<PAGE>
Acorn Family of Funds 3
Third Quarter Report
September 30, 1999
Managed by Wanger Asset Management, L.P.
[ACORN ARTWORK APPEARS HERE]
<PAGE>
Y2K
Year 2000 Update
The Challenge
Computer programs throughout the world historically have used two digits instead
of four to identify the year. With a new millennium approaching, these programs
had to be modified so computers would read 00 as the year 2000 and not 1900. For
the Acorn Funds, and other investment firms that are dependent on date-specific
information for recordkeeping, Y2K ranks as a top business priority.
Y2K Readiness at Acorn Funds
The safety of our shareholders' assets is always of paramount importance to us.
That's why Acorn Funds has been working since 1997 to prepare our systems and
hardware to meet the Year 2000 challenge. Our goal: to conduct normal business
with our shareholders before, during and after the turn of the century. As of
August 31, 1999, our Y2K efforts are complete and our critical systems are Y2K
compliant.
Acorn's Y2K readiness project involved assessment of our Y2K exposure,
remediation, testing, and contingency planning. The project was completed in six
phases:
Phase 1: Creation of a Y2K committee, November 1997.
Phase 2: Establish monitoring process.
Phase 3: Inventory and itemize all systems and obtain information from external
vendors on potential exposure.
Phase 4: Examine all potential exposure points to determine if they present Y2K
problems. Obtain surveys/formal response of Y2K plans from external
vendors.
Phase 5: Remediation. Systems are changed to be Y2K compliant.
Phase 6: Testing. Identify problems, fix and retest.
All six phases of our plan were successful in their mission. From now through
the end of the year, our focus is on updating contingency plans. If something
unforeseen or beyond our control should occur, we'll have plans in place so that
we can service our shareholders in the best and fastest way possible.
<PAGE>
What You Can Expect on Y2K Weekend
As January 1, 2000 is celebrated at various times around the globe, media
coverage of the New Year countdown will be intense. How investors react to Y2K-
related developments as the calendar turns may influence financial markets. The
New York Stock Exchange and the Nasdaq will be open until 1 p.m. EST, six hours
after the year 2000 begins in countries just west of the international date
line.
January 1, 2000 is forecast to be one of the biggest telephone calling days in
history. Your attempts to communicate with Acorn Funds and others -- whether by
phone or the Internet -- may be hindered by overloaded telephone systems and
host computer servers. If you experience problems, they may result from strained
communications systems in response to large call volume, rather than from Y2K-
related computer glitches.
We're All in This Together
As the Acorn Funds count down to the new millennium, we are confident that our
systems and those of vital business partners are ready. We think January 1, 2000
will be business as usual. At the same time, we recognize that computer systems
are interdependent and that one company's non-compliance could affect the
operations of other businesses, so we can't guarantee a problem-free Y2K
passing -- no one can. We are however encouraged that we are part of an industry
that has substantial experience dealing with large-scale computer operations.
A good sign: anecdotally, credit cards, which we've all had for some months now
with `00' expiration dates, seem to be problem-free. Meanwhile, in a U.S. Senate
Year 2000 Committee report (2/24/99) on the impact of the Year 2000 Problem, the
U.S. securities industry was praised as having done more to prepare for Y2K than
any other business sector.
Steps You Can Take: An Investor Checklist for Y2K
There are a number of simple activities you can do to prepare for the year 2000.
Review your investment plan. In our view, events alone shouldn't cause investors
to abandon their long-term investment program. History has proven that it's
almost impossible to time the market. By altering your investment approach in
advance of December 31, you run the risk of missing out on opportunities and
unintentionally incurring transaction costs and potential unfavorable tax
consequences. Any modifications you decide are appropriate should be made
gradually over time.
Maintain good records. Keeping good records is always important. Keep all of
your account statements together in a safe place. Keep your third quarter
account statement and confirmations for any transactions in your account between
October 1 and December 31, 1999. Review statements and transaction records you
receive after December 31, 1999, to reassure yourself of their accuracy.
Check your own computer. Make sure that your personal computer system can handle
the Year 2000 date rollover. Check with the manufacturers of your hardware and
software to determine your computer system's Y2K readiness. The PC Year 2000
Alliance web site at www.pcy2000.org can provide you with direct links to the
web sites of a number of computer suppliers.
Ask questions. Visit www.acornfunds.com to review frequently asked Y2K questions
or www.nasdr.com/3600_inv_kit.htm for a free Year 2000 Investor Kit created by
the securities industry and the National Association of Securities Dealers, Inc.
See www.acornfunds.com for additional information on Y2K.
THIS MATERIAL CONTAINS YEAR 2000 READINESS DISCLOSURES WITHIN THE
MEANING OF THE YEAR 2000 INFORMATION AND READINESS DISCLOSURE ACT
<PAGE>
Acorn Family of Funds Third Quarter Report 1999
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Squirrel Chatter: A Really Big Bull 2
Acorn Twenty
In a Nutshell 4
Performance at a Glance 5
Major Portfolio Changes 14
Statement of Investments 15
Acorn Foreign Forty
In a Nutshell 6
Performance at a Glance 7
Major Portfolio Changes 16
Statement of Investments 17
Portfolio Diversification 18
Acorn USA
In a Nutshell 8
Performance at a Glance 9
Major Portfolio Changes 19
Statement of Investments 20
Acorn International
In a Nutshell 10
Performance at a Glance 11
Major Portfolio Changes 22
Statement of Investments 24
Portfolio Diversification 28
Acorn Fund
In a Nutshell 12
Performance at a Glance 13
Major Portfolio Changes 29
Statement of Investments 31
Foreign Portfolio Diversification 37
Trustees, Officers and Contact Information 38
</TABLE>
.Year-End Distribution Estimates
The following table details the Funds' year-end distribution estimates. These
are preliminary estimates and subject to change.
<TABLE>
<CAPTION>
Acorn Fund Acorn International Acorn USA Acorn Twenty Acorn Foreign Forty
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Long-term Capital Gains $3.40 $1.60 $1.30 $0.00 $0.00
- --------------------------------------------------------------------------------------------------------
Short-term Capital Gains $0.00 $0.00 $0.02 $0.14 $0.00
- --------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
.Squirrel Chatter: A Really Big Bull
[RALPH WANGER PHOTO APPEARS HERE]
The new South Park movie, "Bigger, Larger, and Uncut," I have not yet seen.
Judging by the title, it no doubt refers to the stock market. How much bigger
can it get, and how much longer can it go? A pair of academics have made a stir
by writing an article "Dow 36,000."/1/ They suggest that the current market
cycle will be as big and as long a thing as any bull could hope for. Most
reviewers treat the article as outrageous nonsense and try to refute "Dow
36,000." Could the authors' audacious forecast possibly come to pass?
The Dow is bound to reach 36,000 sooner or later. After all, the Dow was
under 1000 in 1982, and is now over 10,000, up ten-fold in 18 years. So another
mere quadrupling is bound to happen. If the market was to go up 8% per year, a
quadrupling would take another 18 years, perhaps a good result, but not exciting
enough to make you buy a book about it in 1999. Could we do it in six years?
That would require 25% returns. We just finished a four-year run at that level
of growth (1995-1998), so another long run of high returns would be
unprecedented but not unimaginable.
How could the market quadruple again? The whole argument of James Glassman
and Kevin Hassett, authors of "Dow 36,000," boils down to "the risk premium on
equities should be zero." This sounds like an academic argument, but the authors
are academics, so what can you expect? Their theoretical framework is a standard
dividend discount model (DDM). This is a simple algebraic model, but it can be
pushed to some strained conclusions, as we shall see.
A DDM computes the value of a stock as the sum of all of the future
dividends you will get from owning it, each dividend discounted to its present
value. One simple DDM equation for the market is: Risk Premium (RP) = Growth
Rate (GR) -- Risk Free Rate (RF) -- Dividend Yield (Y).
The growth rate is the long-term future growth of the Dow-Jones dividend
stream. Dividends have had an average growth rate of 4.7% since 1915; 5.4% since
1949. Earnings have grown faster than dividends over the last 50 years--7.3%
growth per year for corporate earnings as a whole--matching the growth in GDP
over this period. Since 1991, the economy has been relatively strong and non-
inflationary, and GDP has grown at 5.5% per year. Dividends aren't likely to
grow faster than GDP for the long-term. That would mean corporate profits would
be growing faster than the overall economy, which is against the rules of
economics and politics. We don't know exactly what the future growth rate of
dividends will be (start with guessing real GDP growth, inflation, corporate
profit margins, and the payout ratio of dividends to earnings), but let us
assume that it will be 6%. This is near the rate for the last 50 years, and
using it simplifies the math.
The risk free rate in our equation can be represented by a five-year
government bond, now a little over 6%. Going back to our DDM, you can see that
we take the GR-RF; if both = 6%, they cancel out, simplifying our equation to:
RP = Y (approximately). Most of the time from 1915 to 1990, yield averaged 4%.
/2/ After 1990, the dividend yield started to shrink, and is now at an all-time
low of 1 1/2%. Our equation says that the risk premium has dropped that much
too.
Risk Premium is the Key
The risk premium measures the amount of risk you are willing to assume by
owning stocks vs. owning government bonds. "The customary way to find the value
of a risky security has always been to add a premium for risk to the pure
interest rate, and then use the sum as the interest rate for discounting future
receipts."/3/
The "Dow 36,000" argument rests explicitly on the risk premium dropping
even further. Are you a "New Era" believer? If, in five years, the Dow-Jones
dividend is $222, up from $171 now, and the risk premium is down to 0.62%, then
the formula says the Dow-Jones triples to 36,000. If, however, the risk premium
returns to its long-term mean at 4%, the Dow would be only 5,550, only half its
current level, a fierce bear market. Who will be right? No one knows, but "New
Era" thinkers have appeared in past bull markets only to be discredited. The
next section will give reasons why the market can go much higher, followed by a
section that says it won't.
The Bullish Argument
The "Dow 36,000" theory argues that stocks are no riskier than bonds. This
is a defensible argument (even though many experts disagree). Academics measure
risk by short-term volatility, and bonds have been volatile. One leading
textbook/4/ shows that bonds were more volatile
2
<PAGE>
than stocks in the 1976-87 period. In fact, bonds were extremely volatile
between 1979-1983, when the Iraq-Iran War caused oil prices to jump and
inflation to go to high levels, while interest rates soared to 14%. This was an
unusual period, but there is no reason it couldn't happen again, so we shouldn't
throw out the data from 1979-83.
As investors realized that the equity risk premium was too high, they have
pushed it lower, and this trend isn't over yet. To keep the bull market going,
earnings and dividends need to keep growing, and the risk premium needs to keep
shrinking. The argument put forth in "Dow 36,000" is that the historic market
risk premium of 4% is way too high, because in the long run (any twenty-year
period) stocks have made money.
The risk premium is trending down because investors now realize that stocks
are not riskier than bonds. The risk premium was about 6 1/2 in 1990, down to 3%
in 1992, and has kept on shrinking since then, it is now 1 1/2%, and may well
continue lower. If it gets down to 0.6%, then the Dow Jones will in fact be at
36,000. At that point, stocks will be selling at 80-100 times earnings, four
times the present multiple. That sounds outlandish, but Japan was there in 1989.
Consider this: the Russell 2000 P/E is 61x and the Nasdaq (over-the-counter)
market, influenced by Internet stocks, is 158x right now!
The Bearish Argument
The eminent publication The Economist (September 25, 1999, pg. 17) argues
that the American market is a financial bubble. "History shows that markets do
overshoot and that bubbles can persist for some time--indeed, that is their
nature. It also shows that the bigger a bubble gets, the greater the excesses it
creates in the economy--and the bigger the bang when it eventually pops." If the
U.S. market bubble pops, the Dow P/E ratio can shrink from 27x, where it is now,
back down to 16x (the long-term average P/E), and easily go below the mean to
13x. That halves current values, so "Dow 5,000" could be the bears' book.
A second bearish argument is that the risk premium ought to be 2-4%, not
below 1%, because in fact stocks are riskier than bonds.
The third bearish argument is that "Dow 36,000" is based on a dividend
discount model that is a static model because a DDM does not require any history
to explain its result. In the real world, a market that reached 80-100x earnings
would have a dynamic interaction with the economy. When you have very high stock
prices, you have very low cost of equity capital. Any machine is worth ordering,
any building is worth building, any scheme is worth promoting--exactly what we
see in Internet stocks today. The overexpansion that would result would kill
profits and the market. Example: Japan's bubble popped in 1989 and was followed
by an eight-year bear market.
There is no theoretical reason that the Dow cannot get to 36,000 in a few
years, but the boom would necessarily create the bust that would follow. We
could get there but not stay there.
Is There an Answer?
If the best our mathematical model can do is tell us that the Dow should
sell five years from now somewhere between 5000 and 36,000, have we said
anything at all? Perhaps not. The future course of the stock market is not any
more predictable than this 5000-36,000 result. The "Dow 36,000" theory is based
on a near-zero risk premium, meaning that stocks are no riskier than bonds.
However, history shows there have been some very long bear markets. These bear
markets should be evidence of a risk premium more than zero. I believe that the
"Dow 36,000" argument is too optimistic. The range of future prices is still
very wide, at least 50% in either direction, in a range of 8000-18000. That
ought to be enough volatility to suit anyone.
/s/ Ralph Wanger
Ralph Wanger
Chief Investment Officer, Wanger Asset Management
Lead Portfolio Manager, Acorn Fund
- --------------------------------------------------------------------------------
/1/ James Glassman & Kevin Hassett, Dow 36,000, The Atlantic Monthly, September
1999.
/2/ Ned Davis Research, Chart #S616
/3/ Williams, John Burr, The Theory of Investment Value, Harvard University
Press, 1938: reprinted by Fraser Publishing Company, Burlington, VT 05402 in
1997.
/4/ Bodie, Kane, Marcus, Investments: Second Edition, p. 471. Irwin, Burr Ridge,
IL, 1993. The period 1976-87 included the 1979-83 years of very high
inflation. High inflation makes bonds go down in a volatile manner.
3
<PAGE>
Acorn Twenty
>In a Nutshell
[JOHN H. PARK PHOTO APPEARS HERE]
[MARK H. YOST PHOTO APPEARS HERE]
The third quarter was challenging. Acorn Twenty was off 7.1%, its first down
quarter. On a relative basis, Acorn Twenty stayed ahead of its benchmark, the
S&P MidCap 400 Index, which was off 8.4%, but fell slightly behind the S&P 500's
negative 6.2% return.
A top-performing stock held by your Fund has been Telephone & Data Systems
(see inset). Recommended by Acorn Fund co-manager Chuck McQuaid, TDS was up 22%
for the quarter and is up 98% for the year (111% since the Fund bought it on
11/23/98). Two newer positions, McLeod USA and Herman Miller, were up 17% and
14%, respectively, from the time of purchase through quarter end. McLeod is a
competitive local exchange carrier (CLEC) whose stock went up after its
announcement of a $1 billion investment by Forstmann Little, a private equity
investment firm. Herman Miller is an office furniture manufacturer whose stock
rose following better than expected third quarter earnings.
Two stocks delivered particularly disappointing returns. Progressive
Corporation fell 44% due to pricing pressure from increased competition in the
insurance industry. Progressive, one of the dominant industry players, has been
driving this pricing pressure and we feel over the long term it will emerge as a
better-positioned company. National Data Corporation was down 40% because
earnings were below analysts' estimates last quarter. We continue to believe
National Data is a flourishing information company with promising potential.
With the Fund's one-year anniversary approaching on November 23, Acorn
Twenty is up 21.1% from inception through September 30, 1999 vs. the S&P MidCap
400's 8.8% gain, and the S&P 500's 11.5% return. We thank you for making the
Fund's first year a successful one.
With the Fund's one-year anniversary approaching on November 23, Acorn
Twenty is up 21.1% from inception through September 30, 1999, vs. the S&P MidCap
400's 8.8% gain, and the S&P 500's 11.5% return.
/S/ John H. Park /S/ Mark H. Yost
John H. Park Mark H. Yost
Co-Portfolio Manager Co-Portfolio Manager
Wireless
is More
Telephone & Data Systems (TDS) has been in Acorn Twenty since the Fund's
inception. TDS is comprised of three companies: (1) its wholly owned
telecommunications company, TDS Telecommunications; (2) 81% ownership of U.S.
Cellular, a provider of cellular phone service in small cities and rural areas;
and (3) 82% ownership of Aerial Communications, a start-up PCS (personal
communications service) company. Rapid growth in U.S. Cellular's business over
the past several years has been hidden by start-up losses at Aerial. Acorn Fund
co-manager Chuck McQuaid identified TDS as a growing business selling at a steep
discount to its true value by looking beyond Aerial's negative impact on TDS'
earnings. In December 1998, TDS management announced it would spin off Aerial to
TDS shareholders.TDS stock rose 80% in the first nine months of 1999. In
September, TDS revised its plan, deciding to sell Aerial to Voicestream Wireless
at a fancy price. The increase in Aerial's value added even more value to TDS.
4
<PAGE>
. Performance at a Glance
Acorn Twenty
Information
<TABLE>
<CAPTION>
<S> <C>
Ticker Symbol: ACTWX
Minimum
Initial Investment: $1,000
$1,000 for an IRA
Minimum
Subsequent Investment: $100
Exchange Fee: None
Management Fee*: 0.90%
12b-1 Fee: None
Other Expenses: 0.93%
Less Expense
Reimbursement: 0.48%
Total Expense Ratio*: 1.35%
</TABLE>
*Fees and expenses are calculated for the period from the Fund's inception on
November 23, 1998 through December 31, 1998. Wanger Asset Management has
undertaken to reimburse the Fund for any ordinary operating expenses exceeding
1.35% of its average annual net assets. This expense limitation is voluntary and
is terminable by either the Fund or Wanger Asset Management on 30 days' notice
to the other.
Fund Net Assets as of 9/30/99: $59.4 million
- --------------------------------------------------------------------------------
. Acorn Twenty Top 10 Holdings
<TABLE>
<CAPTION>
<S> <C>
Telephone & Data Systems 9.0%
Cellular & Telephone Services
Americredit 6.4%
Auto Lending
UICI 6.2%
Insurance/Specialty Finance
MidAmerican Energy 5.9%
Growth Utility
RCN 5.7%
Metro Market CLEC: Voice, Video & Internet Services
AES Corporation 5.6%
Power Plants
Liberty Media Group, AT&T 5.1%
Cable Satellite Programming
McLeod USA 4.9%
Super Regional CLEC: Local, Long Distance & Internet Services
ServiceMaster 4.9%
Facilities Management
SEI Investments 4.7%
Mutual Fund Administration
</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.
Acorn Twenty Portfolio Diversification
- --------------------------------------------------------------------------------
. as a % of net assets, as of 9/30/99
[PIE CHART APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C>
Information
Finance
Energy/Minerals
Industrial Goods/Services 4.0%
Health Care
Consumer Goods/Services
Other* 8.9%
</TABLE>
* Other includes "Cash and other assets less liabilities" of 8.1%.
<TABLE>
<CAPTION>
Relative Performance
- ------------------------------------------------------------
3rd quarter Year to Date Life of Fund*
1999
<S> <C> <C> <C>
Acorn Twenty -7.1% 13.1% 21.1%
S&P MidCap 400 -8.4% -2.1% 8.8%
Russell 2000 -6.3% 2.4% 9.7%
S&P 500 -6.2% 5.4% 11.5%
</TABLE>
*Life of Fund performance is from Acorn Twenty's inception 11/23/98 through
9/30/99.
Net Asset Value Per Share 9/30/99: $12.11
- -----------------------------------------
The Value of a $10,000 Investment in Acorn Twenty
- --------------------------------------------------------------------------------
.November 23, 1998 through September 30, 1999
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
ACORN TWENTY S&P MIDCAP 400
<S> <C> <C>
11/23/98 10000 10000
12/31/98 10710 11109
1/31/99 11000 10676
2/28/99 10710 10117
3/31/99 11480 10400
4/30/99 12710 11220
5/31/99 12730 11270
6/30/99 13040 11872
7/30/99 13190 11620
8/31/99 12060 11222
9/30/99 12110 10875
</TABLE>
Total Return Life of Fund 21.1%
This graph compares the results of $10,000 invested in Acorn Twenty on November
23, 1998 (the date Fund shares were first offered to the public), with all
dividends and capital gains reinvested to the S&P MidCap 400.
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
average of U.S. blue-chip companies. The Russell 2000 is formed by taking the
3,000 largest U.S. companies and then eliminating the largest 1,000, leaving a
market capitalization-weighted index of 2,000 small companies. All indexes are
unmanaged and returns include reinvested dividends.
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.
5
<PAGE>
Acorn Foreign Forty
. In a Nutshell
[MARCEL P. HOUTZAGER PHOTO APPEARS HERE]
Acorn Foreign Forty rose 3.9% in the third quarter. This figure is slightly
better than the Lipper International Funds Index, but lagged the 5.3% gain of
the Salomon Smith Barney Cap Range $2-10 Billion Index.
As Y2K fears diminished, our best sector was information technology
services. Logica, Atos, Getronics, and Sema were all up 20% or better. Softbank
kept up its stellar rise as the market continued to recognize the strength of
its Internet portfolio. Softbank is a stock that we have been telling Acorn
Foreign Forty shareholders about since the inception of the Fund due to its
domination of the Internet in Japan.
On the downside, the telecommunications sector underperformed substantially
on concerns over rising capital costs (new telecommunications companies require
large sums of capital in order to finance their sophisticated new equipment).
Despite the sometimes volatile nature of these stocks, we believe that these
"new telcos" can deploy state-of-the-art technology to provide lower cost and
higher quality services (see inset). These companies are a creative and
entrepreneurial force that is changing the communications world. We believe they
also have the potential to make Acorn Foreign Forty shareholders a lot of money
if they continue to grow.
With the Fund's one-year anniversary approaching on November 23, Acorn
Foreign Forty is up 36.2% from inception through September 30, 1999 vs. 15.3%
for the Salomon Smith Barney Cap Range $2-10 Billion, and the EAFE Index gain of
13.0%. We thank you for making the Fund's first year a successful one.
Softbank kept up its stellar rise as the market continued to recognize the
strength of its Internet portfolio. Softbank is a stock that we have been
telling Acorn Foreign Forty shareholders about since the inception of the Fund
due to its domination of the Internet in Japan.
/S/ MARCEL P. HOUTZAGER
Marcel P. Houtzager
Portfolio Manager
Moving the
Bytes Around
One of our favorite long-term themes is the "new telcos," or telecommunications
companies that use new technology to manage the huge growth in Internet data
traffic and company data networks. An example is Energis. This company recently
won a long-term contract to manage Sainsbury's--the United Kingdom's largest
supermarket chain--data network. This network will manage the information
(credit checks, stock control and data from point-of-sale terminals) flowing
between 900 stores and five data centers.
6
<PAGE>
.Performance at a Glance
<TABLE>
<CAPTION>
Acorn Foreign Forty
Information
<S> <C>
Ticker Symbol: ACFFX
Minimum
Initial Investment: $1,000
$1,000 for an IRA
Minimum
Subsequent Investment: $100
Exchange Fee: None
Management Fee*: 0.95%
12b-1 Fee: None
Other Expenses: 1.75%
Less Expense
Reimbursement: 1.25%
Total Expense Ratio*: 1.45%
</TABLE>
*Fees and expenses are calculated for the period from the Fund's inception on
November 23, 1998 through December 31, 1998. Wanger Asset Management has
undertaken to reimburse the Fund for any ordinary operating expenses exceeding
1.45% of its average annual net assets. This expense limitation is voluntary
and is terminable by either the Fund or Wanger Asset Management on 30 days'
notice to the other.
Fund Net Assets as of 9/30/99: $56.7 million
- ----------------------------------------------------------------
.Acorn Foreign Forty Top 10 Holdings
<TABLE>
<S> <C> <C>
Softbank Japan 4.7%
Internet Services/Investment Holding
Atos France 4.1%
Computer Services/Transaction Processing
Celestica Canada 3.9%
Electronic Manufacturing Services
Getronics Netherlands 3.8%
Computer Services
Logica United Kingdom 3.5%
Computer Software & Services
Energis United Kingdom 3.4%
Services
Nintendo Japan 3.4%
Video Games
Mapfre Vida Spain 3.1%
Life Insurance & Mutual Funds
Venture Manufacturing Singapore 3.1%
Electronic Manufacturing Services
Banca Fideuram Italy 3.0%
Life Insurance & Mutual Funds
</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.
Acorn Foreign Forty Portfolio Diversification
- ---------------------------------------------
.as a % of net assets, as of 9/30/99
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Health Care 5.3%
Energy/Minerals 4.8%
Other* 5.2%
Consumer
Goods/Services 8.5%
Industrial
Good/Services 10.8%
Finance 15.0%
Information 50.4%
</TABLE>
* Other includes "Cash and other assets less liabilities" of 1.0%.
<TABLE>
<CAPTION>
Relative Performance
- ------------------------------------------------------------------------
3rd quarter Year to Date Life of Fund*
1999
<S> <C> <C> <C>
Acorn Foreign Forty 3.9% 23.8% 36.2%
EAFE 4.4% 8.5% 13.0%
SSB Cap Range $2-10B 5.3% 11.5% 15.3%
Lipper Int'l Funds Average 3.4% 10.6% NA
</TABLE>
*Life of Fund performance for Acorn Foreign Forty is from inception 11/23/98
through 9/30/99.
Net Asset Value Per Share 9/30/99: $13.59
- -----------------------------------------
The Value of a $10,000 Investment in Acorn Foreign Forty
- --------------------------------------------------------
.November 23, 1998 through September 30, 1999
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
ACORN FOREIGN FORTY EAFE
<S> <C> <C>
11/23/98 10,000 10,000
12/31/98 11,000 10,411
1/31/99 11,790 10,381
2/28/99 11,590 10,133
3/31/99 11,980 10,556
4/30/99 12,240 10,980
5/30/99 12,170 10,418
6/30/99 13,110 10,825
7/31/99 13,511 11,146
8/30/99 13,771 11,187
9/30/99 13,621 11,300
</TABLE>
Total Return Life of Fund 36.2%
This graph compares the results of $10,000 invested in Acorn Foreign Forty on
November 23, 1998 (the date Fund shares were first offered to the public), with
all dividends and capital gains reinvested, with EAFE.
EAFE is Morgan Stanley's Europe, Australasia and Far East Index, an unmanaged
widely recognized international benchmark that comprises 20 major markets in
Europe, Australia, and the Far East. The SSB Cap Range $2-10B is Salomon Smith
Barney's 2 to 10 billion U.S. dollar security market capitalization subset of
its Broad Market Index. It represents a mid-cap developed market index,
excluding the U.S. The Lipper International Funds Average, which includes Acorn
Foreign Forty, measures the performance of all non-U.S. funds tracked by Lipper,
excluding the International Small Cap Funds group. This group consisted of 643
funds for the third quarter. All indexes are unmanaged and returns include
reinvested dividends.
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.
7
<PAGE>
Acorn USA
. In a Nutshell
[ROBERT A. MOHN PHOTO APPEARS HERE]
Acorn USA was off 4.4% in the third quarter, but stayed ahead of the 6.3% loss
posted by the Russell 2000, the Fund's benchmark. We also did better than the
S&P 500 Index, as we did in the second quarter as well. We hope this momentum
continues.
The Fund passed an important milestone in the third quarter. On September 4,
Acorn USA reached its third year of operation, a time period widely used to
judge the performance success of new mutual funds. We are proud of the excellent
results we have delivered to shareholders. For the three years ended September
30, 1999, the Fund's annualized return was 16.3% vs. 8.7% for the Russell 2000
and 6.5% for the Lipper Small Cap Funds Index.
Wall Street's technology obsession continued this quarter. Technology stocks,
with their extraordinary revenue growth, dominated the market and posted strong
results. Our technology stocks ran with the rest, especially our larger
positions in Micros (hotel information systems), Aspect (call center software)
and IntelliQuest (Internet market research). These stocks delivered returns
between 20% and 70%.
But honors for the quarter belong to your Fund's telephone stocks. Chuck
McQuaid, co-manager of Acorn Fund, recommended two new cellular stocks, TDS and
Price Communications, to the Fund this year. Both have been big winners. Host
Marriott Services (airport food concessionaire) deserves special mention as a
non-technology, non-telecom winner. It nearly doubled last quarter after a
takeover by Autogrill, an Italian restaurateur. Host Marriott Services stays in
the family, as Acorn International owns stock in Autogrill.
National Data (health claims processor), on the other hand, committed the sin
of missing its earnings estimate by an entire penny and dropped 40%. We continue
to believe National Data is a flourishing information company with promising
potential.
/s/ Robert A. Mohn
- ----------------------
Robert A. Mohn
Lead Portfolio Manager
On September 4, Acorn USA reached its third year of operation, a time period
widely used to judge the performance success of new mutual funds. We are proud
of the excellent results we have delivered to shareholders. For the three years
ended September 30, 1999, the Fund's annualized return was 16.3% vs. 8.7% for
the Russell 2000 and 6.5% for the Lipper Small Cap Funds Index.
Tech Smart vs.
Street Smart
Americredit lends money to borrowers with poor credit histories to purchase used
automobiles. Five years ago, when Americredit entered the business, other sub-
prime auto lenders relied on street smarts and intuition to lend money. Gut
instinct lending worked when competition was scarce and loan yields were high.
Half the sub-prime auto lenders open for business two years ago have gone bust.
Americredit has the sophisticated computer-based underwriting, risk management
and pricing models to compete well in a tough business, and it now dominates
this rapidly growing industry.
8
<PAGE>
. Performance at a Glance
<TABLE>
<CAPTION>
Acorn USA
Information
<S> <C>
Ticker Symbol: AUSAX
Minimum
Initial Investment: $1,000
$1,000 for an IRA
Minimum
Subsequent Investment: $100
Exchange Fee: None
Management Fee*: 0.94%
12b-1 Fee: None
Other Expenses: 0.26%
Total Expense Ratio*: 1.20%
</TABLE>
*Fees and expenses are for the fiscal year ended
December 31, 1998.
Fund Net Assets as of 9/30/99: $310.7 million
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
. Acorn USA Top 10 Holdings
<S> <C>
MidAmerican Energy 8.1%
Growth Utility
Micros Systems 6.4%
Information Systems for Restaurants & Hotels
Telephone & Data Systems 5.8%
Cellular & Telephone Services
UICI 5.0%
Insurance/Specialty Finance
Americredit 3.0%
Auto Lending
Lincare Holdings 2.9%
Home Health Care Services
Sykes Enterprises 2.7%
Call Center Services
RCN 2.6%
Metro Market CLEC: Voice, Video & Internet Services
First Health 2.5%
PPO Network
Tesoro Petroleum 2.5%
Oil Refinery/Gas Reserves
</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.
<TABLE>
<CAPTION>
Acorn USA Portfolio Diversification
- ---------------------------------------
. as a % of net assets, as of 9/30/99
<S> <C>
Health Care 7.4%
Consumer
Goods/Services 2.7%
Industrial
Goods/Services 8.3%
Information 38.3%
Energy/Minerals 15.2%
Finance 15.0%
Other* 13.1%
</TABLE>
*Other includes "Cash and other assets less liabilities" of 12.6%
Relative Performance
- ----------------------------------------------------------------------
3rd quarter Year to Date Last 12 mos.
1999
Acorn USA -4.4% 3.4% 19.2%
Russell 2000 -6.3% 2.4% 19.1%
Lipper Small-Cap Funds Avg. 2.9% 5.7% 26.9%
S&P MidCap 400 -8.4% -2.1% 25.5%
S&P 500 -6.2% 5.4% 27.8%
Net Asset Value Per Share 9/30/99: $15.27
- -----------------------------------------
The Value of a $10,000 Investment in Acorn USA
- -----------------------------------------------
. September 4, 1996 through September 30, 1999
<TABLE>
<CAPTION>
Date Acorn USA Russell 2000
<S> <C> <C>
9/4/96 10,000 10,000
9/96 10,720 10,360
12/96 11,650 10,899
3/97 11,480 10,335
6/97 13,320 12,011
9/97 15,340 13,798
12/97 15,413 13,335
3/98 17,401 14,678
6/98 17,525 13,993
9/98 14,151 11,174
12/98 16,305 12,997
3/99 15,016 12,292
6/99 17,650 14,203
9/99 16,866 13,305
</TABLE>
Average Annual Total Return
1 Year 19.2%
Life of Fund 18.6%
This graph compares the results of $10,000 invested in Acorn USA on September 4,
1996 (the date Fund shares were first offered to the public), with all dividends
and capital gains reinvested, to the Russell 2000 Index.
The Russell 2000 is formed by taking the 3,000 largest U.S. companies and then
eliminating the largest 1,000, leaving a market capitalization-weighted index of
2,000 small companies. The Lipper Small-Cap Funds Average, which includes Acorn
USA, is an average of all U.S. small-cap funds tracked by Lipper, which
consisted of 643, 619 and 579 for the third quarter, year to date and 12-month
periods above. 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 average of U.S. blue-chip companies. All indexes are unmanaged and
returns include reinvested dividends.
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.
9
<PAGE>
Acorn International
. In a Nutshell
[LEAH JOY ZELL PHOTO APPEARS HERE]
[MARGARET M. FORSTER PHOTO APPEARS HERE]
Acorn International gained 8.3% in the third quarter, bringing the year-to-date
return to 26.5%. These returns reflect the fact that small-cap international
assets were ripe for a rebound. A year ago, stock prices were weak due to the
Russian crisis. Since the crisis subsided, world markets have been strong, led
by small-company stocks.
The return of foreign capital to Asia has been key. A year ago, eight out of
Acorn International's top 10 positions were in Europe; today, that number has
dropped to six, and the Asian names on the list all have moved up in rank. The
three stocks that made the most money for us this quarter were in Australia
(ERG), Singapore (Star Cruises) and Japan (Ryohin Keikaku).
Acorn International gained 8.3% in the third quarter, bringing the year-to-date
return to 26.5%. These returns reflect the fact that small-cap international
assets were ripe for a rebound.
As always, we are working hard to improve the portfolio. Twelve months ago,
our largest stock was 4.6% of the Fund and the top 25 positions totaled 38% of
the Fund's total net assets. Today, our number one position is only 3.3%, but
the top 25 positions add up to 44% of the Fund's net assets. In other words, we
have more medium-sized investments, with less of a spread from largest to
smallest. We believe this shift keeps us adequately diversified, while assuring
that we put weight behind the ideas in which we have the most conviction.
With regard to themes, we continue to like the computer services/consulting
sector. However, we have taken some investment dollars out of Scandinavia and
moved them to companies with exciting prospects that are less well recognized by
the market. One example is Dimension Data, the South African-based parent of
network systems integrator Datacraft Asia. Another is Amdocs, the global leader
in customer care and billing software for telecommunications based in Israel. We
have also expanded the information technology theme to smartcards. These credit
card look alikes have an embedded microchip that can store and process large
amounts of data. Smartcards will be central to secure payment for many goods and
services (see inset).
/s/ Leah Joy Zell
- -----------------------
Leah Joy Zell
Lead Portfolio Manager
/s/ Margaret M. Forster
- -----------------------
Margaret M. Forster
Co-Portfolio Manager
Smart
Money
Take the subway in Hong Kong and watch people pay with a wave of their wallet or
purse. They carry a new type of credit card, one that automatically deducts the
fare from their bank account without touching the turnstile. The same card works
for the bus, pay telephone, even newspapers. More than six million are in
circulation after only two years. Hong Kong's success has persuaded Singapore,
Rome and San Francisco to order their own installations, making system designer
ERG the best-performing stock in Australia this year.
10
<PAGE>
. Performance at a Glance
<TABLE>
<CAPTION>
<S> <C>
Acorn International
Information
Ticker Symbol: ACINX
Minimum
Initial Investment: $1,000
$1,000 for an IRA
Minimum
Subsequent Investment: $100
Exchange Fee: None
Management Fee*: 0.82%
12b-1 Fee: None
Other Expenses: 0.30%
Total Expense Ratio*: 1.12%
</TABLE>
*Fees and expenses are for the fiscal year ended
December 31, 1998.
<TABLE>
<CAPTION>
Fund Net Assets as of 9/30/99: $1,973.6 million
- ----------------------------------------------------------------------
. Acorn International Top 10 Holdings
<S> <C> <C>
WM Data Nordic Sweden 3.3%
Computer Services/Consulting
Star Cruises Singapore 2.9%
Cruise Line
Venture Manufacturing Singapore 2.9%
Electronic Manufacturing Services
Atos France 2.6%
Computer Services/Transaction Processing
NTL United Kingdom 2.4%
Voice, Video & Data Services
Li and Fung Hong Kong 2.3%
Sourcing of Consumer Goods
Serco Group United Kingdom 2.3%
Facilities Management
Rhoen Klinikum Germany 2.1%
Hospital Management
TietoEnator Finland 2.0%
Computer Services/Consulting
Datacraft Asia Singapore 1.9%
Network Integrator
</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.
<TABLE>
<CAPTION>
Acorn International Portfolio Diversification
- --------------------------------------------------
. as a % of net assets, as of 9/30/99
[PIE CHART APPEARS HERE]
<S> <C>
Health Care 3.9%
Finance 6.2%
Other 9.3%
Industrial Goods/Services 11.3%
Energy/Minerals 2.7%
Information 46.2%
Consumer Goods/Services 20.4%
</TABLE>
* Other include "Cash and other assets less liabilities" 5.5%.
<TABLE>
<CAPTION>
Relative Performance
- ----------------------------------------------------------------------
<S> <C> <C> <C>
3rd quarter Year to Date Last 12 mos.
1999
Acorn International 8.3% 26.5% 44.3%
EMI (World ex-U.S.) 5.1% 13.1% 28.0%
IFCI Composite -3.2% 33.0% 57.0%
Lipper Int'l Small-Cap
Funds Index 7.8% 27.0% 40.6%
Lipper Int'l Funds Index 3.4% 10.5% 27.6%
</TABLE>
Net Asset Value Per Share 9/30/99: $26.18
<TABLE>
<CAPTION>
The Value of a $10,000 Investment in Acorn International
- ----------------------------------------------------------------------
. September 23, 1992 through September 30, 1999
[GRAPH APPEARS HERE]
ACORN INT'L EMI (World ex-U.S.)
- -------------------------------------------------
<S> <C> <C>
Sep-1992 10000 10000
Dec-1992 10679 9590.49
Dec-1993 15924 12573.13
Dec-1994 15319 13639.59
Dec-1995 16686 14355.04
Dec-1996 20170 15392.73
Dec-1997 20190 13946.49
Dec-1998 23305 15641.12
Jun-1999 27222 16839
Sep-1999 29486 17694
</TABLE>
This graph compares the results of $10,000 invested in Acorn International on
September 23, 1992 (the date Fund shares were first offered to the public), with
all dividends and capital gains reinvested, with the EMI (World ex-U.S.).
EMI World ex-U.S. is Salomon Brothers' index of the bottom 20% of
institutionally investable capital of countries, as selected by Salomon,
excluding the U.S. The IFCI Composite is the International Finance Corporation's
index of 31 emerging markets, which weights securities according to their market
capitalization after adjusting for shares held by other constituents in the
index. The Lipper International Small Cap Funds Index measures the performance
of the 10 largest international small-cap funds tracked by Lipper, which
includes Acorn International. The Lipper International Funds Index measures the
performance of the 30 largest non-U.S. small-cap funds tracked by Lipper. All
indexes are unmanaged and returns include reinvested dividends.
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.
11
<PAGE>
Acorn Fund
. In a Nutshell
[RALPH WANGER PHOTO APPEARS HERE]
[CHARLES P. McQUAID PHOTO APPEARS HERE]
Acorn Fund fell 2% in the third quarter, but we were able to beat the Russell
2000 and the S&P 500 indexes, which both dropped more than 6%. As the table on
page 13 indicates, your Fund has outperformed these indexes year to date and
over the last twelve months.
Buyouts buoyed the Fund during the quarter. Host Marriott Services sold to
Autogrill, World Color Press was acquired by Quebecor, and Compass International
Services navigated its way into the arms of NCO Group. In each case, these
buyouts produced big profits for us.
We bought some small-cap biotech stocks a while ago, knowing that the
industry was out of favor and at some point could provide some excitement. That
point occurred in the quarter, as many of these stocks delivered returns between
30% and 90%. There are some technology ideas outside the Internet!
The Internet is still potent. Our biggest dollar winner in the quarter was
Softbank. This Japanese-based company dominates the Internet in Japan and has
major equity positions in Yahoo!, E*Trade and many start-up companies. Softbank
jumped 88% in the third quarter and is up about 350% over our cost in less than
a year.
As you would expect, earnings concerns caused our largest losses. While
FPIC Insurance and Labor Ready achieved their earnings targets, investors became
concerned about their future earnings. FPIC released more reserves than usual
while Labor Ready's growth slowed--to "merely" 33% in July and August. As a
result, FPIC declined 75% while Labor Ready was off 54%.
We are proud of our results for the first nine months of 1999, a period
when the majority of stocks have gone down, with a few strong companies keeping
the averages in positive territory.
/s/ Ralph Wanger /s/ Charles P. McQuaid
Ralph Wanger Charles P. McQuaid
Lead Portfolio Manager Co-Portfolio Manager
We are proud of our results for the first nine months of 1999, a period when the
majority of stocks have gone down, with a few strong companies keeping the
averages in positive territory.
- -------------------------------------------------------------------------------
Playing for Fun
and Profit
We've liked entertainment software stocks for a long time. Improving technology
vastly enhances video games--just compare Madden NFL 2000's graphics and
artificial intelligence to Pong's dots and lines. Because play value is
constantly improving, unit volumes are surging. Software manufacturing costs
have plunged as games switch from cartridges to CD-ROMs and DVDs. Unlike
Hollywood, video game sequels often outsell their prequels, creating enduring
franchises for publishers. During the quarter, 3DO blasted an 85% gain, THQ
raced up 50% and electronic Arts scored a 33% return.
- -------------------------------------------------------------------------------
12
<PAGE>
. Performance at a Glance
Acorn Fund
Information
Ticker Symbol: ACRNX
Minimum
Initial Investment: $1,000
$1,000 for an IRA
Minimum
Subsequent Investment: $100
Exchange Fee: None
Management Fee*: 0.69%
12b-1 Fee: None
Other Expenses: 0.15%
Total Expense Ratio*: 0.84%
*Fees and expenses are for the fiscal year ended
December 31, 1998.
Fund Net Assets as of 9/30/99: $3,288.5 million
- -----------------------------------------------
. Acorn Fund Top 10 Holdings
Softbank 2.7%
Internet Services/Investment Holdings
Liberty Media Group, AT&T 2.6%
Cable Satellite Programming
AES Corporation 2.1%
Power Plants
Carnival 2.0%
Largest Cruise Line
Lincare Holdings 1.9%
Home Health Care Services
Harley Davidson 1.9%
Motorcycles & Related Merchandise
NTL 1.9%
Voice, Video & Data Services
RCN 1.9%
Metro Market CLEC: Voice, Video & Internet Services
Solectron 1.7%
Electronic Manufacturing Services
Americredit 1.6%
Auto Lending
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.
Acorn Fund Portfolio Diversification
- ------------------------------------
. as a % of net assets, as of 9/30/99
[PIE CHART APPEARS HERE]
<TABLE>
<CAPTION>
Consumer Industrial
*Other Goods/ Health Goods/ Energy
Foreign Industries Services Care Services Information Finance Minerals
- ------- ---------- -------- ------ ---------- ----------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
14.1% 12.0% 8.7% 6.3% 7.7% 28.8% 13.7% 8.7%
</TABLE>
* Other includes "Cash and other assets less liabilities" of 7.5%.
Relative Performance
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
3rd quarter Year to Date Last 12 mos.
1999
<S> <C> <C> <C>
Acorn Fund -2.0% 9.4% 29.0%
S&P 500 -6.2% 5.4% 27.8%
Russell 2000 -6.3% 2.4% 19.1%
Lipper Small-Cap
Funds Index -2.2% 7.0% 26.8%
S&P MidCap 400 -8.4% -2.1% 25.5%
</TABLE>
Acorn Fund NAV as of 9/30/99: $18.21
- ------------------------------------
The Value of a $10,000 Investment in Acorn Fund
- -------------------------------------------------------------------------------
. June 10, 1970 through September 30, 1999
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
ACORN FUND S&P 500
---------- -------
<S> <C> <C>
6/10/70 10,000 10,000
70 13,587 12,676
71 17,828 14,490
72 19,368 17,242
73 14,765 14,709
74 10,691 10,816
75 13,945 14,842
76 23,045 18,394
77 27,168 17,077
78 31,777 18,200
79 47,790 21,586
80 62,594 28,602
81 58,005 27,195
82 68,208 33,054
83 85,389 40,510
84 89,045 43,051
85 117,142 56,710
86 136,843 67,295
87 142,923 70,828
88 178,370 82,591
89 222,681 108,761
90 183,674 105,386
91 270,641 137,492
92 336,210 147,928
93 444,889 162,882
94 411,750 165,032
95 497,407 227,047
96 609,569 279,177
97 761,852 372,320
98 807,685 478,724
6/30/99 901,844 537,999
9/30/99 883,409 504,404
</TABLE>
Average Annual Total Returns
- ----------------------------
1 Year 29.0%
5 Years 15.4%
10 Years 14.6%
Life of Fund 16.5%
This graph compares the results of $10,000 invested in the Acorn Fund on June
10, 1970 (the date the Fund shares were first offered to the public), with the
S&P 500 Stock Index with dividends reinvested.
The S&P 500 is a broad market-weighted average of U.S. blue-chip companies.
The Russell 2000 is formed by taking the 3,000 largest U.S. companies and then
eliminating the largest 1,000, leaving a market capitalization-weighted index of
2,000 small companies. The Lipper Small-Cap Funds Index, which includes Acorn
Fund, measures the performance of the 30 largest U.S. small-cap funds tracked by
Lipper. 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. All indexes are unmanaged and
returns include reinvested dividends.
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.
13
<PAGE>
Acorn Twenty
. Major Portfolio Changes in the Third Quarter
Number of Shares
-----------------
6/30/99 9/30/99
Additions
- --------------------------------------------------------
Information
McLeod USA 0 68,000
Telephone & Data Systems 51,000 60,000
- --------------------------------------------------------
Health Care
First Health 0 60,000
St. Jude Medical 0 45,000
- --------------------------------------------------------
Consumer Goods/Services
Costco 0 21,000
Herman Miller 63,800 110,000
Jones Apparel 65,000 95,000
- --------------------------------------------------------
Finance
UICI 120,000 143,000
- --------------------------------------------------------
Energy/Minerals
MidAmerican Energy 85,000 118,000
- --------------------------------------------------------
Sales
Information
Acxiom 105,000 0
Keane 100,000 0
PRIMEDIA 235,800 0
Sterling Commerce 65,000 0
- --------------------------------------------------------
Other Industries
The Rouse Company 116,000 21,400
14
<PAGE>
Acorn Twenty
.Statement of Investments (Unaudited) September 30, 1999
<TABLE>
<CAPTION>
Number of Shares Value (000)
- --------------------------------------------------------------------------------
Common Stocks: 91.9%
- --------------------------------------------------------------------------------
<S> <C>
Information: 32.4%
.Television Programming: 5.1%
82,000 Liberty Media Group, AT&T $ 3,044
Cable & Satellite Programming
.Telephone Services: 10.5%
82,000 RCN 3,362
Metro Market CLEC: Voice, Video & Internet
Services
68,000 McLeod USA 2,894
Super Regional CLEC: Local, Long Distance
& Internet Services
- --------------------------------------------------------------------------------
6,256
.Mobile Communications: 9.0%
60,000 Telephone & Data Systems 5,329
Cellular & Telephone Services
.Transaction Processors: 3.2%
72,000 National Data 1,872
Credit Card & Health Claims Processor
.Business Information: 4.6%
63,000 H&R Block 2,737
Tax Preparation
- --------------------------------------------------------------------------------
Information: Total 19,238
- --------------------------------------------------------------------------------
Health Care: 7.0%
.Medical Equipment: 2.4%
45,000 St. Jude Medical 1,418
Heart Valves, Pacemakers, Defibrillators
& Cathators
.Services: 4.6%
52,000 Lincare Holdings 1,386
Home Health Care Services
60,000 First Health 1,346
PPO Network
- --------------------------------------------------------------------------------
2,732
---------
Health Care: Total 4,150
- --------------------------------------------------------------------------------
Consumer Goods/Services: 16.2%
.Cruise Lines: 4.6%
60,400 Royal Caribbean Cruises 2,718
Cruises to Caribbean & Alaska
.Furniture & Manufacturers: 11.6%
95,000 Jones Apparel 2,731
Women's Apparel
110,000 Herman Miller 2,630
Office Furniture
21,000 Costco 1,512
Warehouse Superstores
- --------------------------------------------------------------------------------
6,873
---------
Consumer Goods/Services: Total 9,591
- --------------------------------------------------------------------------------
Finance: 19.2%
.Finance Companies: 6.4%
255,000 Americredit $ 3,809
Auto Lending
.Money Management: 4.7%
31,500 SEI Investments 2,812
Mutual Fund Administration
.Insurance: 8.1%
143,000 UICI 3,656
Insurance/Specialty Finance
14,100 Progressive 1,152
Auto Insurance
- --------------------------------------------------------------------------------
4,808
---------
Finance: Total 11,429
- --------------------------------------------------------------------------------
Industrial Goods/Services: 4.9%
.Other Industrial Services: 4.9%
180,000 ServiceMaster 2,891
Facilities Management
---------
Industrial Goods/Services: Total 2,891
- --------------------------------------------------------------------------------
Energy/Minerals: 11.4%
.Independent Power: 11.4%
118,000 MidAmerican Energy 3,481
Growth Utility
56,000 AES Corporation 3,304
Power Plants
---------
Energy/Minerals: Total 6,785
- --------------------------------------------------------------------------------
Real Estate: 0.8%
21,400 The Rouse Company 492
Regional Shopping Malls
---------
Total Common Stocks: 91.9% 54,576
Short-Term Obligations: 8.4% 4,990
---------
Total Investments: 100.3% 59,566
Cash and Other Assets less Liabilities: (0.3%) (165)
---------
Total Net Assets: 100% $59,401
- --------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
Acorn Foreign Forty
.Major Portfolio Changes in the Third Quarter
<TABLE> Number of Shares
<CAPTION> ----------------------
6/30/99 9/30/99
Additions
- ------------------------------------------------------------
Europe
<S> <C> <C>
.Germany
GFK 0 1,400
.Sweden
NetCom 30,000 40,000
.France/Belgium
Audiofina (Belgium) 0 32,000
Atos 13,000 18,000
.United Kingdom
Carlton Communications 0 85,000
Capita Group 0 80,000
Energis 35,000 82,000
Hays 80,000 100,000
Logica 60,000 150,000
Sema Group 35,000 120,000
St. James Capital 0 250,000
WPP Group 10,000 170,000
.Switzerland
Pargesa Holdings 600 800
.Italy
Banca Fideuram 150,000 300,000
Saipem 150,000 250,000
.Spain
Indra Sistemas 90,000 110,000
Mapfre Vida 40,000 60,000
.Netherlands
Getronics 30,064 40,000
Hunter Douglas 30,487 60,000
- ------------------------------------------------------------
Asia
.Japan
Nintendo 10,000 12,000
.Singapore
Venture Manufacturing 0 200,000
- ------------------------------------------------------------
Other Countries
.Canada
Celestica 20,000 45,000
.Israel
Amdocs 30,000 65,000
.United States
Global TeleSystems 8,000 70,000
(includes effect of 2 for 1 stock split)
Sales
- ------------------------------------------------------------
Europe
.Germany
MobilCom 12,000 0
Stinnes 49,500 0
.Denmark
ISS International System 10,000 0
.Finland
TietoEnator 20,000 0
(formerly known as Tieto Corporation)
.France
SITA 5,000 0
.United Kingdom
Smith & Nephew 200,000 0
.Italy
Autogrill 30,000 0
Olivetti 170,000 0
- ------------------------------------------------------------
Asia
.Japan
NuSkin Enterprises 45,000 0
.Singapore
Natsteel Electronics 200,000 0
</TABLE>
16
<PAGE>
Acorn Foreign Forty
. Statement of Investments (Unaudited) September 30, 1999
Number of Shares Value (000)
- -------------------------------------------------------------------------
Common Stocks: 99.0%
- -------------------------------------------------------------------------
Europe: 67.2%
. Germany: 2.1%
10,000 Rhoen Klinikum $1,140
Hospital Management
1,400 GFK 36
Market Research Services
- -------------------------------------------------------------------------
1,176
. Sweden: 2.6%
40,000 Netcom 1,483
Telecommunication Services
. France/Belgium: 6.9%
18,000 Atos 2,308
Computer Services/Transaction Processing
32,000 Audiofina (Belgium) 1,619
Media Conglomerate
- -------------------------------------------------------------------------
3,927
. United Kingdom: 29.2%
150,000 Logica 1,984
Computer Software & Services
82,000 Energis 1,935
Telecommunication Services
170,000 WPP Group 1,582
Advertising
120,000 Sema Group 1,469
Computer Software & Services
15,000 NTL 1,441
Voice, Video & Data Services
225,000 Bodycote 1,221
Materials Technology & Metal Processing
100,000 Hays 1,082
Outsourcing Services
90,000 SSL International 1,065
Medical & Footcare Products
300,000 NFC 1,057
Logistics & Moving Services
250,000 St James Capital 953
Life Insurance
80,000 Capita Group 921
Outsourcing Services
30,000 Serco Group 674
Facilities Management
85,000 Carlton Communications 643
Media & Communications
79,000 Airtours 503
Packaged Tour Vacations
- -------------------------------------------------------------------------
16,530
. Switzerland: 3.7%
800 Pargesa Holdings $1,317
Industrial & Media Conglomerate
390 Cie Fin Richemont 790
Luxury Goods, Tobacco & Pay TV
- -------------------------------------------------------------------------
2,107
. Italy: 8.8%
300,000 Banca Fideuram 1,700
Life Insurance & Mutual Funds
250,000 Saipem 1,078
Offshore Construction
600,000 SEAT Pagine Gialle 877
Yellow Pages Publishers
42,000 Editoriale L'Espresso 783
Newspapers & Magazines
70,000 Mediolanum 536
Life Insurance & Mutual Funds
- -------------------------------------------------------------------------
4,974
. Spain: 6.5%
60,000 Mapfre Vida 1,764
Life Insurance & Mutual Funds
110,000 Indra Sistemas 1,147
Computer Services
45,000 Aguas de Barcelona 754
Water Utility
- -------------------------------------------------------------------------
3,665
. Netherlands: 7.4%
40,000 Getronics 2,158
Computer Services
60,000 Hunter Douglas 1,623
Decorative Window Coverings
6,501 ASR Verzekeringsgroep 405
Insurance
- -------------------------------------------------------------------------
4,186
-------
Europe: Total 38,048
- -------------------------------------------------------------------------
Asia: 16.1%
. Hong Kong: 1.7%
324,900 SmarTone Telecom 1,000
Mobile Telecommunications Provider
. Japan: 11.3%
7,000 Softbank 2,663
Internet Services/Investment Holdings
12,000 Nintendo 1,914
Video Games
6,000 Takefuji 999
Unsecured Consumer Loans
60,000 Olympus Optical 811
Photographic & Medical Equipment
- -------------------------------------------------------------------------
6,387
. Singapore: 3.1%
200,000 Venture Manufacturing 1,741
Electronic Manufacturing Services
------
Asia: Total 9,128
17
<PAGE>
Acorn Foreign Forty
.Statement of Investments, continued
<TABLE>
<CAPTION>
Number of Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Other Countries: 15.7%
<S> <C> <C>
.Canada: 8.2%
45,000 Celestica $ 2,215
Electronic Manufacturing Services
70,000 Canadian Natural Resources 1,639
Oil & Gas Producer
50,000 Power Financial 810
Financial Services Holding Company
- --------------------------------------------------------------------------------
4,664
.Israel: 2.4%
65,000 Amdocs 1,365
Telecommunications Billing & Customer Care Software
.United States: 5.1%
70,000 Global TeleSystems 1,380
Telecommunications Provider
32,600 MIH 941
Pay-TV
Number of Shares Value (000)
- --------------------------------------------------------------------------------
32,400 Azurix $ 557
Owner/Operator of Water Utilities
- --------------------------------------------------------------------------------
2,878
-------
Other: Total 8,907
-------
Total Common Stocks: 99.0% 56,083
Cash and Other Assets Less Liabilities: 1.0% 595
-------
Total Net Assets: 100% $56,678
================================================================================
</TABLE>
.Portfolio Diversication
At September 30, 1999 the Fund's portfolio of investments as a percent of net
assets was diversified as follows:
<TABLE>
<CAPTION>
Value (000) Percent
- --------------------------------------------------------------------------------
.Information
<S> <C> <C>
Computer Services $ 7,955 14.0%
Telephone Services 6,675 11.8
Publishing 3,446 6.1
CATV 2,382 4.2
Broadcasting 2,262 4.0
Contract Manufacturing 1,741 3.1
Advertising 1,582 2.8
Business Software 1,365 2.4
Business Information 1,147 2.0
- --------------------------------------------------------------------------------
28,555 50.4
.Health Care
Hospital Management 1,140 2.0
Health Care Services 1,065 1.9
Medical Equipment 811 1.4
- --------------------------------------------------------------------------------
3,016 5.3
.Consumer Goods/Services
Consumer Software 1,914 3.4
Durable Goods 1,623 2.8
Entertainment 790 1.4
Travel 503 0.9
- --------------------------------------------------------------------------------
4,830 8.5
.Finance
Insurance 3,932 6.9
Money Management 2,236 4.0
Closed-End Funds 1,317 2.3
Savings & Loans 999 1.8
- --------------------------------------------------------------------------------
8,484 15.0
.Industrial Goods/Services
Outsourcing Services $ 2,677 4.7%
Electrical Components 2,215 3.9
Industrial Materials 1,221 2.2
- --------------------------------------------------------------------------------
6,113 10.8
.Energy/Minerals
Oil/Gas Producers 1,639 2.9
Oil Services 1,078 1.9
- --------------------------------------------------------------------------------
2,717 4.8
.Other Industries
Regulated Utilities 1,311 2.3
Transportation 1,057 1.9
- --------------------------------------------------------------------------------
2,368 4.2
------------------
Total Common Stocks: 56,083 99.0%
Cash and Other Assets Less
Liabilities: 595 1.0
------------------
Net Assets: $56,678 100.0%
================================================================================
</TABLE>
18
<PAGE>
Acorn USA
. Major Portfolio Changes in the Third Quarter
Number of Shares
----------------------
6/30/99 9/30/99
Purchases
- ----------------------------------------------------------------
Information
Applied Power Inc 0 74,000
Computer Task Group 119,000 171,700
National Data 278,300 298,300
Price Communications 0 132,450
(includes effect of 5% stock dividend)
Project Software 0 65,500
Sykes Enterprises 296,500 340,500
Telephone & Data Systems 120,000 204,000
West TeleServices 0 80,000
- ----------------------------------------------------------------
Consumer Goods/Services
Bally Total Fitness 0 55,000
- ----------------------------------------------------------------
Finance
Americredit 543,500 633,500
UICI 580,700 613,700
- ----------------------------------------------------------------
Energy/Minerals
Devon Energy Corp 0 9,000
Sales
- ----------------------------------------------------------------
Information
Activision 75,500 34,500
InfoUSA 26,800 0
Kronos 148,500 45,100
Pinnacle Holdings 50,000 0
Systems & Computer Technology 170,400 73,400
- ----------------------------------------------------------------
Health Care
Lincare Holdings 382,200 341,400
- ----------------------------------------------------------------
Consumer Goods/Services
Host Marriott Services 930,600 0
- ----------------------------------------------------------------
Finance
AmerUs Life Holdings 93,500 0
Coast Contingency Rights 156,500 0
- ----------------------------------------------------------------
Industrial Goods/Services
Compass International Services 186,900 0
Schnitzer Steel 27,300 0
- ----------------------------------------------------------------
Energy/Minerals
Atmos Energy 283,000 248,000
- ----------------------------------------------------------------
Other Industries
Forest City Enterprises Cl. A 28,400 0
19
<PAGE>
Acorn USA
.Statement of Investments (Unaudited) September 30, 1999
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ------------------------------------------------------------------------------------------------------------
<S> <C>
Common Stocks: 87.4%
- ------------------------------------------------------------------------------------------------------------
Information: 38.3%
.Broadcasting: 2.2%
209,100 Data Transmission Network $ 5,214
Data Services for Farmers
32,500 Young Broadcasting 1,702
Television Stations
- ------------------------------------------------------------------------------------------------------------
6,916
.Television Programming: 2.4%
87,000 TV Guide 7,316
TV Program Guides & Programming
.Telephone Services: 2.6%
196,300 RCN 8,048
Metro Market CLEC: Voice, Video & Internet
Services
.Mobile Communications: 7.7%
204,000 Telephone & Data Systems 18,118
Cellular & Telephone Services
132,450 Price Communications 3,319
Cellular Telephone Services
121,800 COMARCO 2,406
Wireless Network Testing
- ------------------------------------------------------------------------------------------------------------
23,843
.Telecommunications Equipment: 1.9%
354,100 Aspect Telecommunications 6,009
Call Center Equipment
.Gaming Equipment: 0.9%
146,000 International Game Technology 2,628
Slot Machines & Progressive Jackpots
.Computer Services: 3.9%
340,500 Sykes Enterprises 8,406
Call Center Services
171,700 Computer Task Group 2,533
Application Development & Staffing Services
434,700 Aztec Technology Partners 747
Application Development & Maintenance Services
63,000 IMR Global 520
Application Development & Maintenance Services
- ------------------------------------------------------------------------------------------------------------
12,206
.Consumer Software: 0.2%
34,500 Activision 608
Entertainment Software
.Business Software: 2.2%
65,500 Project Software 3,504
Enterprise Maintenance Software
214,000 JDA Software 2,501
Applications/Software & Services for Retailers
73,400 Systems & Computer Technology 922
Enterprise Software & Services
- ------------------------------------------------------------------------------------------------------------
6,927
.Transaction Processors: 2.5%
298,300 National Data 7,756
Credit Card & Health Claims Processor
.Business Information/Marketing Services: 4.2%
483,100 IntelliQuest Information 5,254
Technology Market Research
206,000 CACI International 4,390
Technology Services for Government
169,000 PRIMEDIA 2,366
Specialty Magazines & Other Publications
80,000 West TeleServices 830
Customer Care & Sales Support
- ------------------------------------------------------------------------------------------------------------
12,840
.Contract Manufacturing: 0.7%
74,000 Applied Power 2,248
Electronic Enclosures & Industrial Products
.Computer Hardware/Related Systems: 6.9%
491,500 Micros Systems 19,906
Information Systems for Restaurants & Hotels
45,100 Kronos 1,655
Labor Management Solutions
- ------------------------------------------------------------------------------------------------------------
21,561
----------
Information: Total 118,906
- ------------------------------------------------------------------------------------------------------------
Health Care: 7.4%
.Biotechnology/Drug Delivery: 0.1%
78,000 Synaptic Pharmaceuticals 390
Receptor Targeted Drug Design
.Services: 7.3%
341,400 Lincare Holdings 9,100
Home Health Care Services
352,000 First Health 7,898
PPO Network
781,100 Magellan Health Services 5,712
Mental Health Services
- ------------------------------------------------------------------------------------------------------------
22,710
----------
Health Care: Total 23,100
- ------------------------------------------------------------------------------------------------------------
Consumer Goods/Services: 2.7%
.Consumer Services: 1.2%
157,600 NuSkin Enterprises 2,128
Personal Care/Herbal Products
55,000 Bally Total Fitness 1,681
Fitness Centers
- ------------------------------------------------------------------------------------------------------------
3,809
.Retail: 1.5%
74,000 Whole Foods Market 2,421
Natural Food Supermarkets
345,000 Gadzooks 2,286
Teen Apparel Retailer
- ------------------------------------------------------------------------------------------------------------
4,707
----------
Consumer Goods/Services: Total 8,516
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (ooo)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<S> <C> <C>
Finance: 15.0%
.Banks: 1.5%
93,500 Chittenden $ 2,665
Vermont & West Massachusetts Bank
44,000 TCF Financial 1,257
Great Lakes Bank
34,000 Texas Regional Bancshares 841
TexMex Bank
- -------------------------------------------------------------------------------
4,763
.Finance Companies: 4.1%
633,500 Americredit 9,463
Auto Lending
590,000 World Acceptance 3,171
Personal Loans
- -------------------------------------------------------------------------------
12,634
.Money Management: 0.7%
163,000 Phoenix Investment Partners 1,365
Mutual Fund & Pension Manager
52,800 Pioneer Group 792
Equity Mutual Funds
- -------------------------------------------------------------------------------
2,157
.Insurance: 8.7%
613,700 UICI 15,688
Insurance/Specialty Finance
392,100 Acceptance Insurance 4,999
Crop Insurance
13,800 Markel 2,512
Specialty Insurance
93,000 Leucadia National 1,953
Insurance Holding Company
66,000 Protective Life 1,914
Life/Dental Insurance
- -------------------------------------------------------------------------------
27,066
----------
Finance: Total 46,620
- -------------------------------------------------------------------------------
Industrial Goods/Services: 8.3%
.Steel: 0.3%
79,000 Atchison Casting 726
Steel Foundries
.Industrial Distribution: 0.3%
70,000 Vallen 1,015
Safety Products Distribution
.Machinery: 0.1%
45,700 Farr Company 423
Filters
.Specialty Chemicals: 1.0%
225,600 Lilly Industries, Cl. A 3,074
Industrial Coatings
.Other Industrial Services: 6.6%
346,000 Hub Group 7,071
Truck & Rail Freight Forwarder
402,500 Wackenhut, Cl. B 6,037
Prison Management
347,400 Insurance Auto Auctions $ 5,168
Auto Salvage Services
210,000 Labor Ready 2,113
Temporary Manual Labor
- -------------------------------------------------------------------------------
20,389
----------
Industrial Goods/Services: Total 25,627
- -------------------------------------------------------------------------------
Energy/Minerals: 15.2%
.Independent Power: 8.1%
855,400 MidAmerican Energy 25,234
Growth Utility
.Oil/Gas Producers: 2.6%
473,800 Tesoro Petroleum 7,818
Oil Refinery/Gas Reserves
9,000 Devon Energy 373
Oil & Gas Producer
- -------------------------------------------------------------------------------
8,191
.Distribution/Marketing/Refining: 4.5%
248,000 Atmos Energy 5,983
Natural Gas Utility
208,400 Dynegy 4,311
Natural Gas & Electric Processing & Marketing
92,300 Equitable Resources 3,490
Natural Gas Utility & Producer
- -------------------------------------------------------------------------------
13,784
------------
Energy/Minerals: Total 47,209
- -------------------------------------------------------------------------------
Real Estate: 0.5%
47,000 The Rouse Company 1,081
Regional Shopping Malls
18,100 Gaylord Entertainment 534
Opryland Hotel & Other Assets
------------
Real Estate: Total 1,615
------------
Total Common Stocks: 87.4% 271,593
Short-Term Obligations: 12.4% 38,495
------------
Total Investments: 99.8% 310,088
Cash and Other Assets Less Liabilities: 0.2% 594
------------
Total Net Assets: 100% $310,682
- -------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
Acorn International
.Major Portfolio Changes in the Third Quarter
<TABLE>
<CAPTION>
Number of Shares
-------------------------
6/30/99 9/30/99
<S> <C> <C>
Additions
- -----------------------------------------------------------------------
Europe
.Germany
EM.TV & Merchandising 7,100 240,000
(includes effect of 25 for 1 stock split)
Fresenius, Pfd. 40,000 50,000
GFK 0 30,000
.Finland
Talentum 1,400,000 1,500,000
.Sweden
Information Highway 0 150,000
Mandator 1,000,000 1,200,000
.United Kingdom/Ireland
Baltimore Technologies 300,000 500,000
Bodycote 1,750,000 2,000,000
Capita Group 1,870,000 2,000,000
Esat Telecom (Ireland) 205,000 225,000
Flextech 205,000 450,000
NFC 2,000,000 2,500,000
St James Capital 0 500,000
.Italy
Banca Fideuram 3,000,000 3,500,000
Class Editori 1,000,000 1,500,000
.Spain/Portugal
Aguas de Barcelona 125,000 400,000
Cortefiel 400,000 450,000
- ---------------------------------------------------------------------
Asia
.Hong Kong
Pacific Century 0 7,500,000
.Japan
Fuji Software ABC 150,000 180,000
JAFCO 125,000 140,000
Nintendo 144,000 150,000
Otsuka Kagu 25,000 30,000
Taiyo Ink 65,000 80,000
Trans Cosmos 95,000 110,000
.Taiwan
Chroma Ate 2,599,500 2,999,500
Phoenixtec Power 0 2,000,000
Systex 0 2,000,000
.Malaysia
Unisem 504,000 2,000,000
.South Korea
S1 Corporation 50,000 65,000
(includes effect of 3.7% stock dividend)
- ---------------------------------------------------------------------
Latin America
.Mexico
Corp Interamericana de
Entretenimiento 3,600,000 5,000,000
.Brazil
Embratel 620,000 775,000
TeleSudeste Celular 100,000 400,000
- ---------------------------------------------------------------------
Other Countries
.Australia
ERG 6,500,000 7,500,000
.Canada
Leitch Technology 300,000 400,000
.Israel
Amdocs 420,000 750,000
Galileo Technology 250,000 550,000
(includes effect of 2 for 1 stock split)
Gilat Satellite Network 25,000 170,000
.South Africa
Dimension Data 5,000,000 6,000,000
.United States
Global TeleSystems 165,000 450,000
(includes effect of 2 for 1 stock split)
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
----------------------
6/30/99 9/30/99
Sales
- --------------------------------------------------------------------------------
<S> <C> <C>
Europe
.Germany/Austria
Kamps 47,400 0
MobilCom 30,000 0
Merck KGA 175,000 0
Sixt 70,000 0
Stinnes 400,000 0
.Denmark
Kompan International 44,000 0
Vest Wood 50,000 0
.Finland
TietoEnator 1,500,000 1,250,000
(formerly known as Tieto Corporation)
.Sweden
Autoliv 250,000 0
Bure Investment 950,000 0
WM Data Nordic 1,650,000 1,500,000
.France
Imetal 10,000 0
Spir Communications 95,000 0
SITA 45,000 0
.United Kingdom/Ireland
Atkins 1,350,000 1,000,000
Icon (Ireland) 74,000 0
Saville Systems ADR (Ireland) 400,000 0
Serco Group 2,100,000 2,000,000
.Switzerland
Societe Generale d'Affichage 18,000 12,000
Pargesa Holdings 3,200 0
Phoenix Mecano 33,000 30,000
.Italy/Greece
Attica Enterprises (Greece) 1,200,000 700,000
Banca Pop Commercia e
Industria 500,000 0
.Hungary
Matav 55,000 0
- --------------------------------------------------------------------------------
Asia
.Hong Kong
Varitronix International 5,000,000 1,645,000
.Japan
Benesse 50,000 40,000
Nemic Lambda 48,000 0
Kadokawa Shoten 60,000 30,000
Nichii Gakkan 60,000 0
OBIC 35,000 36,000
(includes effect of 20% stock dividend)
Olympus Optical 500,000 0
Ryohin Keikaku 100,000 90,000
Takefuji 80,000 0
.Malaysia
Malaysian Oxygen 576,000 0
.Thailand
United Broadcasting 885,900 0
.Singapore
Datacraft Asia 9,000,000 8,500,000
- --------------------------------------------------------------------------------
Latin America
.Mexico
Nadro, Series L 8,940,000 0
.Brazil
Elevadores Atlas 380,000 0
- --------------------------------------------------------------------------------
Other Countries
.Australia
Ecorp 2,500,000 0
.Canada
Northstar Energy 100,000 0
</TABLE>
23
<PAGE>
Acorn International
.Statement of Investments (Unaudited) September 30, 1999
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stocks and Other
Equity-Like Securities: 94.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Europe: 50.5%
<S> <C> <C>
.Germany/Austria: 4.0%
200,000 Rhoen Klinikum Pfd. $24,069
160,000 Rhoen Klinikum 18,233
Hospital Management
240,000 EM.TV & Merchandising 10,454
Children's Media Production, Merchandising & Distribution
140,000 UnitedGlobalCom (Austria) 10,028
Cable Television for Europe, Israel & Australia
50,000 Fresenius, Pfd. 8,680
Dialysis Equipment & Solutions
165,000 Flughafen Wien (Austria) 6,584
Vienna Airport Authority
30,000 GFK 783
Market Research Services
- ------------------------------------------------------------------------------------------------------------------------------------
78,831
.Denmark: 0.2%
75,000 ISS International System 4,201
Cleaning Services
.Finland: 3.6%
1,250,000 TietoEnator (formerly known as Tieto Corporation) 39,538
Computer Services/Consulting
1,500,000 Talentum 21,087
Trade Journals & Internet Services
500,000 Fiskars, Series A 7,775
Scissors & Gardening Tools
95,400 Spar Finland 2,695
Grocery/Convenience Stores
- ------------------------------------------------------------------------------------------------------------------------------------
71,095
.Norway: 0.1%
654,750 Atex Media Solutions 1,182
Print Media Software
.Sweden: 4.7%
1,500,000 WM Data Nordic 64,955
Computer Services/Consulting
350,000 Modern Times Group 10,673
TV, Newspapers & Electronic Commerce
1,200,000 Mandator 8,417
Computer Services/Consulting
150,000 Information Highway 4,885
Internet Consulting
135,000 IBS 2,487
Enterprise Software
250,000 Sigma 2,028
Technical Consulting
- ------------------------------------------------------------------------------------------------------------------------------------
93,445
.France: 4.3%
400,000 Atos 51,290
Computer Services/Transaction Processing
62,000 NRJ 16,838
Radio Network
60,000 Fininfo 11,949
Data Feeds for French Banks & Brokers
19,000 Penauille Polyservice 5,261
Industrial Cleaning/Airport Services
- ------------------------------------------------------------------------------------------------------------------------------------
85,338
.United Kingdom/Ireland: 15.6%
500,000 NTL 48,047
Voice, Video & Data Services
2,000,000 Serco Group 44,960
Facilities Management
2,000,000 Capita Group 23,024
Outsourcing Services
13,000,000 Electronics Boutique 19,911
Video Game Retailer
510,000 Euro Money Publications 14,972
Financial Publications
1,250,000 SSL International 14,791
Medical & Footcare Products
1,700,000 Rotork 12,067
Valve Actuators for Oil & Water Pipelines
2,000,000 Bodycote 10,853
Materials Technology & Metal Processing
3,500,000 Taylor Nelson 10,375
Market Research Services
500,000 Baltimore Technologies 9,984
Security Software
1,250,000 ITNET 9,933
Outsourcing Services
225,000 Esat Telecom (Ireland) 8,944
Telecommunications Provider
2,500,000 NFC 8,811
Logistics
2,000,000 Oriflame International 8,366
Cosmetics Sold Door-to-Door
1,000,000 Atkins 8,358
Facilities Management
600,000 Logica 7,935
Computer Services/Consulting
2,500,000 Smith & Nephew 7,874
Medical Equipment & Supplies
2,000,000 Photobition Group 7,576
Production of Graphics for Exhibits
450,000 Flextech 7,000
Cable Channels
3,400,000 HALMA 6,495
Fire, Burglary & Flooding Detection Devices
1,500,000 Hogg Robinson 5,842
Corporate Travel Management
715,000 Fairey Group 4,963
Electronic Products
</TABLE>
24
<PAGE>
Number of Shares Value (000)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
300,000 Ocean Group $ 4,610
Freight Forwarder
500,000 St James Capital 1,906
Life Insurance
- --------------------------------------------------------------------------------
307,597
.Switzerland: 4.8%
12,500 Cie Fin Richemont 25,307
Luxury Goods, Tobacco & Pay TV
65,000 Selecta Group 25,123
Vending Machine Owner/Operator
30,000 Phoenix Mecano 14,094
Electrical Components Manufacturer
15,000 Bon Appetit 11,695
Wholesale Food Distributor and Speciality
Restaurant/Retail Outlets
6,500 Sarasin & Cie Bank 11,435
Private Banking
12,000 Societe Generale d'Affichage 7,005
Billboard Advertising
- --------------------------------------------------------------------------------
94,659
.Italy/Greece: 7.5%
1,800,000 Editoriale L'Espresso 33,548
Newspapers & Magazines
2,900,000 Autogrill 32,429
Restaurants & Catering for Travelers
3,500,000 Banca Fideuram 19,830
Life Insurance & Mutual Funds
700,000 Attica Enterprises (Greece) 17,153
Ferry Line
1,500,000 Class Editori 12,860
Newspapers & On-Line Financial Data
1,400,000 Mediolanum 10,720
Life Insurance & Mutual Funds
1,400,000 Aeroporti di Roma 10,407
Airport Management
4,000,000 SEAT Pagine Gialle 5,845
Yellow Pages Publisher
1,250,000 Saipem 5,392
Offshore Construction
- --------------------------------------------------------------------------------
148,184
.Spain/Portugal: 2.1%
400,000 Mapfre Vida 11,758
Life Insurance & Mutual Funds
450,000 Cortefiel 11,694
Apparel Retailer
400,000 Aguas de Barcelona 6,701
Water Utility
650,000 Prosegur 5,711
Security Guards
425,000 Filmes Lusomundo (Portugal) 5,649
Newspapers, Radio, Video, Film Distribution
- --------------------------------------------------------------------------------
41,513
.Netherlands: 2.7%
500,000 Getronics 26,971
Computer Services/Consulting
420,000 Kempen 19,771
Stock Brokerage/Investment Management
950,000 Scala Business Solutions 6,071
95,775 Scala Business Solutions
Warrants 3/31/01 9
Enterprise Software
- --------------------------------------------------------------------------------
52,822
.Hungary: 0.5%
1,200,000 Matav 6,592
Telecommunications Provider
100,000 Gedeon Richter 4,009
Pharmaceuticals
- --------------------------------------------------------------------------------
10,601
---------
Europe: Total 989,468
- --------------------------------------------------------------------------------
Asia: 26.8%
.Hong Kong: 3.6%
14,999,000 Li and Fung 45,377
Sourcing of Consumer Goods
3,000,000 SmarTone Telecom 9,230
Mobile Telecommunications Provider
2,000,000 TVB 8,548
Television Broadcasting
7,500,000 Pacific Century 4,055
Life Insurance
1,645,000 Varitronix International 3,590
LCD Manufacturer
- --------------------------------------------------------------------------------
70,800
.India: 0.0%
1,998,000 Zurich India Quantum 561
(formerly known as Centurion Quantum Growth)
Closed-End Fund
.Japan: 11.6%
150,000 Nintendo 23,922
Video Games
175,000 Orix 21,515
Finance Leasing
120,000 Aiful 20,456
Consumer Lending
90,000 Ryohin Keikaku 18,174
90,000 Ryohin Keikaku New 18,089
Own Brand Specialty Retailer
36,000 OBIC 16,822
Computer Integrator
180,000 Fuji Software ABC 15,334
Computer Services/Consulting
75,000 Nidec 14,194
Spindle Motor Manufacturer
110,000 Trans Cosmos 13,741
Information Technology Services & Investments
20,000 Bellysystem 24 13,431
Telemarketing
140,000 JAFCO 11,769
Venture Capital Fund
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- --------------------------------------------------------------------------------------
<S> <C> <C>
80,000 Taiyo Ink $ 11,271
Speciality Chemicals
30,000 Otsuka Kagu 8,735
Furniture Retailer
40,000 Benesse 7,961
Correspondence Courses
30,000 Kadokawa Shoten 7,608
Magazine/Book Publisher
385,000 NuSkin Enterprises 5,197
Personal Care/Herbal Products
- --------------------------------------------------------------------------------------
228,219
.Taiwan: 1.4%
2,000,000 Hitron Technology 8,589
Network Integration & Internet Services
2,999,500 Chroma Ate 7,927
Test & Measurement Instruments
2,000,000 Systex 6,292
Systems Integrator & Internet Services
2,000,000 Phoenixtec Power 4,153
Uninterruptable Power Supply Manufacturer
- --------------------------------------------------------------------------------------
26,961
.Malaysia: 0.4%
2,000,000 Unisem 8,158
Semiconductor Assembly
.Philippines: 0.3%
75,000,000 Int'l Container Terminal Services 7,152
Container Handling Terminals & Port Management
.South Korea: 0.6%
65,000 S1 Corporation 10,927
Home/Business Security Services
.Singapore: 8.9%
9,500,000 Star Cruises 57,000
Cruise Line
6,500,000 Venture Manufacturing 56,572
Electronic Manufacturing Services
8,500,000 Datacraft Asia 37,400
Network Integrator
6,500,000 Natsteel Electronics 24,272
Electronic Manufacturing Services
- --------------------------------------------------------------------------------------
175,244
--------
Asia: Total 528,022
- --------------------------------------------------------------------------------------
Latin America: 3.9%
.Mexico: 2.3%
7,000,000 Grupo Industrial Bimbo 14,664
Bread, Baked Goods & Snacks
3,500,000 Kimberly Clark de Mexico 12,358
Paper Products
5,000,000 Corp Interamericana de
Entretenimiento 12,117
Special Events & Live Entertainment
4,600,000 Grupo Continental $ 5,561
Beverages
- --------------------------------------------------------------------------------------
44,700
.Brazil: 0.9%
775,000 Embratel 8,864
Long Distance Telecommunications Provider
400,000 TeleSudeste Celular 8,600
Cellular Operator
- --------------------------------------------------------------------------------------
17,464
.Argentina: 0.5%
400,000 IRSA GDS 11,250
Real Estate Management & Development
.Peru: 0.2%
7,000,000 Enrique Ferreyros 4,149
Heavy Machinery Dealer
--------
Latin America: Total 77,563
- --------------------------------------------------------------------------------------
Other Countries: 13.7%
.Australia: 3.5%
7,500,000 ERG 30,835
Smart Card Systems for Public Transportation
5,000,000 AAPT 15,979
Telecommunications Provider
1,000,000 Computershare 12,013
Financial Software/Services
2,000,000 KeyCorp 9,841
Smart Card Technology
- --------------------------------------------------------------------------------------
68,668
.Canada: 4.5%
650,000 Celestica 32,002
Electronic Manufacturing Services
720,000 Canadian Natural Resources 16,855
Oil & Gas Producer
500,000 Penn West Petroleum 10,616
Oil & Gas Producer
600,000 Power Financial 9,718
Financial Services Holding Company
400,000 Leitch Technology 6,261
Television Production Equipment
1,200,000 Bracknell 5,104
Electrical Contractor & Facilities Management
600,000 LGS Group 4,083
Computer Systems Integrator
4,000,000 Dundee Realty 3,539
Real Estate
- --------------------------------------------------------------------------------------
88,178
.Israel: 2.3%
750,000 Amdocs 15,750
Telecommunications Billing & Customer Care
Software
550,000 Galileo Technology 13,750
Communications Semiconductors
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Number of Shares Value (cont'd)
- ------------------------------------------------------------------------
<S> <C> <C>
170,000 Gilat Satellite Network $ 9,116
Satellite Communications Equipment
300,000 ECI Telecom 7,406
Telecommunications Equipment
- ------------------------------------------------------------------------
46,022
.South Africa: 1.2%
6,000,000 Dimension Data 23,850
Networks & Computer Services
.Russia: 0.0%
$1,500,000 Khanty Mansiysk 10% Notes 750
3,917 Khanty Mansiysk 131
Oil Production in Russia
- ------------------------------------------------------------------------
881
.United States: 2.2%
325,000 AES Corporation 19,175
Power Plants
375,000 MIH 10,828
Pay-TV
450,000 Global TeleSystems 8,873
Telecommunications Provider
190,000 Azurix 3,266
Owner & Operator of Water Utilities
- ------------------------------------------------------------------------
42,142
----------
Other: Total 269,741
Total Common Stocks and Other ----------
Equity-Like Securities: 94.5% 1,864,794
Short-Term Obligations: 5.6% 110,979
----------
Total Investments: 100.1% 1,975,773
Cash and Other Assets Less
Liabilities: (0.1%) (2,218)
----------
Total Net Assets: 100% $1,973,555
========================================================================
</TABLE>
27
<PAGE>
Acorn International
.Portfolio Diversication
At September 30, 1999, the Fund's portfolio of investments as a percent of net
assets was diversified as follows:
<TABLE>
<CAPTION>
Value (000) Percent
- -----------------------------------------------------
<S> <C> <C>
. Information
Computer Services $ 286,037 14.6%
Publishing 101,569 5.1
Telephone Services 93,060 4.7
Contract Manufacturing 80,844 4.1
CATV 75,903 3.8
Transaction Processors 52,689 2.7
Business Software 35,483 1.8
Instrumentation 31,079 1.6
Semiconductors 21,908 1.1
Programming 21,127 1.1
Business Information 20,308 1.0
Computer Hardware 18,347 0.9
Radio 16,838 0.9
Broadcasting 14,809 0.8
Marketing 10,375 0.5
Telephone Equipment 9,116 0.5
Mobile Communications 8,600 0.4
Advertising 7,005 0.4
Internet 4,885 0.2
- ----------------------------------------------------
909,982 46.2
. Health Care
Hospital Management 42,302 2.2
Services 14,791 0.7
Medical Equipment 8,680 0.4
Hospital/Laboratory Supplies 7,874 0.4
Pharmaceuticals 4,009 0.2
- ----------------------------------------------------
77,656 3.9
. Consumer Goods/Services
Consumer Services 87,556 4.5
Retail 64,909 3.3
Travel 62,842 3.2
Entertainment 62,707 3.2
Nondurables 33,696 1.7
Restaurants 32,429 1.6
Food 26,359 1.3
Consumer Software 23,922 1.2
Beverages 5,561 0.3
Consumer Goods Distribution 2,695 0.1
- ----------------------------------------------------
402,676 20.4
. Finance
Finance Companies $ 33,284 1.7%
Money Management 30,550 1.5
Insurance 27,437 1.4
Brokerage 19,771 1.0
Banks 11,435 0.6
Closed-End Funds 561 0.0
- ----------------------------------------------------
123,038 6.2
. Industrial Goods/Services
Outsourcing Services 125,920 6.4
Electrical Components 49,686 2.5
Machinery Processing 16,216 0.8
Speciality Chemicals 11,271 0.6
Industrial Materials 10,853 0.5
Industrial Services 9,714 0.5
- ----------------------------------------------------
223,660 11.3
. Energy/Minerals
Oil/Gas Producers 28,352 1.4
Independent Power 19,175 1.0
Oil Services 5,392 0.3
- ----------------------------------------------------
52,919 2.7
. Other Industries
Transportation 50,107 2.5
Real Estate 14,789 0.8
Regulated Utilities 9,967 0.5
- ----------------------------------------------------
74,863 3.8
Total Common Stocks and --------------------
Other Equity-Like Securities 1,864,794 94.5
Short-Term Obligations 110,979 5.6
--------------------
Total Investments 1,975,773 100.1
Cash and Other Assets Less
Liabilities (2,218) (0.1)
--------------------
Net Assets $1,973,555 100.0%
- ----------------------------------------------------
</TABLE>
28
<PAGE>
Acorn Fund
.Major Portfolio Changes in the Third Quarter
<TABLE>
<CAPTION>
Number of Shares
--------------------
6/30/99 9/30/99
<S> <C> <C>
Additions
- -------------------------------------------------------------------
Information
3DO Company 0 218,000
Applied Power 0 350,000
Corus Entertainment (Canada) 0 219,500
Entra Data (Sweden) 20,000 100,000
Musicmaker.com 0 290,000
Oak Industries 350,000 450,000
Playboy Enterprises 150,000 345,000
Price Communications 0 420,000
(includes effect of 5% stock dividend)
Project Software 0 54,000
Shop at Home 0 300,000
Sykes Enterprises 670,000 724,000
West TeleServices 267,000 425,000
- -------------------------------------------------------------------
Health Care
Orthofix International 232,000 407,000
- -------------------------------------------------------------------
Consumer Goods/Services
Bally Total Fitness 480,000 540,000
Gadzooks 425,000 715,000
Herman Miller 336,000 473,000
ITT Educational Services 187,000 319,000
Jones Apparel 630,000 730,000
Station Casinos 250,000 400,000
- -------------------------------------------------------------------
Finance
Ace Cash Express 204,000 390,000
Americredit 3,267,000 3,632,000
FPIC Insurance 220,000 340,000
Protective Life 400,000 600,000
Terra Nova Bermuda 0 252,000
- -------------------------------------------------------------------
Industrial Goods/Services
Airnet Systems 650,000 860,000
AK Steel 0 450,000
Forward Air 120,000 200,000
RPM 0 732,000
- -------------------------------------------------------------------
Energy/Minerals
Canadian Natural Resources
(Canada) 500,000 585,000
Cross Timbers Oil 481,000 1,400,000
Dynegy 1,000,000 1,200,000
Precision Drilling (Canada) 0 139,100
Ulster Petroleums (Canada) 0 200,000
- -------------------------------------------------------------------
Other Industries
Consolidated Tomoka 0 150,000
General Growth Properties 0 200,000
Security Capital European Realty 770,312 823,437
Utilicorp United 0 200,000
</TABLE>
29
<PAGE>
Acorn Fund
. Major Portfolio Changes in the Third Quarter, continued
<TABLE>
<CAPTION>
Number of Shares
--------------------
6/30/99 9/30/99
Sales
- ----------------------------------------------------------
<S> <C> <C>
Information
Aspect Telecommunications 864,000 284,000
BISYS 195,000 141,000
Choicepoint 210,000 178,000
Dunn Computer 39,000 0
Electronic Arts 350,000 200,000
Jabil Circuit 475,000 300,000
Keane 275,000 75,000
Kent Electronics 400,000 300,000
Liberty Media Group, AT&T 2,600,000 2,300,000
Macrovision 150,000 0
Mettler Toledo 591,000 480,000
Sanmina Corporation 200,000 150,000
Solectron 890,000 800,000
Structural Dynamics 310,000 0
World Color Press 1,240,000 140,000
- ----------------------------------------------------------
Health Care
Hillenbrand Industries 91,000 0
Lincare Holdings 2,572,000 2,374,000
Thermedics 7,000 0
- ----------------------------------------------------------
Consumer Goods/Services
Airtours (United Kingdom) 1,650,000 1,322,600
Hollywood Park 500,000 300,000
Host Marriott Services 911,000 0
Just For Feet 600,000 0
Kimberly Clark de Mexico
(Mexico) 3,300,000 0
St. John Knits 429,000 0
Thor Industries 474,000 341,000
- ----------------------------------------------------------
Finance
CNB Bancshares 170,000 0
Coast Contingency Rights 554,000 0
Foremost 430,000 77,000
Washington Mutual 62,000 0
- ----------------------------------------------------------
Industrial Goods/Services
A M Castle 345,000 245,000
Cambrex 600,000 300,000
Compass International Services 736,000 0
Expeditors International
of Washington 1,890,000 1,500,000
HA.LO Industries 1,001,000 626,000
Intermet Holdings 400,000 260,000
Varitronix International
(Hong Kong) 4,500,000 1,795,000
Worthington Industries 700,000 0
- ----------------------------------------------------------
Energy/Minerals
AES Corporation 1,264,000 1,164,000
Atmos Energy 1,000,000 800,000
Atwood Oceanics 225,000 0
Canadian 88 Energy (Canada) 475,000 0
Devon Energy 900,000 630,000
Equitable Resources 1,000,000 900,000
Evergreen Resources 300,000 250,000
- ----------------------------------------------------------
Other Industries
Forest City Enterprises, Cl. A 370,000 0
Weingarten Realty Investors 165,000 0
</TABLE>
30
<PAGE>
Acorn Fund
.Statement of Investments (Unaudited) September 30, 1999
<TABLE>
<CAPTION>
Number of Shares Value (000)
- -------------------------------------------------------------------------
<S> <C>
Common Stocks and Other
Equity-Like Securities: 92.5%
- -------------------------------------------------------------------------
Information: 28.8%
Media
.Broadcasting: 2.1%
695,000 Young Broadcasting $ 36,401
Television Stations
819,000 Data Transmission Network 20,424
Data Services for Farmers
558,000 Granite Broadcasting 6,208
Television Stations
150,000 Cumulus Media 4,903
Radio Stations
300,000 Shop at Home 2,700
Television Home Shopping Network
- -------------------------------------------------------------------------
70,636
.Television Programming: 3.3%
2,300,000 Liberty Media Group, AT&T 85,387
Cable & Satellite Programming
366,000 TV Guide 14,320
TV Program Guides & Programming
345,000 Playboy Enterprises 9,207
CATV & Satellite Programming, Publishing
- -------------------------------------------------------------------------
108,914
Telecommunications
.Telephone Services: 2.4%
1,484,000 RCN 60,844
Metro Market CLEC: Voice,
Video & Internet Services
354,000 Commonwealth Telephone 15,576
Rural Market CLEC: Local, Long Distance &
Internet Services
140,000 Startec Global Communications 1,925
International Telecommunications
- -------------------------------------------------------------------------
78,345
.Mobile Communications: 2.5%
580,000 Telephone & Data Systems 51,511
Cellular & Telephone Services
500,000 Pinnacle Holdings 13,063
Towers for Cellular, PCS & Paging
420,000 Price Communications 10,526
Cellular Telephone Services
355,000 COMARCO 7,011
Wireless Network Testing
- -------------------------------------------------------------------------
82,111
.Telecommunications Equipment: 0.3%
284,000 Aspect Telecommunications 4,819
Call Center Equipment
262,000 REMEC 3,603
Telecommunication Equipment for
Defense & Commercial
36,000 Comverse Technology 3,395
Voicemail & Other Enhanced Services Equipment
- -------------------------------------------------------------------------
11,817
Computer Related Hardware
.Computer Hardware/Related Systems: 2.1%
903,000 Kronos 33,129
Labor Management Solutions
700,000 Micros Systems 28,350
Information System for Restaurants & Hotels
350,000 American Power Conversion 6,650
Uninterruptable Power Systems
- -------------------------------------------------------------------------
68,129
.Semiconductors/Related Equipment: 0.5%
450,000 Oak Industries 15,300
Communications Components
.Gaming Equipment: 2.1%
2,342,000 International Game Technology 42,156
Slot Machines & Progressive Jackpots
450,000 Anchor Gaming 26,775
Slot Machines & Casinos
- -------------------------------------------------------------------------
68,931
.Contract Manufacturing: 2.9%
800,000 Solectron 57,450
Electronic Manufacturing Services
300,000 Jabil Circuit 14,850
Electronic Manufacturing Services
150,000 Sanmina 11,606
Backplanes & Electronic Manufacturing Services
350,000 Applied Power 10,631
Electronic Enclosures & Industrial Products
- -------------------------------------------------------------------------
94,537
.Instrumentation: 1.0%
480,000 Mettler Toledo 14,220
Laboratory Products
613,000 Thermoquest 6,207
$1,500,000 Thermoquest, 5% Note Due 8/15/00 1,455
Mass Spectrometry & Chromatography
$5,000,000 Thermo Optek, 5% Note Due 10/15/00 4,850
265,000 Thermo Optek 2,236
Elemental & Molecular Spectroscopy
266,122 Onix Systems 1,480
Field Measurement & Sensor Equipment
232,000 Metrika Systems 1,334
Gamma Ray Instrumentation
- -------------------------------------------------------------------------
31,782
.Business Software: 0.7%
1,075,000 Systems & Computer Technology 13,505
Enterprise Software & Services
650,000 JDA Software Group 7,597
Applications/Software & Services for Retailers
54,000 Project Software 2,889
Enterprise Maintenance Software
- -------------------------------------------------------------------------
23,991
.Consumer Software: 1.2%
200,000 Electronic Arts 14,475
Entertainment Software
200,000 THQ 8,625
Entertainment Software
</TABLE>
31
<PAGE>
Acorn Fund
.Statement of Investments, continued
<TABLE>
<CAPTION>
Principal Amount or
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
$6,500,000 Activision, 6.75% Note Due 1/1/05 $ 7,280
410,000 Activision 7,226
Entertainment Software
218,000 3DO Company 2,194
Entertainment Software
- ----------------------------------------------------------------------------
39,800
.Computer Services: 1.6%
724,000 Sykes Enterprises 17,874
Call Center Services
790,000 Computer Task Group 11,652
Application Development & Staffing Services
642,000 RCM Technologies 6,902
Technology Staffing Services
141,000 BISYS 6,614
Processing for Banks
400,000 IMR Global 3,300
Application Development & Maintenance Services
214,000 Analysts International 2,220
Technology Staffing Services
75,000 Keane 1,711
Application Development & Maintenance Services
987,000 Aztec Technology Partners 1,696
Application Development & Maintenance Services
- ----------------------------------------------------------------------------
51,969
Software/Services
.Business Information/
Marketing Services/Publishing: 3.0%
800,000 Getty Images 19,300
Photographs for Publications & Electronic Media
1,100,000 PRIMEDIA 15,400
Specialty Magazines & Other Publications
178,000 Choicepoint 11,993
Fraud Protection Information
1,400,000 InfoUSA, Cl. A 9,450
1,000,000 InfoUSA, Cl. B 6,875
Business Data for Sales Leads
403,000 ACNielsen 9,143
Market Research, Information & Analysis
450,000 Information Holdings 8,747
Scientific & Medical Publications,
Patent Information
350,000 Acxiom 6,880
Database Marketing Services
140,000 World Color Press 5,215
Web-Offset Printing
425,000 West Teleservices 4,409
Customer Care & Sales Support
- ----------------------------------------------------------------------------
97,412
.Internet: 0.9%
200,000 RSA Security 5,313
Enterprise Security Software
280,000 Sterling Commerce 5,198
Electronic Commerce Software & Services
310,000 Online Resources 4,301
Internet Banking Technology
2,683 Bigfoot International 4,024
Internet Direct Marketing
135,000 AppNet Systems 3,696
Internet Application Development
290,000 Musicmaker.com 2,991
Make Your Own Music CD
250,000 NeoPlanet, Series A 2,000
Cool Web Browser
342,855 GIGA 1,414
29,714 GIGA Warrants 4
Data on Information Technology
- ----------------------------------------------------------------------------
28,941
.Electronics Distribution: 0.5%
790,000 Pioneer-Standard Electronics 11,406
Component & Computer Distribution
300,000 Kent Electronics 5,550
Component Distribution & Contract Assembly
- ----------------------------------------------------------------------------
16,956
.Transaction Processors: 1.7%
1,874,000 National Data 48,724
Credit Card & Health Claims Processor
450,000 Concord EFS 9,281
Credit Card Processor
- ----------------------------------------------------------------------------
58,005
-------
Information: Total 947,576
- ----------------------------------------------------------------------------
Health Care: 6.3%
.Biotechnology/Drug Delivery: 2.0%
450,000 Inhale Therapeutic Systems 13,669
Pulmonary Drug Delivery
329,000 Protein Design Labs 11,885
Computer Designed Monoclonal Antibodies
525,000 Myriad Genetics 8,925
Gene Discovery & Diagnostic Products
915,000 Microcide Pharmaceuticals 6,405
Antibiotics
351,000 Guilford Pharmaceuticals 5,353
Drug Delivery & Neurology Drugs
1,508,000 Corvas International 4,241
Rational Drug Design
768,000 Synaptic Pharmaceuticals 3,840
Receptor Targeted Drug Design
160,000 Incyte Pharmaceutical 3,700
Gene Sequencing
230,000 CuraGen 3,047
Genomics
529,000 NPS Pharmaceuticals 3,042
Small Molecule Drugs
664,000 Genome Therapeutics 2,656
Gene Discovery Services
- ----------------------------------------------------------------------------
66,763
32
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------
<C> <S> <C>
.Medical Equipment: 0.8%
299,000 Wesley Jessen Vision $ 9,325
Contact Lenses
443,000 Acuson 5,648
Ultrasound Devices
407,000 Orthofix International 5,545
Bone Fixation & Stimulation Devices
541,000 Respironics 4,463
Respiratory Devices
- ---------------------------------------------------------------------------
24,981
.Services: 3.5%
2,374,000 Lincare Holdings 63,282
Home Health Care Services
1,952,000 First Health 43,798
PPO Network
1,180,000 Magellan Health Services 8,629
Mental Health Services
43,000 Spectrum Health Solutions 11
Workman's Compensation
- ---------------------------------------------------------------------------
115,720
-------
Health Care: Total 207,464
- ---------------------------------------------------------------------------
Consumer Goods/Services: 8.7%
Goods
.Leisure Vehicles: 2.2%
1,260,000 Harley-Davidson 63,079
Motorcycles & Related Merchandise
341,000 Thor Industries 8,696
Busses & RVs
- ---------------------------------------------------------------------------
71,775
.Furniture: 0.3%
473,000 Herman Miller 11,308
Office Furniture
.Nondurables: 0.1%
401,000 First Years 4,110
Infant & Toddler Products
.Apparel Manufacturers: 0.9%
730,000 Jones Apparel 20,987
Women's Apparel
600,000 Unifi 6,600
Polyester & Nylon Fabrics
140,000 Gildan Activewear 2,415
Cotton T-Shirts
504,000 Sirena Apparel 8
Bathing Suits & Lingerie
- ---------------------------------------------------------------------------
30,010
Services
.Retail: 1.6%
1,600,000 Borders Group 23,500
Bookstores
400,000 Whole Foods Market 13,088
Natural Food Supermarkets
590,000 Nautica Enterprises 9,514
Men's Casual Apparel
715,000 Gadzooks $ 4,737
Teen Apparel Retailer
400,000 Panera Bread 2,650
Bakery & Deli Restaurants
- ---------------------------------------------------------------------------
53,489
.Consumer Services: 0.8%
540,000 Bally Total Fitness 16,504
Fitness Centers
319,000 ITT Educational Services 6,220
Technology Oriented Postsecondary
Degree Programs
75,000 Steiner Leisure 1,875
Spas & Hair/Skin Products on Cruise Ships
- ---------------------------------------------------------------------------
24,599
.Casinos: 0.6%
400,000 Station Casinos 9,300
Casinos & Riverboats
300,000 Hollywood Park 4,612
Casinos
535,000 Monarch Casino & Resort 3,477
Casino/Hotel in Reno
63,000 Lakes Gaming 606
Hotel & Casino in Biloxi & Gulfport
- ---------------------------------------------------------------------------
17,995
.Cruise Lines: 2.2%
1,500,000 Carnival 65,250
Largest Cruise Line
120,000 Royal Caribbean Cruises 5,400
Cruises to Caribbean & Alaska
410,000 Royal Olympic Cruise 1,025
Cruises in Mediterranean
- ---------------------------------------------------------------------------
71,675
-------
Consumer Goods/Services: Total 284,961
- ---------------------------------------------------------------------------
Finance: 13.7%
.Banks: 1.7%
799,000 TCF Financial 22,821
Great Lakes Bank
612,000 Texas Regional Bancshares 15,147
TexMex Bank
414,000 Chittenden 11,799
Vermont & West Massachusetts Bank
400,000 Eldorado Bancshares 3,425
California Bank
138,000 Peoples Heritage Financial 2,294
New England Bank
- ---------------------------------------------------------------------------
55,486
.Savings & Loans: 2.0%
1,602,000 Peoples Bank Bridgeport 37,847
Connecticut Savings & Loan
782,000 Washington Federal 18,133
Washington State Savings & Loan
622,000 Commonwealth Bancorp 10,613
Philadelphia Savings & Loan
- ---------------------------------------------------------------------------
66,593
</TABLE>
33
<PAGE>
Acorn Fund
.Statement of Investments, continued
<TABLE>
<CAPTION>
Number of Shares Value (000)
- --------------------------------------------------------------------------
<C> <S> <C>
.Insurance: 3.7%
1,155,000 UICI $ 29,525
Insurance/Specialty Insurance
600,000 Protective Life 17,400
Life/Dental Insurance
78,000 Markel 14,201
Specialty Insurance
511,000 Leucadia National 10,731
Insurance Holding Company
488,000 Baldwin & Lyons, Cl. B 10,034
Trucking Insurance
252,000 Terra Nova Bermuda 8,048
Specialty Re-Insurance
612,000 Acceptance Insurance 7,803
Crop Insurance
293,000 United Fire & Casualty 6,739
Property & Casualty
320,000 HCC Insurance Holdings 5,380
Aviation Insurance
340,000 FPIC Insurance 5,121
Medical & Dental Malpractice Insurance
210,000 StanCorp Financial 4,699
Group Life, Disability & 401K
77,000 Foremost 1,848
Mobile Home & RV Insurance
- -------------------------------------------------------------------------
121,529
.Money Management: 3.3%
539,000 SEI Investments 48,123
Mutual Fund Administration
2,679,000 Phoenix Investment Partners 22,437
Mutual Fund & Pension Manager
1,034,000 Pioneer Group 15,510
Equity Mutual Funds
1,063,000 Baker Fentress 14,816
Closed-End Investment Company
300,000 Affiliated Managers Group 8,175
Mutual Fund & Pension Manager
- -------------------------------------------------------------------------
109,061
.Finance Companies: 3.0%
3,632,000 Americredit 54,253
Auto Lending
525,000 Creditrust 11,780
Buys Defaulted Credit Card Paper
600,000 DVI Health Services 9,825
Leases for Big Medical Equipment
1,820,000 World Acceptance 9,783
Personal Loans
1,375,000 Capital Trust 6,789
Mortgage Loans
390,000 Ace Cash Express 5,655
Check Cashing Stores
- -------------------------------------------------------------------------
98,085
-------
Finance: Total 450,754
Industrial Goods/Services: 7.7%
.Steel: 1.1%
820,000 Gibraltar Steel $ 17,271
Steel Processing
450,000 AK Steel 8,212
Carbon & Stainless Steel Producer
420,000 Atchison Casting 3,859
Steel Foundries
245,000 A M Castle 3,093
Steel Distribution
260,000 Intermet Holdings 2,202
Ductile Iron & Aluminum Foundries
- -------------------------------------------------------------------------
34,637
.Industrial Goods: 0.9%
1,000,000 Clarcor 16,812
Filters
538,000 Applied Industrial Technologies 9,684
Industrial Components Distribution
550,000 Advanced Lighting Technologies 3,850
Metal Halide Lighting
- -------------------------------------------------------------------------
30,346
.Specialty Chemicals & Industrial
Materials: 1.1%
1,100,000 Lilly Industries, Cl. A 14,987
Industrial Coatings
732,000 RPM 8,921
Specialty Coatings & Paint
300,000 Cambrex 7,931
Pharmaceutical & Other Specialty Chemicals
100,000 Spartech 2,931
Plastics Distribution & Compounding
445,000 SYMEX 2,003
Combinatorial Materials
100,000 Brunswick Technologies 400
Fiberglass Fabric for Composites
- -------------------------------------------------------------------------
37,173
.Outsourcing Services & Training: 0.9%
2,220,000 Labor Ready 22,339
Temporary Manual Labor
600,000 GP Strategies 6,750
Training Programs
500,000 International Total Services 1,000
Aviation Services
- -------------------------------------------------------------------------
30,089
.Logistics: 2.8%
1,500,000 Expeditors International of Washington 48,141
International Freight Forwarder
759,000 Hub Group 15,513
Truck & Rail Freight Forwarder
426,000 C H Robinson 14,351
Truck Freight Forwarder
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value(000)
- -------------------------------------------------------------------------------
<S> <C> <C>
860,000 Airnet Systems $ 7,847
Check & Other Small Package Shipment
200,000 Forward Air 4,725
Freight Transportation Between Airports
- -------------------------------------------------------------------------------
90,577
.Other Industrial Services: 0.9%
1,326,000 Wackenhut, Cl. B 19,890
31,000 Wackenhut, Cl. A 612
Prison Management
294,000 Mobile Mini 6,431
Leases Portable Storage Units
626,000 HA.LO Industries 3,912
Distributor of Advertising & Promotional Products
- -------------------------------------------------------------------------------
30,845
--------
Industrial Goods/Services: Total 253,667
- -------------------------------------------------------------------------------
Energy/Minerals: 8.7%
.Independent Power: 3.4%
1,164,000 AES Corporation 68,676
1,852 AES Corporation Warrants 166
Power Plants
1,500,000 MidAmerican Energy 44,250
Growth Utility
- -------------------------------------------------------------------------------
113,092
.Oil/Gas Producers: 2.8%
2,100,000 Tesoro Petroleum 34,650
Oil Refinery/Gas Producer
630,000 Devon Energy 26,106
Oil & Gas Producer
1,400,000 Cross Timbers Oil 18,900
Oil & Gas Producer
250,000 Evergreen Resources 6,016
Oil & Gas Producer
175,000 Basin Exploration 4,200
Oil & Gas Producer
800,000 Tipperary 1,250
Oil & Gas Producer
- -------------------------------------------------------------------------------
91,122
.Distribution/Marketing/Refining: 2.4%
900,000 Equitable Resources 34,031
Natural Gas Utility & Producer
1,200,000 Dynegy 24,825
Natural Gas & Electric Processing,
Production & Marketing
800,000 Atmos Energy 19,300
Natural Gas Utility
- -------------------------------------------------------------------------------
78,156
.Oil Services: 0.1%
125,000 Hanover Compressor 3,977
Natural Gas Compressor Rental
--------
Energy/Minerals: Total 286,347
Other Industries: 4.5%
.Real Estate: 3.8%
968,000 The Rouse Company 22,264
Regional Shopping Malls
823,437 Security Capital European Realty 16,469
Strategic Real Estate Investments
820,000 Cornerstone Properties 12,505
Downtown Office Buildings
500,000 First Industrial Realty Trust 12,375
Industrial Properties
466,000 Forest City Enterprises, Cl. B 11,766
Shopping Malls
260,000 Equity Residential Properties Trust 11,017
Nationwide Apartments
400,000 Macerich Company 9,250
Regional Shopping Malls
699,000 LaSalle Hotel Properties 9,043
Upscale/Full Service Hotels
385,000 First Washington Realty Trust 8,085
120,000 First Washington Realty Trust, Cv. Pfd. 3,323
Community Shopping Centers
200,000 General Growth Properties 6,300
Shopping Malls REIT
150,000 Consolidated Tomoka 2,025
16,000 Acres of Florida Land
- -------------------------------------------------------------------------------
124,422
.Waste Management: 0.1%
152,000 Stericycle 2,233
Medical Waste Disposal
.Regulated Utilities: 0.6%
700,000 Unisource Energy 8,269
Electric Utility in Tuscon
130,000 Central Hudson Gas & Electric 5,119
Electric Utility
283,000 Azurix 4,864
Owner & Operator of Water Utilities
200,000 Utilicorp United 4,213
- -------------------------------------------------------------------------------
Global Utility
22,465
--------
Other Industries: Total 149,120
- -------------------------------------------------------------------------------
Foreign Securities: 14.1%
.Canada: 0.7%
585,000 Canadian Natural Resources 13,694
Oil & Gas Producer
219,500 Corus Entertainment 3,548
CATV Programming & Radio Stations
139,100 Precision Drilling 3,218
Oil & Gas Well Driller
200,000 Ulster Petroleums 2,157
Oil & Gas Producer
- -------------------------------------------------------------------------------
22,617
</TABLE>
35
<PAGE>
Acorn Fund
.Statement of Investments, continued
<TABLE>
<CAPTION>
Number of Shares Value (000)
- -----------------------------------------------------------------------
<S> <C> <C>
.Australia: 0.3%
927,959 Aristocrat Leisure $ 9,629
Slot Machines
.United Kingdom: 3.4%
644,000 NTL 61,884
Voice, Video & Data Services
1,200,000 Serco Group 26,976
Facilities Management
1,250,000 Edinburgh Fund Managers 9,037
Investment Management
1,322,600 Airtours 8,430
Packaged Tour Vacations
1,100,000 N. Brown Group 5,942
Mail Order Clothing in Large Sizes
- -----------------------------------------------------------------------
112,269
.Germany/Austria: 0.4%
180,000 Flughafen Wien (Austria) 7,183
Vienna Airport Authority
23,000 Binding-Brauerei 5,095
Brewery
- -----------------------------------------------------------------------
12,278
.Sweden: 1.4%
1,000,000 WM Data Nordic 43,303
Computer Services/Consulting
100,000 Entra Data 1,732
Business Software
- -----------------------------------------------------------------------
45,035
.Netherlands: 0.8%
152,380 ASR Verzekeringsgroep 9,486
Insurance
171,084 Getronics 9,229
Computer Services/Consulting
312,439 Hunter Douglas 8,452
Decorative Window Coverings
- -----------------------------------------------------------------------
27,167
.France: 0.9%
230,000 Atos 29,492
Computer Services/Transaction Processing
.Italy: 0.8%
1,500,000 Banca Fideuram 8,499
Life Insurance & Mutual Funds
1,000,000 Aeroporti di Roma 7,434
Airport Management
1,970,000 Ducati Motor 6,252
Motorcycles
1,250,000 Saipem 5,392
Offshore Construction
- -----------------------------------------------------------------------
27,577
.Malaysia: 0.1%
750,000 Resorts World Berhad $ 1,717
Casino/Hotel Resort
590,000 Berjaya Sports Toto 1,250
Lottery/Gaming
- -----------------------------------------------------------------------
2,967
.Hong Kong: 0.1%
1,795,000 Varitronix International 3,917
LCD Manufacturer
.China: 0.1%
200,000 The Investment Company of China 1,100
Closed-End Fund
.Singapore: 1.7%
8,130,000 Star Cruises 48,780
Cruise Line
2,000,000 Natsteel Electronics 7,468
Electronic Manufacturing Services
- -----------------------------------------------------------------------
56,248
.Japan: 2.8%
235,000 Softbank Corporation 89,391
Internet Services/Investment Holdings
300,000 Olympus Optical 4,057
Photographic & Medical Equipment
- -----------------------------------------------------------------------
93,448
.Mexico: 0.2%
7,350,000 Nadro, Series L 6,212
Pharmaceutical Distributor
.Other Latin America: 0.4%
407,124 IRSA (Argentina) 11,450
Real Estate Management & Development
50,000 Tele Celular Sul (Brazil) 947
Cellular Operator
- -----------------------------------------------------------------------
12,397
----------
Foreign: Total 462,353
Total Common Stocks and Other ----------
Equity-Like Securities: 92.5% $3,042,242
Short-Term Obligations: 7.4% 242,109
----------
Total Investments: 99.9% 3,284,351
Cash and Other Assets Less Liabilities: 0.1% 4,167
----------
Total Net Assets: 100% $3,288,518
- -----------------------------------------------------------------------
</TABLE>
36
<PAGE>
Acorn Fund
.Foreign Portfolio Diversification
At September 30, 1999 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
Business Information/Publishing $ 89,391 2.7%
Computer Services 82,024 2.5
Cable Television 65,432 2.0
Semiconductors & Related
Equipment 26,976 0.8
Contract Manufacturing 7,468 0.2
Business Software 1,732 0.1
Mobile Communications 947 0.0
- ----------------------------------------------------
273,970 8.3
.Health Care
Medical Equipment 4,057 0.1
- ----------------------------------------------------
4,057 0.1
.Consumer Goods/Services
Travel 57,210 1.7
Beverages 13,547 0.4
Gaming 10,879 0.3
Leisure Vehicles 6,252 0.2
Consumer Goods Distribution 6,212 0.2
Retail 5,942 0.2
Entertainment 1,717 0.1
- ----------------------------------------------------
101,759 3.1
.Finance
Money Management $ 17,536 0.6%
Insurance 9,486 0.3
Closed-End Funds 1,100 0.0
- ----------------------------------------------------
28,122 0.9
.Industrial Goods/Services
Electrical Components 3,917 0.1
- ----------------------------------------------------
3,917 0.1
.Energy/Minerals
Oil/Gas Producers 19,069 0.6
Oil Services 5,392 0.2
- ----------------------------------------------------
24,461 0.8
.Other Industries
Transportation 14,617 0.5
Real Estate 11,450 0.3
- ----------------------------------------------------
26,067 0.8
--------- -------
Total Foreign Portfolio $462,353 14.1%
====================================================
</TABLE>
37
<PAGE>
The Acorn
- -----------------------
Family of Funds
Trustees
Irving B. Harris
Chairman
James H. Lorie
Vice Chairman
Leo A. Guthart
Jerome Kahn, Jr.
Steven N. Kaplan
David C. Kleinman
Charles P. McQuaid
Roger S. Meier
Allan B. Muchin
Robert E. Nason
Katherine Schipper
Ralph Wanger
Officers
Ralph Wanger
President
Margaret M. Forster
Vice President
Marcel P. Houtzager
Vice President
Kenneth A. Kalina
Assistant Treasurer
Bruce H. Lauer
Vice President and Treasurer
Charles P. McQuaid
Senior Vice President
Robert A. Mohn
Vice President
John H. Park
Vice President
Steven A. Radis
Vice President and Secretary
Mark H. Yost
Vice President
Leah J. Zell
Vice President
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)
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, 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.
Our e-mail address is:
[email protected]
Find out what's new - visit our web site at:
www.acornfunds.com
38
<PAGE>
The discussions in this report of portfolio companies are for illustration only
and are not recommendations of individual stocks. The information is believed to
be accurate, but the information and the views of the portfolio managers may
change. The Acorn Funds invest in the stocks of small and midsized companies
that may be more volatile than the stocks of larger companies.
<PAGE>
[ACORN ARTWORK APPEARS HERE]
The Acorn
- ------------------------------
Family of Funds
WAM Brokerage Services, L.L.C.
P.O. Box 8502
Boston, MA 02266-8502
