ANNUAL REPORT
May 31, 2000
AMIDEX35(TM)
M U T U A L F U N D
26 Broadway, Suite 741
New York, New York 10004
1-888-876-3566
<PAGE>
TABLE OF CONTENTS
Page
President's Letter ......................................... 1-2
Performance Update ......................................... 3
Schedule of Investments .................................... 4-5
Statement of Assets and Liabilities......................... 6
Statement of Operations .................................... 7
Statement of Changes in Net Assets ......................... 8
Financial Highlights ....................................... 9
Notes to Financial Statements .............................. 10-13
Independent Auditors' Report ............................... 14
<PAGE>
July 25, 2000
Dear AMIDEX35(TM) Mutual Fund Shareholder,
It is with great pride that we provide you with the first annual report
of the AMIDEX35(TM) Mutual Fund. As our partners in this exciting journey, we
would like to share with you some of the Fund's accomplishments over the
past 12 months and to highlight for you some of the economic news from
Israel that could affect companies in our portfolio.
Looking back on the past year, we were pleased with the Fund's
accomplishments, both in terms of the number of people and institutions
expressing interest in the Fund and the steady growth in the number of
investors. The Fund is beginning to attract the media attention that it
deserves, and was recently featured on CNBC, CBS MarketWatch,
SmartMoney.com, and Fox News Network. Not only is the AMIDEX35(TM) Mutual
Fund gaining attention as a fresh and promising new Fund, other Israel
investments, especially Israel's hi-tech companies, are being featured
worldwide.
We have succeeded in introducing the Fund to major distribution
networks, including on-line trading companies and national brokerage firms.
To accommodate a broader field of investors, additional share classes were
formed, and Selling Group Agreements have been signed with more than a
dozen firms.
As the attached reports demonstrate, our no-load class of shares
achieved a total return for our investors of 70.50% from inception on June
8, 1999 through May 31, 2000. Obviously, we are pleased with the initial
performance of the Fund, and we believe that the AMIDEX35(TM) Mutual Fund
remains an exceptional choice as a vehicle for long-term capital growth.
Morningstar has categorized the Fund as an International Stock Mutual
Fund, in the sub-category "Foreign Fund". As of today, the AMIDEX35(TM)
Mutual Fund is the number one best performing mutual fund, year-to-date,
out of 689 Foreign Funds, according to Morningstar. Out of 1,550
International Funds, Morningstar reports that the AMIDEX35(TM) Mutual Fund is
number 7 in total return, year-to-date. We invite you to share in our
sense of pride and accomplishment by following the Fund on Morningstar.com
or Bloomberg.com.
We are fortunate to have been at the right place at the right time. At
no other point in history have so many factors combined to provide such an
appealing Israel investment opportunity. Both the Tel Aviv Stock Exchange,
and our group of Israeli stocks on Wall Street have enjoyed an increasing
amount of attention from investors seeking to profit from Israel's growth
potential and technological superiority.
The New York traded Israeli companies have achieved a number of
milestones. Two Israeli companies (Comverse Technology and Mercury
Interactive) are now included in the S & P 500 Index. Israel is now third
in the world in the number of publicly traded companies on Wall Street.
Teva Pharmaceuticals is now the largest distributor of generic drugs in the
U.S. There were 19 Israeli IPO's on Wall Street in 1999. Several of the
Israeli companies traded in New York are now capitalized at over $10
billion each.
On the Tel Aviv side, one of the main developments contributing to our
success has been the successful combating of inflation. Inflation in 1999
was only 1.3%. Control of inflation contributes to a stable currency
exchange rate, permitting the central Bank of Israel to relax its monitory
policy, and boost domestic economic activity. Interest rates have been
reduced, and in the past year and a half, interest rates have gone down a
cumulative 4.4%. Business activity in the first half of 2000 is up 4.7%,
with continued economic expansion, increasing industrial manufacturing and
accelerated overall activity.
1
<PAGE>
In addition, the Bank of Israel just upgraded its GDP growth forecast
for 2000 from 3% to 4%. The boom in exports has led to a forecasted
current budget deficit for the year 2000 of about 1.8%, compared with 6.9%
in 1996.
Many investors have asked about the potential impact of the peace
process on the Fund. The process will no doubt be a long one, and will be
full of media sensationalism. The reality is that while the process
continues, great strides are already being made in regional commerce.
Bilateral trade between Israel and the Arab countries increased by 35%
in the first half of this year. Israeli exports to the United Arab
Emirates increased in the first six months of 2000 by 133%, while exports
to Saudi Arabia were up 48% during the same period. Cross-border
industrial activity is also picking up, with more than 25 Israeli
industrial companies starting to manufacture their products in Jordan,
Egypt and Turkey. Of course, further steps toward peace for the region
will enhance economic opportunities for Israeli companies.
Another dividend of the peace process already being enjoyed is the
increase in incoming tourism, which set a new record in May 2000, with a
sharp increase of 41% compared to May 1999.
We begin our second year elated by our exceptional performance in our
first year, yet mindful of the potential for short-term market volatility
both here and in Tel Aviv. We remain confident in our Index methodology
and secure in the growth potential for Israeli companies.
There are now over 11,000 mutual funds in America. The AMIDEX35(TM)
Mutual Fund remains a truly unique vehicle in an industry where it is very
hard to stand out. We appreciate your decision to select the AMIDEX35(TM)
Mutual Fund, and thank you for your investment.
/S/BOAZ RAHAV /S/CLIFF GOLDSTEIN
Boaz Rahav Cliff Goldstein
Fund Manager, AMIDEX Funds, Inc. President, AMIDEX Funds, Inc.
This report is intended for the fund's shareholders. It may not be
distributed to prospective investors unless it is preceded or accompanied
by the current fund prospectus.
2
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PERFORMANCE UPDATE -- $10,000 INVESTMENT
FOR THE PERIOD ENDED MAY 31, 2000
[ID: GRAPH WITH FOLLOWING PLOT POINTS . . . ]
No Load Class A Class C S&P 500
08-Jun-99 10,000 10,000
30-Jun-99 10,340 10,427
31-Jul-99 10,360 10,101
31-Aug-99 10,000 10,052
30-Sep-99 10,100 9,776
31-Oct-99 11,110 10,395
19-Nov-99 9,600
30-Nov-99 12,300 9,235 10,606
31-Dec-99 14,290 10,733 11,231
31-Jan-00 14,570 10,963 10,667
29-Feb-00 19,070 14,352 10,465
31-Mar-00 17,900 13,440 11,488
30-Apr-00 17,080 12,816 11,143
19-May-00 10,000
31-May-00 16,750 12,806 10,320 10,914
[ID: END OF PLOT POINTS]
TOTAL RETURN
---------------------------------------------------------------------------
| | Commencement of Operations through 5/31/00 |
|------------------|------------------------------------------------------|
| No-load Class(1) | with redemption fee | without redemption fee |
| | 67.50% | 70.50% |
|------------------|--------------------------|---------------------------|
| Class A(2) | with sales charge | without sales charge |
| | 28.06% | 38.85% |
|------------------|--------------------------|---------------------------|
| | with contingent | without contingent |
| Class C(3) | deferred sales charge | deferred sales charge |
| | 3.20% | 4.20% |
|------------------|------------------------------------------------------|
| S&P 500 | 9.14% |
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------------
(1) The Amidex35(TM) Mutual Fund No-load shares commenced on June 8, 1999.
(2) The Amidex35(TM) Mutual Fund Class A shares commenced on November 19, 1999.
(3) The Amidex35(TM) Mutual Fund Class C shares commenced on May 19, 2000.
3
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SCHEDULE OF INVESTMENTS
MAY 31, 2000
MARKET
SHARES VALUE
------ ------
COMMON STOCK -- 87.52%
BANKING AND INSURANCE -- 9.00%
Bank Hapoalim Ltd. ................................. 132,122 $ 379,588
Bank Lumi Le-Israel ................................ 149,510 325,738
First International Bank of Israel Ltd. ............ 6,257 43,698
Israel Discount Bank CL A .......................... 99,652 123,587
Migdal Insurance Holdings .......................... 109,403 108,491
United Mizrahi Bank Ltd. ........................... 22,749 68,027
----------
1,049,129
----------
CABLE TELEVISION -- .52%
Matav-Cable Systems Media Ltd. ..................... 1,524 60,198
----------
CHEMICALS -- 2.06%
Israel Chemicals Limited ........................... 126,148 159,467
Makhteshim-Agan Industries Ltd.* ................... 37,572 81,049
----------
240,516
----------
COMPUTER SOFTWARE AND SERVICES -- 31.83%
Amdocs Limited* .................................... 20,952 1,297,714
Backweb Technologies Ltd.* ......................... 4,083 62,266
Check point Software Technologies Ltd.* ............ 7,882 1,480,831
DSP Group, Inc.* ................................... 2,157 96,526
Galileo Technology Ltd.* ........................... 4,240 73,405
Mercury Interactive Corporation* ................... 7,816 662,406
Orckit Communications Ltd* ......................... 1,586 39,675
----------
3,712,823
----------
DIGITAL AUDIO -- 1.40%
AudioCodes Ltd.* ................................... 2,232 163,076
----------
DIGITAL IMAGING -- 3.57%
Electronics for Imaging, Inc.* ..................... 6,048 222,642
Orbotech Ltd.* ..................................... 2,300 194,350
----------
416,992
----------
See notes to financial statements.
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SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 2000
MARKET
SHARES VALUE
------ ------
DIVERSIFIED HOLDINGS -- 11.35%
Clal Electronics Industries Ltd. ................... 391 $ 83,689
Clal (Israel) Ltd. ................................. 3,286 132,799
Clal Industries Ltd. ............................... 14,800 159,098
Clal Insurance Enterprise Holdings Ltd. ............ 5,189 80,876
Discount Investment Corporation .................... 4,756 253,126
IDB Development Corporation Ltd. ................... 4,821 203,145
IDB Holding Corporation Ltd. ....................... 3,990 145,584
Israel Corporation Ltd. ............................ 525 89,494
Koor Industries Limited ADR ........................ 8,936 175,927
-----------
1,323,738
-----------
ELECTRONICS -- .71%
Elron Electronic Industries Limited ................ 2,463 82,511
-----------
MEDICAL PRODUCTS -- 6.14%
Teva Pharmaceutical Industries Ltd. ADR ............ 13,295 716,268
-----------
RETAIL -- .70%
Supersol Ltd. ADR .................................. 4,676 82,122
-----------
TELECOMMUNICATIONS -- 20.24%
Bezeq Israeli Telecommunications Corporation Ltd. .. 83,238 468,323
Comverse Technology, Inc.* ......................... 16,101 1,471,229
ECI Telecom Limited ................................ 8,528 231,322
Gilat Satallite Networks Ltd.* ..................... 2,361 190,208
-----------
2,361,082
-----------
Total Common Stock (Cost $9,565,311) ............... 10,208,455
-----------
SHORT-TERM INVESTMENTS -- 7.17%
Star Bank Treasury Money Market Fund
(Cost $836,506) .................................. 836,506
-----------
TOTAL INVESTMENTS (COST $10,401,817) -- 94.69% ..... 11,044,961
OTHER ASSETS IN EXCESS OF LIABILITIES -- 5.31% ..... 619,877
-----------
NET ASSETS -- 100% ................................. $11,664,838
===========
* Non-income producing security.
ADR -- American Depository Receipt
See notes to financial statements.
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STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 2000
ASSETS:
Investments, at market (identified cost: $10,401,817) ..... $11,044,961
Cash ...................................................... 6,993
Receivables:
Dividends ............................................... 1,498
Interest ................................................ 3,188
Investments sold ........................................ 458,235
Fund shares sold ........................................ 173,052
Due from advisor ........................................ 2,016
-----------
Total assets .......................................... 11,689,943
-----------
LIABILITIES:
Payables:
Distribution fees payable ............................... 2,354
Fund shares redeemed .................................... 2,547
Accrued expenses ........................................ 18,003
Other liabilities ....................................... 2,201
-----------
Total liabilities ..................................... 25,105
-----------
NET ASSETS .................................................. $11,664,838
===========
NET ASSETS CONSIST OF:
Common stock .............................................. $ 70
Additional paid-in capital ................................ 10,714,699
Undistributed realized gain on investments ................ 306,925
Net unrealized gain on investments ........................ 643,144
-----------
Total Net Assets (696,260 shares oustanding;
500,000,000 shares of $0.0001 par value authorized) ....... $11,664,838
===========
NO-LOAD CLASS SHARES:
Net Assets applicable to 644,175 shares outstanding (Note 2). $10,981,073
===========
Net Asset Value, offering and redemption price per share .... $ 17.05
===========
CLASS A SHARES:
Net Assets applicable to 48,395 shares outstanding (Note 2).. $ 645,296
===========
Net Asset Value, and redemption price per share ............. $ 13.33
===========
Offering price per share Class A ............................ $ 13.89
===========
CLASS C SHARES:
Net Assets applicable to 3,690 shares outstanding (Note 2)... $ 38,469
===========
Net Asset Value, offering and redemption price per share .... $ 10.42
===========
See notes to financial statements.
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STATEMENT OF OPERATIONS
FOR THE PERIOD JUNE 8, 1999 (COMMENCEMENT OF OPERATIONS)
THROUGH MAY 31, 2000
INVESTMENT INCOME:
Interest .................................................. $ 12,660
Dividends (net of foreign taxes: $12,000) ................. 48,799
-----------
Total investment income ................................. 61,459
-----------
EXPENSES:
Investment advisory fees .................................. 22,654
Service fees .............................................. 67,142
Distribution fees -- No-load Class ........................ 11,120
Distribution fees -- Class A .............................. 205
Distribution fees -- Class C .............................. 7
Other expenses ............................................ 28,516
-----------
Total expenses .......................................... 129,644
-----------
Net investment loss ....................................... (68,185)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments .......................... 375,110
Net change in unrealized appreciation on investments ...... 643,144
-----------
1,018,254
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........ $ 950,069
===========
See notes to financial statements.
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STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD JUNE 8, 1999 (COMMENCEMENT OF OPERATIONS)
THROUGH MAY 31, 2000
INCREASE IN NET ASSETS
Operations:
Net investment loss ....................................... $ (68,185)
Net realized gain on investments .......................... 375,110
Net change in unrealized appreciation on investments ...... 643,144
-----------
Net increase in net assets resulting from operations ........ 950,069
-----------
Increase in net assets from Fund share transactions (Note 2). 10,614,769
-----------
Total increase in net assets ................................ 11,564,838
NET ASSETS:
Beginning of period ....................................... 100,000
-----------
End of period ............................................. $11,664,838
===========
See notes to financial statements.
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FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Per Share Data
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
ENDED ENDED ENDED
MAY 31, 2000(2) MAY 31, 2000(3) MAY 31, 2000(4)
NO-LOAD CLASS CLASS A CLASS C
--------------- --------------- ---------------
<S> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ....................... $ 10.00 $ 9.60 $10.00
------- ------ ------
INVESTMENT OPERATIONS:
Net investment loss ..................... (0.23) (0.10) (0.01)
Net realized and unrealized
gain on investments ................... 7.28 3.83 0.43
------- ------ ------
Total from investment operations ...... 7.05 3.73 0.42
------- ------ ------
NET ASSET VALUE, END OF PERIOD ............ $ 17.05 $13.33 $10.42
------- ------ ------
TOTAL RETURN .............................. 70.50% 38.85% 4.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) .... $10,981 $ 645 $ 38
Ratio of expenses to average net assets.. 2.85%(1) 2.70%(1) 2.51%(1)
Ratio of net investment loss to average
net assets ............................ (1.50%)(1) (1.48%)(1) (2.14%)(1)
Portfolio turnover rate ................. 18.16% 18.16% 18.16%
</TABLE>
(1) Annualized
(2) The Amidex35(TM) Mutual Fund No-load Class shares commenced on
June 8, 1999.
(3) The Amidex35(TM) Mutual Fund Class A shares commenced on
November 19, 1999.
(4) The Amidex35(TM) Mutual Fund Class C shares commenced on May 19, 2000.
See notes to financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD JUNE 8, 1999 (COMMENCEMENT OF OPERATIONS)
THROUGH MAY 31, 2000
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Amidex Funds, Inc. (the "Company") was incorporated under the laws of
the state of Maryland on April 27, 1999, and consists solely of The
Amidex35(TM) Mutual Fund (the "Fund"). The Fund is a non-diversified Fund.
The Company is registered as an open-end management investment company of
the series type under the Investment Company Act of 1940 (the "1940 Act").
The Fund is currently registered to offer four classes of shares, Class A,
Class B, Class C and No-load class, with only the Class A, Class C and
No-load shares currently being offered. The Fund's investment strategy is
capital growth. The Fund became effective with the SEC on April 27, 1999
and commenced operations on June 8, 1999.
The costs incurred in connection with the organization, initial
registration and public offering of shares have been paid by TransNations
Investments, LLC. (the "Advisor"). Accordingly, no organization costs
have been recorded by the Fund.
The following is a summary of significant accounting policies
consistently followed by the Fund.
a) Investment Valuation -- Common stocks and other equity securities
listed on a securities exchange or quoted on a national market system are
valued at 4:00 p.m., New York time on the day of valuation. Price
information on listed stocks is taken from the exchange where the security
is primarily traded. Securities that are listed on an exchange but which
are not traded on the valuation date are valued at the most recent bid
quotation. Other assets and securities for which no quotations are readily
available are valued at fair value as determined in good faith by the
Investment advisor under the supervision of the Board of Directors.
Short-term instruments (those with remaining maturities of 60 days or less)
are valued at amortized cost, which approximates fair market value.
b) Foreign Currency Translation -- Portfolio securities and other
assets and liabilities denominated in foreign currencies are translated
into U.S. dollars based on the exchange rate of such currencies against
U.S. dollars on the date of valuation. Purchases and sales of securities
and income items denominated in foreign currencies are translated into U.S.
dollars at the exchange rate in effect on the transaction date. The Fund
does not separately report the effect of changes in foreign exchange rates
from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions and the difference between the
recorded amounts of dividends, interest and foreign withholding taxes, and
the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains or losses arise from changes in foreign
exchange rates on foreign currency denominated assets and liabilities other
than investments in securities held at the end of the reporting period.
c) Federal Income Taxes -- No provision for federal income taxes has
been made since the Fund has complied to date with the provision of the
Internal Revenue Code applicable to regulated investment companies and
intends to so comply in the future and to distribute substantially all of
its net investment income and realized capital gains in order to relieve
the Fund from all federal income taxes.
d) Distributions to Shareholders -- Dividends from net investment
income and distributions of net realized capital gains, if any, will be
declared and paid at least annually. Income and capital gain distributions
are determined in accordance with income tax regulations that may differ
from accounting principles generally accepted in the United States of
America.
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 2000
e) Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
f) Other -- Investment and shareholder transactions are recorded on
trade date. The Fund determines the gain or loss realized from the
investment transactions by comparing the original cost of the security lot
sold with the net sales proceeds. Dividend income is recognized on the
ex-dividend date or as soon as information is available to the Fund, and
interest income is recognized on an accrual basis.
g) Directors Fees -- Certain directors of the Fund are also directors
of the Advisor. The compensation of unaffiliated directors of the Fund is
borne by the Fund. The unaffiliated directors of the Fund have decided to
waive their fees incurred during the period ended May 31, 2000.
2. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund for the class A shares for the
period ended May 31, 2000 were as follows:
SHARES AMOUNT
------- -----------
Sold ................. 49,409 $ 639,240
Redeemed ............. (1,014) (12,791)
------- -----------
Net Increase ......... 48,395 $ 626,449
======= ===========
Transactions in shares of the Fund for the No-load class of shares for
the period ended May 31, 2000 were as follows:
SHARES AMOUNT
------- -----------
Sold ................. 766,786 $12,268,490
Redeemed ............. (132,611) (2,316,975)
------- -----------
Net Increase ......... 634,175 $ 9,951,515
======= ===========
Transactions in shares of the Fund for the class C shares for the
period ended May 31, 2000 were as follows:
SHARES AMOUNT
------- -----------
Sold ................. 3,690 $ 36,805
Redeemed ............. 0 0
------- -----------
Net Increase ......... 3,690 $ 36,805
======= ===========
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 2000
3. INVESTMENT TRANSACTIONS
The cost of purchases and proceeds from sales of investments, excluding
short-term investments, by the Fund for the period ended May 31, 2000, were
as follows:
Purchases ........................... $9,968,295
Sales ............................... 779,299
At May 31, 2000, net unrealized appreciation of investments for tax
purposes was as follows:
Appreciation ........................ $1,125,735
Depreciation ........................ (482,591)
----------
Net appreciation on investments ..... $ 643,144
==========
At May 31, 2000, the cost of investments for federal income tax
purposes was $10,401,817.
4. ADVISORY FEES AND OTHER RELATED PARTY TRANSACTIONS
The Fund has entered into an Advisory Agreement with TransNations
Investments, LLC (the "Advisor") to provide investment management services
to the Fund. Pursuant to the Advisory Agreement, the Advisor is entitled
to receive a fee, calculated daily and payable monthly at the annual rate
of 0.50% as applied to the Fund's daily net assets. For the period ended
May 31, 2000, the Advisor earned advisory fees of $22,654, with $4,616
remaining payable at May 31, 2000.
The Fund has entered into an Operating Services Agreement (the
"Servicing Agreement") with the Advisor to provide or arrange for
day-to-day operational services to the Fund. Pursuant to the Servicing
Agreement, the Advisor is entitled to receive a fee, calculated daily and
payable monthly at the annual rate of 1.45% as applied to the Fund's daily
net assets. Prior to November 19, 1999 the fee was calculated at the
annual rate of 1.70%. For the period ended May 31, 2000, the Advisor
earned Servicing Agreement fees of $67,142, with $13,387 remaining payable
at May 31, 2000.
The Fund and the Advisor have entered into an Investment Company
Services Agreement (the "ICSA") with Declaration Service Company to provide
day-to-day operational services to the Fund including, but not limited to,
accounting, administrative, transfer agent, dividend disbursement,
registrar and record keeping services.
The effect of the Advisory Agreement and the Servicing Agreement is to
place a "cap" on the Funds' normal operating expenses at 1.95%. The only
other expenses incurred by the fund are distribution fees, brokerage fees,
taxes, if any, legal fees relating to litigation, and other extraordinary
expenses.
The Fund and the Advisor have entered into a Distribution Agreement
with Declaration Distributors, Inc. to provide distribution services to the
Fund. Declaration Distributors, Inc. serves as underwriter/distributor of
the Fund.
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 2000
A separate plan of distribution has been adopted under Rule 12b-1 of
the Investment Company Act of 1940 for each class of shares. With respect
to Class A and the No-load class of shares, the plan provides that the Fund
may pay a servicing or Rule 12b-1 fee of 0.25% annually of the Funds
average net assets attributable to each class of shares, and 1.00% annually
of the Funds' average net assets attributable to Class C shares to persons
or institutions for performing certain servicing functions for the Funds
shareholders. The distribution plan also allows the Fund to pay or
reimburse expenditures in connection with sales and promotional services
related to distribution of the Funds shares, including personal services
provided to prospective and existing shareholders. The distribution plans
for the Class A, the No-load class and the Class C shares took effect
November 19, 1999, June 8, 1999 and May 19, 2000, respectively.
5. OTHER EXPENSES
On March 8, 2000 the Fund incurred an expense of $28,516 due to a
trading error.
6. RECLASSIFICATIONS
In accordance with SOP 93-2, the Fund has recorded a reclassification
in the capital accounts. As of May 31, 2000, the Fund recorded a permanent
book/tax difference of $68,185 from net investment loss to accumulated
undistributed net realized capital gains. This reclassification has no
impact on the net assets of the fund and is designed generally to present
undistributed income and realized gains on a tax basis which is considered
to be more informative to shareholders.
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and
Shareholders of Amidex35(TM) Mutual Fund
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments of the Amidex35(TM) Mutual Fund (the
"Fund") as of May 31, 2000, and the related statements of operations and
changes in net assets for the period June 8, 1999 (commencement of
operations) through May 31, 2000, and the financial highlights for the
periods indicated. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards 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. Our procedures included confirmation of
securities owned as of May 31, 2000 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of the
Fund at May 31, 2000, and the results of its operations and its changes in
net assets and its financial highlights for the above mentioned periods in
conformity with accounting principles generally accepted in the United
States of America.
/S/ DELOITTE & TOUCHE LLP
July 14, 2000
14
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