<PAGE> 1
LETTER TO SHAREHOLDERS
OVERVIEW
The fiscal year 2000 has proven to be one of the most tumultuous years on record
for financial markets. Most major market averages, led by technology stocks,
rose to record highs by early March of 2000. The frenzy to own Internet stocks
reached a fever pitch during this time. By mid March, several factors began to
weigh heavily on the equity markets. Oil prices tripled from their lows in early
1999 to more than $30 per barrel. The Federal Reserve Board continued to raise
short-term interest rates clearly indicating that they were worried about the
possibility of inflation. More recently, the deadlock in the presidential race
between two candidates with very different agendas created a great deal of
uncertainty about the market environment going forward.
When the markets began to correct, those stocks that had been the subject of the
most overt speculation were hit hardest. Many of the highflying Internet stocks
now trade at less than 1/10th of the peak valuations that they traded at in
March, a period of only 8 months. The list of these companies that are now
filing for bankruptcy grows by the week. The correction was not limited to these
stocks. The NASDAQ composite, whose closing price peaked at 5048.62 on March 10,
had lost 33.3% of its value by October 31 of this year closing at 3369.63. The
S&P 500 stock index, which peaked two weeks later than the NASDAQ, fell 6.4%
over this same time period. This disparity in performance underscores the fact
that many "old economy" stocks performed quite well in 2000. Drug and oil shares
staged dramatic rallies after lackluster returns in 1999.
Looking forward, we have reason to be optimistic. There are preliminary signs
that the economy is responding to the Federal Reserve Board action. Economic
indicators are beginning to show signs of slowing and inflation has remained
benign. A resolution to the presidential election appears imminent, as the
Electoral College will meet on December 18, 2000. The broad market volatility
has created some attractive opportunities for both Funds.
1
<PAGE> 2
THE STONEBRIDGE GROWTH FUND
In the semi-annual report, we indicated that we had taken profits in many of the
technology related issues that generated superior performance last year, due to
what we felt were excessive valuations. Despite that fact, we entered the period
after March with a heavy exposure to technology stocks and, as a result, the
Fund was not immune to the correction that ensued. Of the five worst performing
stocks in the Fund, four were technology stocks. It is one of our primary goals
to invest for long-term growth of capital and the technology sector is an
important component of our strategy. While these corrections in the short-run
can hurt performance, we continue to focus on the fact that these companies have
the potential for growth in sales and earnings at rates far greater than the
overall economy.
The Fund is diversified across many different sectors and industries. Some of
the strongest performing companies in the Fund followed by their fiscal year
performance included American International Group (+43%), PepsiCo (+40%),
Emerson Electric (+22%), Exxon-Mobil (+20%) and Pfizer (+18%), which we just
purchased at the end of March. Recently we have used the weakness in technology
stocks to add Applied Materials (Semiconductor Equipment) to the Fund as well as
add to our positions in Motorola, Tellabs and Agilent Technologies.
Going forward, the stock market correction has presented us with many
opportunities to purchase quality companies with superior sales and earnings
growth. However, due to the incredible volatility in the equity markets, we are
exercising patience and discipline in implementing stock positions.
[GROWTH FUND CHART]
2
<PAGE> 3
CHANGE IN VALUE OF A $10,000 INVESTMENT IN STONEBRIDGE GROWTH FUND
VS. THE S&P 500 INDEX WITH INCOME AND THE NYSE COMPOSITE INDEX WITH INCOME
FROM NOVEMBER 1, 1990 TO OCTOBER 31, 2000
[GROWTH FUND VS. THE S&P 500 AND THE NYSE COMPOSITE GRAPH]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stonebridge Growth Fund 10,000.00 13,592.50 13,799.50 14,086.20 18,838.00 17,457.60 19,997.10 25,298.90
S&P 500 10,000.00 13,351.00 14,682.00 16,871.00 17,522.00 22,149.00 27,483.00 36,304.00
NYSE Composite 10,000.00 13,031.00 13,876.00 15,609.00 15,568.00 18,632.00 22,537.00 28,955.00
<CAPTION>
1998 1999 2000
------ ------ ------
<S> <C> <C> <C>
Stonebridge Growth Fund 25,446.70 32,003.80 28,923.70
S&P 500 44,288.00 55,653.00 59,038.00
NYSE Composite 32,698.00 37,640.00 40,081.00
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Return for the
Stonebridge Growth Fund
Periods Ended October 31, 2000
-------------------------------------
1 Year 5 Year 10 Year
------ ------ -------
<S> <C> <C>
(9.62%) 10.61% 11.20%
</TABLE>
<TABLE>
<CAPTION>
Final Portfolio Values
October 31, 2000
----------------------
<S> <C>
Stonebridge Growth Fund $28,924
S&P 500 $59,038
NYSE Composite $40,081
</TABLE>
Average annual total returns reflect reinvestment of all dividends, capital
gains distributions, all fee waivers in effect and any expense reimbursements.
Without the fee waivers and expense reimbursements, the total return figures
would be lower. Past performance is not indicative of future results. Investment
return and principal value may fluctuate and shares, when redeemed, may be worth
more or less than their original cost.
3
<PAGE> 4
THE STONEBRIDGE AGGRESSIVE GROWTH FUND
As we mentioned in the semi-annual report, the volatile market environment of
the past year has proven to be very rewarding for our investment style. Our
emphasis on growth allowed us to fully participate in the explosive appreciation
of technology and biotechnology stocks in the first half of the year. Our value
discipline then forced us to aggressively take profits as the prices of some of
our stocks exceeded our estimation of their intrinsic value based on the
fundamentals of their businesses. This resulted in higher than usual cash
positions for the Fund during the market downturns in April/May and again later
this fall. In addition, our diversification across sectors ensured that we had
exposure to some "old economy" stocks when these stocks performed well.
Small and mid-capitalization stocks provided one of the few bright spots in the
equity markets this last fiscal year. As we have mentioned in recent reports,
the concentration by investors into large capitalization stocks over the past
several years left many small and medium capitalization companies selling at
attractive relative valuations. The Russell 2000 index, our benchmark, was one
of the best performing equity indices rising +17.6% (including dividends) for
the fiscal year ended October 31, 2000. The Fund more than doubled that return
rising +38.2% over that same time period. Some of the Fund's top performers
included Rambus (Electronics), Imclone (Biotechnology), ADC Telecommunications
(Communication Equipment), Onyx Pharmaceuticals (Biotechnology), and Jabil
Circuit (Manufacturing). As with the Growth Fund, we have tried to take
advantage of the weakness in technology stocks to add to our exposure in this
area. Recent purchases include Gasonics International (Semiconductor Equipment)
and Photon Dynamics (Electronics - Instruments & Distribution).
[AGGRESSIVE GROWTH FUND CHART]
4
<PAGE> 5
CHANGE IN VALUE OF A $10,000 INVESTMENT IN STONEBRIDGE AGGRESSIVE GROWTH FUND
VS. THE RUSSELL 2000 INDEX WITH INCOME
FROM NOVEMBER 1, 1990 TO OCTOBER 31, 2000
[AGGRESSIVE GROWTH FUND VS. THE RUSSELL 2000 INDEX GRAPH]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stonebridge Aggressive
Growth Fund 10,000.00 16,266.90 15,466.90 17,330.80 17,648.10 25,350.70 26,689.80 32,798.60
Russell 2000 Index 10,000.00 15,860.00 17,364.00 22,990.00 22,919.00 27,120.00 31,635.00 40,916.00
<CAPTION>
1998 1999 2000
------ ------ ------
<S> <C> <C> <C>
Stonebridge Aggressive
Growth Fund 26,164.10 34,905.70 48,233.40
Russell 2000 Index 36,067.00 41,431.00 48,642.00
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Return for the
Stonebridge Aggressive Growth Fund
Periods Ended October 31, 2000
-------------------------------------
1 Year 5 Year 10 Year
------ ------ -------
<S> <C> <C>
38.18% 13.71% 17.03%
</TABLE>
<TABLE>
<CAPTION>
Final Portfolio Values
October 31, 2000
----------------------
<S> <C>
Stonebridge Aggressive Growth Fund $48,233
Russell 2000 Index $48,642
</TABLE>
Average annual total returns reflect reinvestment of all dividends, capital
gains distributions, all fee waivers in effect and any expense reimbursements.
Without the fee waivers and expense reimbursements, the total return figures
would be lower. Past performance is not indicative of future results. Investment
return and principal value may fluctuate and shares, when redeemed, may be worth
more or less than their original cost.
5
<PAGE> 6
SUMMARY
We expect the unusually high level of volatility of the equity markets to
continue into 2001. As the presidential contest is resolved and the Federal
Reserve works to control inflation and maintain an environment of stable,
positive economic growth, we will continue to purchase high quality, growth
oriented companies at attractive valuations for the benefit of our shareholders.
Thank you for your investment in the Stonebridge Funds. Should you have
questions or concerns, please call a Shareholder Services Representative at
1-800-639-3935.
Sincerely,
/s/ CHARLES E. WOODHOUSE /s/ RICHARD C. BARRETT
Charles E. Woodhouse Richard C. Barrett
Director of Research Chairman, Board of Trustees, and President
Stonebridge Capital Management, Inc. Stonebridge Funds Trust
6
<PAGE> 7
DEFINITION OF INDICES
The STANDARD & POOR'S 500 INDEX (S&P 500) is an unmanaged index containing
common stocks of 500 industrial, transportation, utility and financial
companies, regarded as generally representative of the U.S. stock market. The
index return reflects the reinvestment of income dividends and capital gain
distributions, if any, but does not reflect fees, brokerage commissions, or
other expenses of investing.
The NEW YORK STOCK EXCHANGE COMPOSITE INDEX (NYSE) is an unmanaged market
weighted index comprising of all equity issues listed in the New York Stock
Exchange. This is a total return index which reflects the reinvestment of income
dividends and capital gain distributions, if any, but does not reflect fees,
brokerage commissions, or other expenses of investing.
The RUSSELL 2000 INDEX (Russell 2000), an unmanaged index, measures performance
of the 2,000 smallest companies in the Russell 3000 Index which represents
approximately 7% of the U.S. equity market capitalization. This is a total
return index which reflects the reinvestment of income dividends and capital
gain distributions, if any, but does not reflect fees, brokerage commissions, or
other expenses of investing.
7
<PAGE> 8
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
STONEBRIDGE FUNDS TRUST
LOS ANGELES, CALIFORNIA
We have audited the accompanying statements of assets and liabilities, including
the statements of investments, of Stonebridge Growth Fund and Stonebridge
Aggressive Growth Fund, each a series of shares of Stonebridge Funds Trust, as
of October 31, 2000, and the related statements of operations, changes in net
assets and the financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
statements for the year ended October 31, 1999 and financial highlights
presented for the periods prior to October 31, 2000 were audited by other
auditors whose report dated December 15, 1999 expressed an unqualified opinion
on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. 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 and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 2000, by correspondence with the custodian.
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
Stonebridge Growth Fund and Stonebridge Aggressive Growth Fund as of October 31,
2000, the results of their operations, changes in their net assets and the
financial highlights for the year then ended, in conformity with generally
accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
November 22, 2000
8
<PAGE> 9
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE GROWTH FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - (84.2%)
CAPITAL GOODS - (6.4%)
ELECTRICAL EQUIPMENT - (2.0%)
Emerson Electric Co ........................... 10,000 $ 734,375
------------
MANUFACTURING - (4.4%)
Honeywell International Inc ................... 13,750 739,922
Illinois Tool Works Inc ....................... 15,000 833,438
------------
1,573,360
------------
TOTAL CAPITAL GOODS ........................... 2,307,735
------------
COMMUNICATION SERVICES - (3.0%)
TELECOM - LONG DISTANCE - ( 3.0%)
Global Crossing Ltd* .......................... 45,000 1,063,125
------------
TOTAL COMMUNICATION SERVICES .................. 1,063,125
------------
CONSUMER CYCLICALS - (1.3%)
BUILDING MATERIALS & HOME BUILDING - (1.3%)
Lowe's Companies Inc .......................... 10,000 456,875
------------
TOTAL CONSUMER CYCLICALS ...................... 456,875
------------
CONSUMER STAPLES - (4.8%)
BEVERAGES - (2.0%)
Pepsico Inc ................................... 15,000 726,563
------------
HOUSEHOLD PRODUCTS & HOUSEWARE - (2.8%)
Kimberly Clark Corp ........................... 15,000 990,000
------------
TOTAL CONSUMER STAPLES ........................ 1,716,563
------------
ENERGY - (3.3%)
OIL - INTERNATIONAL - (3.3%)
Exxon Mobil Corp .............................. 13,201 1,177,364
------------
TOTAL ENERGY .................................. 1,177,364
------------
FINANCIAL - (19.6%)
BANKS - MAJOR REGIONAL - (5.1%)
Chase Manhattan Corp .......................... 20,000 910,000
Wells Fargo & Co .............................. 20,000 926,250
------------
1,836,250
------------
</TABLE>
9
<PAGE> 10
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - (Continued)
FINANCIAL - (Continued)
BROKERAGE & DIVERSE FINANCIAL SERVICES - (12.3%)
Citigroup Inc ...................................... 15,000 $ 789,375
Fannie Mae ......................................... 16,000 1,232,000
Freddie Mac ........................................ 20,000 1,200,000
Morgan Stanley Dean Witter & Co .................... 15,000 1,204,687
------------
4,426,062
------------
INSURANCE - MULTILINE & BROKERAGE - (2.2%)
American International Group Inc ................... 8,000 784,000
------------
TOTAL FINANCIAL .................................... 7,046,312
------------
FOREIGN STOCKS - (4.5%)
Elan PLC ADR* ...................................... 11,000 571,312
Royal Dutch Petroleum Co ADR ....................... 18,000 1,068,750
------------
TOTAL FOREIGN STOCKS ............................... 1,640,062
------------
HEALTHCARE - (14.7%)
BIOTECHNOLOGY - (2.4%)
Chiron Corp* ....................................... 20,000 866,250
------------
HEALTHCARE - DIVERSE - (6.0%)
Bristol Myers Squibb Co ............................ 20,000 1,218,750
Johnson & Johnson Inc .............................. 10,000 921,250
------------
2,140,000
------------
MAJOR DRUGS - (4.1%)
Biovail Corp* ...................................... 20,000 841,250
Pfizer Inc ......................................... 15,000 647,813
------------
1,489,063
------------
MEDICAL PRODUCTS & SUPPLIES - (2.2%)
Boston Scientific Corp* ............................ 50,000 796,875
------------
TOTAL HEALTHCARE ................................... 5,292,188
------------
TECHNOLOGY - (26.6%)
COMMUNICATION - EQUIPMENT - (8.1%)
Lucent Technologies Inc ............................ 40,000 932,500
Motorola Inc ....................................... 40,000 997,500
Tellabs Inc* ....................................... 20,000 998,750
------------
2,928,750
------------
</TABLE>
10
<PAGE> 11
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - (Continued)
TECHNOLOGY - (Continued)
COMPUTER HARDWARE & PERIPHERAL - (3.9%)
International Business Machines Corp ............ 10,000 $ 985,000
Lexmark International Group Inc - Class A* ...... 10,000 410,000
------------
1,395,000
------------
COMPUTER NETWORKING - (0.0%)
Avaya Technologies Inc* ......................... 1 9
------------
COMPUTER SOFTWARE & SERVICES - (3.6%)
BMC Software Inc* ............................... 30,000 609,375
Microsoft Corp* ................................. 10,000 688,750
------------
1,298,125
------------
ELECTRONICS - INSTRUMENTS & DEVICES - (2.6%)
Agilent Technologies Inc* ....................... 20,000 926,250
------------
SEMICONDUCTOR EQUIPMENT - (3.0%)
Applied Materials Inc* .......................... 20,000 1,062,500
------------
SEMICONDUCTORS - (5.4%)
Conexant Systems Inc* ........................... 25,000 657,812
Intel Corp ...................................... 20,000 900,000
National Semiconductor Corp* .................... 15,000 390,000
------------
1,947,812
------------
TOTAL TECHNOLOGY ................................ 9,558,446
------------
TOTAL COMMON STOCKS ............................................... 674,952 30,258,670
(Cost $23,574,737) ------------
WARRANTS - (0.0%)
Coram Healthcare Corp* .......................... 495 0
(Cost $0)
CONVERTIBLE BONDS - (3.0%)
Cypress Semiconductor Corp, 3.75%, 07/01/2005 ... $ 300,000 264,375
LSI Logic Corp, 4.00%, 02/15/2005 ............... 300,000 252,000
Phototronics Inc, 6.00%, 06/01/2004 ............. 300,000 301,875
Triquint Semiconductor Inc, 4.00%, 03/01/2007 ... 300,000 243,375
------------
TOTAL CONVERTIBLE BONDS ........................................... 1,061,625
(Cost $997,003) ------------
</TABLE>
11
<PAGE> 12
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------------ ------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -(10.3%)
Federal Home Loan Bank, 6.00%, 11/29/2000 .................. $ 1,000,000 $ 995,431
Federal Home Loan Mortgage, 6.03%, 11/28/2000 .............. 2,000,000 1,991,142
Federal National Mortgage Association, 6.00%, 11/16/2000 ... 700,000 698,283
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS ..................................... 3,684,856
(Cost $3,684,856) ------------
MUTUAL FUNDS - (1.4%)
Fifth Third Government Money Market Fund ................... 425,618 425,618
Fifth Third U.S. Treasury Fund ............................. 79,276 79,276
------------
TOTAL MUTUAL FUNDS ........................................................... 504,894
(Cost $504,894) ------------
TOTAL INVESTMENTS - (98.9%)
(Cost $28,761,490) ......................................... $ 35,510,045
OTHER ASSETS IN EXCESS OF LIABILITIES - (1.1%) ............................... 410,897
------------
NET ASSETS - (100.0%) ........................................................ $ 35,920,942
============
</TABLE>
ADR - American Depositary Receipt
*Securities on which no cash dividends were paid during the preceding twelve
(12) months.
The accompanying notes to financial statements are an integral part of the
financial statements.
12
<PAGE> 13
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - (83.5%)
BASIC MATERIALS - (2.2%)
AGRICULTURAL PRODUCTS - ( 2.2%)
Corn Products International Inc ............... 8,000 $ 201,000
------------
TOTAL BASIC MATERIALS ......................... 201,000
------------
CAPITAL GOODS - (10.6%)
AEROSPACE & DEFENSE - (1.7%)
Precision Castparts Corp ...................... 4,000 151,000
------------
ENGINEERING & CONSTRUCTION - (1.9%)
Southdown Inc ................................. 2,500 177,187
------------
MANUFACTURING - (4.8%)
Jabil Circuit Inc* ............................ 2,500 142,656
Parker Hannifin Corp .......................... 7,000 289,625
------------
432,281
------------
OFFICE EQUIPMENT & SUPPLIES - (2.2%)
Miller Herman Inc ............................. 7,500 195,938
------------
TOTAL CAPITAL GOODS ........................... 956,406
------------
COMMUNICATION SERVICES - (4.2%)
TELECOM - CELLULAR - (2.3%)
Metro One Telecommunications Inc* ............. 15,000 206,250
------------
TELECOM - LONG DISTANCE - (1.9%)
Global Crossing Ltd* .......................... 7,500 177,188
------------
TOTAL COMMUNICATION SERVICES .................. 383,438
------------
CONSUMER CYCLICALS - (10.9%)
BUILDING MATERIALS & HOME BUILDING - (6.1%)
Kaufman & Broad Home Corp ..................... 9,000 267,750
Scotts Co Class A* ............................ 8,000 286,000
------------
553,750
------------
RETAIL - SPECIALTY - (2.8%)
Casey's General Stores Inc .................... 20,000 250,000
------------
</TABLE>
13
<PAGE> 14
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
<TABLE>
<CAPTION>
SHARES OR SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - (Continued)
CONSUMER CYCLICALS - (Continued)
SERVICES - COMMERCIAL & CONSUMER - (2.0%)
Cendant Corp* ..................................... 15,000 $ 180,000
------------
TOTAL CONSUMER CYCLICALS .......................... 983,750
------------
ENERGY - (4.1%)
OIL & GAS - DRILL & EQUIPMENT - (1.9%)
Precision Drilling Corp Class A* .................. 3,000 85,875
Rowan Companies Inc* .............................. 3,500 88,156
------------
174,031
OIL & GAS - EXPLORATION & PRODUCTION - (2.2%)
Devon Energy Corp ................................. 4,000 201,600
------------
TOTAL ENERGY ...................................... 375,631
------------
FINANCIAL - (9.6%)
BANKS - MAJOR REGIONAL - (5.3%)
Bancwest Corp ..................................... 10,000 204,375
Popular Inc ....................................... 10,000 278,125
------------
482,500
------------
BROKERAGE & DIVERSE FINANCIAL SERVICES - (4.3%)
Acacia Research Corp* ............................. 8,000 254,500
Lehman Brothers Holdings Inc ...................... 2,000 129,000
------------
383,500
------------
TOTAL FINANCIAL ................................... 866,000
------------
HEALTHCARE - (15.8%)
BIOTECHNOLOGY - (9.1%)
Gilead Sciences Inc* .............................. 2,000 172,000
Icos Corp* ........................................ 4,000 205,500
Imclone Systems Inc* .............................. 3,000 164,063
Maxim Pharmaceuticals Inc* ........................ 3,000 133,125
Onyx Pharmaceuticals Inc* ......................... 10,000 150,000
------------
824,688
------------
MAJOR DRUGS - (6.7%)
Biovail Corp* ..................................... 5,000 210,312
ISIS Pharmaceuticals Inc* ......................... 15,000 154,687
NEORX Corp* ....................................... 5,000 81,250
Tularik Inc* ...................................... 5,000 158,750
------------
604,999
------------
TOTAL HEALTHCARE .................................. 1,429,687
------------
</TABLE>
14
<PAGE> 15
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------------ ------------
<S> <C> <C>
COMMON STOCKS - (CONTINUED)
TECHNOLOGY - (26.1%)
COMMUNICATION EQUIPMENT - (3.1%)
ADC Telecommunications Inc* ................................ 10,000 $ 213,750
Com21 Inc* ................................................. 6,000 64,875
------------
278,625
------------
COMPUTER SOFTWARE & SERVICES - (2.0%)
BMC Software Inc* .......................................... 9,000 182,812
------------
ELECTRONICS - INSTRUMENTS & DISTRIBUTION - (2.0%)
Photon Dynamics Inc* ....................................... 5,000 180,000
------------
Semiconductor Equipment - (4.2%)
Gasonics International Corp* ............................... 7,500 153,281
Photronics Inc* ............................................ 10,000 225,625
------------
378,906
------------
SEMICONDUCTORS - (14.8%)
Atmel Corp* ................................................ 16,000 239,000
Conexant Systems Inc* ...................................... 6,500 171,031
Cypress Semiconductor Corp* ................................ 5,000 187,188
LSI Logic Corp* ............................................ 7,000 230,125
Microchip Technology Inc* .................................. 8,000 253,000
National Semiconductor Corp* ............................... 10,000 260,000
------------
1,340,344
------------
TOTAL TECHNOLOGY ........................................... 2,360,687
------------
TOTAL COMMON STOCKS
(Cost $6,644,712) .......................................... 298,500 7,556,599
------------
CONVERTIBLE BONDS - (1.6%)
Dura Pharmaceuticals Inc, 3.50% 07/15/2002 ................. $ 150,000 145,125
------------
TOTAL CONVERTIBLE BONDS ...................................................... 145,125
(Cost $129,239) ------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - (13.2%)
Federal Home Loan Bank 6.00%, 11/29/2000 ................... 900,000 895,888
Federal National Mortgage Association 6.00%, 11/22/2000 .... 300,000 298,971
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS ..................................... 1,194,859
(Cost $1,194,859) ------------
</TABLE>
15
<PAGE> 16
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
STATEMENT OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL MARKET
AMOUNT VALUE
------------ ------------
<S> <C> <C>
MUTUAL FUNDS - (1.9%)
Fifth Third Government Money Market Fund .... 108,000 $ 108,000
Fifth Third U.S. Treasury Fund .............. 61,899 61,899
------------
TOTAL MUTUAL FUNDS ............................................ 169,899
(Cost $169,899) ------------
TOTAL INVESTMENTS - (100.2%) .................................. $ 9,066,482
(Cost $8,138,709)
LIABILITIES IN EXCESS OF OTHER ASSETS - (-0.2%) .............. (16,153)
------------
NET ASSETS - (100.0%) ......................................... $ 9,050,329
============
</TABLE>
ADR - American Depositary Receipt
*Securities on which no cash dividends were paid during the preceding twelve
(12) months.
The accompanying notes to financial statements are an integral part of the
financial statements.
16
<PAGE> 17
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 2000
<TABLE>
<CAPTION>
GROWTH AGGRESSIVE GROWTH
FUND FUND
------------ -----------------
<S> <C> <C>
ASSETS:
Investments, at value (Cost - see below) ............... $ 35,510,045 $ 9,066,482
Receivable for investments sold ........................ 449,280 0
Dividends and interest receivable ...................... 35,968 4,958
Receivable for fund shares subscribed .................. 2,197 5,071
Prepaid and other assets ............................... 11,180 3,578
------------ ------------
TOTAL ASSETS ..................................... $ 36,008,670 $ 9,080,089
------------ ------------
LIABILITIES:
Payable for fund shares redeemed ....................... $ 10,071 $ 4,653
Accrued investment advisory fee ........................ 24,675 3,070
Accrued administration fee ............................. 6,370 6,255
Other payables ......................................... 46,612 15,782
------------ ------------
TOTAL LIABILITIES ................................ $ 87,728 $ 29,760
------------ ------------
NET ASSETS ............................................. $ 35,920,942 $ 9,050,329
============ ============
COMPOSITION OF NET ASSETS:
Capital stock ($1.00 par value) ........................ $ 2,466,003 $ 614,836
Paid in capital ........................................ 20,198,618 5,125,562
Accumulated net realized gain on investments ........... 6,507,766 2,382,158
Net unrealized appreciation in value of investments .... 6,748,555 927,773
------------ ------------
NET ASSETS ............................................. $ 35,920,942 $ 9,050,329
============ ============
NET ASSET VALUE PER SHARE:
Net assets ............................................. $ 35,920,942 $ 9,050,329
Shares outstanding ..................................... 2,466,003 614,836
Net asset value and redemption price per share ......... $ 14.57 $ 14.72
COST OF INVESTMENTS ............................................. $ 28,761,490 $ 8,138,709
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of the
financial statements.
17
<PAGE> 18
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2000
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH GROWTH
FUND FUND
------------ ------------
<S> <C> <C>
INCOME:
Dividends ..................................................... $ 383,898 $ 31,643
Interest ...................................................... 203,491 72,253
------------ ------------
TOTAL INCOME ..................................... 587,389 103,896
------------ ------------
EXPENSES:
Investment advisory fees ............................... 301,717 80,248
Administration fees .................................... 77,692 76,369
Transfer agent fees .................................... 98,975 27,276
Fund accounting fees and expenses ...................... 29,092 21,327
Custodian fees ......................................... 5,186 3,273
Legal fees ............................................. 17,360 3,416
Printing fees .......................................... 15,474 1,690
Registration fees ...................................... 10,362 689
Audit fees ............................................. 14,826 8,978
Trustee fees and expenses .............................. 25,620 3,432
Other .................................................. 16,563 3,777
Expense subsidy (Note 4) ............................... (9,415) 0
Expense subsidy reimbursement (Note 4) ................. 0 2,329
------------ ------------
TOTAL EXPENSES ..................................... 603,452 232,804
------------ ------------
NET INVESTMENT LOSS ............................................. (16,063) (128,908)
------------ ------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain on investments ....................... 6,507,222 2,564,674
------------ ------------
Unrealized appreciation on investments
Beginning of year .................................... 17,131,651 1,168,223
End of year .......................................... 6,748,555 927,773
------------ ------------
Change in net unrealized appreciation of investments ... (10,383,096) (240,450)
------------ ------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS .......... (3,875,874) 2,324,224
------------ ------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ................................................. $ (3,891,937) $ 2,195,316
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of the
financial statements.
18
<PAGE> 19
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
2000 1999
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment loss ....................................... $ (16,063) $ (75,238)
Net realized gain on investments .......................... 6,507,222 4,543,115
Change in net unrealized appreciation of investments ...... (10,383,096) 4,902,004
------------ ------------
INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS .................................. (3,891,937) 9,369,881
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain on investments ....... (4,467,333) 0
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Net increase/(decrease) in net assets derived from
beneficial interest transactions - (Note 2) ............. 1,669,971 (5,533,340)
------------ ------------
NET INCREASE/(DECREASE) IN NET ASSETS ............................. (6,689,299) 3,836,541
NET ASSETS:
Beginning of year ......................................... 42,610,241 38,773,700
------------ ------------
End of year ............................................... $ 35,920,942 $ 42,610,241
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of the
financial statements.
19
<PAGE> 20
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
2000 1999
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment loss .................................... $ (128,908) $ (98,204)
Net realized gain on investments ....................... 2,564,674 533,619
Change in net unrealized appreciation of investments ... (240,450) 1,038,714
------------ ------------
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................... 2,195,316 1,474,129
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain on investments .... (435,431) 0
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Net increase/(decrease) in net assets derived from
beneficial interest transactions - (Note 2) .......... 1,453,741 (300,976)
------------ ------------
NET INCREASE IN NET ASSETS ..................................... 3,213,626 1,173,153
NET ASSETS:
Beginning of year ...................................... 5,836,703 4,663,550
------------ ------------
End of year ............................................ $ 9,050,329 $ 5,836,703
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of the
financial statements.
20
<PAGE> 21
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE GROWTH FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT THE YEARS INDICATED:
<TABLE>
<CAPTION>
YEARS ENDED PERIOD ENDED YEARS ENDED
OCTOBER 31, OCTOBER 31, NOVEMBER 30,
2000 1999 1998 1997 1996
---------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of period ........ $ 18.01 $ 14.32 $ 17.69 $ 16.56 $ 14.36
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income/(loss) .............. (0.01) (0.03) 0.00 0.02 0.10
Net realized and unrealized gain/(loss)
on investments ......................... (1.53) 3.72 (0.07) 2.90 2.83
---------- ---------- ---------- ---------- ----------
Total income/(loss) from investment
operations ............................. (1.54) 3.69 (0.07) 2.92 2.93
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment
income ................................. 0.00 0.00 (0.02) (0.10) (0.17)
Distributions from net realized gain
on investments ......................... (1.90) 0.00 (3.28) (1.69) (0.56)
---------- ---------- ---------- ---------- ----------
Total distributions to shareholders ....... (1.90) 0.00 (3.30) (1.79) (0.73)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period .............. $ 14.57 $ 18.01 $ 14.32 $ 17.69 $ 16.56
========== ========== ========== ========== ==========
TOTAL RETURN ................................ (9.62)% 25.77% (0.44)% 19.79% 21.46%
========== ========== ========== ========== ==========
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in 000s) ....... $ 35,921 $ 42,610 $ 38,774 $ 42,380 $ 39,602
========== ========== ========== ========== ==========
Ratio of operating expenses to
average net assets ...................... 1.50% 1.50% 1.50%* 1.50% 1.47%
========== ========== ========== ========== ==========
Ratio of operating expenses to average
net assets before fee waivers .......... 1.52% 1.66% 1.78%* 1.50% 1.47%
========== ========== ========== ========== ==========
Ratio of net investment income/(loss)
to average net assets ................... (0.04)% (0.18)% 0.02%* 0.11% 0.67%
========== ========== ========== ========== ==========
Ratio of net investment income/(loss) to
average net assets before fee waivers ... (0.06)% (0.35)% (0.25)%* 0.11% 0.67%
========== ========== ========== ========== ==========
Portfolio turnover rate** ................. 77% 54% 41% 41% 45%
========== ========== ========== ========== ==========
</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 year ended October 31, 2000 were
$28,647,844 and $35,531,835, respectively.
The accompanying notes to financial statements are an integral part of the
financial statements.
21
<PAGE> 22
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
STONEBRIDGE AGGRESSIVE GROWTH FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR EACH SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT THE YEARS INDICATED
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31,
2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of year ........... $ 11.46 $ 8.59 $ 13.27 $ 13.19 $ 13.97
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss .......................... (0.21) (0.19) (0.37) (0.20) (0.17)
Net realized and unrealized gain/(loss)
on investments .............................. 4.35 3.06 (2.07) 2.83 0.90
---------- ---------- ---------- ---------- ----------
Total income/(loss) from investment
operations ................................ 4.14 2.87 (2.44) 2.63 0.73
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain
on investments .............................. (0.88) 0.00 (2.24) (2.55) (1.51)
---------- ---------- ---------- ---------- ----------
Total distributions to shareholders .......... (0.88) 0.00 (2.24) (2.55) (1.51)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ................. $ 14.72 $ 11.46 $ 8.59 $ 13.27 $ 13.19
========== ========== ========== ========== ==========
TOTAL RETURN ................................. 38.18% 33.41% (20.23)% 22.89% 5.70%
========== ========== ========== ========== ==========
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (in 000s) ............ $ 9,050 $ 5,837 $ 4,664 $ 5,428 $ 4,539
========== ========== ========== ========== ==========
Ratio of operating expenses to
average net assets .......................... 2.90% 2.85% 2.90% 2.90% 2.29%
========== ========== ========== ========== ==========
Ratio of operating expenses to average
net assets before fee waivers
and subsidy reimbursements ................. 2.87% 3.85% 3.69% 2.90% 2.29%
========== ========== ========== ========== ==========
Ratio of net investment loss to average
net assets ................................. (1.60)% (1.90)% (2.01)% (1.62)% (1.26)%
========== ========== ========== ========== ==========
Ratio of net investment loss to average net
assets before fee waivers and
subsidy reimbursements ..................... (1.57)% (2.90)% (1.22)% (1.62)% (1.26)%
========== ========== ========== ========== ==========
Portfolio turnover rate** .................... 133% 88% 92% 88% 108%
========== ========== ========== ========== ==========
</TABLE>
** 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 year ended October 31, 2000 were
$9,438,178 and $9,202,305, respectively.
The accompanying notes to financial statements are an integral part of the
financial statements.
22
<PAGE> 23
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
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, neither Series is
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.
23
<PAGE> 24
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
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.
2. SHARES OF BENEFICIAL INTEREST:
At October 31, 2000, there were an indefinite number of $1.00 par value
shares of beneficial interest authorized for each Series. Transactions
in shares of beneficial interest for the year ended October 31, 2000
and the year ended October 31, 1999, were as follows:
<TABLE>
<CAPTION>
STONEBRIDGE GROWTH FUND
For the Year Ended For the Year Ended
October 31, 2000 October 31, 1999
------------------------------ ------------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares Sold ...................................... 217,757 $ 3,481,890 52,215 $ 839,746
Shares Issued in Reinvestment of Dividends ....... 270,471 4,381,625 0 0
------------ ------------ ------------ ------------
Total ............................................ 488,228 7,863,515 52,215 839,746
Less Shares Redeemed ............................. (388,564) (6,193,544) (394,333) (6,373,086)
------------ ------------ ------------ ------------
Net Increase (Decrease) .......................... 99,664 $ 1,669,971 (342,118) $ (5,533,340)
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
STONEBRIDGE AGGRESSIVE GROWTH FUND
For the Year Ended For the Year Ended
October 31, 2000 October 31, 1999
------------------------------ ------------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares Sold ...................................... 165,935 $ 2,368,130 51,456 $ 538,942
Shares Issued in Reinvestment of Dividends ....... 35,514 414,442 0 0
------------ ------------ ------------ ------------
Total ............................................ 201,449 2,782,572 51,456 538,942
Less Shares Redeemed ............................. (95,713) (1,328,831) (85,413) (839,918)
------------ ------------ ------------ ------------
Net Increase (Decrease) .......................... 105,736 $ 1,453,741 (33,957) $ (300,976)
============ ============ ============ ============
</TABLE>
3. UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS (TAX BASIS)
<TABLE>
<CAPTION>
GROWTH FUND AGGRESSIVE GROWTH FUND
------------ ----------------------
<S> <C> <C>
As of October 31, 2000
Gross appreciation (excess of value over tax cost) $ 8,897,943 $ 1,395,193
Gross depreciation (excess of tax cost over value) (2,149,388) (470,518)
------------ ------------
Net unrealized appreciation $ 6,748,555 $ 924,675
============ ============
Cost of investments for Federal income tax purposes $ 28,761,490 $ 8,141,807
============ ============
</TABLE>
These amounts represent the net increase in the value of investments
(all of which are represented by long transactions) held at October 31,
2000.
24
<PAGE> 25
STONEBRIDGE FUNDS TRUST ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 0.75% and 1.00% of the average
daily net assets of the Stonebridge Growth and Stonebridge Aggressive
Growth Funds, respectively.
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 October 31, 2000, the
Stonebridge Growth Fund and the Stonebridge Aggressive Growth Fund had
cumulative carryover of waived expenses of $186,403 and $78,838,
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 administration fee
equal to the annual rate of 0.10% of the average daily net assets in
each Series up to $250,000,000 and 0.075% 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.
Certain officers and trustees of the Trust are also officers and/or
trustees of the Adviser and ALPS.
25
<PAGE> 26
================================================================================
INTENTIONALLY LEFT BLANK
================================================================================
26
<PAGE> 27
================================================================================
INTENTIONALLY LEFT BLANK
================================================================================
27
<PAGE> 28
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
Derek J. Mullins, Assistant Treasurer
Lisa A. Bruckert, Secretary
INVESTMENT ADVISER
STONEBRIDGE CAPITAL MANAGEMENT,
INCORPORATED
1801 Century Park East, Suite 1800
Los Angeles, California 90067
ADMINISTRATOR, DISTRIBUTOR AND
FUND ACCOUNTANT
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
TAIT, WELLER & BAKER
8 Penn Center Plaza, Suite 800
Philadelphia, PA 19103
This report and its financial statements are submitted for the general
information of the shareholders of the Funds. The report is not authorized for
distribution to prospective investors in the Funds unless preceded or
accompanied by a prospectus.
STONEBRIDGE FUNDS
ANNUAL REPORT
FOR THE YEAR ENDED
OCTOBER 31, 2000
