Shares Amount Shares Amount
Sales 352,345 $3,421,190 432,143 $4,321,443 24,396 $250,010
Redemptions (20,000) (212,800) (20,000) (209,000) 0 0
Net Increase 332,345 $3,208,390 412,143 $4,112,443 24,396 $250,010
NOTE 4 - INVESTMENT TRANSACTIONS
During the period December 11, 1998 to December 31, 1998 for the U.S. Equity
Fund and International Equity Fund and the period December 18, 1998 to December
31, 1998 for the Global Equity Fund, purchases and sales of investment
securities (excluding short-term investments) were as follows:
U.S. International Global
Equity Fund Equity Fund Equity Fund
Purchases $ 0 $352,381 $240,686
Sales $199,777 $533,762 $ 0
The following balances for the Funds as of December 31, 1998:
<TABLE>
Cost for Federal Net Tax Tax Basis Tax Basis
Income Tax Unrealized Gross Unrealized Gross Unrealized
Purposes Appreciation Appreciation Depreciation
<S> <C> <C> <C> <C>
U.S. Equity Fund $2,138,398 $1,484,535 $1,484,535 $ 0
International Equity Fund $3,401,061 $ 904,102 $1,038,475 ($134,373)
Global Equity Fund $ 251,085 $ 4,837 $ 5,920 ($ 1,083)
</TABLE>
NOTE 5 - INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Trust has an Investment Advisory Agreement (the "Agreement") with the
Adviser, with whom certain officers and Trustees of the Trust are affiliated, to
furnish investment advisory services to the Funds. Under the terms of the
Agreement, the Trust, on behalf of the Funds, compensates the Adviser for its
management services based on an annual rate of 0.75% of the U.S. Equity Fund and
1.00% of the International Equity Fund and Global Equity Fund's average daily
net assets.
Page 18
<PAGE>
THE SIMMS FUNDS
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1998
(Unaudited)
The Adviser has agreed to voluntarily defer receipt of all or part of its
advisory fee and/or absorb the Funds' other expenses, including organization
expenses, to the extent necessary to ensure that each of the Fund's operating
expenses, do no exceed the following amounts:
Fund Class A Class Y
U.S. Equity Fund 2.06% 1.31%
International Equity Fund 2.38% 1.63%
Global Equity Fund 2.23% 1.48%
To the extent that Simms defers or absorbs expenses, it may seek payment of such
deferred fees or reimbursement of such absorbed expenses for two years after the
year in which fees were deferred or expenses were absorbed. A Fund will make no
such payment or reimbursement, however, if the total annual Fund operating
expenses exceed the expense limits in effect at the time these payments or
reimbursements are proposed.
Firstar Mutual Fund Services, LLC serves as transfer agent, administrator and
accounting services agent for the Funds. Firstar Bank Milwaukee, N.A. serves
as custodian for the Funds.
NOTE 6 - DISTRIBUTION PLAN
The Trust, on behalf of the Funds, has adopted a distribution plan pursuant to
Rule 12b-1 under the 1940 Act (the "12b-1 Plan"), which provides that each
Fund's Class A shares will pay distribution fees of up to 0.50% of the average
daily net assets to the distributor. Payments under the distribution plan shall
be used to compensate or reimburse the Funds' distributor for services provided
and expenses incurred in connection with the sale of shares, and are not tied to
the amount of actual expenses incurred. The Funds have not yet incurred any fees
pursuant to the Plan for the period December 11, 1998 to December 31, 1998 for
the U.S. Equity and International Equity Funds and for the period December 18,
1998 to December 31, 1998 for the Global Equity Fund.
NOTE 7 - SHAREHOLDER SERVICING PLAN
The Trust, on behalf of the Funds, has adopted a shareholder servicing plan.
Under the shareholder servicing plan, Class A shares may pay financial
institutions, including affiliates of the Adviser, a fee up to 0.25% of its
average daily net assets for services relating to maintenance of investor
accounts, including liaisons with investors. The Funds have not yet incurred any
fees pursuant to the Plan for the period December 11, 1998 to December 31, 1998
for the U.S. Equity and International Equity Funds and for the period December
18, 1998 to December 31, 1998 for the Global Equity Fund.
Page 19
<PAGE>
THE SIMMS FUNDS
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1998
(Unaudited)
NOTE 8 - FORMATION AND REORGANIZATION
On December 11, 1998, all of the assets and liabilities of the Simms Partners
(U.S.) L.P. and the Simms Partners (International) L.P. ("Partnerships") were
transferred to the Simms U.S. Equity Fund and Simms International Equity Fund,
respectively, in a reorganization (the "Reorganization"). The Reorganization was
considered a tax free exchange and no gain or loss was recognized by the
Partnerships on the transfer of their assets to the respective Funds. The Funds'
will retain the basis and holding periods of the assets transferred from the
Partnerships for tax purposes. The market value of assets on the day of transfer
became the new cost basis for book purposes for the respective Funds which
resulted in the tax basis of securities held for the Simms U.S. Equity Fund and
the Simms International Equity Fund being $1,096,429 and $825,707 lower than
their basis for financial reporting purposes, respectively. On December 31,
1998, the tax basis of securities held for the Simms U.S. Equity Fund and the
Simms International Equity Fund was $1,033,657 and $760,824 lower than book
basis, respectively.
Page 20
<PAGE>
- ------------------------------------------------------------------------------
THE SIMMS FUNDS
55 Railroad Avenue
Greenwich, Connecticut 06830
1-877-GET-SIMS
(1-877-438-7467)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Board of Trustees Custodian
Robert A. Simms, Sr., Firstar Bank Milwaukee, N.A.
Chairman 777 E. Wisconsin Avenue
Milwaukee, WI 53202
Beverly W. Aisenbrey
------------------------------------
Arthur S. Bahr Legal Counsel
Robert G. Blount Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
Gen. Robert E. Kelley New York, New York 10022
------------------------------------
Michael A. McManus, Jr.
Independent Auditors
Thomas L. Melly
PricewaterhouseCoopers LLP
Arthur O. Poltrack 100 East Wisconsin Avenue
Milwaukee, WI 53202
- ------------------------------- ------------------------------------
Investment Adviser Distributor
Simms Capital Management, Inc. T.O. Richardson Securities, Inc.
55 Railroad Avenue 2 Bridgewater Road
Greenwich, Connecticut 06830 Farmington, Connecticut 06032
- ------------------------------- ------------------------------------
Administrator, Transfer Agent and This report has been prepared for
Dividend Disbursement Agent shareholders and may be distributed
to others only if preceded or
accompanied by a current prospectus.
Firstar Mutual Fund Services LLC
P.O. Box 701
615 East Michigan Street
Milwaukee, WI 53202
