<PAGE>
Acorn
The Acorn Family of Funds
Semi-Annual Report
------------------------------
June 30, 1997
Managed by Wanger Asset Management, L.P.
<PAGE>
Acorn Family of Funds Semi-Annual Report 1997
.Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Squirrel Chatter
.Excerpt from A Zebra in Lion Country by Ralph Wanger 1
.Stock Talk with Chuck McQuaid 3
Acorn Fund
.In a Nutshell 6
.Performance at a Glance 7
.Major Portfolio Changes 13
.Statement of Investments 15
.Foreign Portfolio Diversification 21
Acorn International
.In a Nutshell 8
.Performance at a Glance 9
.Major Portfolio Changes 22
.Statement of Investments 25
.Portfolio Diversification 32
Acorn USA
.In a Nutshell 4
.Performance at a Glance 5
.Major Portfolio Changes 10
.Statement of Investments 11
Acorn Family of Funds
.Statements of Assets and Liabilities 33
.Statements of Operations 34
.Statements of Changes in Net Assets 35
.Financial Highlights 36
.Notes to Financial Statements 38
</TABLE>
<PAGE>
.Squirrel Chatter
[PHOTO OF RALPH WANGER APPEARS HERE]
The Information Revolution is a theme that Ralph Wanger identified over 27 years
ago. In fact, he has practically made a career out of that one idea. In his
book, A Zebra in Lion Country, Mr. Wanger devotes an entire chapter to this
theme, as it has been the most profitable investment concept for Acorn
shareholders.
Today, a significant portion of the Acorn Family of Funds' portfolios are
directly related to the Information theme. It is very difficult to make money by
investing in companies that create technology. Rather, Acorn's research analysts
prefer to look downstream from technology for their information-related stock
ideas. This means investing in businesses that will benefit from new technology
rather than in the technology companies themselves. We thought our shareholders
would appreciate learning more about this important idea. It's a theme that
never seems to give out.
Many years ago, when my daughter Debra was nine years old, I read her the old,
comfortable children's book, Mary Poppins. It's filled with fantastic
adventures, but the strangest part of it to me was what the author accepted as
plain matter of fact.
The book opens by describing the Banks family as rather ordinary middle
class: "Number Seventeen...is the smallest house in the lane...rather
dilapidated and in need of a coat of paint. But Mr. Banks, who owns it, said to
Mrs. Banks that she could have either a nice, clean, comfortable house or four
children. But not both, for he couldn't afford it.
In this semi-slum, we find the family faced with a crisis: the nursemaid
has quit, and the family is being forced to get by short-handed, with only a
cook, a maid, and a houseboy. Luckily, Mary Poppins shows up and allows Mrs.
Banks to avoid having to touch her own children.
The time when it took four servants to run an ordinary household seems
very far away. Now we have machines instead of houseboys and housegirls. A
revolution in energy use has transformed household productivity,
transportation, industry, and just about everything else. It would be no
exaggeration to say there would have been no Industrial Revolution without the
harnessing of cheap carbon, found in coal, oil, and gas. Many of the companies
supplying the ever-growing energy needs of our world have proved marvelous
investments over most of this century.
But in the last quarter of this century a different theme has emerged.
Twenty years ago I wrote that carbon's dominance was being challenged by a
second chemical element, silicon. Our ability to place thousands of circuit
elements on tiny silicon chips was creating extraordinary information-gathering
and -sorting systems. Information processing was becoming cheaper and cheaper,
while energy was rising in price. It was clear, even in the mid-seventies, that
"the world will substitute information for energy."
Even in 1976 I thought it was kind of old news, but I have continued to
invest in that trend ever since.
At Wanger Asset Management, we have rarely owned semiconductor companies,
but we have made a lot of money for Acorn shareholders in cellular phone
companies--LIN Broadcasting, Mobile Communications, and Telephone & Data
Systems--that use semiconductor chips.
We have never invested in VCR makers, but have owned companies like
Electronic Arts and Sierra On-Line, which make video games.
Acorn shareholders have benefited from investments in credit card
companies, too. "Plastic" has revolutionized consumer behavior in the last
couple of
1
<PAGE>
The slot machine and the ATM are quite similar microcomputers under the skin. If
you like, you can think of the ATM as a slot machine with a boring payoff.
decades, but could't have existed without the changes in processing technology.
Today, people don't have to apply for personal loans at a bank; they just run up
their credit card balances. Acorn has owned four companies that issue credit
cards: Advanta, First USA, and MBNA, and Peoples's Bank.
International Game Technology is the world leader in the manufacturing of
slot machines. This company has been in the Acorn portfolio since 1988. Acorn
shareholders hit the jackpot with this stock. Why?
The slot machine and the ATM are quite similar microcomputers under the skin.
If you like, you can think of the ATM as a slot machine with a boring payoff.
Alternatively, the slot machine can be considered the ultimate user-friendly
computer. (Not so friendly, I admit, once your money runs out.) A growing
percentage of casino gamblers prefer the machines to dealing with humans at
table games (craps, blackjack, roulette), so casinos have been removing the
tables to make room for more slots. The one-armed bandit maker takes a very
simple microcomputer, puts a display and coin box on it, and calls it a slot
machine. If the company sold it as a computer, it would probably get $800 for
it; selling it as a slot machine, it gets $6,000.
Oil and gas companies have also benefited from new technologies that allow
horizontal drilling, reservoir modeling, subsea completions--all of which have
lowered finding costs. Acorn shareholders are benefiting from this innovation by
owning Veritas DGC, PetSec Energy, United Meridian and Tesoro Petroleum.
Companies that put together invaluable databases, like Data Transmissions
Network, benefit from technological advances that help speed up data processing.
Recognizing a transforming technology and then investing downstream from it
should be a key concept for any direct stock investor. We invite you to learn
more about how Acorn is investing in companies downstream from technology by
reading Stock Talk with Chuck McQuaid on page three.
Winning
With Technology
New products are dangerous, especially in the computer field, where obsolescence
comes fast and technological breakthroughs bring price slashing every year. What
I have always looked for instead are the downstream users of new technologies.
I've bought the stocks of companies that buy, use, and exploit the computers and
electronics to reduce costs, revitalize their businesses, and add functionality
to their products.
Italicized excerpts are from A ZEBRA IN LION COUNTRY by Ralph Wanger with
Everett Mattlin. Copyright (C) 1997 by Ralph Wanger. Published by Simon &
Schuster, New York, $25.00. Reprinted by permission.
Each of the Acorn funds owns some but not all of the stocks referenced in
Squirrel Chatter. See each fund's Statement of Investments for a complete list
of fund holdings. Each fund's portfolio varies with changes in portfolio
investments.
2
<PAGE>
.Stock Talk with Chuck McQuaid
As Ralph Wanger explains in Squirrel Chatter, the Acorn funds love to invest in
companies that benefit from technology. Supplying programs to fill up all the
channels on your CATV system is a great business. Below, Chuck McQuaid, Co-
Portfolio Manager of Acorn Fund and Director of Research of Wanger Asset
Management, tells shareholders more about the funds' media investments.
Chuck, it's been three years since your last interview. What changes have you
made to Acorn's media investments?
We've beefed up our holdings of video programmers and reduced our positions in
cable television. Competition between cable television and satellite
broadcasters plus improved technologies boost market penetration and channel
capacity. Video programmers appear to be the primary winners as they benefit
from increased subscriber fees and advertising revenues.
Which stocks have you bought recently?
We added 300,000 shares to our HSN Inc. position so far this year. Home Shopping
Network is growing rapidly under the able leadership of CEO Barry Diller. The
Supreme Court's decision to sustain "must carry" insures that HSN's television
stations will be carried by CATV systems, which is especially important as HSN
launches new programming. We also bought more BET Holdings, which owns Black
Entertainment Network, and United Video Satellite Group, which owns the Prevue
Network and distributes superstation WGN.
What is your biggest video programming investment?
Liberty Media is our largest video programming investment and one of our top
five holdings. It has interests in over 70 national and regional channels,
including Discovery Communications and regional sports channels. The Discovery
Channel's demographics are great for advertisers and its ratings are up.
Learning Channel's and Animal Planet's subscriber counts are surging. Regional
sports channels are very popular and are being bundled together to provide
national advertising. Liberty also has interests in the Encore movie channels
and the shopping channel, QVC.
Has Acorn Fund profited from media buyouts?
Yes, though it may take time to realize value. Our 1994 purchases of
International Family Entertainment at $12-17 looked dumb for a while as video
programmers were out of favor. But IFEOs core cash flow grew 24% in 1995 and 44%
in 1996, so we bought more at $10-14 in 1995 and paid up to $17 for even more in
1996. Our patience is being rewarded as Rupert Murdoch's News Corp is buying out
IFE for $35 a share. Our 1996 purchase of Gaylord Entertainment is paying off
more quickly. Westinghouse has announced it will buy Gaylord's Country Music
Television and The Nashville Network. The deal should close in a few weeks,
providing Acorn shareholders with a tidy profit.
Media stocks are just a part of Acorn's information group. How does Wanger Asset
Management cover the whole group?
I focus on media and communications. Another analyst, Laura McKenna, has made
large profits on computer software and service companies, along with contract
manufacturers. As we mentioned last quarter, Andrew Morley and Todd Narter have
joined us and are beginning to research niche components and systems companies
here in the USA and overseas.
3
<PAGE>
Acorn USA
.In a Nutshell
[PHOTO OF ROBERT A. MOHN APPEARS HERE]
Exuberance reigned on Wall Street last quarter, and Acorn USA joined in the
parade. Your fund gained 16.0%, an excellent showing, though not quite up to the
large-capped S&P 500's +17.5%, nor the small-fried Russell 2000's +16.2%. Since
inception, Acorn USA is up 33%, nearly double the percent return of our Lipper
small-cap fund peers.
We nearly pitched a perfect game last quarter. Only one of our top 20
holdings (Respironics) fell in price, and merely 1/8 of a point at that. Our top
five sluggers were Wackenhut, HealthCare Compare, Data Transmission, C-Tec and
Kronos, each up 20-60% over the past three months. What propelled such strong
returns? Not any extraordinary news events, not any outsized earnings increases,
but simply the buying pressure from investors discovering and paying up for our
companies' wonderful franchises.
These newly enlightened investors figured out that Wackenhut manages safer,
cheaper prisons than do state bureaucrats; HealthCare Compare has a one-of-a-
kind national PPO health care network impossible to clone; Data Transmission's
subscriber base is growing 20% a year; C-Tec is offering a prix fixe bundled
cable, phone and internet service before any other cable guy or baby Bell; and
Kronos's time-clock software is a crucial piece of the factory automation
puzzle.
Even after their recent run, none of these companies are household names,
yet. We don't want to own yesterday's celebrity stocks, we want tommorow's.
We're stock market talent scouts, not autograph hounds. We will continue to
build our portfolio of new and exciting small companies for you.
/s/ Robert A. Mohn
- ----------------------
Robert A. Mohn
Lead Portfolio Manager
Fund Assets as of 6/30/97: $113.7 million
.Acorn USA Top 10 Holdings
CalEnergy 7.5%
Power Plants
Coast Savings 6.4%
California Savings & Loan
Data Transmission Network 5.3%
Data Services for Farmers
HealthCare Compare 4.3%
PPO Network
Wackenhut 4.1%
Prison Management
C-Tec 4.0%
Cable TV/Local Telephone
Royal Caribbean Cruises 3.8%
Cruises to Caribbean and Alaska
Applied Industrial Technologies 3.4%
Distributes Industrial Components
GeoScience 2.9%
Offshore Seismic Equipment Company
Schnitzer Steel 2.9%
Scrap Steel Processor
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
Fund
facts
As Acorn USA's assets have grown, its total expense ratio has declined. As
noted in the financial highlights on page 36, the fund's total expense ratio
has dropped from its original 2.00% (the expense limit at inception) to
1.41%.
4
<PAGE>
.Performance at a Glance
Acorn USA Portfolio Diversification
.as a % of net assets, as of 6/30/97
[PIE CHART APPEARS HERE]
Information 22.9%
Health Care 10.1%
Consumer Goods/Services 7.1%
Finance/Real Estate 14.1%
Industrial Goods/Services 19.7%
Energy/Minerals 19.7%
Cash less liabilities 6.4%
-----
100.0%
Acorn Family of Funds
.Distributions
The following table details the funds' mid-year distributions. The record date
was July 22, 1997, the ex-dividend date was July 23, 1997, and the payable date
was July 30, 1997.
<TABLE>
<CAPTION>
Acorn
Acorn Fund International Acorn USA
- ---------------------------------------------------------------
<S> <C> <C> <C>
Ordinary Income $0.05/share $0.08/share --
Long-Term Capital Gain $0.19/share $0.14/share --
Reinvestment Price $17.05 $21.17 --
</TABLE>
<TABLE>
<CAPTION>
Relative Performance
- --------------------------------------------------------------------------------
2nd quarter Last 6 mos. Since inception
1997 (9/4/96)
<S> <C> <C> <C>
Acorn USA 16.0% 14.3% 33.2%
Russell 2000 16.2% 10.2% 20.1%
S&P MidCap 400 14.7% 13.0% 25.0%
S&P 500 17.5% 20.6% 37.2%
Dow-Jones 17.1% 20.1% 38.9%
Lipper Small Cap
Funds Avg 17.1% 9.0% 17.2%
</TABLE>
The Russell 2000 is formed by taking 3,000 companies and then eliminating the
largest 1,000 leaving a good small company index. 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 S&P 500 is a broad market-weighted index, blue-chip dominated. The Dow
Jones Industrial Average includes 30 large companies. The Lipper Small Cap Funds
Avg is an average of all U.S. small-cap funds tracked by Lipper, which consisted
of 486, 467, and 422 funds for the 2nd qtr., 6-mos., and "since inception"
periods above. The beginning value used to compute the Dow Jones and the Lipper
Small Cap Funds Avg "since inception" return in the chart above is as of
8/31/96. 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.
All indexes are unmanaged and returns include reinvested dividends.
Net Asset Value Per Share 6/30/97: $13.32
- ---------------------------------------------
Q> Why does the share price drop when a fund pays
a distribution?
A> The law requires mutual funds to pay a distribution of any net income and
realized net capital gains to their shareholders. When a fund pays a
distribution, the assets of the fund go down, and the value of each share
drops by the amount of the distribution. But the value is not lost. The
distribution money is transferred to shareholders. Most shareholders reinvest
their distributions, buying more shares at the new lower share price.
Shareholders that take their distributions in cash receive a check equal to
the distribution per share times the number of shares owned.
5
<PAGE>
Acorn Fund
.In a Nutshell
[PHOTOS OF CHARLES P. MCQUAID AND TERENCE M. HOGAN APPEARS HERE]
Acorn Fund gained 13.5% in the second quarter, which is a respectable
performance in most years. As shown on page 7, the indices edged Acorn in the
quarter. The year-to-date figures reflect the Fund's beating the Russell 2000,
but lagging the bigger barometers. Acorn's domestic equities were in-line with
the indices for the quarter and ahead for the six-month period.
We tuned in to some great media stock shows. We watched Rupert Murdoch buy
out International Family for a 69% return, then got great ratings on Liberty
Media, Data Transmission, HSN and United Video, each of which produced gains
over 20 percent.
Technology stocks sizzled into the summer, led by a 106% gain in ACT
Manufacturing. Acorn hit the "K" trifecta when Keane, Kent and Kronos wired in
returns over 50 percent. Analysts International and Compuware joined the 50+
percent club, while stalwart Solectron lit up the circuit with a 40% surge.
Other long-time Acorn holdings helped second quarter performance: Harley-
Davidson roared in with a 42% quarterly gain. HBO, the health care software
mavens, configured a 45% move and prison administrator Wackenhut locked down a
40% return.
We were heartened by the market renaissance in Japan, with several holdings
delivering big gains. Facilities manager NTT Data topped that list, serving up a
46% performance. Our losers in the quarter included Informix, Invacare, SensoNor
and a smattering of Thermo Electron subsidiaries.
Market records fall almost daily, but we will continue to seek consistent
returns over up and down cycles through exciting small and mid-cap stocks.
/s/ Charles P. McQuaid /s/ Terence M. Hogan
Charles P. McQuaid Terence M. Hogan
Co-Portfolio Manager Co-Portfolio Manager
Fund Assets as of 6/30/97: $3,220.7 million
.Acorn Fund Top 10 Holdings
AES Corporation 2.4%
Global Power Producer
Carnival 1.8%
Cruise Ship Line
Liberty Media 1.8%
CATV Programming
Banc One 1.7%
Bank/Credit Cards (acquired First USA )
HealthCare Compare 1.7%
PPO Network
Harley Davidson 1.6%
Motorcycle Manufacturer
Borders 1.5%
Bookstores
Lincare Holdings 1.3%
Home Health Care Services
Solectron 1.2%
Electronics Contract Manufacturer
CalEnergy 1.1%
Power Plants
The Fund's top 10 holdings and portfolio diversification vary with changes
in portfolio investments. See the Statement of Investments for a complete list
of the Fund's holdings.
Do You Remember
What Year It Was?
. 426 mutual funds exist
. South Vietnam surrenders to the
Communist North
. Acorn Fund closes out the year
up 30.6%
. One Flew Over The Cuckoo's Nest
wins an Oscar
. Dow ends the year at 852.41
Answer on page 41.
6
<PAGE>
>Performance at a Glance
The Value of a $10,000 Investment in Acorn Fund
>June 10, 1970 through June 30, 1997
[LINE CHART APPEARS HERE]
Date Acorn Fund ($) S & P ($)
---- -------------- ---------
1970 10,000 10,000
1971 17,828 14,490
1972 19,368 17,242
1973 14,765 14,709
1974 10,691 10,816
1975 13,945 14,842
1976 23,045 18,394
1977 27,168 17,077
1978 31,777 18,200
1979 47,790 21,586
1980 62,594 28,602
1981 58,005 27,195
1982 68,208 33,054
1983 85,389 40,510
1984 89,045 43,051
1985 117,142 56,710
1986 136,843 67,295
1987 142,923 70,828
1988 178,370 82,591
1989 222,681 108,761
1990 183,674 105,386
1991 270,641 137,492
1992 336,210 147,928
1993 444,889 162,882
1994 411,750 165,032
1995 497,407 227,047
1996 609,569 279,177
06/30/97 674,822 336,708
Average Annual Total Return
1 Year 5 Years 10 Years Life of Fund
17.8% 19.3% 15.1% 16.8%
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. 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 a % of net assets, as of 6/30/97
[PIE CHART APPEARS HERE]
Information 20.1%
Health Care 8.4%
Consumer Goods/Services 8.3%
Finance/Real Estate 16.5%
Industrial Goods/Services 9.3%
Energy/Minerals 10.3%
Foreign 17.2%
Cash 9.9%
100.0%
Relative Performance
- --------------------------------------------------------------------------
2nd quarter Last 6 mos. Last 12 mos.
1997
Acorn Fund 13.5% 10.7% 17.8%
Dow-Jones 17.1% 20.1% 38.5%
S&P 500 17.5% 20.6% 34.7%
S&P MidCap 400 14.7% 13.0% 23.3%
Russell 2000 16.2% 10.2% 16.3%
The Dow Jones Industrial Average includes 30 large companies. The S&P 500 is a
broad market-weighted index, 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 indexes
are unmanaged and returns include reinvested dividends.
Net Asset Value Per Share 6/30/97: $16.65
- -----------------------------------------
7
<PAGE>
Acorn International
>In a Nutshell
[PHOTO OF LEAH JOY ZELL APPEARS HERE]
Acorn International gained 5.9% in the second quarter. The best market for the
quarter was Japan, where our portfolio soared 27% in dollars, contributing
nearly half of the total return for the three months. The best stock for the
quarter was Kempen, a Dutch brokerage firm, which has made Acorn International
shareholders $6.5 million since March 31st. Credit for finding Kempen goes to
Marcel Houtzager, a core member of our international team, who has a keen eye
for value in his native market.
On average, a 6% return over three months would be sufficient to make most
investors happy. The second quarter of 1997, however, was anything but average.
The large-cap U.S. market indices hit record highs. European blue chips kept up
the pace in local currencies. Even the EAFE index, whose Japanese weighting has
penalized performance since 1989, gained 13%, its best quarterly showing since
the fourth quarter of 1988.
Meanwhile, small-cap stocks have not participated to the extent the
headlines would suggest. In the UK,
the small-cap index actually fell 4% since March 31st in local currencies,
against a large-cap market that rose 7%. Similar discrepancies in performance
can be demonstrated in Japan, Switzerland, France and elsewhere going back
12 months.
Two-tier markets are nothing new. In the early 1970's, fund managers chased
after the "Nifty Fifty". While we do not know when investors' love affair with
blue chips will wane, our philosophy has always been to own the less well-known
companies at reasonable valuations. We are finding plenty of them. Patience and
experience have taught us that other investors find them too, when given the
chance to pause and look around.
/s/ Leah Joy Zell
Leah Joy Zell
Lead Portfolio Manager
<TABLE>
<CAPTION>
Fund Assets as of 6/30/97: $1,970.0 million
>Acorn International Top 10 Holdings
<S> <C> <C>
WM Data Sweden 2.7%
Computer Services/Consulting
T T Tieto Finland 2.2%
Computer Services/Consulting
Rhoen Klinikum Germany 1.7%
Hospital Management
Axime Ex Segin France 1.2%
Computer Services
Banca Fideuram Italy 1.2%
Life Insurance/Mutual Funds
Kempen Netherlands 1.2%
Stock Brokerage/
Investment Management
Getronics Netherlands 1.1%
Computer Services
Serco Group United Kingdom 1.1%
Facilities Management
Genting International Singapore 0.9%
Cruise Line
Getinge Industrier Sweden 0.9%
Sterilization/Disinfection Equipment
</TABLE>
The Fund's top 10 holdings and portfolio diversification vary with changes
in portfolio investments. See the Statement of Investments for a complete list
of the Fund's holdings.
Fund
- ------------------------------------------------------------------------------
facts
Remember, you can use your touch-tone telephone to obtain your fund account
balance(s) 24 hours a day. Simply call 1-800-962-1585 and follow the easy
automated instructions.
8
<PAGE>
Performance at a Glance
The Value of a $10,000 Investment in Acorn International
September 23, 1992 through June 30, 1997
[LINE CHART APPEARS HERE]
Average Annual Total Return
-------------------------------------
1 Year 3 Years Life of Fund
11.3% 11.9% 17.7%
<TABLE>
<CAPTION>
Date Acorn Int'l ($) EAFE ($)
---- --------------- --------
<S> <C> <C>
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
06/30/96 19,593 15,965
09/30/96 19,362 15,945
12/31/96 20,133 16,199
03/31/97 20,564 15,945
06/30/97 21,786 18,015
</TABLE>
This graph compares the results of $10,000 invested in Acorn International on
September 23, 1992 (the date the Fund began operations), with all dividends and
capital gains reinvested, with Morgan Stanley's Europe, Australia and Far East
Index (EAFE). The beginning value of EAFE is as of 9/30/92. 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 a % of net assets, as of 6/30/97
[PIE CHART APPEARS HERE]
Information 22.9%
Health Care 6.9%
Consumer Goods/Services 24.7%
Finance/Real Estate 20.0%
Industrial Goods/Services/Transportation 13.3%
Energy/Minerals 5.8%
Cash less liabilities 6.4%
------
100.0%
Relative Performance
- ---------------------------------------------------------------------
2nd quarter Last 6 mos. Last 12 mos.
1997
Acorn International 5.9% 8.2% 11.3%
EAFE 13.0% 11.2% 12.8%
Lipper Int'l Small Cap
Funds Avg. 7.3% 10.4% 13.5%
Lipper Int'l Funds Avg. 11.1% 12.5% 16.5%
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 Int'l Small Cap Funds
Avg. is calculated from the performance of a group of small-cap int'l funds,
including Acorn Int'l. For the 2nd qtr., 6-mos. and 12-mos. periods above, the
group consisted of 31, 28 and 24 funds, respectively. The Lipper Int'l Funds
Avg. is an average of all int'l funds tracked by Lipper, excluding the Int'l
Small Cap Funds group. This group consisted of 440, 417 and 368 funds for the
2nd qtr., 6-mos. and 12-mos. periods above, respectively. All indexes are
unmanaged and returns include reinvested dividends.
Net Asset Value Per Share 6/30/97: $21.22
- -----------------------------------------
9
<PAGE>
Acorn USA
Major Portfolio Changes in the Second Quarter
<TABLE>
<CAPTION>
Number of Shares
------------------------
3/31/97 6/30/97
Additions
- ---------------------------------------------------------------------------
<S> <C> <C>
Information
BDM International 0 11,800
C-Tec 111,000 131,000
Centennial Cellular 0 15,000
Data Transmission Network 169,800 189,100
Gaylord Entertainment 20,000 62,000
Kronos 69,000 103,000
United Video Satellite Group 63,000 133,000
Wonderware 60,000 230,700
- ---------------------------------------------------------------------------
Health Care
Cardiac Pathways 0 40,000
- ---------------------------------------------------------------------------
Consumer Goods/Services
Host Marriott Services 136,200 265,200
- ---------------------------------------------------------------------------
Finance
Acceptance Insurance 20,000 76,100
SEI Investments 0 15,000
- ---------------------------------------------------------------------------
Industrial Goods/Services
Wackenhut, Cl. B 198,900 234,900
- ---------------------------------------------------------------------------
Energy/Minerals
United Meridian 0 6,700
- ---------------------------------------------------------------------------
Real Estate
Cornerstone Properties 0 45,000
Forest City Enterprises, Cl. A 0 34,700
Number of Shares
------------------------
3/31/97 6/30/97
Sales
- ----------------------------------------------------------------------------
Information
ACT Manufacturing 34,500 7,100
Richey Electronics 30,000 0
Simulation Sciences 52,300 0
- ---------------------------------------------------------------------------
Consumer Goods/Services
Fairfield Communities 30,000 0
Showboat 78,000 15,800
- ---------------------------------------------------------------------------
Finance
People's Bank Bridgeport 11,000 0
- ---------------------------------------------------------------------------
Industrial Goods/Services
Aftermarket Technology 18,000 0
- ---------------------------------------------------------------------------
Energy/Minerals
Atwood Oceanics 2,200 0
Seagull Energy 86,000 50,100
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Acorn USA
.Statement of Investments (unaudited) June 30, 1997
Number of Shares Value (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks: 93.6%
- --------------------------------------------------------------------------------
Information: 22.9%
.CATV/TV/Satellites: 14.4%
189,100 Data Transmission Network (b) $ 6,004
Data Services for Farmers
131,000 C-Tec (b) 4,569
Cable TV/Local Telephone
133,000 United Video Satellite (b) 2,793
CATV & Satellite Dish Programming
67,000 Tele-Communications,
Liberty Media Group (b) 1,591
CATV & Satellite Dish Programming
62,000 Gaylord Entertainment 1,430
Country & Western Cable Channels
- --------------------------------------------------------------------------------
16,387
.Mobile Communications: 1.3%
62,800 COMARCO (b) 1,209
Wireless Network Testing
15,000 Centennial Cellular (b) 238
Cellular Franchises
- --------------------------------------------------------------------------------
1,447
.Computer Software/Services: 4.4%
230,700 Wonderware (b) 3,259
Industrial Control Software
36,000 American Business Information (b) 783
Provides Data on Small Businesses
74,300 Computer Language Research 724
Commercial Tax Software
11,800 BDM International (b) 271
Software Consulting
- --------------------------------------------------------------------------------
5,037
.Electronics: 2.8%
103,000 Kronos (b) 2,833
Time Accounting Software & Clocks
7,100 ACT Manufacturing (b) 296
Contract Manufacturing
- --------------------------------------------------------------------------------
3,129
-------
Information: Total 26,000
- --------------------------------------------------------------------------------
Health Care: 10.1%
.Medical Equipment: 3.4%
128,000 Respironics (b) 2,704
Sleep Apnea Products
44,000 Kinetic Concepts 792
Hospital Beds
40,000 Cardiac Pathways (b) 360
Heart Surgery Devices
- --------------------------------------------------------------------------------
3,856
.Services: 6.7%
94,000 HealthCare Compare (b) 4,923
PPO Network
57,000 Lincare Holdings (b) 2,451
Home Health Care Services
22,400 United Payors & Providers (b) 297
Medical Claims Repricing
- --------------------------------------------------------------------------------
7,671
-------
Health Care: Total 11,527
- --------------------------------------------------------------------------------
Consumer Goods/Services: 7.1%
.Retail: 3.0%
265,200 Host Marriott Services (b) 3,116
Fast Food Kiosks in Airports, Rest Stops & Malls
14,000 Borders (b) 338
Bookstores
- --------------------------------------------------------------------------------
3,454
.Entertainment/Leisure: 4.1%
123,700 Royal Caribbean Cruises 4,322
Cruises to Caribbean & Alaska
15,800 Showboat 276
Casinos
- --------------------------------------------------------------------------------
4,598
-------
Consumer Goods/Services: Total 8,052
- --------------------------------------------------------------------------------
Finance: 12.0%
.Savings & Loans: 6.3%
159,000 Coast Savings (b) 7,225
California Savings & Loan
.Insurance: 5.0%
76,100 Acceptance Insurance (b) 1,731
Crop Insurance
59,500 Amerus Life Holdings 1,659
Annuities/Life Insurance
51,000 Penn Treaty American (b) 1,562
Nursing Home Insurance
23,000 Leucadia National 712
Insurance Holding Company
- --------------------------------------------------------------------------------
5,664
.Money Management: 0.7%
55,000 Phoenix Duff & Phelps 406
Money Management
15,000 SEI Investments 362
Mutual Fund Administration
- --------------------------------------------------------------------------------
768
-------
Finance: Total 13,657
</TABLE>
See accompanying notes to financial statements
11
<PAGE>
<TABLE>
<CAPTION>
Acorn USA
.Statement of Investments (unaudited)
Number of Shares Value (000)
- --------------------------------------------------------------------------------
Industrial Goods/Services: 19.7%
<S> <C> <C>
.Steel: 7.0%
111,000 Schnitzer Steel $ 3,302
Scrap Steel Processor
88,300 Steel Dynamics (b) 2,207
Steel Mini-Mill
77,000 Atchison Casting (b) 1,280
Steel Foundries
53,000 Gibraltar Steel (b) 1,219
Steel Processing
- --------------------------------------------------------------------------------
8,008
.Machinery: 4.8%
108,200 Applied Industrial Technologies 3,895
Distributes Industrial Components
100,050 Farr Company (b) 1,563
Filters
- --------------------------------------------------------------------------------
5,458
.Industrial Suppliers: 1.7%
96,000 Lilly Industries, Cl. A 1,932
Industrial Coatings
.Services: 6.2%
234,900 Wackenhut, Cl. B 4,683
Prison Management
100,000 World Color Press (b) 2,375
Printing
- --------------------------------------------------------------------------------
7,058
--------
Industrial Goods/Services: Total 22,456
- --------------------------------------------------------------------------------
Energy/Minerals: 19.7%
.Independent Power: 7.5%
224,000 CalEnergy (b) 8,512
Power Plants
.Oil/Gas Producers: 3.1%
165,700 Tesoro Petroleum (b) 2,454
Oil Refinery/Gas Reserves
50,100 Seagull Energy (b) 877
Oil/Gas Producer
6,700 United Meridian (b) 201
Oil/Gas Producers
- --------------------------------------------------------------------------------
3,532
.Distribution/Marketing/Refining: 4.9%
128,000 United Cities Natural Gas 3,008
Natural Gas Distributor
124,400 NGC 1,920
Gas Processing/Marketing
27,000 Atmos Energy 648
Natural Gas Distributor
- --------------------------------------------------------------------------------
5,576
.Oil Services: 4.2%
252,000 GeoScience (b) 3,307
Offshore Seismic Equipment Company
54,600 J Ray McDermott (b) 1,474
Offshore Construction Company
- --------------------------------------------------------------------------------
4,781
--------
Energy/Minerals: Total 22,401
- --------------------------------------------------------------------------------
Real Estate: 2.1%
34,700 Forest City Enterprises, Cl. A 1,657
Shopping Centers
45,000 Cornerstone Properties 692
Downtown Office Buildings
--------
Real Estate: Total 2,349
--------
Total Common Stocks: 93.6% 106,442
(Cost: $90,722)
Short-Term Obligations: 7.1%
Yield 5.56%-5.75%
Due 7/1/97-7/3/97
$5,893 General Motors Acceptance 5,893
$2,192 Ford Motor Credit 2,191
- --------------------------------------------------------------------------------
(Amortized Cost: $8,084) 8,084
--------
Total Investments: 100.7% 114,526
(Cost: $98,806)
--------
Cash and Other Assets Less Liabilities: (0.7%) (836)
--------
Total Net Assets: 100% $113,690
================================================================================
</TABLE>
- --------------------------------------------------------------------------------
.Notes to Statement of Investments
(a) At June 30, 1997, for federal income tax purposes cost of investments was
$98,806,000 and net unrealized appreciation was $15,720,000, consisting of gross
unrealized appreciation of $16,359,000 and gross unrealized depreciation of
$639,000.
(b) Non-income producing security.
See accompanying notes to financial statements
12
<PAGE>
<TABLE>
<CAPTION>
Acorn Fund
.Major Portfolio Changes in the Second Quarter
Number of Shares
-----------------------
3/31/97 6/30/97
Additions
- -----------------------------------------------------------------------------
Information
<S> <C> <C>
Acres Gaming 80,000 370,000
Activision 280,000 460,000
Altron 287,000 357,000
American Business Information 700,000 830,000
BET Holdings, Cl. A 300,000 400,000
Centennial Cellular 300,000 400,000
Electronic Arts 0 150,000
HSN 327,000 600,000
Itron 0 200,000
Metrika Systems 0 200,000
Micros Systems 125,000 279,000
Premiere Technologies 0 350,000
Spectrum HoloByte 450,000 1,100,000
Thermo Bio Analysis 100,000 200,000
Thermo Instrument Systems 685,000 865,000
United International
Holding (Austria) 425,000 552,000
United Video Satellite 700,000 810,000
Wonderware 250,000 650,000
- -----------------------------------------------------------------------------
Health Care
HealthCare Compare 1,000,000 1,026,000
Kinetic Concepts 1,000,000 1,115,000
Magellan Health Services 400,000 528,000
- -----------------------------------------------------------------------------
Consumer Goods/Services
Airtours (United Kingdom) 270,000 330,000
Cie Fin Richemont (Switzerland) 0 2,500
Kimberly Clark de Mexico (Mexico) 2,500,000 3,000,000
- -----------------------------------------------------------------------------
Finance
Acceptance Insurance 0 229,000
Banco Latinoamericano
de Export (Panama) 130,000 162,000
Leucadia National 216,000 396,000
Orient (Japan) 0 350,000
Pioneer Group 0 181,000
Shohkoh Fund (Japan) 0 9,000
Stad Rotterdam (Netherlands) 0 25,000
Industrial Goods/Services
AirNet Systems 0 174,000
National Patent Development 0 310,000
Pameco 0 65,000
Worthington Industries 1,110,000 1,210,000
- -----------------------------------------------------------------------------
Energy/Minerals
J Ray McDermott 385,000 505,000
Pride International 370,000 550,000
Tesoro Petroleum 1,200,000 1,300,000
United Meridian 300,000 400,000
Zeigler Coal Holding 300,000 400,000
- -----------------------------------------------------------------------------
Real Estate
Cornerstone Properties 0 350,000
Equity Residential Properties Trust 210,000 260,000
</TABLE>
13
<PAGE>
Acorn Fund
.Major Portfolio Changes in the Second Quarter
<TABLE>
<CAPTION>
Number of Shares
-----------------------
3/31/97 6/30/97
Sales
- -----------------------------------------------------------------------------
Information
<S> <C> <C>
ACT Manufacturing 500,000 325,000
American Management Systems 400,000 294,000
Argyle Television 44,000 0
Broderbund Software 300,000 200,000
CoreComm 450,000 0
Getronics (Netherlands) 250,000 207,000
Grupo Radio Centro (Mexico) 496,000 225,000
Informix 600,000 0
Keane 210,000 165,000
Palmer Wireless 350,000 0
Planar Systems 375,000 0
SK Telecom ADR (Korea) 283,250 0
SK Telecom (Korea) 4,000 0
Systems & Computer Techology 605,000 505,000
Tele-Communications, Cum. Pfd. 44,000 0
WM Data Nordic (Sweden) 350,000 1,500,000
(includes effect of 400% stock bonus)
- -----------------------------------------------------------------------------
Health Care
Biogen 228,000 0
CIMA Labs 253,000 0
Genome Therapeutics 130,000 0
Invacare 740,000 0
Thermedics 63,000 0
Trex Medical 125,000 29,000
Watson Pharmaceuticals 450,000 0
- -----------------------------------------------------------------------------
Consumer Goods/Services
Aucnet (Japan) 30,000 0
Burswood Property Trust (Australia) 450,000 0
Costa Crociere (Italy) 1,200,000 0
Dave & Buster's 135,000 0
Duckwall Alco Stores 48,000 0
Escada (Germany) 16,000 0
Hellenic Bottling (Greece) 260,000 234,000
Hennes & Mauritz, Cl. B (Sweden) 50,000 50,000
(includes effect of 5 for 1 stock split)
Mr. Max (Japan) 34,000 0
Newell 700,000 600,000
Norwood Promotional 232,000 0
O.Y.L. Industries (Malaysia) 255,000 0
Pricer, Cl. B (Sweden) 220,000 180,000
Resorts World (Malaysia) 1,350,000 800,000
Royal Caribbean Cruises 310,000 235,000
Wolverine World Wide 565,000 450,000
(includes effect of 3 for 2 stock split)
- -----------------------------------------------------------------------------
Finance
ADVANTA, Cl. A 531,000 0
ADVANTA, Cl. B 247,000 93,000
ALLIED Life Financial 318,000 0
Amvescap (United Kingdom) 1,920,000 1,270,000
Banc One 1,013,000 1,151,909
(includes the effect of the
acquisition of First USA)
PXRE 350,000 145,000
T. Rowe Price 100,000 64,000
Washington Mutual 323,000 297,000
- -----------------------------------------------------------------------------
Industrial Goods/Services
Material Sciences 450,000 0
Nordson 148,000 75,000
Thermo Electron 975,000 900,000
Thermo Fibertek 675,000 0
Thermo TerraTech 434,000 0
Thomas Group 300,000 0
- -----------------------------------------------------------------------------
Energy/Minerals
Seagull Energy 1,900,000 1,500,000
Southern Union 630,000 530,000
Thermo Ecotek 585,000 0
</TABLE>
14
<PAGE>
Acorn Fund
Statement of Investments (unaudited) June 30, 1997
<TABLE>
<CAPTION>
Number of Shares Value (000)
- -----------------------------------------------------------------------
Common Stocks and Other
Equity-Like Securities: 90.1%
- -----------------------------------------------------------------------
Information: 20.1%
<S> <C> <C>
Broadcasting/CATV: 1.6%
560,000 C-Tec (b) $ 19,530
1,000,000 Tele-Communications,
Series A TCI Group 14,875
300,000 TCA Cable TV 11,288
80,000 Cablevision Systems (b) 4,280
300,000 Granite Broadcasting (b) 3,075
- -----------------------------------------------------------------------
53,048
Programming for CATV/
TV/Satellites: 5.2%
2,400,000 Tele-Communications,
Liberty Media Group (b) 57,000
819,000 Data Transmission Network (b) (c) 26,003
700,000 International Family Entertainment 24,063
600,000 HSN (b) 18,750
810,000 United Video Satellite (b) 17,010
400,000 BET Holdings, Cl. A (b) 13,100
300,000 Gaylord Entertainment 6,919
280,000 Macrovision (b) 3,815
- -----------------------------------------------------------------------
166,660
Mobile Communications: 1.7%
500,000 Telephone and Data Systems 18,969
900,000 Mobile Telecommunication
Technologies (b) 12,881
355,000 COMARCO (b) (c) 6,834
400,000 Centennial Cellular (b) 6,350
465,000 Vanguard Cellular Systems (b) 6,336
450,000 PriCellular (b) 4,050
- -----------------------------------------------------------------------
55,420
Computer Software/Services: 3.3%
505,000 Systems & Computer Technology (b) 13,509
360,000 Analysts International 12,060
240,000 Compuware (b) 11,460
254,000 BRC Holdings (b) 9,652
650,000 Wonderware (b) 9,181
350,000 Premiere Technologies (b) 9,100
375,000 BDM International (b) 8,625
165,000 Keane (b) 8,580
294,000 American Management Systems (b) 7,864
353,000 CACI International (b) 5,383
160,000 Sterling Commerce (b) 5,260
400,000 Computer Language Research 3,900
Principal Amount or
Number of Shares Value (000)
- -----------------------------------------------------------------------
208,333 Source Informatics Cv. Pfd. (b) 2,360
- -----------------------------------------------------------------------
106,934
Gaming Equipment: 1.1%
1,800,000 International Game Technology 31,950
370,000 Acres Gaming (b) 3,238
- -----------------------------------------------------------------------
35,188
Consumer Software: 0.7%
460,000 Activision (b) 6,612
1,100,000 Spectrum HoloByte (b) 5,363
150,000 Electronic Arts (b) 5,044
200,000 Broderbund Software (b) 4,938
- -----------------------------------------------------------------------
21,957
Business Information: 0.6%
830,000 American Business Information (b) 18,052
885,714 GIGA Cv. Pfd. (b) (c) 3,100
- -----------------------------------------------------------------------
21,152
Contract Manufacturing: 1.8%
545,000 Solectron (b) 38,184
325,000 ACT Manufacturing (b) 13,569
357,000 Altron (b) 5,355
- -----------------------------------------------------------------------
57,108
Instrumentation: 1.8%
865,000 Thermo Instrument Systems (b) 26,383
300,000 IFR Systems (b) (c) 5,625
200,000 Itron (b) 5,175
$5,000,000 Thermo Optek,
5% Note Due 10/15/00 4,951
165,000 Thermo Optek (b) 1,836
293,000 Thermoquest (b) 4,468
265,000 Metrika Systems (b) 4,064
200,000 Thermo Bio Analysis (b) 3,038
$1,500,000 Thermoquest,
5% Note Due 8/15/00 1,607
- -----------------------------------------------------------------------
57,147
Distribution: 0.9%
1,090,000 Pioneer-Standard Electronics 14,715
300,000 Kent Electronics (b) 11,006
450,000 Richey Electronics (b) 3,769
- -----------------------------------------------------------------------
29,490
Computer Systems: 0.9%
600,000 Kronos (b) (c) 16,500
279,000 Micros Systems (b) 11,718
- -----------------------------------------------------------------------
28,218
</TABLE>
15
<PAGE>
Acorn Fund
Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ------------------------------------------------------------------
<S> <C>
Components/Peripherals: 0.5%
425,000 American Power Conversion (b) $ 8,075
250,000 Oak Industries (b) 7,188
- ----------------------------------------------------------------
15,263
--------
Information: Total 647,585
- ----------------------------------------------------------------
Health Care: 8.4%
Biotechnology/Drug Delivery: 1.0%
260,000 RP Scherer (b) 13,443
450,000 Inhale Therapeutic Systems (b) 11,138
800,000 Corvas International (b) 5,200
800,000 Corvas International Warrants (b) 1,600
- ----------------------------------------------------------------
31,381
Medical Equipment: 1.8%
1,162,000 Respironics (b) (c) 24,547
1,115,000 Kinetic Concepts 20,070
300,000 Affymetrix (b) 9,591
275,000 Innovasive Devices (b) 3,231
29,000 Trex Medical (b) 363
- ----------------------------------------------------------------
57,802
Hospital/Laboratory Supplies: 0.8%
273,000 Hillenbrand Industries 12,968
322,000 Sybron International (b) 12,840
- ----------------------------------------------------------------
25,808
Services: 4.8%
1,026,000 HealthCare Compare (b) 53,737
1,000,000 Lincare Holdings (b) 43,000
498,000 HBO & Company 34,300
528,000 Magellan Health Services (b) 15,576
505,000 United Payors and Providers (b) 6,691
300,000 Walsh International (b) 2,513
- ----------------------------------------------------------------
155,817
--------
Health Care: Total 270,808
- ----------------------------------------------------------------
Consumer Goods/Services: 8.3%
Retail: 2.1%
1,960,000 Borders (b) 47,285
313,000 Quality Food Centers (b) 11,894
731,000 Host Marriott Services (b) 8,589
- ----------------------------------------------------------------
67,768
Recreational Vehicles: 1.9%
1,100,000 Harley-Davidson 52,731
Principal Amount or
Number of Shares Value (000)
- ----------------------------------------------------------------
320,000 Thor Industries 7,960
- ----------------------------------------------------------------
60,691
Food: 0.1%
634,000 Au Bon Pain (b) (c) 4,279
Entertainment/Leisure: 3.0%
1,400,000 Carnival 57,750
215,000 GC Companies (b) 9,836
276,000 Carmike Cinemas (b) 9,039
235,000 Royal Caribbean Cruises 8,210
472,000 Hollywood Park, Cv. Pfd. 6,313
180,000 Rio Hotel & Casino (b) 2,711
535,000 Monarch Casino & Resort (b) (c) 2,140
112,000 Showboat 1,953
$6,250,000 Grand Palais Casino
14% Note Due 2/25/98 (b) 313
- ----------------------------------------------------------------
98,265
Manufacturers: 1.2%
600,000 Newell 23,775
450,000 Wolverine World Wide 13,669
- ----------------------------------------------------------------
37,444
--------
Consumer Goods/Services: Total 268,447
- ----------------------------------------------------------------
Finance: 13.4%
Banks: 3.1%
1,151,909 Banc One (Acquired First USA) 55,796
380,000 Texas Regional Bancshares 15,960
285,000 Union Planters 14,784
260,000 TCF 12,838
- ----------------------------------------------------------------
99,378
Savings & Loans: 3.4%
1,267,000 Peoples Bank Bridgeport 32,784
528,000 Coast Savings (b) 23,991
297,000 Washington Mutual 17,746
671,000 Washington Federal 17,236
538,000 Commonwealth Bancorp 8,810
280,000 Imperial Thrift & Loan (b) 4,550
156,000 Indiana Federal 4,407
- ----------------------------------------------------------------
109,524
Insurance: 2.1%
836,000 Baldwin & Lyons, Cl. B 18,915
247,000 Foremost 14,789
351,000 United Fire & Casualty 13,163
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- --------------------------------------------------------------------------
<S> <C> <C>
396,000 Leucadia National 12,251
229,000 Acceptance Insurance (b) 5,210
145,000 PXRE 4,459
- --------------------------------------------------------------------------
68,787
.Money Management: 2.7%
880,000 United Asset Management 24,915
865,000 Baker Fentress 17,084
618,000 SEI 14,909
1,723,000 Phoenix Duff & Phelps 12,707
231,000 BISYS (b) 9,644
181,000 Pioneer Group 4,163
64,000 T. Rowe Price 3,304
- --------------------------------------------------------------------------
86,726
.Credit Cards: 1.1%
575,000 National Data 24,905
275,000 Concord EFS (b) 7,116
93,000 ADVANTA, Cl. B 3,319
- --------------------------------------------------------------------------
35,340
.Other: 1.0%
935,000 Americredit (b) 19,635
1,390,000 World Acceptance (b) (c) 8,861
310,000 DVI Health Services (b) 4,495
- --------------------------------------------------------------------------
32,991
--------
Finance: Total 432,746
- --------------------------------------------------------------------------
Industrial Goods/Services: 9.3%
.Steel: 2.1%
1,210,000 Worthington Industries 22,158
520,000 Gibraltar Steel (b) 11,960
350,000 Schnitzer Steel 10,413
340,000 Steel Dynamics (b) 8,500
405,000 Atchison Casting (b) (c) 6,733
295,000 A M Castle 6,527
120,000 Metal Management (b) 1,793
- --------------------------------------------------------------------------
68,084
.Machinery: 2.7%
900,000 Thermo Electron (b) 30,938
800,000 Baldor Electric 23,650
355,000 Applied Industrial Technologies 12,780
110,000 Applied Power 5,679
270,000 Valmont Industries 5,130
75,000 Nordson 4,819
189,000 Hein-Werner (b) (c) 1,512
</TABLE>
<TABLE>
<CAPTION>
Principal Amount or
Number of Shares Value (000)
- --------------------------------------------------------------------------
<S> <C> <C>
500,000 Stevens International, Cl. A (b) (c) 500
34,000 Stevens International, Cl. B (b) (c) 94
- --------------------------------------------------------------------------
85,102
.Industrial Suppliers: 1.5%
625,000 Unifi 23,359
774,000 Lilly Industries, Cl. A 15,577
96,000 Mine Safety Appliances 5,808
244,000 U.S. Can (b) 3,477
65,000 Pameco (b) 1,154
- --------------------------------------------------------------------------
49,375
.Services: 3.0%
1,185,000 World Color Press (b) 28,144
800,000 Expeditors International
of Washington 22,700
901,000 Wackenhut, Cl. B 17,964
45,000 Wackenhut, Cl. A 1,080
430,000 Hub Group (b) 12,954
210,000 HA(Yen)LO Industries (b) 4,961
$2,900,000 Western Water, 9% Cv.
Note Due 9/25/05 2,900
174,000 Airnet Systems (b) 2,849
310,000 National Patent Development (b) 2,422
- --------------------------------------------------------------------------
95,974
--------
Industrial Goods/Services: Total 298,535
- --------------------------------------------------------------------------
Energy/Minerals: 10.3%
.Independent Power: 3.6%
1,115,000 AES Corporation (b) 78,886
1,852 AES Corporation Warrants (b) 84
950,000 CalEnergy (b) 36,100
- --------------------------------------------------------------------------
115,070
.Oil/Gas Producers: 2.5%
1,500,000 Seagull Energy (b) 26,250
1,300,000 Tesoro Petroleum (b) 19,256
400,000 United Meridian (b) 12,000
475,000 Forest Oil (b) 6,977
320,000 KCS Energy 6,520
350,000 Costilla Energy (b) 4,506
960,000 Tipperary (b) (c) 3,840
- --------------------------------------------------------------------------
79,349
.Distribution/Marketing/Refining: 1.3%
819,000 NGC 12,643
530,000 Southern Union (b) 12,124
</TABLE>
17
<PAGE>
Acorn Fund
.Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Number of Shares Value (000)
- --------------------------------------------------------------------------
<S> <C> <C>
303,000 Atmos Energy 7,272
150,000 KN Energy 6,319
150,000 United Cities Natural Gas 3,525
- --------------------------------------------------------------------------
41,883
.Oil Services: 2.6%
700,000 EVI (b) 29,400
288,000 Atwood Oceanics (b) 19,296
505,000 J Ray McDermott (b) 13,635
550,000 Pride International (b) 13,200
400,000 Veritas DGC (b) 9,000
- --------------------------------------------------------------------------
84,531
.Mining: 0.3%
400,000 Zeigler Coal Holding 9,350
---------
Energy/Minerals: Total 330,183
- --------------------------------------------------------------------------
Real Estate: 3.1%
829,000 The Rouse Company (b) 24,456
260,000 Equity Residential Properties Trust 12,350
400,000 Macerich 11,100
619,000 Homestead Village (b) 11,065
125,000 Homestead Village Warrants (b) 1,063
233,000 Forest City Enterprises, Cl. B 11,009
185,000 Forest City Enterprises, Cl. A 8,834
165,000 Weingarten Realty Investors 6,971
350,000 Cornerstone Properties 5,381
150,000 First Washington Realty Trust 3,788
120,000 First Washington Realty Trust, Cv. Pfd. 3,660
---------
Real Estate: Total 99,677
- --------------------------------------------------------------------------
Foreign Securities: 17.2%
.Canada: 0.9%
800,000 Ranger Oil 7,450
200,000 Shaw Industries, Cl. A 5,081
150,000 Cognos (b) 4,669
125,000 BCE Mobile Communications (b) 3,887
500,000 Shaw Communications, Cl. B 3,679
115,000 Veritas Energy Services (b) 2,667
200,000 Cogeco Cable 1,631
- --------------------------------------------------------------------------
29,064
.United Kingdom: 3.4%
1,200,000 Serco Group 14,060
3,270,000 Medeva 13,959
400,000 NTL (b) 9,950
1,700,000 Securicor Group, Cl. A 8,064
650,000 Comcast UK Cable Partners (b) 7,800
700,000 Powerscreen International 7,625
1,270,000 Amvescap 7,408
81,000 Amvescap ADR 4,718
1,100,000 N. Brown Group 6,984
330,000 Airtours 6,365
350,000 Getty Communications, Cl. A (b) 5,163
600,000 Edinburgh Fund Managers 4,708
580,000 Oriflame 4,682
1,200,000 Body Shop International 3,026
899,900 Capital 2,816
530,000 Ethical Holdings (b) 2,352
- --------------------------------------------------------------------------
109,680
.Germany/Austria: 0.5%
180,000 Flughafen Wien (Austria) 7,605
552,000 United International
Holdings (Austria) (b) 5,727
8,000 Binding-Brauerei 2,204
- --------------------------------------------------------------------------
15,536
.Nordic Countries: 2.0%
1,500,000 WM Data Nordic (Sweden) 26,384
650,000 Getinge Industrier (Sweden) 11,517
240,000 Autoliv (Sweden) 9,390
180,000 Pricer, Cl. B (Sweden) (b) 6,192
260,000 Esselte, Series A (Sweden) 5,952
702,700 SensoNor (Norway) (b) 3,791
50,000 Hennes & Mauritz, Cl. B (Sweden) 1,759
- --------------------------------------------------------------------------
64,985
.Netherlands: 0.6%
135,000 Hunter Douglas 11,507
207,000 Getronics 6,698
25,000 Stad Rotterdam 1,145
- --------------------------------------------------------------------------
19,350
.Switzerland: 0.8%
6,050 Societe Generale de Surveillance 12,947
14,000 Liechtenstein Global Trust 8,595
2,500 Cie Fin Richemont (b) 3,618
- --------------------------------------------------------------------------
25,160
.France: 1.0%
128,000 Axime Ex Segin (b) 15,152
70,000 Cetelem 8,811
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ------------------------------------------------------------------------
<S> <C> <C>
20,000 Canal Plus $ 3,897
24,000 Guilbert 3,401
- ------------------------------------------------------------------------
31,261
.Spain/Portugal: 0.3%
185,000 Vallehermoso 5,000
375,000 Filmes Lusomundo (Portugal) (b) 3,392
- ------------------------------------------------------------------------
8,392
.Italy/Greece: 1.3%
4,000,000 Banca Fideuram 13,059
300,000 Cellular Communications
International (b) 10,050
234,000 Hellenic Bottling (Greece) 8,658
1,000,000 Saipem 5,113
170,000 Industrie Natuzzi 4,356
- ------------------------------------------------------------------------
41,236
.Israel: 0.1%
200,000 Pec Israel Economic (b) 4,800
.Eastern Europe: 0.0%
20,000 Gedeon Richter (Hungary) 1,843
.India: 0.3%
300,000 IS Himalaya Fund (b) 4,530
39,383 Housing Development Finance 4,491
- ------------------------------------------------------------------------
9,021
.Hong Kong: 0.4%
4,500,000 Varitronix International 7,638
7,318,000 JCG Holdings 5,904
- ------------------------------------------------------------------------
13,542
.China: 0.0%
200,000 The Investment Company of China (b) 970
.Singapore/Malaysia: 0.5%
5,100,000 Genting International 15,045
800,000 Resorts World (Malaysia) 2,409
- ------------------------------------------------------------------------
17,454
.Thailand: 0.0%
3,300,000 Sinpinyo Fund V (b) 1,019
.Korea/Taiwan: 0.9%
115,000 Formosa Fund (Taiwan) (b) 14,778
460,000 President Enterprises (Taiwan) (b) 9,545
170,707 Kookmin Bank 3,186
300,000 Korea-Europe Fund 1,635
- ------------------------------------------------------------------------
29,144
.Indonesia: 0.2%
195,501 Unilever Indonesia $ 3,457
1,700,000 Tigaraksa Satria 2,089
- ------------------------------------------------------------------------
5,546
.Japan: 1.7%
266 NTT Data 10,298
110,000 Nintendo 9,228
174,000 Noritsu Koki 8,591
110,000 Paramount Bed 5,527
75,000 Secom 5,512
33,000 Nichiei 3,836
720,000 Tokyu Land (b) 2,989
9,000 Shohkoh Fund 2,729
90,000 Sankyo 2,706
130,000 Heiwa 2,556
350,000 Orient 1,428
- ------------------------------------------------------------------------
55,400
.Australia/New Zealand: 0.5%
1,700,000 Sky City (New Zealand) 8,630
800,000 Village Roadshow 2,889
550,000 Village Roadshow Pfd. 1,380
600,000 PetSec Energy (b) 2,720
- ------------------------------------------------------------------------
15,619
.Mexico: 0.7%
3,000,000 Kimberly Clark de Mexico 12,068
2,000,000 Nadro, Series L 6,801
225,000 Grupo Radio Centro 2,644
170,000 Cofar, Series B 252
- ------------------------------------------------------------------------
21,765
.Brazil: 0.4%
115,000,000 Cemig 5,928
10,000,000 Itau Banco PN 5,601
- ------------------------------------------------------------------------
11,529
.Other Latin America: 0.7%
3,000,000 Siderca (Argentina) 7,771
160,000 IRSA (Argentina) 7,000
162,000 Banco Latinoamericano
de Export (Panama) 6,986
- ------------------------------------------------------------------------
21,757
--------
Foreign: Total 554,073
153,200 Miscellaneous Securities: 0.0% 22
</TABLE>
19
<PAGE>
Acorn Fund
.Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Principal Amount Value (000)
- ---------------------------------------------------------
<C> <S> <C>
Total Common Stocks and Other
----------
Equity-Like Securities: 90.1% $2,902,076
(Cost: $1,604,148)
Short-Term Obligations: 9.9%
Yield 4.56% - 5.68%
Due 7/1/97 - 8/14/97
$50,902 Baxter International 50,685
$38,053 General Motors Acceptance 38,020
$33,303 Aetna Services 33,270
$29,243 Heller Financial 29,108
$25,130 Ford Motor Credit 25,065
$24,476 Aon 24,393
$19,274 American General 19,203
$16,000 Temple Inland 15,957
$14,178 Coca Cola 14,147
$13,705 GE Capital 13,673
$12,678 Sears Roebuck Acceptance 12,625
$11,892 Commercial Credit 11,861
$10,000 US Treasury Bill 9,980
$ 9,862 Prudential Funding 9,853
$ 6,862 Xerox 6,854
$ 3,000 Nynex 2,996
- ---------------------------------------------------------
(Amortized Cost: $317,690) 317,690
----------
Total Investments: 100% 3,219,766
(Cost: $1,921,838)
----------
Cash and Other Assets Less Liabilities: (0.0%) 983
----------
Total Net Assets: 100% $3,220,749
</TABLE>
- --------------------------------------------------------------------------------
.Notes to Statement of Investments
(a) At June 30, 1997, for federal income tax purposes cost of investments was
$1,929,895,000 and net unrealized appreciation was $1,289,871,000, consisting of
gross unrealized appreciation of $1,352,874,000 and gross unrealized
depreciation of $63,003,000.
(b) Non-income producing security.
(c) On June 30, 1997, the Fund held the following percentages of the outstanding
voting shares of the affiliated companies (ownership of at least 5%) listed
below:
Data Transmission Network.......................7.43%
COMARCO.........................................7.40%
Kronos..........................................7.38%
Tipperary.......................................7.36%
World Acceptance................................7.35%
Atchison Casting................................7.32%
Hein-Werner.....................................6.86%
Au Bon Pain.....................................6.30%
Respironics.....................................5.90%
Monarch Casino & Resort.........................5.65%
Stevens International...........................5.65%
IFR Systems.....................................5.59%
Giga............................................5.30%
The aggregate cost and value of investments in these companies at June 30, 1997,
was $86,433,000 and $110,569,000, respectively. The market value of these
securities represents 3.43% of the total net assets at June 30, 1997. During the
six months ended June 30, 1997, cost of purchases in affiliated companies was
$5,745,000. There were no sales or dividends received from these companies
during the six months ended June 30, 1997.
See accompanying notes to financial statements
20
<PAGE>
Acorn Fund
.Foreign Portfolio Diversification
At June 30, 1997, Acorn Fund's foreign portfolio of investments as a percent of
net assets was diversified as follows:
<TABLE>
<CAPTION>
Value (000) Percent
- --------------------------------------------------------------------
<S> <C> <C>
.Information
Computer Systems $ 51,018 1.6%
Broadcasting/CATV 35,328 1.1
Software/Services 34,212 1.1
Mobile Communications 22,001 0.7
Distribution 4,269 0.1
- --------------------------------------------------------------------
146,828 4.6
.Health Care
Biotechnology/Drug Delivery 28,599 0.9
Equipment 11,517 0.3
Hospital/Laboratory Supplies 5,527 0.2
- --------------------------------------------------------------------
45,643 1.4
.Consumer Goods/Services
Manufacturers 61,842 1.9
Entertainment/Leisure 37,821 1.2
Retail 21,941 0.7
Food 20,407 0.6
- --------------------------------------------------------------------
142,011 4.4
.Finance
Money Management $ 52,825 1.6%
Banks 33,001 1.0
Other 33,771 1.1
- --------------------------------------------------------------------
119,597 3.7
.Industrial Goods/Services
Services 34,335 1.1
Machinery Processing 11,416 0.3
- --------------------------------------------------------------------
45,751 1.4
.Energy/Minerals
Oil Services 12,884 0.4
Oil/Gas Producers 12,837 0.4
Independent Power 5,928 0.2
- --------------------------------------------------------------------
31,649 1.0
.Real Estate 14,989 0.5
.Transportation 7,605 0.2
-------------------------
Total Foreign Portfolio $554,073 17.2%
====================================================================
</TABLE>
21
<PAGE>
Acorn International
.Major Portfolio Changes in the Second Quarter
<TABLE>
<CAPTION>
Number of Shares
-----------------------
3/31/97 6/30/97
Additions
- ----------------------------------------------------------------------
Europe
<S> <C> <C>
.Germany
Berzelius Umwelt 0 160,000
IVG Holdings 200,000 290,000
.Finland
Talentum 80,000 550,000
.Sweden
Bure Investment 315,000 665,000
Micronic Laser Systems 0 225,000
.France
Assystem 0 30,000
Fininfo 40,000 60,000
Groupe AB 110,000 350,000
Groupe Partouche 30,000 50,000
Spir Communications 70,000 85,000
.United Kingdom
City Centre Restaurants 3,700,000 4,500,000
Dorling Kindersley 900,000 1,300,000
Edinburgh Fund Managers 710,000 950,000
Eurotherm 0 400,000
Expro International Group 500,000 700,000
Hozelock Group 238,000 600,000
Premier Oil 6,000,000 12,000,000
Seton Healthcare Group 720,000 1,444,000
Spirax Sarco 0 100,000
Vosper Thornycroft Holdings 410,000 730,000
.Switzerland
Hero 0 11,000
Cie Fin Richemont 0 6,000
Publicitas Holding 0 30,000
Selecta Group 0 40,000
.Italy
Banca Pop Commercia 100,000 400,000
Banca Pop Di Bergamo 550,000 700,000
Fila Holdings 60,000 100,000
Pininfarina 0 30,000
Principal Amount
or Number of Shares
-----------------------
3/31/97 6/30/97
.Netherlands
DOC Data 0 250,000
Stad Rotterdam 0 75,000
Wegener 50,000 310,000
(includes effect of 5 for 1 stock split)
.Poland
Best Company Series D 85,000 200,000
- ----------------------------------------------------------------------
Asia
.Hong Kong
China HK Photo Products 7,000,000 19,696,000
Innovative International
Holdings 5,500,000 12,000,000
Li and Fung 10,000,000 13,000,000
Regent Pacific 0 8,910,000
TVB 1,300,000 2,300,000
Vanda Systems 7,200,000 9,600,000
Varitronix International 6,000,000 7,500,000
.Japan
Aderans 150,000 330,000
Amway Japan 110,000 300,000
Chuo Trust & Banking 650,000 900,000
Fuji Software ABC 130,000 190,000
NuSkin Asia Pacific 120,000 160,000
Orient Corporation 0 1,600,000
Shohkoh Fund 30,000 35,000
Softbank Corporation 78,000 95,000
.Korea
Dongbu Fire & Marine Insurance 178,970 233,330
.Malaysia
AMFB 0 3,230,000
.Indonesia
Tunas Ridean 0 2,700,000
.Philippines
Int'l Container Terminal Services,
Cv. 1.75% 3/13/04 0 $3,000,000
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
-------------------------
3/31/97 6/30/97
<S> <C> <C>
.Singapore
Genting International 5,500,000 6,124,600
Omni Industries 0 910,000
Venture Manufacturing 3,050,000 3,500,000
.Thailand
BEC World Public 0 450,000
- ---------------------------------------------------------------------
Latin America
.Mexico
Kimberly Clark de Mexico 3,000,000 3,600,000
Tubos de Acero de Mexico 250,000 400,000
.Brazil
Bompreco 0 100,000
White Martins 3,500,000 2,250,000
(includes effect of 1 to 2
reverse stock split)
.Argentina
Perez Companc 600,000 1,000,000
(includes effect of 11.5% stock dividend)
.Peru
Enrique Ferreyros 2,527,334 4,200,000
.Panama
Banco Latinoamericano
de Exportaciones 150,000 184,000
Other Countries
.Australia
Anaconda Nickel 2,000,000 2,500,000
Siddons Ramset 600,000 1,000,000
.Canada
Pangea Goldfields 0 650,000
Shaw Industries 450,000 520,000
.Israel
ZAG Industries 200,000 300,000
.South Africa
Energy Africa 405,000 780,000
</TABLE>
23
<PAGE>
Acorn International
.Major Portfolio Changes in the Second Quarter
<TABLE>
<CAPTION>
Number of Shares
-----------------------
3/31/97 6/30/97
Sales
- ----------------------------------------------------------------------
Europe
<S> <C> <C>
.Germany
Escada 26,000 0
Fresenius 90,000 60,000
Marschollek Lautenschlager 40,000 0
.Denmark
Carli Gry 20,000 0
.Finland
Benefon 370,000 200,000
.Norway
Aker Maritime 200,000 0
Elkjoep Norge 80,000 0
.Sweden
Frontec, Series B 150,000 0
Hennes & Mauritz, Cl. B 150,000 440,000
(includes effect of 5 for 1 stock split)
Pricer, Cl. B 450,000 350,000
WM Data Nordic 650,000 3,000,000
(includes effect of 400% stock bonus)
.France
Guilbert 40,000 30,000
.United Kingdom
Capita Group 1,400,000 3,000,000
(includes effect of 200% stock bonus)
.Switzerland
Disetronic Holding 2,600 0
.Italy/Greece
Costa Crociere 3,100,000 0
Hellenic Bottling 275,000 247,000
Intracom 150,000 0
.Spain
Campofrio Alimentacion 110,000 0
.Netherlands
Getronics 850,000 700,000
- ----------------------------------------------------------------------
Asia
.Hong Kong
Manhattan Card 12,000,000 0
Vitasoy International 8,900,000 0
.Japan
Aucnet 65,000 0
Cats 86,000 0
Itariyard 90,000 0
Koei 50,000 0
Mr Max 26,000 0
Nichiei 130,000 112,600
Promise 70,000 0
Sanyo Shinpan 33,000 0
.Korea
Daehan City Gas 70,000 0
SK Telecom 15,000 0
.Malaysia
Arab Malaysian Finance 3,300,000 0
Malaysian Assurance Alliance 2,350,000 1,210,000
(includes effect of 10% stock bonus)
O.Y.L. Industries 450,000 0
.Singapore
Datacraft Asia 750,000 0
- ----------------------------------------------------------------------
Latin America
.Mexico
Grupo Herdez, Series B 4,900,000 0
Grupo Radio Centro 579,000 263,000
.Brazil
Cemig Pfd. 185,000,000 165,000,000
.Argentina
Cerveceria Biekert 220,470 0
- ----------------------------------------------------------------------
Other Countries
.Australia
Austereo 4,000,000 0
Burswood Property Trust 670,000 0
</TABLE>
24
<PAGE>
Acorn International
.Statement of Investments (unaudited) June 30, 1997
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ---------------------------------------------------------------------
Common Stocks and Other
Equity-Like Securities: 93.6%
- ---------------------------------------------------------------------
Europe: 49.3%
<S> <C> <C>
.Germany/Austria: 4.8%
165,000 Rhoen Klinikum Pfd. $21,115
100,000 Rhoen Klinikum 13,199
Hospital Management
60,000 Fresenius 12,395
Dialysis Equipment & Solutions
290,000 IVG Holdings 9,985
Real Estate
190,000 Flughafen Wien 8,027
Vienna Airport Authority (Austria)
15,000 Pfleiderer 7,704
Construction Materials
21,000 Cewe Color Holding 5,483
Photographic Developing & Printing
473,000 United International Holdings (b) 4,907
Cable Television for Austria &
Other Countries (Austria)
15,000 Binding-Brauerei 4,132
Brewer
160,000 Berzelius Umwelt 2,442
Industrial Waste Recycling
70,000 Boewe Systec 2,294
Envelope Stuffing Machines
29,000 KTM-Motorradholding (b) 1,987
Off-Road Motorcycles (Austria)
- ---------------------------------------------------------------------
93,670
.Denmark: 0.5%
125,000 Falck 6,598
Ambulance, Firefighting & Security Services
31,000 Kompan International (c) 3,740
Playground Equipment
- ---------------------------------------------------------------------
10,338
.Finland: 3.8%
500,000 TT Tieto, Cl. B (c) 43,318
Computer Services/Consulting
100,000 Vaisala, Cl. A 7,605
Meteorological Instruments
80,000 Fiskars, Series A 6,777
Scissors & Gardening Tools
105,000 Sentra, Cl. A (c) 6,630
Grocery Wholesaling & Retailing
550,000 Talentum (c) 6,247
Trade Journals
200,000 Benefon 3,465
Mobile Telephones
- ---------------------------------------------------------------------
74,042
.Norway: 0.3%
969,400 SensoNor (b) 5,230
Electronic Sensors for Airbags
500,000 Atex Media Solutions 956
Print Media Software
- ---------------------------------------------------------------------
6,186
.Sweden: 7.2%
3,000,000 WM Data Nordic 52,768
Computer Services/Consulting
1,000,000 Getinge Industrier 17,719
Sterilization & Disinfection Equipment
440,000 Hennes & Mauritz, Cl. B 15,479
Apparel Stores
320,000 Autoliv 12,520
Seatbelts & Airbags
350,000 Pricer, Cl. B (b) 12,041
Electronic Shelf Labels for Supermarkets
665,000 Bure Investment 8,386
Health Care Services & Investments
315,000 Esselte, Series A 7,211
Office Supplies & Related Equipment
400,000 Atle 5,380
Investment Company
175,000 Hexagon 4,753
Industrial Conglomerate
50,700 Scala International (b) 2,885
Accounting Software
225,000 Micronic Laser Systems (b) 1,106
Laser Equipment
96,000 Oresa Ventures (b) 894
Eastern European Venture Capital
- ---------------------------------------------------------------------
141,142
France: 4.4%
200,000 Axime Ex Segin (b) 23,676
Computer Services
94,000 Cetelem 11,832
Credit Cards
62,000 NRJ 8,448
Radio Network
60,000 Fininfo 7,052
Data Feeds for French Banks & Brokers
85,000 Spir Communications 6,537
Regional Newspapers
50,000 Technip 5,808
Engineering & Construction
55,000 Virbac 5,480
Drugs for Animals
27,000 Canal Plus 5,261
Pay TV
30,000 Guilbert 4,251
Office Supplies Distribution
</TABLE>
See Accompanying notes to financial statements
25
<PAGE>
Acorn International
.Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ------------------------------------------------------------------------
<S> <C> <C>
50,000 Groupe Partouche $ 3,407
Casinos
350,000 Groupe AB (b) 2,975
Television Programming
30,000 Assystem 1,717
Consultants on Nuclear Power Plants
- ------------------------------------------------------------------------
86,444
.United Kingdom: 12.0%
1,800,000 Serco Group 21,090
Facilities Management
1,600,000 Powerscreen International 17,429
Mobile Crushing & Screening Equipment
1,950,000 Oriflame International 15,740
Natural Cosmetics Sold Door-to-Door
3,170,000 Medeva 13,533
Drugs for Hyperactive Children
3,000,000 Capita Group 11,758
Outsourcing Government Services
467,000 NTL (b) 11,617
Cable TV & Telephone System
1,444,000 Seton Healthcare Group 10,370
Pharmaceuticals
1,500,000 N. Brown Group 9,524
Mail Order Clothing in Large Sizes
4,500,000 City Centre Restaurants 9,474
Fast Food Restaurants
730,000 Vosper Thornycroft Holdings 9,264
Naval Shipbuilding
12,000,000 Premier Oil 9,237
Oil & Gas Producer
4,000,000 St. James Place 8,721
Life Insurance
1,700,000 Securicor Group, Cl. A 8,064
Mobile Communications
950,000 Edinburgh Fund Managers 7,455
Investment Management
1,700,000 Rotork 7,370
Valve Actuators for Oil & Water Pipelines
13,000,000 Electronics Boutique (b) 7,248
Videogame/Computer Software Stores
2,200,000 Capital 6,884
Classy Casinos
500,000 Comcast UK Cable Partners (b) 6,000
Cable TV & Telephone System
2,200,000 HALMA 5,987
Fire Detection Devices & Burglar Alarms
1,300,000 Dorling Kindersley 5,550
Reference Books & CD-ROMs
700,000 Expro International Group 5,330
Oil Field Services
1,800,000 Body Shop International 4,539
Natural Cosmetics & Toiletries
1,200,000 Ivory & Sime 4,334
Investment Management
600,000 Hozelock Group 4,234
Garden Hoses
2,100,000 Aberdeen Trust 3,198
Money Management
670,000 Ethical Holdings (b) (c) 2,973
Drug Delivery
4,000,000 Peek 2,530
Traffic Control Systems
400,000 Eurotherm 2,413
Instruments & Measuring Devices
900,000 Tunstall 1,962
"I've fallen and I can't get up" Monitors
250,000 Planning Sciences (b) 1,438
Database & Business Intelligence Software
100,000 Spirax Sarco 1,144
Steam Traps
125,000 Shanks & McEwan 307
Landfills & Waste Incinerators
- ------------------------------------------------------------------------
236,717
.Switzerland: 4.1%
6,550 Societe Generale de Surveillance 14,017
Inspection/Testing of Trade Goods
25,000 Phoenix Mecano 13,032
Electrical Components Manufacturer
6,000 Cie Fin Richemont 8,684
Luxury Goods & Tobacco
13,000 Liechtenstein Global Trust 7,981
Banking & Investment Management
18,000 Societe Generale d'Affichage 6,926
Billboard Advertising
8,000 Suedelektra Holding 6,859
Natural Resources
11,000 Hero 6,149
Packaged Foods
40,000 Selecta Group (b) 6,091
Vending Machines
30,000 Publicitas Holding 5,721
Print Media
10,000 Prodega (c) 4,527
Cash-and-Carry Retailer
- ------------------------------------------------------------------------
79,987
.Italy/Greece: 5.7%
7,100,000 Banca Fideuram 23,180
Life Insurance & Mutual Funds
2,500,000 Saipem SPA 12,783
Pipeline Construction & Drilling Contractor
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- -----------------------------------------------------------------------
<C> <S> <S>
700,000 Banca Popolare Di Bergamo $ 10,347
Regional Bank
600,000 Gewiss 10,314
Electrical Plugs & Switches
247,000 Hellenic Bottling 9,139
Coca-Cola Bottler (Greece)
650,000 Mediolanum 7,323
Life Insurance & Mutual Funds
2,000,000 Editoriale L'Espresso 6,653
Newspapers & Magazines
200,000 Industrie Natuzzi 5,125
Leather Couches
400,000 Banco Pop Commercia e Industria 4,831
Regional Bank
400,000 Attica Enterprises 3,855
80,000 Attica Enterprises New 771
Ferry Line (Greece)
1,100,000 Banca Di Legnano 3,540
Regional Bank
100,000 Fila Holdings 3,344
Athletic Shoes
1,000,000 Unipol 2,803
Life & Auto Insurance
80,000 Cellular Communications International (b) 2,680
Mobile Communications
1,500,000 Autogrill Finanziaria (b) 2,508
Tollway Restaurants
125,000 Saes Getters 1,984
Getters used in TV's/PC's
175,000 Danieli 1,155
Steel-making Machinery
30,000 Pininfarina 498
Car Design
228 Ergo Bank 14
Bank (Greece)
- -----------------------------------------------------------------------
112,847
.Spain/Portugal: 1.5%
160,000 Cortefiel 6,995
Apparel Retailer
100,000 Mapfre Vida 6,494
Life Insurance & Mutual Funds
200,000 Vallehermoso 5,406
Residential Property Developer & Landlord
200,000 Lusotur (b) 3,211
Real Estate/Resort Developer (Portugal)
250,000 Estoril Sol (c) 3,129
Casino Resort (Portugal)
16,000 Zardoya Otis 2,109
Elevator Maintenance
150,000 Filmes Lusomundo 1,357
Newspapers, Radio, Video,
Film Distribution (Portugal)
24,800 Investec (b) 846
Sports Newspaper (Portugal)
350,000 Televisao Independente 657
Television Station (Portugal)
- -----------------------------------------------------------------------
30,204
.Netherlands: 4.3%
630,000 Kempen (c) 23,055
Stock Brokerage/Investment Management
700,000 Getronics 22,651
Computer Services
135,000 Hunter Douglas 11,507
Blinds
300,000 Fugro McClelland 7,732
300,000 Fugro McClelland Dividend Coupon 245
Engineering, Consulting & Surveying
310,000 Wegener 7,199
Newspaper Publisher
300,000 Telegraaf Holdings 6,492
Newspaper Publisher
75,000 Stad Rotterdam 3,434
Auto Insurance
250,000 DOC Data (b) 3,254
Audio CD & CD Rom Replication
- -----------------------------------------------------------------------
85,569
.Hungary: 0.3%
145,000 Cofinec (b) 4,006
Consumer Goods Packaging
20,000 Gedeon Richter 1,843
Generic Drugs
- -----------------------------------------------------------------------
5,849
.Poland: 0.4%
2,550,000 Bank Inicjatyw 3,065
Warsaw Bank
210,000 Amica Wronki 1,757
Appliance Manufacturer
200,000 Bank Komunalny 955
Gdansk-Area Bank
200,000 Best Company Series D 2,434
Electronics Retailer
- -----------------------------------------------------------------------
8,211
-------
Europe: Total 971,206
</TABLE>
27
<PAGE>
Acorn International
.Statement of Investments (unaudited)
<TABLE>
<CAPTION>
Number of Shares Value (000)
- --------------------------------------------------------------------------------------
Asia: 26.8%
<C> <S> <C>
.Hong Kong: 3.6%
13,000,000 Li and Fung $14,599
Sourcing of Consumer Goods
7,500,000 Varitronix International 12,731
LCD Manufacturer
2,300,000 TVB 10,332
Television Broadcasting
11,000,000 JCG Holdings 8,874
Consumer Finance
12,000,000 Innovative International Holdings 6,273
Auto Accessories
19,696,000 China HK Photo Products 5,720
Fuji Film Distributor
20,000,000 Golden Harvest Entertainment 4,957
Movie Distribution & Exhibition
9,600,000 Vanda Systems 4,461
Systems Integrator
8,910,000 Regent Pacific (b) 2,502
Money Management
2,000,000 Pacific Ports 400
Container Terminal Operation & Port Management
- --------------------------------------------------------------------------------------
70,849
.India/Pakistan: 1.1%
82,702 Housing Development Finance 9,432
Mortgage Lender
300,000 IS Himalaya Fund (b) 4,530
Closed-End Fund
1,047,200 Zee Telefilms (c) 3,627
Hindi Television Programming & Broadcasting
349,450 Max India 1,846
50,000 Max India New Shares 264
Penicillin & Mobile Phones
810,000 Tube Investment GDR 1,150
Bicycle Manufacturer
59,035 Pakistan State Oil 475
Oil Distribution (Pakistan)
342,100 Kotak Mahindra Finance 392
Consumer Finance
2,000,000 Centurion Quantum Growth 307
Closed-End Fund
- --------------------------------------------------------------------------------------
22,023
.Japan: 12.7%
350 NTT Data 13,550
Computer Services/Consulting
270,000 Noritsu Koki 13,331
Photo Processing Lab Manufacturer
112,600 Nichiei 13,087
Lender to Small & Medium Size Businesses
163,000 Secom 11,980
Security Alarm Systems
35,000 Shohkoh Fund 10,613
Short-Term Loans for Small Business
299,000 Hokuto 10,582
Mushroom Grower
140,000 Orix Corporation 10,387
Leasing Company
300,000 Amway Japan 10,172
Network Sales
325,000 Meitec 9,685
Engineering Outsourcing
330,000 Aderans 9,401
Hairpieces & Wigs
110,000 Nintendo 9,228
Video Games
235,000 Konami 8,790
Entertainment Software/Hardware
190,000 Fuji Software ABC 8,302
Computer Services/Consulting
1,600,000 Orient Corporation 6,530
Credit Cards
80,000 Ryohin Keikaku 6,320
Designer & Retailer of Muji Brand
Specialty Consumer Goods
275,000 Mirai Industry 6,296
Manufacturer of Plastic Housing Components
95,000 Softbank Corporation 6,085
Publisher/Software Distributor
115,000 HIS 6,080
Travel Agent
900,000 Chuo Trust & Banking 5,977
Banking
240,000 Shinki 5,957
Corporate & Consumer Lending
120,000 Nidec 5,873
Manufacturer of Motors for Hard Disk Drives
195,000 Sankyo 5,862
Pachinko Machine Manufacturer
165,000 Lasertec 5,624
Manufacturer of LCD & Photomask
Defect Detectors
110,000 Paramount Bed 5,527
Hospital Bed Manufacturer
1,330,000 Tokyu Land 5,521
Real Estate
255,000 Heiwa 5,014
Pachinko Machine Manufacturer
130,000 People 4,431
Sports Clubs
160,000 NuSkin Asia Pacific (b) 4,240
Network Sales
</TABLE>
See accompanying notes to financial statements
28
<PAGE>
Number of Shares Value (000)
- -------------------------------------------------------------------------
160,000 Arrk Corporation $ 3,426
Industrial Modeling
135,000 Xebio 3,327
Sporting Goods Retailer
249,700 Belluna 3,273
Catalog Sales
142,000 Mars Engineering 3,251
Gaming Systems & Machinery
240,000 Central Uni 3,146
Health Care/Medical Equipment
126,020 Nihon Jumbo 3,062
Photo Processing Lab
415,000 Nanto Bank 2,582
Banking
55,000 Tiemco 2,451
Fishing Equipment
165,000 Shochiku 1,557
Film, Television & Kabuki Producer
- -------------------------------------------------------------------------
250,520
>Korea/Taiwan: 2.8%
80,000 Formosa Fund (b) 10,280
Closed-End Fund (Taiwan)
480,000 President Enterprises (b) 9,960
Food Manufacturer & Distributor (Taiwan)
70,000 Taipei Fund 8,785
Closed-End Fund (Taiwan)
233,330 Dongbu Fire & Marine Insurance (b) 6,779
Non-Life Insurance
319,387 Kookmin Bank 5,961
Retail Bank
26,265 S1 Corporation 5,265
Systems Security
230,000 Formosa Growth Fund (b) 5,247
Closed-End Fund (Taiwan)
150,000 Baring Taiwan Fund (b) 2,231
Closed-End Fund (Taiwan)
- -------------------------------------------------------------------------
54,508
>Malaysia: 0.9%
2,000,000 Malaysian Oxygen 10,143
Industrial Gases
1,210,000 Malaysian Assurance Alliance 7,047
Insurance
3,230,000 AMFB 1,049
Consumer Finance
- -------------------------------------------------------------------------
18,239
>Indonesia: 1.5%
3,000,000 Bank Niaga 8,513
Banking
1,600,000 Modern Photo Film 5,659
Fuji Film Distributor
Principal Amount or
Number of Shares Value(000)
- -------------------------------------------------------------------------
230,000 Unilever $ 4,067
Consumer Goods
2,900,900 Tigaraksa Satria (c) 3,564
Distributor of Consumer Goods
2,700,000 Tunas Ridean 3,553
Auto Retailing
3,000,000 Mustika Ratu 3,208
Traditional Cosmetics
220,000 Medco Energi 405
Oil & Gas Drilling & Production
- -------------------------------------------------------------------------
28,969
>Philippines: 1.4%
27,000,000 Int'l Container Terminal Services (b) 13,819
$3,000,000 Int'l Container Terminal Services
Cv. 1.75% 3/13/04 3,000
Container Handling Terminals & Port Management
3,500,000 Philippine Savings Bank 5,308
Banking
14,100,000 Mondragon International (b) 4,972
Casinos/Resort
- -------------------------------------------------------------------------
27,099
>Singapore: 1.8%
6,124,600 Genting International 18,068
Cruise Line
3,500,000 Venture Manufacturing 11,407
2,500,000 Venture Manufacturing Wts. 7/26/99 (b) 5,945
Contract Electronics Manufacturer
910,000 Omni Industries (b) 468
Contract Electronics Manufacturer
- -------------------------------------------------------------------------
35,888
>Thailand: 1.0%
4,470,100 Shinawatra Satellite 5,392
Satellite Leasing
320,000 Bangkok Insurance 5,065
Finance/Insurance
200,000 Serm Suk 4,324
Pepsi Bottler
450,000 BEC World Public 3,856
Television/Radio Broadcasting
2,600,000 Sinpinyo Fund V 803
Closed-End Fund
- -------------------------------------------------------------------------
19,440
-------
Asia: Total 527,535
- -------------------------------------------------------------------------
Latin America: 9.0%
>Mexico: 3.0%
3,600,000 Kimberly Clark de Mexico 14,481
Paper Products
29
<PAGE>
Acorn International
>Statement of Investments (unaudited)
Number of Shares Value (000)
- ------------------------------------------------------------------
1,510,000 Grupo Industrial Bimbo 10,801
Bread, Baked Goods & Snacks
3,000,000 Nadro, Series L 10,201
Pharmaceutical Distributor
450,000 Bufete Industrial (b) 9,619
Engineering & Construction
400,000 Tubos de Acero de Mexico 7,375
Seamless Pipe for Oil Wells
263,000 Grupo Radio Centro 3,090
Radio Stations & Networks
2,100,000 Grupe Accion (formerly known
as Fondo Opcion) (c) 3,089
Real Estate Investment Fund
100,000 Corp Interamericana de
Entretenimiento (b) 424
Management of Live Entertainment
107,000 Cofar 159
Drug Stores
- ------------------------------------------------------------------
59,239
>Brazil: 2.3%
20,000,000 Banco Itau Pfd. 11,202
Bank
165,000,000 Cemig Pfd. 8,506
Electric Utility
2,250,000 White Martins 6,583
Industrial Gases
35,000,000 Telemig 5,982
30,000,000 Telemig Pfd. 5,308
Telecommunications
370,000 Elevadores Atlas 4,820
Elevator Services
100,000 Bompreco 2,775
Supermarket Chain
1,000,000 Brazilian Smaller Companies Warrants 745
Closed-End Fund
- ------------------------------------------------------------------
45,921
>Argentina: 1.8%
320,000 IRSA 14,000
Real Estate Management & Development
4,000,000 Siderca 10,361
Steel Pipe Producer
1,000,000 Perez Companc 8,031
Oil & Gas Producer
1,400,000 Cresud (b) 3,122
Grain & Cattle Farms
- ------------------------------------------------------------------
35,514
>Chile: 1.3%
150,000 Genesis Chile Fund 7,538
Closed-End Fund
Number of Shares Value (000)
- ------------------------------------------------------------------
220,000 Santa Isabel 7,095
Grocery Stores
260,000 Banco BHIF 5,493
Financial Services
120,000 Embotelladora Andina, Series A 2,573
120,000 Embotelladora Andina, Series B 2,505
Coca-Cola Bottler
- ------------------------------------------------------------------
25,204
>Peru: 0.2%
4,200,000 Enrique Ferreyros 4,829
Heavy Machinery Dealer
>Panama: 0.4%
184,000 Banco Latinoamericano
de Exportaciones 7,935
Trade Financing
-------
Latin America: Total 178,642
- ------------------------------------------------------------------
Other Countries: 7.8%
>Australia/New Zealand: 3.7%
2,200,000 Publishing & Broadcasting 12,576
Media & TV Broadcasting
1,750,000 Sky City 8,884
Casino & Hotel (New Zealand)
4,500,000 Tyndall Australia 7,586
Money Management & Insurance
3,000,000 Village Roadshow Pfd. Cl. A 7,529
Film Distribution, Exhibition & Production
5,200,000 Sonic Healthcare 7,207
Pathology Labs
2,500,000 Anaconda Nickel (b) 7,024
Nickel Mining
1,400,000 PetSec Energy (b) 6,346
Oil & Gas Producers
1,000,000 Siddons Ramset 5,469
Manufacturer & Distributor of
Construction Materials
420,000 Hudson Conway (b) 4,201
Casino Managers
1,800,000 Skilled Engineering 3,277
Temporary Skilled Labor
600,000 PDL Holdings 3,152
Electrical Equipment Manufacturer &
Distributor (New Zealand)
- ------------------------------------------------------------------
73,251
>Canada: 3.2%
520,000 Shaw Industries 13,211
Oil Field Services
1,000,000 Ranger Oil 9,313
Oil & Gas Producer
30
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------------
<S> <C> <C>
395,000 Veritas Energy Services (b) $ 9,162
Geophysical Contractor
250,000 Cinar Films (b) 8,125
Children's Television Programming
1,700,000 Pan East Petroleum (b) 4,436
Oil & Gas Producer
600,000 Shaw Communications 4,414
Cable TV
500,000 Cogeco 3,226
Cable TV
1,100,000 Bracknell (b) 3,149
Specialty Contractor
300,000 Shermag (b) 2,696
Manufacturer of Solid Wood Furniture
300,000 Cogeco Cable 2,446
Cable TV
650,000 Pangea Goldfields (b) 1,885
Gold Mining Exploration
250,000 Fundy Cable (b) 1,105
Cable TV
- ----------------------------------------------------------------------------------
63,168
>Israel: 0.7%
325,000 Blue Square Israel (b) 5,606
Supermarkets & Department Stores
200,000 Pec Israel Economic (b) 4,800
Industrial Holdings
300,000 ZAG Industries (b) 3,075
Plastic Hardwares
- ----------------------------------------------------------------------------------
13,481
>South Africa: 0.2%
780,000 Energy Africa 4,041
Oil & Gas Producer
- ----------------------------------------------------------------------------------
Other: Total 153,941
</TABLE>
<TABLE>
<CAPTION>
Principal Amount or
Number of Shares Value (000)
- ----------------------------------------------------------------------------------
Foreign Corporations, Operations in the U.S.: 0.7%
<S> <C> <C>
101,500 AES Corporation (b) $ 7,181
Electric Generating Plants
161,000 Carnival 6,641
Cruise Ship Line (Panama)
Foreign Corporations, Operations
---------
in the U.S.: Total 13,822
4,744 Miscellaneous Securities: 0.0% 17
Total Common Stocks and Other
----------
Equity-Like Securities: 93.6% 1,845,163
(Cost: $1,373,900)
Short-Term Obligations: 6.5%
Yield 5.49%--5.62%
Due 7/1/97--7/18/97
$32,872 General Motors Acceptance 32,829
$22,020 Baxter International 21,987
$17,791 General Electric Capital 17,779
$12,410 Prudential Funding 12,391
$12,296 Sears Roebuck Acceptance 12,271
$10,288 Commercial Credit 10,277
$10,187 Heller Financial 10,162
$9,643 GTE 9,630
- ----------------------------------------------------------------------------------
(Amortized Cost: $127,326) 127,326
---------
Total Investments: 100.1% 1,972,489
(Cost: $1,501,226)
---------
Cash and Other Assets Less Liabilities: (0.1%) (2,452)
---------
Total Net Assets: 100% $ 1,970,037
==================================================================================
</TABLE>
- --------------------------------------------------------------------------------
>Notes to Statement of Investments
(a) At June 30, 1997, for federal income tax purposes cost of investments was
$1,511,853,000 and net unrealized appreciation was $460,636,000 consisting of
gross unrealized appreciation of $579,531,000 and gross unrealized depreciation
of $118,895,000.
(b) Non-income producing security.
(c) On June 30, 1997, the Fund held the following percentages of the
outstanding voting shares of the affiliated companies (ownership of at
least 5%) listed below:
Prodega (Switzerland).........................................10.00%
Estoril Sol (Portugal)........................................ 9.71%
Sentra (Finland).............................................. 9.24%
Tigaraksa Satria (Indonesia).................................. 7.16%
Talentum (Finland)............................................ 6.89%
Kompan International (Denmark)................................ 6.58%
Kempen (Netherlands).......................................... 6.42%
Grupe Accion (Mexico)......................................... 6.28%
TT Tieto (Finland)............................................ 5.69%
Zee Telefilms (India)......................................... 5.61%
Ethical Holdings (UK)......................................... 5.14%
The aggregate cost and value of investments in these companies at June 30, 1997,
was $58,504,000 and $103,899,000 respectively. The market value of these
securities represents 5.27% of the total net assets at June 30, 1997. During the
six months ended June 30, 1997, the cost of purchases and proceeds from sales in
affiliated companies were $6,058,000 and $245,000, respectively. Net dividends
received from these companies amounted to $1,329,000 and net realized gains on
the sale of investments in such companies amounted to $70,000.
31
<PAGE>
Acorn International
>Portfolio Diversification
At June 30, 1997, Acorn International's portfolio of investments as a percent of
net assets was diversified as follows:
<TABLE>
<CAPTION>
Value(000) Percent
- -----------------------------------------------------
<S> <C> <C>
>Information
Software/Services $129,322 6.5%
Computer Systems 103,725 5.3
Broadcasting/CATV 101,150 5.1
Distribution 39,960 2.0
Mobile Communications 33,001 1.7
Consumer Electronics 31,451 1.6
Instrumentation 12,002 0.6
Equipment 1,106 0.1
- -----------------------------------------------------
451,717 22.9
>Health Care
Biotechnology/Drug Delivery 45,916 2.3
Services 42,700 2.2
Hospital/Laboratory Supplies 25,129 1.3
Equipment 20,865 1.1
- -----------------------------------------------------
134,610 6.9
>Consumer Goods/Services
Retail 184,802 9.4
Manufacturers 142,351 7.2
Entertainment/Leisure 81,717 4.1
Food 75,269 3.8
Recreational Vehicles 3,137 0.2
- -----------------------------------------------------
487,276 24.7
>Finance
Money Management $ 144,875 7.4%
Banks 88,824 4.5
Insurance 31,622 1.6
Credit Cards 6,530 0.3
Other 81,475 4.1
- -----------------------------------------------------
353,326 17.9
>Industrial Goods/Services
Services 156,656 8.0
Machinery Processing 68,711 3.5
Steel 16,639 0.8
Forest Products/Construction 7,704 0.4
- -----------------------------------------------------
249,710 12.7
>Energy/Minerals
Oil/Gas Producers 61,114 3.1
Oil Services 28,474 1.4
Independent Power 15,687 0.8
Mining 8,909 0.5
Refining/Marketing 475 0.0
- -----------------------------------------------------
114,659 5.8
>Real Estate 41,212 2.1
>Transportation 12,653 0.6
>Total Common Stocks and
---------------------
Other Equity-Like Securities 1,845,163 93.6
>Short-Term Obligations 127,326 6.5
---------------------
Total Investments $1,972,489 100.1%
=====================================================
</TABLE>
See accompanying notes to financial statements
32
<PAGE>
Acorn Family of Funds
.Statements of Assets and Liabilities (unaudited)
<TABLE>
<CAPTION>
Acorn
(in thousands) Acorn Fund International Acorn USA
- --------------------------------------------------------------------------------------------------------------------
6/30/97
Assets
<S> <C> <C> <C>
Investments, at value (cost: Acorn Fund $1,921,838;
Acorn International $1,501,226; Acorn USA $98,806) $3,219,766 $1,972,489 $114,526
Cash - 9,140 1
Net unrealized appreciation on foreign forward currency contracts - 2,454 -
Organization costs - 4 90
Receivable for:
Securities sold 7,361 4,599 488
Fund shares sold 3,745 2,218 311
Dividends and interest 2,825 4,740 23
Other assets 9 6 -
- --------------------------------------------------------------------------------------------------------------------
Total assets 3,233,706 1,995,650 115,439
Liabilities and Net Assets
Payable for:
Securities purchased 9,394 22,013 1,516
Fund shares redeemed 2,862 2,649 65
Organization costs - 2 90
Other 701 949 78
- --------------------------------------------------------------------------------------------------------------------
Total liabilities 12,957 25,613 1,749
Net assets applicable to Fund shares outstanding $3,220,749 $1,970,037 $113,690
====================================================================================================================
Fund shares outstanding 193,496 92,838 8,538
====================================================================================================================
Pricing of Shares
Net asset value, offering price and redemption price per share $16.65 $21.22 $13.32
====================================================================================================================
Analysis of Net Assets
Paid-in capital $1,754,464 $1,403,353 $ 97,185
Accumulated net realized gain on sales of investments, futures
and foreign currency transactions 163,748 91,299 980
Net unrealized appreciation of investments and other assets (net of unrealized
PFIC gains of $8,057 for Acorn Fund and $10,627 for Acorn International) 1,289,506 463,034 15,720
Undistributed net investment income (loss) 13,031 12,351 (195)
- --------------------------------------------------------------------------------------------------------------------
Net assets applicable to Fund shares outstanding $3,220,749 $1,970,037 $113,690
====================================================================================================================
</TABLE>
See accompanying notes to financial statements
33
<PAGE>
Acorn Family of Funds
>Statements of Operations (unaudited)
<TABLE>
<CAPTION>
Acorn
Acorn Fund International Acorn USA
6 months Year 6 months Year 6 months Inception 9/4
(in thousands) ended 6/30, ended 12/31, ended 6/30, ended 12/31, ended 6/30, through 12/31,
- -----------------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 13,726 $ 23,043 $ 19,006 $ 24,877 $ 238 $ 35
Interest 5,672 7,662 4,111 4,023 169 48
- -----------------------------------------------------------------------------------------------------------------------------------
19,398 30,705 23,117 28,900 407 83
Foreign taxes withheld (586) (845) (2,234) (2,681) - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total investment income 18,812 29,860 20,883 26,219 407 83
Expenses:
Investment advisory 6,520 12,437 7,918 13,255 427 101
Custodian 543 1,079 1,238 2,235 13 6
Transfer and dividend disbursing agent 665 1,030 944 1,558 68 27
Reports to shareholders 260 466 345 706 28 7
Legal and audit 136 152 78 142 17 27
Registration and blue sky 112 174 67 108 36 14
Trustees' and other 123 216 86 209 14 8
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses 8,359 15,554 10,676 18,213 603 190
Less custodian fees paid indirectly - - - - (1) (6)
- -----------------------------------------------------------------------------------------------------------------------------------
Net expenses 8,359 15,554 10,676 18,213 602 184
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 10,453 14,306 10,207 8,006 (195) (101)
Net Realized and Unrealized Gain (Loss) on
Investments, Futures and Foreign Currency
Transactions:
Net realized gain on sales of investments 137,771 298,665 71,391 48,566 961 120
Net realized gain on foreign currency
transactions - 7,234 1,291 - -
Net realized loss on futures (6,779) (22,053) - - - -
Change in net unrealized appreciation of
investments and foreign currency transactions 164,498 250,750 60,529 221,576 11,552 4,168
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments,
futures and foreign currency transactions 295,490 527,362 139,154 271,433 12,513 4,288
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations $305,943 $541,668 $149,361 $279,439 $12,318 $4,187
===================================================================================================================================
</TABLE>
See accompanying notes to financial statements
34
<PAGE>
Acorn Family of Funds
>Statements of Changes in Net Assets (unaudited)
<TABLE>
<CAPTION>
Acorn
Acorn Fund International Acorn USA
6 months Year 6 months Year 6 months Inception 9/4
(in thousands) ended 6/30, ended 12/31, ended 6/30, ended 12/31, ended 6/30, through 12/31,
- --------------------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
From Operations:
Net investment income (loss) $ 10,453 $ 14,306 $ 10,207 $ 8,006 $ (195) $ (101)
Net realized gain on sales of investments,
futures and foreign currency transactions 130,992 276,612 78,625 49,857 961 120
Change in net unrealized appreciation of
investments and foreign currency transactions 164,498 250,750 60,529 221,576 11,552 4,168
- ----------------------------------------------------------------------------------------------------- -------------------------
Net increase in net assets resulting
from operations 305,943 541,668 149,361 279,439 12,318 4,187
Distributions to Shareholders From:
Net investment income (a) - (19,687) - (10,368) - -
Net realized gain - (261,454) - (24,680) - -
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders - (281,141) - (35,048) - -
From Fund Share Transactions:
Reinvestment of dividends and capital
gain distributions - 257,125 - 33,033 - -
Proceeds from other shares sold 321,603 358,315 227,585 386,765 57,800 49,912
- -------------------------------------------------------------------------------------------------------------------------------
321,603 615,440 227,585 419,798 57,800 49,912
Payments for shares redeemed (248,849) (432,510) (179,452) (167,890) (9,513) (1,014)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
Fund share transactions 72,754 182,930 48,133 251,908 48,287 48,898
- -------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 378,697 443,457 197,494 496,299 60,605 53,085
Net Assets:
Beginning of period 2,842,052 2,398,595 1,772,543 1,276,244 53,085 -
End of period (b) $3,220,749 $2,842,052 $1,970,037 $1,772,543 $113,690 $53,085
================================================================================================================================
</TABLE>
(a) Includes distributions of unrealized PFIC gains of $2,671 for Acorn Fund
and $3,813 for Acorn International in 1996.
(b) Includes undistributed net investment income (loss) of $13,031 at June 30,
1997 and $2,578 at December 31, 1996 for Acorn Fund, $12,351 at June 30, 1997
and $2,144 at December 31, 1996 for Acorn International and $(195) at June 30,
1997 and $0 at December 31, 1996 for Acorn USA.
See accompanying notes to financial statements
35
<PAGE>
Acorn Family of Funds
>Financial Highlights (unaudited)
<TABLE>
<CAPTION>
6 months Years
Acorn Fund ended 6/30, ended 12/31,
- ----------------------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each period 1997 1996
<S> <C> <C>
Net Asset Value, beginning of period $15.04 $13.60
Income From Investment Operations
Net investment income .05 .09
Net realized and unrealized gain (loss) on investments, foreign currency and futures 1.56 2.93
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.61 3.02
Less Distributions
Dividends from net investment income -- (.11)
Distributions from net realized and unrealized gains reportable for federal income taxes -- (1.47)
- ----------------------------------------------------------------------------------------------------------------------------
Total distributions -- (1.58)
- ----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, end of period $16.65 $15.04
============================================================================================================================
Total Return 10.7% 22.6%
Ratios/Supplemental Data
Ratio of expenses to average net assets .57%* .57%
Ratio of net investment income to average net assets .72%* .53%
Portfolio turnover rate 22%* 33%
Net assets at end of period (in millions) $3,221 $2,842
</TABLE>
<TABLE>
<CAPTION>
6 months Years
Acorn USA ended 6/30, ended 12/31,
- -----------------------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each period 1997 1996
<S> <C> <C>
Net Asset Value, beginning of period $19.61 $16.59
Income From Investment Operations
Net investment income (loss) .11 .13
Net realized and unrealized gain (loss) on investments and foreign currency 1.50 3.29
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.61 3.42
Less Distributions
Dividends from net investment income -- (.12)
Distributions from net realized and unrealized gains reportable for federal
income taxes -- (.28)
- -----------------------------------------------------------------------------------------------------------------------------
Total distributions -- (.40)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, end of period $21.22 $19.61
=============================================================================================================================
Total Return 8.2% 20.7%
Ratios/Supplemental Data
Ratio of expenses to average net assets 1.14%* 1.17%
Ratio of net investment income (loss) to average net assets 1.09%* .51%
Portfolio turnover rate 33%* 34%
Net assets at end of period (in millions) $1,970 $1,773
</TABLE>
<TABLE>
<CAPTION>
6 months Inception 9/4
Acorn International ended 6/30, through 12/31,
- ------------------------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each period 1997 1996
<S> <C> <C>
Net Asset Value, beginning of period $11.65 $10.00
Income From Investment Operations
Net investment loss (e) (.03) (.02)
Net realized and unrealized gain on investments 1.70 1.67
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.67 1.65
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, end of period $13.32 $11.65
==============================================================================================================================
Total Return 14.3% 16.5%
Ratios/Supplemental Data
Ratio of expenses to average net assets (d) 1.41%* 1.85%*
Ratio of net investment loss to average net assets (.46%)* (.99%)*
Portfolio turnover rate 31%* 20%*
Net assets at end of period (in millions) $114 $53
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C>
$12.24 $13.95 $11.06 $ 9.32 $ 6.51 $ 8.58 $7.27 $6.48
.11 .06 .04 .07 .11 .12 .13 .12
2.42 (1.10) 3.50 2.16 2.95 (1.62) 1.65 1.47
- -------------------------------------------------------------------------------------------------------
2.53 (1.04) 3.54 2.23 3.06 (1.50) 1.78 1.59
(.09) (.11) (.06) (.08) (.10) (.13) (.11) (.16)
(1.08) (.56) (.59) (.41) (.15) (.44) (.36) (.64)
- -------------------------------------------------------------------------------------------------------
(1.17) (.67) (.65) (.49) (.25) (.57) (.47) (.80)
- -------------------------------------------------------------------------------------------------------
$13.60 $12.24 $13.95 $11.06 $ 9.32 $ 6.51 $8.58 $7.27
=======================================================================================================
20.8% (7.4%) 32.3% 24.2% 47.3% (17.5% ) 24.8% 24.8%
.57% .62% .65% .67% .72% .82% .73% .80%
.89% .55% .30% .72% 1.30% 1.60% 1.59% 1.52%
29% 18% 20% 25% 25% 36% 26% 36%
$2,399 $1,983 $2,035 $1,449 $1,150 $ 767 $ 855 $ 563
<CAPTION>
Inception 9/23
through 12/31,
- ------------------------------------------------
1995 1994 1993 1992
<S> <C> <C> <C>
$15.24 $15.94 $10.69 $10.00
.16 .07 .00 (.03)
1.20 (.67) 5.25 .72
- ------------------------------------------------
1.36 (.60) 5.25 .69
-- -- -- --
(.01) (.10) -- --
- ------------------------------------------------
(.01) (.10) -- --
- ------------------------------------------------
$16.59 $15.24 $15.94 $10.69
================================================
8.9% (3.8%) 49.1% 6.9%
1.22% 1.24% 1.21% 2.35%*
.90% .48% .06% (1.37%)*
26% 20% 19% 20%*
$1,276 $1,363 $ 907 $ 30
</TABLE>
(a) Average commission rate paid per share on Acorn Fund stock transactions for
the six months ended June 30, 1997 and for the year ended December 31, 1996 was
$.0086 and $.0194, respectively.
(b) Average commission rate paid per share on Acorn International stock
transactions for six months ended June 30, 1997 and for the year ended December
31, 1996 was $.0087 and $.0008, respectively.
(c) Average commission rate paid per share on Acorn USA stock transactions for
the six months ended June 30, 1997 and for the period ended December 31, 1996
was $.0584 and $.0567, respectively.
(d) In accordance with a requirement by the Securities and Exchange Commission,
the Acorn USA ratio reflects gross custodian fees. This ratio net of custodian
fees paid indirectly would have been 1.40% for the six months ended June 30,
1997 and 1.79% for the period ended December 31, 1996.
(e) Net investment loss per share was based upon the average shares outstanding
during each period.
* Annualized
See accompanying notes to financial statements
37
<PAGE>
Acorn Family of Funds
>Notes to Financial Statements (unaudited)
1. Nature of Operations
Acorn Fund, Acorn International and Acorn USA (the "Funds") are series of Acorn
Investment Trust (the "Trust"), an open-end management investment company
organized as a Massachusetts business trust. The investment objective of each
Fund is to seek long-term growth of capital.
2. Significant Accounting Policies
>Security valuation
Investments are stated at current value. Securities traded on securities
exchanges or in over-the-counter markets in which transaction prices are
reported are valued at the last sales price at the time of valuation. Securities
for which there are no reported sales on the valuation date are valued at the
mean of the latest bid and ask quotation or, if there is no ask quotation, at
the most recent bid quotation. Money market instruments having a maturity of 60
days or less from the valuation date are valued on an amortized cost basis.
Securities for which quotations are not available and any other assets are
valued at a fair value as determined in good faith by the Board of Trustees.
>Foreign currency translations
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
>Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Funds. Interest income is recorded on the
accrual basis and includes amortization of discounts on money market instruments
and long term debt instruments when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis. For Acorn Fund and for Acorn USA, net realized gains
include distributions of realized gains from other investment companies of
$1,395,520 and $21,360 in 1996, respectively.
>Financial instruments
Each Fund may purchase or sell exchange-traded financial futures contracts,
which are contracts that obligate that Fund to make or take delivery of a
financial instrument or the cash value of a securities index at a specified
future date at a specified price. The Funds enter into such contracts to hedge a
portion of their portfolio. Gains and losses are reflected as "Net Realized Gain
(Loss) on Futures" in the Statements of Operations. Additionally, each Fund may
engage in portfolio hedging with respect to changes in currency exchange rates
by entering into forward foreign currency contracts to purchase or sell foreign
currencies. The Statements of Operations reflect gains and losses as realized
for closed forward foreign currency contracts and unrealized for open contracts.
A Fund bears the market risk that arises from changes in the value of financial
instruments and securities indices (futures contracts) or from changes in
foreign currency rates (forward foreign currency contracts) and the credit risk
should a counterparty fail to perform under such contracts.
There were no forward foreign currency contracts open at June 30, 1997 in
Acorn Fund. Acorn Fund had the following open futures contracts at June 30,
1997:
<TABLE>
<CAPTION>
Number of Contract Expiration Unrealized
Contracts Value (000) Date Loss (000)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
S & P 500 Stock Index Futures (Short) 120 $53,415 9/97 $353
</TABLE>
38
<PAGE>
Acorn Family of Funds
.Notes to Financial Statements
There were no futures contracts open at June 30, 1997 in Acorn International.
Acorn International entered into forward contracts to sell foreign currency,
settling July 21 through September 26, 1997, as described below:
<TABLE>
<CAPTION>
U.S.Dollar Unrealized
Foreign Amount Currency Proceeds (000) Gain (000)
- -------------------------------------------------------------------
<C> <S> <C> <C>
69,000,000 Swiss Franc $48,499 $ 665
60,000,000 German Mark $35,010 353
200,000,000 French Franc $34,581 313
200,000,000 Hong Kong Dollar $25,817 8
47,405,280,000 Italian Lira $28,077 287
9,135,000,000 Japanese Yen $81,457 590
452,000,000 Swedish Krone $58,904 238
------
$2,454
</TABLE>
Acorn USA did not enter into any futures or forward foreign currency contracts
during the period ended June 30, 1997.
.Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange on each day the Exchange is open for trading by dividing the
total value of each Fund's investments and other assets, less liabilities, by
the respective number of Fund shares outstanding.
.Federal income taxes, dividends and distributions to shareholders
Each Fund intends to comply with the special provisions of the Internal Revenue
Code available to investment companies.
Dividends payable to shareholders are recorded by the Funds on the ex-
dividend date.
Acorn Fund and Acorn International have elected to mark-to-market their
investments in Passive Foreign Investment Companies ("PFICs") for Federal income
tax purposes. In accordance with this election, Acorn Fund recognized unrealized
appreciation on PFICs of $2,671,000 in 1996. Cumulative net unrealized
appreciation recognized in prior years on PFICs sold amounted to $7,124,000 and
distributions to shareholders from net realized gains relating to PFICs include
$2,671,000 in 1996.
In accordance with its PFIC election, for the year ended December 31, 1996,
Acorn International recognized unrealized appreciation on PFICs of $3,813,000.
The cumulative net unrealized appreciation recognized in prior years on PFICs
sold in 1996 amounted to $5,306,000. Distributions to shareholders from net
investment income relating to PFICs were $3,813,000 in 1996. Prior to 1996, the
Fund recognized unrealized PFIC gains of $11,427,000, which were offset by
accumulated net realized losses on foreign currency transactions and therefore
were not required to be distributed.
Distributions relating to PFICs are treated as ordinary income for Federal
income tax purposes.
3. Transactions With Affiliates
The Funds' investment advisor, Wanger Asset Management, L.P. ("WAM") furnishes
continuing investment supervision to the Funds and is responsible for the
overall management of the Funds' business affairs.
Under the Funds' investment management agreements with WAM, each fund pays
the Advisor an annual management fee, payable monthly, at the rates set forth
below. The fees for Acorn Fund and Acorn International are determined at the
beginning of each calendar quarter and the fees for Acorn USA are determined and
accrued daily:
<TABLE>
<CAPTION>
Acorn Fund
- -------------------------------------------------------------------
<S> <C>
Net asset value:
For the first $100 million .75%
Next $1.4 billion .50%
Net assets in excess of $1.5 billion .40%
Acorn International
- -------------------------------------------------------------------
Net asset value:
For the first $100 million 1.25%
Next $400 million 1.00%
Net assets in excess of $500 million .80%
Acorn USA
- -------------------------------------------------------------------
Net asset value:
For the first $200 million 1.00%
Net assets in excess of $200 million .95%
</TABLE>
39
<PAGE>
Certain officers and trustees of the Trust are also principals of WAM. The
Trust makes no direct payments to its officers and trustees who are affiliated
with WAM. Acorn Fund paid trustees' fees and expenses of $85,845 in 1997 and
$115,700 in 1996; Acorn International paid $56,745 in 1997 and $99,700 in 1996
and Acorn USA paid $2,910 in 1997 and $600 in 1996 to trustees not affiliated
with WAM. Included in these fees are amounts paid to the Chairman of the Board
of $25,075 and $43,200 by Acorn Fund and $16,575 and $37,600 by Acorn
International for the six months ended June 30, 1997 and the year ended December
31, 1996, respectively, and $850 and $200 by Acorn USA for the six months ended
June 30, 1997 and the period ended December 31, 1996, respectively.
WAM advanced Acorn International $71,000 in connection with the
organization and initial registration of the Fund. These costs are being
amortized and reimbursed to WAM over the period January, 1993 though September,
1997. WAM advanced Acorn USA $107,000 in connection with the organization and
initial registration of the Fund. These costs are being amortized and reimbursed
to WAM over the period September, 1996 though August, 2001.
WAM Brokerage Services, L.L.C., a wholly-owned subsidiary of WAM, is the
distributor of the Funds' shares and receives no compensation for its services.
4. Fund Share Transactions
Proceeds and payments on Fund shares as shown in the Statements of Changes in
Net Assets are in respect of the following number of shares:
<TABLE>
<CAPTION>
6 months
Acorn Fund ended 6/30,
- ------------------------------------------------------------------------------
(in thousands) 1997 1996
<S> <C> <C>
Shares sold 20,790 23,744
Shares issued in reinvestment of
dividend and capital gain distributions -- 17,382
------------------
20,790 41,126
Less shares redeemed 16,212 28,523
------------------
Net increase in shares outstanding 4,578 12,603
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
6 months
Acorn International ended 6/30,
- ------------------------------------------------------------------------------
(in thousands) 1997 1996
<S> <C> <C>
Shares sold 11,286 20,757
Shares issued in reinvestment of
dividend and capital gain distributions -- 1,708
------------------
11,286 22,465
Less shares redeemed 8,831 8,994
------------------
Net increase in shares outstanding 2,455 13,471
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
6 months
Acorn USA ended 6/30,
- ------------------------------------------------------------------------------
(in thousands) 1997 1996
<S> <C> <C>
Shares sold 4,781 4,647
Less shares redeemed 799 91
------------------
Net increase in shares outstanding 3,982 4,556
==============================================================================
</TABLE>
5. Investment Transactions
<TABLE>
<CAPTION>
6 months
Acorn Fund ended 6/30,
- -----------------------------------------------------------------------------
(in thousands) 1997 1996
<S> <C> <C>
Investment securities (excluding
money market instruments):
Purchases $300,690 $862,321
Proceeds from sales 484,459 924,259
</TABLE>
<TABLE>
<CAPTION>
6 months
Acorn International ended 6/30,
- ------------------------------------------------------------------------------
(in thousands) 1997 1996
<S> <C> <C>
Investment securities (excluding
money market instruments):
Purchases $385,436 $612,766
Proceeds from sales 295,545 498,234
</TABLE>
<TABLE>
<CAPTION>
6 months
Acorn USA ended 6/30,
- ------------------------------------------------------------------------------
(in thousands) 1997 1996
<S> <C> <C>
Investment securities (excluding
money market instruments):
Purchases $ 57,960 $ 45,708
Proceeds from sales 12,274 1,733
==============================================================================
</TABLE>
40
<PAGE>
The Acorn
- -----------------------
Family of Funds
.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.
Ralph Wanger
.Officers
Ralph Wanger
President
Charles P. McQuaid
Senior Vice President
Terence M. Hogan
Vice President
Leah J. Zell
Vice President
Robert A. Mohn
Vice President
Marcel P. Houtzager
Vice President
Merrillyn J. Kosier
Vice President and Secretary
Bruce H. Lauer
Vice President and Treasurer
Kenneth A. Kalina
Assistant Treasurer
.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]
web site: www.wanger.com
.Distributor
WAM Brokerage Services, L.L.C.
P.O. Box 8502
Boston, Massachusetts 02266-8502
.Transfer Agent, Dividend Disbursing Agent
and Custodian
State Street Bank and Trust Company
Attention: Acorn Family of Funds
P.O. Box 8502
Boston, Massachusetts 02266-8502
1-800-962-1585
.Legal Counsel
Bell, Boyd & Lloyd
Chicago, Illinois
This report, including the unaudited schedules of investments and financial
statements, 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.
Answer to Do You Remember What Year It Was?: 1975
41
<PAGE>
The Acorn
- -----------------------
Family of Funds
WAM Brokerage Services, L.L.C.
P.O. Box 8502
Boston, MA 02266-8502
