[Graphic omitted of Investors Capital Funds logo]
INVESTORS CAPITAL TWENTY FUND
INVESTORS CAPITAL INTERNET AND TECHNOLOGY FUND
SEMI-ANNUAL REPORT
MARCH 31, 2000
<PAGE>
A MESSAGE TO SHAREHOLDERS
--------------------------------------------------------------------------------
Dear Shareholder:
Investors Capital would like to take this opportunity to personally thank each
of the shareholders who have invested in our two mutual funds. The Investors
Capital Twenty Fund has performed extremely well since its launch on October 18,
1999. The Internet and Technology Fund has also shown above average returns in
spite of recent market conditions in the High Tech industry. In our opinion, we
are presently in a difficult market environment.
Many investors have taken a hit in the market recently. Some have been hurt as a
result of using margin, reliance on their neighbor's stock tips or their
investment in IPO's (Initial Public Offerings). It is Investors Capital's view
that it is extremely important to invest in companies with earnings. There is
significant benefit, in our opinion, to utilize a stop loss in order that one
might reduce the risk of significant losses. These two strategies, by the way,
are incorporated in both of our funds.
By utilizing these two strategies, Investors Capital feels we have minimized
many of the pitfalls that a number of funds have fallen into. The stop loss
philosophy takes away the emotion of holding or selling a stock, and by doing
so, we put ourselves in a better position to realize our clients' goal of
capital appreciation within their investment.
Again, we want to thank everyone for their support and wish them a prosperous
year.
Best regards,
Investors Capital Funds
1
<PAGE>
SCHEDULE OF INVESTMENTS March 31, 2000 (unaudited)
--------------------------------------------------------------------------------
INVESTORS CAPITAL TWENTY FUND
MARKET
SHARES VALUE
---------- ----------
COMMON STOCK -- 93.6%
1,800 American Express Company ....................... $ 268,087
4,200 American Tower Corporation, Class A+ ........... 207,375
160 Berkshire Hathaway, Inc., Class B+ ............. 291,200
7,800 Cable Design Technologies Corporation+ ......... 264,712
3,500 Cisco Systems, Inc.+ ........................... 270,594
500 CMGI, Inc.+ .................................... 56,656
4,600 Colgate-Palmolive Company ...................... 259,325
1,700 Corning, Inc. .................................. 329,800
3,000 Costco Wholesale Corporation+ .................. 157,688
5,100 Cypress Semiconductor Corporation+ ............. 251,494
2,200 Cytyc Corporation+ ............................. 106,150
1,100 Electronic Arts, Inc.+ ......................... 78,306
1,100 EMC Corporation+ ............................... 137,500
2,450 General Electric Company ....................... 380,209
6,755 Integrated Device Technology, Inc.+ ............ 267,667
1,800 Intel Corporation .............................. 237,487
1,900 Koninklijke (Royal) Philips Electronics N.V. ... 325,494
2,500 Merrill Lynch & Co., Inc. ...................... 262,500
3,400 Microchip Technology, Inc.+ .................... 223,550
1,100 Microsoft Corporation+ ......................... 116,875
1,275 Omnicom Group, Inc. ............................ 119,133
85 PMC-Sierra, Inc.+ .............................. 17,313
9,500 Sybase, Inc.+ .................................. 192,969
4,900 Symantec Corporation+ .......................... 368,113
4,100 Telefonos de Mexico SA, Class L, ADR ........... 274,700
----------
Total Common Stock (Cost $4,807,285) ........... 5,464,897
----------
TOTAL INVESTMENTS -- 93.6%
(Cost $4,807,285*) ........................... 5,464,897
----------
OTHER ASSETS AND LIABILITIES (NET) -- 6.4% ..... 373,872
----------
NET ASSETS -- 100.0% ........................... $5,838,769
==========
-------------------------
+ Non-income producing security.
* Aggregate cost for Federal tax purposes.
INDUSTRY DIVERSIFICATION
ON MARCH 31, 2000, SECTOR DIVERSIFICATION OF THE FUND WAS AS FOLLOWS:
<TABLE>
<CAPTION>
% OF TOTAL % OF TOTAL
INVESTMENT IN SECURITIES INVESTMENT IN SECURITIES
------------------------ ------------------------
<S> <C> <C> <C>
Electronic Components/Semi-conductors 24.96% Networking Products 4.95%
Diversified Operations 12.29% Household Products 4.74%
Computer Software/Systems 11.70% Distribution Wholesale 2.89%
Financial Services 9.71% Computer Industry 2.52%
Telecommunications 8.82% Advertising 2.18%
Application Software 6.23% Technology 1.94%
Fiber Optics 6.03% Internet/Software/Retail 1.04%
------
TOTAL INVESTMENTS 100.00%
======
</TABLE>
Please see accompanying notes to financial statements.
2
<PAGE>
SCHEDULE OF INVESTMENTS March 31, 2000 (unaudited)
--------------------------------------------------------------------------------
INVESTORS CAPITAL INTERNET AND TECHNOLOGY FUND
MARKET
SHARES VALUE
---------- ----------
COMMON STOCK -- 80.4%
700 America OnLine, Inc.+ .......................... $ 47,075
1,654 Cisco Systems, Inc.+ ........................... 127,875
500 CMGI, Inc.+ .................................... 56,656
150 eBay, Inc.+ .................................... 26,400
800 EMC Corporation+ ............................... 100,000
492 Harmonic, Inc.+ ................................ 40,959
2,737 Integrated Device Technology, Inc.+ ............ 108,454
800 Intel Corporation .............................. 105,550
1,370 Intermedia Communications, Inc.+ ............... 66,188
900 Network Appliance, Inc.+ ....................... 74,475
700 PMC-Sierra, Inc.+ .............................. 142,581
500 Priceline.com, Inc.+ ........................... 40,000
600 RealNetworks, Inc.+ ............................ 34,163
816 Safeguard Scientifics, Inc.+ ................... 57,375
900 Sensar Corporation + ........................... 41,963
620 Siebel Systems, Inc.+ .......................... 74,051
598 Sun Microsystems, Inc.+ ........................ 56,034
2,700 Sybase, Inc.+ .................................. 54,844
1,243 Symantec Corporation+ .......................... 93,380
600 Texas Instruments, Inc. ........................ 96,000
1 VERITAS Software Corporation+ .................. 131
400 WebTrends Corporation+ ......................... 28,800
---------
Total Common Stock (Cost $1,297,309) ........... 1,472,954
---------
TOTAL INVESTMENTS -- 80.4%
(Cost $1,297,309*) ........................... 1,472,954
---------
OTHER ASSETS AND LIABILITIES (NET) -- 19.6% .... 360,172
---------
NET ASSETS -- 100.0% ........................... $1,833,126
==========
--------------------------
+ Non-income producing security.
* Aggregate cost for Federal tax purposes.
INDUSTRY DIVERSIFICATION
ON MARCH 31, 2000, SECTOR DIVERSIFICATION OF THE FUND WAS AS FOLLOWS:
<TABLE>
<CAPTION>
% OF TOTAL % OF TOTAL
INVESTMENT IN SECURITIES INVESTMENT IN SECURITIES
------------------------ ------------------------
<S> <C> <C> <C>
Electronic Components/Semi-conductors 33.58% Application Software 6.98%
Internet/Software/Retail 16.21% Telecommunications 4.49%
Computer Software/Systems 13.97% Fiber Optics 2.78%
Computer Industry 10.59% E-Commerce 2.72%
Networking Products 8.68%
------
TOTAL INVESTMENTS 100.00%
======
</TABLE>
Please see accompanying notes to financial statements.
3
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
March 31, 2000 (unaudited)
INVESTORS INVESTORS CAPITAL
CAPITAL INTERNET AND
TWENTY FUND TECHNOLOGY FUND
----------- -----------------
ASSETS:
Investments, at value (Cost $4,807,285 and
$1,297,309, respectively)(Note 2) ...... $ 5,464,898 $ 1,472,954
Cash ....................................... 582,517 346,833
Dividends and interest receivable .......... 868 --
Receivable for investment securities sold .. 383,810 --
Receivable for capital stock sold .......... 12,252 --
Due from Advisor (Note 3) .................. 10,801 29,975
Prepaid expenses and other assets .......... 21,937 17,986
----------- -----------
Total Assets ............................... 6,477,083 1,867,748
----------- -----------
LIABILITIES:
Payable for investment securities purchased 626,448 --
Distribution fee payable (Note 5) .......... 253 204
Accrued expenses and other liabilities ..... 11,613 34,418
----------- -----------
Total Liabilities .......................... 638,314 34,622
----------- -----------
NET ASSETS ................................. $ 5,838,769 $ 1,833,126
=========== ===========
NET ASSETS CONSIST OF:
Par Value (Note 1) ......................... $ 358 $ 150
Paid-in Capital (Note 1) ................... 4,779,079 1,700,592
Undistributed net investment loss .......... (54,929) (15,184)
Accumulated net realized gain/(loss)
on investments sold ...................... 456,648 (28,077)
Unrealized appreciation on investments ..... 657,613 175,645
----------- -----------
Total Net Assets ........................... $ 5,838,769 $ 1,833,126
=========== ===========
NET ASSETS
Class A .................................... $ 5,095,666 $ 1,652,983
Class C .................................... 743,103 180,143
----------- -----------
Total ...................................... $ 5,838,769 $ 1,833,126
=========== ===========
SHARES OUTSTANDING
Class A .................................... 310,223 135,115
Class C .................................... 48,159 14,406
----------- -----------
Total ...................................... 358,382 149,521
=========== ===========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
Class A .................................... $ 16.43* $ 12.23**
=========== ===========
Class C .................................... $ 15.43 $ 12.50
=========== ===========
----------------------
* Maximum offering per share ($16.43 / 0.9425 = $17.43)
** Maximum offering per share ($12.23 / 0.9425 = $12.98)
Please see accompanying notes to financial statements.
4
<PAGE>
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
For the Period Ended
March 31, 2000 (unaudited)
INVESTORS INVESTORS CAPITAL
CAPITAL INTERNET AND
TWENTY FUND* TECHNOLOGY FUND**
------------ -----------------
INVESTMENT INCOME:
Interest income (Note B) .................. $ 2,213 $ 39
Dividend income (Note B) .................. 1,392 1,229
----------- ----------
Total Investment Income ................... 3,605 1,268
----------- ----------
EXPENSES:
Investment advisory fees (Note 3) ............ 17,541 4,926
Administration fees (Note 4) ................. 22,547 19,014
Distribution fees (Note 5)
Class A .................................. 2,506 735
Class C .................................. 1,682 345
Accounting fees .............................. 6,419 5,837
Custodian fees ............................... 2,281 1,188
Legal and Audit fees ......................... 7,283 4,984
Trustees' fees and expenses .................. 5,000 1,200
Transfer agent fees .......................... 16,436 9,368
Registration and filing fees ................. 13,901 11,073
Other expenses ............................... 6,074 4,190
----------- ----------
Total Gross Expenses ......................... 101,670 62,860
Less: Expenses reimbursed - Class A .......... (35,126) (41,493)
Expenses reimbursed - Class C ........... (6,749) (4,655)
Expenses waived - Distribution
fees - Class C ...................... (1,261) (260)
----------- ----------
Net Expenses ................................. 58,534 16,452
----------- ----------
NET INVESTMENT LOSS ............................ (54,929) (15,184)
----------- ----------
REALIZED AND UNREALIZED GAIN/(LOSS)
FROM INVESTMENTS (NOTE 2):
Net realized gain/(loss) on investments sold . 456,648 (28,077)
Unrealized appreciation on investments ....... 657,613 175,645
----------- ----------
Net realized and unrealized gain on investments 1,114,261 147,568
----------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................... $ 1,059,332 $ 132,384
=========== ==========
----------------------------------------------------------------
* Investors Capital Twenty Fund SEC effective, October 18, 1999 and commenced
operations October 19, 1999.
** Investors Capital Internet and Technology Fund SEC effective, October 18,
1999 and commenced operations November 18, 1999.
Please see accompanying notes to financial statements.
5
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTORS INVESTORS CAPITAL
CAPITAL INTERNET AND
TWENTY FUND TECHNOLOGY FUND
----------- -----------------
FOR THE PERIOD ENDED FOR THE PERIOD ENDED
MARCH 31, 2000* MARCH 31, 2000**
(UNAUDITED) (UNAUDITED)
-------------------- --------------------
<S> <C> <C>
NET ASSETS, AT BEGINNING OF PERIOD ........ $ 85,000 $ 15,000
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS:
Net investment loss ..................... (54,929) (15,184)
Net realized gain/(loss) on
investments sold .................. 456,648 (28,077)
Net change in unrealized appreciation
on investments .................... 657,613 175,645
----------- -----------
Net increase in net assets
resulting from operations ............ 1,059,332 132,384
----------- -----------
CAPITAL STOCK TRANSACTIONS
CLASS A
Shares sold ............................. 4,330,432 1,645,897
Shares redeemed ......................... (220,248) (125,376)
----------- -----------
Net increase Class A shares .......... 4,110,184 1,520,521
----------- -----------
CLASS C
Shares sold ............................. 736,690 166,802
Shares redeemed ......................... (152,437) (1,581)
----------- -----------
Net increase Class C shares .......... 584,253 165,221
----------- -----------
Net increase in net assets
from capital stock transactions ...... 4,694,437 1,685,742
----------- -----------
Net increase in net assets .............. 5,753,769 1,818,126
----------- -----------
NET ASSETS, AT END OF PERIOD ............ $ 5,838,769 $ 1,833,126
=========== ===========
UNDISTRIBUTED NET INVESTMENT LOSS ....... $ (54,929) $ (15,184)
=========== ===========
CAPITAL SHARE TRANSACTIONS:
CLASS A
Shares sold ............................. 317,599 144,510
Shares redeemed ......................... (15,876) (10,895)
----------- -----------
Net increase in Class A shares
outstanding ....................... 301,723 133,615
=========== ===========
CLASS C
Shares sold ............................. 58,548 14,530
Shares redeemed ......................... (10,389) (124)
----------- -----------
Net increase in Class C shares
outstanding ....................... 48,159 14,406
=========== ===========
Increase in shares outstanding .......... 349,882 148,021
=========== ===========
</TABLE>
-----------------------
* Investors Capital Twenty Fund SEC effective, October 18, 1999 and commenced
operations October 19, 1999.
** Investors Capital Internet and Technology Fund SEC effective, October 18,
1999 and commenced operations November 18, 1999.
Please see accompanying notes to financial statements.
6
<PAGE>
FINANCIAL HIGHLIGHTS -- For a share outstanding throughout the period
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTORS INVESTORS CAPITAL
CAPITAL INTERNET AND
TWENTY FUND(a) TECHNOLOGY FUND(a)
-------------- -----------------
FOR THE PERIOD ENDED FOR THE PERIOD ENDED
MARCH 31, 2000 MARCH 31, 2000
(UNAUDITED) (UNAUDITED)
-------------------- --------------------
CLASS A CLASS C CLASS A CLASS C
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period ..... $ 10.00 $ 10.64 $ 10.00 $ 9.75
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS: .......
Net investment loss (d) (0.30) (0.29) (0.20) (0.20)
Net realized and unrealized gain
on investments (d) ................... 6.73 5.08 2.43 2.95
-------- -------- -------- --------
Total from Investment Operations ......... 6.43 4.79 2.23 2.75
-------- -------- -------- --------
Net Asset Value, at end of period ........ $ 16.43 $ 15.43 $ 12.23 $ 12.50
======== ======== ======== ========
Total Return (c) ......................... 64.30% 45.02% 22.30% 28.21%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000s) ......... $5,096 $743 $1,653 $180
Ratios to average net assets:
Net investment loss (b) .................. (4.69)% (4.69)% (4.61)% (4.61)%
Operating expenses (b) ................... 5.00% 5.00% 5.00% 5.00%
Operating expenses excluding
reimbursements and waivers (b) ........ 8.55% 9.30% 18.96% 19.71%
Net investment income excluding
reimbursements and waivers (b) ........ (8.24)% (8.99)% (18.57)% (19.32)%
Portfolio Turnover Rate (c) .............. 364% 364% 111% 111%
</TABLE>
----------------------------
(a) The Investors Capital Twenty Fund SEC effective, October 18, 1999.
Class A commenced operations on October 19, 1999
Class C commenced operations on October 29, 1999
The Investors Capital Internet and Technology Fund SEC effective, October
18, 1999.
Class A commenced operations on November 18, 1999
Class C commenced operations on November 19, 1999
(b) Annualized.
(c) Not Annualized.
(d) Based on weighted average share method.
Please see accompanying notes to financial statements.
7
<PAGE>
INVESTORS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (unaudited)
--------------------------------------------------------------------------------
(1) ORGANIZATION
Investors Capital Funds (the "TRUST") was organized as a Delaware business
trust on July 14, 1999 and is registered under the Investment Company Act of
1940, as amended, (the "1940 ACT") as a non-diversified open-end management
investment company. The Trust currently consists of two non-diversified
series: the Investors Capital Twenty Fund and the Investors Capital Internet
Fund (each a "Fund" and collectively, the "Funds"). Effective April 1, 2000,
the Investors Capital Internet Fund changed its name to Investors Capital
Internet and Technology Fund.
On October 8, 1999 the Fund sold 10,000 Class A shares of the Investors
Capital Twenty Fund at $10.00 per share to Eastern Point Advisors, Inc., the
Fund's Investment Advisor. Between October 8, 1999 and the respective dates
of commencement of operations of each class of the Funds, the Trust had no
other activities than those relating to organizational matters.
The Trust is authorized to issue an unlimited number of shares of beneficial
interest of $.001 par value. Each Fund currently offers two Classes of
shares ("Class A" and "Class C"). Each Class of shares has equal rights as
to earnings, assets and voting privileges, except that each Class bears
different distribution expenses. Each Class of shares has exclusive voting
rights with respect to matters that affect just that Class. Income, expenses
(other than expenses attributable to a specific Class) and realized and
unrealized gains or losses on investments are allocated to each Class of
shares based on relative net assets.
(2) SIGNIFICANT ACCOUNTING POLICIES
The Funds seek long-term growth of capital by investing primarily in common
stocks selected for their growth potential. The Investors Capital Twenty
Fund normally concentrates its investments in a core group of 20-30 common
stocks. The Investors Capital Internet and Technology Fund seeks long term
growth of capital through investments in a portfolio of Internet,
Internet-related and Technology common stocks. Due to the inherent risk in
any investment program, the Funds cannot ensure that the investment
objectives will be realized.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of the financial statements. The
policies are in conformity with generally accepted accounting principles.
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those
estimates.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (unaudited) (continued)
--------------------------------------------------------------------------------
A. SECURITIES VALUATION:
Each Fund determines its net asset value per share (NAV) each business
day at the close of regular trading on the New York Stock Exchange. The
net asset value per share is computed by adding the value of all
securities and other assets in the portfolio, deducting any liabilities
(expenses and fees are accrued daily) and dividing by the number of
shares outstanding. The equity securities of each Fund listed or traded
on a stock exchange are valued at the last sale prices on its principal
exchange. If no sale price is reported, the mean of the last bid and
asked price is used. Securities traded over-the-counter are priced at
the last available bid price. The Funds may determine the fair value of
any security in good faith in accordance with procedures approved by the
Trust's Board of Trustees if market quotations are not readily
available, or if, in the opinion of the advisor, any quotation of market
price is not representative of true market value.
B. SECURITIES TRANSACTION AND RELATED INCOME:
Securities transactions are accounted for on the date the securities are
purchased or sold (trade date). Cost is determined and gains and losses
are based on the identified cost basis for both financial statement and
federal income tax purposes. Dividend income is reported on the
ex-dividend date. Interest income and expenses are accrued daily.
C. DISTRIBUTIONS TO SHAREHOLDERS:
The Funds will distribute substantially all net investment income and
long term capital gains, if any, annually. Distributions to shareholders
are recorded on the ex-dividend date. It is the policy of each Fund to
comply with the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute substantially all of
its taxable income to its shareholders in a manner which results in no
tax to the Fund. Therefore, no federal income or excise tax provision is
required.
(3) INVESTMENT ADVISORS
Eastern Point Advisors, Inc. serves as the Funds' advisor. Pursuant to the
terms of the Investment Advisory Agreement, Eastern Point shall have full
discretion to manage the assets of the Funds in accordance with their
investment objectives and policies. As compensation for its services Eastern
Point receives, on a monthly basis, an investment advisory fee calculated at
the annual rate of 1.50% of each of the Fund's average daily net assets.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (unaudited) (continued)
--------------------------------------------------------------------------------
Eastern Point has also voluntarily agreed to waive its advisory fees or
reimburse other Fund expenses so that each Fund's annual operating expenses
will not exceed 5.00% of each Fund's average daily net assets. This waiver
may be terminated by Eastern Point at any time. Effective June 1, 2000, the
Advisor has voluntarily undertaken to waive a portion of its advisory fee
and/or reimburse fund expenses so that total operating expenses of each Fund
do not exceed 5.00% for Class A shares and 5.75% for Class C shares.
For the period ended March 31, 2000, the Advisor reimbursed expenses as
follows:
Investors Capital Twenty Fund $41,875
Investors Capital Internet and Technology Fund $46,148
During the period ended March 31, 2000, the Advisor also waived $1,261 and
$260 of distribution/services fees for the Class C shares of the Twenty Fund
and the Internet and Technology Fund, respectively.
Eastern Point Advisors, Inc., has agreed to bear all of the costs incurred
in connection with the organization of the Funds.
(4) ADMINISTRATOR
PFPC Inc. ("PFPC", or the "ADMINISTRATOR") serves as the Funds'
administrator pursuant to a service agreement. Under the agreement, the
Administrator provides the Funds with office space and personnel to assist
the Funds in managing daily business affairs.
(5) DISTRIBUTION PLAN AND OTHER TRANSACTIONS WITH AFFILIATES
Investors Capital Corporation (the "DISTRIBUTOR") serves as the Funds'
principal distributor pursuant to a Distribution Agreement. The Distributor
is an affiliate of Eastern Point.
CLASS A - The Class A shares of the Fund have adopted a Rule 12b-1
Distribution Plan (the "CLASS A PLAN") pursuant to Rule 12(b)-1 under the
1940 Act. The Class A Plan provides that the Fund will compensate the
Distributor for payments to dealers or others at the rate of 0.25% per annum
of the average daily net assets of the Class A shares of the Fund. The fees
payable under the Class A Plan shall be used to compensate the Distributor
for any expenses primarily intended to result in the sale of the Fund's
shares, including, but not limited to: payments the Distributor makes to
broker-dealers or other financial institutions and industry professionals
for providing distribution assistance and administrative support services to
the holders of the Fund's Class A shares, payments
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (unaudited) (continued)
--------------------------------------------------------------------------------
made for the preparation, printing and distribution of advertisements and
sales literature, and payments made for printing and distributing
prospectuses and shareholders reports to other than existing shareholders of
the Fund.
CLASS C - The Class C shares of the Fund have also adopted a Rule 12b-1
Distribution Plan (the "CLASS C PLAN") pursuant to Rule 12(b)-1 under the
1940 Act. The Class C Plan provides that the Fund will compensate the
Distributor for payments to dealers or others at the rate of 0.75% per annum
of the average daily net assets of the Class C shares of the Fund. The fees
payable under the Class C Plan shall be used to compensate the Distributor
for any expenses primarily intended to result in the sale of the Fund's
shares, including, but not limited to: payments the Distributor makes to
broker-dealers or other financial institutions and industry professionals
for providing distribution assistance and administrative support services to
the holders of the Fund's Class C shares, payments made for the preparation,
printing and distribution of advertisements and sales literature, and
payments made for printing and distributing prospectuses and shareholders
reports to other than existing shareholders of the Fund.
The Class C Plan also provides that the Fund will compensate the Distributor
with a servicing fee at the rate of 0.25% per annum of the average daily net
assets of the Class C shares of the Fund. The servicing fee shall be used to
pay, among other things, for assisting in establishing and maintaining
customer accounts and records; assisting with purchase and redemption
requests; arranging for bank wires; monitoring dividend payments from the
Trust on behalf of customers; furnishing personal services and maintaining
shareholder accounts; facilitating certain shareholder communications from
the Trust to customers; receiving and answering correspondence; and aiding
in maintaining the investment of the Fund's Class C shareholders.
During the period ended March 31, 2000, the Advisor waived 0.75% of
distribution/service fees to maintain the expense cap at 5.00% for Class C
shares of both Funds.
An officer of the Trust is also an officer of the Distributor and has more
than 25% ownership interest in both Eastern Point and the Distributor.
A. BROKER COMMISSIONS:
The Funds intend to place substantially all of their securities
transactions through their affiliated Distributor in accordance with
procedures set forth in Rule 17e-1 under the 1940 Act. The Advisor may
also use non-affiliated brokers to execute portfolio transactions on
behalf of the Funds. Investors Capital Corporation, Inc., provided
brokerage services to the Funds. For the period ended March 31, 2000,
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (unaudited) (continued)
--------------------------------------------------------------------------------
Investors Capital Twenty Fund and Investors Capital Internet and
Technology Fund incurred $7,701 and $2,639, respectively, in brokerage
commissions with Investors Capital Corporation.
Certain officers and Trustees of the Funds are affiliated persons of the
Advisor and the Distributor. No officer, Trustee or employee of the Advisor,
PFPC or any affiliate thereof, received any compensation from the Trust for
serving as an officer or Trustee of the Trust.
(6) SECURITIES TRANSACTIONS
For the period ended March 31, 2000, aggregate cost of purchases and
proceeds from sales of securities, other than short-term investments, were
as follows:
PURCHASES SALES
--------- -----
Investors Capital Twenty $12,799,745 $8,449,109
Investors Capital Internet and Technology $2,139,996 $814,610
The aggregate gross unrealized appreciation and depreciation, as computed on
a federal income tax basis, at March 31, 2000 for each Fund is as follows:
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION NET
------------ ------------ --------
Investors Capital Twenty $756,332 $(98,719) $657,613
Investors Capital Internet and Technology $270,686 $(95,041) $175,645
12
<PAGE>
[Graphic omitted of Investors Capital Funds logo]
BOARD OF TRUSTEES AND OFFICERS
Theodore E. Charles, Robert T. Martin,
President Trustee
Timothy B. Murphy, John S. Rando,
Treasurer Trustee
C. David Weller, Arthur E. Stickney,
Secretary Trustee
Legal Counsel
DISTRIBUTOR
Investors Capital Corporation
230 Broadway East, Suite 203
Lynnfield, MA 01940
CUSTODIAN AUDITOR
The Bank of New York Briggs, Bunting & Dougherty, LLP
1 Wall Street 2121 Two Logan Square
New York, NY 10286 Philadelphia, PA 19103-4901
TRANSFER AGENT
PFPC Inc.
211 S. Gulph Road
King of Prussia, PA 19406
--------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Investors Capital Funds. It is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.
--------------------------------------------------------------------------------
SAR 03/00
