CURRENT INCOME SHARES, INC.
SEMI-ANNUAL REPORT
For the Six Months Ended
June 30, 2000
<PAGE>
CURRENT INCOME SHARES, INC.
August 15, 2000
Dear Shareholders:
During the six months ended June 30, 2000, we paid total dividends of $0.40 per
share, consisting of dividends per share of $0.20 per quarter. The net asset
value per share at June 30, 2000 was $12.07, down from $12.23 at December 31,
1999. Including dividends, the total investment return for Current Income Shares
based on net asset value was 2.02% for the six months ended June 30, 2000. The
total return based on market value was 6.01% for the same period.
Corporate bonds, which make up about 86.5% of the portfolio, underperformed
Treasury bonds during the first half of 2000. The reason was primarily due to an
unusual demand for Treasury bonds brought on by the federal budget surplus,
which led the U.S. Treasury to announce they would retire bonds early as well as
issue fewer new bonds in the future. Because of the demand created by bonds
being retired early as well as the prospect of a lower supply of future issues,
most Treasury notes and bonds appreciated during the period, driving down
yields. For example, yields on the five-year note fell 16 basis points, while
yields on the ten-year and 30-year note fell 42 and 58 basis points,
respectively (one basis point equals 0.01%). This is highly unusual in a period
in which the Federal Reserve Board raised short-term rates 100 basis points,
from 5.50% to 6.50%.
Another reason that corporate bonds underperformed Treasury securities was
investor concerns about the Fed's activities. With the U.S. economy growing at a
7.3% annual rate in the fourth quarter of 1999 and 5.4% in the first quarter of
2000, the Fed began an aggressive campaign to raise short-term interest rates in
order to slow the economy and keep inflation at bay. In doing so, there was a
fear among some investors that the Fed would overshoot the mark and throw the
economy into a recession. This "hard landing" scenario would make corporate
bonds more risky from a credit standpoint as corporate profits declined.
1
<PAGE>
During the six-month period, the yield spread on corporates over Treasury
securities widened from 111 basis points on December 31, 1999 to 159 basis
points on June 30, 2000. The total average return for U.S. Treasury securities
of all maturities was 5.37%, while corporate bonds gained only 2.68%.
Because the federal budget surplus estimates continued to increase, it appeared
that the Treasury bond buyback program would be in place for some time. At the
beginning of 1999, the fiscal year 2000 budget surplus was estimated to be $120
billion. It is currently estimated to be $210 billion, and could rise as high as
$240 billion by the time the fiscal year ends on September 30, 2000. Total
publicly held U.S. Treasury debt has fallen from a peak of $3.8 trillion to
about $3.45 trillion currently. There have been discussions about eliminating
the one-year Treasury bill and perhaps even the 30-year bond, which was first
issued in 1977.
Another reason that corporate bond yield spreads have widened is because there
has been some deterioration in credit quality among issuers. This may seem
surprising given the decade-long economic boom in the U.S. However, most issuers
of corporate debt are "old economy" companies in industries such as autos,
chemicals, manufacturing, paper and so on. By and large, the stock prices of
these companies have not kept up with other sectors of the economy such as
technology and services. Some corporate managements have elected to use the cash
on the balance sheet to repurchase shares of stock at low prices. This reduces
the company's equity in relation to its debt, which often leads credit rating
agencies to downgrade bond issues because of the increased leverage.
As a result, we believe that it is important to maintain strong credit quality
in Current Income Shares. As of June 30, 2000, the portfolio's average credit
quality was A-, with 41% of the portfolio receiving an A- rating or better.
About 43% of the portfolio was rated BBB, while 13% was rated BB. During the
period, positions were added in K-Mart, Corp., Qwest Communications
International, Inc., Federal National Mortgage Association and Korea Development
Bank while bonds issued by FleetBoston Financial Corp., Cable & Wireless,
Westvaco Paper and WorldCom, Inc. were either sold or called.
By raising short-term interest rates a total of 175 basis points between June
1999 and May 2000, was the Fed too aggressive? A number of indicators show that
the economy has in fact slowed, but not dangerously so. For example, job growth
was a still-healthy 177,000 per month in the first half of 2000, down from
199,000 per month in 1999. Despite rising oil prices, inflation is still under
control, with the Consumer Price Index advancing at about 3% in 2000. Although
recent data indicate that average hourly earnings are rising 3.6%, manufacturing
unit labor costs are still declining due to productivity advances. Ten years
into an economic expansion, that is truly remarkable.
2
<PAGE>
Corporate bond yield spreads will likely stay wide due to the continuing
Treasury buyback program. However, we believe that the Federal Reserve Board is
approaching the end of its tightening campaign. With a slower economy, long-term
yields should stabilize or decline between now and the end of the year. In the
meantime, investment-grade corporate bonds routinely offer investors more than
8% in yield, which we believe is quite attractive given 3% inflation.
On the following pages, you will find the complete portfolio of investments held
by Current Income Shares on June 30, 2000 together with the financial statements
for the period.
Thank you for investing in Current Income Shares, Inc.
Sincerely,
/s/ Greg Knopf
Gregory Knopf, President
3
<PAGE>
CURRENT INCOME SHARES, INC.
SCHEDULE OF INVESTMENTS at June 30, 2000 (Unaudited)
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
MORTGAGE BACKED OBLIGATIONS: 8.6%
$2,764,284 Government National Mortgage Association,
Pool #439463, 8.000%, 12/15/2026 $ 2,801,348
1,000,000 Federal National Mortgage Association,
8.000%, 06/01/2030 999,688
-----------
TOTAL MORTGAGE BACKED OBLIGATIONS
(cost $3,815,786) 3,801,036
-----------
U.S. TREASURY OBLIGATION: 2.6%
1,140,000 U.S. Treasury Bond, 6.375%, 08/15/2027
(cost $1,170,276) 1,172,419
-----------
CORPORATE BONDS: 86.5%
ASSET BACKED: 0.3%
121,123 Chase Manhattan Grantor Trust, 6.610%, 09/15/2002 120,950
-----------
AUTO RENT & LEASE: 1.9%
1,000,000 Hertz Corp., 7.000%, 01/15/2028 863,187
-----------
BANKS: 10.7%
1,500,000 Bankers Trust Corp., 7.250%, 01/15/2003 1,485,362
500,000 FleetBoston Financial Corp., 7.125%, 04/15/2006 483,155
1,000,000 Golden State Escrow Corp., 7.000%, 08/01/2003 927,280
1,000,000 Korea Development Bank, 7.130%, 04/22/2004 966,942
1,000,000 Wells Fargo Capital, 7.960%, 12/15/2026 891,428
-----------
4,754,167
-----------
CABLE & SATELITE TELEVISION: 4.6%
500,000 Continental Cablevision, Inc., 9.500%, 08/01/2013 541,556
1,000,000 News America Holdings, Inc., 7.750%, 01/01/2024 909,067
600,000 Time Warner, Inc., 7.480%, 01/15/2008 586,108
-----------
2,036,731
-----------
DIVERSIFIED OPERATIONS: 1.2%
535,000 Seagram Co. Ltd., 6.500%, 04/01/2003 519,087
-----------
ELECTRIC UTILITIES: 14.3%
1,000,000 Chugach Electric Assn., Inc., 9.140%, 03/15/2022 1,032,832
1,000,000 Cleveland Electric Illuminating Co./
Toledo Edison Co., 7.670%, 07/01/2004 991,455
2,000,000 Houston Industries, Inc., 9.375%, 06/01/2001 2,034,536
1,250,000 Nevada Power Co., 6.200%, 04/15/2004 1,188,588
1,250,000 Orange & Rockland Utilities, Inc., 7.000%, 03/01/2029 1,102,936
-----------
6,350,347
-----------
ENERGY: 5.6%
1,000,000 Union Oil Co. of California, 9.125%, 02/15/2006 1,056,065
1,500,000 Union Pacific Resources Group, Inc., 7.000%, 10/15/2006 1,437,176
-----------
2,493,241
-----------
GAS: 6.5%
1,000,000 Coastal Corp., 9.625%, 05/15/2012 1,134,235
1,000,000 KN Energy, Inc., 7.250%, 03/01/2028 902,549
1,000,000 Phillips Petroleum Co., 7.125%, 03/15/2028 843,589
-----------
2,880,373
-----------
4
<PAGE>
CURRENT INCOME SHARES, INC.
SCHEDULE OF INVESTMENTS at June 30, 2000 (Unaudited) - (Continued)
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
INSURANCE: 1.6%
$1,000,000 Conseco Inc., 9.000%, 10/15/2006 $ 700,000
-----------
MANUFACTURING: 6.5%
250,000 Georgia Pacific Group, 9.875%, 11/01/2021 255,337
1,500,000 Lockheed Martin Corp., 7.700%, 06/15/2008 1,472,266
1,250,000 Owens-Illinois Inc., 8.100%, 05/15/2007 1,154,785
-----------
2,882,388
-----------
MORTGAGE BANKERS: 1.9%
950,641 Prudential Home Mortgage, 7.000%, 02/15/2026 855,454
-----------
1,000,000 Kmart Corp., 8.375%, 12/01/2004 954,522
1,000,000 Safeway, Inc., 7.450%, 09/15/2027 930,955
1,500,000 Staples, Inc., 7.125%, 08/15/2007 1,398,729
-----------
3,284,206
-----------
SECURITIES BROKER/DEALER: 2.3%
1,000,000 Lehman Brothers Holdings, Inc., 8.750%, 05/15/2002 1,018,427
-----------
SOVEREIGN & SUPRANATIONAL: 5.4%
1,100,000 Province of Nova Scotia, 8.750%, 04/01/2022 1,217,502
1,000,000 Province of Saskatchewan, 9.375%, 12/15/2020 1,154,370
-----------
2,371,872
-----------
TELECOMMUNICATIONS: 5.4%
1,100,000 Qwest Communications International, Inc.,
7.500%, 11/01/2008 1,067,636
900,000 TCI Communications, Inc., 7.125%, 02/15/2028 816,518
500,000 WorldCom, Inc., 7.750%, 04/01/2007 499,928
-----------
2,384,082
-----------
TRANSPORTATION: 10.9%
1,500,000 AMR Corp., 10.000%, 04/15/2021 1,532,169
875,254 Continental Airlines, Inc., 6.748%, 03/15/2017 782,809
1,498,819 General Motors Corp., 8.950%, 07/02/2009 1,546,077
1,000,000 Norfolk Southern Corp., 7.050%, 05/01/2037 978,140
-----------
4,839,195
-----------
TOTAL CORPORATE BONDS
(cost $40,196,589) 38,353,707
-----------
CASH EQUIVALENTS: 0.3%
MONEY MARKET INVESTMENTS: 0.3%
115,831 Federated Prime Money Market, 5.680%
(cost $115,831) 115,831
-----------
TOTAL INVESTMENTS IN
SECURITIES
(cost $45,298,482+): 98.0% 43,442,993
Other Assets less Liabilities: 2.0% 879,218
-----------
NET ASSETS: 100.0% $44,322,211
-----------
+ At June 30, 2000, the basis of investments for federal income tax purposes
was the same as their cost for financial reporting purposes. Unrealized
appreciation and depreciation were as follows:
Gross unrealized appreciation $ 414,452
Gross unrealized depreciation (2,269,941)
------------
Net unrealized depreciation $ (1,855,489)
============
See accompanying Notes to Financial Statements.
5
<PAGE>
CURRENT INCOME SHARES, INC.
STATEMENTS OF ASSETS AND LIABILITIES at June 30, 2000 (Unaudited)
ASSETS
Investments in securities, at market value (cost $45,298,482) $ 43,442,993
Receivables:
Interest .................................................. 903,802
Prepaid expenses and other assets ........................... 5,226
------------
Total assets ............................................ 44,352,021
------------
LIABILITIES
Payables:
Due to adviser .............................................. 10,806
Administration fees ......................................... 6,287
Custody fees ................................................ 1,024
Accrued expenses .............................................. 11,693
------------
Total liabilities ......................................... 29,810
------------
NET ASSETS .................................................... $ 44,322,211
============
NET ASSET VALUE PER COMMON SHARE
($44,322,211 / 3,673,334 shares outstanding) .................. $ 12.07
============
COMPONENTS OF NET ASSETS
Common shares ($1.00 par value with 25,000,000 shares
authorized, 3,673,334 shares issued and outstanding) ...... $ 3,673,334
Capital ..................................................... 42,977,827
Accumulated net investment income ........................... 113,860
Accumulated net realized loss on investments ................ (587,321)
Net unrealized depreciation on investments .................. (1,855,489)
------------
Net assets ................................................ $ 44,322,211
============
See accompanying Notes to Financial Statements.
6
<PAGE>
CURRENT INCOME SHARES, INC.
STATEMENT OF OPERATIONS For the Six Months Ended June 30, 2000 (Unaudited)
NET INVESTMENT INCOME
Income
Interest .................................................. $ 1,795,889
Expenses
Advisory fees .......................................... 81,250
Administration fees .................................... 21,917
Custody fees ........................................... 2,464
Fund accounting fees ................................... 7,306
Transfer agent fees .................................... 19,706
Registration expense ................................... 1,500
Audit fees ............................................. 14,497
Reports to shareholders ................................ 17,511
Director fees and expenses ............................. 19,559
Legal fees ............................................. 30,012
Miscellaneous .......................................... 2,156
Insurance expense ...................................... 2,208
-----------
Total expenses ...................................... 220,086
-----------
NET INVESTMENT INCOME ............................ 1,575,803
-----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized loss on investments ............................ (75,395)
Net unrealized depreciation on investments .................. (637,004)
-----------
Net realized and unrealized loss on investments ........... (712,399)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .... $ 863,404
===========
See accompanying Notes to Financial Statements.
7
<PAGE>
CURRENT INCOME SHARES, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 2000# December 31, 1999
-------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment income .................... $ 1,575,803 $ 3,018,901
Net realized loss on investments .......... (75,395) (206,277)
Net unrealized depreciation on investments (637,004) (4,380,464)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ............ 863,404 (1,567,840)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net realized income .................. (1,469,334) (3,012,134)
------------ ------------
TOTAL DECREASE IN NET ASSETS ........... (605,930) (4,579,974)
NET ASSETS
Beginning of period ....................... 44,928,141 49,508,115
------------ ------------
END OF PERIOD ............................. $ 44,322,211 $ 44,928,141
============ ============
Accumulated net investment income ............ $ 113,860 $ 7,391
============ ============
</TABLE>
----------
# Unaudited
See accompanying Notes to Financial Statements.
8
<PAGE>
CURRENT INCOME SHARES, INC.
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period
<TABLE>
<CAPTION>
Year Ended December 31,
Six Months Ended ------------------------------------------------------------
June 30, 2000# 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $ 12.23 $ 13.48 $ 13.40 $ 13.05 $ 13.64 $ 12.45
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............. 0.43 0.82 0.83 0.85 0.83 0.88
Net realized and unrealized
gain (loss) on investments ....... (0.19) (1.25) 0.08 0.35 (0.54) 1.79
-------- -------- -------- -------- -------- --------
Total from investment operations ..... 0.24 (0.43) 0.91 1.20 0.29 2.67
-------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From net investment income ......... (0.40) (0.82) (0.83) (0.85) (0.88) (1.48)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ....... $ 12.07 $ 12.23 $ 13.48 $ 13.40 $ 13.05 $ 13.64
======== ======== ======== ======== ======== ========
Market value, end of period .......... $ 10.188 $ 10.000 $ 12.313 $ 12.188 $ 11.375 $ 11.875
Total investment return+ ............. 6.01%* (12.44%) 8.05% 15.33% 3.54% 22.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions) $ 44.3 $ 44.9 $ 49.5 $ 49.2 $ 47.9 $ 50.1
Ratio of expenses to average
net assets ....................... 1.00%** 0.93% 0.91% 0.95% 1.00% 0.90%
Ratio of net investment income
to average net assets ............ 7.1%** 6.4% 6.2% 6.5% 6.3% 6.6%
Portfolio turnover rate ............ 9.28%* 18.82% 13.23% 52.10% 62.86% 118.52%
</TABLE>
----------
# Unaudited
* Not annualized
** Annualized
+ Total investment return based on market value and does not reflect
brokerage commissions.
See accompanying Notes to Financial Statements.
9
<PAGE>
CURRENT INCOME SHARES, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - ORGANIZATION
Current Income Shares, Inc. (the "Company") is registered under the
Investment Act of 1940, as amended, as a diversified, closed-end management
investment company. The Company was incorporated on November 15, 1972, and
commenced operations on March 27, 1973. The primary investment objective of the
Company is to seek a high level of current income for its shareholders
consistent with investment in a diversified portfolio in which marketable
securities considered by management to be of high quality will predominate. To a
lesser extent, the Company may also invest in other debt securities and in
certain equities.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Company. These policies are in conformity with generally
accepted accounting principles.
A. SECURITY VALUATION. Securities listed or traded on a national
securities exchange are valued at the last reported sales price at the
close of regular trading on each day that the exchanges are open for
trading; securities traded in the over-the-counter market and listed
securities for which no sales were reported on that date are valued at
the most recent bid price.
B. FEDERAL INCOME TAXES. The Company intends to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income and
net capital gains to its shareholders. Therefore, no federal income
tax provision is required.
C. SECURITY TRANSACTIONS, INTEREST INCOME AND DISTRIBUTIONS. Security
transactions are accounted for on the trade date. Distributions to
shareholders are recorded on the ex-dividend date and interest income
is recorded on the accrual basis. Purchased discounts and premiums on
securities held are accreted or amortized to interest income over the
life of each security using a method which approximates the effective
interest method. Realized gains and losses are computed using the
specific cost of the securities sold.
D. 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 reported
amounts of assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
10
<PAGE>
CURRENT INCOME SHARES, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
HighMark Capital Management, Inc., (the "Adviser") a subsidiary of
Union-BanCal Corp., provides the Company with investment management services
under an Investment Advisory Agreement. The Adviser furnishes all investment
advice, office space, facilities, and most of the personnel needed by the
Company. As compensation for its advisory services, the Adviser is entitled to a
monthly fee at the annual rate of 0.30% based upon the average daily net assets
of the Company. Prior to March 1, 2000, the Adviser received 0.50% of the
Company's average daily net assets for management and advisory services. For the
six months ended June 30, 2000, the Company paid $81,250 to the Adviser.
Shareholders approved the amended and restated investment advisory agreement
between the Company and the Adviser at a shareholder meeting held on May 11,
2000. In addition, included in advisory fees are payments for administration and
fund accounting of $11,043 and $3,681 respectively, for the period from January
1 to February 29, 2000.
Union Bank of California, N.A. acts as custodian ("the Custodian") for the
Company. Fees for the custodian are being paid on the basis of net assets of the
Company.
Investment Company Administration, L.L.C. (the "Administrator") acts as the
Company's administrator under an Administration Agreement dated March 1, 2000.
The Administrator prepares various federal and state regulatory filings, reports
and returns for the Company; prepares reports and materials to be supplied to
the trustees; monitors the activities of the Company's custodian, transfer agent
and accountants; coordinates the preparation and payment of Company expenses and
reviews the Company's expense accruals. For its services, the Administrator
receives a monthly fee at the annual rate of 0.15% based upon the average net
assets of the Company. For the period from March 1, 2000 to June 30, 2000, the
Fund incurred $21,917 in Administration fees. Services provided by the
Administrator were provided by the Adviser prior to March 1, 2000.
Computershare Investor Services, L.L.C., (the "Agent") acts as the Transfer
Agent and provides Dividend Reinvestment Plan (the "Plan") services to the
Company.
11
<PAGE>
CURRENT INCOME SHARES, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
NOTE 4 - PURCHASES AND SALES OF SECURITIES
The cost of purchases and the proceeds from the sale of securities,
excluding U.S. Government Obligations and short-term investments, for the six
months ended June 30, 2000, were $3,795,142 and $4,042,510, respectively. The
cost of purchases from U.S. Government Obligations were $999,688.
The Company had capital loss carryforwards at June 30, 2000, that can be
used to offset future capital gains.
Expiring December 31,
---------------------------------
2004 2005 2007
---- ---- ----
Capital Loss Carryovers $208,907 $96,836 $206,276
NOTE 5 - UNAUDITED QUARTERLY RESULTS OF OPERATIONS
The following is a summary of unaudited quarterly results of operations:
Net Realized and
Distributed Net Unrealized Gain (Loss)
Investment Income On Investment
Investment ------------------ ----------------------
Income Amount Per Share Amount Per Share
------ ------ --------- ------ ---------
Three months ended:
March 31, 2000 $713,288 $734,667 $0.20 $ (16,035) $(0.01)
June 30, 2000 862,515 734,667 0.20 (696,364) (0.18)
March 31, 1999 $751,233 $734,667 $0.20 $(1,574,150) $(0.43)
June 30, 1999 749,565 734,667 0.20 (1,498,065) (0.41)
September 30, 1999 758,851 734,667 0.20 (570,902) (0.15)
December 31, 1999 759,252 808,133 0.22 (943,624) (0.26)
March 31, 1998 $862,370 $734,667 $0.20 $ (50,337) $(0.01)
June 30, 1998 871,040 734,667 0.20 400,293 0.11
September 30, 1998 885,570 771,400 0.21 1,204,096 0.33
December 31, 1998 883,192 808,134 0.22 (1,273,797) (0.35)
NOTE 6 - DIVIDEND REINVESTMENT PLAN
The Company maintains a Dividend Reinvestment Plan (the "Plan") in which
shareholders may participate. The Plan is offered through Computershare Investor
Services, L.L.C. (the "Agent"). Under the Plan, the Agent uses dividends and
other cash distributions from the Company to purchase additional shares of
Company common stock in the open market for Plan participants. Participants may
also make certain cash contributions to the Plan. Further information regarding
the Plan may be obtained in writing to the Agent at: Computershare Investor
Services, L.L.C., 311 West Monroe Street (11th Floor), Chicago, IL 60606, or
calling (877) 588-4147.
12
<PAGE>
CURRENT INCOME SHARES, INC.
DIRECTORS AND OFFICERS
WILLARD H. ALTMAN, Director
CLARK R. GATES, Director
KATHLEEN KELLOGG, Director
MICHAEL L. NOEL, Director
ROBERT M. WHITLER, Director
R. GREGORY KNOPF, President
E. JACK MONTGOMERY, Vice President and Portfolio Manager
DENISE LEWIS, Treasurer
RITA DAM, Secretary
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
NYSE SYMBOL
"CUR"
<PAGE>
Adviser
HIGHMARK CAPITAL MANAGEMENT, INC.
475 Sansome Street. 14th Floor
San Francisco, CA 94111
Company Mailing Address
CURRENT INCOME SHARES, INC.
445 S. Figueroa St., Suite 306
Los Angeles, CA 90071 (888) 465-2825
Custodian
UNION BANK OF CALIFORNIA
475 Sansome Street. 15th Floor
San Francisco, CA 94111
Transfer Agent
COMPUTERSHARE INVESTOR SERVICES, L.L.C.
311 W. Monroe St., 11th Floor
Chicago, IL 60606
Legal Counsel
ROY W. ADAMS, JR., ESQ.
1040 Country Club Drive, Suite 135
Moraga, CA 94556
This report is intended for the shareholders of the Fund and may not be used as
sales literature.
Past performance results shown in this report should not be considered a
representation of future performance. Share price and returns will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Statements and other information herein are dated and are subject to change.
