THE SIMMS FUNDS
U.S. EQUITY FUND
INTERNATIONAL
EQUITY FUND
GLOBAL EQUITY FUND
ANNUAL REPORT
JUNE 30, 2000
(SIMMS CAPITAL MANAGEMENT, INC. GLOBAL INVESTORS LOGO)
THE SIMMS FUNDS
REPORT FROM MANAGEMENT AUGUST 18, 2000
Dear Shareholders,
Although the current year has been difficult for equity investors for the fiscal
year ended June 30, 2000, we are proud to provide the following results for our
Funds. The Simms U.S. Equity Fund's total return was 21% for the Class Y shares
and assets under management have increased 80% to $9.4 million. The Simms
International Equity Fund's total return was 48% for the Class Y shares and
assets under management have increased 173% to $15.1 million. The Simms Global
Equity Fund's total return was 34% for the Class Y shares and assets under
management have increased over five fold to $5.9 million.
Most other indices are down modestly for the current quarter and the current
year. Only U.S. mid-cap (+8%), SWEDEN (+6%), CANADA (+19%) and several emerging
markets are up meaningfully year-to-date. Commodity prices led by oil (a proxy
for the natural resource based Canadian economy) continued to rise in the
quarter. Our quarterly and trailing 12-month performance and sector weights can
be attributed to superior stock selection.
UNITED STATES & CANADA:
In the U.S., Greenspan seems to have engineered a soft landing as interest
rates, oil prices and a slumping stock market have taken the edge off consumer
confidence and spending. The Fed is allowed to put further tightening on hold
for the time being (through the election) as the economic indicators (Purchasing
Managers Surveys, retail sales, etc.) confirm a slowing in the economy. The oil
price wild card seems to have been taken off the table by the Saudi Arabians,
who remember the "wreck" $30/bbl oil caused in the 1980s.
Most 2nd quarter earnings warnings have been made (Computer Associates,
Honeywell, etc.), which means some pretty strong quarterly earnings reports
(Cisco, EMC, GE, Nokia, Oracle) are ahead of us. GDP growth is estimated at 4%
for the quarter compared to 5.4% in the first quarter and earnings expectations
are intact. S&P operating earnings (I/B/E/S) are estimated to rise to $57.79
this year (vs. $51.02 last) and $62.62 in 2001. Lastly, market PE ratios of 26x
2000 and 24x 2001 seem reasonable given the environment.
The market is looking ahead towards a post-tightening period, with a more
equity-friendly environment enjoying moderate growth, low inflation and
unemployment and continued gains in productivity and prosperity. Our largest
sector weights remain in technology, consumer cyclicals and healthcare. We
---------- ------------------ ----------
bought Amgen (biotech), Comverse Technology, Home Depot (consumer), as well as
------- --------
Xilinx (technology), and sold Fannie Mae (finance), Honeywell (capital goods),
------- -------------
Lucent (telecom) and Microsoft (technology). These changes were all made based
------- ----------
on our valuation models.
EUROPE & UNITED KINGDOM:
Yes, the U.S. economy is showing signs of a cooling off, but most economic
indicators are still pointing to a robust upswing in EUROPE. GDP is expected to
be up another 3.5% by year-end, with rising earnings (+14%) and business
sentiment at an all-time high. The Euro has stabilized at roughly US$0.95 in the
second quarter supported by higher interest rates and the strong economy. The
UNITED KINGDOM risks becoming more isolated as owners of manufacturing
facilities on the island threaten to close if the UK doesn't soon agree to join
the monetary union.
The economy's ability to create new jobs after so many years of stagnation and
restructuring is particularly impressive. Unemployment in EUROLAND is now down
to 9.2% from 11.7% in January 1997. The NETHERLANDS (2.9%), AUSTRIA (3.3%) and
PORTUGAL (4.2%) are leading the way, but most countries across the continent are
now enjoying a rapid reduction in unemployment.
On the other hand, the stock markets there have continued to demonstrate a total
lack of direction. Last year's strong performance in TMT (technology, media and
--- ---------- -----
telecom) stocks pushed valuations to levels which investors felt uncomfortable
-------
with six months later. Yet, there is no new leadership in the market. "Value
stocks" are not doing much better and equities seem to follow the moody swings
of Wall Street.
We have continued our search for stocks with impressive growth but better
earnings visibility and lower price earnings ratios. Ahold, the DUTCH
headquartered retailer is expected to have 17% earnings growth in the next 3 to
5 years, while trading less than 20 times earnings. Similarly, we bought TNT
Post, the Dutch postal service company with a dominant express mail business in
Europe. TNT Post is trading at a reasonable PER while it should benefit from
strong demand coming from Internet-related orders. During the second quarter, we
also took profits in Adecco which had become expensive and sold Dixons as their
Internet business seems to be stagnating.
As expected, the European Union leaders agreed to let GREECE join the EMU on
January 1, 2001 as the 12th member. We own Hellenic Telecom there as well as
Matav (telecom) in HUNGARY, which remains an emerging market country.
-------
JAPAN:
The Bank of JAPAN's June survey of business conditions (the Tankan survey) was
generally better than expected. However, the timid economic recovery has
disproportionately affected large manufacturing exporters that have benefited
from the global IT investment boom. Small and medium size businesses are not
showing healthy improvements, and Japanese consumers are still holding on to
their savings. It seems, however, that the Japanese economy is slowly
recovering, and we may expect a modest growth in GDP for the next 18 months.
Hence, we expect the BoJ to move away from its "zero interest rate" policy
sometime during the third quarter. Again, lower oil prices are a major plus.
JAPANESE equities overall (TOPIX -6%) continued their lackluster performance in
the second quarter. We took profits in Trend Micro (tech) and Nippon Telegraph
----
(telecom). Both benefited from the rally in TMT and their valuations have eroded
------- ---
due to price. With the proceeds we bought Eisai (pharma) after the market had
------
digested disappointing '99 earnings. The company's prospects are particularly
exciting in the U.S., where two of its drugs are selling very well.
EMERGING MKTS:
Even though the EMERGING MARKETS underperformed global equities (-11%) in the
second quarter, economic recovery in the sector appears to be accelerating.
CHINA, as an example, is expecting +8% growth this year -- their first positive
(YoY) in three years. Our emerging markets stocks declined only 1.3% in the
second quarter re-enforcing the value of our stock selection process. Teva
Pharmaceutical in ISRAEL led the way +48% in Q2. We remain marginally
overweight in the sector.
In the much-anticipated MEXICAN elections, Vincente Fox Quesada of PAN (National
Action Party) was the upset winner over the PRI (Institutional Revolutionary
Party), which had been in power for 71 years. This victory had not been priced
into the market as we saw a 6% jump in the Bolsa the day after the election
(July 2nd). Long term, this is bullish for the market and we retain our
position in Telmex.
The Asian recovery has broadened, with domestic demand replacing net exports as
the main growth driver. Private consumption now contributes the most to GDP.
Further corporate and financial reform is necessary to sustain this expansion.
Korea Telecom remains our only position in the region outside of HONG KONG.
According to published reports, 42% of Hang Seng Index 1999 operating profits
came from outside HONG KONG through three big firms, one of which is China
Mobile (HK) [formerly China Telecom]. CHINA is expected to be the second largest
market for cellular subscribers behind the U.S. and China Mobile's earnings
should grow 24% annually over the next 5 years. In addition to China Mobile we
also own Asia Satellite.
SUMMARY:
As stated earlier, we believe the environment is ideal for investing in equities
globally. Broadly speaking, we are overweight in foreign stocks (EAFE versus
the S&P); overweight in Europe, underweight in U.S., UK and JAPAN and
essentially equal-weight in the EMERGING MARKETS. More importantly, we continue
to be FULLY INVESTED in quality GROWTH STOCKS around the globe.
PORTFOLIO CHARACTERISTICS AND DIVERSIFICATION AS OF 6/30/00
PORTFOLIO CHARACTERISTICS U.S. INT'L GLOBAL
-------------------------------------------------------------------
P/E (2000) 43.8x 38.7x 42.0x
P/E (2001) 35.7x 30.5x 33.7x
5 Year Growth Rate 22.2% 20.9% 22.0%
ROE (LT growth rate) 24.4% 20.2% 23.4%
Yield 0.3% 0.8% 0.6%
Avg. Mkt. Cap $116.7 B $45.4 B $82.2 B
GLOBAL REGIONAL DIVERSIFICATION VS. MSCI WORLD (AS OF 6/30/00)
------------------------------------------------------------------
U.S. & Canada 43.1% 50.6%
Europe 28.7% 24.2%
Japan 10.7% 12.9%
United Kingdom 4.1% 9.4%
Asia Pacific (ex. Japan) 1.9% 2.9%
Latin America 1.1% NA
Middle East 5.9% NA
Cash (in US$) 4.5% NA
GLOBAL SECTOR DIVERSIFICATION
-----------------------------
Technology 36.8%
Consumer 16.8%
Telecom 11.6%
Healthcare 13.8%
Financials 7.5%
Capital Goods 4.6%
Util. & Transport. 4.4%
Cash (in US$) 4.5%
We thank you for your support and for future growth.
/s/ Robert A. Simms
Robert A. Simms
President & CEO
/s/ Thomas L. Melly
Thomas L. Melly
Principal,
Portfolio Manager
/s/ Jennifer D. Miller
Jennifer D. Miller
Principal,
Portfolio Manager
/s/ Herve van Caloen
Herve van Caloen
Principal,
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
Simms U.S. Equity _ Simms U.S. Equity --
Date Class A No Load Class A S&P 500 Index
4/99 10,000 9,600 10,000
6/99 10,246 9,836 10,144
9/99 10,033 9,632 9,510
12/99 12,007 11,527 10,925
3/00 12,525 12,024 11,176
6/00 12,271 11,780 10,879
Average Annual Total Return One Since
For the period ended June 30, 2000 Year Inception
---------------------------------- ---- ---------
Simms U.S. Equity Fund - Class A No Load (1)<F1> 19.76% 18.92%
Simms U.S. Equity Fund - Class A (1)<F1> 14.98% 14.81%
S&P 500 Index 7.25% 7.38%
(1)<F1> April 26, 1999 inception.
SIMMS U.S. EQUITY FUND -- CLASS Y VS. S&P 500 INDEX GROWTH OF HYPOTHETICAL
$10,000 INVESTMENT
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
9/99 12,310 11,125
12/99 14,749 12,780
3/00 15,423 13,074
6/00 15,134 12,726
Average Annual Total Return One Since
For the period ended June 30, 2000 Year Inception
---------------------------------- ---- ---------
Simms U.S. Equity Fund - Class Y (1)<F2> 20.98% 30.57%
S&P 500 Index 7.25% 16.76%
(1)<F2> December 11, 1998 inception.
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
Simms International Morgan Stanley
Equity -- Class A Simms International Capital International
Date No Load Equity -- Class A 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
9/99 11,025 10,584 11,030
12/99 15,779 15,148 12,962
3/00 15,954 15,316 12,985
6/00 15,223 14,614 12,341
Average Annual Total Return One Since
For the period ended June 30, 2000 Year Inception
---------------------------------- ---- ---------
Simms International Equity Fund - Class A No Load (1)<F3> 47.48% 34.62%
Simms International Equity Fund - Class A (1)<F3> 41.62% 30.76%
Morgan Stanley Capital International EAFE Index 15.12% 16.04%
(1)<F3> February 1, 1999 inception.
SIMMS INTERNATIONAL EQUITY FUND -- CLASS Y VS. MORGAN STANLEY CAPITAL
INTERNATIONAL EAFE INDEX GROWTH OF HYPOTHETICAL $10,000 INVESTMENT
Simms International Morgan Stanley Capital
Date Equity -- Class Y International EAFE Index
12/98 10,000 10,000
3/99 10,410 10,531
6/99 10,910 11,005
9/99 11,690 11,324
12/99 16,757 13,307
3/00 16,941 13,331
6/00 16,192 12,670
Average Annual Total Return One Since
For the period ended June 30, 2000 Year Inception
---------------------------------- ---- ---------
Simms International Equity Fund - Class Y (1)<F4> 48.41% 36.37%
Morgan Stanley Capital International EAFE Index 15.12% 16.42%
(1)<F4> December 11, 1998 inception.
THE SIMMS FUNDS
GLOBAL EQUITY FUND
SIMMS GLOBAL EQUITY FUND -- CLASS A VS. MORGAN STANLEY CAPITAL WORLD INDEX
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT
Simms Global Equity -- Simms Global Equity -- Morgan Stanley
Date 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
9/99 11,000 10,580 10,853
12/99 14,333 13,760 12,701
3/00 14,785 14,194 12,829
6/00 14,304 13,732 12,293
Average Annual Total Return One Since
For the period ended June 30, 2000 Year Inception
---------------------------------- ---- ---------
Simms Global Equity Fund - Class A No Load (1)<F5> 32.71% 30.00%
Simms Global Equity Fund - Class A (1)<F5> 27.37% 26.13%
Morgan Stanley Capital World Index 11.03% 16.33%
(1)<F5> February 19, 1999 inception.
SIMMS GLOBAL EQUITY FUND -- CLASS Y VS. MORGAN STANLEY CAPITAL WORLD INDEX
GROWTH OF HYPOTHETICAL $10,000 INVESTMENT
Date Simms Global Equity -- Class Y Morgan Stanley Capital World Index
12/98 10,000 10,000
3/99 10,830 10,786
6/99 11,270 11,381
9/99 11,530 11,156
12/99 15,046 13,056
3/00 15,556 13,187
6/00 15,066 12,636
Average Annual Total Return One Since
For the period ended June 30, 2000 Year Inception
---------------------------------- ---- ---------
Simms Global Equity Fund - Class Y (1)<F6> 33.68% 30.62%
Morgan Stanley Capital World Index 11.03% 16.44%
(1)<F6> December 18, 1998 inception.
THE SIMMS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000
<TABLE>
U.S. INTERNATIONAL GLOBAL
EQUITY FUND EQUITY FUND EQUITY FUND
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Investments in securities at market value
(identified cost $6,892,424, $11,424,957 and
$5,192,166, respectively) (Note 2) $9,381,388 $14,966,261 $5,783,422
Dividends and interest receivable 4,179 22,470 6,411
Receivable for investments sold -- 618,400 127,013
Receivable from Adviser 24,272 5,199 34,553
Other assets 10,060 11,427 9,221
---------- ----------- ----------
Total assets 9,419,899 15,623,757 5,960,620
---------- ----------- ----------
LIABILITIES
Payable for investments purchased -- 510,088 58,721
Accrued expenses and other liabilities 46,756 51,297 44,642
---------- ----------- ----------
Total liabilities 46,756 561,385 103,363
---------- ----------- ----------
NET ASSETS $9,373,143 $15,062,372 $5,857,257
---------- ----------- ----------
---------- ----------- ----------
NET ASSETS CONSIST OF:
Shares of beneficial interest $6,733,459 $10,246,579 $5,452,477
Accumulated net realized gain (loss) on investments 150,720 1,274,489 (186,476)
Net unrealized appreciation on investments 2,488,964 3,541,304 591,256
---------- ----------- ----------
Net assets $9,373,143 $15,062,372 $5,857,257
---------- ----------- ----------
---------- ----------- ----------
CLASS A
Net assets $262,568 $608,550 $705,954
Shares of beneficial interest outstanding
(unlimited shares, no par value) 18,780 38,911 47,424
Net asset value and redemption price per share $13.98 $15.64 $14.89
------ ------ ------
------ ------ ------
Maximum offering price per share $14.56 $16.29 $15.51
------ ------ ------
------ ------ ------
CLASS Y
Net assets $9,110,575 $14,453,822 $5,151,303
Shares of beneficial interest outstanding
(unlimited shares, no par value) 644,376 916,693 342,362
Net asset value, offering and redemption price per share $14.14 $15.77 $15.05
------ ------ ------
------ ------ ------
</TABLE>
See notes to financial statements
THE SIMMS FUNDS
STATEMENTS OF OPERATIONS
For the Year Ended June 30, 2000
<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, $9,551,
and $1,539, respectively) $ 27,887 $ 70,723 $ 16,139
Interest 22,568 31,142 14,739
---------- ---------- --------
Total investment income 50,455 101,865 30,878
---------- ---------- --------
EXPENSES:
Investment advisory fees 55,070 118,935 30,776
Shareholder servicing and accounting 63,034 78,420 62,638
Professional fees 32,076 38,671 17,397
Trustees' fees and expenses 2,030 2,180 1,980
Administration fees 46,072 46,024 44,522
Reports to shareholders 4,321 5,764 1,118
Federal and state registration fees 25,083 25,485 22,493
Custody fees 5,496 6,063 9,668
Other 6,540 8,137 1,114
Distribution fees - Class A 597 2,105 1,521
Shareholder servicing fees - Class A 131 587 302
---------- ---------- --------
Total expenses before reimbursements 240,450 332,371 193,529
Less: Reimbursements from Adviser (148,181) (145,224) (148,675)
---------- ---------- --------
Net expenses 92,269 187,147 44,854
---------- ---------- --------
NET INVESTMENT LOSS (41,814) (85,282) (13,976)
---------- ---------- --------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain (loss) on investments (41,230) 1,272,896 (169,669)
Change in unrealized appreciation/depreciation
on investments 1,402,989 3,013,551 514,596
---------- ---------- --------
Net realized and unrealized gain on investments 1,361,759 4,286,447 344,927
---------- ---------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,319,945 $4,201,165 $330,951
---------- ---------- --------
---------- ---------- --------
</TABLE>
See notes to financial statements
THE SIMMS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
U.S. EQUITY FUND
------------------------------------------------
FOR THE PERIOD
FOR YEAR ENDED DECEMBER 11, 1998 (1)<F7> TO
JUNE 30, 2000 JUNE 30, 1999
--------------- ----------------------------
<S> <C> <C>
OPERATIONS:
Net investment loss $ (41,814) $ (10,547)
Net realized gain (loss) (41,230) 2,080
Change in unrealized appreciation on investments 1,402,989 1,085,975
---------- ----------
Net increase in net assets resulting from operations 1,319,945 1,077,508
---------- ----------
CAPITAL SHARE TRANSACTIONS: (NOTE 4)
Net increase in net assets resulting from
capital share transactions 3,240,909 4,087,304
---------- ----------
DISTRIBUTION TO CLASS A SHAREHOLDERS FROM
NET REALIZED GAINS (8,168) --
---------- ----------
DISTRIBUTION TO CLASS Y SHAREHOLDERS FROM
NET REALIZED GAINS (394,355) --
---------- ----------
Total increase in net assets 4,158,331 5,164,812
NET ASSETS:
Beginning of period 5,214,812 50,000
---------- ----------
End of period $9,373,143 $5,214,812
---------- ----------
---------- ----------
</TABLE>
(1)<F7> Commencement of operations.
See notes to financial statements
<TABLE>
INTERNATIONAL EQUITY FUND
-----------------------------------------------
FOR THE PERIOD
FOR YEAR ENDED DECEMBER 11, 1998 (1)<F8> TO
JUNE 30, 2000 JUNE 30, 1999
--------------- -----------------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (85,282) $ 12,552
Net realized gain (loss) 1,272,896 (129,222)
Change in unrealized appreciation on investments 3,013,551 527,753
----------- ----------
Net increase in net assets resulting from operations 4,201,165 411,083
----------- ----------
CAPITAL SHARE TRANSACTIONS: (NOTE 4)
Net increase in net assets resulting from
capital share transactions 5,670,421 5,053,197
----------- ----------
DISTRIBUTION TO CLASS A SHAREHOLDERS FROM
NET REALIZED GAINS (9,505) --
----------- ----------
DISTRIBUTION TO CLASS Y SHAREHOLDERS FROM:
Net investment income (11,524) --
Net realized gains (302,465) --
----------- ----------
Total distribution (313,989) --
----------- ----------
Total increase in net assets 9,548,092 5,464,280
NET ASSETS:
Beginning of period 5,514,280 50,000
----------- ----------
End of period $15,062,372 $5,514,280
----------- ----------
----------- ----------
</TABLE>
(1)<F8> Commencement of operations.
See notes to financial statements
<TABLE>
GLOBAL EQUITY FUND
----------------------------------------------
FOR THE PERIOD
FOR YEAR ENDED DECEMBER 18, 1998 (1)<F9> TO
JUNE 30, 2000 JUNE 30, 1999
--------------- ----------------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (13,976) $ 903
Net realized loss (169,669) (16,807)
Change in unrealized appreciation on investments 514,596 76,660
---------- ---------
Net increase in net assets resulting from operations 330,951 60,756
---------- ---------
CAPITAL SHARE TRANSACTIONS: (NOTE 4)
Net increase in net assets resulting from
capital share transactions 4,606,370 860,073
---------- ---------
DISTRIBUTION TO CLASS Y SHAREHOLDERS FROM
NET INVESTMENT INCOME (903) --
---------- ---------
Total increase in net assets 4,936,418 920,829
NET ASSETS:
Beginning of period 920,839 10
---------- ---------
End of period $5,857,257 $920,839
---------- ---------
---------- ---------
</TABLE>
(1)<F9> Commencement of operations.
See notes to financial statements
THE SIMMS FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
U.S. EQUITY FUND
-----------------------------------------------------------------------------------------
YEAR YEAR APRIL 26, 1999(1)<F10> DECEMBER 11, 1998(1)<F10>
ENDED ENDED THROUGH THROUGH
JUNE 30, 2000 JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 1999
--------------- --------------- ---------------------- -------------------------
CLASS A CLASS Y CLASS A CLASS Y
--------------- --------------- ---------------------- -------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period $12.50 $12.51 $12.20 $10.00
------ ------ ------ ------
Income from investment operations:
Net investment loss (0.16)(2)<F11> (0.10)(2)<F11> (0.02)(3)<F11> (0.03)(3)<F11>
Net realized and unrealized
gains on investments 2.57 2.66 0.32 2.54
------ ------ ------ ------
Total from investment operations 2.41 2.56 0.30 2.51
------ ------ ------ ------
Less distributions from
net realized gains (0.93) (0.93) -- --
------ ------ ------ ------
Net asset value, end of period $13.98 $14.14 $12.50 $12.51
------ ------ ------ ------
------ ------ ------ ------
Total return (4)<F13> 19.76% 20.98% 2.46%(5)<F14> 25.10%(5)<F14>
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $262,568 $9,110,575 $983 $5,213,829
Ratio of expenses to average net
assets before reimbursement
by Adviser 3.88% 3.27% 8.39%(6)<F15> 5.59%(6)<F15>
Ratio of expenses to average net
assets after reimbursement
by Adviser 1.86% 1.25% 2.06%(6)<F15> 1.31%(6)<F15>
Ratio of net investment loss to
average net assets before
reimbursement by Adviser (3.19%) (2.58%) (7.38%)(6)<F15> (4.70%)(6)<F15>
Ratio of net investment loss to
average net assets after
reimbursement by Adviser (1.17%) (0.56%) (1.06%)(6)<F15> (0.42%)(6)<F15>
Portfolio turnover rate (7)<F16> 50.31% 50.31% 50.40% 50.40%
</TABLE>
(1)<F10> 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)<F11> Net investment loss per share represents net investment loss divided
by the average shares outstanding throughout the period.
(3)<F12> Net investment loss per share is calculated using ending balances
prior to consideration of adjustments for permanent book and tax
differences.
(4)<F13> The total return does not reflect the 4.00% maximum sales charge for
Class A shares.
(5)<F14> Not annualized.
(6)<F15> Annualized.
(7)<F16> 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
<TABLE>
INTERNATIONAL EQUITY FUND
-----------------------------------------------------------------------------------------
YEAR YEAR FEBRUARY 1, 1999(1)<F17> DECEMBER 11, 1998(1)<F17>
ENDED ENDED THROUGH THROUGH
JUNE 30, 2000 JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 1999
--------------- --------------- ---------------------- -------------------------
CLASS A CLASS Y CLASS A CLASS Y
--------------- --------------- ---------------------- -------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period $10.88 $10.91 $10.54 $10.00
------ ------ ------ ------
Income from investment operations:
Net investment income (loss) (0.19)(2)<F18> (0.15)(2)<F18> 0.00 0.03
Net realized and unrealized
gains on investments 5.32 5.39 0.34 0.88
------ ------ ------ ------
Total from investment operations 5.13 5.24 0.34 0.91
------ ------ ------ ------
Less distributions:
Dividends from
net investment income -- (0.01) -- --
Distributions from net realized gains (0.37) (0.37) -- --
------ ------ ------ ------
Total distributions (0.37) (0.38) -- --
------ ------ ------ ------
Net asset value, end of period $15.64 $15.77 $10.88 $10.91
------ ------ ------ ------
------ ------ ------ ------
Total return (3)<F19> 47.48% 48.41% 3.23%(4)<F20> 9.10%(4)<F20>
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $608,550 $14,453,822 $160,421 $5,353,859
Ratio of expenses to average net
assets before reimbursement
by Adviser 3.42% 2.78% 6.54%(5)<F21> 5.52%(5)<F21>
Ratio of expenses to average net
assets after reimbursement
by Adviser 2.20% 1.56% 2.38%(5)<F21> 1.63%(5)<F21>
Ratio of net investment loss to
average net assets before
reimbursement by Adviser (2.56%) (1.92%) (4.14%)(5)<F21> (3.48%)(5)<F21>
Ratio of net investment income (loss)
to average net assets after
reimbursement by Adviser (1.34%) (0.70%) 0.02%(5)<F21> 0.42%(5)<F21>
Portfolio turnover rate (6)<F22> 88.41% 88.41% 49.48% 49.48%
</TABLE>
(1)<F17> 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)<F18> Net investment loss per share represents net investment loss divided
by the average shares outstanding throughout the period.
(3)<F19> The total return does not reflect the 4.00% maximum sales charge for
Class A shares.
(4)<F20> Not annualized.
(5)<F21> Annualized.
(6)<F22> 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
<TABLE>
GLOBAL EQUITY FUND
-----------------------------------------------------------------------------------------
YEAR YEAR FEBRUARY 19, 1999(1)<F23> DECEMBER 18, 1998(1)<F23>
ENDED ENDED THROUGH THROUGH
JUNE 30, 2000 JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 1999
--------------- --------------- ---------------------- -------------------------
CLASS A CLASS Y CLASS A CLASS Y
--------------- --------------- ---------------------- -------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period $11.22 $11.27 $10.41 $10.00
------ ------ ------ ------
Income from investment operations:
Net investment income (loss) (0.06) (0.03) (0.00) 0.01
Net realized and unrealized
gains on investments 3.73 3.82 0.81 1.26
------ ------ ------ ------
Total from investment operations 3.67 3.79 0.81 1.27
------ ------ ------ ------
Less dividends from
net investment income -- (0.01) -- --
------ ------ ------ ------
Net asset value, end of period $14.89 $15.05 $11.22 $11.27
------ ------ ------ ------
------ ------ ------ ------
Total return (2)<F24> 32.71% 33.68% 7.78%(3)<F25> 12.70%(3)<F25>
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $705,954 $5,151,303 $143,194 $777,645
Ratio of expenses to average net
assets before reimbursement
by Adviser 6.85% 6.25% 32.84%(4)<F26> 37.44%(4)<F26>
Ratio of expenses to average net
assets after reimbursement
by Adviser 2.00% 1.40% 2.23%(4)<F26> 1.48%(4)<F26>
Ratio of net investment loss to
average net assets before
reimbursement by Adviser (5.84%) (5.24%) (30.77%)(4)<F26> (35.61%)(4)<F26>
Ratio of net investment income (loss)
to average net assets after
reimbursement by Adviser (0.99%) (0.39%) (0.15%)(4)<F26> 0.35%(4)<F26>
Portfolio turnover rate (5)<F27> 79.24% 79.24% 28.70% 28.70%
</TABLE>
(1)<F23> 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)<F24> The total return does not reflect the 4.00% maximum sales charge for
Class A shares.
(3)<F25> Not annualized.
(4)<F26> Annualized.
(5)<F27> 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, 2000
SHARES VALUE
------ -----
COMMON STOCKS -- 98.8%
BUSINESS SERVICES -- 8.8%
6,470 Cisco Systems, Inc.*<F28> $ 411,249
4,660 Omnicom Group Inc. 415,031
----------
826,280
----------
COMPUTERS -- 12.4%
5,810 Dell Computer Corporation*<F28> 286,506
6,220 EMC Corporation*<F28> 478,551
4,420 Sun Microsystems, Inc.*<F28> 401,944
----------
1,167,001
----------
CONSUMER PRODUCTS -- 3.8%
5,250 Lexmark International
Group, Inc. - Class A*<F28> 353,063
----------
DRUGS -- 11.9%
4,510 Amgen Inc.*<F28> 316,827
10,307 Pfizer Inc. 494,736
6,010 Schering-Plough Corporation 303,505
----------
1,115,068
----------
ELECTRICAL EQUIPMENT -- 3.6%
6,420 General Electric Company 340,260
----------
ELECTRONICS -- 8.8%
2,940 Intel Corporation 393,041
5,200 Xilinx, Inc.*<F28> 429,325
----------
822,366
----------
FINANCIAL SERVICES -- 6.7%
13,840 Concord EFS, Inc.*<F28> 359,840
9,877 MBNA Corporation 267,914
----------
627,754
----------
INSURANCE -- 2.7%
5,500 AFLAC Incorporated 252,656
----------
INTERNET SERVICES -- 1.6%
2,880 America Online, Inc.*<F28> 151,920
----------
MEDICAL INSTRUMENTS -- 2.5%
4,700 Guidant Corporation*<F28> 232,650
----------
MULTI-INDUSTRY -- 3.9%
7,810 Tyco International Ltd.+<F29> 369,999
----------
RETAIL -- 18.3%
5,010 Bed Bath & Beyond Inc.*<F28> 181,613
13,360 Family Dollar Stores, Inc. 261,355
3,600 The Home Depot, Inc. 179,775
5,700 RadioShack Corporation 270,037
9,500 Safeway Inc.*<F28> 428,687
6,760 Wal-Mart Stores, Inc. 389,545
----------
1,711,012
----------
SOFTWARE -- 8.2%
5,025 Computer Associates
International, Inc. 257,217
6,110 Oracle Corporation*<F28> 513,622
----------
770,839
----------
TELECOMMUNICATION EQUIPMENT -- 2.0%
2,000 Comverse Technology, Inc.*<F28> 186,000
----------
UTILITIES - ELECTRIC -- 3.6%
7,380 AES Corporation*<F28> 336,713
----------
TOTAL COMMON STOCKS
(Cost $6,774,617) 9,263,581
----------
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS -- 1.3%
VARIABLE RATE DEMAND NOTES#<F30> -- 1.3%
$ 6,402 American Family Financial
Services, Inc., 6.3060% 6,402
96,460 Firstar Bank, N.A., 6.4238% 96,460
9,098 General Mills, Inc., 6.2788% 9,098
5,847 Wisconsin Corporate Central
Credit Union, 6.3438% 5,847
----------
TOTAL SHORT-TERM
INVESTMENTS
(Cost $117,807) 117,807
----------
TOTAL INVESTMENTS
(COST $6,892,424) -- 100.1% 9,381,388
----------
LIABILITIES, LESS OTHER
ASSETS -- (0.1)% (8,245)
----------
TOTAL NET ASSETS -- 100.0% $9,373,143
----------
----------
*<F28> Non-income producing security.
+<F29> Foreign security.
#<F30> Variable rate demand notes are considered short-term obligations and
are payable on demand. Interest rates change periodically on
specified dates. The rates listed are as of June 30, 2000.
See notes to financial statements
THE SIMMS FUNDS
INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
June 30, 2000
SHARES VALUE
------ -----
COMMON STOCKS -- 94.3%
BELGIUM -- 1.8%
ELECTRONICS -- 1.8%
6,100 Lernout & Hauspie Speech
Products N.V.*<F31> $ 268,781
-----------
Total Belgium 268,781
-----------
DENMARK -- 1.6%
TELECOMMUNICATIONS -- 1.6%
6,900 Tele Danmark A/S - ADR 234,600
-----------
Total Denmark 234,600
-----------
FINLAND -- 6.8%
TELECOMMUNICATIONS -- 6.8%
12,360 Nokia Oyj - ADR, Class A 617,228
8,830 Sonera Oyj - ADR 406,180
-----------
Total Finland 1,023,408
-----------
FRANCE -- 5.8%
DIVERSIFIED OPERATIONS -- 3.2%
27,180 Vivendi S.A. - ADR 481,746
-----------
SOFTWARE -- 2.6%
4,250 Dassault Systemes S.A. - ADR 399,500
-----------
Total France 881,246
-----------
GERMANY -- 4.3%
ELECTRONICS -- 2.7%
4,160 Epcos AG - ADR*<F31> 409,760
-----------
MEDICAL PRODUCTS -- 1.6%
8,840 Frensenius Medical
Care AG - ADR 231,498
-----------
Total Germany 641,258
-----------
GREECE -- 1.7%
TELECOMMUNICATIONS -- 1.7%
21,010 Hellenic Telecommunications
Organization SA (OTE) - ADR 256,059
-----------
Total Greece 256,059
-----------
HONG KONG -- 3.5%
TELECOMMUNICATIONS -- 3.5%
4,680 Asia Satellite Telecommunications
Holdings Ltd. - ADR 160,290
2,080 China Telecom Limited*<F31> 369,850
-----------
Total Hong Kong 530,140
-----------
HUNGARY -- 2.7%
TELECOMMUNICATIONS -- 2.7%
11,780 Magyar Tavkozlesi Rt. - ADR 405,674
-----------
Total Hungary 405,674
-----------
IRELAND -- 4.9%
DRUGS -- 4.9%
15,340 Elan Corporation PLC - ADR*<F31> 743,031
-----------
Total Ireland 743,031
-----------
ISRAEL -- 3.4%
DRUGS -- 3.4%
9,140 Teva Pharmaceutical
Industries Ltd. - ADR 506,699
-----------
Total Israel 506,699
-----------
ITALY -- 2.5%
OPTICAL SUPPLIES -- 2.5%
31,260 Luxottica Group SpA - ADR 380,981
-----------
Total Italy 380,981
-----------
JAPAN -- 21.2%
COMPUTERS -- 3.8%
3,310 Fujitsu Limited - ADR 574,080
-----------
DRUGS -- 3.4%
15,800 Eisai Company, Ltd - ADR 507,742
-----------
ELECTRONICS -- 9.2%
14,620 Cannon, Inc. - ADR 736,483
2,440 Kyocera Corporation - ADR 419,222
2,480 Sony Corporation - ADR 233,895
-----------
1,389,600
-----------
FINANCIAL SERVICES -- 4.8%
9,600 Orix Corporation - ADR 721,800
-----------
Total Japan 3,193,222
-----------
MEXICO -- 2.0%
TELECOMMUNICATIONS -- 2.0%
5,300 Telefonos de Mexico S.A. - ADR 302,763
-----------
Total Mexico 302,763
-----------
NETHERLANDS -- 16.1%
ELECTRONICS -- 7.5%
14,764 Koninklijke (Royal) Philips
Electronics N.V. - NYS 701,290
6,690 STMicroelectronics N.V. - NYS 429,414
-----------
1,130,704
-----------
FOOD, BEVERAGES & TOBACCO -- 2.2%
11,280 Koninklijke Ahold N.V. - ADR 330,645
-----------
TEXTILES & APPAREL -- 3.5%
5,510 Gucci Group N.V. - NYS 522,073
-----------
TRANSPORTATION -- 2.9%
16,400 TNT Post Group N.V. - ADR 441,775
-----------
Total Netherlands 2,425,197
-----------
SOUTH KOREA -- 2.6%
TELECOMMUNICATIONS -- 2.6%
8,000 Korea Telecom
Corporation - ADR 387,000
-----------
Total South Korea 387,000
-----------
SPAIN -- 2.0%
TELECOMMUNICATIONS -- 2.0%
4,751 Telefonica S.A. - ADR 304,361
-----------
Total Spain 304,361
-----------
SWEDEN -- 4.0%
TELECOMMUNICATIONS EQUIPMENT -- 4.0%
29,800 Telefonaktiebolaget LM Ericsson 596,000
-----------
Total Sweden 596,000
-----------
UNITED KINGDOM -- 7.4%
BUSINESS SERVICES -- 1.8%
3,660 WPP Group PLC - ADR 265,807
-----------
COMMUNICATIONS & MEDIA -- 2.8%
13,610 Pearson PLC - ADR 427,534
-----------
TELECOMMUNICATIONS -- 2.8%
10,190 Vodafone AirTouch PLC - ADR 422,248
-----------
Total United Kingdom 1,115,589
-----------
TOTAL COMMON STOCKS
(Cost $10,654,705) 14,196,009
-----------
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS -- 5.1%
VARIABLE RATE DEMAND NOTES#<F32> -- 5.1%
$ 37,579 American Family Financial
Services, Inc., 6.3060% 37,579
504,218 Firstar Bank, N.A., 6.4238% 504,218
1,153 Sara Lee Corporation, 6.2738% 1,153
128,057 Wisconsin Corporate Central
Credit Union, 6.3438% 128,057
99,245 Wisconsin Electric Power
Company, 6.3060% 99,245
-----------
TOTAL SHORT-TERM
INVESTMENTS
(Cost $770,252) 770,252
-----------
TOTAL INVESTMENTS
(COST $11,424,957) --
99.4% 14,966,261
-----------
OTHER ASSETS, LESS
LIABILITIES -- 0.6% 96,111
-----------
TOTAL NET ASSETS --
100.0% $15,062,372
-----------
-----------
*<F31> Non-income producing security.
#<F32> Variable rate demand notes are considered short-term obligations and
are payable on demand. Interest rates change periodically on
specified dates. The rates listed are as of June 30, 2000.
ADR - American Depository Receipts
NYS - New York Shares
See notes to financial statements
THE SIMMS FUNDS
GLOBAL EQUITY FUND
SCHEDULE OF INVESTMENTS
June 30, 2000
SHARES VALUE
------ -----
COMMON STOCKS -- 94.8%
BELGIUM -- 0.9%
ELECTRONICS -- 0.9%
1,160 Lernout & Hauspie Speech
Products N.V.*<F33> $ 51,112
----------
Total Belgium 51,112
----------
BERMUDA -- 1.8%
MULTI-INDUSTRY -- 1.8%
2,180 Tyco International Ltd. 103,278
----------
Total Bermuda 103,278
----------
DENMARK -- 0.9%
TELECOMMUNICATIONS -- 0.9%
1,510 Tele Danmark A/S - ADR 51,340
----------
Total Denmark 51,340
----------
FINLAND -- 3.4%
TELECOMMUNICATIONS -- 3.4%
2,400 Nokia Oyj - ADR, Class A 119,850
1,700 Sonera Oyj - ADR 78,200
----------
Total Finland 198,050
----------
FRANCE -- 3.6%
DIVERSIFIED OPERATIONS -- 1.7%
5,560 Vivendi S.A. - ADR 98,547
----------
SOFTWARE -- 1.9%
1,180 Dassault Systemes S.A. - ADR 110,920
----------
Total France 209,467
----------
GERMANY -- 2.5%
ELECTRONICS -- 1.5%
890 Epcos AG - ADR*<F33> 87,665
----------
MEDICAL PRODUCTS -- 1.0%
2,300 Frensenius Medical
Care AG - ADR 60,231
----------
Total Germany 147,896
----------
GREECE -- 1.0%
TELECOMMUNICATIONS -- 1.0%
4,640 Hellenic Telecommunications
Organization SA (OTE) - ADR 56,550
----------
Total Greece 56,550
----------
HONG KONG -- 1.8%
TELECOMMUNICATIONS -- 1.8%
950 Asia Satellite Telecommunications
Holdings Ltd. - ADR 32,538
420 China Telecom Limited*<F33> 74,681
----------
Total Hong Kong 107,219
----------
HUNGARY -- 1.5%
TELECOMMUNICATIONS -- 1.5%
2,570 Magyar Tavkozlesi Rt. - ADR 88,504
----------
Total Hungary 88,504
----------
IRELAND -- 2.7%
DRUGS -- 2.7%
3,300 Elan Corporation PLC - ADR*<F33> 159,844
----------
Total Ireland 159,844
----------
ISRAEL -- 1.8%
DRUGS -- 1.8%
1,920 Teva Pharmaceutical
Industries Ltd. - ADR 106,440
----------
Total Israel 106,440
----------
ITALY -- 1.2%
OPTICAL SUPPLIES -- 1.2%
5,840 Luxottica Group SpA - ADR 71,175
----------
Total Italy 71,175
----------
JAPAN -- 11.0%
COMPUTERS -- 2.0%
680 Fujitsu Limited - ADR 117,938
----------
DRUGS -- 1.7%
3,060 Eisai Company, Ltd - ADR 98,335
----------
ELECTRONICS -- 4.6%
2,648 Cannon, Inc. - ADR 133,393
510 Kyocera Corporation - ADR 87,624
500 Sony Corporation - ADR 47,156
----------
268,173
----------
FINANCIAL SERVICES -- 2.7%
2,098 Orix Corporation - ADR 157,743
----------
Total Japan 642,189
----------
MEXICO -- 1.1%
TELECOMMUNICATIONS -- 1.1%
1,130 Telefonos de Mexico S.A. - ADR 64,551
----------
Total Mexico 64,551
----------
NETHERLANDS -- 8.2%
ELECTRONICS -- 3.7%
2,782 Koninklijke (Royal) Philips
Electronics N.V. - NYS 132,145
1,330 STMicroelectronics N.V. - NYS 85,369
----------
217,514
----------
FOOD, BEVERAGES & TOBACCO -- 1.2%
2,400 Koninklijke Ahold N.V. - ADR 70,350
----------
TEXTILES & APPAREL -- 1.8%
1,100 Gucci Group N.V. - NYS 104,225
----------
TRANSPORTATION -- 1.5%
3,370 TNT Post Group N.V. - ADR 90,779
----------
Total Netherlands 482,868
----------
SOUTH KOREA -- 1.5%
TELECOMMUNICATIONS -- 1.5%
1,850 Korea Telecom Corporation - ADR 89,494
----------
Total South Korea 89,494
----------
SPAIN -- 1.0%
TELECOMMUNICATIONS -- 1.0%
886 Telefonica S.A. - ADR 56,759
----------
Total Spain 56,759
----------
SWEDEN -- 1.9%
TELECOMMUNICATIONS EQUIPMENT -- 1.9%
5,750 Telefonaktiebolaget LM Ericsson 115,000
----------
Total Sweden 115,000
----------
UNITED KINGDOM -- 4.0%
BUSINESS SERVICES -- 1.0%
760 WPP Group PLC - ADR 55,195
----------
COMMUNICATIONS & MEDIA -- 1.6%
3,020 Pearson PLC - ADR 94,868
----------
TELECOMMUNICATIONS -- 1.4%
2,010 Vodafone AirTouch PLC - ADR 83,289
----------
Total United Kingdom 233,352
----------
UNITED STATES -- 43.0%
BUSINESS SERVICES -- 3.7%
1,850 Cisco Systems, Inc.*<F33> 117,591
1,090 Omnicom Group Inc. 97,078
----------
214,669
----------
COMPUTERS -- 5.7%
1,730 Dell Computer Corporation*<F33> 85,311
1,770 EMC Corporation*<F33> 136,179
1,250 Sun Microsystems, Inc.*<F33> 113,672
----------
335,162
----------
CONSUMER PRODUCTS -- 1.8%
1,570 Lexmark International
Group, Inc. - Class A*<F33> 105,583
----------
DRUGS -- 5.2%
1,230 Amgen Inc.*<F33> 86,408
2,970 Pfizer Inc. 142,560
1,480 Schering-Plough Corporation 74,740
----------
303,708
----------
ELECTRICAL EQUIPMENT -- 1.4%
1,590 General Electric Company 84,270
----------
ELECTRONICS -- 4.3%
880 Intel Corporation 117,645
1,630 Xilinx, Inc.*<F33> 134,577
----------
252,222
----------
FINANCIAL SERVICES -- 3.6%
4,115 Concord EFS, Inc.*<F33> 106,990
3,900 MBNA Corporation 105,788
----------
212,778
----------
INSURANCE -- 1.3%
1,690 AFLAC Incorporated 77,634
----------
INTERNET SERVICES -- 0.8%
920 America Online, Inc.*<F33> 48,530
----------
MEDICAL INSTRUMENTS -- 1.3%
1,490 Guidant Corporation*<F33> 73,755
----------
RETAIL -- 7.9%
1,480 Bed Bath & Beyond Inc.*<F33> 53,650
3,770 Family Dollar Stores, Inc. 73,751
1,080 The Home Depot, Inc. 53,933
1,590 RadioShack Corporation 75,326
2,580 Safeway Inc.*<F33> 116,422
1,550 Wal-Mart Stores, Inc. 89,319
----------
462,401
----------
SOFTWARE -- 3.8%
1,480 Computer Associates
International, Inc. 75,758
1,750 Oracle Corporation*<F33> 147,109
----------
222,867
----------
TELECOMMUNICATIONS EQUIPMENT -- 1.0%
610 Comverse Technology, Inc.*<F33> 56,730
----------
UTILITIES - ELECTRIC -- 1.2%
1,560 AES Corporation*<F33> 71,175
----------
Total United States 2,521,484
----------
TOTAL COMMON STOCKS
(Cost $4,965,316) 5,556,572
----------
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS -- 3.9%
VARIABLE RATE DEMAND NOTES#<F34> -- 3.9%
$174,189 Firstar Bank, N.A., 6.4238% 174,189
3,814 General Mills, Inc., 6.2788% 3,814
36,928 Wisconsin Corporate Central
Credit Union, 6.3438% 36,928
11,919 Wisconsin Electric
Power Company, 6.3060% 11,919
----------
TOTAL SHORT-TERM
INVESTMENTS
(Cost $226,850) 226,850
----------
TOTAL INVESTMENTS
(COST $5,192,166) -- 98.7% 5,783,422
----------
OTHER ASSETS, LESS
LIABILITIES -- 1.3% 73,835
----------
TOTAL NET ASSETS -- 100.0% $5,857,257
----------
----------
*<F33> Non-income producing security.
#<F34> Variable rate demand notes are considered short-term obligations and
are payable on demand. Interest rates change periodically on
specified dates. The rates listed are as of June 30, 2000.
ADR - American Depository Receipts
NYS - New York Shares
See notes to financial statements
THE SIMMS FUNDS
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2000
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. The Trust issues
its shares in series, with 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, each Fund
is 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, if any, 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.
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. On the same day the tax
basis of securities held for the U.S. Equity Fund and the International Equity
Fund was $1,096,452 and $825,707 lower than their basis for financial reporting
purposes, respectively. On June 30, 2000, the tax basis of the remaining
securities held by the U.S. Equity Fund and the International Equity Fund was
$493,512 and $280,098 lower than their basis for financial reporting purposes,
respectively.
NOTE 4 -- SHARES OF BENEFICIAL INTEREST
At June 30, 2000, each Fund had an unlimited number of shares of beneficial
interest authorized with no par value.
The following table summarizes the capital share transactions of each class of
shares for each Fund:
<TABLE>
U.S. INTERNATIONAL GLOBAL
EQUITY FUND EQUITY FUND EQUITY FUND
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 2000 JUNE 30, 2000
----------------------- ----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Sales 18,784 $244,492 29,172 $388,314 34,660 $510,729
Reinvested distributions 622 8,168 664 9,505 -- --
Redemptions (705) (9,500) (5,676) (78,110) -- --
------ -------- ------ -------- ------ --------
Net increase 18,701 $243,160 24,160 $319,709 34,660 $510,729
------ -------- ------ -------- ------ --------
-------- -------- --------
SHARES OUTSTANDING:
Beginning of period 79 14,751 12,764
------ ------ ------
End of period 18,780 38,911 47,424
------ ------ ------
------ ------ ------
CLASS Y
Sales 353,974 $4,798,383 413,707 $5,175,693 337,537 $5,012,128
Reinvested distributions 22,822 304,005 19,087 275,230 65 903
Redemptions (149,089) (2,104,639) (6,672) (100,211) (64,215) (917,390)
-------- ---------- ------- ---------- ------- ----------
Net increase 227,707 $2,997,749 426,122 $5,350,712 273,387 $4,095,641
-------- ---------- ------- ---------- ------- ----------
---------- ---------- ----------
SHARES OUTSTANDING:
Beginning of period 416,669 490,571 68,975
-------- ------- -------
End of period 644,376 916,693 342,362
-------- ------- -------
-------- ------- -------
Total net increase $3,240,909 $5,670,421 $4,606,370
---------- ---------- ----------
---------- ---------- ----------
APRIL 26, 1999- FEBRUARY 1, 1999- FEBRUARY 19, 1999-
JUNE 30, 1999 JUNE 30, 1999 JUNE 30, 1999
----------------------- ----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------ ------ ------
CLASS A
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
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
------- ------- ------
------- ------- ------
Total net increase $4,087,304 $5,053,197 $860,073
---------- ---------- --------
---------- ---------- --------
</TABLE>
NOTE 5 -- INVESTMENT TRANSACTIONS
During the year ended June 30, 2000 for the U.S. Equity Fund, International
Equity Fund and 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 $6,527,059 $14,641,104 $6,872,205
Sales $3,557,248 $10,094,245 $2,422,925
The following information for the Funds is as of June 30, 2000:
<TABLE>
COST FOR FEDERAL TAX BASIS TAX BASIS TAX BASIS
INCOME TAX NET UNREALIZED GROSS UNREALIZED GROSS UNREALIZED
PURPOSES APPRECIATION APPRECIATION DEPRECIATION
---------------- -------------- ---------------- ----------------
<S> <C> <C> <C> <C>
U.S. Equity Fund $ 6,409,019 $2,972,369 $3,157,594 $(185,225)
International Equity Fund $11,292,183 $3,674,078 $4,301,744 $(627,666)
Global Equity Fund $ 5,258,157 $ 525,265 $ 880,907 $(355,642)
</TABLE>
At June 30, 2000, the Global Equity Fund had an accumulated net realized capital
loss carryover of $18,854, expiring in 2008. To the extent the Fund realizes
future net capital gains, taxable distributions to its shareholders will be
offset by an unused capital loss carryover for the Fund. In addition, the
Global Equity Fund realized, on a tax basis, post-October losses through June
30, 2000 of $124,717, 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 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 1.45% 0.95%
International Equity Fund 1.65% 1.15%
Global Equity Fund 1.65% 1.15%
The Adviser agreed to lower the expense caps as reflected in the above table
effective May 9, 2000 and until at least June 30, 2002 in a supplement to the
Funds' prospectus. Prior to May 9, 2000, the Adviser capped expenses as follows:
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. For the period ended June 30,
2000, the Adviser reimbursed/absorbed expenses of $148,181, $145,224 and
$148,675 for the U.S. Equity, International Equity and Global Equity Funds,
respectively. Reimbursed/absorbed expenses subject to potential recovery by
year of expiration are as follows:
U.S. INTERNATIONAL GLOBAL
YEAR OF EXPIRATION EQUITY FUND EQUITY FUND EQUITY FUND
------------------ ----------- ----------- -----------
6/30/2001 $146,519 $156,233 $107,742
6/30/2002 $148,181 $145,224 $148,675
Firstar Mutual Fund Services, LLC serves as transfer agent, administrator and
accounting services agent for the Funds. Firstar Bank, 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 Class A shares. The U.S.
Equity Fund, International Equity Fund and Global Equity Fund incurred $597,
$2,105 and $1,521 in fees pursuant to the 12b-1 Plan for the year ended June 30,
2000.
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 $131, $587 and $302 in fees pursuant to the
shareholder servicing plan for the year ended June 30, 2000. The Board of
Trustees voted to eliminate the shareholder servicing plan effective February
25, 2000.
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 Simms Funds (comprising,
respectively, the U.S. Equity Fund, International Equity Fund and Global Equity
Fund, and hereafter referred to as the "Funds") at June 30, 2000, the results of
each of their operations for the year then ended, and the changes in each of
their net assets and the financial highlights for each of the periods presented,
in conformity with accounting principles generally accepted in the United
States. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Funds' management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 2000 by correspondence with the custodian
and brokers, provide a reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
August 4, 2000
THE SIMMS FUNDS
TAX INFORMATION
REQUIRED INCOME TAX DISCLOSURES
In early 2000, shareholders received information regarding all distributions
paid to them by the Funds during the fiscal year ended June 30, 2000. The Funds
hereby designate the following amounts as long-term capital gains distributions.
U.S. INTERNATIONAL GLOBAL
EQUITY FUND EQUITY FUND EQUITY FUND
----------- ----------- -----------
Capital Gains Taxed at 20% $82,504 $221,195 $ --
(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, 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.
