AMWAY MUTUAL FUND
7575 Fulton Street East
Ada, Michigan, 49355-7150
FORWARDING SERVICE REQUESTED
STANDARD A
U.S. POSTAGE
PAID
SOUTH SUBURBAN, IL
PERMIT NO. 3602
Amway
Mutual
Fund
Semi-Annual
Report
1999
AMWAY MUTUAL FUND
Dear Shareholders:
I am pleased to provide you with the Semi-Annual Report to shareholders for
Amway Mutual Fund for the six months ended June 30, 1999. During the first six
months of 1999, stock markets continued to hit new highs amid a strong economy
and low inflation. During the second quarter of 1999, value stocks had an
advantage over growth stocks as the large cap growth dominance moderated and
gains in the stock market broadened. This style rotation was positive for your
Fund, which returned 12.1% in the first half of 1999, compared with a return of
11.7% for the S&P 500.
The fear of rising inflation and the Federal Reserve Bank tightening credit
has lead to instability in the stock markets. We anticipate this instability
will continue into the second half of 1999. As the cost of borrowing for
companies increase, they reduce capital investment and profits are reduced.
Should interest rates continue to rise, your Fund's value strategy should
cushion any market downturns.
There are many changes coming to your Fund. We will be introducing a new
family of funds shortly, expanding your choices of asset classes. Many new
services will also be added to the family of funds, increasing your options for
obtaining account and performance information and for buying and selling shares.
We will be launching our web site, with educational and investment tools to
assist you in reaching your investment goals. Statements showing your account
balance, asset allocation and transactions during the quarter will be provided
to you on a quarterly basis. The name of your Fund will change to Activa Value
Fund, as part of your new Activa Mutual Fund family. Be on the lookout for more
information on the new funds and services in the near future.
We have been working hard to bring the latest technology and highest level of
service to your Fund. We know you will be pleased with the changes and the many
new options that will be available.
Sincerely,
James J. Rosloniec
President
Trustees
Richard A. DeWitt
Allan D. Engel
Donald H. Johnson
Walter T. Jones
James J. Rosloniec
Richard E. Wayman
Transfer Agent
Amway Management Company
7575 Fulton Street East
Ada, Michigan 49355-7150
Custodian
The Northern Trust Company
50 South LaSalle Street
Chicago IL 60675
Auditors Investment Adviser
BDO Seidman, LLP Amway Management Company
99 Monroe Avenue, NW 7575 Fulton Street East
Grand Rapids Michigan 49503 Ada, Michigan 49355-7150
Legal Matters Sub-Advisor
John Dougherty Ark Asset Management Co., Inc.
Attorney at Law 125 Broad Street
55 Connecticut Ave., NW 12th Floor
Washington DC 20035 New York, NY 10004
August 20, 1999
2
<PAGE>
AMWAY MUTUAL FUND
SCHEDULE OF INVESTMENTS
June 30, 1999 (Unaudited)
% of Shares or Market
Investments Par Value Value
----------- ----------- -----------
BANKING 7.32%
Bank of America Corporation 73,600 5,395,800
Bank One Corp. 39,400 2,346,763
BankBoston Corp. 80,500 4,115,563
Keycorp. 17,900 575,037
Washington Mutual, Inc. 101,400 3,587,025
------------
16,020,188
------------
BUSINESS SERVICES 1.94%
Bell Atlantic Corp. 64,864 4,240,484
------------
CHEMICALS & ALLIED PRODUCTS 3.24%
Air Products & Chemicals, Inc. 83,100 3,344,775
DuPont (E. I.) De Nemours 54,800 3,743,525
------------
7,088,300
------------
COMMUNICATION 5.81%
AT&T Corp. 57,200 3,192,475
GTE Corp. 69,600 5,272,200
US West, Inc. 72,400 4,253,500
------------
12,718,175
------------
CREDIT AGENCIES OTHER THAN BANKS 0.83%
Household International, Inc. 38,200 1,809,725
------------
ELECTRIC & ELECTRONIC EQUIPMENT 5.55%
Alliedsignal, Inc. 31,000 1,953,000
Compaq Computer Corp. 181,000 4,287,438
Emerson Electric Co. 47,500 2,986,563
Raytheon Co. Class A 30,700 2,114,462
Raytheon Co. Class B 11,500 809,312
------------
12,150,775
------------
ELECTRIC, GAS, & SANITARY SERVICES 6.34%
American Electric Power Co. 47,000 1,765,438
FPL Group, Inc. 39,200 2,141,300
FirstEnergy Corp. 78,100 2,421,100
Public Service Enterprises Group 48,800 1,994,700
Texas Utilities Co. 68,400 2,821,500
Waste Management Inc. *50,800 2,730,500
------------
13,874,538
------------
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
AMWAY MUTUAL FUND
SCHEDULE OF INVESTMENTS
June 30, 1999 (Unaudited)
% of Shares or Market
Investments Par Value Value
----------- ----------- -----------
FABRICATED METAL PRODUCTS 2.96%
Crown Cork & Seal Company 89,500 2,550,750
Masco Corp. 135,800 3,921,225
------------
6,471,975
------------
FOOD AND KINDRED PRODUCTS 5.27%
Archer-Daniels-Midland 273,410 4,220,767
BestFoods 32,900 1,628,550
Conagra, Inc. 121,800 3,242,925
The Pepsi Bottling Group, Inc. 106,000 2,444,625
------------
11,536,867
------------
FURNITURE AND FIXTURES 1.59%
Newell Rubbermaid, Inc. 74,800 3,478,200
------------
GENERAL MERCHANDISE STORES 4.69%
Federated Department Stores *78,700 4,166,181
May Dept. Stores Co. 80,450 3,288,394
Sears, Roebuck & Company 63,100 2,811,894
------------
10,266,469
------------
HEALTH SERVICES 1.27%
Tenet Healthcare Corp. *149,600 2,776,950
------------
INSTRUMENTS AND RELATED PRODUCTS 3.78%
Baxter International, Inc. 71,900 4,358,937
Eastman Kodak Co. 57,800 3,915,950
------------
8,274,887
------------
INSURANCE AGENTS, BROKERS, & SERVICE 1.44%
Cigna Corp. 35,400 3,150,600
------------
INSURANCE CARRIERS 10.29%
Aetna Inc. 60,100 5,375,194
Allstate Corp. 118,900 4,265,538
Chubb Corp. 71,100 4,941,450
Loews Corp. 21,500 1,701,187
St. Paul Cos., Inc. 105,000 3,340,312
Unum Corp. 52,700 2,885,325
------------
22,509,006
------------
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
AMWAY MUTUAL FUND
SCHEDULE OF INVESTMENTS
June 30, 1999 (Unaudited)
% of Shares or Market
Investments Par Value Value
----------- ----------- -----------
MACHINERY, EXCEPT ELECTRICAL 2.32%
Deere & Co. 78,100 3,094,713
Seagate Technology *77,700 1,991,062
------------
5,085,775
------------
OIL AND GAS EXTRACTION 12.03%
Burlington Resources 83,000 3,589,750
Conoco, Inc. CL A 170,000 4,738,750
Halliburton Co. 52,700 2,384,675
Occidental Petroleum Corp. 89,500 1,890,688
Praxair, Inc. 74,400 3,640,950
Schlumberger Ltd. 18,300 1,165,481
Tenneco, Inc. 48,500 1,157,937
USX-Marathon Group 52,600 1,712,787
Union Pacific Resources 147,000 2,397,938
Unocal Corp. 91,800 3,637,575
------------
26,316,531
------------
PAPER & ALLIED PRODUCTS 6.66%
Champion International Corp. 63,200 3,025,700
Fort James Corp. 117,100 4,435,163
International Paper Co. 85,800 4,332,900
Kimberly-Clark Corp. 48,600 2,770,200
------------
14,563,963
------------
PETROLEUM & COAL PRODUCTS 2.15%
Amerada Hess Corp. 39,800 2,368,100
Atlantic Richfield Company 15,600 1,303,575
Texaco, Inc. 15,200 950,000
Tosco Corp. 3,200 83,000
------------
4,704,675
------------
PRINTING AND PUBLISHING 0.93%
Gannett Co. 28,500 2,034,187
------------
RAILROAD TRANSPORTATION 5.05%
Burlington Northern Santa Fe 143,400 4,445,400
CSX Corp. 83,800 3,797,188
Norfolk Southern Corp. 93,100 2,804,637
------------
11,047,225
------------
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
AMWAY MUTUAL FUND
SCHEDULE OF INVESTMENTS
June 30, 1999 (Unaudited)
% of Shares or Market
Investments Par Value Value
----------- ----------- -----------
RUBBER AND MISC. PLASTICS PRODUCTS 1.53%
Goodyear Tire & Rubber Co. 56,800 3,340,550
------------
STONE, CLAY & GLASS PRODUCTS 1.16%
PPG Industries 43,100 2,545,594
------------
TRANSPORTATION EQUIPMENT 4.28%
Dana Corp. 102,400 4,716,800
Ford Motor Co. 34,700 1,958,381
Lockheed Martin Corp. 72,500 2,700,625
------------
9,375,806
------------
WHOLESALE TRADE - DURABLE GOODS 0.66%
Delphi Automotive Systems 77,800 1,444,162
------------
WHOLESALE TRADE - NONDURABLE GOODS 0.91%
McKesson HBOC, Inc. 62,000 1,991,750
------------
Total Common Stock (Cost $207,439,451) 100.00% $218,817,357
============
*Non-dividend producing as of June 30, 1999
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
AMWAY MUTUAL FUND
STATEMENT OF ASSETS AND LIABILITIES
FOR THE SIX MONTHS ENDED
June 30, 1999 (Unaudited)
ASSETS
Investments in securities, at market
(identified cost $207,439,451)
(Notes 1 and 5) $218,817,357
Cash 514,589
Receivables:
Securities sold 954,089
Dividends 449,868
Fund shares sold 102,945
Interest 25,335
Miscellaneous 1,953
Prepaid insurance 5,326
Reorganization costs 122,906
-----------
TOTAL ASSETS 220,994,368
LIABILITIES
Accounts payable:
Advisory fee (Note 6) 257,898
Fund shares redeemed 231,183
12b-1 fee (Note 6) 128,011
Transfer agent fee (Note 6) 65,388
-----------
TOTAL LIABILITIES 682,480
-----------
NET ASSETS
Capital stock (40,000,000 shares
of $1.00 par value authorized),
amount paid in on 27,358,945
shares outstanding (Note 4) 196,970,527
Undistributed net investment
income 1,141,104
Accumulated net realized
gain on investments 10,822,350
Net unrealized appreciation
on investments 11,377,907
-----------
TOTAL NET ASSETS
(equivalent to $8.05 per share) $220,311,888
===========
Net asset value per share:
Class A - based on net assets
of $219,806,609 and 27,295,992
shares outstanding $8.05
Class R - based on net assets
of $505,279 and 62,953
shares outstanding $8.03
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
AMWAY MUTUAL FUND
STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED
June 30, 1999 (Unaudited)
INVESTMENT INCOME
Income
Dividends $1,986,273
Interest 110,900
Securities litigation settlement 3,846
-----------
Total income 2,101,018
Expenses
Advisory fee (Note 6) 487,902
12b-1 fee - Class A (Note 6) 238,570
Transfer agent fees - Class A (Note 6) 129,506
Transfer agent fees - Class R (Note 6) 413
Custodian fee 25,521
Legal services 20,815
Shareholder communications 18,100
Data processing service (Note 7) 15,558
Amortization of reorganization costs 15,075
Audit fees 13,213
Registration fees 11,403
Insurance 5,950
-----------
Total expenses 982,024
Fees paid indirectly (Note 7) -15,558
-----------
Net expenses 966,466
-----------
NET INVESTMENT INCOME 1,134,552
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain (Note 5) 11,400,567
Unrealized appreciation on
investments
Beginning of year 2,459,552
June 30, 1999 11,377,907
-----------
Net change in unrealized
appreciation on investments 8,918,355
-----------
NET GAIN ON INVESTMENTS 20,318,922
-----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $21,453,474
===========
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
AMWAY MUTUAL FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
June 30, 1999 December 31, 1998
(Unaudited) (Audited)
NET ASSETS FROM OPERATIONS
<S> <C> <C>
Net investment income $ 1,134,552 $ 1,665,189
Net realized gain on investments 11,400,567 25,406,792
Net increase (decrease) in unrealized appreciation 8,918,355 (10,357,465)
----------- -----------
Net increase in net assets resulting from operations 21,453,474 16,714,516
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (Note3) Net investment:
Class A -- (1,662,878)
Class R -- (1,625)
Net realized gain from investment transactions:
Class A -- (25,670,393)
Class R -- (19,517)
----------- -----------
Total distributions to shareholders -- (27,354,413)
----------- -----------
CAPITAL SHARE TRANSACTIONS (Notes 4 and 6)
Net proceeds from sale of shares:
Class A 31,935,180 65,648,672
Class R 352,185 135,152
Net asset value of shares issued to shareholders in reinvestment of
investment income and realized gain from security transactions:
Class A -- 25,976,297
Class R -- 21,142
Payment for shares redeemed:
Class A (13,384,295) (40,349,536)
Class R (61) --
----------- -----------
Net increase in net assets derived from
capital share transactions 18,903,009 51,431,727
----------- -----------
Net Increase in Net Assets 40,356,483 40,791,830
NET ASSETS
Beginning of period 179,955,405 139,163,575
----------- -----------
End of period (includes undistributed net investment income of
$1,141,104 and $6,548, respectively) $220,311,888 $179,955,405
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
AMWAY MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
Amway Mutual Fund (Fund) is a series of Amway Mutual Fund Trust (Trust), an
open-end management investment company registered under the Investment Company
Act of 1940. The Trust was organized as a Delaware business trust on February 2,
1998. The Fund is the successor of Amway Mutual Fund, Inc. (See Note 2)
(A) Share Class-The Fund offers two classes of shares (Class A and Class
R). Each share of Class A and Class R represents an equal
proportionate interest in the Fund and, generally, will have identical
voting, dividend, liquidation, and other rights and the same terms and
conditions. Each class will have exclusive voting rights with respect
to matters affecting only that class. Each class bears different
distribution, shareholder servicing and transfer agent expenses.
Income, non-class specific expenses, and realized and realized and
unrealized gains or losses on investments are allocated to each class
of shares based on its relative net assets.
(B) Security Valuation-Investments in securities listed or admitted to
trading on a national securities exchange are valued at their last
reported sale price before the time of valuation. If a security is
traded only in the over-the-counter market, or if no sales have been
reported for a listed security on that day, it is valued at the mean
between the current closing bid and ask prices. Securities for which
market quotations are not readily available, including any restricted
securities (none at June 30, 1999), and other assets of the Fund are
valued at fair market value as determined in good faith by the Fund's
Board of Trustees.
(C) Federal Income Taxes-It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to make distributions of income and capital
gains sufficient to relieve it from substantially all federal income
taxes.
(D) Security Transactions and Related Investment Income-Security
transactions are accounted for on the trade date and dividend income
is recorded on the ex-dividend date. Interest income is recorded on
the accrual basis. Realized gains and losses from security
transactions and unrealized appreciation and depreciation of
investments are reported on a specific identification basis. Dividends
and distributions to shareholders are recorded by the Fund on the
ex-dividend date.
(E) Reorganization Costs-Costs incurred during the Fund's reorganization
and issuance of Class R shares are being amortized over a period of 60
months using the straight-line method.
NOTE 2-REORGANIZATION AND REGISTRATION OF CLASS R SHARES
The Fund, formerly Amway Mutual Fund, Inc., was reorganized as a series of
the Trust in accordance with the Agreement and Plan of Reorganization, approved
on April 28, 1998 by the shareholders and Board of Trustees of Amway Mutual
Fund, Inc.
In 1998, the Fund began offering Class R shares, following their registration
with the SEC on November 1, 1998. These shares are offered to tax-exempt
retirement and benefit plans of Amway Corporation and its affiliates, and are
not subject to any sales charges or 12b-1 distribution fees.
NOTE 3-DISTRIBUTION TO SHAREHOLDERS
On December 18, 1998, a distribution of $1.3117 and $1.3345 aggregating
$27,333,271 and $21,142 was declared from ordinary income and net realized gains
from investment transactions (including $.6516 applicable to short-term gains
that are taxable to shareholders as ordinary income dividends and $.5803
applicable to long-term gains) during 1998, for Class A and Class R,
respectively. The dividend was paid on December 23, 1998 to shareholders of
record on December 17, 1998.
10
<PAGE>
AMWAY MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS
(Unaudited) (Continued)
NOTE 4-CAPITAL STOCK
At June 30, 1999, there were 40,000,000 shares of $1.00 par value capital
stock authorized. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Six Months Year Ended
Ended December
June 30, 1999 31, 1998
------------ ------------
Shares Class A Class R Class A Class R
------- ------- ------- -------
<S> <C> <C> <C>
Outstanding, beginning of period 25,036,115 18,916 17,999,216 --
Sold 4,054,209 44,045 8,659,484 15,908
Issued in payment of dividends -- -- 3,684,581 3,008
--------- --------- --------- ---------
4,054,209 44,045 12,344,065 18,916
Redeemed 1,794,332 8 5,307,166 --
--------- --------- --------- ---------
Net increase for the period 2,259,877 44,037 7,036,899 18,916
--------- --------- --------- ---------
Outstanding, end of period 27,295,992 62,953 25,036,115 18,916
</TABLE>
NOTE 5-INVESTMENT TRANSACTIONS
At June 30, 1999, the cost of investments owned was $207,842,402 for federal
income tax purposes. Aggregate gross unrealized gains on securities in which
there was an excess of market value over tax cost were $19,103,620. Aggregate
gross unrealized losses on securities in which there was an excess of tax cost
over market value were $8,128,664. Net unrealized gains for tax purposes were
$10,974,956 at June 30, 1999.
Realized gains from sales of investments were determined on the basis of
specific identification. For tax purposes gains of $11,287,558 were realized on
investments.
For the period ended June 30, 1999, cost of purchases and proceeds from sales
of investments, other than corporate short-term notes, aggregated $94,400,821
and $68,912,546, respectively.
NOTE 6-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Advisory and Service Contract (Contract) with
Amway Management Company (Investment Advisor). Under the Contract, the Fund
employs the Investment Advisor to furnish investment advice and manage on a
regular basis the investment portfolio of the Fund; to furnish for the use of
the Fund, office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Fund, and (with certain
exceptions) administering its affairs; and to pay the salaries and fees of all
Officers and Trustees of the Fund. Except when otherwise specifically directed
by the Fund, the Investment Advisor will make investment decisions on behalf of
the Fund and place all orders for the purchase and sale of portfolio securities
for the Fund's account. The Investment Advisor shall be permitted to enter into
an agreement with another advisory organization (sub-advisor), whereby the
sub-advisor will provide all or part of the investment advice and services
required to manage the Fund's investment portfolio as provided for in this
agreement. In return for its Investment Advisor services, the Fund pays the
Investment Advisor quarterly, pursuant to the contract, a fee at the annual rate
of 0.55% on the first $100 million of average daily net assets of the Fund,
0.50% on the next $50 million in assets, and 0.45% on the next $50 million in
assets. When the Fund's assets reach $200 million, the rate would be 0.50 % on
assets up to $200 million and 0.45% on assets in excess of $200 million, so long
as the Fund continued to have at least $200 million in assets. The advisory fee
incurred by the Fund amounted to $487,902 for the period ended June 30, 1999.
11
<PAGE>
AMWAY MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS
(Unaudited) (Continued)
The Investment Advisor has entered into a Sub-Advisory Agreement with Ark
Asset Management Co., Inc. (Sub-Advisor). Under the Sub-Advisory Agreement, the
Advisor employs the Sub-Advisor to furnish investment advice and manage on a
regular basis the investment portfolio of the Fund, subject to the direction of
the Advisor, the Board of Trustees of the Fund, and to the provisions of the
Fund's current Prospectus. Except when otherwise specifically directed by the
Fund or the Advisor, the Sub-Advisor will make investment decisions on behalf of
the Fund and place all orders for the purchase or sale of portfolio securities
for the Fund's account. For services rendered, the Investment Advisor, not the
Fund, pays the Sub-Advisor a fee at the annual rate of 0.45% on the first $100
million of average daily net assets of the Fund, 0.40% on the next $50 million
in assets and 0.35% on the next $50 million in assets. When the Fund's assets
reach $200 million, the rate would be 0.40% on assets up to $200 million and
0.35% on assets in excess of $200 million, so long as the Fund continued to have
at least $200 million in assets.
Under the Plan and Agreement of Distribution, pursuant to Rule 12b-1 under
the Investment Company Act of 1940 with Amway Management Company (AMC), which
became effective on April 22, 1998, AMC provides services in connection with
distributing the Fund's shares. For these services rendered, the Fund
compensates AMC at a maximum annual rate of .25 of 1% of the average net assets
of the Fund.
The Fund has a transfer agency and dividend disbursing agency agreement with
AMC. Under this agreement, AMC is the agent for transfer of the Fund's shares
and disbursement of the Fund's distributions. The fees incurred by the Fund in
connection with these services were $129,506 and $413 for Class A and Class R,
respectively, for the period ended June 30, 1999.
A beneficial shareholder of Amway Management Company is also a beneficial
shareholder of 42.5% (as of June 30, 1999) of the outstanding capital shares of
the Fund.
Certain officers and trustees of the Fund are affiliated with the investment
advisor and transfer agent.
The officers serve without compensation from the Fund. Trustees' fees,
amounting to $30,000, for the period ended June 30, 1999, were paid by Amway
Management Company, the Fund's investment advisor. The trustees' payments
consist of an annual retainer plus a per meeting fee.
NOTE 7-DATA PROCESSING SERVICE
Portfolio accounting services for the Fund in the amount of $15,558 for the
period ended June 30, 1999 are paid for through the use of directed brokerage
commissions.
NOTE 8-RELATED PARTY TRANSACTION
A certain class of distributors of Amway Corporation and Amway of Canada,
Ltd. (Corporations) received from each corporation part of its distributor's
profit-sharing bonus in Amway Mutual Fund common stock shares. On January 14,
1999, the Corporations purchased 353,892 Amway Mutual Fund shares valued at
$2,526,792 (based on the net asset value of $7.14 per share) and transferred the
shares to these distributors.
FINANCIAL HIGHLIGHTS
(Selected data for each share of capital
stock outstanding throughout each period.)
<TABLE>
<CAPTION>
Six Month Ended Year Ended
June 30, 1999 December 31, 1998
(unaudited) (audited)
Class A Class R Class A Class R*
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 7.18 $ 7.16 $ 7.73 $ 8.42
----------- -------- ----------- --------
Income (loss) from investment operations:
Net investment income .04 .02 .08 .09
Net realized and unrealized gain
(loss) on securities .83 .85 .68 (.02)
----------- -------- ----------- --------
Total income (loss) from
investment operations .87 .87 .76 .07
----------- -------- ----------- --------
Distributions:
Dividends from net investment income -- -- .08 .10
Distributions from capital gains -- -- 1.23 1.23
----------- -------- ----------- --------
Total distributions -- -- 1.31 1.33
----------- -------- ----------- --------
Net Asset Value, end of period $ 8.05 $ 8.03 $ 7.18 $ 7.16
=========== ======== =========== ========
Total Return** 12.12% 12.15% 10.17% 7.08%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $219,806,609 $505,279 $179,820,020 $135,385
Ratio of expenses to average net assets .5% .5% 1.0% 1.0%
Ratio of net income (loss) to average
net assets .6% .6% 1.0% 1.8%
Portfolio turnover rate 37.0% 37.0% 101.1% 101.1%
Average commission rate paid per
share for portfolio transactions $ .0500 $ .0500 $ .0521 $ .0521
</TABLE>
*The Fund began offering Class R Shares on November 1, 1998. Class R's return
and ratios have been annualized.
**The six months ended June 30, 1999 is not annualized but an aggregate total
return for the period.
The accompanying notes are an integral part of these financial statements.
