THE SIMMS FUNDS
U.S. EQUITY FUND
----------------
INTERNATIONAL
EQUITY FUND
-------------
GLOBAL EQUITY FUND
(THE SIMMS FUNDS LOGO)
ANNUAL REPORT
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JUNE 30, 1999
(SIMMS CAPITAL MANAGEMENT, INC.
Global Investors Logo)
THE SIMMS FUNDS
REPORT FROM MANAGEMENT AUGUST 19, 1999
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Dear Shareholders,
It gives me great pleasure in writing this first letter to you. We are proud
of the efficient manner that our two partnerships (U.S. and International) were
converted and The Global Fund initiated in the creation of the Simms Family of
Funds. We credit this virtual error free kickoff to our counsel, Kramer, Levin
Naftalis and Frankel, our custodians and administrators, Firstar Mutual Fund
Services LLC, our Board of Trustees and, of course, our staff at Simms Capital.
While the initial investment results are good, we do not take them for granted.
These results are a function of our well developed investment process that
identifies stocks with superior investment characteristics and growth potential.
Our results for the first fiscal period reflect the period from inception of
the funds through our fiscal year end, June 30, 1999. For this stub period,
our U.S. Equity Fund return was 25.10%, compared to the Standard & Poor return
of 18.66%. For our International Equity Fund, the return was 9.10%, compared to
the Morgan Stanley EAFE Index of 10.05%. For our Global Equity Fund, which had
a later start, the return was 12.70%, compared to the Morgan Stanley World Index
of 13.81%.
The global economies are clearly recovering from last fall's financial crisis.
U.S. investors witnessed an instant closure of the valuation differentials
between value and growth stocks, prompting some market indices (DJIA and Russell
2000) to outperform the cap-weighted S&P 500 in the second quarter of 1999.
International returns lagged behind the U.S. because of the strength of the U.S.
dollar. Remember that few investors have made money in emerging markets or in
Japan over the last five years, as the returns for the period were negative. It
is easy to understand why naysayers of international investing demean its
usefulness, especially when comparing the additional risk (volatility of these
returns) to those in the U.S. Domestic benchmarks (depending on the category:
large-cap growth/value, mid-cap, small-cap) have returned 15-30% annualized
during the five-year period.
UNITED STATES:
Alan Greenspan's "merry band" continues to fine-tune the "Goldilocks" economic
environment by raising the Federal Funds rate by 25 basis points to 5% and
taking their foot off the brake with their "neutral bias" position on rates.
The economy should continue to coast with a modest growth bias (GDP +3%),
moderate inflationary pressures (CPI 2 1/2 - 3%) and a buoyant profits outlook
(+8%) for S&P operating earnings of $48.06. GDP for the second quarter is
expected to be up 4%, productivity +3% and operating earnings +11%. The neutral
interest rate bias has set the stage for a surge in new offerings of U.S.
corporate debt. We believe, as others do, that the technology revolution, the
development of e-commerce and the accompanying productivity benefits are the
primary drivers of the extended, economic cycle with low inflation
("Goldilocks"). Such conditions should continue, producing an ideal environment
for investing in financial assets (both stocks and bonds).
The Fed's announcement of a tightening bias in April, with the implied interest
rate hike, produced significant volatility (no kidding!) during the second
quarter with large cap growth stocks (consumer, pharmaceutical, technology)
suffering significant contractions of valuations while cyclical stocks (ALCOA,
INC., CATERPILLAR INC. & INTERNATIONAL PAPER COMPANY) moved sharply upwards.
The adjustment in the disparity in the valuation of the two groups (growth vs.
value) occurred virtually instantly (in a short period of two weeks). It is now
likely behind us. We expect our type of stocks: brand name, high-quality growth
(both revenues and earnings) to outperform over long periods. We continue to
own growth stocks in growth industries (technology, consumer, healthcare and
select growth companies with high industrial exposure, e.g., AES, ALLIED SIGNAL,
GENERAL ELECTIC, TYCO INTERNATIONAL and XEROX).
EUROPE & UK:
European markets continue to show lackluster performance in U.S. $ terms, mainly
due to the continued weakness of the Euro (-4% vs. the US$ for the quarter) but
we are witnessing a modest pick-up in the economies there. The Euroland
countries have just one monetary policy, but they still have differences in
cultural behavior and fiscal policies. GERMANY continued to dominate policy and
announced new fiscal measures in June, which moves further towards fiscal
harmonization. The interest rate differential with the U.S. has started to
narrow with 10 year bond yields increasing from approximately 4% to roughly 4.5%
by the end of the quarter. This narrowing is expected to rally support for the
Euro versus the U.S. $. The rate structure in the UNITED KINGDOM (UK) continues
to weaken as does the economy and should be below the U.S. rates soon. The
strength in oil prices should benefit the UK and NORWAY. IRELAND, where we own
ELAN and ALLIED IRISH BANK, is the country in the region with the lowest
corporate and personal income tax rates and the strongest growth in GDP in 1998
(+9%) and 1999 (+5%).
The consolidation and restructuring in Europe is well underway if the level of
M&A activity is an indication. Deals completed in the first six months total
approximately $500 billion, which is roughly 50% of U.S. activity and 10x that
in Asia. Most of the activity is currently within local borders for protective
purposes (OLIVETTI/TELECOM ITALIA) and cross border activity is still on the
horizon. The fruits (profits) of this activity are ahead - both for the
companies and we, the investors. Only after Wall Street (international
investment bankers) gets theirs - will we get ours!
Even though other international investors have reduced their huge exposure to
European markets in order to put more money in the markets of Asia, we continue
to maintain our positions in the large, liquid growth stocks in the region.
Recent purchases have included REPSOL and STMICROELECTRONICS.
JAPAN:
The 1.9% increase in first quarter GDP (8% annualized) adds a spark of
confidence for the investor and hype for the market (mostly from foreign
investors taking money out of Europe). Most economists have taken a "wait and
see" attitude for confirmation of a turn in the economy. The reduction in the
unemployment rate in June may be a good omen, but increased public spending is
needed; after all, a very stimulative monetary policy (JGB rates at 1.8%) has
had little effect on consumption or investment spending. JAPAN seems mired in a
liquidity trap reminiscent of the Great Depression, which took a decade to
repair confidence and rekindle consumer and capital spending. JAPAN is
operating at 67.2% of capacity and requires much restructuring and
consolidation, yet certain companies (ours) are still projecting growth in
revenue and earnings for the next several years. Even though JAPAN remains
behind the curve in developing the new paradigm industries, a few companies are
already showing the benefit of those prospects: NTT - cellular/restructuring,
FUJITSU - computing/PCs/Internet, ITO YOKADO (NIFTY SERVE CORP.) - convenience
stores (Seven-Eleven)/Internet and our most recent purchase, TREND MICRO - anti-
virus/e-commerce.
EMERGING MARKETS:
BRAZIL, the dominant economy of LATIN AMERICA, has successfully deflated the
economy and interest rates, which are down to 20% from 40%, and could approach
single digits by next year. Other nations in the region, however, are still
recovering from the devaluation of the Brazilian real, especially ARGENTINA,
Brazil's largest trading partner, which is also incurring political instability
and may seek a debt moratorium.
We have diversified our emerging markets exposure by selling TEL CHILE, reducing
TELECOM ARGENTINA and adding TELEFONOS DE MEXICO in the region. We have added
KOREA TELECOM in the PACIFIC and are increasing our EMERGING EUROPEAN exposure
by adding to OTE HELLENIC TELECOM in GREECE while maintaining MATAV in HUNGARY.
SUMMARY:
The global recovery and the possible recovery in Japan bode well for investing
in shares of foreign companies (we prefer ADRs for previously defined purposes)
and U.S. multinationals. Yes, even though industrial cyclicals like ALCOA,
INC., CATERPILLAR INC. and INTERNATIONAL PAPER COMPANY will benefit, we remain
committed to our style - large cap growth - and refuse to be tempted by those
top-down rotators, which are likely to be whipsawed. As previously stated,
while being optimistic about returns in the U.S., we think the EAFE Index will
outperform the S&P 500 over the next three to five year cycle.
Thank you for your confidence.
/s/ Robert A. Simms /s/ Thomas L. Melly /s/ Jennifer D. Miller
Robert A. Simms Thomas L. Melly Jennifer D. Miller
President & CEO Principal, Principal,
Portfolio Manager Portfolio Manager
THE SIMMS FUNDS
U.S. EQUITY FUND
- ----------------
SIMMS U.S. EQUITY FUND -- CLASS A VS. S&P 500 INDEX GROWTH OF HYPOTHETICAL
$10,000 INVESTMENT
Cumulative Total Return
For the period ended June 30, 1999
Since
Inception
Simms U.S. Equity Fund - Class A No Load (1)<F1> 2.46%
Simms U.S. Equity Fund - Class A (1)<F1> (1.67)%
S&P 500 Index 1.44%
(1)<F1>April 26, 1999 inception.
date Simms U.S. Equity Simms U.S. Equity S&P 500 Index
Class A No Load Class A
4/99 10,000 9,600 10,000
6/99 10,246 9,836 10,144
SIMMS U.S. EQUITY FUND -- CLASS Y VS. S&P 500 INDEX GROWTH OF HYPOTHETICAL
$10,000 INVESTMENT
Cumulative Total Return
For the period ended June 30, 1999
Since
Inception
Simms U.S. Equity Fund - Class Y (1)<F2> 25.10%
S&P 500 Index 18.66%
(1)<F2>December 11, 1998 inception.
date Simms U.S. Equity -- Class Y S&P 500 Index
12/98 10,000 10,000
3/99 11,990 11,085
6/99 12,510 11,866
THE SIMMS FUNDS
INTERNATIONAL EQUITY FUND
- -------------------------
SIMMS INTERNATIONAL EQUITY FUND -- CLASS A VS. MORGAN STANLEY CAPITAL
INTERNATIONAL EAFE INDEX GROWTH OF HYPOTHETICAL $10,000 INVESTMENT
Cumulative Total Return
For the period ended June 30, 1999
Since
Inception
Simms International Equity Fund - Class A No Load (1)<F3> 3.23%
Simms International Equity Fund - Class A (1)<F3> (0.93)%
Morgan Stanley Capital International EAFE Index 7.20%
(1)<F3>February 1, 1999 inception.
date Simms International Simms International Morgan Stanley
Equity - Class A Equity - Class A Capital International
No Load EAFE Index
2/99 10,000 9,600 10,000
3/99 9,867 9,472 10,258
6/99 10,323 9,910 10,720
SIMMS INTERNATIONAL EQUITY FUND -- CLASS Y VS. MORGAN STANLEY CAPITAL
INTERNATIONAL EAFE INDEX GROWTH OF HYPOTHETICAL $10,000 INVESTMENT
Cumulative Total Return
For the period ended June 30, 1999
Since
Inception
Simms International Equity Fund - Class Y (1)<F4> 9.10%
Morgan Stanley Capital International EAFE Index 10.05%
(1)<F4>December 11, 1998 inception.
date Simms International Equity -- Morgan Stanley Capital
Class Y International EAFE Index
12/98 10,000 10,000
3/99 10,410 10,531
6/99 10,910 11,005
THE SIMMS FUNDS
GLOBAL EQUITY FUND
- ------------------
SIMMS GLOBAL EQUITY FUND -- CLASS A VS. MORGAN STANLEY CAPITAL WORLD INDEX
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT
Cumulative Total Return
For the period ended June 30, 1999
Since
Inception
Simms Global Equity Fund - Class A No Load (1)<F5> 7.78%
Simms Global Equity Fund - Class A (1)<F5> 3.44%
Morgan Stanley Capital World Index 10.72%
(1)<F5>February 19, 1999 inception.
date Simms Global Equity Simms Global Equity Morgan Stanley
Class A No Load Class A Capital World Index
2/99 10,000 9,600 10,000
3/99 10,394 9,978 10,494
6/99 10,779 10,347 11,072
SIMMS GLOBAL EQUITY FUND -- CLASS Y VS. MORGAN STANLEY CAPITAL WORLD INDEX
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT
Cumulative Total Return
For the period ended June 30, 1999
Since
Inception
Simms Global Equity Fund - Class Y (1)<F6> 12.70%
Morgan Stanley Capital World Index 13.81%
(1)<F6>December 18, 1998 inception.
date Simms Global Equity Morgan Stanley Capital
Class Y World Index
12/98 10,000 10,000
3/99 10,830 10,786
6/99 11,270 11,381
THE SIMMS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1999
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<TABLE>
U.S. INTERNATIONAL GLOBAL
EQUITY FUND EQUITY FUND EQUITY FUND
----------- ------------- -----------
<S> <C> <C> <C>
ASSETS
Investments in securities at market value
(identified cost $4,117,907, $5,001,044
and $848,593, respectively) (Note 2) $5,203,882 $5,528,797 $925,253
Dividends and interest receivable 3,863 9,476 1,354
Receivable for fund shares sold -- 24,602 --
Receivable from Adviser 27,963 33,024 23,740
Other assets 18,661 20,414 14,202
---------- ---------- --------
Total assets 5,254,369 5,616,313 964,549
---------- ---------- --------
LIABILITIES
Payable for investment purchased -- 55,878 --
Accrued expenses and other liabilities 39,557 46,155 43,710
---------- ---------- --------
Total Liabilities 39,557 102,033 43,710
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NET ASSETS $5,214,812 $5,514,280 $920,839
---------- ---------- --------
---------- ---------- --------
NET ASSETS CONSIST OF:
Shares of beneficial interest $3,778,038 $4,775,975 $860,083
Accumulated undistributed -- 12,584 903
net investment income
Accumulated net realized gain 350,799 197,968 (16,807)
(loss) on investments
Net unrealized appreciation on investments 1,085,975 527,753 76,660
---------- ---------- --------
Net assets $5,214,812 $5,514,280 $920,839
---------- ---------- --------
---------- ---------- --------
CLASS A
Net assets $983 $160,421 $143,194
Shares of beneficial interest outstanding
(unlimited shares, no par value) 79 14,751 12,764
Net asset value and redemption price per share $12.50 $10.88 $11.22
---------- ---------- --------
---------- ---------- --------
Maximum offering price per share $13.02 $11.33 $11.69
---------- ---------- --------
---------- ---------- --------
CLASS Y
Net assets $5,213,829 $5,353,859 $777,645
Shares of beneficial interest outstanding
(unlimited shares, no par value) 416,669 490,571 68,975
Net asset value, offering and
redemption price per share $12.51 $10.91 $11.27
---------- ---------- --------
---------- ---------- --------
</TABLE>
See notes to financial statements
THE SIMMS FUNDS
STATEMENTS OF OPERATIONS
For the Period December 11, 1998(1)<F7> to June 30, 1999 (U.S. Equity Fund and
International Equity Fund) and
For the Period December 18, 1998(1)<F7> to June 30, 1999 (Global Equity Fund)
- ------------------------------------------------------------------------------
<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, $12,008,
and $642, respectively) $ 15,015 $ 55,702 $ 3,819
Interest 7,600 6,546 1,826
---------- ---------- ---------
Total investment income 22,615 62,248 5,645
---------- ---------- ---------
EXPENSES:
Investment advisory fees 18,985 30,313 3,040
Shareholder servicing and accounting 40,543 51,361 37,873
Professional fees 21,292 22,092 9,270
Trustees' fees and expenses 1,810 1,860 1,875
Administration fees 25,637 26,205 25,870
Reports to shareholders 14,463 15,363 14,558
Federal and state registration fees 13,852 15,252 13,720
Custody fees 2,644 2,444 4,890
Other 2,222 2,522 1,145
Distribution fees - Class A 1 190 162
Shareholder servicing fees - Class A 1 95 81
---------- ---------- ---------
Total expenses before reimbursements 141,450 167,697 112,484
Less: Reimbursements from Adviser (108,288) (118,001) (107,742)
---------- ---------- ---------
Net expenses 33,162 49,696 4,742
---------- ---------- ---------
NET INVESTMENT INCOME (LOSS) (10,547) 12,552 903
---------- ---------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) on investments 2,080 (129,222) (16,807)
Change in unrealized
appreciation on investments 1,085,975 527,753 76,660
---------- ---------- ---------
gain on investments 1,088,055 398,531 59,853
---------- ---------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,077,508 $ 411,083 $ 60,756
---------- ---------- ---------
---------- ---------- ---------
(1)<F7>Commencement of operations<F1>
</TABLE>
See notes to financial statements
THE SIMMS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
U.S. INTERNATIONAL GLOBAL
EQUITY FUND EQUITY FUND EQUITY FUND
----------- ------------- -----------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
DECEMBER 11,1998 DECEMBER 11,1998 DECEMBER 18, 1998
(1)<F8> (1)<F8> (1)<F8>
TO TO TO
JUNE 30, 1999 JUNE 30, 1999 JUNE 30, 1999
---------------- ---------------- -----------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (10,547) $ 12,552 $ 903
Net realized gain (loss) 2,080 (129,222) (16,807)
Change in unrealized
appreciation on investments 1,085,975 527,753 76,660
---------- ---------- ---------
Net increase in net assets
resulting from operations 1,077,508 411,083 60,756
---------- ---------- ---------
CAPITAL SHARE TRANSACTIONS: (NOTE 4)
Net increase in net assets
resulting from capital
share transactions 4,087,304 5,053,197 860,073
---------- ---------- ---------
Total increase in net assets 5,164,812 5,464,280 920,829
NET ASSETS:
Beginning of period 50,000 50,000 10
---------- ---------- ---------
End of period (including
undistributed net investment
income of $0, $12,584 and
$903, respectively) $5,214,812 $5,514,280 $920,839
---------- ---------- ---------
---------- ---------- ---------
</TABLE>
(1)<F8>Commencement of operations.
See notes to financial statements
THE SIMMS FUNDS
FINANCIAL HIGHLIGHTS
U.S. EQUITY FUND
----------------------------------
APRIL 26, 1999 DECEMBER 11, 1998
(1)<F9> (1)<F9>
THROUGH THROUGH
JUNE 30, 1999 JUNE 30, 1999
-------------- -----------------
CLASS A CLASS Y
------- -------
PER SHARE DATA:
Net asset value, beginning of period $12.20 $10.00
------ ------
Income from investment operations:
Net investment loss (0.02)(2) (0.03)(2)
<F10> <F10>
Net realized and unrealized
gains on investments 0.32 2.54
------ ------
Total from investment operations 0.30 2.51
------ ------
Net asset value, end of period $12.50 $12.51
------ ------
------ ------
Total return (3)<F11> (4)<F12> 2.46% 25.10%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $983 $5,213,829
Ratio of expenses to average net assets
before reimbursement by Adviser (5)<F13> 8.39% 5.59%
Ratio of expenses to average net assets
after reimbursement by Adviser (5)<F13> 2.06% 1.31%
Ratio of net investment loss to average
net assets before reimbursement
by Adviser (5)<F13> (7.38%) (4.70%)
Ratio of net investment loss to average
net assets after reimbursement by
Adviser (5)<F13> (1.06%) (0.42%)
Portfolio turnover rate (6)<F14> 50.40% 50.40%
(1)<F9> Commencement of operations for Class Y shares occurred on December 11,
1998 for the U.S. Equity Fund. Commencement of sale of Class A shares occurred
on April 26, 1999 for the U.S. Equity Fund.
(2)<F10> Net investment income per share is calculated using ending balances
prior to consideration of adjustments for permanent book and tax differences.
(3)<F11> The total return does not reflect the 4.00% maximum sales charge for
Class A shares.
(4)<F12> Not annualized.
(5)<F13> Annualized.
(6)<F14> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
See notes to financial statements
THE SIMMS FUNDS
FINANCIAL HIGHLIGHTS
- --------------------
INTERNATIONAL EQUITY FUND
-------------------------------------
FEBRUARY 1, 1999 DECEMBER 11, 1998
(1)<F15> (1)<F15>
THROUGH THROUGH
JUNE 30, 1999 JUNE 30, 1999
---------------- ----------------
CLASS A CLASS Y
---------------- ----------------
PER SHARE DATA:
Net asset value, beginning of period $10.54 $10.00
------ ------
Income from investment operations:
Net investment income 0.00 0.03
Net realized and unrealized
gains on investments 0.34 0.88
------ ------
Total from investment operations 0.34 0.91
------ ------
Net asset value, end of period $10.88 $10.91
------ ------
------ ------
Total return (2)<F16> (3)<F17> 3.23% 9.10%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $160,421 $5,353,859
Ratio of expenses to average net assets
before reimbursement by Adviser (4)<F18> 6.54% 5.52%
Ratio of expenses to average net assets
after reimbursement by Adviser (4)<F18> 2.38% 1.63%
Ratio of net investment loss
to average net assets before
reimbursement by Adviser (4)<F18> (4.14%) (3.48%)
Ratio of net investment income to
average net assets after
reimbursement by Adviser (4)<F18> 0.02% 0.42%
Portfolio turnover rate (5)<F19> 49.48% 49.48%
(1)<F15> Commencement of operations for Class Y shares occurred on
December 11, 1998 for the International Equity Fund. Commencement of sale of
Class A shares occurred on February 1, 1999 for the International Equity Fund.
(2)<F16> The total return does not reflect the 4.00% maximum sales charge for
Class A shares.
(3)<F17> Not annualized.
(4)<F18> Annualized.
(5)<F19> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
See notes to financial statements
THE SIMMS FUNDS
FINANCIAL HIGHLIGHTS
- --------------------
GLOBAL EQUITY FUND
-------------------------------------
FEBRUARY 19, 1999 DECEMBER 18, 1998
(1)<F20> (1)<F20>
THROUGH THROUGH
JUNE 30, 1999 JUNE 30, 1999
---------------- ----------------
CLASS A CLASS Y
------- -------
PER SHARE DATA:
Net asset value, beginning of period $10.41 $10.00
------ ------
Income from investment operations:
Net investment income (loss) (0.00) 0.01
Net realized and unrealized
gains on investments 0.81 1.26
------ ------
Total from investment operations 0.81 1.27
------ ------
Net asset value, end of period $11.22 $11.27
------ ------
------ ------
Total return (2)<F21> (3)<F22> 7.78% 12.70%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $143,194 $777,645
Ratio of expenses to average
net assets before reimbursement
by Adviser (4)<F23> 32.84% 37.44%
Ratio of expenses to average
net assets after reimbursement
by Adviser (4)<F23> 2.23% 1.48%
Ratio of net investment loss
to average net assets before
reimbursement by Adviser (4)<F23> (30.77%) (35.61%)
Ratio of net investment income (loss)
to average net assets after
reimbursement by Adviser (4)<F23> (0.15%) 0.35%
Portfolio turnover rate (5)<F24> 28.70% 28.70%
(1)<F20> Commencement of operations for Class Y shares occurred on December 18,
1998 for the Global Equity Fund. Commencement of sale of Class A shares
occurred on February 19, 1999 for the Global Equity Fund.
(2)<F21> The total return does not reflect the 4.00% maximum sales charge for
Class A shares.
(3)<F22> Not annualized.
(4)<F23> Annualized.
(5)<F24> Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
See notes to financial statements
THE SIMMS FUNDS
U.S. EQUITY FUND
SCHEDULE OF INVESTMENTS
June 30, 1999
- -----------------------
Shares Value
- ----- -----
COMMON STOCKS -- 94.5%
AEROSPACE -- 4.3%
3,600 AlliedSignal Inc. $226,800
--------
BUSINESS SERVICES -- 8.7%
3,260 Cisco Systems, Inc.*<F25> 210,066
3,040 Omnicom Group Inc. 243,200
--------
453,266
--------
BUSINESS MACHINES -- 3.7%
3,250 Xerox Corporation 191,953
--------
COMPUTERS -- 13.5%
2,360 Dell Computer
Corporation *<F25> 87,320
3,280 EMC Corporation *<F25> 180,400
1,610 International Business
Machines Corporation 208,093
3,280 Sun Microsystems, Inc.*<F25> 225,910
--------
701,723
--------
DRUGS -- 7.0%
1,500 Pfizer Inc. 164,625
3,820 Schering-Plough Corporation 202,460
--------
367,085
--------
ELECTRONICS -- 1.8%
1,600 Intel Corporation 95,200
--------
ELECTRICAL EQUIPMENT -- 3.0%
1,370 General Electric Company 154,810
--------
FINANCIAL SERVICES -- 9.5%
2,800 Concord EFS, Inc.*<F25> 118,475
2,680 Fannie Mae 183,245
6,367 MBNA Corporation 194,989
--------
496,709
--------
INSURANCE -- 3.7%
4,080 AFLAC Incorporated 195,330
--------
INTERNET SERVICES -- 3.8%
1,800 America Online, Inc. 198,900
--------
MEDICAL INSTRUMENTS -- 3.1%
3,120 Guidant Corporation *<F25> 160,485
--------
MULTI-INDUSTRY -- 4.1%
2,250 Tyco International Ltd. 213,188
--------
RETAIL -- 11.9%
3,160 Bed Bath & Beyond Inc. *<F25> 121,660
6,000 Tandy Corporation 293,250
4,220 Wal-Mart Stores, Inc. 203,615
--------
618,525
--------
SOFTWARE -- 7.3%
1,965 Computer Associates
International, Inc. 108,075
3,000 Microsoft Corporation *<F25> 270,562
--------
378,637
--------
TELECOMMUNICATIONS -- 6.5%
3,675 AT&T Corp. 205,111
1,980 Lucent Technologies Inc. 133,526
--------
338,637
--------
UTILITIES - ELECTRIC -- 2.6%
2,380 AES Corporation *<F25> 138,338
--------
TOTAL COMMON STOCKS
(Cost $3,843,611) 4,929,586
---------
SHORT-TERM INVESTMENTS -- 5.3%
VARIABLE RATE DEMAND NOTES #<F26> -- 5.3%
$153,544 Firstar Bank, 4.970% $ 153,544
65,335 General Mills, Inc., 4.825% 65,335
55,417 Pitney Bowes, Inc., 4.825% 55,417
----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $274,296) 274,296
----------
TOTAL INVESTMENTS
(COST $4,117,907) -- 99.8% 5,203,882
----------
OTHER ASSETS,
LESS LIABILITIES -- 0.2% 10,930
----------
TOTAL NET ASSETS -- 100.0% $5,214,812
----------
----------
*<F25> Non-income producing security.
#<F26> 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 June 30, 1999.
See notes to financial statements
THE SIMMS FUNDS
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
June 30, 1999
- -------------------------
Shares Value
- ----- -----
COMMON STOCKS -- 98.3%
ARGENTINA -- 1.0%
TELECOMMUNICATIONS -- 1.0%
1,780 Telefonica de Argentina
S.A. - ADR $ 55,848
---------
Total Argentina 55,848
---------
DENMARK -- 2.0%
TELECOMMUNICATIONS -- 2.0%
4,300 Tele Danmark A/S - ADR 110,725
---------
Total Denmark 110,725
---------
FINLAND -- 6.6%
TELECOMMUNICATIONS -- 6.6%
3,940 Nokia Oyj - ADR, Class A 360,756
---------
Total Finland 360,756
---------
FRANCE -- 4.0%
INSURANCE -- 2.5%
2,240 Axa - ADR 139,580
SOFTWARE -- 1.5%
2,490 Dassault Systemes S.A. - ADR 82,637
---------
Total France 222,217
---------
GREECE -- 1.5%
TELECOMMUNICATIONS -- 1.5%
7,680 Hellenic Telecommunications
Organization SA (OTE) - ADR 84,960
---------
Total Greece 84,960
---------
HUNGARY -- 1.9%
TELECOMMUNICATIONS -- 1.9%
3,780 Magyar Tavkozlesi Rt. - ADR 103,950
---------
Total Hungary 103,950
---------
IRELAND -- 4.7%
DRUGS -- 3.1%
6,200 Elan Corporation PLC
ADR *<F27> 172,050
FINANCIAL SERVICES -- 1.6%
3,120 Allied Irish Banks PLC - ADR 85,020
---------
Total Ireland 257,070
---------
ITALY -- 8.2%
OPTICAL SUPPLIES -- 2.6%
9,240 Luxottica Group SPA - ADR 143,798
TELECOMMUNICATIONS -- 5.6%
2,930 Telecom Italia SPA - ADR 308,199
---------
Total Italy 451,997
---------
JAPAN -- 18.9%
COMPUTERS -- 5.3%
2,900 Fujitsu Limited - ADR 291,710
ELECTRONICS -- 4.5%
8,470 Canon, Inc. - ADR 246,689
RETAIL -- 2.2%
1,800 Ito-Yokado Co., Ltd. - ADR 122,175
TELECOMMUNICATIONS -- 6.9%
6,120 Nippon Telegraph & Telephone
Corporation - ADR 383,265
---------
Total Japan 1,043,839
---------
MEXICO -- 2.1%
TELECOMMUNICATIONS -- 2.1%
1,420 Telefonos de Mexico
S.A. - ADR 114,754
---------
Total Mexico 114,754
---------
NETHERLANDS -- 14.9%
ELECTRONICS -- 9.8%
2,723 Philips Electronics N.V. 274,703
3,800 STMicroelectronics
N.V. - NYS 263,625
---------
538,328
---------
HOUSEHOLD PRODUCTS -- 3.1%
2,464 Unilever N.V. 171,884
PRINTING & PUBLISHING -- 2.0%
2,760 Wolters Kluwer N.V. - ADR 109,867
---------
Total Netherlands 820,079
---------
PORTUGAL -- 3.0%
TELECOMMUNICATIONS -- 3.0%
4,070 Portugal Telecom S.A. - ADR 167,633
---------
Total Portugal 167,633
---------
SOUTH KOREA -- 1.5%
TELECOMMUNICATIONS -- 1.5%
2,000 Korea Telecom
Corporation - ADR*<F27> 80,000
---------
Total South Korea 80,000
---------
SPAIN -- 7.1%
OIL & GAS SERVICES -- 3.9%
10,500 Repsol S.A. - ADR 213,281
TELECOMMUNICATIONS -- 3.2%
1,225 Telefonica S.A. - ADR 180,190
---------
Total Spain 393,471
---------
SWITZERLAND -- 2.4%
DRUGS -- 2.4%
1,290 Roche Holding AG - ADR 132,602
---------
Total Switzerland 132,602
---------
UNITED KINGDOM -- 18.5%
BUSINESS SERVICES -- 3.3%
2,120 WPP Group PLC - ADR 181,790
DRUGS -- 3.6%
5,020 AstraZeneca Group PLC - ADR 196,721
FINANCIAL SERVICES -- 4.1%
1,870 Barclays PLC - ADR 223,465
FOOD, BEVERAGES & TOBACCO -- 3.3%
6,920 Cadbury Schweppes
PLC - ADR 184,245
TELECOMMUNICATIONS -- 4.2%
1,180 Vodafone AirTouch PLC - ADR 232,460
---------
Total United Kingdom 1,018,681
---------
TOTAL COMMON STOCKS
(Cost $4,890,829) 5,418,582
---------
PRINCIPAL
AMOUNT
- ---------
SHORT-TERM INVESTMENT -- 2.0%
VARIABLE RATE DEMAND NOTE #<F28> -- 2.0%
$110,215 Firstar Bank, 4.970% 110,215
---------
TOTAL SHORT-TERM
INVESTMENT
(Cost $110,215) 110,215
---------
TOTAL INVESTMENTS
(Cost $5,001,044) -- 100.3% 5,528,797
---------
LIABILITIES, LESS OTHER
ASSETS -- (0.3%) (14,517)
---------
TOTAL NET ASSETS -- 100.0% $5,514,280
----------
----------
*<F27> Non-income producing security.
#<F28> 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 June 30, 1999.
ADR - American Depository Receipts
NYS - New York Shares
See notes to financial statements
THE SIMMS FUNDS
GLOBAL EQUITY FUND
SCHEDULE OF INVESTMENTS
June 30, 1999
- -----------------------
Shares Value
- ------ -----
COMMON STOCKS -- 82.4%
ARGENTINA -- 0.5%
TELECOMMUNICATIONS -- 0.5%
130 Telefonica de Argentina
S.A. - ADR 4,079
---------
Total Argentina 4,079
---------
DENMARK -- 0.8%
TELECOMMUNICATIONS -- 0.8%
300 Tele Danmark A/S - ADR 7,725
---------
Total Denmark 7,725
---------
FINLAND -- 2.6%
TELECOMMUNICATIONS -- 2.6%
260 Nokia Oyj - ADR, Class A 23,806
---------
Total Finland 23,806
---------
FRANCE -- 1.6%
INSURANCE -- 0.9%
130 Axa - ADR 8,101
SOFTWARE -- 0.7%
200 Dassault Systemes
S.A. - ADR 6,637
---------
Total France 14,738
---------
GREECE -- 0.8%
TELECOMMUNICATIONS -- 0.8%
620 Hellenic Telecommunications
Organization SA (OTE) - ADR 6,859
---------
Total Greece 6,859
---------
HUNGARY -- 0.8%
TELECOMMUNICATIONS -- 0.8%
260 Magyar Tavkozlesi Rt. - ADR 7,150
---------
Total Hungary 7,150
---------
IRELAND -- 1.7%
DRUGS -- 1.0%
340 Elan Corporation PLC - ADR*<F29> 9,435
FINANCIAL SERVICES -- 0.7%
240 Allied Irish Banks
PLC - ADR 6,540
---------
Total Ireland 15,975
---------
ITALY -- 3.0%
OPTICAL SUPPLIES -- 1.0%
570 Luxottica Group SPA - ADR 8,871
TELECOMMUNICATIONS -- 2.0%
180 Telecom Italia SPA - ADR 18,934
---------
Total Italy 27,805
---------
JAPAN -- 7.1%
COMPUTERS -- 2.2%
200 Fujitsu Limited - ADR 20,118
ELECTRONICS -- 1.6%
510 Canon, Inc. - ADR 14,854
RETAIL -- 0.9%
120 Ito-Yokado Co., Ltd. - ADR 8,145
TELECOMMUNICATIONS -- 2.4%
360 Nippon Telegraph & Telephone
Corporation - ADR 22,545
---------
Total Japan 65,662
---------
MEXICO -- 0.4%
TELECOMMUNICATIONS -- 0.4%
50 Telefonos de Mexico S.A. - ADR 4,041
---------
Total Mexico 4,041
---------
NETHERLANDS -- 5.7%
ELECTRONICS -- 3.5%
138 Philips Electronics N.V. 13,921
260 STMicroelectronics
N.V. - NYS 18,038
---------
31,959
---------
HOUSEHOLD PRODUCTS -- 1.3%
170 Unilever N.V. 11,833
PRINTING & PUBLISHING -- 0.9%
220 Wolters Kluwer N.V. - ADR 8,758
---------
Total Netherlands 52,550
---------
PORTUGAL -- 1.0%
TELECOMMUNICATIONS -- 1.0%
220 Portugal Telecom S.A. - ADR 9,061
---------
Total Portugal 9,061
---------
SOUTH KOREA -- 0.6%
TELECOMMUNICATIONS -- 0.6%
130 Korea Telecom Corporation -
ADR*<F29> 5,200
---------
Total South Korea 5,200
---------
SPAIN -- 3.2%
OIL & GAS SERVICES -- 1.6%
720 Repsol S.A. - ADR 14,625
TELECOMMUNICATIONS -- 1.6%
101 Telefonica S.A. - ADR 14,918
---------
Total Spain 29,543
---------
SWITZERLAND -- 1.0%
DRUGS -- 1.0%
90 Roche Holding AG - ADR 9,251
---------
Total Switzerland 9,251
---------
UNITED KINGDOM -- 7.1%
BUSINESS SERVICES -- 1.5%
160 WPP Group PLC - ADR 13,720
DRUGS -- 1.2%
290 AstraZeneca Group PLC - ADR 11,364
FINANCIAL SERVICES -- 1.4%
110 Barclays PLC - ADR 13,145
FOOD, BEVERAGES & TOBACCO -- 1.3%
440 Cadbury Schweppes PLC - ADR 11,715
TELECOMMUNICATIONS -- 1.7%
80 Vodafone AirTouch PLC - ADR 15,760
---------
Total United Kingdom 65,704
---------
UNITED STATES -- 44.5%
AEROSPACE -- 1.9%
280 AlliedSignal Inc. 17,640
BUSINESS SERVICES -- 4.5%
380 Cisco Systems, Inc. *<F29> 24,486
210 Omnicom Group Inc. 16,800
---------
41,286
---------
BUSINESS MACHINES -- 1.7%
270 Xerox Corporation 15,947
COMPUTERS -- 6.9%
210 Dell Computer Corporation *<F29> 7,770
280 EMC Corporation *<F29> 15,400
160 International Business Machines
Corporation 20,680
290 Sun Microsystems, Inc. *<F29> 19,974
---------
63,824
---------
DRUGS -- 2.9%
110 Pfizer Inc. 12,073
280 Schering-Plough Corporation 14,840
---------
26,913
---------
ELECTRONICS -- 1.0%
150 Intel Corporation 8,925
ELECTRICAL EQUIPMENT -- 1.2%
100 General Electric Company 11,300
FINANCIAL SERVICES -- 5.0%
240 Concord EFS, Inc.*<F29> 10,155
220 Fannie Mae 15,042
690 MBNA Corporation 21,131
---------
46,328
---------
INSURANCE -- 1.7%
320 AFLAC Incorporated 15,320
INTERNET SERVICES -- 1.7%
140 America Online, Inc. 15,470
MEDICAL INSTRUMENTS -- 1.6%
290 Guidant Corporation *<F29> 14,917
MULTI-INDUSTRY -- 1.9%
180 Tyco International Ltd. 17,055
RETAIL -- 5.1%
200 Bed Bath & Beyond Inc. *<F29> 7,700
500 Tandy Corporation 24,437
310 Wal-Mart Stores, Inc. 14,957
---------
47,094
---------
SOFTWARE -- 3.1%
170 Computer Associates
International, Inc. 9,350
210 Microsoft Corporation *<F29> 18,939
---------
28,289
---------
TELECOMMUNICATIONS -- 3.3%
320 AT&T Corp. 17,860
190 Lucent Technologies Inc. 12,813
---------
30,673
---------
UTILITIES - ELECTRIC -- 1.0%
150 AES Corporation *<F29> 8,719
---------
Total United States 409,700
---------
TOTAL COMMON STOCKS
(Cost $682,189) 758,849
---------
SHORT-TERM INVESTMENTS -- 18.1%
VARIABLE RATE DEMAND NOTES #<F30> -- 18.1%
$30,500 Firstar Bank, 4.9700% 30,500
30,293 General Mills, Inc., 4.8250% 30,293
30,000 Pitney Bowes, Inc., 4.8250% 30,000
30,294 Sara Lee Corporation,
4.8200% 30,294
30,000 Warner-Lambert Company,
4.7010% 30,000
15,317 Wisconsin Electric Power
Company, 4.7006% 15,317
---------
TOTAL SHORT- TERM
INVESTMENTS
(Cost $166,404) 166,404
---------
TOTAL INVESTMENTS
(Cost $848,593) -- 100.5% 925,253
----------
LIABILITIES, LESS OTHER
ASSETS -- (0.5%) (4,414)
----------
TOTAL NET ASSETS -- 100.0% $920,839
----------
----------
*<F29> Non-income producing security.
#<F30> 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 June 30, 1999.
ADR - American Depository Receipts
NYS - New York Shares
See notes to financial statements
THE SIMMS FUNDS
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1999
- ---------------------------------
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 U.S. Equity Fund commenced operations with the sale of Class Y shares on
December 11, 1998. The investment objective of the Fund is capital appreciation
through investments in the common stock of U.S. companies with large market
capitalizations, including multinational companies. The Fund may also invest in
convertible securities and preferred stock of U.S. companies.
The International Equity Fund commenced operations with the sale of Class Y
shares on December 11, 1998. The investment objective of the Fund is capital
appreciation through investments in the securities of foreign companies with
large market capitalizations, 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 Global Equity Fund commenced operations with the sale of Class Y shares on
December 18, 1998. The investment objective of the Fund is capital appreciation
through investments in the securities of U.S. and foreign companies with large
market capitalizations, including multinational companies. The Fund's foreign
equity investments primarily consist of ADRs. 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. Class A
shares were initially sold on April 26, 1999, February 1, 1999 and February 19,
1999 for the U.S. Equity Fund, International Equity Fund and Global Equity Fund,
respectively. The Class A shares are subject to an initial sales charge imposed
at the time of purchase, in accordance with the Fund's prospectus, and expenses
pursuant to the distribution and shareholder servicing plans described in Notes
7 and 8. 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 and bid prices.
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 and bid prices 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.
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, reclassifications are made in the
capital accounts in the period that the difference arises. Accordingly, at June
30, 1999, reclassifications were recorded to increase accumulated undistributed
net investment income by $10,547 and $32, increase accumulated net realized gain
on investments by $348,719 and $327,190, and decrease paid in capital for shares
of beneficial interest by $359,266 and $327,222 for the U.S. Equity Fund and
International Equity Fund, respectively.
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.
NOTE 3 -- 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. (the "Partnerships")
were transferred to the U.S. Equity Fund and 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 U.S.
Equity Fund and International Equity Fund 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 of $3,333,389 for the U.S. Equity Fund
and $4,221,506 for the International Equity Fund became the cost basis for
financial reporting purposes for the respective Funds. This resulted in the tax
basis of securities held for the U.S. Equity Fund and the International Equity
Fund being $1,096,452 and $825,707 lower than their basis for financial
reporting purposes, respectively. On June 30, 1999, the tax basis of these
securities held by the U.S. Equity Fund and the International Equity Fund was
$737,186 and $498,517 lower than their basis for financial reporting purposes,
respectively.
NOTE 4 -- SHARES OF BENEFICIAL INTEREST
At June 30, 1999, 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 A
U.S. INTERNATIONAL GLOBAL
EQUITY FUND EQUITY FUND EQUITY FUND
APRIL 26, 1999- FEBRUARY 1, 1999- FEBRUARY 19, 1999-
JUNE 30, 1999 JUNE 30, 1999 JUNE 30, 1999
--------------- ----------------- ------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ------- ------ ------- ------ -------
Sales 79 $960 14,751 $155,219 12,764 $136,141
Redemptions -- -- -- -- -- --
-- ---- ------ -------- ------ --------
Net Increase 79 $960 14,751 $155,219 12,764 $136,141
-- ---- ------ -------- ------ --------
-- ---- ------ -------- ------ --------
CLASS Y
U.S. INTERNATIONAL GLOBAL
EQUITY FUND EQUITY FUND EQUITY FUND
DECEMBER 11, 1998- DECEMBER 11, 1998- DECEMBER 18, 1998-
JUNE 30, 1999 JUNE 30, 1999 JUNE 30, 1999
------------------ ------------------ ------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ------- ------ ------ ------ ------
Sales 452,329 $4,524,084 567,689 $5,756,594 69,021 $724,438
Redemptions (40,660) (437,740) (82,118) (858,616) (47) (506)
------- ---------- ------- ---------- ------ --------
Net Increase 411,669 $4,086,344 485,571 $4,897,978 68,974 $723,932
------- ---------- ------- ---------- ------ --------
------- ---------- ------- ---------- ------ --------
SHARES OUTSTANDING:
Beginning of period 5,000 5,000 1
------- ------- ------
End of period 416,669 490,571 68,975
------- ------- ------
------- ------- ------
NOTE 5 -- INVESTMENT TRANSACTIONS
During the period December 11, 1998 to June 30, 1999 for the U.S. Equity Fund
and International Equity Fund and the period December 18, 1998 to June 30, 1999
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 $2,433,424 $3,071,729 $830,895
Sales $1,925,282 $2,260,487 $131,256
The following information for the Funds is as of June 30, 1999:
COST FOR TAX BASIS TAX BASIS
FEDERAL NET TAX GROSS GROSS
INCOME TAX UNREALIZED UNREALIZED UNREALIZED
PURPOSES APPRECIATION APPRECIATION DEPRECIATION
---------- ------------ ------------ ------------
U.S. Equity Fund $3,380,721 $1,823,161 $1,841,447 $ 18,286
International Equity Fund $4,511,829 $1,016,968 $1,273,554 $256,586
Global Equity Fund $ 848,646 $ 76,607 $ 103,869 $ 27,262
The Global Equity Fund realized, on a tax basis, post-October losses through
June 30, 1999 of $16,754, which are not recognized for tax purposes until the
first day of the following fiscal year.
NOTE 6 -- INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Trust has an Investment Advisory Agreement (the "Agreement") with the Simms
Capital Management, Inc. (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.
The Adviser has agreed to voluntarily reimburse and/or absorb the Funds'
advisory, organization and other expenses, to the extent necessary to ensure
that each Fund's operating expenses do not exceed the following amounts:
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 the Adviser reimburses or absorbs fees and expenses, it may
seek payment of such amounts for two years after the year in which expenses were
reimbursed or absorbed. A Fund will make no such payment, 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 7 -- 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 may pay distribution fees of up to 0.50% of the average
daily net assets to T.O. Richardson Securities, Inc. (the "Distributor").
Payments under the 12b-1 Plan shall be used to reimburse the Distributor for
services provided and expenses incurred, including amounts paid to brokers or
dealers, in connection with the sale of each Fund's shares. The U.S. Equity
Fund, International Equity Fund and Global Equity Fund incurred $1, $190 and
$162 in fees pursuant to the 12b-1 Plan for the periods from April 26, 1999 to
June 30, 1999, from February 1, 1999 to June 30, 1999 and from February 19, 1999
to June 30, 1999, respectively.
NOTE 8 -- 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 of 0.25% of its average
daily net assets for services relating to maintenance of investor accounts,
including liaisons with investors. The U.S. Equity Fund, International Equity
Fund and Global Equity Fund incurred $1, $95 and $81 in fees pursuant to the
shareholder servicing plan for the periods from April 26, 1999 to June 30, 1999,
from February 1, 1999 to June 30, 1999 and from February 19, 1999 to June 30,
1999, respectively.
THE SIMMS FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------
To the Board of Trustees and Shareholders of
The Simms Funds
In our opinion, the accompanying statements of assets and liabilities, including
the schedules 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 U.S. Equity Fund, the
International Equity Fund, and the Global Equity Fund (constituting The Simms
Funds, hereafter referred to as the "Funds") at June 30, 1999, and the results
of each of their operations, changes in net assets and the financial highlights
for each of the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as the "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 generally accepted auditing standards
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, 1999 by correspondence with the custodian
and brokers, provide a reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
July 30, 1999
THE SIMMS FUNDS
TAX INFORMATION
June 30, 1999
- ---------------
REQUIRED INCOME TAX DISCLOSURES
The International Equity Fund utilized earnings and profits distributed to
shareholders on redemption of shares as part of the dividends paid deduction.
The portion of earnings and profits distributed to shareholders on redemption of
shares designated as a 20% rate capital gain distribution for purposes of the
dividends paid deduction is $9,152.
(SIMMS CAPITAL MANAGEMENT, INC.
Global Investors Logo)
THE SIMMS FUNDS
55 Railroad Avenue
Greenwich, Connecticut 06830
1-877-GET-SIMS
(1-877-438-7467)
INVESTMENT ADVISER
Simms Capital Management
55 Railroad Avenue
Greenwich, Connecticut 06830
ADMINISTRATOR, TRANSFER AGENT AND DIVIDEND DISBURSEMENT AGENT
Firstar Mutual Fund Services, LLC
P.O. Box 701
615 East Michigan Street
Milwaukee, Wisconsin 53202
CUSTODIAN
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
DISTRIBUTOR
T.O. Richardson Securities, Inc.
2 Bridgewater Road
Farmington, Connecticut 06032
This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
