<PAGE>
LETTER TO SHAREHOLDERS
THE INVESTMENT ENVIRONMENT:
Equity markets recovered substantially in the fourth quarter of 1998 and into
the first quarter of 1999. Fears of global recession and the potential for
severe dislocation in the financial markets all but disappeared in the face of
continued strong growth in the United States and stabilization of the economies
of Asia and Latin America.
STONEBRIDGE GROWTH FUND:
For the six months ended April 30, 1999, portfolio turnover increased
substantially over the same period in fiscal year 1998. The activity is a
reflection of our efforts to actively position the Fund to leverage
opportunities created by the sell off of 1998. Securities added during this
timeframe included Sun Microsystems, Inc. (Computer Hardware & Peripheral), MCI
WorldCom, Inc. (Telecom - Long Distance) and Bell Atlantic (Telephone). We see
these stocks as a means to allow our shareholders to participate in the growth
of the internet without paying "internet" price/earnings multiples. Other
securities added such as Gannett, Inc. (Publishing) and Hannaford Brothers Co.
(Food and Drug Retailing), reflect our core objective of seeking out the shares
of companies with strong sales and earnings growth that can be purchased at
reasonable valuations relative to their peer groups.
The Stonebridge Growth Fund participated in the recovery of the equity markets
in the fourth quarter of 1998 through the spring of 1999. For the six months
ended April 30, 1999, the Fund rose +17.11%. The S&P 500 Index rose +22.32% and
the New York Stock Exchange Index rose +17.68%. For the first four months of
calendar year 1999, the Fund rose +8.26% versus a rise of +9.05% for the S&P 500
Index and a rise of +6.97% for the New York Stock Exchange Index. While the Fund
performed in line with the broad indices, fund volatility was 23% less than the
S&P 500 Index over the same period.
STONEBRIDGE AGGRESSIVE GROWTH FUND:
The first six months of fiscal year 1999 proved to be a rewarding environment
for investments in small capitalization stocks. At the close of the last fiscal
year, we indicated that we would try to take advantage of the volatility of last
year's market to purchase high quality growth companies at attractive
valuations. We are pleased to report that we found no shortage of opportunities.
We made substantial investments in such names as Platinum Technology
International, Inc. (Computer Software & Services), ADC Telecommunications, Inc.
(Communication Equipment), Warnaco Group, Inc. (Textiles and Shoes), and Imclone
Systems, Inc. (Biotechnology). As a result, the Fund posted a substantial gain
of +14.78% for the semi-annual report period ended April 30, 1999. This compares
to a return of +15.25% for the Russell 2000 Index and +9.01% for the S&P 600
Small Cap Index. For the first four months of calendar year 1999, the Fund rose
+3.25% versus a rise of +3.05% for the Russell 2000 Index and a drop of -2.49%
for the S&P 600 Small Cap Index.
The sector diversification strategy that we completed last summer with the
objective of reducing fund volatility relative to the Russell 2000 Index appears
to have achieved our goal. For the first six months of fiscal year 1999, the
Fund was 8.5% less volatile than the Russell 2000 Index and this relative
volatility was 48.6% less than the same period in fiscal year 1998. Thus, for
this period, we achieved our goal of superior risk adjusted returns.
Thank you for your continued support of the Stonebridge Funds. Should you have
questions or concerns, please call a Shareholder Services Representative at
1-800-639-3635.
Sincerely,
/s/ Charles E. Woodhouse /s/ Richard C. Barrett
Charles E. Woodhouse Richard C. Barrett
Director of Research President
Stonebridge Capital Management, Inc. Stonebridge Capital Management, Inc.
1
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (93.6%)
BASIC MATERIALS (2.5%)
CHEMICALS (2.5%)
Du Pont E I De Nemours & Co................................... 15,000 $ 1,059,375
-----------
TOTAL BASIC MATERIALS......................................... 1,059,375
-----------
CAPITAL GOODS (7.9%)
AEROSPACE & DEFENSE (1.2%)
Boeing Co..................................................... 12,000 487,500
-----------
ELECTRICAL EQUIPMENT (3.1%)
Emerson Electric Co........................................... 20,000 1,290,000
-----------
MANUFACTURING (3.6%)
Illinois Tool Works Inc....................................... 20,000 1,540,000
-----------
TOTAL CAPITAL GOODS........................................... 3,317,500
-----------
COMMUNICATION SERVICES (7.3%)
TELECOM - LONG DISTANCE (1.9%)
MCI WorldCom Inc*............................................. 10,000 821,875
-----------
TELEPHONE (5.4%)
Bell Atlantic Corp............................................ 20,000 1,152,500
SBC Communications Inc........................................ 20,000 1,120,000
-----------
2,272,500
-----------
TOTAL COMMUNICATION SERVICES.................................. 3,094,375
-----------
CONSUMER CYCLICALS (6.7%)
PUBLISHING (2.5%)
Gannett Inc................................................... 15,000 1,062,187
-----------
TEXTILES & SHOES (4.2%)
Intimate Brands Inc Class A................................... 35,000 1,750,000
-----------
TOTAL CONSUMER CYCLICALS...................................... 2,812,187
-----------
CONSUMER STAPLES (12.5%)
BROADCAST MEDIA & ENTERTAINMENT (4.0%)
Time Warner Inc............................................... 24,000 1,680,000
-----------
FOOD AND DRUG RETAILING (4.3%)
Hannaford Brothers Co......................................... 20,000 872,500
Pepsico Inc................................................... 25,000 923,438
-----------
1,795,938
-----------
</TABLE>
2
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (CONTINUED)
CONSUMER STAPLES (CONTINUED)
HOUSEHOLD PRODUCTS & HOUSEWARES (2.4%)
Campbell Soup Co.............................................. 25,000 $ 1,025,000
-----------
PERSONAL CARE (1.8%)
Gillette Co................................................... 15,000 782,812
-----------
TOTAL CONSUMER STAPLES........................................ 5,283,750
-----------
ENERGY (2.5%)
OIL - INTERNATIONAL (2.5%)
Mobil Corp.................................................... 10,000 1,047,500
-----------
TOTAL ENERGY.................................................. 1,047,500
-----------
FINANCIAL (13.9%)
BANKS - MAJOR REGIONAL (2.0%)
Chase Manhattan Corp.......................................... 10,000 827,500
-----------
BROKERAGE & DIVERSE FINANCIAL SERVICES (6.5%)
American Express Co........................................... 10,000 1,306,875
Fannie Mae.................................................... 20,000 1,418,750
-----------
2,725,625
-----------
INSURANCE - MULTILINE & BROKERAGE (3.1%)
American International Group Inc.............................. 11,250 1,321,172
-----------
INSURANCE - PROPERTY (2.3%)
MGIC Investment Corp.......................................... 20,000 971,250
-----------
TOTAL FINANCIAL............................................... 5,845,547
-----------
FOREIGN STOCKS (7.7%)
Nestle S A Sponsored ADR*(1).................................. 12,000 1,112,549
Roche Holdings Ltd Sponsored ADR.............................. 10,000 1,178,364
Royal Dutch Petroleum Co...................................... 16,000 939,000
-----------
TOTAL FOREIGN STOCKS 3,229,913
-----------
HEALTHCARE (9.8%)
HEALTHCARE - DIVERSE (8.2%)
Abbott Labs................................................... 35,000 1,695,313
Bristol Myers Squibb Co....................................... 20,000 1,271,250
Johnson & Johnson Inc......................................... 5,000 487,500
-----------
3,454,063
-----------
</TABLE>
3
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (CONTINUED)
HEALTHCARE (CONTINUED)
MAJOR DRUGS (1.6%)
Merck & Co Inc................................................ 10,000 $ 702,500
-----------
TOTAL HEALTHCARE.............................................. 4,156,563
-----------
TECHNOLOGY (22.8%)
COMMUNICATION - EQUIPMENT (1.7%)
Motorola Inc.................................................. 9,000 721,125
-----------
COMPUTER HARDWARE & PERIPHERAL (10.3%)
Compaq Computer Corp.......................................... 30,000 669,375
Lexmark International Group Inc Class A*...................... 20,000 2,470,000
Sun Microsystems Inc.......................................... 20,000 1,196,250
-----------
4,335,625
-----------
COMPUTER SOFTWARE & SERVICES (5.0%)
Computer Associates International Inc......................... 25,000 1,067,188
International Business Machines Corp.......................... 5,000 1,045,937
-----------
2,113,125
-----------
ELECTRONICS - INSTRUMENTS & DISTRIBUTION (2.9%)
W.W. Grainger Inc............................................. 24,000 1,204,500
-----------
SEMICONDUCTORS (2.9%)
Intel Corp.................................................... 20,000 1,223,750
-----------
TOTAL TECHNOLOGY.............................................. 9,598,125
-----------
TOTAL COMMON STOCKS
(Cost $22,765,569)............................................ 39,444,835
-----------
WARRANTS (0.0%)
Coram Healthcare Corp......................................... 495 0
(Cost $0) -----------
U.S. GOVERNMENT AGENCY OBLIGATIONS (2.4%)
Federal Mortgage Corporation Discount Note 4.52%, 05/06/99.... 1,000,000 999,280
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS............................... 999,280
(Cost $999,280) -----------
</TABLE>
4
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
<S> <C> <C>
MUTUAL FUNDS (3.9%)
Fifth Third Money Market Fund................................. 1,648,372 $1,648,372
-----------
TOTAL MUTUAL FUNDS..................................................... 1,648,372
(Cost $1,648,372) -----------
TOTAL INVESTMENTS (99.9%)
(Cost $25,413,221)............................................ $ 42,092,487
OTHER ASSETS IN EXCESS OF LIABILITIES (0.1%).......................... 30,298
-----------
NET ASSETS (100%)...................................................... $ 42,122,785
-----------
-----------
</TABLE>
*Securities on which no cash dividends were paid during the preceding six (6)
months.
(1)Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers.
The accompanying notes to financial statements are an integral part of the
financial statements.
5
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (94.6%)
BASIC MATERIALS (1.6%)
PAPER AND FOREST PRODUCTS (1.6%)
Caraustar Industries Inc...................................... 3,000 $ 76,500
-----------
TOTAL BASIC MATERIALS......................................... 76,500
-----------
CAPITAL GOODS (8.9%)
AEROSPACE & DEFENSE (4.4%)
Precision Castparts Corp...................................... 5,000 213,750
-----------
ELECTRICAL EQUIPMENT (1.7%)
Vicor Corp*................................................... 6,000 84,375
-----------
MANUFACTURING (1.3%)
Halter Marine Group Inc*...................................... 10,000 60,625
-----------
OFFICE EQUIPMENT & SUPPLIES (1.5%)
Miller Herman Inc............................................. 3,500 69,781
-----------
TOTAL CAPITAL GOODS........................................... 428,531
-----------
COMMUNICATION SERVICES (3.4%)
TELECOM - CELLULAR (3.4%)
Metro One Telecommunications*................................. 10,000 163,125
-----------
TOTAL COMMUNICATION SERVICES.................................. 163,125
-----------
CONSUMER CYCLICALS (7.6%)
RETAIL - SPECIALTY (4.3%)
Casey's General Stores Inc.................................... 7,000 92,750
General Nutrition Companies Inc.*............................. 7,000 115,937
-----------
TOTAL CONSUMER CYCLICALS...................................... 208,687
-----------
TEXTILES AND SHOES - (3.3%)
Warnaco Group Inc Class A..................................... 6,000 160,125
-----------
TOTAL CONSUMER CYCLICALS...................................... 368,812
-----------
CONSUMER STAPLES (4.3%)
FOODS (1.9%)
Suiza Foods Corp*............................................. 2,500 93,906
-----------
RETAIL - FOOD & DRUG (2.4%)
Whole Foods Market Inc........................................ 3,000 117,000
-----------
TOTAL CONSUMER STAPLES........................................ 210,906
-----------
</TABLE>
6
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (CONTINUED)
ENERGY (2.3%)
OIL & GAS - DRILL & EQUIPMENT (2.3%)
Rowan Companies Inc*.......................................... 7,000 $ 112,000
-----------
TOTAL ENERGY.................................................. 112,000
-----------
FINANCIAL (10.0%)
BANKS - MAJOR REGIONAL (5.9%)
Bancwest Corp................................................. 4,000 159,250
Popular Inc................................................... 4,000 124,000
-----------
283,250
-----------
BROKERAGE AND DIVERSE FINANCIAL SERVICES (1.3%)
Ocwen Financial Corp*......................................... 7,500 63,281
-----------
INSURANCE - PROPERTY (2.8%)
Fidelity National Financial Inc............................... 7,500 136,875
-----------
TOTAL FINANCIAL............................................... 483,406
-----------
HEALTHCARE (19.7%)
BIOTECHNOLOGY (11.4%)
Chiron Corp*.................................................. 10,000 201,250
Gilead Sciences Inc*.......................................... 2,000 92,125
Imclone Systems Inc*.......................................... 5,000 90,313
Onyx Pharmaceuticals Inc*..................................... 10,000 80,000
Sangstat Medical Corp*........................................ 6,000 87,000
-----------
550,688
-----------
MAJOR DRUGS (6.7%)
Dura Pharmaceuticals Inc*..................................... 8,000 96,000
Fuisz Technologies Ltd*....................................... 10,000 72,500
La Jolla Pharmaceutical*...................................... 30,000 75,000
Watson Pharmaceuticals Inc*................................... 2,000 81,000
-----------
324,500
-----------
MEDICAL PRODUCTS & SUPPLIES (1.6%)
Alkermes Inc*................................................. 3,000 80,250
-----------
TOTAL HEALTHCARE.............................................. 955,438
-----------
TECHNOLOGY (35.0%)
COMMUNICATION EQUIPMENT (7.1%)
ADC Telecommunications Inc*................................... 3,000 143,437
Qualcomm Inc*................................................. 1,000 200,000
-----------
343,437
-----------
</TABLE>
7
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
<S> <C> <C>
COMMON STOCKS (CONTINUED)
TECHNOLOGY (CONTINUED)
COMPUTER HARDWARE & PERIPHERAL (2.3%)
Sequent Computer Systems Inc*................................. 10,000 $ 109,375
-----------
COMPUTER SOFTWARE & SERVICES (14.2%)
Cambridge Technical Partners Inc*............................. 6,000 86,625
Earthlink Network Inc*........................................ 1,000 68,937
Orcad Inc*.................................................... 10,000 77,500
Parametric Technology Corp*................................... 9,000 117,563
Platinum Technology International Inc*........................ 10,000 255,000
Visio Corp* .................................................. 3,000 81,000
-----------
686,625
-----------
ELECTRONICS - INSTRUMENTS & DISTRIBUTION (2.6%)
Avid Technology Inc*.......................................... 5,000 81,250
Rambus Inc*................................................... 750 45,094
-----------
126,344
-----------
SEMICONDUCTORS (6.9%)
Intel Corp.................................................... 3,000 183,563
Triquint Semiconductor Inc*................................... 5,000 151,875
-----------
335,438
-----------
SEMICONDUCTOR EQUIPMENT (1.9%)
Photronics Inc*............................................... 4,000 95,750
-----------
TOTAL TECHNOLOGY.............................................. 1,696,969
-----------
TRANSPORTATION (1.8%)
AIR FREIGHT (1.8%)
Teekay Shipping Corp.......................................... 5,000 85,000
-----------
TOTAL TRANSPORTATION.......................................... 85,000
-----------
TOTAL COMMON STOCKS
(Cost $4,018,821)............................................. 4,580,687
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.6%)
Federal Mortgage Corporation Discount Note 4.50%, 05/24/99.... 175,000 174,524
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS............................... 174,524
(Cost $174,499) -----------
MUTUAL FUNDS (2.0%)
Fifth Third Money Market Fund................................. 95,216 95,216
-----------
TOTAL MUTUAL FUNDS..................................................... 95,216
(Cost $95,216) -----------
</TABLE>
8
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
<S> <C> <C>
TOTAL INVESTMENTS (100.2%)
(Cost $4,288,536)............................................. $ 4,850,427
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.2%).......................... (8,381)
-----------
NET ASSETS (100%)...................................................... $ 4,842,046
-----------
-----------
</TABLE>
*Securities on which no cash dividends were paid during the preceding six (6)
months.
The accompanying notes to financial statements are an integral part of the
financial statements.
9
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH GROWTH
FUND FUND
---- ----
<S> <C> <C>
ASSETS:
Investments, at value (Cost - see below)....................... $ 42,092,487 $ 4,850,427
Dividends and interest receivable.............................. 46,050 989
Receivable for capital stock sold.............................. 2,264 0
Deferred expense subsidy** (Note 4)............................ 147,350 54,584
Prepaid bond expenses.......................................... 25,935 3,889
Other assets................................................... 13,287 1,736
-----------------------------
TOTAL ASSETS............................................. $ 42,327,373 $ 4,911,625
-----------------------------
LIABILITIES:
Management fee**...............................................$ 166,854 $ 53,704
Administration fee**........................................... 6,334 5,470
Transfer Agent fee............................................. 17,003 2,866
Custody fee.................................................... 302 432
Fund Accounting fee............................................ 4,881 3,181
Trustee fee**.................................................. 3,633 657
Printing fee................................................... 4,683 2,017
Other payables................................................. 898 1,252
-----------------------------
TOTAL LIABILITIES........................................ $ 204,588 $ 69,579
-----------------------------
NET ASSETS..................................................... $ 42,122,785 $ 4,842,046
-----------------------------
-----------------------------
COMPOSITION OF NET ASSETS:
Capital stock ($1.00 par value)................................ $ 2,511,959 $ 491,249
Paid in capital................................................ 20,994,718 3,570,234
Accumulated undistributed net investment loss.................. (14,232) (45,752)
Accumulated net realized gain on investments................... 1,951,074 264,424
Net unrealized appreciation in value of investments............ 16,679,266 561,891
-----------------------------
NET ASSETS .................................................... $ 42,122,785 $ 4,842,046
-----------------------------
-----------------------------
NET ASSET VALUE PER SHARE:
Net assets..................................................... $ 42,122,785 $ 4,842,046
Shares outstanding............................................. 2,511,959 491,249
Net asset value and redemption price per share................. $16.77 $9.86
COST OF INVESTMENTS............................................... $ 25,413,221 $ 4,288,536
-----------------------------
-----------------------------
</TABLE>
**Related Party
The accompanying notes to financial statements are an integral part of the
financial statements.
10
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1999
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH GROWTH
FUND FUND
---- ----
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Dividends....................................................... $ 193,437 $ 9,535
Interest........................................................ 92,422 14,034
-----------------------------
TOTAL INCOME............................................. $ 285,859 23,569
-----------------------------
EXPENSES:
Management fee................................................. $ 150,925 $ 23,641
Administrative fee............................................. 37,198 37,196
Transfer Agency fee............................................ 58,041 9,759
Fund Accounting fee............................................ 12,785 6,383
Custodian fee.................................................. 632 2,685
Legal fee...................................................... 22,566 391
Printing fee................................................... 16,846 6,041
Registration fee............................................... 6,668 987
Audit fee...................................................... 7,108 3,222
Trustee fee.................................................... 13,956 1,693
Insurance fee.................................................. 9,899 1,209
Other fees..................................................... 3,317 1,236
Expense subsidy (Note 4)....................................... (39,850) (25,122)
-----------------------------
TOTAL EXPENSES............................................. $ 300,091 $ 69,321
-----------------------------
-----------------------------
NET INVESTMENT LOSS............................................... $ (14,232) $ (45,752)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments............................... $ 1,951,074 $ 264,424
Unrealized appreciation
Beginning of period.......................................... 12,229,647 129,509
End of period................................................ 16,679,266 561,891
-----------------------------
Change in net unrealized appreciation.......................... 4,449,619 432,382
-----------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 6,400,693 696,806
-----------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................................... $ 6,386,461 $ 651,054
-----------------------------
-----------------------------
</TABLE>
The accompanying notes to financial statements are an integral part of the
financial statements.
11
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, OCTOBER 31,
1999 (UNAUDITED) 1998
---------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)................................. $ (14,232) $ 9,393
Net realized gain on investments............................. 1,951,074 1,003,163
Net change in unrealized appreciation/depreciation........... 4,449,619 (1,065,437)
---------------------------------
INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS........................................ 6,386,461 (52,881)
---------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income......................... 0 (54,630)
Distributions from net realized gain on investments.......... 0 (7,908,061)
---------------------------------
DECREASE IN NET ASSETS RESULTING FROM
DISTRIBUTIONS TO SHAREHOLDERS.......................... 0 (7,962,691)
---------------------------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets derived from
shares of beneficial interest transactions (Note 2) ....... (3,037,376) 4,409,424
---------------------------------
NET INCREASE (DECREASE) IN NET ASSETS.......................... 3,349,085 (3,606,148)
---------------------------------
NET ASSETS:
Beginning of period.......................................... 38,773,700 42,379,848
---------------------------------
End of period (including accumulated undistributed net
investment loss of ($14,232) and $0, respectively)........ $ 42,122,785 $ 38,773,700
---------------------------------
---------------------------------
</TABLE>
The accompanying notes to financial statements are an integral part of the
financial statements.
12
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1999 (UNAUDITED) 1998
---------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)................................. $ (45,752) $ (104,471)
Net realized gain on investments............................. 264,424 (77,914)
Net change in unrealized appreciation/depreciation........... 432,382 (1,040,401)
---------------------------------
INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ....................................... 651,054 (1,222,786)
---------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income......................... 0 0
Distributions from net realized gain on investments.......... 0 (924,200)
---------------------------------
DECREASE IN NET ASSETS RESULTING FROM
DISTRIBUTIONS TO SHAREHOLDERS.......................... 0 (924,200)
---------------------------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets derived from
shares of beneficial interest transactions (Note 2) ....... (472,558) 1,382,109
---------------------------------
NET INCREASE (DECREASE) IN NET ASSETS.......................... 178,496 (764,877)
---------------------------------
NET ASSETS:
Beginning of period.......................................... 4,663,550 5,428,427
---------------------------------
End of period (including accumulated undistributed net
investment loss of ($45,752) and $0, respectively)........ $ 4,842,046 $ 4,663,550
---------------------------------
---------------------------------
</TABLE>
The accompanying notes to financial statements are an integral part of the
financial statements.
13
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE GROWTH FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT THE PERIODS INDICATED:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, OCTOBER 31, YEARS ENDED NOVEMBER 30,
1999 (UNAUDITED) 1998 1997 1996 1995 1994
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
- --------------
Net asset value, beginning of period..................... $14.32 $17.69 $16.56 $14.36 $12.61 $12.62
---------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income................................. (0.01) 0.00 0.02 0.10 0.17 0.07
Net realized and unrealized gain (loss)
on investments..................................... 2.46 (0.07) 2.90 2.83 2.34 0.29
---------------------------------------------------------------
Total income from investment operations............... 2.45 (0.07) 2.92 2.93 2.51 0.36
---------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO
STOCKHOLDERS:
Distributions from net investment
income............................................. 0.00 (0.02) (0.10) (0.17) (0.07) (0.07)
Distributions from net realized gain
on investments..................................... 0.00 (3.28) (1.69) (0.56) (0.69) (0.30)
---------------------------------------------------------------
Total distributions to shareholders................... 0.00 (3.30) (1.79) (0.73) (0.76) (0.37)
---------------------------------------------------------------
Net asset value, end of period........................... $16.77 $14.32 $17.69 $16.56 $14.36 $12.61
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL RETURN............................................. 17.11% (0.44)% 19.79% 21.46% 23.50% 2.81%
---------------------------------------------------------------
---------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net assets, end of period (in 000s)................... $42,123 $38,774 $42,380 $39,602 $34,775 $30,775
---------------------------------------------------------------
---------------------------------------------------------------
Ratio of operating expenses to
average net assets.................................. 1.50%* 1.50%* 1.50% 1.47% 1.49% 1.64%
---------------------------------------------------------------
---------------------------------------------------------------
Ratio of operating expenses to average
net assets without fee waivers..................... 1.69%* 1.78%* 1.50% 1.47% 1.49% 1.64%
---------------------------------------------------------------
---------------------------------------------------------------
Ratio of net investment income (loss)
to average net assets............................... (0.07)%* 0.02%* 0.11% 0.67% 1.27% 0.53%
---------------------------------------------------------------
---------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets without fee waivers.............. 0.13%* (0.25)%* 0.11% 0.67% 1.27% 0.53%
---------------------------------------------------------------
---------------------------------------------------------------
Portfolio turnover rate**............................. 23% 41% 41% 45% 38% 36%
---------------------------------------------------------------
---------------------------------------------------------------
</TABLE>
*Annualized
**A portfolio turnover rate is the percentage computed by taking the lesser
of purchases or sales of portfolio securities (excluding securities with a
maturity date of one year or less at the time of acquisition) for a period
and dividing it by the monthly average of the market value of such
securities during the period. Purchases and sales of investment securities
(excluding short-term securities) for the six months ended April 30, 1999
were $10,519,573 and $8,452,503, respectively.
The accompanying notes to financial statements are an integral part of the
financial statements.
14
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT THE PERIODS INDICATED
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, YEARS ENDED OCTOBER 31,
1999 (UNAUDITED) 1998 1997 1996 1995 1994
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
- --------------
Net asset value, beginning of period..................... $8.59 $13.27 $13.19 $13.97 $10.24 $12.07
---------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss).......................... (0.09) (0.37) (0.20) (0.17) (0.26) (0.29)
Net realized and unrealized gain (loss)
on investments..................................... 1.36 (2.07) 2.83 0.90 4.51 0.55
---------------------------------------------------------------
Total income from investment operations............... 1.27 (2.44) 2.63 0.73 4.25 0.26
---------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain
on investments..................................... 0.00 (2.24) (2.55) (1.51) (0.52) (2.09)
---------------------------------------------------------------
Total distributions to shareholders .................. 0.00 (2.24) (2.55) (1.51) (0.52) (2.09)
---------------------------------------------------------------
Net asset value, end of period........................... $9.86 $8.59 $13.27 $13.19 $13.97 $10.24
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL RETURN............................................. 14.78% (20.23)% 22.89% 5.70% 43.71% 1.86%
---------------------------------------------------------------
---------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net assets, end of period (in 000s)................... $4,842 $4,664 $5,428 $4,539 $4,151 $2,992
---------------------------------------------------------------
---------------------------------------------------------------
Ratio of operating expenses to
average net assets.................................. 2.93%* 2.90% 2.90% 2.29% 3.10% 3.51%
---------------------------------------------------------------
---------------------------------------------------------------
Ratio of operating expenses to average
net assets without fee waivers..................... 3.99%* 3.69% 2.90% 2.29% 3.10% 3.51%
---------------------------------------------------------------
---------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets.................................. (1.93)%* (2.01)% (1.62)% (1.26)% (2.10)% (2.86)%
---------------------------------------------------------------
---------------------------------------------------------------
Ratio of net investment income (loss) to
average net assets without fee waivers.............. (0.87)%* (1.22)% (1.62)% (1.26)% (2.10)% (2.86)%
---------------------------------------------------------------
---------------------------------------------------------------
Portfolio turnover rate**............................. 45% 92% 88% 108% 60% 43%
---------------------------------------------------------------
---------------------------------------------------------------
</TABLE>
*Annualized
**A portfolio turnover rate is the percentage computed by taking the lesser
of purchases or sales of portfolio securities (excluding securities with a
maturity date of one year or less at the time of acquisition) for a period
and dividing it by the monthly average of the market value of such
securities during the period. Purchases and sales of investment securities
(excluding short-term securities) for the six months ended April 30, 1999
were $2,063,851 and $1,914,995, respectively.
The accompanying notes to financial statements are an integral part of the
financial statements.
15
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION AND NATURE OF OPERATIONS -- Stonebridge Funds Trust ("the
Trust") is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company
organized as a Delaware business trust by a Declaration of Trust dated
July 31, 1998. The Trust, which became effective November 1, 1998,
currently has two active investment portfolios, the Stonebridge Growth
Fund (previously the Stonebridge Growth Fund, Inc.) and the Stonebridge
Aggressive Growth Fund (previously the Stonebridge Aggressive Growth
Fund, Inc.), each referred to as a "Series" of the Trust.
USE OF ESTIMATES -- The preparation of each Series' financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in these financial statements and accompanying notes. Actual
results could differ from those estimates.
SECURITY VALUATION -- Investment securities listed or traded on a
registered securities exchange or quoted on NASDAQ are valued at the last
sales price on the date of valuation. Securities traded on the
over-the-counter market for which no sales are reported are valued at the
mean between the bid and asked price. Short-term debt securities having
a remaining maturity of 60 days or less consist exclusively of U.S.
Treasury and Agency Obligations and are stated at amortized cost which is
approximately equivalent to value.
FEDERAL INCOME TAXES -- As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, each Series is not subject to
income taxes to the extent that it distributes all of its taxable income
for the fiscal year.
DISTRIBUTIONS -- Distributions of net investment income, if any, are
distributed annually. Distributions of net realized gains, if any, are
declared at least once each year. Distributions to shareholders are
recorded on the ex-dividend date.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of distributions made
during the year from net investment income or net realized gains may
differ from its ultimate characterization for federal income tax
purposes. Also, due to the timing of dividend distributions, the fiscal
year in which amounts are distributed may differ from the fiscal year in
which the income or realized gain was recorded by the Series.
ALLOCATION OF EXPENSE -- Trust expenses which are not Series specific are
allocated to each Series based upon its relative proportion of net assets
and/or open accounts to the Trust's totals.
OTHER -- Securities transactions are accounted for on the date the
securities are purchased or sold (trade date). Dividend income is
recorded on the ex-dividend date. Interest income, which includes
amortization of premiums and accretion of discounts, is accrued and
recorded daily. Realized gains and losses from investment transactions
and unrealized appreciation and depreciation of investments are reported
on an identified cost basis, which is the same basis each Series uses for
federal income tax purposes.
16
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
2. SHARES OF BENEFICIAL INTEREST:
At April 30, 1999, there were an indefinite number of $1.00 par value
shares of beneficial interest. Transactions in shares of beneficial
interest for the six months ended April 30, 1999 and for the year ended
October 31, 1998, were as follows:
<TABLE>
<CAPTION>
STONEBRIDGE GROWTH FUND
For the Six Months Ended For the Period Ended
April 30, 1999 October 31, 1998
-------------- ----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares Sold..................................... 21,654 $ 335,971 86,431 $1,380,501
Shares Issued in Reinvestment of Dividends...... 0 0 532,749 7,837,364
--------------------------------------------------
Total........................................... 21,654 335,971 619,180 9,217,865
Less Shares Redeemed............................ (218,152) (3,373,347) (306,521) (4,808,441)
--------------------------------------------------
Net Increase (Decrease)......................... (196,498) $(3,037,376) 312,659 $4,409,424
--------------------------------------------------
--------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STONEBRIDGE AGGRESSIVE GROWTH FUND
For the Six Months Ended For the Period Ended
April 30, 1999 October 31, 1998
-------------- ----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares Sold..................................... 7,289 $ 66,906 101,506 $1,102,475
Shares Issued in Reinvestment of Dividends...... 0 0 89,906 863,993
--------------------------------------------------
Total........................................... 7,289 66,906 191,412 1,966,468
Less Shares Redeemed............................ (59,097) (539,464) (57,432) (584,359)
--------------------------------------------------
Net Increase (Decrease)......................... (51,808) $ (472,558) 133,980 $1,382,109
--------------------------------------------------
--------------------------------------------------
</TABLE>
3. UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS
<TABLE>
<CAPTION>
GROWTH FUND AGGRESSIVE GROWTH FUND
----------- ----------------------
<S> <C> <C>
As of April 30, 1999
Gross appreciation (excess of value over cost) $ 17,308,236 $ 997,671
Gross depreciation (excess of cost over value) (628,970) (435,780)
- --------------------------------------------------------------------------------------------------------
Net unrealized appreciation $ 16,679,266 $ 561,891
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
These amounts represent the net increase in the value of investments (all
of which are represented by long transactions) held at April 30, 1999.
4. TRANSACTIONS WITH AFFILIATES:
The Trust has entered into an advisory agreement with Stonebridge Capital
Management, Inc. (the Adviser) for both Series. The advisory agreement
has been approved by the Trust's Board of Trustees and shareholders.
Pursuant to its advisory agreement with the Trust, the Adviser is
entitled to an investment advisory fee, computed daily and payable
monthly, at an annual rate of .75% and 1.00% of the average daily net
assets of the Stonebridge Growth and Stonebridge Aggressive Growth Funds,
respectively. For the six months ended April 30, 1999, advisory fees paid
to the Adviser totaled approximately $111,000 and $250 for the
Stonebridge Growth and Stonebridge Aggressive Growth Funds, respectively.
17
<PAGE>
STONEBRIDGE FUNDS TRUST SEMI-ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
4. TRANSACTIONS WITH AFFILIATES (CONTINUED):
The Adviser has agreed to defer its annual management fee to the extent
necessary to limit the overall annual expenses of the Growth Fund and
Aggressive Growth Fund to 1.50% and 2.90%, respectively; however, in
circumstances where the Adviser is required to waive 100% of its annual
management fee, it will not be responsible for reimbursing the Funds for
additional expenses. Each Series will remain liable to the Adviser for
all such expenses subsidized in any fiscal year, for a period of up to
three years from the date the expenses were incurred, so long as
reimbursement will not cause the annual expense ratio to exceed the
expense limit in effect for that year; such a reimbursement would be
recognized as an expense previously deferred in the Statement of
Operations in the period it was incurred. As of April 30, 1999, the
Stonebridge Growth Fund and the Stonebridge Aggressive Growth Fund had
cumulative carryover of waived expenses of $147,350 and $66,368,
respectively.
On November 2, 1998, the Trust entered into an administration agreement
with ALPS Mutual Funds Services, Inc. ("ALPS"). The administration
agreement provides that ALPS will receive a monthly management fee equal
to the annual rate of .10% of the average daily net assets in each Series
up to $250,000,000 and .075% of the average daily net assets of each
Series in excess of $250,000,000. At all times ALPS' fee will be no less
than $6,250 per month per Series. For the six months ended April 30,
1999, ALPS received approximately $37,500 for administration services
from each of the Series.
Certain officers and trustees of the Trust are also officers and/or
trustees of the Adviser and/or ALPS.
18
<PAGE>
- -------------------------------------------------------------------------------
INTENTIONALLY
LEFT BLANK
- -------------------------------------------------------------------------------
19
<PAGE>
[LOGO]
STONEBRIDGE FUNDS
OFFICERS AND TRUSTEES
Richard C. Barrett, CFA, CHAIRMAN, BOARD OF TRUSTEES
AND PRESIDENT
Debra L. Newman, VICE PRESIDENT, TREASURER AND TRUSTEE
Charles E. Woodhouse, VICE PRESIDENT AND TRUSTEE
Craig B. Burger, CFA, VICE PRESIDENT AND TRUSTEE
John G. Ayer, Ph.D, CFA, TRUSTEE
Selvyn B. Bleifer, M.D., TRUSTEE
Marvin Freedman, TRUSTEE
Charles F. Haas, TRUSTEE
William H. Taylor II, TRUSTEE
Thomas A. Carter, ASSISTANT TREASURER
Lisa A. Bruckert, SECRETARY
INVESTMENT ADVISER
STONEBRIDGE CAPITAL MANAGEMENT,
INCORPORATED
1801 Century Park East, Suite 1800
Los Angeles, California 90067
ADMINISTRATOR AND DISTRIBUTOR
ALPS MUTUAL FUNDS SERVICES, INC.
370 Seventeenth Street, Suite 3100
Denver, Colorado 80202
TRANSFER AGENT
NATIONAL FINANCIAL DATA SERVICES
330 West 9th Street
Kansas City, Missouri 64105
CUSTODIAN
FIFTH THIRD BANK
Fifth Third Center
38 Fountain Square Plaza
Cincinnati, Ohio 45263
LEGAL COUNSEL
PAUL, HASTINGS, JANOFSKY & WALKER LLP
555 S. Flower Street
Los Angeles, California 90071
INDEPENDENT AUDITORS
HEIN + ASSOCIATES LLP
717 Seventeenth Street, Suite 1600
Denver, Colorado 80202
This report and its financial statements are submitted for the general
information of the shareholders of the Fund. The report is not authorized for
distribution to prospective investors in the Fund unless preceded or accompanied
by a prospectus.
