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RREEF RREAL ESTATE SECURITIES FUND
SEMI-ANNUAL REPORT
MAY 31, 2000
(LOGO) RREEF
Real Estate Investment Managers
A % RoProperty Investment Management Company
Shares of the RREEF RReal Estate Securities Fund are distributed by an
independent third party, Sunstone Distribution Services, LLC.
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<PAGE>
RREEF RREAL ESTATE SECURITIES FUND
SCHEDULE OF INVESTMENTS
MAY 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- ---------
COMMON STOCKS 98.9%
APARTMENTS 22.6%
11,800 Apartment Investment & Management Co. $ 472,738
15,760 Archstone Communities Trust 353,615
9,620 AvalonBay Communities, Inc. 382,395
6,930 Camden Property Trust 194,473
4,200 Equity Residential Properties Trust 187,425
4,600 Essex Property Trust, Inc. 183,138
8,900 Post Properties, Inc. 390,487
---------
2,164,271
---------
DIVERSIFIED COMPANIES 5.3%
30,000 Security Capital U.S. Realty<F1> 511,875
---------
HOTELS 7.3%
11,580 MeriStar Hospitality Corp. 220,020
14,710 Starwood Hotels and Resorts Worldwide 434,864
23,350 Wyndham International, Inc.<F1> 43,781
---------
698,665
---------
INDUSTRIALS 9.2%
10,500 AMB Property Corp. 236,250
16,200 Duke-Weeks Realty Corp. 349,313
11,700 Liberty Property Trust 292,500
---------
878,063
---------
OFFICE 29.6%
11,550 CarrAmerica Realty Corp. 288,750
15,600 Cornerstone Properties, Inc. 280,800
13,900 Equity Office Properties, Inc. 369,219
25,120 Highwoods Properties, Inc. 604,450
16,090 Mack-Cali Realty Corp. 434,430
8,000 Spieker Properties, Inc. 371,500
32,170 Trizec Hahn Corp. 482,929
---------
2,832,078
---------
REGIONAL MALLS 11.3%
8,560 General Growth Properties, Inc. 270,710
26,690 Simon Property Group 653,905
1,500 Taubman Centers, Inc. 16,313
4,400 Urban Shopping Centers, Inc. 147,400
---------
1,088,328
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RREEF RREAL ESTATE SECURITIES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
MAY 31, 2000 (UNAUDITED)
Number
Of Shares Value
--------- ---------
COMMON STOCKS (CONTINUED) 98.9%
RETAIL 12.1%
4,400 Chelsea GCA Realty, Inc. $ 148,775
19,662 Developers Diversified Realty Corp. 238,870
19,400 Federal Realty Investment Trust 425,587
15,200 JDN Realty Corp. 162,450
3,500 Kimco Realty Corp. 141,750
---------
1,162,432
---------
SELF-STORAGE 1.5%
6,300 Public Storage, Inc. 140,569
---------
TOTAL COMMON STOCKS (COST $8,762,333) 9,476,281
---------
Principal
Amount
---------
SHORT-TERM INVESTMENTS 0.5%
$ 46,366 UMB Bank, n.a., Money Market Fiduciary 46,366
TOTAL SHORT-TERM INVESTMENTS (COST $46,366) 46,366
---------
TOTAL INVESTMENTS (COST $8,808,699) 99.4% 9,522,647
OTHER ASSETS LESS LIABILITIES 0.6% 55,628
---------
NET ASSETS 100.0% $ 9,578,275
---------
---------
<F1> Non-income producing
See notes to financial statements.
<PAGE>
RREEF RREAL ESTATE SECURITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 2000 (UNAUDITED)
ASSETS:
Investments, at value (cost $8,808,699) ...................... $9,522,647
Receivable for fund shares issued ............................ 49,919
Interest and dividends receivable ............................ 15,514
Receivable for investments sold .............................. 14,293
Prepaid expenses and other assets ............................ 7,665
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Total Assets ................................................. 9,610,038
---------
LIABILITIES:
Payable for securities purchased ............................. 23,329
Accrued investment advisory fee .............................. 7,854
Payable for fund shares redeemed ............................. 580
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Total Liabilities ............................................ 31,763
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NET ASSETS ....................................................... $9,578,275
==========
NET ASSETS CONSIST OF:
Paid-in-capital .............................................. $8,768,676
Undistributed net investment income .......................... 55,433
Accumulated undistributed net realized gain on investments ... 40,218
Net unrealized appreciation on investments ................... 713,948
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NET ASSETS ....................................................... $9,578,275
==========
SHARES OUTSTANDING, (NO PAR VALUE)
(UNLIMITED SHARES AUTHORIZED)
CLASS A ...................................................... 854,180
CLASS B ...................................................... 1
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
CLASS A ...................................................... $ 11.21
CLASS B ...................................................... $ 11.39
See notes to financial statements.
<PAGE>
RREEF RREAL ESTATE SECURITIES FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 2000 (UNAUDITED)
INVESTMENT INCOME:
Interest ...................................................... $ 3,720
Dividends ..................................................... 207,823
----------
Total Investment Income ....................................... 211,543
----------
EXPENSES:
Management fees ............................................... 32,311
Trustees' fees and expenses ................................... 15,041
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Total Expenses ................................................ 47,352
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NET INVESTMENT INCOME ............................................. 164,191
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REALIZED AND UNREALIZED GAIN:
Net realized gain on investments .............................. 20,805
Change in unrealized appreciation on investments .............. 713,948
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Net Gain on Investments ....................................... 734,753
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NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ......................................... $ 898,944
==========
See notes to financial statements.
<PAGE>
RREEF RREAL ESTATE SECURITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED MAY 31, 2000 (UNAUDITED)
OPERATIONS:
Net investment income ....................................... $ 164,191
Net realized gain on investments ............................ 20,805
Change in unrealized appreciation on investments ............ 713,948
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Net increase in net assets resulting from operations ........ 898,944
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CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares ................................ 8,878,313
Shares issued to shareholders in reinvestment of dividends .. 59,684
-----------
8,937,997
Redemption of shares ........................................ (269,331)
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Net increase from capital share transactions ................ 8,668,666
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DIVIDENDS PAID FROM:
Net investment income ....................................... (89,345)
Net realized gains .......................................... --
-----------
(89,345)
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TOTAL INCREASE IN NET ASSETS .................................... 9,478,265
NET ASSETS:
Beginning of period ......................................... 100,010
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End of period (includes undistributed net ................... $ 9,578,275
investment income of $55,433) ===========
TRANSACTIONS IN SHARES:
Shares sold ................................................. 874,391
Issued in reinvestment of dividends ......................... 5,772
Shares redeemed ............................................. (25,982)
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Net increase ................................................ 854,181
===========
See notes to financial statements.
<PAGE>
RREEF RREAL ESTATE SECURITIES FUND
FINANCIAL HIGHLIGHTS
FOR A FUND SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
CLASS A CLASS B
--------------- ---------------
SIX MONTHS PERIOD
ENDED ENDED
MAY 31, 2000 MAY 31, 2000<F1>
(UNAUDITED) (UNAUDITED)
--------------- ----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD .................................................... $ 10.00 $ 9.90
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................................................... 0.20 --
Net realized and unrealized gain on investments ..................................... 1.12 1.49
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Total from Investment Operations .................................................... 1.32 1.49
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DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ................................................ (0.11) --
Distributions from net realized gains ............................................... -- --
--------------- ---------------
Total Distributions ................................................................. (0.11) --
NET ASSET VALUE, END OF PERIOD .......................................................... $ 11.21 $ 11.39
=============== ===============
TOTAL RETURN<F2> ........................................................................ 13.34% 15.05%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period ........................................................... $ 9,578,264 $ 11
Ratio of expenses to average net assets ............................................. 1.45% 0.00%
Ratio of net investment income to average net assets ................................ 5.04% 0.00%
Portfolio turnover rate<F2> ......................................................... 71% 71%
</TABLE>
<F1> Commenced operations on February 23, 2000
<F2> Not annualized
See notes to financial statements.
<PAGE>
RREEF RREAL ESTATE SECURITIES FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000 (UNAUDITED)
1. ORGANIZATION
RREEF Securities Trust (the "Trust") was organized on September 15, 1999 as
a Delaware business trust registered under the Investment Company Act of
1940 (the "1940 Act"), as amended, as an open-end management investment
company. The RREEF RReal Estate Securities Fund (the "Fund") is a
non-diversified portfolio of the Trust and is authorized to issue two
classes of shares: Class A and Class B. The two classes of shares differ
principally in their respective shareholder servicing and distribution
expenses and arrangements. Class A commenced operations on December 1,
1999; Class B commenced operations on February 23, 2000.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
financial statements have been prepared in accordance with generally
accepted accounting principles that require management to make certain
estimates and assumptions at the date of the financial statements. Actual
results may differ from such estimates.
INVESTMENT VALUATION - Equity securities for which market quotations are
readily available are valued at the most recent closing price. If a closing
price is not reported, equity securities for which reliable bid quotations
are available are valued at the mean between bid and asked prices.
Short-term securities having a maturity of 60 days or less are valued at
amortized cost, which approximates market value. Securities and assets for
which market quotations are not readily available are valued at fair value
as determined in good faith by or under the direction of the Board of
Trustees.
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 to its
shareholders which will be sufficient to relieve it from all or
substantially all federal income taxes.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME - Securities transactions are
accounted for on a trade date basis. Realized gains and losses from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income is
recognized on an accrual basis.
<PAGE>
RREEF RREAL ESTATE SECURITIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 2000 (UNAUDITED)
DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income are
declared and paid quarterly. Distributions of net realized capital gains,
if any, are declared and paid at least annually.
Distributions to shareholders are determined in accordance with federal
income tax regulations and are recorded on the ex-dividend date. The
character of distributions made during the year from net investment income
or net realized gains may differ from the characterization for federal
income tax purposes due to differences in the recognition of income,
expense and gain items for financial statement and tax purposes. Where
appropriate, reclassifications between net asset accounts are made for such
differences that are permanent in nature.
EXPENSES - Each class of shares is charged for those expenses directly
attributable to the class. Expenses that are not directly attributable to a
class of shares are typically allocated among the classes in proportion to
their relative net assets.
3. INVESTMENT TRANSACTIONS
Purchases and sales of securities, excluding short-term investments, for
the six months ended May 31, 2000 were $ 13,019,735 and $4,278,207,
respectively.
At May 31, 2000, accumulated net unrealized appreciation was $710,210 based
on the aggregate cost of investments for federal income tax purposes of
$8,812,437, which consisted of unrealized appreciation of $790,604 and
unrealized depreciation of $80,394.
4. INVESTMENT ADVISORY AGREEMENT
The Fund has entered into an Investment Management Agreement with RREEF
America, L.L.C. (the "Adviser"). Pursuant to the agreement, the Fund pays
the Adviser an investment management fee based on the average daily net
assets at the annual rate of 1.00%. Fees for these services are reported as
Management Fees on the Statement of Operations. The Adviser pays all of the
Fund's expenses other than 12b-1 fees, brokerage expenses, taxes, interest,
fees and expenses of those Trustees who are not "interested persons" as
defined in the 1940 Act (including legal fees), and extraordinary expenses.
<PAGE>
TRUSTEES Nicholas C. Babson
Peter J. Broccolo
Richard W. Burke
Kim G. Redding
Robert L. Stovall
OFFICERS Peter J. Broccolo
Paula M. Ferkull
Karen J. Knudson
Kim G. Redding
INVESTMENT ADVISER RREEF AMERICA L.L.C.
875 North Michigan Avenue, 41st Floor
Chicago, Illinois 60611
ADMINISTRATOR AND SUNSTONE FINANCIAL GROUP, INC.
FUND ACCOUNTANT 207 East Buffalo Street, Suite 400
Milwaukee, Wisconsin 53202
CUSTODIAN UMB BANK, N.A.
928 Grand Boulevard, 10th Floor
Kansas City, Missouri 64106
INDEPENDENT ACCOUNTANTS DELOITTE & TOUCHE LLP
180 North Stetson Avenue
Chicago, Illinois 60601
LEGAL COUNSEL D'ANCONA & PFLAUM LLC
111 East Wacker Drive, Suite 2800
Chicago, Illinois 60601
DISTRIBUTOR SUNSTONE DISTRIBUTION SERVICES, LLC
207 East Buffalo Street, Suite 400
Milwaukee, Wisconsin 53202
DIVIDEND-DISBURSING RREEF RREAL ESTATE SECURITIES FUND
AND TRANSFER AGENT c/o Sunstone Financial Group, Inc.
207 East Buffalo Street, Suite 315
Milwaukee, Wisconsin 53202
THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF SHAREHOLDERS OF THE
RREEF RREAL ESTATE SECURITIES FUND. IT IS NOT AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS UNLESS ACCOMPANIED OR PRECEDED BY AN EFFECTIVE PROSPECTUS
FOR THE FUND. THE PROSPECTUS PROVIDES MORE COMPLETE INFORMATION, INCLUDING FEES
AND EXPENSES, THE INVESTMENT OBJECTIVES, RISKS AND OPERATING POLICIES OF THE
FUND. READ THE PROSPECTUS CAREFULLY.
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