<PAGE>
Acorn Family of Funds
Annual Report
December 31, 1999
Managed by Wanger Asset Management, L.P. 4
<PAGE>
[PICTURE APPEARS HERE]
Kublai Khan, a portrait from a Chinese engraving
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 Family of Funds invest in the stocks of small and midsized
companies that may be more volatile than the stocks of larger companies.
<PAGE>
Acorn Family of Funds Annual Report 1999
Table of Contents
<TABLE>
<S> <C>
Squirrel Chatter:
From Chain Mail to E-Mail 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 19
Acorn USA
In a Nutshell 8
Performance at a Glance 9
Major Portfolio Changes 20
Statement of Investments 21
Acorn International
In a Nutshell 10
Performance at a Glance 11
Major Portfolio Changes 24
Statement of Investments 26
Portfolio Diversification 30
Acorn Fund
In a Nutshell 12
Performance at a Glance 13
Major Portfolio Changes 31
Statement of Investments 33
Acorn Family of Funds
Statements of Assets and Liabilities 41
Statements of Operations 42
Statements of Changes in Net Assets 44
Financial Highlights 46
Notes to Financial Statements 49
Special Notice 52
</TABLE>
Prospectus Supplement
Trustees, Officers and Contact Information
>1999 Year-End Distributions
The following table details the funds' year-end distributions. The record date
was December 9, 1999, the ex-dividend date was December 10, 1999, and the
payable date was December 15, 1999.
<TABLE>
<CAPTION>
Acorn Fund Acorn International Acorn USA Acorn Twenty Acorn Foreign Forty
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Long-term Capital Gain $3.35 $1.55 $1.32 $0.00 None
- ---------------------------------------------------------------------------------------------------------
Short-term Capital Gain $0.00 $0.00 $0.01 $0.14 None
- ---------------------------------------------------------------------------------------------------------
Ordinary Income $0.06 $0.07 $0.00 $0.00 None
- ---------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
>Squirrel Chatter: From Chain Mail To E-Mail
A Five-Minute History of the World
[PHOTO HERE]
During the early part of the last millennium, the hotbed of ideas that moved
civilization forward came from the Steppes of Asia, not the Valley of Silicon.
The Western Hemisphere wasn't even on the map at that point, and Europe was an
insignificant, rather primitive gang of quarreling principalities at the wrong
end of the Eurasian landmass.
The center of power, and the center of civilization, was ruled by Genghis
Khan and his children. He and his unstoppable armies created a gigantic empire
that spread across Mongolia and China, and included Persia and Russia. Nobody in
Europe knew the extent or power of the Mongol Empire until young Marco Polo
traveled across Asia in the 1280s. Years later, he returned to his native Venice
with a sack of jewels and a pack of tall tales about lands of gigantic, rich
cities, an opulent and sophisticated court, and advanced technology. Most of his
contemporaries thought he was kidding. Here are two examples of Marco's stories
that sounded crazy in 1290, but after a few centuries, changed the world.
Rocks That Burned
Marco Polo wrote:
It is a fact that all over the country of Cathay there is a kind of
black stone existing in beds in the mountains, which they dig out and burn
like firewood. If you supply the fire with them at night, and see that they
are well kindled, you will find them still alight in the morning; and they
make such capital fuel that no other is used throughout the country. It is
true that they have plenty of wood also, but they do not burn it, because
those stones burn better and cost less./1/
Modern technology is based on burning rocks. The story of the Industrial
Revolution is how our lives changed when we learned how to burn coal to run
ships and trains, and make electricity for motors and computers. Adopting oil
and gas was also part of the story. As The Economist put it, "Coal was to power
Britain's industrial revolution, and, later, as steam-powered machinery spread,
the first steps in its agricultural revolution too.
... Today's oil-driven world and tomorrow's driven by who knows what owe
their birth to coal."/2/
Money That Grows On Trees
In Medieval Europe, coins made of gold and silver were scarce and often of
questionable quality. Marco Polo reported how Kublai Khan turned tree bark into
money:
The Emperor's Mint then is in this same City of Cambaluc [Beijing
today], and the way it is wrought is such that you might say he hath the
Secret of Alchemy in perfection, and you would be right! For he makes his
money after this fashion.
He makes them take the bark of a certain tree, in fact the Mulberry
Tree, the leaves of which are the food of the silkworms, -- these trees
being so numerous that whole districts are full of them. ...
... All these pieces of paper are issued with as much solemnity and
authority as if they were of pure gold or silver.
And the Khan causes every year to be made such a vast quantity of this
money, which costs him nothing, that it must equal in amount all the
treasure of the world./3/
That's right folks, the Chinese invented the Fed. China's first version of
paper money appeared in 1024. In contrast, 13th century European governments
were weak, with poor communications, primitive legal systems, and no fiscal
policy above the level of extortion. Europe's first attempt at paper money came
400 years later when Johan Palmstruch founded the Stockholm Banco in 1656. His
was a private company that intended to issue paper money, enjoying royal
privileges in return for a royal cut. After sustained lobbying and a public-
relations effort that would be impressive today, an issue of bank notes followed
in 1661. But the venture over-reached itself, issued too many notes and crashed
disastrously in 1667. Palmstruch was disgraced and -- fickle government -- was
sentenced to death./4/
Paper money has had a mixed career since, with a number of disastrous
hyper-inflationary episodes. The test of a modern government's strength and
sense is, like Kublai Khan's, the ability to issue credible paper money. "Strong
government" has been another central theme of the last two centuries, with both
beneficial and destructive results.
History from Marco Polo to Alan Greenspan mainly explains how the language
of the Internet turned out to be English instead of Turkish, Chinese, or
Arabic./5/ Marco Polo was a 13th century primitive visiting a superior
civilization. Five hundred years later, the tides reversed. Europe adopted coal,
paper money, printing, gunpowder and the magnetic compass from China, and went
on to
2
<PAGE>
build technology, wealth and power. China preferred stability and stagnation.
Europe had taken control of the world by the end of the 19th century.
History hasn't ended yet. The European empires dissolved in the 20th century.
Asia, no longer stagnant, now has many countries that fully match Western wealth
and technology.
Is there a message here for investors? We already know that everything
changes with time. Venice, Constantinople, and Cordoba now exist as outdoor
museums where tourists come to admire their 13th century glory. England was a
minor province for some French kings then; no one in the 13th century would have
put the English on a world power list. In the same way, stocks have had their
times of leadership followed by stagnation or extinction. One hundred years
ago, the best stock in the United States was the Pennsylvania Railroad. Later
favorites would include GM, U.S. Steel, RCA, Sears, DuPont, Schlumberger, and
IBM, all of which are still around but not what they once were. A few have had
longevity: GE, Merck.
Will current favorites fade? Wal-Mart without Sam and Microsoft without billg
might well. Many of the new Internet companies will suffer the biggest massacre
of naifs since the Children's Crusade. Will new companies become favorites? Of
course. We will try to find some of them. Our small-company, global approach
ought to keep working. The next seven hundred years look very promising.
1999 Scarlet A Winners
I must tell you what the Great Khan did in regard to those barons who had
behaved well in the battle. Him who was before captain of 100, he made captain
of 1000. ... Besides that, he bestowed upon them fine jewels of gold and
silver, and pearls, and precious stones; insomuch as the amount that fell to
each of them was something astonishing./6/
Every year, we reward the stock market barons whose ideas won the investment
battle. While we can't bestow jewels and great armies to each of them, we do
bestow this recognition, our gratitude and a Scarlet A certificate. To be
considered for 1999, the recommended stock had to increase more than 140% and
make a profit exceeding $12 million.
Three big winners came from Japan. Softbank, an Internet service provider and
investment company, had a weighted return of 1,493% for Acorn Foreign Forty and
was a big winner for Acorn Fund too. Trans Cosmos, an information technology
services company, gained 1,257% for Acorn International. JAFCO, a venture
capital fund, returned more than 600% and was another Acorn International
winner. Our gratitude goes to Mahendra Singh Negi of Merrill Lynch Japan for
these picks. Mahendra has the distinction of being the first Scarlet A hat-trick
winner.
Other international winners included NTL, a cable television operator in the
UK, up more than 175% for Acorn Fund and Acorn Foreign Forty. Ron Getto of
Donaldson Lufkin & Jenrette receives the Scarlet A for this pick for a second
year. Star Cruises, a Singapore-based cruise line, was brought to us by Lim Kok
Ann of BNP Prime Peregrine in Singapore. Star Cruises saw a 385% gain for Acorn
Fund and Acorn International.
Closer to home, two biotechnology companies topped the Acorn Fund list.
CuraGen returned 885%. Our thanks to Richard van den Broek of Chase H&Q for that
suggestion. David Stone brought Myriad Genetics to our attention, up 390%.
David, formerly with SG Cowen, is now consulting with his own firm, Liberty Tree
Advisors.
Getty Images, up 183% in Acorn Fund, is a stock photography company. Bob East
of Deutsche Bank Alex Brown gets the Scarlet A nod for this pick. And finally,
Barry Ollman of Hanifen Imhoff brought UnitedGlobalCom, a manager of foreign
cable television stations, to our attention. This stock gained 638% for Acorn
International and nearly 200% for Acorn Fund.
Thanks for sharing your inspirations. I'm sure our shareholders thank you too.
We look forward to hearing your future picks and to seeing what the market has
in store for all of us in 2000.
/s/ Ralph Wagner
Ralph Wanger
Chief Investment Officer, Wanger Asset Management
Lead Portfolio Manager, Acorn Fund
- --------------------------------------------------------------------------------
1 The Travels Of Marco Polo, Yule-Cordier edition, p. 442. Dover Publications,
1993, a republication of a 1903 version.
2 The Economist, December 31, 1999, p. 75.
3 The Travels Of Marco Polo, op. cit, p. 442.
4 The Economist, op. cit, p. 91.
5 If you need an Internet Service Provider (ISP) in one of these languages,
Startec Global has one for you.
6 The Travels Of Marco Polo, op. cit, p. 350.
3
<PAGE>
Acorn Twenty
>In a Nutshell
[PHOTO HERE]
Acorn Twenty finished its first full year of operation up 29.3%, strongly
outperforming the 14.7% S&P MidCap 400 return and the S&P 500's 21.0% gain for
the year. At year-end, Acorn Twenty had $68.5 million in assets. Looking back on
our inaugural year, we want to thank our shareholders for the integral role you
played in our strong beginning.
Several stocks contributed to Acorn Twenty's 1999 performance. The biggest
winners were our telecommunications stocks. Telephone and Data Systems, a
cellular phone and personal communication services provider, was up 183% for the
year following the company's announcement of the sale of its Aerial
Communications subsidiary to Voicestream Wireless. RCN, a competitive local
exchange carrier (CLEC), rose 175% as investors (including Paul Allen, co-
founder of Microsoft and owner of the Portland Trail Blazers) realized the value
of its residential local phone, cable, and data networks. Another
telecommunications stock, McLeod USA, gained 62.6% for the Fund. McLeod, like
RCN, is a CLEC, but provides services to businesses rather than residential
communities. Other strong performing stocks include Liberty Media, a long-time
Acorn Fund favorite, up 147% for the year, and AES Corp, an independent power
producer, up 90%.
Losers came from the insurance industry, a tough area for investors despite
low valuations. UICI, an insurance and specialty finance company, and
Progressive, an auto insurer, both had disappointing years. We felt a recovery
in this sector was imminent but we now believe there are better opportunities
elsewhere.
Acorn Twenty celebrated its one-year anniversary on November 23, 1999. Its
success is due to the collaborative efforts of the Acorn research team. Our
sincere thanks go to Ralph Wanger, Chuck McQuaid, Rob Mohn, Laura McKenna, Jason
Selch, and Ben Andrews.
Acorn Twenty finished its first full year of operation up 29.3%, strongly
outperforming the 14.7% S&P MidCap 400 return and the S&P 500's 21.0% gain for
the year. At year-end, Acorn Twenty had $68.5 million in assets.
Electrons
Everyone!
AES contributed a whopping 90% to Acorn Twenty last year -- high-voltage
performance from a long-time Acorn Fund favorite. AES owns and operates power
plants and electric utilities in 16 countries including the United States,
Brazil, Pakistan, Australia, India, Hungary, China and the United Kingdom.
Founded in 1981, AES started with a simple vision of delivering low-cost
electricity to U.S. utilities that were short of power. Soon, AES realized that
there were many opportunities outside the United States to build or acquire
utility assets from governments looking to privatize/deregulate their power
industries. Today, AES is the preeminent, independent global power company with
a history of 30% annual earnings gains. We believe the recent $3 billion
acquisition of Drax Power in the United Kingdom could keep AES growing brightly
for years to come.
/s/ John H. Park /s/ Mark H. Yost
John H. Park Mark H. Yost
Co-Portfolio Manager Co-Portfolio Manager
4
<PAGE>
>Performance at a Glance
<TABLE>
<CAPTION>
Acorn Twenty
- --------------------------------------------------------------------------------
Information
<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: 0.49%
Less Expense
Reimbursement: 0.04%
Total Net Expense Ratio*: 1.35%
</TABLE>
*Fees and expenses are calculated for the fiscal year ended December 31, 1999.
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 12/31/99: $68.5 million
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
>Acorn Twenty Top 10 Holdings
<S> <C>
First Health 7.3%
PPO Network
AmeriCredit 6.9%
Auto Lending
Liberty Media Group, AT&T 6.8%
Cable & Satellite Programming
AES Corporation 6.1%
Power Plants
McLeod USA 5.8%
Metro Market CLEC: Local, Long Distance & Internet Services
RCN 5.8%
Metro Market CLEC: Voice, Video & Internet Services
Telephone and Data Systems 5.5%
Cellular & Telephone Services
SEI Investments 5.5%
Mutual Fund Administration
MidAmerican Energy 4.7%
Growth Utility
H&R Block 4.7%
Tax Preparation
</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 Twenty Portfolio Diversification
- --------------------------------------------------------------------------------
>as a % of net assets, as of 12/31/99
[PIE CHART APPEARS HERE]
<S> <C>
Other* 7.2%
Consumer
Goods/Services 14.8%
Information 34.5%
Health Care 11.1%
Industrial Goods/Services 4.0%
Finance 17.6%
Energy/Minerals 10.8%
</TABLE>
*Cash, short-term obligations and other assets less liabilities.
<TABLE>
<CAPTION>
Relative Performance
- --------------------------------------------------------------------------------
4th quarter Last 12 mos.
1999
<S> <C> <C>
Acorn Twenty 14.4% 29.3%
S&P MidCap 400 17.2% 14.7%
Lipper Mid Cap Fund Average 28.6% 39.2%
Russell 2000 18.4% 21.3%
S&P 500 14.9% 21.0%
</TABLE>
Net Asset Value Per Share 12/31/99: $13.70
- ------------------------------------------
The Value of a $10,000 Investment in Acorn Twenty
- --------------------------------------------------------------------------------
>November 23, 1998 through December 31, 1999
<TABLE>
<CAPTION>
Average Annual Total Return
---------------------------
1 year Life of Fund
<S> <C>
29.30% 34.44%
</TABLE>
<TABLE>
<CAPTION>
[Edgar Representation of Line Graph]
- ---------------------------------------------------------------------
ACORN Twenty MidCap 400
- ---------------------------------------------------------------------
<S> <C> <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
- ---------------------------------------------------------------------
8/30/99 12060 11222
- -----------------------------------------------------------------------
9/30/99 12110 10875
- ---------------------------------------------------------------------
12/31/99 13850 12745
- ---------------------------------------------------------------------
</TABLE>
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 Lipper Mid Cap Fund Average, which
includes Acorn Twenty, measures the performance of all U.S. mid-cap funds
tracked by Lipper. 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
[PHOTO HERE]
At the end of 1999, Acorn Foreign Forty was up 81.6% for the year, more than
double the returns of the Salomon Smith Barney Cap Range $2-10 Billion Index
(+23.5%), the EAFE (+ 27.0%) and the Lipper International Funds Average
(+40.8%). We are pleased with our strong beginning and we hope that you are too.
Much of Acorn Foreign Forty's gain for the year came in the fourth quarter as
the Fund advanced 46.7% on the strength of our information technology (IT)
stocks. There was no slowing of the Fund's largest position, Softbank, up 151.5%
for the quarter and a staggering 1,493% for the year. This Japanese Internet
company was an obvious winner for the portfolio. Finland's Comptel, a producer
of telephone-billing software, was up 273% in 1999 and was also among the Fund's
top performers. Benefiting from Internet-related services, two Italian
publishing names -- Editoriale L'Espresso (+375.9) and SEAT Pagine Gialle
(+211%) -- posted strong annual gains.
On the downside, Mapfre Vida, a Spanish life insurance company, fell out of
favor with investors. We view this as a solid business with strong prospects, a
stance that its parent company seems to agree with. As of the writing of this
report, the parent has announced plans to buy out minority shareholders at a
premium price.
Looking forward, we believe we are well positioned in areas where mid-caps
have the right balance of scale, financial strength, and entrepreneurial spirit,
to be leaders. These industry groups include emerging telecommunication
services, IT services, outsourcing services and media. In addition, the
valuation gap between large- and mid-cap stocks is working in our favor,
allowing us to pick up high-quality names at good prices.
Much of Acorn Foreign Forty's gain for the year came in the fourth quarter as
the Fund advanced 46.7% on the strength of our information technology (IT)
stocks. There was no slowing of the Fund's largest position, Softbank, up 151.5%
for the quarter and a staggering 1,493% for the year.
Internet Advertising Is
Music For M6
Ever wonder what those Internet IPO's do with their newly minted millions? M6
Metropole TV in France can tell you. They advertise. Most Internet start-ups
have only two assets: a business plan and a brand name that is built using
advertising, and lots of it. M6 is the fastest growing TV station in France and,
with a format similar to MTV, appeals to the tech-savvy generation these start-
ups are anxious to reach. In addition, previously regulated European companies
focusing on branding for the first time, are turning to television advertising,
putting even more money in M6 coffers.
/s/ Marcel P. Houtzager /s/ Roger Edgley
Marcel P. Houtzager Roger Edgley
Co-Portfolio Manager Co-Portfolio Manager
6
<PAGE>
>Performance at a Glance
Acorn Foreign Forty
- --------------------------------------------------------------------------------
Information
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: 0.59%
Less Expense
Reimbursement: 0.09%
Total Net Expense Ratio*: 1.45%
*Fees and expenses are calculated for the fiscal year ended December 31, 1999.
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 12/31/99: $107.4 million
- --------------------------------------------------------------------------------
>Acorn Foreign Forty Top 10 Holdings
Softbank Japan 6.2%
Internet Services/Investment Holdings
Celestica Canada 4.7%
Electronic Manufacturing Services
NetCom Sweden 3.9%
Telecommunication Services
Star Cruises Singapore 3.8%
Cruise Line
Energis United Kingdom 3.7%
Telecommunication Services
Logica United Kingdom 3.6%
Computer Software & Services
Venture Manufacturing Singapore 3.5%
Electronic Manufacturing Services
Banca Fideuram Italy 3.3%
Life Insurance & Mutual Funds
M6 Metropole TV France 3.2%
Television Broadcaster
Global TeleSystems United States 3.2%
Telecommunication Services
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 12/31/99
[PIE CHART APPEARS HERE]
Energy/Minerals 2.6%
Health Care 2.1%
Other* 6.9%
Consumer Goods/Services 8.5%
Information 58.5%
Industrial
Goods/Services 9.1%
Finance 12.3%
*Other includes cash, short-term obligations and other assets less
liabilities of 5.0%.
Relative Performance
- --------------------------------------------------------------------------------
4th quarter Last 12 mos.
1999
Acorn Foreign Forty 46.7% 81.6%
EAFE 17.0% 27.0%
SSB Cap Range $2-10B 10.8% 23.5%
Lipper Int'l Funds Average 25.7% 40.8%
Net Asset Value Per Share 12/31/99: $19.93
- ------------------------------------------
The Value of a $10,000 Investment in Acorn Foreign Forty
- --------------------------------------------------------
>November 23, 1998 through December 31, 1999
Average Acorn Total Return
- --------------------------
1 year Life of Fund
81.60% 87.58%
[EDGAR Representation of Line Graph]
- ---------------------------------------------------
ACORN foreign EAFE
- ---------------------------------------------------
11/23/98 10000 10000
12/31/98 11000 10411
1/31/99 11790 10381
2/28/99 11590 10133
3/31/99 11980 10556
4/30/99 12240 10980
5/30/99 12170 10418
6/30/99 13110 10825
7/31/99 13511 11146
8/30/99 13771 11186
9/30/99 13621 11300
12/31/99 19975 13218
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 658
funds for the fourth quarter and 618 funds for the year ended December 31, 1999.
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
[PHOTO HERE]
Your Fund outperformed the stock market indexes both large and small in 1999.
Acorn USA returned 23.0% last year, beating the small-cap Russell 2000's 21.3%
and the large-cap S&P 500's 21.0% return. Most of our performance came in the
final quarter of the year, when Acorn USA gained 18.9%, the Russell 2000 gained
18.4%, and the S&P 500 was up 14.9%.
Technology and telephones were our biggest winners. Tech stocks roared all
year, ending 1999 with a deafening crescendo. Our top holding, Micros Systems (a
management systems company for restaurants and hotels), more than doubled in
price to become the largest position in the Fund. Aspect, a call-center
technology provider, was another tech winner.
Internet stocks continued to climb as concept stocks, ignoring fusty ideas
such as profitability. Our Internet plays included RCN (rcn.com), up 170%, TV
Guide (TV web portal), up 265%, and Project Software (mro.com), up 170%. Some
Internet magic also rubbed off on our wireless telephone stocks (Telephone and
Data Systems and Price Communications), as investors realized cellular phones
would be the newest way to surf the Web.
Our insurance stocks were disappointing. Our two worst-performing stocks were
UICI and Acceptance Insurance, both caught with their reserves down in the
fourth quarter. Both stocks overshot to the downside and currently trade at
prices that we believe offer favorable risk/reward tradeoffs.
The investing world has recently fixated on growth vs. value stocks,
forgetting the small-cap, large-cap feud. We are pleased that small caps have
been outperforming large caps since last April. We are optimistic that small
caps will continue their good showing in the year 2000. After all, why do you
think they call the small-cap index the Russell 2000?
We are pleased that small caps have been outperforming large caps since last
April. We are optimistic that small caps will continue their good showing in the
year 2000. After all, why do you think they call the small-cap index the Russell
2000?
Aspect Communication's
Rebirth
Aspect Communications sells telephone call center technology. Aspect's stock
declined last January after announcing poor sales of its call center
software/hardware systems. Rather than hoping the business would correct itself
with some relatively minor tweaking (the usual business reflex when faced with
crisis), management opted for a dramatic gesture. They slashed their hardware
switch business from 60% to 30% of their revenue base and emerged as a software
company. Our technology analyst, Todd Narter, assessed the quality of Aspect's
new products (high) and new management team (higher) and advocated holding the
stock. Good decision. Aspect has increased six-fold since, as demand for its new
software exploded.
/s/ Robert A. Mohn
Robert A. Mohn
Portfolio Manager
8
<PAGE>
>Performance at a Glance
Acorn USA
Information
Ticker Symbol: AUSAX
Minimum
Initial Investment $1,000
$1,000 for an IRA
Minimum
Subsequent Investment: $100
Exchange Fee: None
Management Fee*: 0.93%
12b-1 Fee: None
Other Expenses: 0.22%
Total net Expense Ratio*: 1.15%
*Fees and expenses are for the fiscal year ended
December 31, 1999.
Fund Net Assets as of 12/31/99: $371.4 million
- ----------------------------------------------
>Acorn USA Top 10 Holdings
Micros Systems 10.5%
Information Systems for Restaurants & Hotels
MidAmerican Energy 7.8%
Growth Utility
Telephone and Data Systems 6.3%
Cellular & Telephone Services
Sykes Enterprises 3.7%
Call Center Services
Lincare Holdings 3.2%
Home Health Care Services
AmeriCredit 3.2%
Auto Lending
First Health 2.8%
PPO Network
National Data 2.7%
Credit Card & Health Claims Processor
RCN 2.7%
Metro Market CLEC: Voice, Video & Internet Services
Aspect Communications 2.7%
Call Center Software
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 USA Portfolio Diversification
- ------------------------------------------------
>as a % of net assets, as of 12/31/99
[PIE CHART APPEARS HERE]
Consumer
Goods/Services 3.2%
Real Estate 0.2%
Industrial
Goods/Services 6.4%
Health Care 8.8%
Information 48.1%
Other* 9.8%
Finance 10.4%
Energy/Minerals 13.1%
* Cash, short-term obligations and other assets less liabilities.
Relative Performance
- ------------------------------------------------------
4th quarter Last 12 mos.
1999
Acorn USA 18.9% 23.0%
Russell 2000 18.4% 21.3%
Lipper Small-Cap Funds Avg. 24.1% 33.4%
S&P MidCap 400 17.2% 14.7%
S&P 500 14.9% 21.0%
Net Asset Value Per Share 12/31/99: $16.75
- ------------------------------------------
The Value of a $10,000 Investment in Acorn USA
- -------------------------------------------------
>September 4, 1996 through December 31, 1999
Average Annual Total Return
- -------------------------------
1 Year 3 Year Life of Fund
23.02% 19.86% 23.33%
[Edgar Representation of Line Graph]
- --------------------------------------------------------------------
Date Acorn USA Russell 2000
- --------------------------------------------------------------------
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
- --------------------------------------------------------------------
12/99 20,059 15,759
- ---------------------------------------------------------------------
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 and consisted
of 820 funds for the fourth quarter and 757 funds for the 12-month period. 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
[PHOTO APPEARS HERE]
The champagne corks popped on New Year's Eve across the world without a Y2K
crisis, and global equities celebrated the turn of the millennium with a
powerful rally. Acorn International fully participated in the festivities. For
1999 as a whole, Acorn International soared 79%, beating all of its relevant
benchmarks. The Fund rose 42% over the three months ended December 31, as
compared to 9% for the EMI Index, 17% for EAFE, and 28% for the peer group.
These results remind us, once again, that market timing is a difficult game.
Investors who stayed on the sidelines in the fourth quarter to be `safe' paid
dearly for their insurance, while those who followed a strategy of being
invested for the long-term were handsomely rewarded for their discipline.
A year ago we predicted that the environment for international investing was
on the upswing. Today, our opinion is in the direction of greater positive
conviction.
To generate big returns you need big winners. Our star performer of the year
was Star Cruises, which rose 385% for a gain of $77 million. In terms of themes
that worked well, Celestica (+352%) and Venture Manufacturing (+201%) earned
shareholders $108 million on the growth in outsourced production of electronic
goods, while NTL (+176%) and UnitedGlobalCom (+638%) together made us $71
million on the premise that the European cable industry would consolidate. We
had few pure Internet plays. Rather, our stocks are considered Internet
beneficiaries. They include Editoriale L'Espresso (+369% =$58 million),
Datacraft Asia (+369%=$57 million), JAFCO (+600%=$46 million) and Trans Cosmos
(+1257%=$40 million). Of our long-term core holdings, Hong Kong trading firm Li
& Fung gained 150% to post $45 million in profits, while newcomers Baltimore
Technologies and ERG rose 575% and 293% respectively, to earn shareholders $67
million combined. By comparison, the most lost by any one stock in the portfolio
in the last twelve months was $5.8 million.
Although we do not pay a lot of attention to country weightings in managing
the Fund, being in Asia did matter in 1999. We made $250 million in Japan and
$212 million in Singapore, on holdings that appreciated around 265% each. Italy
was our best European market, with a $120 million gain, followed by Sweden at
$66 million and France at $62 million (along with Canada and Hong Kong). Only
Spain, Denmark and Peru finished the year in the red, albeit in single digits.
A year ago we predicted that the environment for international investing was
on the upswing. Today, our opinion is in the direction of greater positive
conviction. Without making any predictions, we remain steadfast optimists.
From the entire international team to all of you, Happy New Year!
/s/ Leah Joy Zell /s/ Margaret May Forster
Leah Joy Zell Margaret M. Forster
Lead Portfolio Manager Co-Portfolio Manager
A Star Is
Born
Few investors have heard of Star Cruises. That's because its owner, the Lim
family, holds most of the shares. But the Singapore-based company is already
Asia's largest cruise ship operator. After the pending takeover of Norwegian
Cruise Lines, it will have a fleet of 23 vessels and rank third in the world,
behind Carnival and Royal Caribbean. Asia's cruise market is projected to grow
25% this year to one million passengers. Star intends to develop the market
further by offering service to and from Japan beginning in March. Given that
under one percent of Japanese tourists go on cruises each year, we believe that
the company's growth prospects are nothing short of stellar.
10
<PAGE>
>Performance at a Glance
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*: 0.81%
12b-1 Fee: None
Other Expenses: 0.30%
Total Net Expense Ratio*: 1.11%
*Fees and expenses are for the fiscal year ended
December 31, 1999.
Fund Net Assets as of 12/31/99: $2,868.2 million
- ------------------------------------------------------------------------------
>Acorn International Top 10 Holdings
Star Cruises Singapore 3.4%
Cruise Line
Li & Fung Hong Kong 2.6%
Sourcing of Consumer Goods
TietoEnator Finland 2.6%
Computer Services/Consulting
Venture Manufacturing Singapore 2.6%
Electronic Manufacturing Services
Editoriale L'Espresso Italy 2.4%
Newspaper & Magazine Publisher
Celestica Canada 2.3%
Electronic Manufacturing Services
Datacraft Asia Singapore 2.3%
Network Integrator
Atos France 2.2%
Computer Services/Transaction Processing
Serco Group United Kingdom 2.2%
Facilities Management
WMData Nordic Sweden 2.0%
Computer Services/Consulting
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 International Portfolio Diversification
- ------------------------------------------------------------------------------
>as a % of net assets, as of 12/31/99
[PIE CHART APPEARS HERE]
Health Care 3.2%
Finance 8.3%
Other* 7.3%
Information 49.6%
Industrial
Goods/Services 13.7%
Consumer
Goods/Services 17.9%
*Other includes cash, short-term obligations and other assets less
liabilities of 3.3%.
Relative Performance
- -------------------------------------------------------------------
4th quarter Last 12 mos.
1999
Acorn International 41.6% 79.2%
EMI (World ex-U.S.) 9.1% 23.5%
EAFE 17.0% 27.0%
IFCI Composite 25.3% 66.6%
Lipper Int'l Small-Cap Funds Index 28.3% 62.9%
Lipper Int'l Funds Index 24.7% 37.8%
Net Asset Value Per Share 12/31/99: $35.33
- ------------------------------------------
The Value of a $10,000 Investment in Acorn International
- ------------------------------------------------------------
>September 23, 1992 through December 31, 1999
Average Annual Total Return
- -------------------------------
1 Year 3 Year Life of Fund
79.19% 22.19% 21.73%
[Edgar Representation of Line Graph]
- --------------------------------------------------------
ACORN INT'L EMI-EX US
- --------------------------------------------------------
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
- --------------------------------------------------------
Dec-1999 41761 $19,312
- --------------------------------------------------------
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 Smith Barney's index of the bottom 20% of
institutionally investable capital of countries, as selected by Salomon,
excluding the U.S. 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 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.
mid and large 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
[PHOTO HERE]
1999 was an excellent year for the Acorn Fund. We no longer had to swim
upstream--small-cap stocks matched large caps, ending four years of relative
underperformance. Our foreign stocks jumped 139%! Acorn Fund rose 33.4% in the
year and 21.9% in the quarter, outpacing the unmanaged small-cap and large-cap
indexes for both time periods.
Acorn's biggest winner for the year -- and likely for all time -- was
Softbank, a Japanese stock. This Internet company was up nearly fifteen-fold for
the year and is now the Fund's largest position. Not only did the stock soar, we
called the shot, featuring it a year ago in the 1998 Annual Report. Our other
blockbuster foreign stock was Star Cruises, up 385% for the period.
Telecommuncations was our best sector during the year. Cable and telephone
providers NTL and UnitedGlobalCom in Europe, plus RCN in the United States, each
wired home gains over 170%. Telephone and Data Systems, a cellular and land-line
phone company, jumped 180%.
Media stocks continued their star performances. Our stalwart, long-term
holding Liberty Media jumped nearly 150% while TV Guide doubled. We swapped out
of much of Liberty as we found better values in smaller names. We sold our
remaining TV Guide after it ran up following the announcement of merger plans
with Gemstar.
We made good money in a number of technology stocks. Contract manufacturer
Solectron assembled a 104% profit, while connector and laser firm Oak Industries
tripled on a sellout to Corning. Electronic time-clock company Kronos clocked a
double while hospitality computer systems company Micros Systems served up a
125% gain.
We believe Acorn Fund has delivered excellent returns this year although we
underweighted the highly speculative technology stocks that are currently the
rage. As stock-pickers--not stock-traders--we buy names that we believe have the
potential to perform for the long-term, avoiding the risk and over-valuations
that often come with buying the "flavor of the month."
/s/ Ralph Wanger /s/ Charles P. McQuaid
Ralph Wanger Charles P. McQuaid
Lead Portfolio Manager Co-Portfolio Manager
1999 was an excellent year for the Acorn Fund. We no longer had to swim
upstream--small-cap stocks matched large caps, ending four years of relative
underperformance.
We got the Picture
We remain biased toward companies that benefit from technology. Getty Images
licenses rights to photographs and moving images to advertisers, publishers, the
news media, and others. Getty's collection spans from the Hindenberg disaster to
the Lewinsky hug. The Internet has boosted demand and cut Getty's costs. Sales
via the Internet recently grew 164% year-to-year and accounted for 32% of
company revenues. Pricing on the Internet is firm, while salesforce productivity
is up fifty-fold! Getty's stock price, while up over 180% this year, remains
reasonable compared to other Internet companies.
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: 0.16%
Total Net Expense Ratio*: 0.85%
*Fees and expenses are for the fiscal year ended December 31, 1999.
Fund Net Assets as 12/31/99: $3,920.8 million
- ------------------------------------------------
>Acorn Fund Top 10 Holdings
Softbank 5.7%
Internet Services/Investment Holdings
AES Corporation 2.2%
Power Plants
Liberty Media Group, AT&T 2.2%
Cable & Satellite Programming
Star Cruises 2.1%
Cruising/Casino Operations
Telephone and Data Systems 1.9%
Cellular & Telephone Services
AmeriCredit 1.8%
Auto Lending
Lincare Holdings 1.8%
Home Health Care Services
SEI Investments 1.7%
Mutual Fund Administration
Harley-Davidson 1.6%
Motorcycles & Related Merchandise
National Data 1.6%
Credit Card & Health Claims Processor
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
Acorn Fund Portfolio Diversification
- --------------------------------------------
>as a % of net assets, as of 12/31/99
[PIE CHART APPEARS HERE]
*Other 8.9%
Real Estate 4.2%
Energy/Minerals 7.1%
Industrial Goods/
Services 8.1%
Health Care 7.7%
Information 38.4%
Finance 13.8%
Consumer
Goods/Services 11.8%
*Other includes cash, short-term obligations and other assets less liabilities
of 7.8%.
Relative Performance
- ---------------------------------------------------------------------
4th quarter Last 12 mos.
1999
Acorn Fund 21.9% 33.4%
S&P 500 14.9% 21.0%
Russell 2000 18.4% 21.3%
Lipper Small-Cap
Funds Index 32.3% 41.5%
S&P MidCap 400 17.2% 14.7%
Acorn Fund NAV as of 12/31/99: $18.53
- -----------------------------------------
The Value of a $10,000 Investment in Acorn Fund
- --------------------------------------------------
>June 10, 1970 through December 31, 1999
Average Annual Total Return
- ---------------------------------------
1 Year 5 Years 10 Years Life of Fund
33.38% 21.21% 17.06% 17.14%
[EDGAR Representation of Line Graph]
- ------------------------------------------------------------
ACORN Fund S & P
- ------------------------------------------------------------
6/10/70 10000 10000
- ------------------------------------------------------------
70 13587 12676
- ------------------------------------------------------------
71 17828 14490
- ------------------------------------------------------------
72 19368 17242
- ------------------------------------------------------------
73 14765 14709
- ------------------------------------------------------------
74 10691 10816
- ------------------------------------------------------------
75 13945 14842
- ------------------------------------------------------------
76 23045 18394
- ------------------------------------------------------------
77 27168 17077
- ------------------------------------------------------------
78 31777 18200
- ------------------------------------------------------------
79 47790 21586
- ------------------------------------------------------------
80 62594 28602
- ------------------------------------------------------------
81 58005 27195
- ------------------------------------------------------------
82 68208 33054
- ------------------------------------------------------------
83 85389 40510
- ------------------------------------------------------------
84 89045 43051
- ------------------------------------------------------------
85 117142 56710
- ------------------------------------------------------------
86 136843 67295
- ------------------------------------------------------------
87 142923 70828
- ------------------------------------------------------------
88 178370 82591
- ------------------------------------------------------------
89 222681 108761
- ------------------------------------------------------------
90 183674 105386
- ------------------------------------------------------------
91 270641 137492
- ------------------------------------------------------------
92 336210 147928
- ------------------------------------------------------------
93 444889 162882
- ------------------------------------------------------------
94 411750 165032
- ------------------------------------------------------------
95 497407 227047
- ------------------------------------------------------------
96 609569 279177
- ------------------------------------------------------------
97 761852 478724
- ------------------------------------------------------------
98 807685 478724
- ------------------------------------------------------------
6/30/99 901844 537999
- ------------------------------------------------------------
9/30/99 883409 504404
- ------------------------------------------------------------
12/31/99 1077255 579455
- ------------------------------------------------------------
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
dividends and capital gains reinvested, to the S&P 500 Stock Index.
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 Fund
>Major Portfolio Changes in the Fourth Quarter
<TABLE>
<CAPTION>
Number of Shares Held
-----------------------
9/30/99 12/31/99
<S> <C> <C>
Additions
- --------------------------------------------------------------------------------
Information
Tektronix 0 41,000
- --------------------------------------------------------------------------------
Health Care
First Health 60,000 185,000
Lincare Holdings 52,000 75,000
- --------------------------------------------------------------------------------
Consumer Goods/Services
Harrah's Entertainment 0 105,000
- --------------------------------------------------------------------------------
Finance
Progressive 14,100 28,000
Number of Shares Held
-----------------------
9/30/99 12/31/99
Sales
- --------------------------------------------------------------------------------
Information
Telephone and Data Systems 60,000 30,000
- --------------------------------------------------------------------------------
Health Care
St. Jude Medical 45,000 0
- --------------------------------------------------------------------------------
Consumer Goods/Services
Costco 21,000 0
Royal Caribbean Cruises 60,400 45,000
- --------------------------------------------------------------------------------
Energy/Minerals
MidAmerican Energy 118,000 95,000
- --------------------------------------------------------------------------------
Real Estate
The Rouse Company 21,400 0
</TABLE>
14
<PAGE>
Acorn Twenty
>Statement of Investments December 31, 1999
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------------------------
Common Stocks: 92.8%
- ----------------------------------------------------------------------------------------------
<S> <C>
Information: 34.5%
>Television Programming: 6.8%
82,000 Liberty Media Group, AT&T (b) $ 4,653
Cable & Satellite Programming
>Telecommunications/Wireline
Communications: 11.6%
68,000 McLeod USA (b) 4,003
Super Regional CLEC: Local, Long Distance &
Internet Services
82,000 RCN (b)
Metro Market CLEC: Voice, Video & 3,977
Internet Services
- ----------------------------------------------------------------------------------------------
7,980
>Instrumentation: 2.3%
41,000 Tektronix
Analytical Instruments 1,594
>Mobile Communications: 5.5%
30,000 Telephone and Data Systems
Cellular & Telephone Services 3,780
>Transaction Processors: 3.6%
72,000 National Data
Credit Card & Health Claims Processor 2,444
>Business Information: 4.7%
73,000 H&R Block
Tax Preparation 3,194
------
Information: Total 23,645
- ----------------------------------------------------------------------------------------------
Health Care: 11.1%
>Services: 11.1%
185,000 First Health (b) 4,972
PPO Network
75,000 Lincare Holdings (b) 2,602
Home Health Care Services
------
Health Care: Total 7,574
- ----------------------------------------------------------------------------------------------
Consumer Goods/Services: 14.8%
>Cruise Lines: 3.2%
45,000 Royal Caribbean Cruises 2,219
Cruises to Caribbean & Alaska
>Casinos: 4.1%
105,000 Harrah's Entertainment (b) 2,776
Casinos & Riverboats
>Furniture & Manufacturers: 7.5%
95,000 Jones Apparel (b) 2,577
Women's Apparel
110,000 Herman Miller 2,530
Office Furniture
- ----------------------------------------------------------------------------------------------
5,107
------
Consumer Goods/Services: Total 10,102
- ----------------------------------------------------------------------------------------------
<CAPTION>
Principal Amount or
Number of Shares Value (000)
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Finance: 17.6%
>Finance Companies: 6.9%
255,000 AmeriCredit (b) $ 4,718
Auto Lending
>Money Management: 5.5%
31,500 SEI Investments 3,749
Mutual Fund Administration
>Insurance: 5.2%
28,000 Progressive 2,048
Auto Insurance
143,000 UICI (b) 1,510
Insurance/Specialty Finance
- ----------------------------------------------------------------------------------------------
3,558
-------
Finance: Total 12,025
- ----------------------------------------------------------------------------------------------
Industrial Goods/Services: 4.0%
>Other Industrial Services: 4.0%
225,000 ServiceMaster 2,770
Facilities Management
-------
Industrial Goods/Services: Total 2,770
- ----------------------------------------------------------------------------------------------
Energy/Minerals: 10.8%
>Independent Power: 10.8%
56,000 AES Corporation (b) 4,186
Power Plants
95,000 MidAmerican Energy 3,200
Growth Utility
-------
Energy/Minerals: Total 7,386
-------
Total Common Stocks: 92.8% 63,502
(Cost: $52,064)
Short-Term Obligation: 3.3%
$ 2,281 Associates First Capital 4.00%
Due 1/03/00 2,280
-------
(Amortized Cost: $ 2,280)
Total Investments: 96.1% 65,782
(Cost: $54,344)
Cash and Other Assets less Liabilities: 3.9% 2,688
-------
Total Net Assets: 100% $68,470
==============================================================================================
</TABLE>
- --------------------------------------------------------------------------------
>Notes to Statement of Investments:
(a) At December 31, 1999, for federal income tax purposes, cost of investments
was $54,461,000 and net unrealized appreciation was $11,321,000, consisting of
gross unrealized appreciation of $16,536,000 and gross unrealized depreciation
of $5,215,000.
(b) Non-income producing security.
15
<PAGE>
Acorn Foreign Forty
>Major Portfolio Changes in the Fourth Quarter
<TABLE>
<CAPTION>
Number of Shares
-----------------------------
9/30/99 12/31/99
Additions
- -------------------------------------------------------------
Europe
<S> <C> <C>
>Finland
Comptel 0 21,200
>France/Belgium
Audiofina (Belgium) 32,000 40,000
M6 Metropole TV 0 7,000
>Sweden
NetCom 40,000 60,000
>United Kingdom/Ireland
Airtours 79,000 85,000
Carlton Communications 85,000 250,000
Capita Group 80,000 100,000
Hays 100,000 120,000
Irish Life Permanent (Ireland) 0 170,000
NTL 15,000 18,000
St. James Capital 250,000 660,000
Thus 0 220,000
>Italy
Editoriale L'Espresso 42,000 208,000
SEAT Pagine Gialle 600,000 800,000
Saipem 250,000 300,000
>Netherlands
Fox Kids Europe 0 5,000
- -------------------------------------------------------------
Asia
>Japan
Shohkoh Fund 0 4,000
>Singapore
Star Cruises 0 400,000
Venture Manufacturing 200,000 325,000
- -------------------------------------------------------------
Other Countries
>Israel
Amdocs 65,000 90,000
>United States
Azurix 32,400 100,000
Global Telesystems 0 2,568,000
Sales
- -------------------------------------------------------------
Europe
>Germany
GFK 1,400 0
>United Kingdom
Bodycote 225,000 0
>Spain
Aguas de Barcelona 45,000 0
Mapfre Vida 60,000 43,000
>Netherlands
ASR Verzekeringsgrp 6,501 0
- -------------------------------------------------------------
Asia
>Japan
Olympus Optical 60,000 0
Takefuji 6,000 0
- -------------------------------------------------------------
Other Countries
>United States
MIH 32,600 0
</TABLE>
16
<PAGE>
Acorn Foreign Fund
>Statement of Investments December 31, 1999
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------
Common Stocks: 95.0%
- ----------------------------------------------------------------
Europe: 62.7%
<S> <C>
>Germany: 1.0%
30,000 Rhoen Klinikum $1,102
Hospital Management
>Finland: 1.4%
21,200 Comptel (b) 1,490
Telephone Billing Software
>Sweden: 3.9%
60,000 Netcom (b) 4,216
Telecommunication Services
>France/Belgium: 8.8%
7,000 M6 Metropole TV 3,466
Television Broadcaster
40,000 Audiofina (Belgium) 3,019
Television Broadcaster
18,000 Atos (b) 2,982
Computer Services/Transaction Processing
- ----------------------------------------------------------------
9,467
>United Kingdom/Ireland: 28.2%
82,000 Energis (b) 3,940
Telecommunication Services
150,000 Logica 3,870
Computer Software & Services
170,000 WPP Group 2,694
Advertising
250,000 Carlton Communications 2,435
Television Broadcaster
660,000 St. James Capital 2,356
Life Insurance
18,000 NTL (b) 2,246
Voice, Video & Data Services
120,000 Sema Group 2,160
Computer Software & Services
120,000 Hays 1,911
Outsourcing Services
100,000 Capita Group 1,825
Outsourcing Services
170,000 Irish Life & Permanent (Ireland) 1,608
Life Insurance
220,000 Thus (b) 1,379
Telecommunication Services
300,000 NFC 1,187
Logistics & Moving Services
90,000 SSL International 1,139
Medical & Footcare Products
30,000 Serco Group 941
Facilities Management
85,000 Airtours 522
Packaged Tour Vacations
- ----------------------------------------------------------------
30,213
>Switzerland: 2.1%
800 Pargesa Holdings $ 1,308
Industrial & Media Conglomerate
390 Cie Fin Richemont 932
Luxury Goods, Tobacco & Pay TV
- ----------------------------------------------------------------
2,240
>Italy: 9.9%
300,000 Banca Fideuram 3,550
Life Insurance & Mutual Funds
800,000 SEAT Pagine Gialle 2,625
Yellow Pages Publishers
208,000 Editoriale L'Espresso 2,405
Newspapers & Magazines
300,000 Saipem 1,084
Offshore Construction
70,000 Mediolanum 964
Life Insurance & Mutual Funds
- ----------------------------------------------------------------
10,628
>Spain: 2.9%
110,000 Indra Sistemas 2,065
Computer Services
43,000 Mapfre Vida 991
Life Insurance & Mutual Funds
- ----------------------------------------------------------------
3,056
>Netherlands: 4.5%
40,000 Getronics 3,188
Computer Services
60,000 Hunter Douglas 1,630
Decorative Window Coverings
5,000 Fox Kids Europe (b) 64
Programming/Cartoons
- ----------------------------------------------------------------
4,882
------
Europe: Total 67,294
- ----------------------------------------------------------------
Asia: 18.3%
>Hong Kong: 1.4%
324,900 SmarTone Telecom 1,567
Mobile Telecommunications
>Japan: 9.6%
7,000 Softbank 6,697
Internet Services/Investment Holdings
12,000 Nintendo 1,993
Video Games
4,000 Shohkoh Fund 1,583
Commercial Lender
- ----------------------------------------------------------------
10,273
>Singapore: 7.3%
400,000 Star Cruises 4,080
Cruise Line
325,000 Venture Manufacturing 3,727
Electronic Manufacturing Services
- ----------------------------------------------------------------
7,807
------
Asia: Total 19,647
</TABLE>
17
<PAGE>
Acorn Foreign Forty
>Statement of Investments, continued
<TABLE>
<CAPTION>
Number of Shares Value(000)
- ----------------------------------------------------------------------------
<S> <C>
Other Countries: 14.0%
>Canada: 7.1%
90,000 Celestica (b) $ 5,028
Electronic Manufacturing Services
70,000 Canadian Natural Resources (b) 1,706
Oil & Gas Producer
50,000 Power Financial 830
Financial Services Holding Company
- ----------------------------------------------------------------------------
7,564
>Israel: 2.9%
90,000 Amdocs (b) 3,105
Telecommunications Billing & Customer Care Software
>United States: 4.0%
2,568,000 Global TeleSystems 3,431
Telecommunication Services
Principal Amount or
Number of Shares Value(000)
- ----------------------------------------------------------------------------
100,000 Azurix (b) $ 894
Owner/Operator of Water Utilities
- ----------------------------------------------------------------------------
4,325
----------
Other: Total 14,994
----------
Total Common Stocks: 95.0% $ 101,935
(Cost:$63,840)
Short-Term Obligation: 4.2%
$4,573 Associates First Capital 4.00%
Due 1/03/00 4,572
(Amortized Cost:$4,572)
----------
Total Investments: 99.2% 106,507
(Cost:$68,412)
Cash and Other Assets Less Liabilities: 0.8% 844
----------
Total Net Assets: 100% $ 107,351
- ----------------------------------------------------------------------------
</TABLE>
________________________________________________________________________________
>Notes to Statement of Investments:
(a) At December 31, 1999, for federal income tax purposes, cost of investments
was $64,145,000 and net unrealized appreciation was $37,790,000, consisting
of gross unrealized appreciation of $39,336,000 and gross unrealized
depreciation of $1,546,000.
(b) Non-income producing security.
(c) At December 31, 1999, $32,233,000 or 30.0% of the Fund's net assets was
denominated in the Euro currency.
18
<PAGE>
Acorn Foreign Forty
>Portfolio Diversification
At December 31, 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
Telephone Services $17,158 16.0%
Computer Services 12,200 11.4
Publishing 9,102 8.5
Broadcasting 8,984 8.4
Business Software 4,595 4.3
Contract Manufacturing 3,727 3.5
Advertising 2,694 2.4
CATV 2,246 2.1
Business Information 2,065 1.9
- ----------------------------------------------------------------
62,771 58.5
>Health Care
Health Services 1,139 1.1
Hospital Management 1,102 1.0
- ----------------------------------------------------------------
2,241 2.1
>Consumer Goods/Services
Cruises 4,080 3.8
Consumer Software 1,993 1.9
Durable Goods 1,630 1.5
Entertainment 932 0.8
Travel 522 0.5
- ----------------------------------------------------------------
9,157 8.5
>Finance
Money Management 4,514 4.2
Insurance 4,177 3.9
Savings & Loans 1,608 1.5
Finance Companies 1,583 1.5
Closed-End Funds 1,308 1.2
- ----------------------------------------------------------------
13,190 12.3
>Industrial Goods/Services
Electrical Components $ 5,028 4.7%
Outsourcing Services 4,677 4.4
- ----------------------------------------------------------------
9,705 9.1
>Energy/Minerals
Oil/Gas Producers 1,706 1.6
Oil Services 1,084 1.0
- ----------------------------------------------------------------
2,790 2.6
>Other Industries
Transportation 1,187 1.1
Regulated Utilities 894 0.8
- ----------------------------------------------------------------
2,081 1.9
----------------------
Total Common Stocks: 101,935 95.0
Short-Term Obligation: 4,572 4.2
----------------------
Total Investments: 106,507 99.2
Cash and Other Assets less
Liabilities: 844 0.8
---------------------
Net Assets: $107,351 100.0%
- ----------------------------------------------------------------
</TABLE>
19
<PAGE>
Acorn USA
>Major Portfolio Changes in the Fourth Quarter
<TABLE>
<CAPTION>
Number of Shares
-----------------------------
9/30/99 12/31/99
Additions
- -------------------------------------------------------------------
<S> <C> <C>
Information
American Power Conversion 0 129,000
Aztec Technology Partners 434,700 820,000
Classic Communications 0 37,100
Diversinet 0 73,000
Galileo Technology 0 232,000
Getty Images 0 56,800
JDA Software 214,000 486,300
Meta Group 0 16,700
Micros Systems 491,500 526,000
Navidec 0 125,000
Online Resources 0 121,000
Salem Communications 0 36,300
- -------------------------------------------------------------------
Health Care
Genome Therapeutics 0 44,900
Genset 0 31,000
Genzyme Molecular Oncology Division 0 32,500
Maxygen 0 33,070
Myriad Genetics 0 26,700
- -------------------------------------------------------------------
Consumer Goods/Services
ITT Educational Services 0 112,000
Telespectrum 0 122,500
- -------------------------------------------------------------------
Finance
People's Bank Bridgeport 0 38,000
Terra Nova Bermuda 0 30,000
- -------------------------------------------------------------------
Industrial Goods/Services
Advanced Lighting Technologies 0 140,000
- -------------------------------------------------------------------
Energy/Minerals
Dynegy 208,400 253,400
Sales
- -------------------------------------------------------------------
Information
Aspect Communications 354,100 257,100
IMR Global 63,000 0
IntelliQuest Information 483,100 0
Kronos 45,100 0
Project Software 65,500 119,000
(includes effect of 2 for 1 stock split)
Sykes Enterprises 340,500 312,500
Systems & Computer Technology 73,400 0
Telephone and Data Systems 204,000 186,000
TV Guide 187,000 68,000
(includes effect of 2 for 1 stock split)
- -------------------------------------------------------------------
Health Care
Synaptic Pharmaceuticals 78,000 0
- -------------------------------------------------------------------
Industrial Goods/Services
Farr 45,700 0
Vallen 70,000 0
- -------------------------------------------------------------------
Energy/Minerals
Devon Energy 9,000 0
- -------------------------------------------------------------------
Real Estate
Gaylord Entertainment 18,100 0
</TABLE>
20
<PAGE>
Acorn USA
>Statement of Investments December 31, 1999
<TABLE>
<CAPTION>
Number of Shares Value (000)
- --------------------------------------------------------------------------
<S> <C> <C>
Common Stocks: 90.2%
- --------------------------------------------------------------------------
Information: 48.1%
>Broadcasting: 1.7%
209,100 Data Transmission Network (b) $ 3,607
Data Services for Farmers
39,500 Young Broadcasting (b) 2,015
Television Stations
36,300 Salem Communications (b) 821
Radio Stations for Religious Programming
- --------------------------------------------------------------------------
6,443
>Television Programming: 0.8%
68,000 TV Guide 2,924
TV Program Guides & Programming
>Telecommunications/Wireline
Communications: 3.1%
207,800 RCN (b) 10,078
Metro Market CLEC: Voice, Video &
Internet Services
37,100 Classic Communications (b) 1,356
Cable Television in Rural Areas
- --------------------------------------------------------------------------
11,434
>Mobile Communications: 8.5%
186,000 Telephone and Data Systems 23,436
Cellular & Telephone Services
131,400 Price Communications (b) 3,655
Cellular Telephone Services
121,800 Comarco (b) 2,862
Wireless Network Testing
73,000 Diversinet (b) 1,606
Wireless PKI Security
- --------------------------------------------------------------------------
31,559
>Telecommunications Equipment: 2.7%
257,100 Aspect Communications (b) 10,059
Call Center Software
>Gaming Equipment: 0.8%
146,000 International Game Technology 2,966
Slot Machines & Progressive Jackpots
>Computer Services: 5.4%
312,500 Sykes Enterprises (b) 13,711
Call Center Services
820,000 Aztec Technology Partners (b) 3,741
Technology Staffing Services
151,700 Computer Task Group 2,247
Application Development & Staffing Services
16,700 Meta Group (b) 317
IT Publications & Consulting Services
- --------------------------------------------------------------------------
20,016
>Consumer Software: 0.1%
15,500 Activision (b) 237
Entertainment Software
>Business Software: 3.9%
486,300 JDA Software (b) 7,963
Applications/Software & Services for Retailers
119,000 Project Software (b) 6,604
Enterprise Maintenance Software
- --------------------------------------------------------------------------
14,567
>Transaction Processors: 2.7%
298,300 National Data $10,124
Credit Card & Health Claims Processor
>Internet: 1.0%
121,000 Online Resources (b) 2,012
Internet Banking Technology
125,000 Navidec (b) 1,500
Internet Computer Services
- --------------------------------------------------------------------------
3,512
>Business Information/
Marketing Services: 3.6%
206,000 CACI International (b) 4,661
Technology Services for Government
130,000 West TeleServices (b) 3,177
Customer Care & Sales Support
169,000 PRIMEDIA (b) 2,788
Specialty Magazines & Other Publications
56,800 Getty Images (b) 2,776
Photographs for Publications & Electronic Media
- --------------------------------------------------------------------------
13,402
>Contract Manufacturing: 0.9%
92,000 Applied Power 3,381
Electronic Enclosures & Industrial Products
>Semiconductors/Related
Equipment: 1.5%
232,000 Galileo Technology (b) 5,597
Semiconductors for Networking Equipment
>Computer Hardware/
Related Systems: 11.4%
526,000 Micros Systems (b) 38,924
Information Systems for Restaurants & Hotels
129,000 American Power Conversion (b) 3,402
Uninterruptable Power Systems
- --------------------------------------------------------------------------
42,326
-------
Information: Total 178,547
- --------------------------------------------------------------------------
Health Care: 8.8%
>Biotechnology/Drug Delivery: 1.4%
33,070 Maxygen (b) 2,348
Molecular Breeding
26,700 Myriad Genetics (b) 1,228
Gene Discovery & Diagnostic Products
44,900 Genome Therapeutics (b) 724
Gene Discovery Services
31,000 Genset (b) 591
Genomics
32,500 Genzyme Molecular
Oncology Division (b) 227
Gene Expression Technology & Cancer Drugs
5,118
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------------
>Services: 7.4%
<S> <C> <C>
341,400 Lincare Holdings (b) $ 11,842
Home Health Care Services
390,000 First Health (b) 10,481
PPO Network
816,100 Magellan Health Services (b) 5,152
Mental Health Services
- ---------------------------------------------------------------------------------
27,475
--------
Health Care: Total 32,593
- ---------------------------------------------------------------------------------
Consumer Goods/Services: 3.2%
>Consumer Services: 1.5%
112,000 ITT Educational Services (b) 1,729
Technology Oriented Postsecondary
Degree Programs
55,000 Bally Total Fitness (b) 1,468
Fitness Centers
157,600 NuSkin Enterprises (b) 1,428
Personal Care/Herbal Products
122,500 Telespectrum (b) 873
Call Center Services
- ---------------------------------------------------------------------------------
5,498
>Retail: 1.7%
375,000 Gadzooks (b) 3,680
Teen Apparel Retailer
58,500 Whole Foods Market (b) 2,713
Natural Food Supermarkets
- ---------------------------------------------------------------------------------
6,393
--------
Consumer Goods/Services: Total 11,891
- ---------------------------------------------------------------------------------
Finance: 10.4%
>Banks: 1.5%
93,500 Chittenden (b) 2,770
Vermont & West Massachusetts Bank
44,000 TCF Financial 1,095
Great Lakes Bank
34,000 Texas Regional Bancshares 986
TexMex Bank
38,000 Peoples Bank Bridgeport 803
Connecticut Savings & Loan
- ---------------------------------------------------------------------------------
5,654
>Finance Companies: 3.9%
633,500 AmeriCredit (b) 11,720
Auto Lending
590,000 World Acceptance (b) 2,839
Personal Loans
- ---------------------------------------------------------------------------------
14,559
>Money Management: 0.6%
163,000 Phoenix Investment Partners 1,324
Mutual Fund & Pension Manager
52,800 Pioneer Group (b) 832
Equity Mutual Funds
- ---------------------------------------------------------------------------------
2,156
Number of Shares Value (000)
- ---------------------------------------------------------------------------------
>Insurance: 4.4%
637,700 UICI (b) $ 6,736
Insurance/Specialty Finance
392,100 Acceptance Insurance (b) 2,279
Crop Insurance
93,000 Leucadia National 2,151
Insurance Holding Company
13,800 Markel (b) 2,139
Specialty Insurance
66,000 Protective Life 2,100
Life/Dental Insurance
30,000 Terra Nova Bermuda 900
Specialty Re-Insurance
- ---------------------------------------------------------------------------------
16,305
--------
Finance: Total 38,674
- ---------------------------------------------------------------------------------
Industrial Goods/Services: 6.4%
>Steel: 0.2%
79,000 Atchison Casting (b) 721
Steel Foundries
>Industrial Goods: 0.2%
140,000 Advanced Lighting Technologies (b) 805
Metal Halide Lighting
>Specialty Chemicals: 0.8%
225,600 Lilly Industries, Cl. A 3,031
Industrial Coatings
>Other Industrial Services: 5.2%
346,000 Hub Group (b) 6,920
Truck & Rail Freight Forwarder
347,400 Insurance Auto Auctions (b) 5,472
Auto Salvage Services
422,500 Wackenhut, Cl. B 4,357
Prison Management
210,000 Labor Ready (b) 2,546
Temporary Manual Labor
- ---------------------------------------------------------------------------------
19,295
--------
Industrial Goods/Services: Total 23,852
- ---------------------------------------------------------------------------------
Energy/Minerals: 13.1%
>Independent Power: 7.8%
855,400 MidAmerican Energy 28,816
Growth Utility
>Oil/Gas Producers: 1.5%
473,800 Tesoro Petroleum (b) 5,478
Oil Refinery/Gas Reserves
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
>Distribution/Marketing/Refining: 3.8%
253,400 Dynegy $ 6,161
Natural Gas & Electric Processing & Marketing
248,000 Atmos Energy 5,068
Natural Gas Utility
92,300 Equitable Resources 3,081
Natural Gas Utility & Producer
- ----------------------------------------------------------------------------------------------
14,310
--------
Energy/Minerals: Total 48,604
- ----------------------------------------------------------------------------------------------
Real Estate: 0.2%
47,000 The Rouse Company 999
Regional Shopping Malls
--------
Real Estate: Total 999
Principal Amount Value (000)
- ----------------------------------------------------------------------------------------------
Total Common Stocks: 90.2% $335,160
(Cost: $287,478)
Short-Term Obligations: 10.5%
Yield 4.00% - 4.05% Due 1/03- 1/06/00
$ 17,297 Associates First Capital 17,293
11,260 Motorola Credit 11,254
10,287 Citicorp 10,283
- ----------------------------------------------------------------------------------------------
(Amortized Cost: $38,830) 38,830
--------
Total Investments: 100.7% 373,990
- ----------------------------------------------------------------------------------------------
(Cost: $326,308)
Cash and Other Assets Less Liabilities: (0.7%) (2,562)
--------
Total Net Assets: 100% $371,428
==============================================================================================
</TABLE>
- --------------------------------------------------------------------------------
>Notes to Statement of Investments:
(a) At December 31, 1999, for federal income tax purposes, cost of investments
was $326,698,000 and net unrealized appreciation was $47,292,000, consisting of
gross unrealized appreciation of $93,617,000 and gross unrealized depreciation
of $46,325,000.
(b) Non-income producing security.
23
<PAGE>
Acorn International
>Major Portfolio Changes in the Fourth Quarter
<TABLE>
<CAPTION>
Number of Shares
----------------------
9/30/99 12/31/99
<S> <C> <C>
Additions
- --------------------------------------------------------------------------------------------
Europe
>Germany
Dialog Semiconductor 0 100,000
Pfeiffer Vacuum Technologies 0 150,000
Pixelpark 0 28,000
Rhoen Klinikum 160,000 500,000
>Finland
Data Fellows 0 100,000
Helsinki Telephone 0 120,000
>Norway
Enitel 0 160,000
>Sweden
Mandator 1,200,000 1,350,000
Modern Times Group 350,000 400,000
Sigma 250,000 1,085,000
>United Kingdom/Ireland
Bodycote 2,000,000 2,250,000
Chloride Group 0 3,206,400
FKI 0 128,000
Flextech 450,000 500,000
Irish Life & Permanent (Ireland) 0 750,000
ITNET 1,250,000 1,350,000
NFC 2,500,000 3,500,000
Photobition Group 2,000,000 2,125,000
Smith & Nephew 2,500,000 3,000,000
SSL International 1,250,000 1,500,000
St. James Capital 500,000 2,840,000
Thus 0 1,000,000
>Switzerland
Bachem 0 5,000
Julius Baer 0 1,600
Selecta Group 65,000 80,000
>Italy
Autogrill 2,900,000 3,000,000
Banca Fideuram 3,500,000 4,000,000
Gruppo Coin 0 650,000
Mediolanum 1,400,000 1,500,000
>Spain/Portugal
Indra Sistemas 0 500,000
PT Multimedia (Portugal) 0 100,000
>Netherlands
Fox Kids Europe 0 65,000
Versatel 0 27,000
>Hungary
Matav ADR 0 47,000
- --------------------------------------------------------------------------------------------
Asia
>Hong Kong
Li & Fung 14,999,000 30,000,000
TVB 2,000,000 3,500,000
>Japan
C Two-Network 0 35,000
Densei Lambda 0 300,000
Kokuyo 0 400,000
Misumi 0 75,000
Nichiei 0 175,000
Nintendo 150,000 160,000
Otsuka Kagu 30,000 40,000
Wilson Learning 0 24,400
Yamaha 0 800,000
>Taiwan
Hitron Technology 2,000,000 3,000,000
Phoenixtec Power 2,000,000 4,000,000
Systex 2,000,000 3,000,000
>South Korea
Cheil Jedang 0 100,000
Korea Technology Investments 0 1,000,000
(includes effect of 42% stock dividend)
S1 Corporation 65,000 1,000,000
(includes effect of a 10 for 1 stock split)
>Singapore
Natsteel Electronics 6,500,000 7,500,000
- --------------------------------------------------------------------------------------------
Latin America
>Mexico
Cifra SA Series V 0 5,450,000
Grupo Industrial Bimbo 7,000,000 9,000,000
Grupo Continental 4,600,000 5,000,000
>Argentina
El Sitio 0 30,000
- --------------------------------------------------------------------------------------------
Other Countries
>Australia
Computershare 1,000,000 4,500,000
(includes effect of 4 for 1 stock split)
>Canada
Cinar 0 500,000
Corus Entertainment 0 500,000
Mosaic 0 110,000
Power Financial 600,000 750,000
>Israel
Amdocs 750,000 800,000
ECI Telecom 300,000 350,000
Galileo Technology 550,000 650,000
Radware 0 75,000
>United States
Azurix Corp 190,000 500,000
Global TeleSystems 0 475,000
MIH 375,000 400,000
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
----------------------
9/30/99 12/31/99
<S> <C> <C>
Sales
- --------------------------------------------------------------------------------------------
Europe
>Germany/Austria
GFK 30,000 0
UnitedGlobalCom (Austria) 140,000 250,000
(includes effect of a 2 for 1 stock
split)
>Denmark
ISS International System 75,000 0
>Finland
TietoEnator 1,250,000 1,200,000
>Norway
Atex Media Solutions 654,750 0
>Sweden
WM Data Nordic 1,500,000 950,000
>France
Atos 400,000 375,000
Fininfo 60,000 50,000
>United Kingdom/Ireland
Atkins 1,000,000 0
Electronics Boutique 13,000,000 0
Esat Telecom (Ireland) 225,000 150,000
Logica 600,000 500,000
NTL 500,000 450,000
(includes effect of a 5 for 4 stock split)
Oriflame International 2,000,000 0
>Switzerland
Cie Fin Richemont 12,500 10,000
Societe Generale d'Affichage 12,000 5,000
>Italy/Greece
Attica Enterprises (Greece) 700,000 0
Editoriale L'Expresso 1,800,000 6,000,000
(includes effect of a 3.5 to 1 stock split)
>Netherlands
Scala Business Solutions 950,000 0
Sales
- --------------------------------------------------------------------------------------------
Asia
>Hong Kong
Pacific Century 7,500,000 0
Varitronix International 1,645,000 0
>Japan
Aiful 120,000 50,000
Bellsystem24 20,000 15,000
JAFCO 140,000 130,000
Kadokawa Shoten 30,000 0
NuSkin Enterprises 385,000 0
OBIC 36,000 30,000
Trans Cosmos 110,000 85,000
>Philippines
Int'l Container Terminal 75,000,000 36,918,000
Services
>South Korea
Datacraft Asia 8,500,000 8,000,000
- --------------------------------------------------------------------------------------------
Latin America
>Brazil
TeleSudeste Celular 400,000 340,000
- --------------------------------------------------------------------------------------------
Other Countries
>Canada
Celestica 650,000 1,200,000
(includes effect of a 2 for 1 stock split)
>United States
AES Corporation 325,000 300,000
</TABLE>
25
<PAGE>
Acorn International
>Statement of Investments December 31, 1999
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ---------------------------------------------------------------------------------------------------------------------
Common Stocks and Other
Equity-Like Securities: 96.7%
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Europe: 48.7%
>Germany/Austria: 3.6%
600,000 Rhoen Klinikum Pfd. $ 21,374
500,000 Rhoen Klinikum 18,366
Hospital Management
250,000 UnitedGlobalCom (Austria) (b) 17,656
Cable Television for Europe, Israel & Australia
240,000 EM.TV & Merchandising 15,458
Children's Media Production, Merchandising
& Distribution
50,000 Fresenius, Pfd. 9,158
Dialysis Equipment & Solutions
100,000 Dialog Semiconductor (b) 7,397
Custom Semiconductors for Cell Phones
165,000 Flughafen Wien (Austria) 5,730
Vienna Airport Authority
150,000 Pfeiffer Vacuum Technologies 3,849
Vacuum Pump Manufacturer
28,000 Pixelpark (b) 3,184
Internet Consulting
- ---------------------------------------------------------------------------------------------------------------------
102,172
>Finland: 4.7%
1,200,000 TietoEnator 74,872
Computer Services/Consulting
1,500,000 Talentum (c) 36,380
Trade Journals & Internet Services
120,000 Helsinki Telephone 9,987
Telecommunications Provider
625,000 Fiskars, Series A 8,177
Scissors & Gardening Tools
95,400 Spar Finland (c) 3,341
Grocery/Convenience Stores
100,000 F-Secure (b) 2,918
Security Software
- ---------------------------------------------------------------------------------------------------------------------
135,675
>Norway: 0.2%
160,000 Enitel (b) 4,779
Telecommunications Provider
>Sweden: 5.2%
950,000 WM Data Nordic 58,716
Computer Services/Consulting
160,000 Information Highway (b) 26,508
Internet Consulting
1,085,000 Sigma 23,203
Technical Consulting
1,350,000 Mandator 20,146
Computer Services/Consulting
400,000 Modern Times Group (b) 19,834
TV, Newspapers and Electronic Commerce
- ---------------------------------------------------------------------------------------------------------------------
148,407
>France: 4.4%
375,000 Atos (b) $ 62,117
Computer Services/Transaction Processing
62,000 NRJ 42,646
Radio Network
50,000 Fininfo 12,579
Data Feeds for French Banks & Brokers
20,000 Penauille Polyservice 8,011
Industrial Cleaning/Airport Services
- ---------------------------------------------------------------------------------------------------------------------
125,353
>United Kingdom/Ireland: 14.2%
2,000,000 Serco Group 62,762
Facilities Management
450,000 NTL (b) 56,138
Voice, Video & Data Services Via Cable Networks
500,000 Baltimore Technologies 41,397
Security Software
2,000,000 Capita Group 36,510
Outsourcing Services
1,500,000 SSL International 18,986
Medical & Footcare Products
500,000 Euro Money Publications 18,174
Financial Publications
3,500,000 Taylor Nelson 15,464
Market Research Services
1,350,000 ITNET 14,885
Outsourcing Services
3,500,000 NFC 13,853
Logistics
150,000 Esat Telecom (Ireland) (b) 13,725
Telecommunications Provider
500,000 Logica 12,900
Computer Services/Consulting
2,125,000 Photobition Group 11,312
Production of Graphics for Exhibits
2,250,000 Bodycote 10,868
Materials Technology & Metal Processing
2,840,000 St. James Capital 10,140
Life Insurance
3,000,000 Smith & Nephew 10,081
Medical Equipment & Supplies
500,000 Flextech (b) 9,289
Cable Channels
1,700,000 Rotork 8,582
Valve Actuators for Oil & Water Pipelines
750,000 Irish Life & Permanent (Ireland) (b) 7,095
Savings Products
3,400,000 HALMA 6,509
Fire, Burglary & Flooding Detection Devices
1,000,000 Thus (b) 6,268
Telecommunications Provider
1,500,000 Hogg Robinson 5,876
Corporate Travel Management
715,000 Fairey Group 5,833
Electronic Products
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
290,000 Ocean Group $ 5,411
Freight Forwarder
3,206,400 Chloride Group 5,050
Electrical Equipment Manufacturer/Retailer
128,000 FKI (b) 496
Autonomous Manufacturer
- ---------------------------------------------------------------------------------------------------------------------
407,604
>Switzerland: 3.7%
80,000 Selecta Group 25,152
Vending Machine Owner/Operator
10,000 Cie Fin Richemont 23,895
Luxury Goods
30,000 Phoenix Mecano 15,091
Electrical Components Manufacturer
15,000 Bon Appetit 14,856
Wholesale Food Distributor and
Speciality Restaurant/Retailer
6,500 Sarasin & Cie Bank 13,202
Private Banking
5,000 Bachem 8,017
Peptides
1,600 Julius Baer 4,839
Private Banking
5,000 Societe Generale d'Affichage (b) 2,578
Billboard Advertising
- ---------------------------------------------------------------------------------------------------------------------
107,630
>Italy: 8.2%
6,000,000 Editoriale L'Espresso (b) 69,378
Newspaper & Magazine Publisher
4,000,000 Banca Fideuram 47,339
Life Insurance & Mutual Funds
3,000,000 Autogrill 37,738
Restaurants and Catering for Travelers
1,500,000 Class Editori 26,115
Newspapers & On-Line Financial Data
1,500,000 Mediolanum 20,665
Life Insurance & Mutual Funds
4,000,000 SEAT Pagine Gialle 13,123
Yellow Pages Publisher
1,400,000 Aeroporti di Roma 9,130
Airport Management
650,000 Gruppo Coin (b) 7,588
Food & Clothing Retailer
1,250,000 Saipem 4,516
Offshore Oil Services
- ---------------------------------------------------------------------------------------------------------------------
235,592
>Spain/Portugal: 1.9%
450,000 Cortefiel 11,774
Apparel Retailer
500,000 Indra Sistemas 9,384
Computer Services/Consulting
400,000 Mapfre Vida 9,218
Life Insurance & Mutual Funds
425,000 Filmes Lusomundo (Portugal) (b)(c) 5,988
Newspapers, Radio, Video, Film Distribution
400,000 Aguas de Barcelona $ 5,853
Water Utility
650,000 Prosegur 5,815
Security Guards
100,000 PT Multimedia (Portugal) (b) 5,683
Cable TV, Satellite Operator &
Internet Service Provider
- ---------------------------------------------------------------------------------------------------------------------
53,715
>Netherlands: 2.0%
500,000 Getronics 39,851
Computer Services/Consulting
420,000 Kempen 16,695
Stock Brokerage/Investment Management
27,000 Versatel (b) 951
Telecommunications Provider
65,000 Fox Kids Europe (b) 831
Cartoons
- ---------------------------------------------------------------------------------------------------------------------
58,328
>Hungary: 0.6%
1,200,000 Matav 8,402
47,000 Matav ADR 1,692
Telecommunications Provider
100,000 Gedeon Richter 6,574
Pharmaceuticals
- ---------------------------------------------------------------------------------------------------------------------
16,668
----------
Europe: Total 1,395,923
- ---------------------------------------------------------------------------------------------------------------------
Asia: 28.9%
>Hong Kong: 4.0%
30,000,000 Li & Fung 75,256
Sourcing of Consumer Goods
3,500,000 TVB (b) 23,863
Television Broadcasting
3,000,000 SmarTone Telecom 14,472
Mobile Telecommunications Provider
- ---------------------------------------------------------------------------------------------------------------------
113,591
>India: 0.0%
1,998,000 Zurich India Quantum (b) 533
Closed-End Fund
>Japan: 11.6%
130,000 JAFCO 46,415
Venture Capital Fund
175,000 Orix 39,406
Finance Leasing
85,000 Trans Cosmos 36,252
Information Technology Services & Investments
180,000 Ryohin Keikaku 36,113
Own Brand Specialty Retailer
160,000 Nintendo 26,575
Video Games
75,000 Nidec 21,642
Spindle Motor Manufacturer
</TABLE>
27
<PAGE>
Acorn International
>Statement of Investments, continued
Number of Shares Value(000)
- ----------------------------------------------------------------------------
30,000 OBIC $ 21,246
Computer Integrator
15,000 Bellsystem24 16,434
Telemarketing
180,000 Fuji Software ABC 14,086
Computer Services/Consulting
40,000 Otsuka Kagu 10,760
Furniture Retailer
40,000 Benesse 9,625
Correspondence Courses
300,000 Densei Lambda 9,391
Power Supplies
77,000 Taiyo Ink 9,038
Speciality Chemicals
35,000 C Two-Network 7,909
Discount Food Retailer
50,000 Aiful 6,114
Consumer Lending
75,000 Misumi 5,906
Distributor of Capital Goods Components
400,000 Kokuyo 5,321
Office Product Manufacturer & Retailer
800,000 Yamaha 5,196
Musical Instruments Manufacturer
175,000 Nichiei 3,800
Commercial Lender
24,400 Wilson Learning 1,193
Corporate Training
- ----------------------------------------------------------------------------
332,422
>Taiwan: 1.9%
3,000,000 Systex 20,456
Systems Integrator & Internet Services
3,000,000 Hitron Technology (b) 17,970
Network Integration & Internet Services
2,999,500 Chroma Ate (b) 8,793
Test & Measurement Instruments
4,000,000 Phoenixtec Power 7,711
Uninterruptable Power Supply Manufacturer
- ----------------------------------------------------------------------------
54,930
>Malaysia: 0.4%
2,000,000 Unisem 12,842
Semiconductor Assembly
>Philippines: 0.1%
36,918,000 Int'l Container Terminal Services (b) 3,344
Container Handling Terminals & Port Management
>South Korea: 1.2%
1,000,000 S1 Corporation 17,261
Security Services
100,000 Cheil Jedang 11,537
Consumer Staples
1,000,000 Korea Technology Investments (b) 6,103
Venture Capital
- ----------------------------------------------------------------------------
34,901
>Singapore: 9.7%
9,500,000 Star Cruises $ 96,900
Cruise Line
6,500,000 Venture Manufacturing 74,542
Electronic Manufacturing Services
8,000,000 Datacraft Asia 66,400
Network Integrator
7,500,000 Natsteel Electronics 39,628
Electronic Manufacturing Services
- ----------------------------------------------------------------------------
277,470
---------
Asia: Total 830,033
- ----------------------------------------------------------------------------
Latin America: 4.3%
>Mexico: 2.5%
9,000,000 Grupo Industrial Bimbo 20,090
Bread, Baked Goods & Snacks
5,000,000 Corp Interamericana de 19,974
Entretenimiento (b)
Special Events & Live Entertainment
3,500,000 Kimberly Clark de Mexico 13,575
Paper Products
5,450,000 Cifra SA Series V (b) 10,940
Discount Stores
5,000,000 Grupo Continental 7,282
Beverages
- ----------------------------------------------------------------------------
71,861
>Brazil: 1.2%
750,000 Embratel 20,438
Long Distance Telecommunications Provider
340,000 TeleSudeste Celular 13,196
Cellular Telecommunications Provider
- ----------------------------------------------------------------------------
33,634
>Argentina: 0.5%
400,000 IRSA GDS 12,938
Real Estate Management & Development
30,000 El Sitio (b) 1,102
Internet Network for Spanish & Portuguese
- ----------------------------------------------------------------------------
14,040
>Peru: 0.1%
7,000,000 Enrique Ferreyros 3,791
Heavy Machinery Dealer
---------
Latin America: Total 123,326
- ----------------------------------------------------------------------------
Other Countries: 14.8%
>Australia: 3.2%
7,500,000 ERG 42,130
Smart Card Systems for Public Transportation
4,500,000 Computershare 22,174
Financial Software/Services
5,000,000 AAPT (b) 17,115
Telecommunications Provider
2,000,000 KeyCorp (b)(c) 10,762
Smart Card Technology
- ----------------------------------------------------------------------------
92,181
28
<PAGE>
Number of Shares Value (000)
- --------------------------------------------------------------------------------
>Canada: 5.2%
1,200,000 Celestica (b) $ 67,035
Electronic Manufacturing Services
720,000 Canadian Natural Resources (b) 17,547
Oil & Gas Producer
750,000 Power Financial 12,445
Financial Services Holding Company
500,000 Cinar (b) 12,250
Children's TV Programming
500,000 Corus Entertainment (b) 10,198
CATV Programming & Radio Stations
500,000 Penn West Petroleum (b) 9,766
Oil & Gas Producer
1,200,000 Bracknell (b) 5,393
Electrical Contractor & Facilities Management
400,000 Leitch Technology (b) 4,923
Television Production Equipment
600,000 LGS Group (b) 4,853
Computer Systems Integrator
4,000,000 Dundee Realty (b) 4,038
Real Estate
110,000 Mosaic (b) 852
Outsourcing Market Services
- --------------------------------------------------------------------------------
149,300
>Israel: 2.7%
800,000 Amdocs (b) 27,600
Telecommunications Billing & Customer
Care Software
170,000 Gilat Satellite Network (b) 20,188
Satellite Communications Equipment
650,000 Galileo Technology (b) 15,681
Communications Semiconductors
350,000 ECI Telecom 11,069
Telecommunications Equipment
75,000 Radware (b) 3,234
Internet Infrastructure & Internet Traffic
- --------------------------------------------------------------------------------
77,772
Principal Amount of
Number of Shares Value(000)
- --------------------------------------------------------------------------------
>South Africa: 1.3%
6,000,000 Dimension Data (b) $ 37,674
Networks & Computer Services
>Russia: 0.0%
$1,500,000 Khanty Mansiysk 10% Notes
Due 10/14/02 (b) 750
4,001 Khanty Mansiysk (b) 150
Oil Production in Russia
- --------------------------------------------------------------------------------
900
>United States: 2.4%
400,000 MIH (b) 23,600
Pay-TV
300,000 AES Corporation (b) 22,425
Power Plants
475,000 Global TeleSystems 16,447
Telecommunications Provider
500,000 Azurix (b) 4,469
Owner & Operator of Water Utilities
- --------------------------------------------------------------------------------
66,941
------------
Other: Total 424,768
Total Common Stocks and Other
Equity-Like Securities: 96.7% ------------
2,774,050
(Cost: $1,188,760)
Short-Term Obligations: 3.1%
Yield 4.00% Due 1/03 - 1/06/00
$64,438 Associates First Capital 64,424
25,000 Bell Atlantic Financial 24,986
------------
(Amortized Cost: $89,410) 89,410
------------
Total Investments: 99.8% 2,863,460
(Cost: $1,278,170)
Cash and Other Assets less Liabilities: 0.2% 4,743
------------
Total Net Assets: 100% $2,868,203
================================================================================
- --------------------------------------------------------------------------------
>Notes to Statement of Investments:
(a) At December 31, 1999, for federal income tax purposes, cost of investments
was $1,344,131,000 and net unrealized appreciation was $1,519,329,000,
consisting of gross unrealized appreciation of $1,570,379,000 and gross
unrealized depreciation of $51,050,000.
(b) Non-income producing security.
(c) On December 31, 1999, the Fund held the following percentages of the
outstanding voting shares of the affiliated companies (ownership of at
least 5%) listed below:
Talentum (Finland)................ 9.19% KeyCorp (Australia)............ 6.40%
Filmes Lusomundo (Portugal)....... 7.08%
The aggregate cost and value of investments in these companies at December 31,
1999, was $20,950,000 and $53,129,000, respectively. The market value of these
securities represents 1.85% of the total net assets at December 31, 1999. During
the period ended December 31, 1999, the cost of purchases and proceeds from
sales in affiliated companies was $13,398,000 and $12,962,000 respectively. Net
dividends received from these companies amounted to $381,000 and net realized
loss on sales on investments in such companies amounted to $15,750,000.
(d) At December 31, 1999, $741,228,000 or 25.8% of the Fund's net assets was
denominated in the Euro currency.
29
<PAGE>
Acorn International
>Portfolio Diversification
At December 31, 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 $ 458,867 16.0%
Telephone Services 178,031 6.2
Publishing 169,158 5.9
CATV 106,683 3.7
Transaction Processors 75,066 2.6
Business Software 71,915 2.5
Programming 58,571 2.0
Radio 42,646 1.5
Contract Manufacturing 39,628 1.4
Semiconductors 35,920 1.3
Computer Hardware 34,403 1.2
Instrumentation 32,909 1.1
Broadcasting 28,786 1.0
Business Information 25,084 0.9
Telephone Equipment 20,188 0.7
Marketing 15,464 0.5
Internet 13,203 0.5
Mobile Communications 13,196 0.5
Advertising 3,430 0.1
- --------------------------------------------------------------------------
1,423,148 49.6
>Health Care
Hospital Management 39,740 1.4
Services 18,986 0.7
Pharmaceuticals 14,591 0.5
Hospital/Laboratory Supplies 10,081 0.3
Medical Equipment 9,158 0.3
- --------------------------------------------------------------------------
92,556 3.2
>Consumer Goods/Services
Travel 102,776 3.6
Consumer Services 91,952 3.2
Entertainment 90,295 3.1
Retail 73,310 2.6
Restaurants 37,738 1.3
Food 34,946 1.2
Nondurables 33,289 1.2
Consumer Software 26,575 0.9
Beverages 7,282 0.3
Durable Goods 5,321 0.2
Manufacturers 5,196 0.2
Consumer Goods Distribution 3,341 0.1
- --------------------------------------------------------------------------
512,021 17.9
>Finance
Finance Companies $ 89,621 3.1%
Money Management 78,946 2.7
Insurance 38,898 1.4
Brokerage 16,695 0.6
Banks 13,202 0.5
Closed-End Funds 533 0.0
- --------------------------------------------------------------------------
237,895 8.3
>Industrial Goods/Services
Outsourcing Services 174,528 6.1
Electrical Components 166,059 5.8
Machinery Processing 16,718 0.6
Industrial Services 16,710 0.6
Industrial Materials 10,868 0.3
Specialty Chemicals 9,038 0.3
- --------------------------------------------------------------------------
393,921 13.7
>Energy/Minerals
Oil/Gas Producers 28,213 1.0
Independent Power 22,425 0.7
Oil Services 4,516 0.2
- --------------------------------------------------------------------------
55,154 1.9
>Other Industries
Transportation 32,057 1.1
Real Estate 16,976 0.6
Regulated Utilities 10,322 0.4
- --------------------------------------------------------------------------
59,355 2.1
Total Common Stocks and
----------------------------------------
Other Equity-Like Securities: 2,774,050 96.7
Short-Term Obligations: 89,410 3.1
----------------------------------------
Total Investments: 2,863,460 99.8
Cash and Other Assets less
Liabilities: 4,743 0.2
----------------------------------------
Net Assets: $ 2,868,203 100.0%
==========================================================================
</TABLE>
30
<PAGE>
ACORN FUND
>Major Portfolio Changes in the Fourth Quarter
<TABLE>
<CAPTION>
Number of Shares
----------------------
9/30/99 12/31/99
<S> <C> <C>
Additions
- --------------------------------------------------------------------------
Information
American Management Systems 0 250,000
American Power Conversion 350,000 550,000
Aztec Technology Partners 987,000 1,616,000
Bigfoot 0 263,158
Cambridge Technology 0 500,000
Cinar (Canada) 0 300,000
Classic Communications 0 200,000
Corus Entertainment (Canada) 219,500 500,000
Dionex 0 98,000
Hyperion Solutions 0 200,000
Indus International 0 300,000
Internet Commerce 0 197,725
MAPICS 0 280,000
Meta Group 0 104,000
Micros Systems 700,000 765,000
Navidec 0 61,000
Online Resources 310,000 470,000
Pioneer-Standard Electronics 790,000 890,000
Playboy Enterprises 345,000 550,000
Plexus 0 35,000
Salem Communications 0 137,000
Varian 0 520,000
Young Broadcasting 695,000 785,000
- --------------------------------------------------------------------------
Health Care
Genzyme Molecular Oncology Division 0 190,000
Techne 0 27,000
- --------------------------------------------------------------------------
Consumer Goods/Services
Bally Total Fitness 540,000 1,250,000
Calloway Golf 0 100,000
Education Management 0 234,000
Gaiam 0 160,000
Helen of Troy 0 460,000
Hollywood Park 300,000 360,000
Isle of Capri Casino 0 650,000
ITT Educational Services 319,000 600,000
MotherNature.com 0 130,000
Nautica Enterprises 590,000 725,000
Quiksilver 0 200,000
Station Casinos 400,000 1,080,000
Steiner Leisure 75,000 270,000
- --------------------------------------------------------------------------
Finance
Ace Cash Express 390,000 570,000
AmeriCredit 3,632,000 3,912,000
CCB Financial 0 180,000
Commonwealth Bancorp 622,000 702,000
Creditrust 525,000 700,000
DVI Health Services 600,000 750,000
HCC Insurance Holdings 320,000 820,000
Neuberger Berman 0 650,000
People's Bank Bridgeport 1,602,000 1,842,000
Philadelphia Consolidated Holding 0 675,000
Phoenix Investment Partners 2,679,000 3,019,000
RLI 0 300,000
SEI Investments 539,000 555,000
Terra Nova Bermuda 252,000 322,000
Texas Regional Bancshares 612,000 672,000
UICI 1,155,000 1,291,000
- --------------------------------------------------------------------------
Industrial Goods/Services
AK Steel 450,000 650,000
Labor Ready 2,220,000 2,500,000
Mobile Mini 294,000 520,000
Wackenhut, Cl. B 1,326,000 1,526,000
- --------------------------------------------------------------------------
Energy/Minerals
Basin Exploration 175,000 350,000
Cross Timbers Oil 1,400,000 1,615,000
Hanover Compressor 125,000 205,000
Newpark Resources 0 1,120,000
Precision Drilling (Canada) 139,100 530,000
Ulster Petroleums (Canada) 200,000 400,000
US Aggregates 0 283,000
- --------------------------------------------------------------------------
Other Industries
Amli Residential 0 250,000
Azurix 283,000 1,300,000
BRE Properties 0 250,000
Conectiv 0 600,000
First Washington Realty Trust,
Cv. Pfd. 120,000 240,000
Manufactured Home Communities 0 400,000
Security Capital European Realty 823,437 903,125
SL Green Realty 0 500,000
Stericycle 152,000 287,000
Summit Properties 0 250,000
Unisource Energy 700,000 865,000
</TABLE>
31
<PAGE>
ACORN FUND
>Major Portfolio Changes in the Fourth Quarter, continued
<TABLE>
<CAPTION>
Number of Shares
----------------------
9/30/99 12/31/99
<S> <C> <C>
Sales
- --------------------------------------------------------------------------
Information
AppNet Systems 135,000 0
Aspect Communications 284,000 0
Berjaya Sports Toto (Malaysia) 590,000 0
BISYS 141,000 95,000
Concord EFS 450,000 380,000
Cumulus Media 150,000 100,000
Electronic Arts 200,000 0
Granite Broadcasting 558,000 250,000
IMR Global 400,000 0
Intermet 260,000 0
Jabil Circuit 300,000 200,000
Keane 75,000 0
Kronos 903,000 713,000
Liberty Media Group, AT&T 2,300,000 1,500,000
NTL (United Kingdom) 644,000 250,000
(includes effect of 5 for 4 stock split)
Oak Industries 450,000 200,000
Pinnacle Holdings 500,000 355,000
Project Software 54,000 0
RCN 1,484,000 584,000
REMEC 262,000 0
RSA Security 200,000 100,000
Sanmina 150,000 0
Solectron 800,000 400,000
Sterling Commerce 280,000 0
Sykes Enterprises 724,000 650,000
Tele Celular Sul (Brazil) 50,000 0
THQ 200,000 245,000
(includes effect of 3 for 2 stock split)
TV Guide 366,000 0
Varitronix International
(Hong Kong) 1,795,000 0
World Color Press 140,000 0
- --------------------------------------------------------------------------
Health Care
Lincare Holdings 2,374,000 2,038,000
Olympus Optical (Japan) 300,000 0
Respironics 541,000 0
- --------------------------------------------------------------------------
Consumer Goods/Services
Carnival 1,500,000 1,100,000
Harley-Davidson 1,260,000 1,000,000
Resorts World Berhad (Malaysia) 750,000 0
Royal Caribbean Curises 120,000 0
- --------------------------------------------------------------------------
Finance
Foremost 77,000 0
FPIC Insurance 340,000 0
Peoples Heritage Financial 138,000 0
Washington Federal 782,000 0
- --------------------------------------------------------------------------
Industrial Goods/Services
C H Robinson 426,000 350,000
Cambrex 300,000 0
Expeditors International of
Washington 1,500,000 1,411,000
Flughafen Wien (Austria) 180,000 0
HA LO Industries 626,000 0
- --------------------------------------------------------------------------
Energy/Minerals
Atmos Energy 800,000 600,000
Canadian Natural Resources
(Canada) 585,000 385,000
Devon Energy 630,000 600,000
MidAmerican Energy 1,500,000 0
- --------------------------------------------------------------------------
Other Industries
Equity Residential 260,000 0
</TABLE>
32
<PAGE>
Acorn Fund
>Statement of Investments December 31, 1999
<TABLE>
<CAPTION>
Number of Shares Value (000)
- ---------------------------------------------------------------------------------------------
Common Stocks and Other
Equity-Like Securities: 92.2%
- ---------------------------------------------------------------------------------------------
<S> <C>
Information: 38.4%
Media
>Broadcasting: 1.7%
785,000 Young Broadcasting (b) $ 40,035
Television Stations
819,000 Data Transmission Network (b) (c) 14,128
Data Services for Farmers
100,000 Cumulus Media (b) 5,075
Radio Stations in Small Cities
137,000 Salem Communications (b) 3,100
Radio Stations for Religious Programming
300,000 Shop at Home (b) 2,981
Television Home Shopping Network
250,000 Granite Broadcasting (b) 2,531
Television Stations
- ---------------------------------------------------------------------------------------
67,850
>Television Programming CATV: 2.9%
1,500,000 Liberty Media Group, AT&T (b) 85,125
Cable & Satellite Programming
550,000 Playboy Enterprises (b) 13,372
CATV & Satellite Programming, Publishing
500,000 Corus Entertainment (Canada) (b) 10,198
CATV Programming & Radio Stations
300,000 Cinar (Canada) (b) 7,350
Children's TV Programming
9,000 Fox Kids Europe (Netherlands) (b) 115
Cartoons
- ---------------------------------------------------------------------------------------
116,160
Telecommunications
>Telecommunications/Wireline
Communications: 2.3%
250,000 NTL (United Kingdom) (b) 31,188
Voice, Video & Data Services
584,000 RCN (b) 28,324
Metro Market CLEC: Voice, Video &
Internet Services
354,000 Commonwealth Telephone (b) 18,718
Rural Market CLEC: Local, Long Distance & Internet Services
200,000 Classic Communications (b) 7,312
Cable Television in Rural Areas
230,000 Startec Global Communications (b) 4,834
International Telecommunications
36,000 Thus (United Kingdom) (b) 226
Emerging Telecommunications
- ---------------------------------------------------------------------------------------
90,602
>Mobile Communications: 2.8%
580,000 Telephone and Data Systems 73,080
Cellular & Telephone Services
355,000 Pinnacle Holdings (b) 15,043
Towers for Cellular, PCs & Paging
420,000 Price Communications (b) 11,681
Cellular Telephone Services
355,000 COMARCO (b) (c) 8,342
Wireless Network Testing
- ---------------------------------------------------------------------------------------
108,146
Principal Amount or
Number of Shares Value (000)
- ---------------------------------------------------------------------------------------
>Telecommunications Equipment: 0.1%
36,000 Comverse Technology (b) 5,211
Voicemail & Other Enhanced Services Equipment
Computer Related Hardware
>Computer Hardware/
Related Systems: 2.9%
765,000 Micros Systems (b) 56,610
Information System for Restaurants & Hotels
713,000 Kronos (b) (c) 42,780
Labor Management Solutions
550,000 American Power Conversion (b) 14,506
Uninterruptable Power Systems
- ---------------------------------------------------------------------------------------
>Semiconductors 113,896
Related Equipment: 0.5%
200,000 Oak Industries (b) 21,225
Communications Components
>Gaming Equipment: 2.1%
2,342,000 International Game Technology 47,572
Slot Machines & Progressive Jackpots
450,000 Anchor Gaming (b) 19,547
Slot Machines & Casinos
1,000,000 Aristocrat Leisure (Australia) 14,388
Slot Machines
- ---------------------------------------------------------------------------------------
81,507
>Contract Manufacturing: 2.0%
400,000 Solectron (b) 38,050
Electronic Manufacturing Services
200,000 Jabil Circuit (b) 14,600
Electronic Manufacturing Services
350,000 Applied Power 12,862
Electronic Enclosures & Industrial Products
2,000,000 Natsteel Electronics (Singapore) 10,567
Electronic Manufacturing Services
35,000 Plexus (b) 1,540
Electronic Manufacturing Services
- ---------------------------------------------------------------------------------------
77,619
>Instrumentation: 1.4%
480,000 Mettler Toledo (b) 18,330
Laboratory Products
520,000 Varian (b) 11,700
Analytical Instruments
613,000 Thermoquest (b) 6,322
$ 1,500,000 Thermoquest, 5% Note Due 8/15/00 1,470
Mass Spectrometry & Chromatography
$ 5,000,000 Thermo Optek, 5% Note Due 10/15/00 4,900
265,000 Thermo Optek 3,014
Elemental & Molecular Spectroscopy
98,000 Dionex (b) 4,036
Ion & Liquid Chromatography
266,000 Onix Systems (b) 1,629
Field Measurement & Sensor Equipment
232,000 Metrika Systems (b) 1,392
Gamma Ray Instrumentation
- ---------------------------------------------------------------------------------------
52,793
</TABLE>
33
<PAGE>
Acorn Fund
>Statement of Investments, continued
<TABLE>
<CAPTION>
Principal Amount or
Number of Shares Value (000)
- ---------------------------------------------------------------------------------------------
<S> <C>
>Business Software: 1.2%
1,075,000 Systems & Computer Technology (b) $ 17,469
Enterprise Software & Services
687,000 JDA Software Group (b) 11,250
Applications/Software & Services for Retailers
200,000 Hyperion Solutions (b) 8,700
Analytical Application Software
300,000 Indus International (b) 3,656
Enterprise Asset Management Software
280,000 MAPICS (b) 3,535
Mid Market ERP Systems
100,000 Entra Data (Sweden) 2,562
Business Software
- ---------------------------------------------------------------------------------------------
47,172
>Consumer Software: 0.5%
$ 6,500,000 Activision, 6.75% Note Due 1/1/05 6,532
400,000 Activision (b) 6,125
Entertainment Software
245,000 THQ (b) 5,681
Entertainment Software
250,000 3DO Company (b) 2,273
Entertainment Software
- ---------------------------------------------------------------------------------------------
20,611
>Computer Services: 5.2%
1,000,000 WM Data Nordic (Sweden) 61,806
Computer Services/Consulting
230,000 Atos (France) (b) 38,098
Computer Services/Transaction Processing
650,000 Sykes Enterprises (b) 28,519
Call Center Services
171,084 Getronics (Netherlands) 13,636
Computer Services/Consulting
500,000 Cambridge Technology (b) 13,125
Software Implementation Services
790,000 Computer Task Group 11,702
Application Development & Staffing Services
642,000 RCM Technologies (b) (c) 11,075
Technology Staffing Services
250,000 American Management Systems (b) 7,844
Software Development Services
1,616,000 Aztec Technology Partners (b) (c) 7,373
Application Development & Maintenance Services
95,000 BISYS (b) 6,199
Processing for Banks
214,000 Analysts International 2,675
Technology Staffing Services
104,000 Meta Group (b) 1,976
IT Publications & Consulting Services
- ---------------------------------------------------------------------------------------------
204,028
Software/Services
>Business Information/Marketing
Services/Publishing: 3.8%
800,000 Getty Images (b) 39,100
Photographs for Publications & Electronic
Media
2,400,000 InfoUSA (b) 33,450
Business Data for Sales Leads
Number of Shares Value (000)
- ---------------------------------------------------------------------------------------------
1,100,000 PRIMEDIA (b) $ 18,150
Specialty Magazines & Other Publications
356,000 Choicepoint (b) 14,729
Fraud Protection Information
450,000 Information Holdings (b) 13,078
Scientific & Medical Publications,
Patent Information
445,000 West Teleservices (b) 10,875
Customer Care & Sales Support
403,000 ACNielsen (b) 9,924
Market Research, Information & Analysis
350,000 Acxiom (b) 8,400
Database Marketing Services
- ---------------------------------------------------------------------------------------------
147,706
>Internet: 6.6%
235,000 Softbank Corporation (Japan) 224,817
Internet Services/Investment Holdings
470,000 Online Resources (b) 7,814
Internet Banking Technology
100,000 RSA Security (b) 7,750
Enterprise Security Software
197,725 Internet Commerce (b) 5,046
E-Commerce Service Network
2,683 Bigfoot International (b) (c) 4,024
263,158 Bigfoot International, Series A (b) (c) 2,500
Internet Direct Marketing
511,630 NeoPlanet, Series A (b) 2,000
Web Browser
250,000 Musicmaker.com (b) 1,469
Make Your Own Music CD
61,000 Navidec (b) 732
Internet Computer Services
47,855 GIGA (b) 197
29,714 GIGA Warrants (b) 4
Data on Information Technology
- ---------------------------------------------------------------------------------------------
256,353
>Electronics Distribution: 0.5%
890,000 Pioneer-Standard Electronics 12,849
Component & Computer Distribution
300,000 Kent Electronics (b) 6,825
Component Distribution & Contract Assembly
- ---------------------------------------------------------------------------------------------
19,674
>Transaction Processors: 1.9%
1,874,000 National Data (c) 63,599
Credit Card & Health Claims Processor
380,000 Concord EFS (b) 9,785
Credit Card Processor
- ---------------------------------------------------------------------------------------------
73,384
Information: Total 1,503,937
Health Care: 7.7%
>Biotechnology/Drug Delivery: 3.7%
525,000 Myriad Genetics (b) (c) 24,150
Gene Discovery & Diagnostic Products
329,000 Protein Design Labs (b) 23,030
Computer Designed Monoclonal Antibodies
450,000 Inhale Therapeutic Systems (b) 19,153
Pulmonary Drug Delivery
</TABLE>
34
<PAGE>
Number of Shares Value (000)
- --------------------------------------------------------------------------
230,000 CuraGen (b) $ 16,042
Gene Based Drug Development
664,000 Genome Therapeutics (b) 10,707
Gene Discovery Services
160,000 Incyte Pharmaceutical (b) 9,600
Gene Sequencing
7,350,000 Nadro, Series L (Mexico) 9,309
Pharmaceutical Distributor
915,000 Microcide Pharmaceuticals (b) (c) 8,121
Antibiotics
1,508,000 Corvas International (b) (c) 6,692
Rational Drug Design
529,000 NPS Pharmaceuticals (b) 6,480
Small Molecule Drugs
351,000 Guilford Pharmaceuticals (b) 5,967
Drug Delivery & Neurology Drugs
768,000 Synaptic Pharmaceuticals (b) (c) 5,184
Receptor Targeted Drug Design
190,000 Genzyme Molecular
Oncology Division (b) 1,330
Gene Expression Technology &
Cancer Drugs
- --------------------------------------------------------------------------
145,765
>Medical Equipment: 0.6%
299,000 Wesley Jessen Vision (b) 11,325
Contact Lenses
407,000 Orthofix International (b) 5,825
Bone Fixation & Stimulation Devices
443,000 Acuson (b) 5,565
Ultrasound Devices
- --------------------------------------------------------------------------
22,715
>Hospital/Laboratory Supplies: 0.0%
27,000 Techne (b) 1,487
Cytokines, Antibodies, Other Reagents for
Life Sciences
>Services: 3.4%
2,038,000 Lincare Holdings (b) 70,693
Home Health Care Services
1,952,000 First Health Group (b) 52,460
PPO Network
1,280,000 Magellan Health Services (b) 8,080
Mental Health Services
- --------------------------------------------------------------------------
131,233
--------
Health Care: Total 301,200
- --------------------------------------------------------------------------
Consumer Goods/Services: 11.8%
Goods
>Leisure Vehicles: 2.0%
1,000,000 Harley-Davidson 64,062
Motorcycles & Related Merchandise
341,000 Thor Industries 10,379
RV's & Busses
2,200,000 Ducati Motor (Italy) (b) 5,701
Motorcycles & Related Merchandise
- --------------------------------------------------------------------------
80,142
>Furniture: 0.3%
520,000 Herman Miller 11,960
Office Furniture
>Beverages: 0.1%
23,000 Binding-Brauerei (Germany) $ 4,583
Brewery
>Nondurables: 0.2%
460,000 Helen of Troy (b) 3,335
Personal Care Products
401,000 First Years 3,333
Infant & Toddler Products
- --------------------------------------------------------------------------
6,668
>Durable Goods: 0.2%
312,439 Hunter Douglas (Netherlands) 8,489
Decorative Window Coverings
>Textiles/Apparel: 1.0%
730,000 Jones Apparel (b) 19,801
Women's Apparel
725,000 Nautica Enterprises (b) 8,202
Men's Casual Apparel
600,000 Unifi (b) 7,388
Polyester & Nylon Fabrics
85,000 Gildan Activewear (b) 1,541
Cotton T-Shirts
- --------------------------------------------------------------------------
36,932
Services
>Retail: 1.9%
1,600,000 Borders Group (b) 25,700
Bookstores
400,000 Whole Foods Market (b) 18,550
Natural Food Supermarkets
1,100,000 N. Brown Group (United Kingdom) 11,009
Mail Order Clothing in Large Sizes
729,000 Gadzooks (b) (c) 7,153
Teen Apparel Retailer
400,000 Panera Bread (b) 3,100
Bakery & Deli Restaurants
200,000 Quiksilver (b) 3,100
Gen Y Clothing
160,000 Gaiam (b) 2,540
Healthy Living Catalog & E-Commerce
100,000 Calloway Golf 1,769
Premium Golf Clubs & Balls
130,000 MotherNature.com (b) 951
Healthy Living E-Commerce
- --------------------------------------------------------------------------
73,872
>Consumer Services: 1.5%
1,250,000 Bally Total Fitness (b) 33,359
National Chain of Fitness Centers
600,000 ITT Educational Services (b) 9,263
Technology Oriented Postsecondary
Degree Programs
1,322,600 Airtours (United Kingdom) 8,119
Packaged Tour Vacations
270,000 Steiner Leisure (b) 4,506
Spas & Hair/Skin Products on Cruise Ships
234,000 Education Management (b) 3,276
Postsecondary Education
- --------------------------------------------------------------------------
58,523
35
<PAGE>
Acorn Fund
>Statement of Investments, continued
Number of Shares Value (000)
- --------------------------------------------------------------------------
>Casinos: 1.1%
1,080,000 Station Casinos (b) $ 24,233
Casinos & Riverboats
650,000 Isle of Capri Casino (b) 8,572
Five Casinos in Secondary Markets
360,000 Hollywood Park (b) 8,078
Casinos & Card Clubs
535,000 Monarch Casino & Resort (b) (c) 2,809
Casino/Hotel in Reno
63,000 Lakes Gaming (b) 500
Hotel & Casino in Biloxi & Gulfport
- --------------------------------------------------------------------------
44,192
>Cruise Lines: 3.5%
8,130,000 Star Cruises (Singapore) 82,926
Cruising/Casino Operations
1,100,000 Carnival 52,594
Largest Cruise Line
410,000 Royal Olympic Cruise (b) 1,999
Cruises in Mediterranean
- --------------------------------------------------------------------------
137,519
--------
Consumer Goods/Services: Total 462,880
- --------------------------------------------------------------------------
Finance: 13.8%
>Banks: 1.6%
799,000 TCF Financial 19,875
Great Lakes Bank
672,000 Texas Regional Bancshares 19,488
TexMex Bank
414,000 Chittenden 12,265
Vermont & West Massachusetts
Bank
180,000 CCB Financial 7,841
North Carolina Bank
400,000 Eldorado Bancshares (b) 4,300
California Bank
- --------------------------------------------------------------------------
63,769
>Savings & Loans: 1.3%
1,842,000 Peoples Bank Bridgeport 38,912
Connecticut Savings & Loan
702,000 Commonwealth Bancorp (c) 11,671
Philadelphia Savings & Loan
- --------------------------------------------------------------------------
50,583
>Insurance: 3.4%
600,000 Protective Life 19,088
Life/Dental Insurance
1,291,000 UICI (b) 13,636
Insurance/Specialty Insurance
78,000 Markel (b) 12,090
Specialty Insurance
511,000 Leucadia National 11,817
Insurance Holding Company
820,000 HCC Insurance Holdings 10,814
Aviation Insurance
488,000 Baldwin & Lyons, Cl. B 10,797
Trucking Insurance
300,000 RLI 10,200
Specialty Insurance
- --------------------------------------------------------------------------
154,308 ASR Verzekeringsgroep $ 9,814
(Netherlands)
Auto/Life Insurance
675,000 Philadelphia Consolidated 9,788
Holding (b) (c)
Specialty Insurance
322,000 Terra Nova Bermuda 9,660
Specialty Re-Insurance
274,000 United Fire & Casualty 6,199
Property & Casualty
210,000 StanCorp Financial 5,289
Group Life, Disability & 401K
612,000 Acceptance Insurance (b) 3,557
Crop Insurance
- --------------------------------------------------------------------------
132,749
>Money Management: 4.6%
555,000 SEI Investments 66,054
Mutual Fund Administration
3,019,000 Phoenix Investment Partners (c) 24,529
Mutual Fund & Pension Manager
1,500,000 Banca Fideuram (Italy) 17,752
Life Insurance & Mutual Funds
1,034,000 Pioneer Group (b) 16,286
Equity Mutual Funds
650,000 Neuberger Berman 16,169
Major Asset Management Company
1,063,000 Baker Fentress 15,081
Closed-End Investment Company
300,000 Affiliated Managers Group (b) 12,131
Mutual Fund & Pension Manager
1,250,000 Edinburgh Fund Managers
(United Kingdom) 10,723
Investment Management
200,000 The Investment Company of
China (China) (b) 1,112
Closed-End Fund
- --------------------------------------------------------------------------
179,837
>Finance Companies: 2.9%
3,912,000 AmeriCredit (b) (c) 72,372
Auto Lending
750,000 DVI Health Services (b) 11,391
Leases for Big Medical Equipment
570,000 Ace Cash Express (b) (c) 10,545
Check Cashing Stores
1,820,000 World Acceptance (b) (c) 8,759
Personal Loans
1,375,000 Capital Trust (b) (c) 6,875
Mortgage Loans
700,000 Creditrust (b) (c) 5,381
Buys Defaulted Credit Card Paper
- --------------------------------------------------------------------------
115,323
--------
Finance: Total 542,261
- --------------------------------------------------------------------------
Industrial Goods/Services: 8.1%
>Steel: 1.0%
820,000 Gibraltar Steel (c) 19,167
Steel Processing
36
<PAGE>
Number of Shares Value (000)
- -----------------------------------------------------------------------
650,000 AK Steel $12,269
Carbon & Stainless Steel Producer
420,000 Atchison Casting (b) (c) 3,832
Steel Foundries
245,000 A M Castle 2,879
Steel Distribution
- -----------------------------------------------------------------------
38,147
>Industrial Goods: 0.8%
1,000,000 Clarcor 18,000
Engines, Mobile & Environmental Filtration
538,000 Applied Industrial Technologies 8,944
Industrial Components Distribution
550,000 Advanced Lighting Technologies (b) 3,162
Metal Halide Lighting
- -----------------------------------------------------------------------
30,106
>Specialty Chemicals & Industrial
Materials: 0.9%
1,100,000 Lilly Industries, Cl. A 14,781
Industrial Coatings
346,121 SYMEX (b) 9,345
Combinatorial Materials
732,000 RPM 7,457
Specialty Coatings & Paint
100,000 Spartech 3,225
Plastics Distribution & Compounding
139,000 Brunswick Technologies (b) 495
Fiberglass Fabric for Composites
- -----------------------------------------------------------------------
35,303
>Outsourcing Services &
Training: 0.9%
2,500,000 Labor Ready (b) (c) 30,313
Temporary Manual Labor
600,000 GP Strategies (b) (c) 3,675
Training Programs
500,000 International Total Services (b) (c) 594
Aviation Services
- -----------------------------------------------------------------------
34,582
>Logistics: 2.7%
1,411,000 Expeditors International
of Washington 61,819
International Freight Forwarder
759,000 Hub Group (b) 15,180
Truck & Rail Freight Forwarder
350,000 C H Robinson 13,912
Truck Freight Forwarder
200,000 Forward Air (b) 8,675
Freight Transportation Between Airports
860,000 Airnet Systems (b) (c) 6,127
Check & Other Small Package Shipment
- -----------------------------------------------------------------------
105,713
>Other Industrial Services: 1.8%
1,200,000 Serco Group (United Kingdom) 37,657
Facilities Management
1,526,000 Wackenhut, Cl. B 15,737
31,000 Wackenhut, Cl. A 463
Prison Management
520,000 Mobile Mini (b) $11,180
Leases Portable Storage Units
1,000,000 Aeroporti di Roma (Italy) 6,521
Airport Management
- -----------------------------------------------------------------------
71,558
-------
Industrial Goods/Services: Total 315,409
- -----------------------------------------------------------------------
Energy/Minerals: 7.1%
>Independent Power: 2.2%
1,164,000 AES Corporation (b) 87,009
1,852 AES Corporation Warrants (b) 231
Power Plants
- -----------------------------------------------------------------------
87,240
>Oil/Gas Producers: 2.5%
2,100,000 Tesoro Petroleum (b) (c) 24,281
Oil Refinery/Gas Producer
600,000 Devon Energy 19,725
Oil & Gas Producer
1,615,000 Cross Timbers Oil 14,636
Oil & Gas Producer
530,000 Precision Drilling (Canada) (b) 13,558
Oil & Gas Well Driller
385,000 Canadian Natural Resources
(Canada) (b) 9,383
Oil & Gas Producer
350,000 Basin Exploration (b) 6,169
Oil & Gas Producer
300,000 Evergreen Resources (b) 5,925
Oil & Gas Producer
400,000 Ulster Petroleums (Canada) (b) 3,554
Oil & Gas Producer
800,000 Tipperary (b) (c) 1,100
Oil & Gas Producer
- -----------------------------------------------------------------------
98,331
>Distribution/Marketing/Refining: 1.8%
900,000 Equitable Resources 30,037
Natural Gas Utility & Producer
1,200,000 Dynegy 29,175
Natural Gas & Electric Processing,
Production & Marketing
600,000 Atmos Energy 12,262
Natural Gas Utility
- -----------------------------------------------------------------------
71,474
>Mining: 0.1%
283,000 US Aggregates (b) 3,396
Aggregrates, Ready Mix & Asphalt
>Oil Services: 0.5%
205,000 Hanover Compressor (b) 7,739
Natural Gas Compressor Rental
1,120,000 Newpark Resources (b) 6,860
Oilfield Fluid Management & Equipment Rental
1,250,000 Saipem (Italy) 4,516
Offshore Construction
- -----------------------------------------------------------------------
19,115
-------
Energy/Minerals: Total 279,556
37
<PAGE>
Acorn Fund
>Statement of Investments, continued
Number of Shares Value (000)
- -----------------------------------------------------------------------
Other Industries: 5.3%
>Real Estate: 4.2%
968,000 The Rouse Company $20,570
Regional Shopping Malls
903,125 Security Capital European Realty (b) 18,063
Strategic Real Estate Investments
466,000 Forest City Enterprises, Cl. B 14,475
Shopping Malls
500,000 First Industrial Realty Trust 13,719
Industrial Properties
412,000 IRSA (Argentina) 13,326
Real Estate Management & Development
820,000 Cornerstone Properties 11,992
Downtown Office Buildings
500,000 SL Green Realty 10,875
Downtown Office Buildings
400,000 Manufactured Home Communities 9,725
Manufactured Home Communities
400,000 Macerich Company 8,325
Regional Shopping Malls
699,000 LaSalle Hotel Properties 8,170
Upscale/Full Service Hotels
385,000 First Washington Realty Trust (c) 7,195
240,000 First Washington Realty Trust, Cv.
Pfd. (c) 5,730
Community Shopping Centers
250,000 BRE Properties 5,672
Apartments - Class A
200,000 General Growth Properties 5,600
Shopping Malls REIT
250,000 Amli Residential 5,047
Midwestern Apartments
250,000 Summit Properties 4,469
Southeastern Apartments
153,000 Consolidated Tomoka 1,951
16,000 Acres of Florida Land
- -----------------------------------------------------------------------
164,904
>Waste Management: 0.1%
287,000 Stericycle (b) 5,399
Medical Waste Disposal
>Regulated Utilities: 1.0%
1,300,000 Azurix (b) 11,619
Water Utility Holding Company
Principal Amount or
Number of Shares Value (000)
- -----------------------------------------------------------------------
600,000 Conectiv $10,087
Electric Utility in New Jersey, Delaware
& Maryland
865,000 Unisource Energy (b) 9,677
Electric Utility in Arizona
130,000 CH Energy 4,290
Electric Utility in New York
200,000 Utilicorp United 3,888
Global Utility Holding Company
- -----------------------------------------------------------------------
39,561
--------
Other Industries: Total 209,864
- -----------------------------------------------------------------------
Other Securities: 0.0% 19
Total Common Stocks and Other
----------
Equity-Like Securities: 92.2% $3,615,126
(Cost: $2,077,035)
Short-Term Obligations: 7.7%
Yield 4.00%-6.60% Due 1/3-2/3/00
$ 39,106 Aetna 39,073
37,110 Ford Motor Credit 37,098
33,386 GTE Corp 33,333
33,232 Exxon 33,214
29,974 Sears 29,920
28,962 AON 28,905
25,000 Bell Atlantic Financial 24,989
18,308 Citicorp 18,289
16,503 Wal-Mart 16,491
14,943 Associates First Capital 14,940
14,350 US West 14,334
11,907 US Treasury Bill 11,853
---------
(Amortized Cost: $302,439) 302,439
---------
Total Investments: 99.9% 3,917,565
(Cost: $2,379,474)
Cash and Other Assets Less Liabilities: 0.1% 3,274
---------
Total Net Assets: 100% $3,920,839
========================================================================
- ------------------------------------------------------------------------
>Notes to Statement of Investment:
(a) At December 31, 1999, for federal income tax purposes, cost of investment
was $2,318,230,000 and net unrealized appreciation was $1,536,335,000,
consisting of gross unrealized appreciation of $1,771,700,000 and gross
unrealized depreciation of $235,365,000.
(b) Non-income producing security.
38
<PAGE>
(c) On December 31, 1999, the Fund held the following percentages of the
outstanding voting shares of the companies listed below:
Corvas International............................................ 9.99%
Sirena Apparel.................................................. 9.92%
World Acceptance................................................ 9.47%
First Washington Realty Trust................................... 8.65%
COMARCO......................................................... 8.28%
Microcide Pharmaceuticals....................................... 8.24%
Gadzooks........................................................ 8.17%
Airnet Systems.................................................. 7.53%
International Total Services.................................... 7.51%
Aztec Technology Partners....................................... 7.28%
Synaptic Pharmaceuticals........................................ 7.15%
Data Transmission Network....................................... 6.99%
Phoenix Investment Partners..................................... 6.90%
Bigfoot International........................................... 6.54%
Tesoro Petroleum................................................ 6.49%
Creditrust...................................................... 6.48%
Gibraltar Steel................................................. 6.38%
Capital Trust................................................... 6.25%
RCM Technologies................................................ 5.86%
Commonwealth Bancorp............................................ 5.86%
Labor Ready..................................................... 5.84%
Kronos.......................................................... 5.66%
Ace Cash Express................................................ 5.66%
Monarch Casino & Resort......................................... 5.64%
National Data................................................... 5.53%
Atchison Casting................................................ 5.49%
GP Strategies................................................... 5.41%
Philadelphia Consolidated Holding............................... 5.38%
Americredit..................................................... 5.32%
Tipperary....................................................... 5.29%
Myriad Genetics................................................. 5.19%
The aggregate cost and value of investments in these companies at December 31,
1999, was $391,459,000 and $457,372,000, respectively. The market value of
these securities represents 11.67% of the total net assets at December 31, 1999.
During the year ended December 31, 1999, cost of purchases and proceeds from
sales in affiliated companies was $115,904,000 and $38,702,000, respectively.
Dividends received from these companies amounted to $2,378,000 and net realized
gain on sales of investments in such companies amounted to $18,100,000.
(d) On December 31, 1999, the market value of foreign securities represents
17.16% of total net assets. The Fund's foreign portfolio was diversified
as follows:
Value(000) Percent
---------- -------
Japan............................................ $224,817 5.73%
United Kingdom................................... 98,921 2.52%
Singapore........................................ 93,493 2.38%
Sweden........................................... 64,368 1.64%
Canada........................................... 44,042 1.12%
France........................................... 38,098 0.97%
Italy............................................ 34,490 0.88%
Netherlands...................................... 32,055 0.82%
Australia........................................ 14,388 0.37%
Argentina........................................ 13,326 0.34%
Mexico........................................... 9,309 0.24%
Germany.......................................... 4,583 0.12%
China............................................ 1,112 0.03%
Total............................................ $673,002 17.16%
39
<PAGE>
Acorn Family of Funds
>Report of Independent Auditors
To the Board of Trustees and Shareholders of Acorn Investment Trust
We have audited the accompanying statements of assets and liabilities, including
the schedule of investments of Acorn Fund, Acorn International, Acorn USA, Acorn
Twenty and Acorn Foreign Forty, comprising the Acorn Investment Trust, as of
December 31, 1999, the related statements of operations, changes in net assets,
and the financial highlights for the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of December 31, 1999, by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective Funds of the Acorn Investment Trust as of December 31,
1999, the results of their operations and changes in their net assets and
financial highlights for the periods indicated therein, in conformity with
accounting principles generally accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
February 3, 2000
See accompanying notes to financial statements
40
<PAGE>
Acorn Family of Funds
>Statements of Assets and Liabilities
<TABLE>
<CAPTION>
Acorn Acorn Acorn Acorn Acorn
(in thousands) Fund International USA Twenty Foreign Forty
- ------------------------------------------------------------------------------------------------------------------------
12/31/99
<S> <C> <C> <C> <C> <C>
Assets
Investments, at value (cost: Acorn Fund $2,379,474; Acorn
International $1,278,170; Acorn USA $326,308; Acorn
Twenty $54,344; Acorn Foreign Forty $68,412) $3,917,565 $2,863,460 $373,990 $65,782 $106,507
Cash 1 13,086 1 1 618
Organization costs -- -- 36 -- --
Receivable for:
Securities sold 3,710 1,676 294 4,410 --
Fund shares sold 2,692 3,816 906 170 478
Dividends and interest 2,744 1,897 23 24 134
Other assets 468 210 28 -- --
- ------------------------------------------------------------------------------------------------------------------------
Total assets 3,927,180 2,884,145 375,278 70,387 107,737
Liabilities and Net Assets
Net unrealized depreciation on foreign forward
currency contracts -- 1,951 -- -- --
Payable for:
Securities purchased 4,681 10,739 3,279 1,872 332
Fund shares redeemed 675 2,088 424 12 11
Organization costs -- -- 36 -- --
Other 985 1,164 111 33 43
- ------------------------------------------------------------------------------------------------------------------------
Total liabilities 6,341 15,942 3,850 1,917 386
- ------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Fund shares outstanding $3,920,839 $2,868,203 $371,428 $68,470 $107,351
========================================================================================================================
Fund shares outstanding 211,618 81,178 22,170 4,996 5,387
========================================================================================================================
Pricing of Shares
Net asset value, offering price and redemption price
per share $ 18.53 $ 35.33 $ 16.75 $ 13.70 $ 19.93
========================================================================================================================
Analysis of Net Assets
Paid-in capital $2,171,715 $1,246,840 $317,053 $53,298 $ 68,575
Accumulated net realized gain on sales
of investments, futures and foreign
currency transactions 208,505 49,089 6,668 3,734 767
Net unrealized appreciation of investments and other
assets (net of unrealized PFIC gains of $65,710 for
Acorn International and $305 for Acorn Foreign Forty) 1,538,091 1,517,676 47,682 11,438 37,790
Undistributed net investment income 2,528 54,598 25 -- 219
- ------------------------------------------------------------------------------------------------------------------------
Net assets applicable to
Fund shares outstanding $3,920,839 $2,868,203 $371,428 $68,470 $107,351
========================================================================================================================
</TABLE>
41
<PAGE>
Acorn Family of Funds
>Statements of Operations
<TABLE>
<CAPTION>
Acorn
Acorn Fund International
Year Year Year Year
(in thousands) ended 12/31, ended 12/31, ended 12/31, ended 12/31,
- -------------------------------------------------------------------------------------------------------------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Investment Income:
Dividends $ 34,159 $ 28,483 $ 20,878 $ 26,225
Interest 11,416 13,414 4,883 10,223
- -------------------------------------------------------------------------------------------------------------------------
45,575 41,897 25,761 36,448
Foreign taxes withheld (330) (513) (2,094) (2,521)
- -------------------------------------------------------------------------------------------------------------------------
Total investment income 45,245 41,384 23,667 33,927
Expenses:
Investment advisory 23,437 24,905 15,668 14,124
Administration 1,699 1,812 961 858
Custodian 875 924 2,321 1,957
Transfer and dividend disbursing agent 1,312 1,414 1,380 1,384
Reports to shareholders 448 573 446 575
Legal and audit 229 223 136 97
Registration and blue sky 64 55 58 58
Trustees' and other 683 446 399 166
- -------------------------------------------------------------------------------------------------------------------------
Total expenses 28,747 30,352 21,369 19,219
Less custodian fees paid indirectly -- -- -- --
Less reimbursement of expenses by advisor -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Net expenses 28,747 30,352 21,369 19,219
- -------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 16,498 11,032 2,298 14,708
Net Realized and Unrealized Gain (Loss) on Investments,
Futures and Foreign Currency Transactions:
Net realized gain (loss) on sales of investments 915,362 252,065 205,354 2,408
Net realized gain (loss) on foreign currency transactions (110) (132) 1,133 (6,031)
Net realized gain (loss) on futures (6,918) (17,930) (403) 7,811
Change in net unrealized appreciation of
investments and foreign currency transactions 92,272 (43,553) 1,054,166 215,847
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments,
futures and foreign currency transactions 1,000,606 190,450 1,260,250 220,035
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $1,017,104 $201,482 $1,262,548 $234,743
=========================================================================================================================
</TABLE>
See accompanying notes to financial statements
42
<PAGE>
<TABLE>
<CAPTION>
Acorn
Acorn USA Acorn Twenty Foreign Forty
Year Year Year Inception 11/23 Year Inception 11/23
ended 12/31, ended 12/31, ended 12/31, through 12/31, ended 12/31, through 12/31,
- -----------------------------------------------------------------------------------------
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C>
$ 2,223 $ 882 $ 280 $ 38 $ 459 $ 6
1,259 1,042 130 7 158 3
- -----------------------------------------------------------------------------------------
3,482 1,924 410 45 617 9
-- -- -- -- (42) (1)
- -----------------------------------------------------------------------------------------
3,482 1,924 410 45 575 8
2,805 2,336 503 26 426 11
150 124 28 1 22 1
43 39 12 2 85 3
218 246 105 18 60 13
95 126 75 1 53 1
41 32 29 1 29 1
26 33 20 4 25 2
85 43 17 -- 6 --
- -----------------------------------------------------------------------------------------
3,463 2,979 789 53 706 32
(6) (5) (11) (2) (13) (3)
-- -- (23) (12) (42) (11)
- -----------------------------------------------------------------------------------------
3,457 2,974 755 39 651 18
- -----------------------------------------------------------------------------------------
25 (1,050) (345) 6 (76) (10)
38,768 23,791 5,015 (246) 792 74
-- -- -- -- -- --
-- -- -- -- -- --
30,941 (14,625) 8,906 2,532 36,932 1,163
- -----------------------------------------------------------------------------------------
69,709 9,166 13,921 2,286 37,724 1,237
- -----------------------------------------------------------------------------------------
$69,734 $ 8,116 $13,576 $2,292 $37,648 $1,227
=========================================================================================
</TABLE>
43
<PAGE>
Acorn Family of Funds
>Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Acorn
Acorn Fund International
Year Year Year Year
(in thousands) ended 12/31, ended 12/31, ended 12/31, ended 12/31,
- ------------------------------------------------------------------------------------------------------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
From Operations:
Net investment income (loss) $ 16,498 $ 11,032 $ 2,298 $ 14,708
Net realized gain (loss) on sales of investments,
futures and foreign currency transactions 908,334 234,003 206,084 4,188
Change in net unrealized appreciation of
investments and foreign currency transactions 92,272 (43,553) 1,054,166 215,847
------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 1,017,104 201,482 1,262,548 234,743
Distributions to Shareholders From:
Net investment income (16,501) (6,284) (16,992) (12,611)
Net realized gain (638,460) (219,264) (119,344) (22,701)
- ------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders (654,961) (225,548) (136,336) (35,312)
From Fund Share Transactions:
Reinvestment of dividend and capital
gain distributions 586,161 204,856 128,048 33,102
Proceeds from other shares sold 346,317 490,137 648,562 406,219
- ------------------------------------------------------------------------------------------------------------------
932,478 694,993 776,610 439,321
Payments for shares redeemed (923,243) (802,923) (760,116) (536,194)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
Fund share transactions 9,235 (107,930) 16,494 (96,873)
- ------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 371,378 (131,996) 1,142,706 102,558
Net Assets:
Beginning of period 3,549,461 3,681,457 1,725,497 1,622,939
- ------------------------------------------------------------------------------------------------------------------
End of period $3,920,839 $3,549,461 $2,868,203 $1,725,497
==================================================================================================================
Undistributed Net Investment Income $ 2,528 $ 2,531 $ 54,598 $ 5,419
==================================================================================================================
</TABLE>
See accompanying notes to financial statements
44
<PAGE>
<TABLE>
<CAPTION>
Acorn
Acorn USA Acorn Twenty Foreign Forty
Year Year Year Inception 11/23 Year Inception 11/23
ended 12/31, ended 12/31, ended 12/31, through 12/31, ended through 12/31,
- --------------------------------------------------------------------------------------------------
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C>
$ 25 $ (1,050) $ (345) $ 6 $ (76) $ (10)
38,768 23,791 5,015 (246) 792 74
30,941 (14,625) 8,906 2,532 36,932 1,163
- --------------------------------------------------------------------------------------------------
69,734 8,116 13,576 2,292 37,648 1,227
-- -- -- -- -- --
(28,268) (19,532) (705) -- (99) --
- --------------------------------------------------------------------------------------------------
(28,268) (19,532) (705) -- (99) --
25,972 17,705 658 -- 94 --
118,916 175,578 34,563 31,688 66,325 14,739
- --------------------------------------------------------------------------------------------------
144,888 193,283 35,221 31,688 66,419 14,739
(95,877) (85,540) (13,346) (256) (12,402) (181)
- --------------------------------------------------------------------------------------------------
49,011 107,743 21,875 31,432 54,017 14,558
- --------------------------------------------------------------------------------------------------
90,477 96,327 34,746 33,724 91,566 15,785
280,951 184,624 33,724 -- 15,785 --
- --------------------------------------------------------------------------------------------------
$371,428 $280,951 $ 68,470 $33,724 $107,351 $15,785
==================================================================================================
$ 25 -- -- $ 6 $ 219 $ 9
==================================================================================================
</TABLE>
45
<PAGE>
Acorn Family of Funds
>Financial Highlights
<TABLE>
<CAPTION>
Years
Acorn Fund ended 12/31,
- ----------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each period 1999 1998
<S> <C> <C>
Net Asset Value, beginning of year $16.85 $16.99
Income From Investment Operations
Net investment income .09 .04
Net realized and unrealized gain (loss) on investments, foreign currency and futures 5.22 .91
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations 5.31 .95
Less Distributions
Dividends from net investment income (0.09) (0.03)
Distributions from net realized and unrealized gains reportable for federal income taxes (3.54) (1.06)
- ----------------------------------------------------------------------------------------------------------------
Total distributions (3.63) (1.09)
- ----------------------------------------------------------------------------------------------------------------
Net Asset Value, end of year $18.53 $16.85
================================================================================================================
Total Return 33.4% 6.0%
Ratios/Supplemental Data
Ratio of expenses to average net assets .85% .84%
Ratio of net investment income to average net assets .49% .30%
Portfolio turnover rate 34% 24%
Net assets at end of period (in millions) $3,921 $3,549
Years
Acorn International ended 12/31,
- ----------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each period 1999 1998
Net Asset Value, beginning of period $20.82 $18.39
Income From Investment Operations
Net investment income (loss) .83 .17
Net realized and unrealized gain (loss) on investments 15.45 2.68
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations 16.28 2.85
Less Distributions
Dividends from net investment income (.22) (.15)
Distributions from net realized and unrealized gains reportable for federal income taxes (1.55) (.27)
- ----------------------------------------------------------------------------------------------------------------
Total distributions (1.77) (.42)
- ----------------------------------------------------------------------------------------------------------------
Net Asset Value, end of period $35.33 $20.82
================================================================================================================
Total Return (a) 79.2% 15.4%
Ratios/Supplemental Data
Ratio of expenses to average net assets 1.11% 1.12%
Ratio of net investment income to average net assets .12% .86%
Portfolio turnover rate 46% 37%
Net assets at end of period (in millions) $2,868 $1,725
(a) Total return is not annualized for periods less than one year.
* Annualized
Years
Acorn USA ended 12/31,
- ----------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each period 1999 1998
Net Asset Value, beginning of period $14.80 $15.12
Income From Investment Operations
Net investment gain (loss) (b) -- (.07)
Net realized and unrealized gain on investments 3.32 .87
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations 3.32 .80
- ----------------------------------------------------------------------------------------------------------------
Less Distributions
Dividends from net investment income -- --
Distributions from net realized and unrealized gains reportable for federal income taxes (1.37) (1.12)
- ----------------------------------------------------------------------------------------------------------------
Total distributions (1.37) (1.12)
- ----------------------------------------------------------------------------------------------------------------
Net Asset Value, end of period $16.75 $14.80
================================================================================================================
Total Return (c) 23.0% 5.8%
Ratios/Supplemental Data
Ratio of expenses to average net assets (a) 1.15% 1.20%
Ratio of net investment income (loss) to average net assets 0.00% (.42%)
Portfolio turnover rate 49% 42%
Net assets at end of period (in millions) $ 371 $ 281
</TABLE>
(a) In accordance with a requirement by the Securities and Exchange Commission,
the Acorn USA ratio reflects gross custodian fees. This ratio net of custodian
fees paid indirectly would have been 1.79% for the year ended December 31, 1996.
(b) Net investment income (loss) per share was based upon the average shares
outstanding during each period.
(c) Total return is not annualized for periods less than one year.
* Annualized
See accompanying notes to financial statements
46
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
$15.04 $13.60 $12.24 $13.95 $11.06 $ 9.32 $ 6.51 $ 8.58
.15 .09 .11 .06 .04 .07 .11 .12
3.57 2.93 2.42 (1.10) 3.50 2.16 2.95 (1.62)
- -------------------------------------------------------------------------
3.72 3.02 2.53 (1.04) 3.54 2.23 3.06 (1.50)
(0.16) (.11) (.09) (.11) (.06) (.08) (.10) (.13)
(1.61) (1.47) (1.08) (.56) (.59) (.41) (.15) (.44)
- -------------------------------------------------------------------------
(1.77) (1.58) (1.17) (.67) (.65) (.49) (.25) (.57)
- -------------------------------------------------------------------------
$16.99 $15.04 $13.60 $12.24 $13.95 $11.06 $ 9.32 $ 6.51
=========================================================================
25.0% 22.6% 20.8% (7.4%) 32.3% 24.2% 47.3% (17.5%)
.56% .57% .57% .62% .65% .67% .72% .82%
.75% .53% .89% .55% .30% .72% 1.30% 1.60%
32% 33% 29% 18% 20% 25% 25% 36%
$3,681 $2,842 $2,399 $1,983 $2,035 $1,449 $1,150 $ 767
<CAPTION>
Inception 9/23
through 12/31,
- ----------------------------------------------------------
1997 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
$19.61 $16.59 $15.24 $15.94 $10.69 10.00
.40 .13 .16 .07 -- (.03)
(.34) 3.29 1.20 (.67) 5.25 .72
- ----------------------------------------------------------
.06 3.42 1.36 (.60) 5.25 .69
(.38) (.12) -- -- -- --
(.90) (.28) (.01) (.10) -- --
- ----------------------------------------------------------
(1.28) (.40) (.01) (.10) -- --
- ----------------------------------------------------------
$18.39 $19.61 $16.59 $15.24 $15.94 $ 10.69
==========================================================
0.2% 20.7% 8.9% (3.8%) 49.1% 6.9%
1.19% 1.17% 1.22% 1.24% 1.21% 2.35%*
.58% .51% .90% 0.48% 0.06% (1.37%)*
39% 34% 26% 20% 19% 20%*
$1,623 $1,773 $1,276 $1,363 $ 907 $ 30
<CAPTION>
Inception 9/4
through 12/31,
- ---------------------
1997 1996
<S> <C>
$11.65 $10.00
(.07) (.02)
3.83 1.67
- ---------------------
3.76 1.65
- ---------------------
-- --
(.29) --
- ---------------------
(.29) --
- ---------------------
$15.12 $11.65
=====================
32.3% 16.5%
1.35% 1.85%*
(.49%) (.99%)*
33% 20%*
$ 185 $ 53
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
Year Inception 11/23
Acorn Twenty ended 12/31, through 12/31,
- ------------------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each year 1999 1998
<S> <C> <C>
Net Asset Value, beginning of period $10.71 $ 10.00
Income From Investment Operations
Net investment income (loss) (b) (.08) --
Net realized and unrealized gain on investments 3.21 .71
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.13 .71
- ------------------------------------------------------------------------------------------------------------------------
Less Distributions
Distributions from net realized and unrealized gains reportable for federal income
taxes (.14) --
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value, end of period $13.70 $ 10.71
- ------------------------------------------------------------------------------------------------------------------------
Total Return (d) 29.3% 7.1%
Ratios/Supplemental Data
Ratio of expenses to average net assets (a) (c) 1.37% 1.41%*
Ratio of net investment income (loss) to average net assets (c) (.62%) 0.22%*
Portfolio turnover rate 101% 173%*
Net assets at end of period (in millions) $ 68 $ 34
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) In accordance with a requirement by the Securities and Exchange
Commission, the Acorn Twenty ratio reflects total expenses prior to the
reduction of custodian fees for cash balances it maintains with the custodian
("custodian fees paid indirectly"). This ratio net of custodian fees paid
indirectly would have been 1.35% for the period ended December 31, 1998 and the
year ended December 31, 1999.
(b) Net investment income per share was based upon the average shares
outstanding during the period.
(c) Acorn Twenty was reimbursed by the Advisor for certain net expenses from
November 23, 1998 through December 31, 1999. Without the reimbursement, the
ratio of expenses (prior to custodian fees paid indirectly) to average net
assets and the ratio of net investment income to average net assets would have
been 1.83% and (.21%), respectively, for the period ended 12/31/98 and 1.41% and
(.66%), respectively, for the year ended 12/31/99.
(d) Total return is not annualized for periods less than one year.
*Annualized
<TABLE>
<CAPTION>
Year Inception 11/23
Acorn Foreign Forty ended 12/31, through 12/31,
- ----------------------------------------------------------------------------------------------------------------------------
For a share outstanding throughout each year 1999 1998
<S> <C> <C>
Net Asset Value, beginning of period $11.00 $ 10.00
Income From Investment Operations
Net investment loss (c) (.02) (.01)
Net realized and unrealized gain on investments 8.98 1.01
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations 8.96 1.00
- --------------------------------------------------------------------------------------------------------------------------
Less Distributions
Distributions from net realized and unrealized gains reportable for federal income taxes (.03) .00
- --------------------------------------------------------------------------------------------------------------------------
Net Asset Value, end of period $19.93 $ 11.00
- --------------------------------------------------------------------------------------------------------------------------
Total Return (d) 81.6% 10.0%
Ratios/Supplemental Data
Ratio of expenses to average net assets (a) (c) 1.48% 1.73%*
Ratio of net investment loss to average net assets (c) (.17)% (.78)%*
Portfolio turnover rate 60% 90%*
Net assets at end of period (in millions) $ 107 $ 16
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) In accordance with a requirement by the Securities and Exchange
Commission, the Acorn Foreign Forty ratio reflects total expenses prior to the
reduction of custodian fees for cash balances it maintains with the custodian
("custodian fees paid indirectly"). This ratio net of custodian fees paid
indirectly would have been 1.45% for the period ended December 31, 1998 and the
year ended December 31, 1999.
(b) Net investment loss per share was based upon the average shares
outstanding during the period.
(c) Acorn Foreign Forty was reimbursed by the Advisor for certain net expenses
from November 23, 1998 through December 31, 1999. Without the reimbursement, the
ratio of expenses (prior to custodian fees paid indirectly) to average net
assets and the ratio of net investment income to average net assets would have
been 2.70% and -1.75%, respectively, for the period ended 12/31/98 and 1.57% and
(.26%), respectively, for the year ended 12/31/99.
(d) Total return is not annualized for periods less than one year.
* Annualized
See accompanying notes to financial statements
48
<PAGE>
Acorn Family of Funds
>Notes to Financial Statements
1. Nature of Operations
Acorn Fund, Acorn International, Acorn USA, Acorn Twenty and Acorn Foreign Forty
(the "Funds") are series of Acorn Investment Trust (the "Trust"), an open-end
management investment company organized as a Massachusetts business trust. The
investment objective of each Fund is to seek long-term growth of capital.
2. Significant Accounting Policies
>Security valuation
Investments are stated at current value. Securities traded on securities
exchanges or in over-the-counter markets in which transaction prices are
reported are valued at the last sales price at the time of valuation. Securities
for which there are no reported sales on the valuation date are valued at the
mean of the latest bid and ask quotation or, if there is no ask quotation, at
the most recent bid quotation. Money market instruments having a maturity of 60
days or less from the valuation date are valued on an amortized cost basis.
Securities for which quotations are not available and any other assets are
valued at a fair value as determined in good faith by the Board of Trustees.
>Foreign currency translations
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
>Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Funds. Interest income is recorded on the
accrual basis and includes amortization of discounts on money market instruments
and long-term debt instruments when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis.
>Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results may differ from those estimates.
>Financial instruments
Each Fund may purchase or sell exchange-traded financial futures contracts,
which are contracts that obligate that Fund to make or take delivery of a
financial instrument or the cash value of a securities index at a specified
future date at a specified price. The Funds enter into such contracts to hedge
a portion of their portfolio. Gains and losses are reflected as "Net Realized
Gain (Loss) on Futures" in the Statements of Operations. Additionally, each
Fund may engage in portfolio hedging with respect to changes in currency
exchange rates by entering into forward foreign currency contracts to purchase
or sell foreign currencies. The Statements of Operations reflect gains and
losses as realized for closed forward foreign currency contracts and unrealized
for open contracts. A Fund bears the market risk that arises from changes in
the value of financial instruments and securities indices (futures contracts) or
from changes in foreign currency rates (forward foreign currency contracts) and
the credit risk should a counterparty fail to perform under such contracts.
None of the funds had futures contracts open at December 31, 1999. Acorn
International entered into forward contracts to sell foreign currency as
described below:
Acorn International
<TABLE>
<CAPTION>
Foreign Settlement U.S. Dollar Unrealized Loss
Amount (000) Currency Date Proceeds (000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
155,000 Hong Kong Dollar 1/10/00 $19,939 $ 439
5,260,000 Japanese Yen 3/10/00 $52,040 $1,512
------
Total Unrealized Loss $1,951
======
</TABLE>
Acorn USA, Acorn Twenty and Acorn Foreign Forty did not enter into any futures
or forward foreign currency contracts during the year ended December 31, 1999.
49
<PAGE>
Acorn Family of Funds
>Notes to Financial Statements
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange on each day the Exchange is open for trading by dividing the
total value of each Fund's investments and other assets, less liabilities, by
the respective number of Fund shares outstanding.
>Federal income taxes, dividends and distributions to shareholders
Each Fund has complied with the special provisions of the Internal Revenue Code
available to investment companies.
In accordance with the distribution requirements imposed on investment
companies, Acorn Fund, Acorn International and Acorn USA paid long-term capital
gain distributions in 1999 of $715,158,000, $135,249,000 and $27,669,000,
respectively, which was sufficient to allow each fund not to incur any income
tax. Acorn Twenty and Acorn Foreign Forty were not required to pay a long-term
capital gain distribution.
Acorn Fund, Acorn International and Acorn Foreign Forty have elected to mark-
to-market their investments in Passive Foreign Investment Companies ("PFICs")
for Federal income tax purposes. A summary of transactions relating to PFICs for
Acorn International is follows:
<TABLE>
<CAPTION>
Acorn International (000)
- -----------------------------------------------------------------------------
<S> <C>
Cumulative net unrealized appreciation
recognized in prior years at December 31, 1998 $ 311
Unrealized appreciation recognized through
December 31, 1999 66,039
Cumulative net unrealized appreciation recognized
in prior years on PFICs sold through
December 31, 1999 (640)
-------
Cumulative net unrealized appreciation recognized
in prior years at December 31, 1999 65,710
-------
A summary of transactions relating to PFICs during
1999 follows:
Unrealized appreciation recognized 66,039
Gain on the sale of PFICs classified as
ordinary income 2,710
</TABLE>
At December 31, 1999, Acorn Fund had no cumulative net unrealized appreciation
on PFICs.
At December 31, 1999, Acorn Foreign Forty had cumulative net unrealized
appreciation on PFICs of $305,000, of which $286,000 was recognized in 1999.
Distributions relating to PFICs are treated as ordinary income for Federal
income tax purposes.
Dividends payable to shareholders are recorded by the Funds on the ex-dividend
date.
Reclassifications have been made in 1999 for Acorn Fund, Acorn International
and Acorn USA in the accompanying analysis of net assets from accumulated net
realized gain on sale of investments to paid-in-capital of $95,281,000,
$19,806,000 and $4,308,000, respectively. A reclassification was also made in
Acorn International of $1,526,000 from undistributed net income to paid-in-
capital. All reclassifications were made to reflect differences between
financial reporting and income tax basis and had no impact on net asset value.
3. Transactions with Affiliates
The Funds' investment advisor, Wanger Asset Management, L.P. ("WAM") furnishes
continuing investment supervision to the Funds and is responsible for the
overall management of the Funds' business affairs.
Under the Funds' investment management agreement, fees are accrued daily and
paid monthly to WAM at the annual rates shown in the table below for each fund.
Acorn Fund
- ------------------------------------------------
Net asset value:
For the first $700 million .75%
Next $1.3 billion .70%
Net assets in excess of $2 billion .65%
Acorn International
- ------------------------------------------------
Net asset value:
For the first $100 million 1.20%
Next $400 million .95%
Net assets in excess of $500 million .75%
Acorn USA
- ------------------------------------------------
Net asset value:
For the first $200 million .95%
Net assets in excess of $200 million .90%
Acorn Twenty
- ------------------------------------------------
On average daily net assets .90%
Acorn Foreign Forty
- ------------------------------------------------
On average daily net assets .95%
WAM has also contracted to provide administrative services to each Fund at an
annual rate of .05% of average daily net assets.
Certain officers and trustees of the Trust are also principals of WAM. The
Trust makes no direct payments to its officers and trustees who are affiliated
with WAM. Acorn Fund paid trustees' fees and expenses of the following:
50
<PAGE>
- -------------------------------------------------
(in thousands) 1999 1998
Acorn Fund $ 293 $ 211
Acorn International 150 94
Acorn USA 24 11
Acorn Twenty 4 --
Acorn Foreign Forty 2 --
-----------------
$ 473 $ 316
-----------------
WAM advanced Acorn USA $107,000 in connection with the organization and initial
registration of the Fund. These costs are being amortized and reimbursed to WAM
over the period September 1996 through August 2001.
WAM Brokerage Services, L.L.C., a wholly owned subsidiary of WAM, is the
distributor of the Funds' shares and receives no compensation for its services.
4. Borrowing Arrangements
The trust participates in a $250,000,000 credit facility which was entered into
to facilitate portfolio liquidity. No amounts were borrowed under this facility
during 1999.
5. Fund Share Transactions
Proceeds and payments on Fund shares as shown in the Statements of Changes in
Net Assets are in respect of the following numbers of shares:
Acorn Fund
- ---------------------------------------------------------------------------
(in thousands) 1999 1998
Shares sold 19,615 28,471
Shares issued in reinvestment of
dividend and capital gain distributions 33,973 12,814
---------------------
53,588 41,285
Less shares redeemed 52,676 47,224
---------------------
Net increase (decrease) in
Shares outstanding 912 (5,939)
===========================================================================
Acorn International
- ---------------------------------------------------------------------------
(in thousands) 1999 1998
Shares sold 25,580 19,818
Shares issued in reinvestment of
dividend and capital gain distributions 4,028 1,540
---------------------
29,608 21,358
Less shares redeemed 31,304 26,757
---------------------
Net decrease in
shares outstanding (1,696) (5,399)
===========================================================================
Acorn USA
- ---------------------------------------------------------------------------
(in thousands) 1999 1998
Shares sold 7,922 11,062
Shares isued in reinvestment of
dividend and capital gain distributions 1,645 1,270
---------------------
9,567 12,332
Less shares redeemed 6,383 5,558
---------------------
Net increase in shares outstanding 3,184 6,774
===========================================================================
Acorn Twenty
- ---------------------------------------------------------------------------
(in thousands) 1999 1998
Shares sold 2,862 3,176
Shares issued in reinvestment of
dividend and capital gain distributions 51 --
---------------------
2,913 3,176
Less shares redeemed 1,067 26
---------------------
Net increase in shares outstanding 1,846 3,150
===========================================================================
Acorn Foreign Forty
- ---------------------------------------------------------------------------
(in thousands) 1999 1998
Shares sold 4,836 1,453
Shares issued in reinvestment of
dividend and capital gain distributions 7 --
---------------------
4,843 1,453
Less shares redeemed 891 18
---------------------
Net increase in shares outstanding 3,952 1,435
===========================================================================
6. Investment Transactions
Investment Transactions (excluding money market instruments) for each of the
Funds are as follows:
Acorn Fund
- ---------------------------------------------------------------------------
(in thousands) 1999 1998
Investment securities:
Purchases $1,092,137 $ 830,390
Proceeds from sales 1,809,918 1,048,096
===========================================================================
Acorn International
- ---------------------------------------------------------------------------
(in thousands) 1999 1998
Investment securities:
Purchases $ 846,014 $ 570,304
Proceeds from sales 844,062 709,630
===========================================================================
Acorn USA
- ---------------------------------------------------------------------------
(in thousands) 1999 1998
Investment securities:
Purchases $ 138,244 $ 178,181
Proceeds from sales 135,001 95,639
===========================================================================
Acorn Twenty
- ---------------------------------------------------------------------------
(in thousands) 1999 1998
Investment securities:
Purchases $ 71,463 $ 34,025
Proceeds from sales 53,710 4,483
===========================================================================
Acorn Foreign Forty
- ---------------------------------------------------------------------------
(in thousands) 1999 1998
Investment securities:
Purchases $ 76,252 $ 13,984
Proceeds from sales 26,238 974
===========================================================================
51
<PAGE>
The Acorn
- ------------------------
Family of Funds
Special Notice
At a special meeting on September 28, 1999, shareholders of each of the Funds
voted to elect trustees and ratified the selection of Ernst & Young LLP as each
Fund's independent public accountants. In addition, the shareholders of Acorn
Fund approved changes in the fund's fundamental investment restrictions relating
to borrowing, pledging securities, making loans and potentially conflicting
investments. The shareholders of Acorn International Fund approved a change in
the fund's fundamental investment restriction relating to borrowing. The record
date share position of each Fund and the total share position voted of each Fund
were respectively: Acorn Fund 181,818,414.034 and 109,108,700.395; Acorn
International 75,107,534.215 and 40,338,122.803; Acorn USA 19,659,364.098 and
11,684,245.812; Acorn Twenty 4,927,513.538 and 3,177,688.592; and Acorn Foreign
Forty 3,725,825.422 and 2,395,620.278.
The outcome of the votes were as follows:
A. The shareholders of the Funds elected the following individuals to serve on
the Board of Trustees:
<TABLE>
<CAPTION>
Trustees For Against Abstentions
<S> <C> <C> <C>
Irving B. Harris 163,378,454.609 0 3,325,923.271
Ralph Wanger 164,345,992.521 0 2,358,385.359
James H. Lorie 164,061,574.524 0 2,642,803.356
Leo A. Guthart 163,666,160.185 0 3,038,217.695
Jerome Kahn, Jr. 164,403,059.047 0 2,301,318.833
Steven N. Kaplan 163,719,389.859 0 2,984,988.021
David C. Kleinman 163,688,990.045 0 3,015,387.835
Charles P. McQuaid 164,435,251.767 0 2,269,126.113
Roger S. Meier 164,237,804.009 0 2,466,573.871
Allan B. Muchin 163,644,858.679 0 3,059,519.201
Robert E. Nason 163,695,618.878 0 3,008,759.002
Katherine Schipper 163,690,662.247 0 3,013,715.633
</TABLE>
B. The shareholders of the Funds also voted on the following matters:
<TABLE>
<CAPTION>
For Against Abstentions Broker Non-
Votes
<S> <C> <C> <C> <C>
Acorn Fund
(a) Changes in Fundamental Policies
Elimination of restriction regarding
ownership of securities of issuers in
which affiliates have invested 94,505,322.836 5,320,314.152 3,584,052.407 5,699,011.000
Amendment of restriction regarding
borrowing 92,982,636.813 6,745,187.615 3,681,864.967 5,699,011.000
Amendment of restriction regarding
pledging of assets 92,714,704.717 6,855,170.904 3,839,813.774 5,699,011.000
Amendment of restriction regarding
loans 92,597,514.287 7,078,660.830 3,733,514.278 5,699,011.000
(b) Ratification of Ernst & Young 106,497,904.924 943,541.308 1,667,254.163
Acorn International
(a) Change in Fundamental Policy
Amendment of restriction regarding
borrowing 33,641,050.963 2,065,722.787 717,735.053 3,913,614.000
(b) Ratification of Ernst & Young 39,360,825.054 402,086.702 575,211.047
Acorn USA
Ratification of Ernst & Young 11,420,978.579 68,795.912 194,471.321
Acorn Twenty
Ratification of Ernst & Young 3,088,510.310 40,201.622 48,976.660
Acorn Foreign Forty
Ratification of Ernst & Young 2,359,957.051 13,709.837 21,953.390
</TABLE>
52
<PAGE>
Acorn Fund
Acorn International
Acorn U.S.A.
Acorn Twenty
Acorn Foreign Forty
Supplement dated January 4, 2000
to Prospectus dated May 1, 1999 of Acorn Investment Trust
As of December 31, 1999, Mr. Roger Edgley is the Co-portfolio manager, with
Marcel Houtzager, of Acorn Foreign Forty. Mr. Edgley joined Wanger Asset
Management ("WAM") as an analyst in 1994, and was named Managing Director and
Director of Research of WAM in 1998. Before joining WAM, Mr. Edgley was an
analyst at Crosby Securities. He is a CFA, and earned his BSc from the
University of Hertfordshire, his MA from the University of Sussex, and his MSc
from the London School of Economics.
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Trustees Officers Investment Advisor
<S> <C> <C>
Irving B. Harris Ralph Wanger Wanger Asset Management, L.P.
Chairman President 227 West Monroe Street, Suite 3000
James H. Lorie Margaret M. Forster Chicago, Illinois 60606
Vice Chairman Vice President 1-800-922-6769
Leo A. Guthart Marcel P. Houtzager
Jerome Kahn, Jr. Vice President Distributor
Steven N. Kaplan Kenneth A. Kalina WAM Brokerage Services, L.L.C.
David C. Kleinman Assistant Treasurer P.O. Box 8502
Charles P. McQuaid Bruce H. Lauer Boston, Massachusetts 02266-8502
Roger S. Meier Vice President and Treasurer
Allan B. Muchin Charles P. McQuaid Transfer Agent, Dividend Disbursing Agent and Custodian
Robert E. Nason Senior Vice President State Street Bank and Trust Company
Katherine Schipper Robert A. Mohn Attention: Acorn Family of Funds
Ralph Wanger Vice President P.O. Box 8502
John H. Park Boston, Massachusetts 02266-8502
Vice President 1-800-962-1585
Steven A. Radis
Vice President and Secretary Legal Counsel
Mark H. Yost Bell, Boyd & Lloyd, LLC
Vice President Chicago, Illinois
Leah J. Zell
Vice President Independent Auditors
Ernst & Young LLP
Chicago, Illinois
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This report, including the audited 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.
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[PICTURE APPERARS HERE]
The Acorn
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Family of Funds FIRSTCLASS
PRE-SORT
WAM Brokerage Services, L.L.C. U.S. POSTAGE
P.O. Box 8502 PAID
Boston, MA 02266-8502 CHICAGO,IL
PERMIT NO. 1200
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