SEMI-ANNUAL REPORT
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THE LEGACY FUNDS, INC.
[GRAPHIC OMITTED]
Legacy Growth Fund
April 30, 2000
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THE LEGACY FUNDS, INC.
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STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
April 30, 2000
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<TABLE>
<CAPTION>
----------------
Legacy
Growth Fund
----------------
<S> <C>
ASSETS:
Investments, at market value
(Cost of $1,876,009) $1,863,995
Receivable from Adviser 7,666
Interest receivable 1,084
Dividends receivable 317
Prepaid assets 14,891
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Total assets 1,887,953
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LIABILITIES:
Accrued expenses and other liabilities 23,172
----------------
Total liabilities 23,172
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NET ASSETS $1,864,781
================
NET ASSETS CONSIST OF:
Capital stock $1,880,049
Accumulated undistributed net investment loss (380)
Accumulated undistributed net realized loss on
investments (2,873)
Net unrealized depreciation on investments (12,015)
-----------------
Total Net Assets $1,864,781
================
Shares outstanding
(Unlimited shares authorized
with a par value of $0.001 each) 183,057
================
Net Asset Value, Redemption Price
and Offering Price Per Share $10.19
================
</TABLE>
See Notes to the Financial Statements.
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THE LEGACY FUNDS, INC.
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STATEMENT OF OPERATIONS (Unaudited)
February 15, 2000* through April 30, 2000
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<TABLE>
<CAPTION>
----------------
Legacy
Growth Fund
----------------
<S> <C>
INVESTMENT INCOME:
Dividend income (net of withholding tax of $1) $ 883
Interest income 2,288
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Total investment income 3,171
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EXPENSES:
Investment advisory fees 2,089
Administration fees 6,225
Fund accounting fees 5,300
Transfer agent fees and expenses 3,702
Distribution fees 1,044
Custody fees 2,875
Professional fees 2,119
Federal and state registration 1,608
Trustees' fees and expenses 1,125
Reports to shareholders 216
Other 2,850
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Total expenses before Adviser reimbursement 29,153
Less: Fees and expenses reimbursed by Adviser (25,602)
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Net expenses 3,551
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NET INVESTMENT LOSS (380)
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REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments (2,873)
Change in unrealized depreciation on investments (12,015)
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Net realized and unrealized loss on investments (14,888)
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NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (15,268)
================
</TABLE>
* Commencement of Operations
See Notes to the Financial Statements.
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THE LEGACY FUNDS, INC.
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STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
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<TABLE>
<CAPTION>
-----------------------
Legacy Growth Fund
-----------------------
February 15, 2000*
through
April 30, 2000
-----------------------
<S> <C>
OPERATIONS:
Net investment loss $ (380)
Net realized loss on investments (2,873)
Change in unrealized depreciation on investments (12,015)
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Net decrease in net assets resulting from
operations (15,268)
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CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 1,880,049
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Net increase in net assets resulting from
capital share transactions 1,880,049
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TOTAL INCREASE IN NET ASSETS 1,864,781
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NET ASSETS:
Beginning of period 0
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End of period $ 1,864,781
=======================
Undistributed Net Investment Loss included in
Net Assets at End of Period $ (380)
=======================
</TABLE>
* Commencement of Operations
See Notes to the Financial Statements.
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THE LEGACY FUNDS, INC.
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FINANCIAL HIGHLIGHTS (Unaudited)
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<TABLE>
<CAPTION>
-----------------------
Legacy Growth Fund
-----------------------
February 15, 2000*
through
April 30, 2000
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<S> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
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INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.00
Net realized and unrealized gain on investments 0.19
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Total from investment operations 0.19
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NET ASSET VALUE, END OF PERIOD $10.19
=======================
TOTAL RETURN 1.90% 1
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $1,864,781
Ratio of net expenses to average net assets:
Before expense reimbursement 13.99% 2
After expense reimbursement 1.70% 2
Ratio of net investment income to average net assets:
Before expense reimbursement (12.47%)2
After expense reimbursement (0.18%)2
Portfolio turnover rate 2.89%
</TABLE>
* Commencement of Operations.
1 Not annualized.
2 Annualized.
See Notes to the Financial Statements.
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THE LEGACY FUNDS, INC.
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SCHEDULE OF INVESTMENTS - April 30, 2000 (Unaudited)
Legacy Growth Fund
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<TABLE>
<CAPTION>
Shares Value
------ -----
<S> <C> <C>
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COMMON STOCKS - 80.5%
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BANKING & FINANCIAL SERVICES - 11.1%
200 American Express Company $ 30,012
600 Charles Schwab Corporation 26,700
500 Citigroup, Inc. 29,719
300 Goldman Sachs Group, Inc. 27,975
800 MBNA Corporation 21,250
300 Morgan Stanley Dean Witter & Company 23,025
700 T. Rowe Price Associates 26,687
225 State Street Corporation 21,797
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207,165
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BUSINESS SERVICE - 1.6%
600 First Data 29,212
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CAPITAL GOODS - 6.8%
2,000 Bolder Technologies Corporation* 14,000
200 General Electric 31,450
800 Roper Industries, Inc. 25,200
500 Sealed Air Corporation* 27,813
600 Tyco International Limited 27,563
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126,026
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COMMUNICATIONS & MEDIA - 1.1%
500 Sirius Satellite Radio, Inc.* 19,844
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COSMETICS & SOAP - 2.3%
500 Gillette Company 18,500
400 Procter & Gamble 23,850
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42,350
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DRUGS - 3.9%
450 Merck & Co. 31,275
950 Neotherapeutics, Inc.* 12,350
700 Pfizer, Inc. 29,487
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73,112
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ELECTRONICS - 4.6%
300 Applied Materials Inc.* 30,544
500 Philips Electronics 22,312
700 Solectron Corporation* 32,769
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85,625
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INSURANCE - 4.6%
1,300 Ace Limited 31,119
280 American International Group 30,712
250 Marsh & McLennan Company 24,641
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86,472
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See Notes to the Financial Statements.
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INTERNET TECHNOLOGY - 9.9%
400 America Online Inc.* $ 23,925
600 Commerce One, Inc.* 36,637
200 Exodus Communications, Inc.* 17,688
160 Inktomi Corporation* 24,630
1,300 Looksmart Limited* 31,200
175 Verisign, Inc.* 24,391
200 Yahoo!, Inc.* 26,050
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184,521
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MEDICAL - 4.6%
450 American Home Products Corporation 25,284
500 Amgen* 28,000
400 Johnson & Johnson Company 33,000
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86,284
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RESTAURANT - 1.4%
700 McDonald's Corporation 26,687
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RETAIL - GENERAL - 2.8%
500 Home Depot 28,031
450 Wal-Mart Stroes, Inc. 24,919
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52,950
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SOFTWARE - 2.4%
300 Microsoft Corporation* 20,925
200 Siebel Systems, Inc.* 24,575
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45,500
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TECHNOLOGY - 11.4%
400 Cisco Systems, Inc.* 27,731
500 Dell Computer Corporation* 25,063
200 EMC Corporation Massachusetts* 27,788
225 Intel Corporation 28,533
400 Lucent Technologies, Inc. 24,875
300 Oracle Systems* 23,981
325 Sun Microsystems* 29,880
450 Symbol Technologies, Inc. 25,088
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212,939
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TELECOMMUNICATIONS - 7.4%
800 MCI WorldCom, Inc.* 36,350
430 Nextlink Communications, Inc.* 36,254
300 Nortel Networks Corporation 33,975
280 Qualcom, Inc.* 30,363
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136,942
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WIRELESS - 4.6%
200 Nextel Communications, Inc. - A* 21,887
1,300 Nextel Partners, Inc. Class A* 28,519
350 Voicestream Wireless Corporation* 34,650
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85,056
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TOTAL COMMON STOCKS
(Cost of $1,512,699) 1,500,685
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See Notes to the Financial Statements.
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SHORT-TERM INVESTMENTS - 19.5%
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363,310 Firstar Stellar U.S. Treasury Money
Market Fund $ 363,310
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TOTAL SHORT-TERM INVESTMENTS
(Cost of $363,310) 363,310
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TOTAL INVESTMENTS - 100.0%
(Cost of $1,876,009) 1,863,995
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Other Assets & Liabilities - 0.0% 786
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TOTAL NET ASSETS - 100.0% $ 1,864,781
=================
</TABLE>
* Non-income producing security.
See Notes to the Financial Statements.
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THE LEGACY FUNDS, INC.
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NOTES TO THE FINANCIAL STATEMENTS (Unaudited) April 30, 2000
Legacy Growth Fund
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1. ORGANIZATION
The Legacy Funds, Inc. (the "Trust") was organized as a Delaware Business
Trust on July 15, 1999 and is registered under the Investment Company Act of
1940, as amended (the "1940 act"), as an open-end management investment
company issuing its shares in series, each series representing a distinct
portfolio with its own investment objectives and policies. The Legacy Growth
Fund, (the "Fund") is the first series. The Fund is a diversified series of
the Trust. The principal objective of the Fund is long-term growth of
capital. The Fund commenced operations on February 15, 2000.
The costs incurred in connection with the organization have been paid on
behalf of the Trust by the Adviser and will not be reimbursed by the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Investment Valuation
The Fund's securities are valued at their market value, which usually
means the last quoted sale price on the security's principal exchange
on that day. Portfolio securities listed on a securities exchange for
which market quotations are readily available are valued at the last
quoted sale price of the day or, if there is no such reported sale,
within range of the most recent quoted bid and asked prices. Other
assets and securities for which market quotations are not readily
available will be priced at their fair value as determined in good
faith by, or under procedures adopted by, the Board of Trustees.
Short-term instruments (those with a remaining maturity of 60 days or
less) are valued at amortized cost, which approximates market value.
(b) Federal Income Taxes
The Fund intends to comply with the requirements of the Internal
Revenue Code necessary to qualify as a regulated investment company and
to make the requisite distributions of income and capital gains to its
shareholders sufficient to relieve it from all or substantially all
Federal income taxes.
(c) Distributions to Shareholders
Dividends from net investment income, if any, will be declared and paid
annually. Distributions of net realized capital gains, if any, will
also be declared and paid annually.
(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 and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the period. Actual results could differ from those
estimates.
(e) Other
Investment and shareholder transactions are recorded on the trade date.
The Fund determines the gain or loss realized from the investment
transactions by comparing the original costs 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. Generally
accepted accounting principles require that permanent financial
reporting and tax differences be reclassified to capital stock.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund for the period ended April 30, 2000, were
as follows:
Shares sold 183,057
Shares issued to holders in reinvestment of dividends 0
Shares redeemed 0
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Net increase 183,057
=======
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investments, excluding short-term
investments, by the Fund for the period ended April 30, 2000, were
$1,538,472 and $22,900, respectively.
At April 30, 2000, gross unrealized appreciation and depreciation of
investments for tax purposes was as follows:
Appreciation $ 107,371
(Depreciation) (119,386)
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Net unrealized depreciation on investments $ (12,015)
==========
At April 30, 2000, the cost of investments for federal income tax purposes
was $1,876,009.
5. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Trust has an Investment Advisory Agreement (the "Agreement") with the
Adviser, Ingalls & Snyder, with whom certain Officers and Trustees of the
Trust are affiliated, to furnish investment advisory services to the Fund.
Under the terms of the Agreement, the Trust, on behalf of the Fund,
compensates the Adviser for its management services at the annual rate of
1.00% of the Fund's average daily assets.
The Adviser has agreed contractually to waive its management fee and/or
reimburse the Fund's other expenses, to the extent necessary, to ensure that
the Fund's operating expenses do not exceed 1.70% of its average daily net
assets for the first year of operations. This contractual fee waiver may not
be discontinued or modified by Ingalls & Snyder during the stated period.
Firstar Bank, N.A., a subsidiary of Firstar Corporation, a publicly held
bank holding company, serves as custodian for the Funds. Firstar Mutual Fund
Services, LLC, a wholly owned limited liability company of Firstar Bank,
N.A., serves as transfer agent, administrator and accounting services agent
for the Trust.
The Trust, on behalf of the Fund, has adopted a distribution plan pursuant
to Rule 12b-1 under the 1940 Act (the "12b-1 Plan"), which provides that the
Fund will pay distribution fees to Ingalls & Snyder LLC (the "Distributor")
at an annual rate of 0.50% of the average daily net assets attributable to
its shares. Payments under the distribution plan shall be used to compensate
or reimburse the Fund's distributor for services provided and expenses
incurred in connection with the sales of shares.
Investment Adviser
Ingalls & Snyder LLC
61 Broadway
New York, NY 10006
Distributor
Ingalls & Snyder LLC
61 Broadway
New York, NY 10006
Administrator, Fund Accountant
and Transfer Agent
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
Custodian
Firstar Bank, N.A.
615 East Michigan Street
Milwaukee, WI 53202
Legal Counsel
Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, NY 10004
Independent Auditors
Arthur Andersen LLP
100 East Wisconsin Avenue
Milwaukee, WI 53202
Trustees
Theodore F. Ells
Robert E. Belknap
Steven M. Foote
Barnabus B. B. Breed
Steven L. Wood
This report must be accompanied or preceded by the Fund's current prospectus.
