<PAGE>
Acorn
Acorn Fund / Acorn International
First Quarter Report
--------------------------------------
March 31, 1996
Managed by Wanger Asset Management, L.P.
<PAGE>
Acorn Fund and Acorn International First Quarter Report 1996
.Squirrel Chatter: The Queen of Underland
I was reading a bedtime story to my two daughters, Jenny and Elise. They love
the Chronicles of Narnia by C.S. Lewis. In Book Six, The Silver Chair, we read
one chapter that struck me as a wonderful metaphor for the dangerous seductions
of a long bull market. The heroes of the story are two English children, Jill
and Scrubb, and a frog-like man, Puddleglum. They are in a gloomy cave world
called Underland, in the Evil Witch's castle. They have just rescued Rilian, a
brave (but none-too-bright) prince from the Witch's spell. The Witch had been on
a roadtrip, but shows up again unexpectedly. In this chapter, the Witch uses her
magic to recapture the party.
"How now my lord Prince," the Witch-Queen said, "Why stand you here
unbound? Who are these aliens? And is it they who have destroyed the chair
which was your only safety?"
Prince Rilian shivered as she spoke to him. And no wonder: it is not easy
to throw off in half an hour an enchantment which has made one a slave for ten
years. Then, speaking with a great effort, he said: "I am now in my right
mind. I am the King's son of Narnia."
Now the Witch said nothing at all, but moved gently across the room, always
keeping her face and eyes very steadily toward the Prince. When she had come
to a little ark set in the wall not far from the fireplace, she opened it, and
took out first a handful of a green powder. This she threw on the fire. It did
not blaze much, but a very sweet and drowsy smell came from it. And all
throughout the conversation which followed, that smell grew stronger, and
filled the room, and made it harder to think. Secondly, she took out a musical
instrument rather like a mandolin. She began to play it with her fingers--a
steady, monotonous thrumming that you didn't notice after a few minutes. But
the less you noticed it, the more it got into your brain and your blood. This
also made it hard to think. After she had thrummed for a time (and the sweet
smell was now strong) she began speaking in a sweet, quiet voice.
"Narnia?" the evil Witch said. "Narnia? There is no land called Narnia."
"Oh, don't be so silly," said Scrubb, who was fighting hard against the
enchantment of the sweet smell and the thrumming. "As if you didn't know! It's
up above, up where you can see the sky and the sun and the stars. Why, you've
been there yourself. We met you there."
The Witch's soft seductive voice caused the enchantment to gain force...
Soon enough, Jill couldn't remember the names of the things in her world.
And this time it didn't come into her head that she was being enchanted, for
now the magic was in its full strength; and of course, the more enchanted you
get, the more you feel that you are not enchanted at all. She found herself
saying (and at the moment it was a relief to say): "No. I suppose that other
world must be all a dream."
"Yes. It is all a dream," said the Witch, always thrumming.
"Yes, all a dream," said Jill.
"There never was such a world," said the Witch.
"No," said Jill and Scrubb, "never was such a world."
"There never was any world but mine," said the Witch.
"There never was any world but yours," said they.
Our heroes, fighting desperately against the enchantment, remember that there
had been a sun in their world and no sun in the Witch's underground kingdom.
Then came the Witch's voice, cooing softly like the voice of a wood-pigeon
from the high elms in an old garden at three o'clock in the middle of a
sleepy, summer afternoon; and it said: "What is the sun that you all speak of?
Do you mean anything by the word?"
"Yes, we jolly well do," said Scrubb.
"Can you tell me what it's like?" asked the Witch (thrum, thrum, thrum,
went the strings).
"Your sun is a dream..."
Slowly and gravely the Witch repeated, "There is no sun." And they all said
nothing. She repeated, in a softer and deeper voice. "There is no sun." After
a pause, and after a struggle in their minds, all four of them said together,
"You are right. There is no sun." It was such a relief to give in and say it.
The Witch-Queen's magic caused the heroes of the story to agree that the
underground world is the only reality and the real world is a fantasy. A
prolonged bull market has the same effect on us as investors. We do not need to
have constant guitar music or magical powders up our
1
<PAGE>
...the more enchanted you get, the more you feel that you are not enchanted at
all.
nose to be under the spell of the Witch, who is cooing in our ears, "The market
will only go up. There is no risk. IPOs are marvelous. Your stockbroker is your
best friend. You will soon make a limitless fortune without effort."
In the Narnia story, our heroes managed to fight off the enchantment at the
last moment. The Witch changed instantly into her true form, a great loathsome
serpent, to kill by force those whom she had failed to enslave. The prince may
have been too dim to stop the Witch when she started casting her spell, but in
the critical moment, he killed her with his sword and lived happily ever after.
A bull market has the form of a lovely, soft-voiced woman, but it too can
become a loathsome beast in an instant. What should you do to foil the Market-
Witch in the real world? We know trying to be a market-timer doesn't work.
Thinking like a long-term investor is your best defense. If you stare the
monster down with focus, patience and a calm eye, you may be rewarded with
investment success in the end.
.The WAM Team
In our annual report, we indicated that we have been increasing our staff and
improving our systems to manage your investments effectively. We now have
fourteen investment professionals working for you. David Snoddy and Peter
Zaldivar are the newest members of our international investment team. David
comes to WAM from Jardine Fleming Securities in Tokyo, where he was a senior
analyst. Peter joins us from Lord Asset Management in Chicago, where he was a
vice president and portfolio manager.
.Making Your Life Easier
This quarter marks the debut of our redesigned shareholder fund reports. Our
efforts are the direct result of your suggestions for improvement. Combining our
reports has reduced our production and mailing costs. These savings are passed
on to you.
We have also updated our statements, making them easier to understand.
Based on your recommendations, we will no longer automatically mail quarterly
account statements. You will continue to receive a confirmation statement
whenever there is activity in your account, such as a purchase, redemption,
automatic investment, dividend distribution or registration change. You will
also continue to receive a year-end statement, regardless of account activity,
as well as quarterly fund reports. And of course, free statements showing your
recent account activity are available anytime upon request.
In June, you will receive a new shareholder investment booklet containing
customized investment slips. This booklet will serve as a convenient way for you
to buy more shares.
We recently mailed the new 1996 Acorn Funds prospectus to shareholders.
Please take a moment to read it. We have expanded the types of transactions you
may initiate over a recorded telephone line. If you ever need help or have
questions about a transaction, a friendly customer service representative can
help. Simply call our toll-free number, 1-800-9-ACORN-9 (1-800-922-6769) during
regular business hours for assistance.
Happy Investing!
/s/ Ralph Wanger
Ralph Wanger
President
2
<PAGE>
.More Squirrel Chatter
[PHOTO OF MARCEL HOUTZAGER]
Among Wanger Asset Management's principals, Marcel Houtzager wins the prize for
most varied personal history. He was born in Schevening, the Netherlands, but
his father was a Shell geophysicist, so Marcel grew up in Nigeria, Turkey, South
Africa, and Brazil. He came to the U.S. for college where he met and married
Liora Szold, an Israeli. Marcel became a CPA in '88, a U.S. citizen in '89
(Liora in '87), and joined WAM in '92, four months before the launch of Acorn
International.
Q. Wanger Asset Management is known for using investment themes to guide the
stock picking process. Do themes work on the international side as well?
A. Themes often work wonderfully in international markets. Important trends pay
no attention to borders. Sometimes we get the additional advantage of time
travel. The U.S. is a mature consumer economy, and many foreign economies are
getting more American each year, repeating our experiences. Sometimes it's a
little bit like watching a movie for the second time--you know ahead of time
when the good part is about to start.
Q. Can you give a specific example?
A. As people get richer, they spend a higher percentage of their income on
leisure, entertainment, and tourism. Acorn made a lot of money on Carnival, a
cruise line mainly serving American tourists in the Caribbean. Similar fast
growth is now benefiting Costa Crociere in the Mediterranean and Genting
International in Southeast Asia.
Q. How about a theme you are currently putting new money in?
A. One of my favorite themes takes advantage of the sorry state of European
national pension systems (excluding the U.K. and the Netherlands). Most European
countries do not have funded pension plans at either the company or state level,
let alone IRA or 401(k) plans. Instead they rely almost entirely on pay-as-you-
go national pension schemes similar to our social security system. This works as
long as the promised benefits are modest, and the pool of people who "pay" grows
at about the same rate as the people who "go." Unfortunately, the promised
benefits are in fact fairly extravagant, and the "go" pool is growing while the
"pay" pool is shrinking. Both politicians and would-be pensioners are worried
they will wake up one day to a giant sucking sound coming from the benefits
department of their national retirement administration.
Q. So where's the theme?
A. Europeans are buying life insurance and mutual funds at a rapid clip because
they must save now if they want to maintain an acceptable standard of living in
their golden years. Politicians are encouraging them to do so because the
government needs buyers for the companies that are to be privatized over the
coming years. This is a virtuous circle which has only just begun. We have so
far invested over $70 million in European companies that benefit from the high
anticipated growth in retirement investment products. The U.S. experience with
mutual funds highlights the tremendous growth potential of the industry even
without the added incentives that are present in Europe.
Q. Just how much growth are you expecting?
A. Funded retirement plans and a developed stock market go hand in hand. In the
U.S. and the U.K., where funded pension plans are fairly well developed, the
total value of all publicly-owned stocks about equals GDP. In Italy and Germany,
stock markets are less than a quarter of the size of their respective economies.
Although retirement savings is not the only determinant of stock market size,
there is no conceptual reason why the Italian and German stock markets and
retirement savings industries should not increase fourfold over time.
Q. What happens if European pension money flows into local stock markets?
A. We don't have a crystal ball, but we believe more investors and greater
liquidity are always better for markets. We want to invest beforehand; as we say
in Holland, "Ochtendstond heeft goud in de mond."/1/
- -------------------------------------------------------------------------------
/1/The equivalent English proverb is, "The early bird gets the worm."
3
<PAGE>
Acorn Fund
.In a Nutshell
Acorn Fund was up 7.7% for the first quarter, outperforming nearly all of the
benchmark indexes, as shown on page 5. We trailed our benchmarks in 1995, but
remained true to our investment philosophy. It paid off in the first quarter
of 1996.
Several stocks were instrumental in helping us post these gains. Zoltek, a
St. Louis-based carbon fiber company, was our biggest percentage gain winner, up
183% since we first purchased it in November 1995. Borders Group, the largest
mall-based bookseller in the U.S., is posting strong profits in a retail
industry faced with red-ink results. Our two credit card companies, ADVANTA and
First USA (both top 10 holdings) rebounded 36% and 28% in the first quarter.
Fears of an epidemic of credit card defaults proved groundless. Lincare
Holdings, another top 10 position, left other health care stocks looking
comparatively under-the-weather during the first quarter. The stock rose a
robust 30% based on a strong earnings report and the diminished prospect for
Medicare cuts in 1996. Our energy stocks did well as natural gas consumption was
high and oil prices jumped unexpectedly.
The Fund's foreign sub-portfolio was up 8.9% during the first quarter.
Foreign markets offer good potential returns at this time.
We reopened Acorn Fund in November 1995. Cash came in at a moderate rate in
the first quarter, about $5 million per month. We are finding plenty of good
companies to buy for you.
Fund Assets as of 3/31/96: $2,597.7 million
.Acorn Fund Top 10 Holdings
Thermo Electron 1.8%
Energy Systems & Processing Equipment
Newell 1.7%
Consumer Goods
ADVANTA, Class A 1.7%
Credit Cards
Harley Davidson 1.7%
Recreational Vehicles Manufacturer
Solectron 1.5%
Electronics Contract Manufacturer
TCI Liberty Media Group 1.5%
CATV Programming
Carnival 1.5%
Cruise Ship Line
First USA 1.3%
Credit Cards
Tele Communications, Class A 1.3%
Cable TV
Lincare Holdings 1.2%
Home Health Care Services
Fund facts
Where to find us in the newspaper:
4
<PAGE>
.Performance at a Glance
The Value of a $10,000 Investment in Acorn Fund
.June 10, 1970 through March 31, 1996
[GRAPH APPEARS HERE]
ACORN FUND MOUNTAIN CHART PLOT POINTS
DATE ACORN FUND ($) S & P ($)
- ---- -------------- ---------
1970 10,000 10,000
1971 17,828 13,837
1972 19,368 16,192
1973 14,765 14,466
1974 10,691 10,630
1975 13,945 14,595
1976 23,045 18,092
1977 27,168 16,789
1978 31,777 17,877
1979 47,790 21,205
1980 62,594 28,098
1981 58,005 26,701
1982 68,208 32,464
1983 85,389 38,577
1984 89,045 42,028
1985 117,142 55,470
1986 136,843 65,987
1987 142,923 69,441
1988 178,370 80,960
1989 222,681 106,584
1990 183,674 103,479
1991 270,641 135,053
1992 336,210 144,111
1993 444,889 158,635
1994 411,750 160,733
1995 497,407 221,131
3/31/96 535,444 233,000
This graph compares the results of $10,000 invested in Acorn Fund on June 10,
1970 (the date Fund shares were first offered to the public), with all dividends
and capital gains reinvested, with the Standard & Poor's 500 Stock Index with
dividends reinvested (source: Salomon Brothers Inc Stock Facts and Shaw Data
Services, Inc.). Past performance does not guarantee future results. The
investment return and principal value of an investment in the Fund will
fluctuate so that Fund shares, when redeemed, may be worth more or less than
their original cost.
Acorn Fund Portfolio Diversification
.as of March 31, 1996
[PIE CHART FOR TABLE BELOW APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C>
Consumer Goods and Services 11.7%
Information Group 19.1%
Finance Group 15.7%
Industrial Goods and Services 10.6%
Health Care 11.4%
Energy and Minerals 6.7%
Real Estate 1.8%
Foreign 20.8%
Cash less liabilities 2.2%
</TABLE>
<TABLE>
<CAPTION>
Relative Performance
- -------------------------------------------------------------------
1st quarter Last 12 mos.
<S> <C> <C>
Acorn Fund 7.7% 26.5%
Dow-Jones 9.8% 37.7%
Standard & Poor's 500 5.4% 32.1%
Standard & Poor's MidCap 6.2% 28.5%
Russell 2000 5.1% 29.1%
</TABLE>
The Dow Jones Industrial Average includes 30 large companies. The S&P 500 is a
broad market-weighted average, still blue-chip dominated. The S&P MidCap 400 is
a market value-weighted index of 400 stocks that are in the next tier down from
the S&P 500. The Russell 2000 is formed by taking 3,000 companies and then
eliminating the largest 1,000 leaving a good small company index. All indices
are unmanaged and returns include reinvested dividends. The Fund's top 10
holdings and portfolio diversification vary with changes in portfolio
investments.
Net Asset Value Per Share 3/31/96: $14.64
- -----------------------------------------
5
<PAGE>
Acorn International
.In a Nutshell
Acorn International finished the first quarter up a healthy 9%. Stock selection
made the difference as we were ahead of both EAFE and the Lipper International
Small Company Funds Average for the quarter and trailing 12 months.
After a difficult 1994 and 1995, international small-caps appear to be back
in favor. Of our larger positions, Fresenius and Getronics rose a stunning 67%
and 54%, respectively. Other international holdings, such as Axime Ex Segin in
France, Raision Tehtaat in Finland, Sece Cortaillod in Switzerland, Kimberly
Clark in Mexico, Telemig in Brazil, and Serm Suk in Thailand, rose between 40%
and 125%. Overall, approximately two-thirds of the fund's gain came from
developed markets and one-third from emerging markets, in line with their
relative weightings within the portfolio.
Leah Zell, your Fund's co-portfolio manager, was featured in the May issue
of Money Magazine. The article mentions an excellent study by Rex Sinquefield,
chief investment officer at Dimensional Fund Advisors in Santa Monica, CA.1 The
paper showed that from 1975 to 1994 a U.S. investor got some diversification by
buying big companies overseas, but even better results by using foreign small-
caps. Look what happened when a U.S. investor balanced between stocks and bonds
moved a quarter of his U.S. stock portfolio into foreign small-caps:
<TABLE>
<CAPTION>
Domestic Diversified
Portfolio Portfolio Net Result
- -----------------------------------------------------------------------
<S> <C> <C> <C>
U.S. S&P 500 Index 60% 45%
Foreign Small-Cap Index/2/ 0% 15%
U.S. Treasury Bonds 40% 40%
Annualized Return 12.8% 14.5% +1.7%
Standard Deviation 10.1% 9.4% -0.7%
</TABLE>
Hot stuff! Rex's study proved that an international small-cap component in your
overall asset mix increased your return and lowered your risk at the same time.
Of course, past results can't predict the future, but we think this study is
impressive.
Fund Assets as of 3/31/96: $1,453.6 million
.Acorn International Top 10 Holdings
WM Data Sweden 2.4%
Computer Services/Consulting
Korea Mobile Telecom Korea 1.6%
Mobile Communications
Fresenius Germany 1.5%
Dialysis Equipment & Solutions
Getronics Netherlands 1.3%
Computer Consulting
T T Tieto, Class B Finland 1.2%
Computer Services/Consulting
Phoenix Mecano Switzerland 1.0%
Electrical Components Manufacturer
Rhoen Klinikum Preferred Germany 1.0%
Hospital Management
Sysdeco Group Norway 1.0%
Software Tool Sets & Systems
International CableTel United Kingdom 1.0%
Cable TV & Telephone System
Societe Generale
de Surveillance Switzerland 0.9%
Inspection/Testing of Trade Goods
Fund facts
Where to find us on NASDAQ:
Acorn Fund: ACRNX
Acorn International: ACINX
International investing allows you to achieve greater diversification and to
take advantage of changes in foreign economies and market conditions, providing
opportunities different from those available in the U.S., and risks which in
some ways may be greater than in U.S. investments, including: exchange rate
fluctuations; different government regulation and accounting, auditing, and
financial reporting standards; different settlement periods and trading
practices and often higher transaction costs; and frequently less liquidity and
greater price volatility. Investing in countries outside the U.S. also involves
political risk (like expropriation or nationalization). Economies in individual
markets may differ favorably or unfavorably from the U.S. economy. Many of the
risks of international investing are even greater in emerging markets, which are
often substantially smaller, less developed, less liquid, and more volatile than
the securities markets of the United States and other more developed countries.
/1/Sinquefield, Rex A., "Where Are the Gains from International
Diversification?," Financial Analysts Journal, January-February, 1996.
/2/The foreign small-cap index was constructed by Sinquefield from various
public market indices and other sources.
6
<PAGE>
.Performance at a Glance
The Value of a $10,000 Investment in Acorn International
.September 23, 1992 through March 31, 1996
[GRAPH APPEARS HERE]
DATE ACORN INT'L ($) EAFE ($)
- ---- --------------- --------
09/23/92 10,000 10,000
09/30/92 10,010 10,000
12/31/92 10,690 9,614
03/31/93 12,000 10,767
06/30/93 12,920 11,849
09/30/93 13,910 12,635
12/31/93 15,940 12,745
03/31/94 15,850 13,190
06/30/94 15,550 13,864
09/30/94 16,491 13,877
12/31/94 15,334 13,736
03/31/95 14,811 13,992
06/30/95 15,727 14,093
09/30/95 16,824 14,681
12/31/95 16,703 15,275
03/31/96 18,203 15,717
This graph compares the results of $10,000 invested in Acorn International on
September 23, 1992 (the date the Fund began operations) with Morgan Stanley's
Europe, Australia and Far East Index (EAFE). Past performance does not guarantee
future results. The investment return and principal value of an investment in
the Fund will fluctuate so that Fund shares, when redeemed, may be worth more or
less than their original cost.
Acorn International Portfolio Diversification
.as of March 31, 1996
[PIE CHART FOR TABLE BELOW APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C>
Consumer Goods and Services 28.2%
Information Group 23.7%
Finance Group 20.1%
Industrial Goods and Services 8.7%
Health Care 7.7%
Energy and Minerals 4.8%
Real Estate 1.4%
Transportation 0.8%
Cash 4.6%
</TABLE>
<TABLE>
<CAPTION>
Relative Performance
- ----------------------------------------------------------------------------
1st quarter Last 12 mos.
<S> <C> <C>
Acorn International 9.0% 22.9%
EAFE 2.9% 12.3%
Lipper International Small
Company Funds Average 7.2% 18.4%
</TABLE>
EAFE is Morgan Stanley's Europe, Australia and Far East Index, an unmanaged
index of companies throughout the world in proportion to world stock market
capitalization, excluding the U.S. and Canada. The Lipper International Small
Company Funds Average is a group comprised of twelve small company international
funds, including Acorn International. The Fund's top 10 holdings and portfolio
diversification vary with changes in portfolio investments.
Net Asset Value Per Share 3/31/96: $18.08
- -----------------------------------------
7
<PAGE>
Acorn Fund
.Major Portfolio Changes in the First Quarter
<TABLE>
<CAPTION>
Number of Shares
--------------------
12/31/95 3/31/96
<S> <C> <C>
Additions
- ------------------------------------------------------------------------
Information Group
Altron 150,000 221,000
American Management Systems - 125,000
BDM International - 100,000
CACI International 220,000 436,000
Continuum - 94,000
Korea Mobile Telecom GDS - 40,000
Mobile Telecommunications
Technologies 700,000 800,000
PILTEL 2,000,000 6,000,000
Pioneer-Standard Electronics 900,000 1,000,000
Richey Electronics 200,000 300,000
Sanmina - 70,000
Sierra On-Line 150,000 300,000
Sligos 27,000 63,000
Sysdeco Group - 100,000
United Video Satellite - 465,000
(includes effect of 2 for 1 stock split)
Thermoquest - 20,000
- ------------------------------------------------------------------------
Health Care Group
AMSCO International 1,150,000 1,354,000
Corvas International - 800,000
Kinetic Concepts 607,000 930,000
Lincare Holdings 625,000 967,000
MDL Information Systems - 185,000
Medeva 810,000 2,230,000
RP Scherer 95,000 260,000
Steris 205,000 340,000
Watson Pharmaceuticals 225,000 280,000
- ------------------------------------------------------------------------
Consumer Goods and Services
Autoliv - 120,000
Escada 13,000 20,000
Esselte - 10,000
Genting International 4,500,000 5,000,000
Hollywood Park Cv. Pfd. 201,000 472,000
N. Brown Group 800,000 1,200,000
Nine West - 50,000
Noritsu Koki - 150,000
(includes effect of 50% stock bonus)
Norwood Promotional 150,000 232,000
Panamerican Beverages 120,000 170,000
Royal - 132,000
(includes effect of 10% stock bonus)
Wolverine World Wide 190,000 375,000
- ------------------------------------------------------------------------
Finance Group
Arab Malaysian Finance - 220,000
Banca Fideuram 2,500,000 4,700,000
Credicorp - 250,000
Phoenix Duff & Phelps 710,000 1,546,000
Formosa Fund - 120,000
IS Himalaya Fund - 300,000
Itau Banco PN 12,000,000 15,000,000
JCG Holdings 2,800,000 7,000,000
Kookmin Bank - 257,429
Liechtenstein Global Trust 8,000 14,000
First USA Paymentech - 15,000
- ------------------------------------------------------------------------
Industrial Goods and Services
Baldor Electric 525,000 800,000
Bearings - 180,000
Ecco SA - 14,000
Hub Group - 430,000
Loral - 215,000
Myers Industries 100,000 180,000
Pec Israel Economic Corporation 100,000 200,000
Schnitzer Steel 35,000 175,000
Shaw Industries - 200,000
Societe Generale de Surveillance 3,500 6,000
US Can - 162,000
Valmont Industries - 135,000
Superior Services - 70,000
Thermo Sentron - 34,000
- ------------------------------------------------------------------------
Energy and Minerals
Atmos Energy - 50,000
CalEnergy - 475,000
Coeur D'Alene Mines - 250,000
Forest Oil - 400,000
J Ray McDermott - 160,000
Landmark Graphics 235,000 335,000
Louis Dreyfus Natural Gas 240,000 380,000
Petroleum Securities - 740,000
Ranger Oil - 400,000
United Meridian 350,000 440,000
- ------------------------------------------------------------------------
Real Estate Group
Vallehermoso 60,000 300,000
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
12/31/95 3/31/96
Sales
- --------------------------------------------------------------
<S> <C> <C>
Information Group
ADVO 520,000 -
Century Communications, Cl. A 635,000 500,000
Clipsal Industries 500,000 -
Harman International 500,000 -
International Game Technology 2,245,000 2,040,000
New Straits Times Press 745,000 -
Solectron 1,200,000 900,000
SAP 50,000 -
Tele-Communications,
Series A TCI Group 2,000,000 1,800,000
Television Broadcasts 1,150,000 -
- --------------------------------------------------------------
Health Care Group
Alteon 260,000 -
Anesta 175,000 64,000
Apria Healthcare Group 456,000 366,000
Biogen 85,000 70,000
Cygnus Therapeutic Systems 258,000 170,000
HBO & Company 285,000 249,000
Ligand Pharmaceuticals 159,000 -
North American Biologicals 742,000 562,000
Protein Design Labs 195,000 155,000
Sepracor 380,000 280,000
Serologicals 69,000 -
TheraTech 223,000 163,000
ThermoTrex 200,000 150,000
Pet Practice 90,000 -
- --------------------------------------------------------------
Consumer Goods and Services
Autobacs Seven 50,000 -
Burswood Property Trust 3,000,000 1,800,000
Genting 1,040,000 -
Hennes & Mauritz, Cl. B 150,000 110,000
Home Shopping Network 800,000 -
International Speedway 14,000 -
Liz Claiborne 105,000 -
Mikasa 425,000 275,000
Multibras PN 1,900,000 -
O.Y.L. Industries 660,000 460,000
Sky City 400,000 1,700,000
(includes effect of 5 for 1 split)
Sony Music Entertainment 65,000 33,000
St. John Knits 182,000 147,000
Stanhome 180,000 -
Zale 85,000 -
Casa Anglo Brasileira Pfd. 12,000,000 -
OK Holding 27,000 -
- --------------------------------------------------------------
Finance Group
Mercury Finance 1,524,000 1,393,000
Nationsbank 211,000 -
(formerly known as Bank South Corp.)
New World Infrastructure 2,200,000 -
- --------------------------------------------------------------
Industrial Goods and Services
Johnson Electric Holdings 1,100,000 -
Nordson 200,000 150,000
SensoNor 800,000 600,000
Thermo Fibertek 735,000 600,000
UCAR International 40,000 -
Unifi 900,000 600,000
Zoltek Companies 180,000 110,000
Modernform 375,000 -
- --------------------------------------------------------------
Energy and Minerals
Coflexip 96,000 -
Enserv 250,000 -
Petroleum Helicopters 170,000 -
Seagull Energy 150,000 -
Thermo Ecotek 580,000 500,000
Weatherford International 200,000 -
- --------------------------------------------------------------
Real Estate Group
The Rouse Company 1,400,000 829,000
Weingarten Realty Investors 315,000 165,000
</TABLE>
9
<PAGE>
Acorn Fund
.Statement of Investments (unaudited) March 31, 1996
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------
Common Stocks and Other
Equity-Like Securities: 97.8%
- ----------------------------------------------------------------------------
<S> <C> <C>
Information Group: 19.1%
.Broadcasting and CATV: 5.8%
1,500,000 Tele-Communications,
Liberty Media Group $ 39,563
1,800,000 Tele-Communications,
Series A TCI Group 33,413
50,000 Tele-Communications, Cum. Pfd. 3,331
700,000 International Family Entertainment 11,813
465,000 United Video Satellite 9,765
300,000 Silver King Communications 9,300
300,000 TCA Cable TV 8,738
300,000 BET Holdings 8,363
300,000 Argyle Television 6,525
440,000 Jones Intercable, Cl. A 6,380
22,500 Jones Intercable 352
500,000 Century Communications, Cl. A 4,844
80,000 Cablevision Systems 4,600
300,000 Granite Broadcasting 3,600
270,000 DMX 523
- ----------------------------------------------------------------------------
151,110
.Mobile Communications: 3.5%
500,000 Telephone and Data Systems 23,125
800,000 Mobile Telecommunication
Technologies 12,500
450,000 Cellular Communications of
Puerto Rico 12,150
500,000 Vanguard Cellular Systems 10,000
180,000 Cellular Communications Cv. Pfd. 9,203
468,750 PriCellular 6,270
352,000 COMARCO 5,236
300,000 Centennial Cellular 4,575
200,000 Palmer Wireless 3,825
375,000 Shared Technologies 2,016
400,000 Pittencrieff Communications 2,000
- ----------------------------------------------------------------------------
90,900
.Computer Software and Services: 1.5%
775,000 Systems & Computer Technology 11,431
266,000 Business Records 9,842
436,000 CACI International 4,523
94,000 Continuum 3,913
100,000 BDM International 3,825
125,000 American Management Systems 3,188
Principal Amount or
Number of Shares Value (000)
- ----------------------------------------------------------------------------
120,000 Computer Language Research $ 1,950
100,000 Tripos 788
170,000 Kurzweil Applied Intelligence 414
- ----------------------------------------------------------------------------
39,874
.Gaming Equipment: 1.1%
2,040,000 International Game Technology 27,795
.Computer Game Software: 0.5%
300,000 Sierra On-Line 10,088
350,000 Spectrum HoloByte 2,844
- ----------------------------------------------------------------------------
12,932
.Business Information: 0.3%
400,000 American Business Information 6,400
600,000 GIGA Cv. Pfd. 2,100
- ----------------------------------------------------------------------------
8,500
.Computer Systems: 2.1%
900,000 Solectron 39,600
221,000 Altron 6,437
700,000 Triad Systems 4,113
275,000 ACT Manufacturing 3,334
70,000 Sanmina 2,083
- ----------------------------------------------------------------------------
55,567
.Instrumentation: 1.2%
635,000 Thermo Instrument Systems 19,209
$5,000 Thermo Optek, 5% Note Due
10/15/00 5,650
228,000 IFR Systems 3,107
$1,500 Thermoquest, 5% Note Due
8/15/00 1,695
20,000 Thermoquest 340
85,000 Datum 776
- ----------------------------------------------------------------------------
30,777
.Distribution: 1.3%
1,000,000 Pioneer-Standard Electronics 15,375
304,000 Kent Electronics 10,754
520,000 Bell Microproducts 3,445
300,000 Richey Electronics 3,188
- ----------------------------------------------------------------------------
32,762
.Components and Peripherals: 1.7%
500,000 Oak Industries 12,438
435,000 Kronos 11,093
210,000 In Focus Systems 7,363
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
350,000 Exide Electronics Group $ 4,638
350,000 Planar Systems 4,463
205,000 Blonder Tongue Labs 2,716
80,000 Daktronics 300
- ----------------------------------------------------------------------------
43,011
.Consumer Electronics: 0.1%
110,000 Universal Electronics 1,279
150,000 InterTAN 825
- ----------------------------------------------------------------------------
2,104
----------
Information Group: Total 495,332
- ----------------------------------------------------------------------------
Health Care Group: 11.4%
.Biotechnology/Drug Delivery: 2.9%
260,000 RP Scherer 11,407
280,000 Watson Pharmaceuticals 11,200
562,000 North American Biologicals 7,411
450,000 Inhale Therapeutic Systems 6,862
130,000 Human Genome Sciences 5,005
70,000 Biogen 4,165
280,000 Sepracor 4,095
800,000 Corvas International 3,960
800,000 Corvas International Warrants 800
155,000 Protein Design Labs 3,817
170,000 Cygnus Therapeutic Systems 3,549
163,000 TheraTech 3,464
345,000 Ethical Holdings 3,234
100,000 Vertex Pharmaceuticals 2,650
133,000 CellPro 2,095
66,000 Incyte Pharmaceutical 1,881
64,000 Anesta 912
- ----------------------------------------------------------------------------
76,507
.Medical Equipment: 3.9%
1,354,000 AMSCO International 18,956
580,000 Invacare 16,385
552,000 Thermedics 15,594
930,000 Kinetic Concepts 12,439
554,000 Respironics 11,634
340,000 Steris 10,200
345,000 Space Labs Medical 8,021
89,000 Boston Scientific 4,094
450,000 Affymetrix 2,025
48,000 Fresenius USA 978
50,000 Trex Medical 512
- ----------------------------------------------------------------------------
100,838
.Hospital/Laboratory Supplies: 0.7%
273,000 Hillenbrand Industries 9,282
322,000 Sybron International 7,889
- ----------------------------------------------------------------------------
17,171
.Services: 3.9%
967,000 Lincare Holdings 31,427
249,000 HBO & Company 23,468
582,000 Renal Treatment Centers 13,822
366,000 Apria Healthcare Group 11,620
150,000 ThermoTrex 6,412
450,000 Pharmaceuticals Marketing Services 6,075
833,333 Walsh International, Cv. Pfd. 5,000
185,000 MDL Information Systems 3,897
- ----------------------------------------------------------------------------
101,721
----------
Health Care Group: Total 296,237
- ----------------------------------------------------------------------------
Consumer Goods and Services Group: 11.7%
.Retail: 2.0%
980,000 Borders Group 27,930
295,000 Quality Food Centers 7,227
440,000 Cato 4,455
215,000 Lands' End 3,762
275,000 Mikasa 3,266
220,000 Duckwall Alco Stores 2,420
50,000 Nine West 2,162
70,000 Dave & Buster's 1,120
- ----------------------------------------------------------------------------
52,342
.Recreational Vehicles: 1.9%
1,100,000 Harley-Davidson 42,762
317,000 Thor Industries 5,944
- ----------------------------------------------------------------------------
48,706
.Food: 0.4%
634,000 Au Bon Pain 5,389
325,000 Quantum Restaurant Group 5,362
- ----------------------------------------------------------------------------
10,751
.Entertainment and Leisure: 4.1%
1,400,000 Carnival 38,500
2,000,000 Alliance Entertainment 18,750
215,000 GC Companies 8,170
265,000 Royal Caribbean Cruises 6,459
</TABLE>
11
<PAGE>
Acorn Fund
.Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Principal Amount or
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
200,000 Anchor Gaming $ 6,450
276,000 Carmike Cinemas 6,279
472,000 Hollywood Park, Cv. Pfd. 4,602
1,235,000 American Media 4,477
167,000 Rio Hotel & Casino 2,547
250,000 Players International 2,379
188,000 Station Casinos 2,185
535,000 Monarch Casino & Resort 2,073
200,000 Playboy Enterprises, Cl. B 2,025
$ 6,250 Grand Palais Casino,
14% Note Due 2/25/98 937
- ----------------------------------------------------------------------------
105,833
.Manufacturers: 3.3%
1,650,000 Newell 44,137
475,000 First Brands 13,300
375,000 Wolverine World Wide 10,500
147,000 St. John Knits 9,904
232,000 Norwood Promotional 4,814
700,000 O'Sullivan Industries 4,112
- ----------------------------------------------------------------------------
86,767
----------
Consumer Group: Total 304,399
- ----------------------------------------------------------------------------
Finance Group: 15.7%
.Banks: 1.5%
96,000 BayBanks 10,320
285,000 Union Planters 8,621
206,000 First Commerce 6,798
309,000 Texas Regional Bancshares 6,798
105,000 First American 4,672
104,000 Riverside National Bank 1,417
- ----------------------------------------------------------------------------
38,626
.Savings & Loans: 2.8%
756,000 Washington Federal 16,443
700,000 Peoples Bank Bridgeport 15,050
375,000 Coast Savings 11,719
390,000 Washington Mutual 11,602
260,000 TCF Financial 9,425
162,000 Bell Bancorp 5,994
156,000 Indiana Federal 2,886
- ----------------------------------------------------------------------------
73,119
.Insurance: 1.8%
836,000 Baldwin & Lyons, Cl. B 11,913
351,000 United Fire & Casualty 10,881
331,000 Transnational Re 7,241
127,000 Foremost 6,985
318,000 ALLIED Life Financial 5,525
216,000 Leucadia National 5,373
- ----------------------------------------------------------------------------
47,918
.Money Management: 2.7%
440,000 United Asset Management 20,405
784,000 Baker Fentress 14,406
434,000 SEI 9,765
1,546,000 Phoenix Duff and Phelps 9,662
241,000 BISYS Group 7,983
127,000 T. Rowe Price Associates 6,731
- ----------------------------------------------------------------------------
68,952
.Credit Cards: 4.9%
842,000 ADVANTA, Cl. A 43,784
520,000 ADVANTA, Cl. B 24,700
600,000 First USA 33,975
575,000 National Data 19,622
220,000 Concord EFS 5,830
15,000 First USA Paymentech 529
- ----------------------------------------------------------------------------
128,440
.Other: 2.0%
1,393,000 Mercury Finance 19,676
879,000 Americredit 12,196
237,000 Aames Financial 8,532
1,220,000 Cash America 6,557
320,000 DVI Health Services 3,960
- ----------------------------------------------------------------------------
50,921
----------
Finance Group: Total 407,976
- ----------------------------------------------------------------------------
Industrial Goods and Services: 10.6%
.Steel: 1.3%
1,090,000 Worthington Industries 21,664
175,000 Schnitzer Steel 4,572
300,000 Gibraltar Steel 4,500
264,000 Atchison Casting 3,366
- ----------------------------------------------------------------------------
34,102
.Machinery: 5.4%
800,000 Thermo Electron 47,600
540,000 Sealed Air 18,427
800,000 Baldor Electric 16,100
600,000 Thermo Fibertek 13,350
150,000 Nordson 9,112
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Principal Amount or
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
120,000 Teleflex $ 5,415
180,000 Bearings 5,108
96,000 Mine Safety Appliances 4,440
135,000 Valmont Industries 4,050
110,000 Applied Power 3,589
300,000 Douglas & Lomason 3,488
180,000 Myers Industries 3,038
162,000 US Can 2,754
500,000 Stevens International, Cl. A 1,531
34,000 Stevens International, Cl. B 123
205,000 Hein-Werner 1,179
34,000 Thermo Sentron 544
- ----------------------------------------------------------------------------
139,848
.Furniture and Textiles: 1.2%
600,000 Unifi 14,775
745,000 Lilly Industries, Cl. A 10,151
110,000 Zoltek 5,211
- ----------------------------------------------------------------------------
30,137
.Services: 2.7%
600,000 Expeditors International of
Washington 15,750
215,000 Loral 10,535
430,000 Hub Group 7,579
444,000 Wackenhut, Cl. B 7,104
60,000 Wackenhut, Cl. A 1,178
530,000 Thermo Terratech 7,089
256,000 HA.LO Industries 7,072
374,000 Thomas Group 5,330
154,000 Unitog 3,850
$2,900 Western Water, 9% Cv.
Note Due 9/25/05 3,474
115,000 AG Services of America 1,294
70,000 Superior Services 928
- ----------------------------------------------------------------------------
71,183
----------
Industrial Group: Total 275,270
- ----------------------------------------------------------------------------
Energy and Minerals Group: 6.7%
.Independent Power: 2.0%
995,000 The AES Corporation 24,751
475,000 CalEnergy 12,647
500,000 Thermo Ecotek 10,062
285,000 Thermo Power 3,634
- ----------------------------------------------------------------------------
51,094
Number of Shares Value (000)
- ----------------------------------------------------------------------------
.Oil & Gas Producers: 2.0%
440,000 United Meridian $ 10,505
770,000 Global Natural Resources 10,202
300,000 Devon Energy 7,050
600,000 Tesoro Petroleum 5,100
400,000 Forest Oil 4,950
380,000 Louis Dreyfus Natural Gas 4,132
650,000 Coho Resources 4,062
200,000 St. Mary Land & Exploration 3,100
360,000 Abraxas Petroleum 1,935
110,000 Abraxas Petroleum CVRs 945
100,000 Basin Exploration 512
- ----------------------------------------------------------------------------
52,493
.Distribution/Marketing/Refining: 1.0%
606,000 Southern Union 12,423
510,000 NGC 6,502
143,000 KN Energy 4,451
50,000 Atmos Energy 1,150
- ----------------------------------------------------------------------------
24,526
.Oil Services: 1.4%
314,000 Atwood Oceanics 11,304
809,000 Digicon 8,697
255,000 Energy Ventures 6,789
335,000 Landmark Graphics 5,569
160,000 J Ray McDermott 3,100
20,000 Seacor Holdings 737
- ----------------------------------------------------------------------------
36,196
.Mining: 0.3%
250,000 Coeur D'Alene Mines 5,094
250,000 Zeigler Coal Holding 3,625
- ----------------------------------------------------------------------------
8,719
----------
Energy Group: Total 173,028
- ----------------------------------------------------------------------------
Real Estate Group: 1.8%
829,000 The Rouse Company 18,134
210,000 Equity Residential Properties Trust 6,563
165,000 Weingarten Realty Investors 5,919
155,000 Forest City Enterprises, Cl. B 5,716
123,000 Forest City Enterprises, Cl. A 4,520
120,000 First Washington Realty Trust,
Cv. Pfd. 2,985
80,000 First Washington Realty Trust 1,520
</TABLE>
13
<PAGE>
Acorn Fund
.Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
243,000 Sunstone Hotel Investors $ 2,491
----------
Real Estate Group: Total 47,848
- ----------------------------------------------------------------------------
Foreign Securities: 20.8%
.Canada: 0.7%
800,000 Shaw Communications, Cl. B 5,505
125,000 BCE Mobile Communications 4,094
400,000 Ranger Oil 2,800
200,000 Shaw Industries 2,092
250,600 Veritas Energy Services 1,931
200,000 Cogeco Cable 1,211
- ----------------------------------------------------------------------------
17,633
.United Kingdom/Ireland: 3.4%
400,000 International CableTel 12,050
500,000 Securicor Group, Cl. A 9,144
1,200,000 Serco Group 9,031
2,230,000 Medeva 8,323
450,000 ADT 7,931
600,000 Comcast UK Cable Partners 7,575
1,700,000 Invesco 6,669
68,000 Invesco ADS 2,728
1,200,000 N. Brown Group 5,404
580,000 Oriflame 4,356
600,000 Powerscreen International 3,984
3,750,000 Waterford Wedgwood (Ireland) 3,778
1,000,000 Capital 3,282
1,200,000 Body Shop International 2,693
995,000 North American Gas Investors Trust 1,002
4,500,000 Rhino Group 721
700,000 Pittencrieff Resources 492
- ----------------------------------------------------------------------------
89,163
.Germany/Austria: 0.6%
425,000 United International Holdings
(Austria) 6,800
20,000 Escada 3,746
50,000 Flughafen Wien (Austria) 3,419
8,000 Binding-Brauerei 3,089
- ----------------------------------------------------------------------------
17,054
.Nordic Countries: 2.1%
460,000 WM Data Nordic (Sweden) 20,302
110,000 Hennes & Mauritz, Cl. B (Sweden) 7,817
120,000 Autoliv (Sweden) 6,122
600,000 SensoNor (Norway) 5,239
150,000 Huhtamki (Finland) 4,791
193,000 Pricer, Cl. B (Sweden) 3,754
29,000 Chr. Hansen Holding, Cl. B (Denmark) 3,353
(formerly known as Chr. Hansen's
Laboratorium)
100,000 Sysdeco Group (Norway) 1,793
90,000 Benefon (Finland) 1,408
50,000 Sentra, Cl. A (Finland) 847
10,000 Esselte (Sweden) 177
- ----------------------------------------------------------------------------
55,603
.Netherlands: 0.4%
77,000 Getronics 5,582
24,000 Telegraaf Holdings 4,851
- ----------------------------------------------------------------------------
10,433
.Switzerland: 1.0%
6,000 Societe Generale de Surveillance 12,525
14,000 Liechtenstein Global Trust 7,715
13,200 Sece Cortaillod Holdings 7,075
- ----------------------------------------------------------------------------
27,315
.France: 1.1%
54,000 Guilbert 7,797
70,000 Ecco Travail Temporaire 6,187
63,000 Sligos 5,731
26,000 Cetelem 5,071
14,000 Ecco SA 3,228
- ----------------------------------------------------------------------------
28,014
.Spain/Portugal: 0.4%
300,000 Vallehermoso 5,390
375,000 Filmes Lusomundo (Portugal) 2,451
70,000 Cortefiel 1,636
- ----------------------------------------------------------------------------
9,477
.Italy/Greece: 1.1%
200,000 Hellenic Bottling (Greece) 7,467
4,700,000 Banca Fideuram 6,874
150,000 Cellular Communications
International 4,988
90,000 Industrie Natuzzi 4,894
1,200,000 Costa Crociere 2,124
1,100,000 Tecnost 1,818
- ----------------------------------------------------------------------------
28,165
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
.Israel: 0.2%
200,000 Pec Israel Economic $ 4,300
- ----------------------------------------------------------------------------
4,300
.India: 0.3%
300,000 IS Himalaya Fund 4,260
39,393 Housing Development Finance 3,743
298,700 Industrial Credit & Investment
Corp. of India 828
- ----------------------------------------------------------------------------
8,831
.Hong Kong: 0.5%
3,500,000 Varitronix International 6,427
7,000,000 JCG Holdings 6,382
- ----------------------------------------------------------------------------
12,809
.China: 0.4%
810,000 AES China Generating 6,784
200,000 The Investment Company of China 1,700
111,275 The China Investment Company 932
- ----------------------------------------------------------------------------
9,416
.Singapore: 0.4%
5,000,000 Genting International 9,375
- ----------------------------------------------------------------------------
9,375
.Malaysia: 0.9%
1,950,000 Resorts World 11,105
1,260,000 Kian Joo Can Factory 7,026
168,000 Kian Joo Can Factory,
Warrants 5/22/99 525
460,000 O.Y.L. Industries 4,002
220,000 Arab Malaysian Finance 1,053
- ----------------------------------------------------------------------------
23,711
.Thailand: 0.6%
100,000 The Thailand Fund 10,216
3,300,000 Sinpinyo Fund V 2,387
200,000 Thai President Foods 1,451
71,500 International Cosmetics 595
- ----------------------------------------------------------------------------
14,649
.Korea/Taiwan: 1.7%
134,957 Shinsegae 9,574
15,043 Shinsegae (New) 1,002
120,000 Formosa Fund 8,760
257,429 Kookmin Bank 6,012
5,000 Korea Mobile Telecom 5,931
40,000 Korea Mobile Telecom GDS 1,830
320,000 President Enterprises (Taiwan) 4,280
80,000 Seoul International Trust 3,800
300,000 Korea-Europe Fund 2,437
- ----------------------------------------------------------------------------
43,626
.Indonesia/Philippines: 0.7%
6,000,000 PILTEL (Philippines) 8,136
960,000 Tigaraksa Satria 4,764
195,501 Unilever Indonesia 3,178
2,400,000 Mayora Indah 1,771
- ----------------------------------------------------------------------------
17,849
.Japan: 1.7%
150,000 Noritsu Koki 5,197
75,000 Secom 4,909
132,000 Royal 4,140
209,000 Mr. Max 3,875
160,000 Heiwa 3,820
90,000 Sankyo 3,792
56,100 Paramount Bed 3,619
110,000 Tostem 3,440
77,000 Aucnet 3,316
40,000 Nichiei 2,678
60,000 Promise 2,669
46,000 Tsutsumi Jewelry 2,235
33,000 Sony Music Entertainment 1,699
- ----------------------------------------------------------------------------
45,389
.Australia/New Zealand: 0.7%
1,700,000 Sky City (New Zealand) 7,121
1,600,000 Village Roadshow 6,634
1,800,000 Burswood Property Trust 2,408
740,000 Petroleum Securities 1,910
- ----------------------------------------------------------------------------
18,073
.Mexico: 0.6%
350,000 Kimberly Clark de Mexico 6,683
1,000,000 Nadro, Series L 4,310
300,000 Grupo Radio Centro 2,513
4,200,000 Grupo Herdez, Series B 1,192
600,000 Fondo Opcion, Series B 513
170,000 Cofar, Series B 135
- ----------------------------------------------------------------------------
15,346
</TABLE>
15
<PAGE>
Acorn Fund
.Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
.Brazil: 0.4%
15,000,000 Itau Banco PN $ 5,331
190,000,000 Cemig 5,329
- ----------------------------------------------------------------------------
10,660
.Other Latin America: 0.9%
170,000 Panamerican Beverages (Panama) 6,864
130,000 Banco Latinoamericano de Export
(Panama) 6,419
250,000 Credicorp (Peru) 4,500
160,000 IRSA (Argentina) 4,500
- ----------------------------------------------------------------------------
22,283
----------
Foreign Group: Total 539,174
Total Common Stocks and Other ----------
Equity-Like Securities: 97.8% $2,539,264
----------
Money Market Instruments: 2.3% 59,443
----------
Total Investments: 100.1% 2,598,707
----------
Cash and Other Assets Less Liabilities: (0.1%) (994)
----------
Total Net Assets: 100% $2,597,713
- ----------------------------------------------------------------------------
</TABLE>
.Portfolio Diversification
At March 31, 1996, the Fund's foreign portfolio of investments as a percentage
of net assets was diversified as follows:
<TABLE>
<CAPTION>
Percent
- ------------------------------------------
<S> <C>
.Consumer Goods and Services 7.2%
.Information 5.1
.Finance 4.4
.Industrial Goods and Services 2.0
.Health Care 0.9
.Energy and Minerals 0.7
.Real Estate 0.4
.Transportation 0.1
-----
Total Foreign Portfolio 20.8%
</TABLE>
16
<PAGE>
Acorn International
.Major Portfolio Changes in the First Quarter
<TABLE>
<CAPTION>
Principal Amount
or Number of Shares
---------------------
12/31/95 3/31/96
<S> <C> <C>
Additions
- -------------------------------------------------------------------
Europe
.Germany
Cewe Color Holding 0 21,000
Escada 38,000 40,000
Marschollek Lautenschlager 3,100 5,000
.Italy
Editoriale L'Espresso 925,000 1,000,000
Saipem SPA 1,150,000 2,200,000
.Sweden
Esselte 0 10,000
.France
Axime Ex Segin 65,000 80,000
Ecco SA 0 14,000
Fininfo 0 39,000
.United Kingdom
Bluebird Toys 0 460,000
Edinburgh Fund Managers 300,000 850,000
HALMA 0 270,000
Seton Healthcare Group 390,000 640,000
Tunstall 0 550,000
.Netherlands
Kempen 390,000 410,000
Wegener 0 20,000
.Denmark
Kompan International 22,000 27,000
.Spain
Mapfre Vida 0 100,000
Vallehermoso 300,000 350,000
- -------------------------------------------------------------------
Asia
.India
IS Himalaya Fund 0 300,000
Max India 174,450 193,850
Max India Zero Coupon 0 Rs 50,000
Tube Investments GDR 456,000 810,000
.Malaysia
Arab Malaysian Finance 0 930,000
Malaysian Assurance Alliance 1,699,500 1,799,500
.Indonesia
Bank Niaga 1,850,000 2,350,000
Modern Photo Film 750,000 1,350,000
.Philippines
Int'l Container Terminal Services 11,000,000 14,000,000
Universal Robina 11,000,000 12,000,000
.Thailand
Bangkok Insurance 0 320,000
Singer Thailand 100,756 201,512
.Hong Kong
First Sign International Holdings 0 24,000,000
Vitasoy International Holdings 14,000,000 15,000,000
.Japan
Central Uni 0 117,000
(includes effect of 30% stock bonus)
HIS 0 37,000
Hokuto 140,000 208,000
(includes effect of 30% stock bonus)
Mars Engineering 0 13,000
Nichiei 124,000 130,000
Nihon Jumbo 0 43,720
(includes effect of 20% stock bonus)
Noritsu Koki 0 200,000
(includes effect of 50% stock bonus)
Royal 0 165,000
(includes effect of 10% stock bonus)
Ryohin Keikaku 0 34,600
(includes effect of 30% stock bonus)
Tsutsumi Jewelry 81,000 85,000
.Korea/Taiwan
Daehan City Gas 0 85,000
Korea Housing Bank 0 119,320
Shinsegae 88,666 100,000
Formosa Fund 50,000 80,000
Formosa Growth Fund 155,000 230,000
Taipei Fund 0 70,000
</TABLE>
17
<PAGE>
Acorn International
.Major Portfolio Changes in the First Quarter
<TABLE>
<CAPTION>
Number of Shares
------------------------
12/31/95 3/31/96
<S> <C> <C>
Additions (continued)
- --------------------------------------------------------------------
Latin America
.Mexico
Bufete Industrial 370,000 380,000
Grupo Industrial Bimbo 0 930,000
Kimberly Clark de Mexico 500,000 550,000
.Other Latin America
Panamerican Beverages 150,000 170,000
Ceteco Holdings 0 75,000
.Argentina
Cresud 0 1,200,000
IRSA 260,000 280,000
Quilmes Industrial 0 300,000
Quilmes Industrial Pfd. 0 150,000
.Chile
Genesis Chile Fund 130,000 150,000
Santa Isabel 0 240,000
.Brazil
Banco Itau Pfd. 26,000,000 28,000,000
- --------------------------------------------------------------------
Other Countries
.Canada
Pan East Petroleum Warrants 0 700,000
Shaw Industries 0 435,000
Tesco 0 300,000
.Australia
Austereo 2,900,000 3,760,000
Petroleum Securities Australia Sales 1,400,000 2,500,00
Sales
- --------------------------------------------------------------------
Europe
.Germany
SAP Pfd. 25,000 0
.Austria
Flughafen Wien 170,000 145,000
.Italy
Industrie Natuzzi 130,000 105,000
.Sweden
Althin Medical AB 265,000 130,000
Elekta Instrument, Cl. B 250,000 0
Hennes & Mauritz, Cl. B 250,000 185,000
.France
Coflexip 390,000 0
Technip 55,000 0
.United Kingdom
Invesco 3,000,000 2,000,000
.Netherlands
De Boer Winkelbedrijven 90,000 0
Telegraaf Holdings 57,000 43,000
.Norway
Elkjoep Norge 400,000 300,000
SensoNor 1,300,000 990,000
.Denmark
OK Holding 106,000 0
.Portugal
Banco Portuguese 120,444 0
Jeronimo Martins 110,000 0
.Finland
Rautakirya, Cl. B 45,000 0
.Greece
Teletypos 133,130 0
.Switzerland
Zehnder Holding 10,000 5,000
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
------------------------
12/31/95 3/31/96
- --------------------------------------------------------------------
<S> <C> <C>
Asia
.Hong Kong
ABC Communication Holdings 12,100,000 4,500,000
Johnson Electric Holdings 2,500,000 0
Television Broadcasts 2,300,000 0
.China
New World Infrastructure 2,500,000 0
.Japan
Autobacs Seven 72,000 0
Sony Music Entertainment 104,000 50,000
.Korea
Baik Yang 18,080 0
.Malaysia
Genting 450,000 0
New Straits Times Press 2,000,000 500,000
O.Y.L. Industries 1,200,000 850,000
Sistem Televisyen Malaysia 2,100,000 0
.Singapore
Clipsal Industries 1,600,000 0
Clipsal Industries Warrants 656,000 0
.Taiwan
Baring Taiwan Fund 300,000 150,000
.Thailand
International Cosmetics 360,000 237,100
Modernform 1,505,000 0
- --------------------------------------------------------------------
Latin America
.Brazil
Casa Anglo Brasileira Pfd. 20,000,000 0
Fabricadora De Pecas 120,000 0
Multibras Pfd. 3,000,000 0
White Martins 3,500,000,000 0
- --------------------------------------------------------------------
Other Countries
.Canada
Archer Resources 340,000 0
Enserv 400,000 0
.New Zealand
Sky City 410,000 1,750,000
(includes effect of 5 for 1 stock split)
.Australia
Burswood Property Trust 4,500,000 2,700,000
Just Jeans Holdings 3,100,000 0
</TABLE>
19
<PAGE>
Acorn International
.Portfolio Diversification
At March 31, 1996, the Fund's portfolio of investments as a percentage of net
assets was diversified as follows:
<TABLE>
<CAPTION>
Value (000) Percent
- -------------------------------------------------------------
<S> <C> <C>
.Information
Distribution $ 81,336 5.6%
Computer Systems 80,499 5.5
Broadcasting and CATV 79,387 5.5
Mobile Communications 43,653 3.0
Consumer Electronics 29,584 2.0
Software 26,321 1.8
Instrumentation 4,316 0.3
- -------------------------------------------------------------
345,096 23.7
.Health Care
Biotechnology/Drug Delivery 40,783 2.8
Hospital/Laboratory Supplies 30,395 2.1
Services 23,896 1.6
Equipment 16,760 1.2
- -------------------------------------------------------------
111,834 7.7
.Consumer Goods and Services
Retail 168,076 11.5
Manufacturers 94,814 6.5
Food 84,180 5.8
Entertainment and Leisure 59,207 4.1
Recreational Vehicles 4,247 0.3
- -------------------------------------------------------------
410,524 28.2
.Finance
Banks 87,549 6.0
Money Management 84,633 5.8
Insurance 15,998 1.1
Other 106,047 7.2
- -------------------------------------------------------------
294,227 20.1
.Industrial Goods and Services
Machinery Processing 61,379 4.2
Services 54,996 3.8
Steel 5,176 0.4
Forest Products and Construction 4,369 0.3
Furniture and Textiles 11 0.0
- -------------------------------------------------------------
125,931 8.7
.Energy and Minerals
Oil and Gas Producers 26,867 1.9
Cogeneration 18,457 1.3
Oil Services 15,327 1.1
Mining 6,454 0.4
Refining/Marketing 1,949 0.1
- -------------------------------------------------------------
69,054 4.8
.Real Estate 20,010 1.4
- -------------------------------------------------------------
.Transportation 9,916 0.8
- -------------------------------------------------------------
----------------------
Total Common Stocks and Other
Equity-Like Securities 1,386,592 95.4
----------------------
Money Market Instruments 70,367 4.8
----------------------
Total Investments 1,456,959 100.2
Cash and Other Assets less ----------------------
Liabilities (3,357) (0.2)
----------------------
Net Assets $1,453,602 100.0%
=============================================================
</TABLE>
20
<PAGE>
Acorn International
.Statement of Investments (unaudited) March 31, 1996
<TABLE>
<CAPTION>
Number of Shares Value (000)
- -----------------------------------------------------------------------
<S> <C>
Common Stocks and Other
Equity-Like Securities: 95.4%
- -----------------------------------------------------------------------
Europe: 50.4%
.Germany/Austria: 7.0%
120,000 Fresenius $ 21,945
14,000 Fresenius Pfd. 2,489
Dialysis Equipment and Solutions
135,000 Rhoen Klinikum Pfd. 14,082
90,000 Rhoen Klinikum 9,814
Hospital Management
145,000 Flughafen Wien 9,916
Vienna Airport Authority (Austria)
40,000 Escada 7,491
Designer Fashions
21,000 Cewe Color Holding 6,899
Photographic Developing & Printing
400,000 United International Holdings 6,400
Cable Television for Austria and Other
Countries (Austria)
15,000 Binding-Brauerei 5,791
Brewer
5,000 Marschollek Lautenschlager 4,538
Financial Planning
45,000 VAE Eisenbahnsysteme 4,525
Railroad Switches (Austria)
15,000 Pfleiderer 4,369
Construction Materials
30,000 BWT 3,915
Water Filtration Systems (Austria)
- -----------------------------------------------------------------------
102,174
.Denmark: 0.8%
47,000 Chr. Hansen Holding, Cl. B 5,435
(formerly known as Chr. Hansen's
Laboratorium)
Rennet, Food Additives & Allergens
27,000 Kompan International 4,311
Playground Equipment
- -----------------------------------------------------------------------
9,746
.Finland:3.4%
500,000 TT Tieto, Cl. B
(formerly known as Tietotehdas Cl. B) 16,725
Computer Services/Consulting
300,000 Raision Tehtaat, Series V 10,294
Foodstuffs & Specialty Chemicals
370,000 Benefon 5,789
Mobile Telephones
180,000 Huhtamaki 5,749
Confectionery & Contraceptives
100,000 Vaisala, Cl. A 4,316
Meteorological Instruments
80,000 Fiskars, Series A 4,230
Scissors & Power Supply Equipment
105,000 Sentra, Cl. A 1,779
Convenience Stores, Restaurants
- -----------------------------------------------------------------------
48,882
.Norway: 2.3%
785,000 Sysdeco 14,077
Software Tool Sets & Systems
990,000 SensoNor 8,645
Electronic Sensors for Airbags
300,000 Elkjoeb Norge 5,847
Consumer Electronics Retailer
250,000 Maritime Group 5,653
Oil Field Equipment & Services
- -----------------------------------------------------------------------
34,222
.Sweden: 6.0%
800,000 WM Data Nordic 35,308
Computer Services/Consulting
185,000 Hennes & Mauritz, Cl. B 13,147
Apparel Stores
215,000 Getinge Industrier 11,001
Sterilization & Disinfection Equipment
170,000 Autoliv 8,673
Seatbelts & Airbags
575,000 Allgon, Series B 8,603
Mobile Telephone Antennae & Systems
400,000 Pricer, Cl. B 7,780
Electronic Shelf Labels for Supermarkets
130,000 Althin Medical AB 2,801
Dialysis & Other Medical Equipment
10,000 Esselte 177
Office Supplies & Related Equipment
- -----------------------------------------------------------------------
87,490
.France: 5.0%
80,000 Axime Ex Segin 10,169
Computer Services/Consulting
60,000 Guilbert 8,663
Office Supplies Distributor
95,000 Sligos 8,642
Computer Services/Credit Card Processing
42,000 Cetelem 8,191
Consumer Loans
62,000 NRJ 7,745
Radio Network
65,000 Spir Communication 7,591
Newspaper Publisher & Printer
42,000 Virbac 5,672
Veterinary Pharmaceuticals Manufacturer
56,000 Ecco Travail Temporaire 4,949
Temporary Employment
</TABLE>
21
<PAGE>
Acorn International
.Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Number of Shares Value (000)
- -----------------------------------------------------------------------
<S> <C> <C>
52,000 CEP Communications $ 4,931
Trade Magazines & Book Publishing
39,000 Fininfo 3,602
Financial Data Feeds
14,000 Ecco SA 3,228
Temporary Employment
- -----------------------------------------------------------------------
73,383
.United Kingdom/Ireland: 11.3%
467,000 International CableTel 14,068
Cable TV & Telephone System
1,800,000 Serco Group 13,546
Facilities Management
1,800,000 Oriflame International 13,519
Natural Cosmetics
1,550,000 Powerscreen International 10,292
Mobile Crushing & Screening Equipment
2,000,000 Capita Group 9,617
Outsourcing Government Services
850,000 Edinburgh Fund Managers 8,953
Investment Management
2,500,000 Capital 8,205
Crockfords Casino
430,000 Securicor Group, Cl. A 7,864
Mobile Communications
2,000,000 Invesco 7,846
Investment Management
1,700,000 N. Brown Group 7,655
Mail Order Women's Clothing
2,034,000 Medeva 7,591
Pharmaceuticals
670,000 Ethical Holdings 6,281
Drug Delivery
450,000 Comcast UK Cable Partners 5,681
Cable TV & Telephone System
1,700,000 Rotork 5,553
Valve Actuators
3,700,000 City Centre Restaurants 5,253
Fast Food Restaurants
410,000 Vosper Thornycroft Holdings 5,176
Naval Shipbuilding
1,280,000 Ivory & Sime 4,514
Investment Management
640,000 Seton Healthcare Group 4,426
Pharmaceuticals
500,000 Dorling Kindersley 4,221
Reference Book & CD-ROM Publisher
1,800,000 Body Shop International 4,039
Natural Cosmetics & Toiletries
550,000 Tunstall 3,098
Monitoring Equipment
13,000,000 Rhino Group 2,084
Video Game Stores
460,000 Bluebird Toys 1,987
Toy Manufacturer
1,750,000 Pittencrieff Resources 1,229
Oil Producer
1,000,000 North American Gas Investors Trust 1,007
Closed-End Fund
270,000 HALMA 758
Fire Detection Devices & Burglar Alarms
- -----------------------------------------------------------------------
164,463
.Switzerland: 4.6%
25,500 Phoenix Mecano 14,352
Electrical Components Manufacturer
6,500 Societe Generale de Surveillance 13,569
Inspection/Testing of Trade Goods
21,600 Sece Cortaillod Holdings 11,577
Cables, Cable TV & Electrical Supply Distribution
5,000 Bobst 8,233
Packaging Machinery
13,000 Liechtenstein Global Trust 7,164
Banking & Investment Management
7,000 Suedelektra Holding 6,351
Diversified Pool of Commodity-Related Projects
10,000 Prodega 3,108
Cash-and-Carry Retailer
5,000 Zehnder Holding 2,226
Specialty Radiators
- -----------------------------------------------------------------------
66,580
.Italy/Greece: 5.0%
8,500,000 Banca Fideuram 12,432
Life Insurance & Mutual Funds
600,000 Gewiss 8,609
Electrical Components Manufacturer
550,000 Banca Popolare Di Bergamo 8,437
Regional Bank
2,200,000 Saipem SPA 7,307
Pipeline Construction & Drilling Contractor
170,000 Hellenic Bottling Company 6,347
Coca-Cola Bottler (Greece)
120,000 Ergo Bank 5,881
Bank (Greece)
105,000 Industrie Natuzzi 5,709
Leather Furniture Manufacturer
3,100,000 Costa Crociere 5,488
Cruise Ship Line
1,100,000 Banca Di Legnano 4,124
Regional Bank
80,000 Cellular Communications International 2,660
Mobile Communications
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
1,600,000 Tecnost $ 2,645
ATM, Lotto, Toll Collection Equipment
Manufacturer
1,000,000 Editoriale L'Espresso 2,357
Newspaper & Magazine Publisher
- ----------------------------------------------------------------------------
71,996
.Turkey: 0.5%
4,500,000 Tat Konservcelik Sanayii 2,762
Tomato Paste
90,000,000 Sabah Yayincilik 2,127
Newspapers, Magazines
62,000,000 Medya Holdings 1,574
Newspapers, Magazines, Television
30,000,000 Hurriyet Gazetecilik 1,481
Newspapers, Magazines
- ----------------------------------------------------------------------------
7,944
.Spain/Portugal: 1.9%
350,000 Vallehermoso 6,288
Residential Property Developer & Landlord
100,000 Mapfre Vida 5,720
Finance-Insurance
110,000 Conservera Campofrio 4,165
Sausage Maker
160,000 Cortefiel 3,738
Apparel Retailing
170,000 Lusotur 3,069
Real Estate/Resort Developer (Portugal)
375,000 Oscar Mayer S.A. 1,320
Sausage Maker
350,000 Televisao Independente 1,204
Television Station (Portugal)
235,000 Estoril Sol 1,147
Casino Resort (Portugal)
100,000 Filmes Lusomundo 653
Newspapers, Radio, Video, Film
Distribution (Portugal)
65,000 Marco Iberica Midesa 445
Magazine Distributor
- ----------------------------------------------------------------------------
27,749
.Netherlands: 2.5%
260,000 Getronics 18,849
Computer Consulting
43,000 Telegraaf Holdings 8,691
Newspaper Publisher
410,000 Kempen 4,466
Stock Brokerage/Investment Management
225,000 Fugro McClelland 2,696
Engineering, Consulting & Surveying
20,000 Wegener 2,330
Newspaper Publisher
- ----------------------------------------------------------------------------
37,032
.Eastern Europe: 0.1%
180,813 Bank Komunalny 560
Bank (Poland)
- ----------------------------------------------------------------------------
560
----------
Europe: Total 732,221
- ----------------------------------------------------------------------------
Asia: 28.8%
.China: 0.3%
390,000 AES China Generating 3,266
Independent Power
111,275 The China Investment Company 932
Closed-End Fund
- ----------------------------------------------------------------------------
4,198
.Hong Kong: 3.8%
5,000,000 Varitronix International 9,181
LCD Manufacturer
10,000,000 JCG Holdings 9,117
Consumer Finance
10,000,000 Li and Fung 8,923
Sourcing of Consumer Goods
15,000,000 Vitasoy International Holdings 6,595
Soya Milk Manufacturer
20,000,000 Golden Harvest Entertainment 6,530
Movie Distribution & Exhibition
11,000,000 Manhattan Card 5,832
Chase's Local Credit Card
7,500,000 Chen Hsong Holdings 4,170
Plastic Injection Machines
24,000,000 First Sign International Holdings 3,538
Brand Name Apparel
4,500,000 ABC Communication Holdings 885
Paging Service
- ----------------------------------------------------------------------------
54,771
.India/Pakistan: 1.8%
82,702 Housing Development Finance 7,858
Mortgage Lender
300,000 IS Himalaya Fund 4,260
Closed-End Fund
810,000 Tube Investment GDR 2,835
Bicycle Manufacturer
987,800 Industrial Credit & Investment
Corporation of India 2,737
Bank/Financial Services
597,800 Zee Telefilms 2,244
Hindi Television Programming
</TABLE>
23
<PAGE>
Acorn International
.Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Principal Amount or
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
221,785 Pakistan State Oil $ 1,949
Oil Distribution (Pakistan)
193,850 Max India 1,535
Rs 50,000 Max India Zero Coupon 733
Mobile Communications
342,100 Kotak Mahindra Finance 1,033
Consumer Finance Company
525,000 Business India TV 887
Satellite Television Broadcasting Network
2,000,000 Centurion Quantum Growth 352
Closed-End Fund
71,800 Mirc Electronic 204
Consumer Electronics
Health Care
14,900 Adamjee Insurance 58
Insurance (Pakistan)
- ----------------------------------------------------------------------------
26,685
.Japan: 8.3%
200,000 Secom 13,090
Security Alarm Systems
250,000 Promise 11,119
Consumer Finance
130,000 Nichiei 8,703
Lender to Small & Medium Businesses
114,000 Sanyo Shinpan 8,433
Consumer Finance
195,000 Sankyo 8,216
Pachinko Machine Manufacturer
340,000 Heiwa 8,118
Pachinko Machine Manufacturer
240,000 Tostem 7,506
Window Sash Manufacturer
208,000 Hokuto 7,011
Mushroom Grower
200,000 Noritsu Koki 6,929
Photo Processing Lab Manufacturer
143,000 Aucnet 6,159
Used Auto Auctions Via Satellite
92,400 Paramount Bed 5,961
Hospital Bed Manufacturer
165,000 Royal 5,176
Retail Auto Parts
85,000 Tsutsumi Jewelry 4,131
Jewelry Manufacturer, Retailer & Wholesaler
198,000 Mr. Max 3,671
Household Goods & Appliance Retailer
117,000 Central Uni 2,958
Health Care/Medical Equipment
141,000 Homac 2,799
Discount Retailer
34,600 Ryohin Keikaku 2,754
Specialty Consumer Goods Retailer
50,000 Sony Music Entertainment 2,575
Recorded Music/CDs
37,000 HIS 2,103
Travel Agent
43,720 Nihon Jumbo 1,924
Photo Processing Lab
13,000 Mars Engineering 949
Gaming Systems & Machinery
- ----------------------------------------------------------------------------
120,285
.Korea/Taiwan: 5.2%
19,000 Korea Mobile Telecom 22,539
Mobile Communications
440,000 Kookmin Bank 10,276
Retail Bank
85,000 Daehan City Gas 6,845
Gas Utility
90,161 Shinsegae 6,396
9,839 Shinsegae (New) 655
Department Stores
80,000 Formosa Fund 5,840
Closed-End Fund (Taiwan)
400,000 President Enterprises 5,350
Food Manufacturer & Distributor (Taiwan)
70,000 Taipei Fund 5,110
Closed-End Fund (Taiwan)
225,000 Daehan Blue Chip Index Trust 4,848
Closed-End Fund
230,000 Formosa Growth Fund 2,904
Closed-End Fund (Taiwan)
83,250 Korea Housing Bank Old 2,203
36,070 Korea Housing Bank New 1,021
Bank
150,000 Baring Taiwan Fund 1,219
Closed-End Fund (Taiwan)
- ----------------------------------------------------------------------------
75,206
.Malaysia: 2.3%
1,799,500 Malaysian Assurance Alliance 11,245
Insurance
850,000 O.Y.L. Industries 7,396
Air Conditioners
1,400,000 Malaysian Oxygen 7,032
Industrial Gases Producer & Distributor
930,000 Arab Malaysian Finance 4,450
Consumer Finance
500,000 New Straits Times Press 2,571
Newspaper Publisher
- ----------------------------------------------------------------------------
32,694
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
.Indonesia: 2.5%
1,633,000 Tigaraksa Satria $ 8,104
Distributor of Consumer Goods
1,350,000 Modern Photo Film 7,335
Fuji Film Distributor
2,350,000 Bank Niaga 5,743
Banking
3,000,000 Mustika Ratu 5,631
Traditional Cosmetics
6,500,000 Mayora Indah 4,797
Baked Goods/Candy
230,000 Unilever 3,739
Consumer Goods
1,200,000 Suba Indah 950
Beverage & Food
- ----------------------------------------------------------------------------
36,299
.Philippines: 2.0%
7,000,000 PILTEL 9,492
Communications
14,000,000 Int'l Container Terminal Services 8,155
Container Handling Terminals &
Port Management
3,000,000 Philippine Savings Bank 5,901
Banking
12,000,000 Universal Robina 5,844
Snack Foods
- ----------------------------------------------------------------------------
29,392
.Singapore: 1.0%
5,200,000 Genting International 9,750
Cruise Line
950,000 Venture Manufacturing 3,375
1,109,900 Venture Manufacturing
Warrants 7/26/99 2,074
Contract Electronics Manufacturer
- ----------------------------------------------------------------------------
15,199
.Thailand: 1.6%
200,000 Serm Suk 5,961
Pepsi Bottler
320,000 Bangkok Insurance 5,682
Finance-Insurance
600,000 Srithai Superware 4,518
Plastic/Melamine Tableware & Containers
300,000 Thai President Foods 2,176
Instant Noodles & Cookies
237,100 International Cosmetics 1,973
Consumer Goods Distribution
2,600,000 Sinpinyo Fund V 1,881
Closed-End Fund
201,512 Singer Thailand 1,693
Consumer Goods Distributor
- ----------------------------------------------------------------------------
23,884
----------
Asia: Total 418,613
- ----------------------------------------------------------------------------
Latin America: 8.5%
.Mexico: 2.5%
550,000 Kimberly Clark de Mexico 10,503
Paper Products
1,500,000 Nadro, Series L 6,465
Pharmaceutical Distributor
380,000 Bufete Industrial 6,318
Engineering & Construction
930,000 Grupo Industrial Bimbo 4,255
Bread, Baked Goods & Snacks
400,000 Grupo Radio Centro 3,350
Radio Stations & Networks
5,500,000 Grupo Herdez, Series B 1,561
Sauces & Condiments
600,000 GBM Atlantico 1,425
Bank & Brokerage
1,500,000 Fondo Opcion, Series B 1,283
Real Estate Investment Fund
3,000,000 Grupo Fernandez Editores 740
Textbook Publisher
107,000 Cofar 85
Drug Stores
- ----------------------------------------------------------------------------
35,985
.Brazil: 1.4%
28,000,000 Banco Itau Pfd. 9,950
Bank
160,000,000 Cemig Pfd. 4,487
Electric Utility
35,000,000 Telemig Pfd. 2,764
30,000,000 Telemig 2,157
Telecommunications
1,000,000 Brazilian Smaller Companies Warrants 715
Closed-End Fund
- ----------------------------------------------------------------------------
20,073
.Argentina: 1.1%
280,000 IRSA 7,875
Real Estate Management & Development
300,000 Quilmes Industrial 3,600
150,000 Quilmes Industrial Pfd. 1,612
Beverages
1,200,000 Cresud 2,341
Agriculture
</TABLE>
25
<PAGE>
Acorn International
.Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Principal Amount or
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
229,500 Cerveceria Biekert $ 471
Brewer
- ----------------------------------------------------------------------------
15,899
.Chile: 1.0%
240,000 Santa Isabel 6,090
Retail
150,000 Genesis Chile Fund 5,775
Closed-End Fund
150,000 Banco De A Edwards 3,150
Bank
- ----------------------------------------------------------------------------
15,015
.Peru: 0.9%
310,000 Credicorp 5,580
Universal Bank
2,200,000 Banco Wiese 3,907
Bank
2,000,000 Enrique Ferreyros 2,506
Heavy Machinery Dealer
$1,252 Tele 2000,
9.75% Cv. Note 4/5/97 1,171
Telecommunications and Cable TV
- ----------------------------------------------------------------------------
13,164
.Other Latin America: 1.6%
150,000 Banco Latinoamericano
de Exportaciones 7,406
Trade Financing (Panama)
170,000 Panamerican Beverages 6,864
Coca-Cola Bottler (Panama)
105,000 Compania Boliviana de
Energia Electrica 3,859
Electric Utility (Bolivia)
75,000 Ceteco Holdings 3,109
White Goods Retail
400,000 Banco de Bogota 2,084
Bank (Colombia)
450,000 Global Casinos Cv. Pfd. 274
225,000 Global Casinos 77
Worldwide Casino Operator (Aruba)
- ----------------------------------------------------------------------------
23,673
----------
Latin America: Total 123,809
- ----------------------------------------------------------------------------
Other Countries: 6.7%
.Australia/New Zealand: 3.6%
4,000,000 Village Roadshow Pfd. 13,143
Film Distribution, Exhibition & Production
1,900,000 Publishing & Broadcasting 8,324
Media & TV Broadcasting
1,750,000 Sky City 7,330
Casino & Hotel (New Zealand)
2,500,000 Petroleum Securities Australia 6,454
Oil Exploration & Mining
3,760,000 Austereo 5,677
Media-Radio
12,000,000 Command Petroleum Holdings 4,224
Oil & Gas Exploration
2,700,000 Burswood Property Trust 3,612
Perth Casino & Resort
560,000 PDL Holdings 3,051
Electrical Equipment Manufacturer &
Distributor (New Zealand)
- ----------------------------------------------------------------------------
51,815
.Canada: 2.3%
1,000,000 Shaw Communications 6,881
Cable TV
800,000 Ranger Oil 5,600
Oil & Gas Producer
600,000 Veritas Energy Services 4,624
Geophysical Contractor
435,000 Shaw Industries 4,549
Pipe Inspection & Coating
700,000 Pan East Petroleum Warrants 2,826
330,000 Pan East Petroleum 1,332
Oil & Gas Producer
300,000 Tesco 2,367
Oil Drilling Equipment
500,000 Cogeco 2,294
Cable TV
300,000 Cogeco Cable 1,816
Cable TV
250,000 Fundy Cable 1,239
Cable TV
- ----------------------------------------------------------------------------
33,528
.Israel: 0.5%
200,000 Pec Israel Economic 4,300
Industrial Holdings
260,000 Ampal American Israel 1,495
Hotels, Real Estate & Industrial Holdings
560,000 Alliance Tire 1,412
Off-the-Road Tires
- ----------------------------------------------------------------------------
7,207
.South Africa: 0.3%
460,000 Kersaf Investments 5,261
Casino Resorts
----------
Other: Total 97,811
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
- ----------------------------------------------------------------------------
Foreign Corporations, Operations in the U.S.: 1.0%
550,000 ADT $ 9,694
Alarm Systems & Auto Auctions (Bermuda)
161,000 Carnival 4,428
Cruise Ship Line (Panama)
Foreign Corporations, ----------
Operations in the U.S.: Total 14,122
3,076 Miscellaneous Securities: 0.0% 16
Total Common Stocks and Other
----------
Equity-Like Securities: 95.4% $1,386,592
----------
Money Market Instruments: 4.8% 70,367
----------
Total Investments: 100.2% 1,456,959
----------
Cash and Other Assets Less Liabilities: (0.2%) (3,357)
----------
Total Net Assets: 100% $1,453,602
- ----------------------------------------------------------------------------
</TABLE>
27
<PAGE>
Acorn Fund
- -----------------------------
Acorn International
.Trustees
Irving B. Harris
Chairman
James H. Lorie
Vice Chairman
Leo A. Guthart
Jerome Kahn, Jr.
David C. Kleinman
Charles P. McQuaid
Roger S. Meier
Adolph Meyer, Jr.
Malcolm N. Smith
Ralph Wanger
.Officers
Ralph Wanger
President
Charles P. McQuaid
Senior Vice President
Terence M. Hogan
Vice President
Leah J. Zell
Vice President
Merrillyn J. Kosier
Vice President and Secretary
Bruce H. Lauer
Vice President and Treasurer
Kenneth A. Kalina
Assistant Treasurer
.Transfer Agent, Dividend Disbursing Agent
and Custodian
State Street Bank and Trust Company
Attention: Acorn Funds
P.O. Box 8502
Boston, Massachusetts 02266-8502
1-800-962-1585
.Investment Advisor
Wanger Asset Management, L.P.
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
1-800-9-ACORN-9
(1-800-922-6769)
e-mail: [email protected]
.Distributor
WAM Brokerage Services, L.L.C.
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
1-312-634-9200
.Legal Counsel
Bell, Boyd & Lloyd
Chicago, Illinois
This report, including the unaudited schedule of investments, is submitted for
the general information of the shareholders of Acorn Investment Trust. This
report is not authorized for distribution unless preceded or accompanied by a
prospectus.
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Acorn Fund
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Acorn International
