LOGO
GILFORD OAKWOOD EQUITY FUND
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SEMI-ANNUAL REPORT
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For the Six Months Ended
June 30, 2000
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GILFORD OAKWOOD EQUITY FUND
August 15, 2000
Dear Fellow Shareholders,
Oakwood Capital Management LLC is pleased to submit the first half report
on the Gilford Oakwood Equity Fund (GO Equity Fund).
For the period ended June 30, 2000, the total return of the Class C shares
of the GO Equity Fund was +21.6%*. This compares to the total return on the
Standard and Poors 500 ("S&P 500") for the same period of -0.4%. The Class B
shares, funded only since January 21, 2000, experienced a total return of
+20.2%* versus total return for the same period on the S&P 500 of 4.3%.
We are pleased that our fund has enjoyed excellent performance for the
first half of 2000 relative to the S&P 500 and to most major indices. We
attribute these outstanding results to our key philosophies on equity investing,
that is, to be fully diversified, to accept incremental risk only when the
market is offering a commensurate reward for taking it and to buy attractive
companies when their stocks can be obtained at reasonable valuations.
The portfolio weighted price to earnings (P/E) ratio, based upon 2000
consensus earnings estimates, for the GO Equity Fund is 50.4 times compared to a
bottom up capitalization weighted P/E ratio for the S&P 500 index of 44.5 times.
For 2001 the same number for the GO Equity Fund is 30.7 times and 35.6 times for
the S&P 500. Based on these projected consensus earnings forecasts, the stocks
currently held in the fund are forecasted to increase earnings 32.1% next year
compared to a capitalization-weighted increase of 27.8% for the S&P 500. The
consensus estimated five-year earnings growth rate for the stocks in the fund is
22.8% versus 18.0% for the S&P 500 index. Thus in our opinion, the companies
whose stocks are represented in the fund have the potential to generate earnings
growth in excess of the market while maintaining an estimated P/E ratio on next
year's earnings less than that of the market.
After five years of unprecedented returns, U.S. stocks appear to have
paused in the first half of 2000. Despite flat to negative returns in major
indices for the first six months, however, the U.S. economy continues to
demonstrate uncanny strength. The Federal Reserve Board's ("Fed") six increases
in short term rates over
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the past twelve months have failed to stall the economy, which is still
more reminiscent of the early stages of a recovery than the eleventh year of
expansion.
Fed action has now begun to slow consumer spending somewhat but capital
spending remains strong, aided by continued high demand for state-of-the-art
computers, telecommunications equipment, software and semiconductors. Price
levels, which began to move upward during the first half of the year, have
moderated recently although inflation's annual rate of increase stands well
above levels of late last year. As the perception builds that the Fed will be
successful in engineering a soft landing for the U.S. economy, we believe stock
prices will then anticipate the economic environment that will exist once the
Fed is finished with this round of tightening. In our opinion, such a scenario
could be more positive for equities than the first half of this year.
We remain slightly overweighted in larger capitalization technology stocks
and are overweighted to a larger extent in communications stocks. The companies
in these industries continue to dominate their market segments as the world
progresses from analog to digital, from wire to wireless, from narrow to
broadband and from telephones to the Internet. In short, the market continues to
demand the ability to store ever greater amounts of data in ever smaller spaces
and to move data at faster and faster speeds. We are also overweighted in
industrial cyclicals to take advantage of a strong capital spending environment
and believe that financials offer good value as well. We deliberately remain
market weighted in energy issues in view of that industry's current pricing
environment.
We expect to continue to add value to our fund by seeking the stocks of
companies with long term strategic advantage, seasoned, visionary and focused
management teams, strong financials and global franchises.
Cordially,
/s/ James M. Lyon /s/ Marla L. Harkness
James M. Lyon, CFA, CIC Marla L. Harkness, CFA, CIC
* Past performance is no guarantee of future performance. Shares may be worth
more of less than the purchase cost at the time of redemption. If shares
were to be sold by the shareholder, a Contingent Deferred Sales Charge
("CDSC") may apply. Assuming that the maximum CDSC applies, the cumulative
total return of the Class B Shares would have been 15.2% for the period
January 21, 2000 through June 30, 2000. For the Class C shares, cumulative
total return for the period December 31, 1999 through June 30, 2000 would
have been 20.6%. For further information regarding the CDSC please consult
the prospectus. To obtain a prospectus, please phone 800-282-2340.
Distributed by Gilford Securities Incorporated, NY, NY 10022.
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GILFORD OAKWOOD EQUITY FUND
SCHEDULE OF INVESTMENTS at June 30, 2000 (Unaudited)
SHARES VALUE
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COMMON STOCKS: 96.4%
AEROSPACE - DEFENSE: 1.8%
800 Boeing Co. (The) $ 33,450
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BANKING/FINANCIAL SERVICES: 9.0%
400 Bank of New York Co., Inc. (The) 18,600
762 Chase Manhattan Corp. (The) 35,122
575 Citigroup Inc. 34,644
1,350 MBNA Corp. 36,619
500 Providian Financial Corp. 45,000
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169,985
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BEVERAGES - NON-ALCOHOLIC: 1.8%
600 Coca-Cola Co. (The) 34,463
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COMMUNICATIONS: 2.7%
589 General Motors Corp. - Class H 51,741
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COMPUTERS: 7.1%
700 Dell Computer Corp.* 34,519
525 Gateway, Inc.* 29,794
250 International Business Machines Corp. 27,391
450 Sun Microsystems, Inc.* 40,921
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132,625
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CONGLOMERATES: 2.3%
900 Tyco International Ltd. 42,637
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DRUGS & PHARMACEUTICALS: 8.0%
375 Eli Lilly and Co. 37,453
1,000 ICN Pharmaceuticals, Inc. 27,813
1,125 Pfizer, Inc. 54,000
600 Schering - Plough Corp. 30,300
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149,566
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ELECTRONIC COMPONENTS - SEMICONDUCTORS: 13.4%
600 Applied Materials, Inc.* 54,375
425 Intel Corp. 56,817
950 Novellus Systems, Inc.* 53,734
450 Rambus, Inc.* 46,350
600 Texas Instruments, Inc. 41,212
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252,488
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ELECTRONICS: 1.8%
800 Solectron Corp.* 33,500
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ENTERTAINMENT: 2.3%
575 Time Warner, Inc. 43,700
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INSURANCE: 1.9%
300 American International Group, Inc. 35,250
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INVESTMENT BANKERS/BROKERS: 1.9%
1,052 Charles Schwab Corp. (The) 35,374
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METAL - ALUMINUM: 1.9%
1,250 Alcoa, Inc. 36,250
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OIL & GAS: 6.2%
533 BP Amoco PLC ADR 30,148
700 Schlumberger Ltd. 52,237
1025 Unocal Corp. 33,953
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116,338
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RETAIL: 6.4%
850 Best Buy Co., Inc.* 53,763
800 Home Depot, Inc. (The) 39,950
1,700 Staples, Inc.* 26,137
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119,850
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SOFTWARE: 2.0%
450 Oracle Corp.* 37,828
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TELECOMMUNICATION EQUIPMENT: 13.5%
700 Cisco Systems, Inc.* 44,494
250 Corning, Inc. 67,469
900 Lucent Technologies Inc. 53,325
1,658 Motorola, Inc. 48,186
600 Tellabs, Inc.* 41,062
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254,536
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TELECOMMUNCIATION SERVICES: 3.8%
700 Qwest Communications International, Inc.* 34,781
800 WorldCom, Inc.* 36,700
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71,481
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TEXTILE APPAREL: 1.8%
1,450 Jones Apparel Group, Inc.* 34,075
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See accompanying Notes to Financial Statements.
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GILFORD OAKWOOD EQUITY FUND
SCHEDULE OF INVESTMENTS at June 30, 2000 (Unaudited) - (Continued)
SHARES VALUE
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TRANSPORT - RAIL: 2.0%
430 Kansas City Southern Industries, Inc. $ 38,136
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UTILITIES: 4.8%
650 AES Corp. (The)* 29,656
1,450 Williams Companies, Inc. (The) 60,447
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90,103
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TOTAL COMMON STOCKS
(cost $1,661,167) 1,813,376
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TOTAL INVESTMENTS IN SECURITIES
(cost $1,661,167**): 96.4% 1,813,376
Other Assets less Liablities: 3.6% 67,794
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NET ASSETS: 100.0% $1,881,170
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* Non-income producing security.
** At June 30, 2000, the basis of investments for federal income tax purposes
was the same as their cost for financial reporting purposes. Unrealized
appreciation and depreciation were as follows:
Gross unrealized appreciation $ 201,964
Gross unrealized depreciation (49,755)
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Net unrealized appreciation $ 152,209
=========
See accompanying Notes to Financial Statements.
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GILFORD OAKWOOD EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
at June 30, 2000 (Unaudited)
ASSETS
Investments in securities, at value (cost $1,661,167) ........ $1,813,376
Cash ......................................................... 32,942
Receivables:
Fund shares sold ........................................... 39,976
Due from advisor ........................................... 14,622
Dividends .................................................. 230
Prepaid expenses ........................................... 1,462
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Total assets ............................................. 1,902,608
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LIABILITIES
Payables:
Administration fees ........................................ 2,459
Distribution fees .......................................... 2,220
Shareholder servicing fees ................................. 574
Accrued expenses ............................................. 16,185
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Total liabilities ........................................ 21,438
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NET ASSETS ................................................... $1,881,170
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See accompanying Notes to Financial Statements.
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GILFORD OAKWOOD EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
at June 30, 2000 (Unaudited) - (Continued)
COMPONENTS OF NET ASSETS
Paid-in capital .......................................... $ 1,664,374
Accumulated net investment loss .......................... (10,407)
Accumulated net realized gain on investments ............. 74,994
Net unrealized appreciation of investments ............... 152,209
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Net assets ............................................ $ 1,881,170
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CLASS B
Net assets applicable to shares outstanding ............. $ 460,815
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Shares outstanding ...................................... 19,177
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NET ASSET VALUE AND OFFERING PRICE PER SHARE* ........... $ 24.03
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CLASS C
Net assets applicable to shares outstanding ............. $ 1,420,355
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Shares outstanding ...................................... 58,429
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NET ASSET VALUE AND OFFERING PRICE PER SHARE* ........... $ 24.31
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* Redemption price per share is equal to Net Asset Value less any applicable
sales charges.
See accompanying Notes to Financial Statements.
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GILFORD OAKWOOD EQUITY FUND
STATEMENT OF OPERATIONS
For the Periods Ended June 30, 2000 (Unaudited)*
INVESTMENT INCOME
Income
Dividends ................................................... $ 2,859
Interest .................................................... 923
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Total income .............................................. 3,782
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Expenses
Administration fees ........................................... 14,918
Transfer agent fees ........................................... 8,951
Fund accounting fees .......................................... 8,773
Audit fees .................................................... 7,211
Advisory fees ................................................. 5,604
Custody fees .................................................. 3,912
Distribution fees - Class C .................................. 3,681
Reports to shareholders ....................................... 2,394
Legal fees .................................................... 2,382
Trustee fees .................................................. 1,989
Shareholder servicing fees - Class C .......................... 1,227
Distribution fees - Class B .................................. 522
Shareholder servicing fees - Class B .......................... 174
Miscellaneous ................................................. 2,380
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Total expenses .............................................. 64,118
Less: fees waived and expenses absorbed ..................... (49,929)
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Net expenses ................................................ 14,189
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NET INVESTMENT LOSS ....................................... (10,407)
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments ............................. 74,994
Net unrealized appreciation on investments ................... 152,209
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Net realized and unrealized gain on investments ........... 227,203
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ... $ 216,796
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* Commenced operations on December 31, 1999 for Class C and January 21, 2000
for Class B.
See accompanying Notes to Financial Statements.
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GILFORD OAKWOOD EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the Periods Ended June 30, 2000 (Unaudited)*
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment loss ......................................... $ (10,407)
Net realized gain on investments ............................ 74,994
Net unrealized appreciation on investments .................. 152,209
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...... 216,796
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CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold
Class B ..................................................... 652,961
Class C ..................................................... 1,226,213
Cost of shares redeemed
Class B ..................................................... (205,800)
Class C ..................................................... (9,000)
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Net increase in net assets derived from net change in
outstanding shares (a)...................................... 1,664,374
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TOTAL INCREASE IN NET ASSETS .................................. 1,881,170
NET ASSETS
Beginning of period ........................................... --
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END OF PERIOD ................................................. $ 1,881,170
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(a) A summary of capital share transactions is as follows:
CLASS B SHARES
Shares sold ................................................. 29,177
Shares redeemed ............................................. (10,000)
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NET INCREASE .............................................. 19,177
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CLASS C SHARES
Shares sold ................................................. 58,829
Shares redeemed ............................................. (400)
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NET INCREASE .............................................. 58,429
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* Commenced operations on December 31, 1999 for Class C and January 21, 2000
for Class B.
See accompanying Notes to Financial Statements.
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GILFORD OAKWOOD EQUITY FUND
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout the period
<TABLE>
<CAPTION>
Class B Class C
-------------- --------------
January 21, 2000+
Through Six Months Ended
June 30, 2000* June 30, 2000*
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period ................... $20.00 $20.00
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .................................. (0.07) (0.16)
Net realized and unrealized gain
on investments....................................... 4.10 4.47
------ ------
Total from investment operations ....................... 4.03 4.31
------ ------
Net asset value, end of period ......................... $24.03 $24.31
====== ======
Total return ........................................... 20.15%++ 21.55%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions) ................. $ 0.5 $ 1.4
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
Before fees waived and expenses absorbed ............. 11.85%** 11.22%**
After fees waived and expenses absorbed .............. 2.50%** 2.50%**
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS:
Before fees waived and expenses absorbed ............. (11.22)%** (10.55)%**
After fees waived and expenses absorbed .............. (1.87)%** (1.83)%**
Portfolio turnover rate .............................. 35.85%++ 35.85%++
</TABLE>
+ Commencement of operations.
* Unaudited.
** Annualized
++ Not annualized.
See accompanying Notes to Financial Statements.
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GILFORD OAKWOOD EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - ORGANIZATION
The Gilford Oakwood Equity Fund (the "Fund") is a series of shares of
beneficial interest of the Trust for Investment Managers (the "Trust") which is
registered under the Investment Company Act of 1940 (the "1940 Act") as an
open-end management investment company. Gilford Oakwood Equity Fund Class B and
Class C commenced operations on January 21, 2000 and December 31, 1999,
respectively. The investment objective of the Fund is to seek long-term growth
of capital. The Fund seeks to achieve its objective by investing primarily in
equity securities.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. SECURITIES VALUATION. Securities traded on a national securities
exchange or NASDAQ are valued at the last reported sale price at the
close of regular trading on each day that the exchanges are open for
trading; securities traded on an exchange or NASDAQ for which there
have been no sales, and other over-the-counter securities, are valued
at the last reported bid price. Securities for which quotations are
not readily available are valued at their respective fair values as
determined in good faith by the Board of Trustees.
U.S. Government securities with less than 60 days remaining to
maturity when acquired by the Fund are valued on an amortized cost
basis. U.S. Government securities with more than 60 days remaining to
maturity are valued at their current market value (using the mean
between the bid and asked price) until the 60th day prior to maturity,
and are then valued at amortized cost based upon the value on such
date unless the Board of Trustees determines during such 60 day period
that amortized cost does not represent fair value. Short-term
investments are stated at cost, which when combined with accrued
interest, approximates market value.
B. FEDERAL INCOME TAXES. The Fund intends to comply with the requirements
of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its
shareholders. Therefore, no federal income tax provision is required.
11
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GILFORD OAKWOOD EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
C. SECURITIES TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS.
Securities transactions are accounted for on the trade date. The cost
of securities sold is determined on a first in, first-out basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on an accrual basis.
D. USE OF ESTIMATES. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
Oakwood Capital Management LLC (the "Advisor") provides the Fund with
investment management services under an Investment Advisory Agreement (the
"Agreement"). Under the Agreement the Advisor furnishes all investment advice,
office space, facilities, and most of the personnel needed by the Fund. As
compensation for its services, the Advisor receives a monthly fee at the annual
rate of 1.00% of the Fund's average daily net assets. For the period ended June
30, 2000, the Fund incurred $5,604 in advisory fees.
The Fund is responsible for its own operating expenses. The Advisor has
contractually agreed to limit the Fund's total operating expenses by reducing
all or a portion of its fees and reimbursing the Fund's expenses, for a one year
period, so that its ratio of expenses to average net assets will not exceed
2.50%. In the case of the Fund's initial period of operations any fee withheld
or voluntarily reduced and/or any Fund expense absorbed by the Advisor pursuant
to an agreed upon expense cap shall be reimbursed by the Fund to the Advisor, if
so requested by the Advisor, anytime before the end of the fifth fiscal year
following the year to which the fee waiver and/or expense absorption relates,
provided the aggregate amount of the Fund's current operating expenses for such
fiscal year does not exceed the applicable limitation on Fund expenses. During
the period ended June 30, 2000, the Advisor waived fees of $5,604 and absorbed
expenses of $44,325. The Fund must pay its current ordinary operating expenses
before the Advisor is entitled to any reimbursement of fees and/or expenses. Any
such reimbursement is also contingent upon Board of Trustees review and approval
prior to the time the reimbursement is initiated.
12
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GILFORD OAKWOOD EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
Investment Company Administration, L.L.C. (the "Administrator") acts as the
Fund's administrator under an Administration Agreement. The Administrator
prepares various federal and state regulatory filings, reports and returns;
prepares reports and materials to be supplied to the trustees; monitors the
activities of the Fund's custodian, transfer agent and accountant; coordinates
the preparation and payment of Fund expenses and reviews the Fund's expense
accruals.
For its services, the Administrator receives a monthly fee at the following
annual rates:
Under $22.5 million $45,000
$22.5 to $50 million 0.20% of average daily net assets
$50 to $100 million 0.15% of average daily net assets
$100 to $150 million 0.10% of average daily net assets
Over $150 million 0.05% of average daily net assets
For the period ended June 30, 2000, the Fund incurred $14,918 in
administration fees.
Certain officers and trustees of the Trust are also officers and/or
directors of the Administrator.
NOTE 4 - DISTRIBUTION COSTS
The Fund has adopted a Distribution Plan (the "Plan") in accordance with
Rule 12b-1 under the 1940 Act. Gilford Securities, Incorporated (the
"Distributor") acts as the Fund's principal underwriter in a continuous public
offering of the Fund's shares. The Plan provides that the Fund may pay a fee to
the Distributor at an annual rate of 0.75% of the average daily net assets of
the Fund's Class B and Class C shares. The fee is paid to the Distributor as
reimbursement for, or in anticipation of, expenses incurred for
distribution-related activity. For the period ended June 30, 2000, the Fund
incurred distribution fees of $522 and $3,681 under the plan for Class B and
Class C shares, respectively.
13
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GILFORD OAKWOOD EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
NOTE 5 - SHAREHOLDER SERVICING FEE
The Fund has entered into a Shareholder Servicing Agreement with the
Distributor, under which the Fund pays servicing fees at an annual rate of 0.25%
of the average daily net assets of the Fund's Class B and Class C shares.
Payments to the Distributor under the Shareholder Servicing Agreement may
reimburse the Distributor for payments it makes to selected brokers, dealers and
administrators which have entered into Service Agreements with the Distributor
for services provided to shareholders of the Fund. The services provided by such
intermediaries are primarily designed to assist shareholders of the Fund and
include the furnishing of office space and equipment, telephone facilities,
personnel and assistance to the Fund in servicing such shareholders. Services
provided by such intermediaries also include the provision of support services
to the Fund and include establishing and maintaining shareholders' accounts and
record processing, purchase and redemption transactions, answering routine
client inquiries regarding the Fund, and providing such other personal services
to shareholders as the Fund may reasonably request. For the period ended June
30, 2000, the Fund incurred shareholder servicing fees of $174 and $1,227 under
the agreement for Class B and Class C shares, respectively.
NOTE 6 - PURCHASES AND SALES OF SECURITIES
The cost of purchases and the proceeds from the sale of securities for the
period ended June 30, 2000, excluding short-term investments, were $2,102,902
and $416,730, respectively.
14
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================================================================================
Advisor
OAKWOOD CAPITAL MANAGEMENT LLC
1901 Avenue of the Stars
Los Angeles, CA 90067
Distributor
GILFORD SECURITIES, INC.
850 Third Avenue
New York, NY 10022
Custodian
FIRSTAR INSTITUTIONAL CUSTODY SERVICES
425 Walnut Street
Cincinnati, OH 45202
Transfer Agent
AMERICAN DATA SERVICES, INC.
P.O. Box 5536
Hauppauge, NY 11788-0132
(800) 282-2340
Legal Counsel
PAUL, HASTINGS, JANOFSKY & WALKER, LLP
555 South Flower Street, 23rd Floor
Los Angeles, CA 90071
================================================================================
This report is intended for the shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.
Past performance results shown in this report should not be considered a
representation of future performance. Share price and returns will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Statements and other information herein are dated and subject to change.
